Fiat Chrysler Automobiles NV (BIT: FCA) reported good results and a stronger position as a company at the end of FY17. In its year-end financial statement, the company reported net revenue of €110.93 billion (US$138.54 billion) – only a small variation on the €111.02 billion (US$138.65 billion) in 2016 – leading to an adjusted EBIT of €7.05 billion (US$8.8 billion) and net profit of €3.5 billion (US$4.37 billion). This represented an increase compared to the results of 2016 of 16 and 93 percent respectively.
According to the company’s investor presentation, the company achieved or exceeded all its key targets for 2017. As a result, rating companies have shown greater confidence in FCA’s performance. Both Moody’s and S&P have upgraded the company to positive from stable, while Fitch maintains its outlook as positive.
FY17 was also a favorable year for FCA in terms of debt recovery. The company reported net industrial debt of €2.39 billion (US$2.98 billion) at the end of the year and a total debt of €17.97 billion (US$22.44 billion). Only in 4Q17, the company cut its net industrial debt by €2.02 billion (US$2.52 billion). The year-end numbers show a decrease of 47.9 and 25.3 percent compared to those reported in 2016’s statement. Furthermore, according to FCA CEO Sergio Marchionne’s presentation at the North American International Auto Show 2018, the company could be debt-free by 2018.
In terms of regional performance, North America was the major contributor to FCA’s results with net revenue of €66.09 billion (US$82.54 billion) and adjusted EBT of €5.23 billion (US$6.53 billion). This was despite the region’ sales dropping by 7.6 percent and a lower market share of 11.4 percent compared to 2016’s 12.2 percent.
The EMEA region was the second-biggest participant in FCA’s results with €22.7 billion (US$28.35 billion) in net revenue and €735 million (US$917.94 million) in adjusted EBIT, followed by LATAM and APAC. The company forecasts continued growth in the LATAM, APAC and EMEA regions with industry sales increments of 7.3, 1.5 and 2.1 percent respectively in 2018. The NAFTA region, in comparison, will show further contraction as the company expects total vehicle sales of 20.7 million by the end of 2018, down from the 21.2 million reported in FY17.
Outside the company’s volume brands – Jeep, RAM, Alfa Romeo, Chrysler, Dodge and Fiat – Maserati alone contributed with €4.06 billion (US$5.07 billion) to FCA’s net revenue, up from the €3.48 billion (US$4.35 billion) reported in 2016. Meanwhile, FCA’s component division including Magneti Marelli, Comau and Teksid, generated €10.12 billion (US$12.64 billion) in revenue and €536 million (US$669.42 million) in adjusted EBIT.
Overall, the company says 2017 was a strong year that reinforces it Business Plan targets established for 2018. According to FCA’s statement, the expected earnings in 2018 will bring €125 billion (US$156.11 billion) in net revenue, adjusted EBIT equal to or higher than €8.7 billion (US$10.87 billion) and adjusted net profit of €5 billion (US$6.24 billion).
The data used in this article was sourced from FCA and Automotive News. If you want to learn more about FCA’s presence in Mexico, check out our feature analysis in Mexico Automotive Review 2017.