BANK AM BELLEVUE INVESTOR SEMINAR

Transcription

1 BANK AM BELLEVUE INVESTOR SEMINAR Flims January 11, 2014

2 Safe Harbor Statement C e r t a i n i n f o r m a t i o n i n c l u d e d in t h i s p r e s e n t a t i o n, i n c l u d i n g, w i t h o u t l i m i t a t i o n, a n y f o r e c a s t s i n c l u d e d h e r e i n, is f o r w a r d l o o k i n g a n d is s u b j e c t to i m p o r t a n t r i s k s a n d u n c e r t a i n t i e s t h a t c o u l d c a u s e a c t u a l r e s u l t s to d i f f e r m a t e r i a l l y. T h e G r o u p s b u s i n e s s e s i n c l u d e i t s a u t o m o t i v e, a u t o m o t i v e - r e l a t e d a n d o t h e r s e c t o r s, a n d i t s o u t l o o k is p r e d o m i n a n t l y b a s e d on w h a t it c o n s i d e r s to be t h e k e y e c o n o m i c f a c t o r s a f f e c t i n g t h e s e b u s i n e s s e s. F o r w a r d - l o o k i n g s t a t e m e n t s w i t h r e g a r d to t h e G r o u p ' s b u s i n e s s e s i n v o l v e a n u m b e r of i m p o r t a n t f a c t o r s t h a t a r e s u b j e c t to c h a n g e, i n c l u d i n g, b u t n o t l i m i t e d to: t h e m a n y i n t e r r e l a t e d f a c t o r s t h a t a f f e c t c o n s u m e r c o n f i d e n c e a n d w o r l d w i d e d e m a n d for a u t o m o t i v e a n d a u t o m o t i v e - r e l a t e d p r o d u c t s a n d c h a n g e s in c o n s u m e r p r e f e r e n c e s t h a t c o u l d r e d u c e r e l a t i v e d e m a n d for t h e G r o u p s p r o d u c t s ; g o v e r n m e n t a l p r o g r a m s ; g e n e r a l e c o n o m i c c o n d i t i o n s in e a c h of t h e G r o u p ' s m a r k e t s ; l e g i s l a t i o n, p a r t i c u l a r l y t h a t r e l a t i n g to a u t o m o t i v e - r e l a t e d i s s u e s, t h e e n v i r o n m e n t, t r a d e a n d c o m m e r c e a n d i n f r a s t r u c t u r e d e v e l o p m e n t ; a c t i o n s of c o m p e t i t o r s in t h e v a r i o u s i n d u s t r i e s in w h i c h t h e G r o u p c o m p e t e s ; p r o d u c t i o n d i f f i c u l t i e s, i n c l u d i n g c a p a c i t y a n d s u p p l y c o n s t r a i n t s, e x c e s s i n v e n t o r y l e v e l s, a n d t h e i m p a c t of v e h i c l e d e f e c t s a n d / o r p r o d u c t r e c a l l s ; l a b o r r e l a t i o n s ; i n t e r e s t r a t e s a n d c u r r e n c y e x c h a n g e r a t e s ; o u r a b i l i t y to r e a l i z e b e n e f i t s a n d s y n e r g i e s from o u r g l o b a l a l l i a n c e a m o n g t h e G r o u p s m e m b e r s ; s u b s t a n t i a l d e b t a n d l i m i t s on l i q u i d i t y t h a t m a y l i m i t o u r a b i l i t y to e x e c u t e t h e G r o u p s c o m b i n e d b u s i n e s s p l a n s ; p o l i t i c a l a n d c i v i l u n r e s t ; e a r t h q u a k e s or o t h e r n a t u r a l d i s a s t e r s a n d o t h e r r i s k s a n d u n c e r t a i n t i e s. A n y of t h e a s s u m p t i o n s u n d e r l y i n g t h i s p r e s e n t a t i o n or a n y of t h e c i r c u m s t a n c e s or d a t a m e n t i o n e d in t h i s p r e s e n t a t i o n m a y c h a n g e. A n y f o r w a r d - l o o k i n g s t a t e m e n t s c o n t a i n e d in t h i s p r e s e n t a t i o n s p e a k o n l y as of t h e d a t e of t h i s p r e s e n t a t i o n. We e x p r e s s l y d i s c l a i m a d u t y to p r o v i d e u p d a t e s to a n y f o r w a r d - l o o k i n g s t a t e m e n t s. F i a t d o e s n o t a s s u m e a n d e x p r e s s l y d i s c l a i m s a n y l i a b i l i t y in c o n n e c t i o n w i t h a n y i n a c c u r a c i e s in a n y of t h e s e f o r w a r d - l o o k i n g s t a t e m e n t s or in c o n n e c t i o n w i t h a n y u s e by a n y t h i r d p a r t y of s u c h f o r w a r d - l o o k i n g s t a t e m e n t s. T h i s p r e s e n t a t i o n d o e s n o t r e p r e s e n t i n v e s t m e n t a d v i c e or a r e c o m m e n d a t i o n for t h e p u r c h a s e or s a l e of f i n a n c i a l p r o d u c t s a n d / o r of a n y k i n d of f i n a n c i a l s e r v i c e s. F i n a l l y, t h i s p r e s e n t a t i o n d o e s n o t r e p r e s e n t an i n v e s t m e n t s o l i c i t a t i o n in I t a l y, p u r s u a n t to S e c t i o n 1, l e t t e r ( t ) of L e g i s l a t i v e D e c r e e no. 58 of F e b r u a r y 24, 1998, as a m e n d e d, n o r d o e s it r e p r e s e n t a s i m i l a r s o l i c i t a t i o n as c o n t e m p l a t e d by t h e l a w s in a n y o t h e r c o u n t r y or s t a t e. January 11, 2014 Bank am Bellevue Investor Seminar 2

3 The creation of global carco The last key milestone TRANSACTION SUMMARY (PURCHASE OF VEBA S 41.5% EQUITY INTEREST IN CHRYSLER) Fiat to acquire VEBA s 41.5% equity interest in Chrysler for aggregate consideration of $3.65bn, funded through: One-time special dividend from Chrysler to VEBA of $1.9bn Remaining consideration of $1.75bn paid by Fiat Both above considerations funded from available cash on hand In addition, separately, Chrysler to make, in consideration of operational commitments from UAW, four contributions to VEBA totalling $0.7bn over three years $175mn at settlement TRANSACTION BENEFITS TO FIAT Acquisition of remaining 41.5% of Chrysler at reasonable levels Eliminates headwinds to seamless integration of Fiat Chrysler global alliance Effective and efficient access to capital markets Full optimization of global product platforms, R&D, manufacturing footprint and sales & marketing efforts $175mn on each of following three anniversaries Upon settlement of purchase, parties to dismiss Delaware Call Option litigation Closing expected on or before January 20, 2014 Given funding arrangements for this transaction, it is not envisioned that Fiat will require equity capital to be raised via a rights issue January 11, 2014 Bank am Bellevue Investor Seminar 3

4 Some thoughts with another year behind us We are a global automotive player, geographically well-balanced Currently ranked #7 worldwide, with upside potential #4 player in strong NAFTA market through Chrysler #1 player in LATAM, with ongoing investment offering opportunity to move upscale and protect margins Growing presence in APAC, with opportunities to localize production of Jeep Break-even in EMEA by mid-decade by focusing existing production capacity in Italy on higher value-added production, also for export We have an unrivalled brand portfolio Iconic Jeep brand shipments nearly double from through expansion of line-up and geographic presence Alfa Romeo to move to the heart of premium market Focus of Fiat on 500 and Panda as pillar vehicles Maintaining a leading position in EMEA LCVs with Fiat Professional Dodge offerings from muscle car performance to high value utility vehicles Imported from Detroit Chrysler, refined comfort and American craftsmanship Ram, a leading full-line NAFTA commercial vehicle player with trucks, chassis cabs and vans Significant potential for margin expansion of Maserati, a classic marque for exclusivity, elegance, power and style Uniquely exclusive Ferrari brand Group has clear strategy and all necessary elements to execute January 11, 2014 Bank am Bellevue Investor Seminar 4

5 Nine months to September 2013 Executive summary Worldwide shipments for mass-market brands at ~3.2mn units, up 1.4% vs. last year Key financial metrics Revenues at 63bn Trading profit of 2.5bn EBIT of 2.5bn Net profit of 655mn Net industrial debt at 8.3bn Available liquidity over 20bn Recent investment programs announced Production of Maserati Quattroporte in Avv. Giovanni Agnelli plant (Italy) started in January, then followed by Ghibli with overall investment for plant upgrade and refurbishing exceeding 0.5bn Plans for future activities at Sevel plant (~ 700mn over 5 years), announced in July Refurbishment of Mirafiori plant for production of two new models, including a Maserati luxury SUV (announced in September) Group successfully concluded several transactions in debt capital markets In March Fiat repaid a 1bn bond at maturity and issued a 1.25bn bond (6.625% fixed coupon, due Mar 2018) In June Chrysler successfully re-priced its $3.0bn term loan and $1.3bn undrawn credit facility, while amending certain loan covenants to be consistent with Company s bond agreement; term loan re-priced again in December (aggregate savings of ~$70mn per annum) In July, Fiat issued a 6-year 850mn bond (6.75% fixed coupon, due October 2019), subsequently increased by 400mn in Sep Fiat renewed its 3-year 2.0bn revolving credit facility, subsequently increased to 2.1bn in July Partnerships in car financing extended in Europe (with extension of FGA-Credit Agricole JV) and in Brazil (with renewed agreement between Fiat and Itaù Unibanco), while Chrysler Group signed a private-label financing arrangement with Santander Consumer USA Inc. to provide a full range of wholesale and retail financing services to Chrysler Group s dealers and consumers Updated business plan to be presented on occasion of Q analyst call January 11, 2014 Bank am Bellevue Investor Seminar 5

6 Nine months to September 2013 Financial highlights Net revenues ( mn) Group revenues up 1%, or 5% at constant exchange rates At constant exchange, top-line growth for NAFTA (+4%), LATAM (+5%) and APAC (+48%) offsetting slight reduction in EMEA (-1%) Luxury brands increased 18% driven by Maserati 62,182 62, Net profit ( mn) 44mn attributable to the owners of the parent Net loss of 729mn for Fiat excl. Chrysler, a 79mn improvement over prior year Income taxes of 427mn Excl. Chrysler, 260mn in taxes related primarily to taxable income of companies operating outside Italy and employment-related taxes in Italy 9M 12 9M 13 9M 12 (1) 9M 13 Trading profit ( mn) Group trading margin of 3.9% (4.3% a year ago) Dec Sep Net industrial debt ( bn) Absorption for Fiat ex-chrysler was 2,1bn, 0,9bn better than last year 191mn decrease over the same period in 2012, including ~ 140mn negative currency translation impact Mass-market brands 2,654 2,463 Net industrial debt for Chrysler decreased 0.3bn, less than prior year reduction as a result of negative working capital performance mainly connected to the new Jeep Cherokee shipment hold at the end of Q3 NAFTA: 1,600mn (+4.9% margin) LATAM: 575mn (+7.4% margin) APAC: 295mn (+9.0% margin) EMEA: - 420mn (-3.2% margin) Luxury Brands: 312mn (+12.5% margin) Components: 131mn (+2.2% margin) 9M 12 (1) 9M EBIT ( mn) Mass-market brands NAFTA: 1,669mn LATAM: 520mn APAC: 270mn EMEA: - 304mn Luxury brands: 312mn Components: 132mn 2,597 9M 12 (1) (1) Restated for adoption of IAS 19 as amended (Trading Profit/EBIT reduced by 173mn; Net Profit reduced by 351mn) Note: Graphs not to scale 2,516 9M , Dec Sep Undrawn committed credit lines Cash & Mktable Securities Liquidity ( bn) A 0.7bn decrease over Dec-12, reflecting negative cash from operation, net of Capex and new financing, and negative currency translation effects Fiat excl. Chrysler at 10.7bn ( 11.1bn at year-end 2012) Chrysler at 9.5bn, a 0.3bn reduction from Dec 2012 January 11, 2014 Bank am Bellevue Investor Seminar 6

7 Nine months to September 2013 Performance by segment MASS-MARKET BRANDS NAFTA LATAM APAC EMEA Ferrari & Maserati 1,930 1,669 MASS-MARKET BRANDS 783 EBIT before unusuals 2012: 814mn 2013: 575mn (304) (573) 6.0 9M M 2013 NAFTA LATAM APAC EMEA Ferrari & Maserati 5.9 Components Components (1.7) (2.1) Other & Eliminations (144) (83) Other & Eliminations (1) 2012 restated for adoption of IAS 19 as amended (NAFTA: - 159mn; Components: - 3; Eliminations and Adjustments: - 11mn) Note: Graphs not to scale; Numbers may not add due to rounding EBIT before unusuals 2012: (459)mn 2013: (303)mn (1) (1) Fiat Group EBIT before unusuals 2012: 2,729mn 2013: 2,552mn 2,597 2,516 (1) Fiat Group (1) Group revenues up 1% (+5% at constant exchange rates) NAFTA +1% (+4% at constant rates) LATAM -5% (+5% at constant rates) APAC +43% driven by strong volume performance EMEA -2% mainly reflecting volume declines in Europe during H1 (Q3 first quarterly increase since Q1 2010) Luxury brands up 18%, driven by Maserati EBIT NAFTA -14% mainly reflecting lower trading profit and higher positive net unusual items in 2013 LATAM reflecting the trading profit performance and net unusual charges related to devaluation of the Venezuelan bolivar relative to the U.S. dollar APAC up 23% inclusive of Chinese JV s industrial costs to support new products EMEA continues reducing losses January 11, 2014 Bank am Bellevue Investor Seminar 7

8 Nine months to September 2013 Net Industrial Debt walk mn Change in Net Industrial Debt (1,762) Cash Flow from operating activities, net of Capex (1,576) 5,780 (1,678) (212) (208) (6,545) (5,258) (160) (2) (24) (8,307) Dec 31, 2012 Industrial EBITDA Financial Charges & Taxes Change in Funds & Other Working Capex Investments, capital Scope & Other Capital increase /Repos/ Dividends FX translation effect Sep 30, 2013 Fiat excl. Chrysler at 7.1bn, with an increase of 2.1bn in first nine months driven by Capex ( 2.6bn or 0.4bn higher than last year), seasonal cash absorption and equity investments Cash flow from operating activities of 0.8bn, a significant improvement if compared to a cash burn of ~ 1.0bn in same period of 2012, which was heavily impacted by a negative working capital performance Chrysler net debt down 0.3bn to 1.2bn, with cash from operating activities covering Capex Shipment hold of all-new Jeep Cherokee at Q3-end driving working capital absorption of 0.3bn, partially offsetting a 3.2bn positive contribution from operating activities before working capital Capex of 2.7bn during first nine months January 11, 2014 Bank am Bellevue Investor Seminar 8

9 Sustainability More than 20 years of long-term commitments Fiat published its first Environmental Report in 1992 and its first Sustainability Report in 2004 Fiat and Chrysler began aligning sustainability efforts and published first joint Sustainability Report for 2011 Currently, Fiat Annual Report includes a sustainability section and presents environmental and social data in Highlights section Fiat sustainability leadership - demonstrated by inclusion in major international sustainability indexes - continuing with inclusion of Chrysler Group metrics 1 st Fiat Environmental Report 1 st Fiat Sustainability Report 1 st joint Fiat-Chrysler Sustainability Report 2 nd joint Fiat-Chrysler Sustainability Report Initial convergence of financial and sustainability reporting on path of Integrated Reporting January 11, 2014 Bank am Bellevue Investor Seminar 9

10 Some most common questions in review January 11, 2014 Bank am Bellevue Investor Seminar 10

11 Why are Chrysler Group margins lower than its U.S. peers? Margin gap affected by Chrysler LLC ( Old CarCo ) 2009 bankruptcy Chrysler Group had older product lineup after bankruptcy Reliance on high levels of fleet sales through 2010 Rebuilding brand equity required increasing R&D costs and marketing investments New and significantly refreshed products began to hit market only in late 2010 Margins trending upwards as new and refreshed products gain momentum Margin gap vs. NA peers largely as a result of higher volumes and more favorable mix Ford and GM shipped ~0.7mn and ~1.1mn more units than Chrysler Group, respectively in 2012, with better economies of scale and fixed costs absorption Higher mix of large pickup trucks, large SUVs and luxury vehicles for Ford and GM Costs of launches and inefficiencies in supply chain running beyond 100% capacity continuing to impact margins negatively in % 10% 8% 6% 4% 2% 0% EBIT * MARGIN AUTOMOTIVE ONLY (EBIT % of Net Revenue) Sep YTD 2013 Q * Internal estimates excl. equity income (GM) and special items Total Cars = 30% Small & Mid-Size Cars 17% Pickups & Vans 18% Large & Specialty Cars 13% SUVs 31% Minivans & X-Overs 21% Ford N.A. GM N.A. U.S. SALES MIX (2012 CY) Ford Worldwide Chrysler Group GM Worldwide (1,652k vehicles) (2,250k vehicles) (2,596k vehicles) Total Cars = 33% Total Cars = 40% Small & Mid-Size Cars 25% Large & Specialty Cars 8% Pickups & Vans 35% SUVs 21% Minivans & X-Overs 11% Small & Mid-Size Cars 26% Chrysler Sep YTD 2013 profitability mainly impacted by Lack of Jeep Liberty shipments as production ceased during 2012 in preparation for allnew 2014 Jeep Cherokee Ongoing launches of new 2014 Jeep Grand Cherokee and 2013 Ram Heavy Duty pickup in H Large & Specialty Cars 14% Pickups & Vans 29% SUVs 21% Minivans & X-Overs 10% January 11, 2014 Bank am Bellevue Investor Seminar 11

12 Why does Chrysler Group have a high Capex spending profile? Chrysler LLC ( Old CarCo ) underinvested in new products to save cash during financial crisis (particularly 2007 through 2009) Aged product lineup Unbalanced portfolio with competing products within a segment as a result of wrongly-focused investments Inefficient manufacturing infrastructure Vehicle rejuvenation started again in late 2009 Product investments back to pre-2007 recessionary levels Sharing of R&D and architectures with Fiat to reduce overall expenditure requirements, including Mini (Fiat 500), Compact (Dodge Dart, Jeep Cherokee, Fiat Viaggio ) as well as LCV (ProMaster) architectures Chrysler Group launched over 25 new and significantly refreshed products since late 2009 Initially concentrated on rebuilding Jeep and Ram brand with allnew Grand Cherokee and Cherokee and significantly refreshed Light Duty and Heavy Duty pickups Development of new powertrains to replace outdated engines and transmissions New Pentastar V6 engines New 4-cylinder TigerShark and FIRE engines equipped with MultiAir2 technology New 8- and 9-speed transmissions Capacity expansions and WCM implementation Non-product related plant investments of ~$1.0bn since mid to improve infrastructure and quality of production systems Added shifts at most plants (shipments increased from 1.6mn vehicles in 2010 to 2.4mn in 2012) CHRYSLER GROUP CAPEX SPEND (U.S. GAAP) ($ bn) % 9.1% 10% 8.8% 8.4% 8.5% ~8.7% 7.0 8% % 4.0 4% % % E R&D (left axis) Capex (left axis) As percent of Revenue (right axis) REFURBISHING OF MANUFACTURING INFRASTRUCTURE Jefferson North assembly plant (example) January 11, 2014 Bank am Bellevue Investor Seminar 12

13 How is the Group leveraging its iconic Jeep brand? New all-time global sales record in 2013 (732k vehicles), surpassing 2012 mark of 702k units Previous record at 675k vehicles in 1999 Rejuvenated, competitive product line-up with significant improvement in fuel economy on all key nameplates Wrangler continuing to play iconic presence in SUVs Class-leading Grand Cherokee MY14 launched in Q maintaining a leading segment position in U.S. Award-winning Cherokee shipments started in Oct New upgrades on Compass and Patriot continue to position vehicles successfully in market Leveraging on extreme off-road potential with Trail Rated models Expanding product offerings into new segments (including B-SUV in 2014) and geographies Brand shipments target of 0.8mn units in 2013 Maintaining Jeep status as #1 SUV brand in U.S. Cleared holds for Jeep Cherokee, shipments fast recovering in Q4 (~60k vehicles shipped through December) Expanding internationally with enlargement of distribution network in worldwide markets underway GRAND CHEROKEE CHEROKEE Refreshed in Q New 8-speed transmission and new front & rear exterior New 3.0L V6 EcoDiesel engine to provide bestin-class 30mpg highway All-new, into largest SUV segment (by sales volume) in NAFTA New 9-speed transmission for significantly improved fuel economy Best-in-class capability January 11, 2014 Bank am Bellevue Investor Seminar 13

14 Are the Ram products competitive against peers? Ram performance exceeding segment growth Annual double-digit growth rates since 2009 Large pickup segment share in U.S. at 18.4% Sep YTD (+390bps vs. same period in 2010) in a segment growing in line with overall industry Strengthening brand portfolio while enlarging product offerings into commercial van segment Light Duty pickups: Ram 1500 with best-in-class fuel efficiency (25mpg highway with an all-new 8-speed transmission) Heavy Duty pickups: Ram 2500 with best-in-class towing, Ram 3500 with best-in-class max trailer weight; available 6.7L Cummins Turbo Diesel engine with best-in-class torque Large Commercial Van: launched Ram ProMaster (based on successful Fiat Ducato architecture), the brand s first full-size van offerings into an expanding, purpose-built segment Small Commercial Van: City van to be introduced in 2014, produced by Fiat-Tofas JV Vehicle sales (000 s) RAM PICKUP GROWTH (U.S. RAM 1500, 2500, 3500 & 3500 CHASSIS CAB) 0 +12% +22% Full Year +19% 24% Sep YTD Launched Ram 4500/5500 Chassis Cab Launched Ram Chassis Cab Cutaway Launched Refreshed Ram Added Laramie Longhorn and Outdoorsman models Launched Ram 1500 Express model Launched Refreshed Ram 1500 Launched Ram ProMaster January 11, 2014 Bank am Bellevue Investor Seminar 14

15 What is Maserati s potential? Investing in product line-up to compete across 100% of luxury market by 2015 New products gaining momentum (13k orders each for New Quattroporte and Ghibli through December 2013) Luxury SUV available in market in 2015, allnew luxury sportscars to follow Cumulative Capex (including capitalized R&D) of ~ 1.5bn through 2014 Steadily growing trading profit, doubledigit margin starting 2014 Worldwide distribution network to reach 400+ dealerships by , (33) 7, , FINANCIAL HIGHLIGHTS 4, ,675 6,159 6, ~2.5x 2012 levels Shipments 2x 2013 levels Revenues (times of 2012 levels) >2x >4x >5x Trading margin Double-digit margin starting E 2014E 2015E 2015E Revenues ( mn) Trading Profit ( mn) Volumes (units) ~50k NEW RANGE COVERAGE AND POSITIONING - A FULL RANGE ROUNDING OUT OFFERINGS IN LUXURY MARKET - MASERATI TO COVER 100% OF TOTAL LUXURY OR ~1 MILLION MARKET UNITS BY 2015 January 11, 2014 Bank am Bellevue Investor Seminar 15

16 Is the pricing environment improving in Europe? PASSENGER CAR MARKET INDUSTRY RETAILS SALES - PASSENGER CARS - (AS PERCENT OF TOTAL MARKET) PASSENGER CAR MARKET INDUSTRY RETAILS SALES - PASSENGER CARS - (AS PERCENT OF TOTAL MARKET) (mn units) CAGR % Retail sales (mn units) CAGR % Retail sales '07 '08 '09 '10 '11 '12 '13E '07 '08 '09 '10 '11 '12 '13E '07 '08 '09 '10 '11 '12 '13E '07 '08 '09 '10 '11 '12 '13E 2007 Index = INDUSTRY PRICE TREND (A-, B-, C- & D-Segment) Sep YTD 2013 CPI List Price Transaction Price 2007 Index = INDUSTRY PRICE TREND (A-, B-, C- & D-Segment) Sep YTD 2013 CPI List Price Transaction Price Source: Jato Dynamics, Internal analysis Source: Jato Dynamics, Internal analysis List price trend following same pattern of Consumer Price Index, while transaction prices lagging behind (only +2% vs. 2007) in both Italy & Germany Pricing pressure continuing, in particular for mass-market segments (mainly A- & B-Segment) Transaction price in 2009 & 2010 impacted by eco-incentives AVERAGE PRICING NOT IMPROVING, BUT SHOWING SOME STABILIZATION AT TROUGH January 11, 2014 Bank am Bellevue Investor Seminar 16

17 How can EMEA achieve the operating break-even? Synergies on capital and cost Utilize EMEA production base to develop our global brands (Maserati, Fiat 500 family, Jeep and Alfa Romeo) Products for competitive offerings in Europe complementary to those produced in NAFTA & LATAM (where production capacity is or will soon be saturated) Architecture allocation Italian footprint for higher value-added production Focus ex-italy on smaller segments Gradually increasing production output from EMEA plants by mid-decade, driven by volumes for export and EMEA market Improvement of capacity utilization driven by export, especially for Jeep Small SUV, Alfa Romeo and Maserati brands Targeting break-even trading result by middecade Sep YTD (420)mn (583)mn (287)mn TRADING PERFORMANCE IN EMEA (238) (225) (207) (165) (157) (121) (138) (116) (98) (106) (65) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% RE-FOCUS AND REALIGNMENT OF PRODUCT PORTFOLIO ONGOING Top-3 model in EU27+EFTA since Q A 160bps share gain in Q3 13 to 14.0% Segment leadership for Panda & 500 combined since inception Share highly resilient over past 5 years, notwithstanding new entrants and launches 92% 79% Index 100 = 2008 Fiat 500 Share Index Key Competitors Avg. Share Index 89% 87% 93% 79% 89% 68% 97% 59% n n+1 n+2 n+3 n+4 n+5 Year Achieved 18.8% share in EU27+EFTA in just 12 months since introduction Achieved leadership in Small-MPV in Q3 13 Expanded line-up with intro of two new models Trekking, available throughout Europe starting Q3 13, representing ~20% of total 500L sales Living, launched in September 2013, rounding out 500L offerings January 11, 2014 Bank am Bellevue Investor Seminar 17

18 Hundreds What are the prospects for the Brazilian market? Steady growth in an historically volatile, erratic environment QUARTERLY BRAZILIAN GDP YEAR-OVER-YEAR CHANGE ( ) 10% 8% 6% FY 2013 industry at ~3.6mn units, similar to 2012 FY 2013 market performance primarily impacted by tough comps in Q2 and Q3 as market pushed up strongly by introduction of sales tax incentives in 2012 Exceptionally strong Group s share last year driven by Company s flexibility to react promptly to increased demand 2014 market expected to perform substantially in line with 2013 levels 4% 2% 0% -2% -4% Economy projected to keep growing despite increased uncertainty due to 2014 elections Inflation under control Unemployment rate at 5.6% expected in 2013, seen at 5.8% in 2014, remaining at 10-year historical lows Consumer confidence currently under pressure, but expected to return to normality Brazil Human Development Index performing well Disposable income expected to grow in coming years also driven by reduction of income inequality during past decade Strong Brazilian reserves of ~$370bn Public investments boosted by 2014 FIFA World Championship and 2016 Olympic Games 13,509 11, ,377 12,416 13,435 12,915 14,412 14,336 12,242 12,470 17,033 15,160 15,972 17,629 14,107 14,234 14,609 14,848 14,858 14,015 13,651 14,454 17,187 16,017 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec NEW STRADA PICKUP INDUSTRY AVERAGE DAILY SALES BY MONTH (passenger cars & LCVs; units) Best-selling nameplate in its relative segment Launched two refreshed models Single-cab Strada launched in market in October Ramp-up production for double-cab version started in October January 11, 2014 Bank am Bellevue Investor Seminar 18

19 What is the status of the new plant in Brazil? Located in Goiana (State of Pernambuco), in northeast Brazil Expandable, flexible world-class production site Integrated international supplier park Product engineering and testing facilities Over 80% of components sourced nearby Favorable logistics infrastructure (port, railway ) Start-of-production expected in H Initial annual capacity of 200k vehicles for domestic market and export Small-Wide architecture to strengthen mid-size car offerings Investment for new complex started in Q Capex spanning through 2016 (~ 1.5bn in period) with Fiat to receive financing for up to 80% of total investment In addition, once production begins, project will also benefit from tax incentives for a period of 5 years January 11, 2014 Bank am Bellevue Investor Seminar 19

20 What is the pattern to relaunch the Alfa Romeo brand? Strong brand heritage NEW ALFA ROMEO 4C Focus on brand DNA (sportiness, performance, style) for sedans, X-overs and specialties Technical product solutions on par with peers, leveraging capital and cost synergies available in Group portfolio Improving brand image and awareness, through focus on product excellence as per Maserati experience Distribution across all regions EVERY TIME I SEE AN ALFA ROMEO GO BY, I TIP MY HAT HENRY FORD A 2-seater compact supercar for brand relaunch ~3.5k units per year worldwide Produced in Maserati Modena plant Well-received by commentators as true Alfa Car of the Year 2013 by FHM, Britain's leading men's lifestyle magazine Launched in Europe in September A fascinating and powerful model Carbon fiber monocoque Brand-new 1750 turbo GDI all-aluminum engine January 11, 2014 Bank am Bellevue Investor Seminar 20

21 Did you lower 2013 guidance when Q3 results were reported? UPDATED NUMBERS, INCORPORATING FOREX MOVEMENT, ARE WITHIN RANGE OF ORIGINAL GUIDANCE FOR THE YEAR Updated guidance Change Revenues ~ 88bn From 88-92bn range ( 84-88bn range at current exchange rates) Trading profit bn range From bn range ( bn range at current exchange rates) Net profit Net industrial debt bn range bn range From bn range ( bn range at current exchange rates) From 7.0bn (which did not include ~ 0.2bn negative impact from Q3 equity investments, net of exchange rates) January 11, 2014 Bank am Bellevue Investor Seminar 21

22 Contacts GROUP INVESTOR RELATIONS TEAM Marco Auriemma Vice President Maristella Borotto Francesca Ferragina Timothy Krause Paolo Mosole fax: websites: January 11, 2014 Bank am Bellevue Investor Seminar 22