September 2016 - FCA Group
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September 2016 Q2 2016 Results July 27, 2016
Safe harbor statement
This document, and in particular the section entitled provide or arrange for adequate access to financing for the
“Financial plan targets”, contains forward-looking statements. Group’s dealers and retail customers; the Group’s ability to
These statements may include terms such as “may”, “will”, access funding to execute the Group’s business plan and
“expect”, “could”, “should”, “estimate”, “anticipate”, “believe”, improve the Group’s business, financial condition and results
“remain”, “on track”, “design”, “target”, “objective”, “goal”, of operations; various types of claims, lawsuits and other
“forecast”, “projection”, “outlook”, “prospects”, “plan”, contingent obligations against the Group; disruptions
“intend”, or similar terms. Forward-looking statements are arising from political, social and economic instability;
not guarantees of future performance. Rather, they are based material operating expenditures in relation to compliance
on the Group’s current expectations and projections about with environmental, health and safety regulation;
future events and, by their nature, are subject to inherent developments in labor and industrial relations and
risks and uncertainties. They relate to events and depend on developments in applicable labor laws; increases in costs,
circumstances that may or may not occur or exist in the disruptions of supply or shortages of raw materials;
future and, as such, undue reliance should not be placed on exchange rate fluctuations, interest rate changes, credit risk
them. Actual results may differ materially from those and other market risks; political and civil unrest;
expressed in such statements as a result of a variety of earthquakes or other disasters and other risks and
factors, including: the Group’s ability to reach certain uncertainties.
minimum vehicle volumes; developments in global financial Any forward-looking statements contained in this
markets and general economic and other conditions; changes document speak only as of the date of this document and
in demand for automotive products, which is highly cyclical; the Company does not undertake any obligation to update
the Group’s ability to enrich the product portfolio and offer or revise publicly forward-looking statements. Further
innovative products; the high level of competition in the information concerning the Group and its businesses,
automotive industry; the Group’s ability to expand certain of including factors that could materially affect the
the Group’s brands internationally; changes in the Group’s Company’s financial results, is included in the Company’s
credit ratings; the Group’s ability to realize anticipated reports and filings with the U.S. Securities and Exchange
benefits from any acquisitions, joint venture arrangements Commission, the AFM and CONSOB.
and other strategic alliances; potential shortfalls in the
Group’s defined benefit pension plans; the Group’s ability to
September 2016 2
FCA today
Shipments 4.7M 1 Shipments 2.4M 1
APAC Maserati APAC Maserati
4% 0.2M 1% 32K 5% 0.1M 1% 13K
EMEA
26% EMEA
1.2M 30%
0.7M
NAFTA NAFTA
57% 56%
2.7M 1.3M
LATAM
12% LATAM
0.6M 9%
0.2M
Net revenues €111B Net revenues €54B
Comp. Maserati
FY 2015 H1 2016 Comp. Maserati
6% €7B 2% €2B 6% €3B 2% €1B
APAC 3%
APAC 4% Shipments 1 4.7M 2.4M €2B
€5B
H1 2016
FY 2015
EMEA Net Revenues 2 €111B €54B EMEA
20% NAFTA
18% NAFTA
€11B 64%
€20B 63%
€35B
€70B
Adjusted EBIT €4.8B €3.0B
LATAM LATAM
6% €6B Net Industrial Debt €5.0B €5.5B
5% €3B
(at period end)
Adjusted EBIT €4.8B Adjusted EBIT €3.0B
Total Liquidity 3 €24.6B €24.7B Comp. 7% Maserati
Comp. 8% Maserati
€0.4B 2% €0.1B (at period end) €0.2B 2% €0.1B
APAC 1% APAC 2%
€0.1B €0.1B
Note: Information for 2015 has been re-presented to exclude Ferrari consistent with EMEA 8%
EMEA 4%
€0.2B Ferrari’s classification as a discontinued operation for the year ended €0.2B
December 31, 2015
1 Including JVs
NAFTA NAFTA
2 Represents net revenues from external customers and does not include
93% 86%
€4.5B intercompany amounts
€2.6B
3 Includes cash & cash equivalents, current securities and undrawn committed
credit facilities
Memo: Refer to Appendix for definitions of supplemental financial measures and Memo:
LATAM (2)% €(0.1)B reconciliations to applicable IFRS metrics LATAM
FCA key strategic initiatives
2014-2018 BUSINESS PLAN
GLOBALIZE LUXURY VOLUME STRENGTHEN MARGIN
JEEP & PREMIUM GROWTH BALANCE EXPANSION
STRATEGY SHEET
Localized Expand Leverage Strong cash NAFTA
production in Maserati broad-based generation capacity
all regions product range brand realignment
portfolio Remove FCA
Expand Revive Alfa US cash ring- Leverage Jeep
product Romeo Platform and fencing and Fiat 500
portfolio distinctive component family in
brand DNA sharing to Sizeable net EMEA
achieve scale cash position
Use existing by end of plan Pernambuco
EMEA new products
capacity and tax
incentives
Major
Global OEM
Initiatives outlined in May 2014 Business Plan remain intact
September 2016 4
Financial plan targets
2015 2018E
2014 * 2015 * 2016E Jan ’16 Plan Update
(ex. Ferrari) Guidance **
(ex. Ferrari) ***
Net Revenues €96B €113B €111B >€112B
>€110B
~€136B
~€129B
Revised
Original
€8.7 – 9.8B
Adjusted EBIT
Margin %
€3.8B
3.9%
€5.3B
4.7%
€4.8B
4.3%
>€5.5B
>€5.0B
€8.3 – 9.4B
6.4 – 7.2%
6.4 – 7.2%
Adjusted Net
Profit €1.1B €2.0B €1.7B >€2.0B
>€1.9B
€4.7 – 5.5B
€4.5 –5.3B
Net Industrial
Cash (Debt)
€(7.7)B €(6.0)B €(5.0)B 
Broad-based brand portfolio
Mass-market Luxury
SUVS TRUCKS & EXCLUSIVE PERFORMANCE
LCVS
Exclusive performance
SEDANS & FUNCTIONAL
MINIVAN 500 & TIPO
FAMILIES
Premium
LCVS PERFORMANCE SPORT CARS AND UVS
Brand portfolios target unique market segments
providing opportunities for global volume growth
Designates global growth opportunities September 2016 6
2015 – 2016 new product launches
Renegade Levante Giulia
First entry into small Creates a whole Marks the rebirth
SUV segment new class of SUV of the legendary Alfa Romeo brand
Empowers a new generation Offered with Euro 6 gas and State-of-the-art mid-size sedan
of adventure seekers diesel engine options with distinctive Italian styling
New Entrants
500X Tipo family Mobi
Further expands Sedan, station wagon Focused on
500 family and hatchback versions urban mobility
Modern design, versatility Targeting value Unites practicality and
and off-road capability oriented consumers modern technology
Toro 124 Spider Fullback
Mid-size pickup Revival of Metric ton pickup
with drivability of an SUV original roadster with standard four-wheel drive
Design and capability RWD layout with exceptional Meets the needs
of larger trucks dynamic performance of work and leisure
Next Generation
Pacifica All-new C-SUV
Unsurpassed highway Production to launch in
fuel-economy in its segment Sept ’16 in Pernambuco (Brazil),
Q4 ‘16 in China and
Industry's first hybrid minivan, Q1 ’17 in Mexico
available in H2 ‘16
Volume growth supported by multiple new product launches,
most of which represent white-space entrants
September 2016 7
Jeep growth plans
Sales (‘000)
Jeep: +266% (+24% CAGR) Jeep: +62% (+17% CAGR)
UV industry: +172% (+18% CAGR)
>2,000
NAFTA 63K
EMEA 58K
LATAM 35K
APAC 2K
158 1,238
81 (16)
88
233 All Discontinued APAC production localization
New Model
+288%
205 +162% B and C-SUV globalization
Brand extension
151 +371%
338
+284%
+144%
2009 Wrangler Gr. Cherokee Cherokee Patriot Compass Renegade Commander 2015 2018E
Sales Growth by Region (000s)
Jeep volume growth expected to continue in all regions
supported by new product launches and key renewals
September 2016 8
2018 global manufacturing footprint
Belvidere Assembly 2018 Production (units) Melfi Assembly
Belvidere, Illinois Melfi, Italy
Distribution
GLOBAL NAFTA LATAM EMEA APAC
~2,000K ~1,100K ~200K ~200K ~500K
Cherokee Renegade
(Q2 2017)
Jefferson North Assembly
Detroit, Michigan GAC FCA Joint Venture
Changsha, China
Grand
Cherokee Renegade
Toledo North Assembly GAC FCA Joint Venture
Toledo, Ohio Guangzhou, China
(Q1 2018)
Wrangler Toluca Assembly Pernambuco Assembly
2-door Toluca, Mexico Goiana, Brazil Cherokee
Wrangler C-SUV C-SUV C-SUV
4-door (Q1 2017) Renegade (September 2016) (Q4 2016)
Jeep production expanded to all regions in 2015 supporting local volume growth by
eliminating tariffs and high transportation costs on products previously exported from NAFTA
September 2016 9
Alfa Romeo plan update
COMMITMENT TO REVIVE
DISTINCTIVE BRAND DNA
OUR FIRST DELIVERABLE – THE ALL-NEW GIULIA
Stunning Italian design All-new RWD/AWD architecture with near
perfect 50:50 weight distribution
Hand crafted interior with state-of-the-art
technology Class-leading power-to-weight ratio
All-new class-leading powertrains Extensive use of aluminum and carbon fiber –
including active front splitter
September 2016 10All-new Giulia – the results
Media Reaction
“Alfa Romeo has made a
brilliant car, the Giulia is “The Quadrifoglio sounds
FASTEST LAP EVER great” great – snarling, angry,
and very Alfa – proving
“The cars I drove at Balocco that nobody makes a V-6
BY A FOUR DOOR PRODUCTION were great: dexterous, with more aural appeal
SEDAN AT NÜRBURGRING beguiling and gifted” than the Italians”
“It is the embodiment of
agility and aggression”
“A feast for all senses and the
stuff long-lasting goose
bumps are made of”
“Drivers can easily make the
vehicle dance through curves
faster than and more light-
footed than the Audi”
“The Giulia is more than just a
car for Alfa fans”
“The long wait
was worth it”
September 2016 11Alfa Romeo plan update
Commitment to Initial launch focus Planned product
overall brand and on EMEA and line-up will be
product strategy NAFTA regions completed by
remains in place mid-2020
4C 4C Spider Giulietta Mito Giulia Mid-size UV Full-size UVs (2) Specialty (2) Hatchback
Sedan
2016 2016 |-------------------------- 2017 to 2020 -------------------------|
September 2016 12Maserati brand update
ALL-NEW LEVANTE
Commercial Launch Q2 ‘16
Represents Maserati’s first ever SUV
Launched in EMEA, NAFTA and APAC
Over 14,000 orders received –
vast majority are customer orders
Reaffirms brand business plan targets
September 2016 13Products aligned with automotive technology trends
Forward Collision Warning First-of-its-kind Collaboration
Blind Spot Monitoring ~100 Uniquely Engineered and
360° View Camera Built Pacifica Hybrid Minivans
Lane Keep Assist Co-locate Engineering Teams
Active Braking Knowledge Sharing
Park Assist
Active Safety (ADAS) Autonomous Driving
PROACTIVE STRATEGIES
AROUND CORE
TECHNOLOGIES
Connectivity Electric Vehicles
Apple CarPlay and Android Auto
Over-the-Air Radio Software Updates Fiat 500e – 100% Electric Vehicle
4G LTE Services Pacifica PHEV Minivan
Uconnect App Lithium-ion Battery Packs
Remote Vehicle Diagnostics Mobile Access App
September 2016 14NAFTA assembly plant loading update
• Shift in U.S. demand to UVs and trucks
expected to be permanent
• Continuation of low gas prices expected –
helping to support the shift
• Unmet demand for Wrangler, Ram pickups and
Grand Cherokee, key high margin products
• Future “white-space” products planned –
Jeep Grand Wagoneer and Jeep pickup truck
ACTION PLAN
• Realign installed capacity to produce more
pickups and Jeeps by end of 2017 to match
shift in demand
• Accomplish within existing plant
infrastructure – no new greenfield plants –
with hourly headcount stable or higher
• Solidify partnering opportunities to maintain
market presence in compact and mid-size
sedan segments
• Regulatory compliance planned through new
product technologies and architecture
efficiency actions
September 2016 15Capex spending
€B
Capex spending for 2017 and
8.8 8.5 – 9.0 2018 expected to be in line with
2016 levels
2.5
Plan includes spending to
support development of
advanced technologies and
meet regulatory compliance
requirements
6.3
Spending as a percentage of
net revenues expected to
continue to decline and fall
in-line with industry average
2015 2016E
Flexibility exists to reduce or
P&E/Tooling R&D Capitalized
retime capex and R&D
Capex spending as spending if industry outlook
% of net revenues 7.9% 7.6% - 8.0% deteriorates
Note: Information for 2015 has been re-presented to exclude Ferrari, consistent with Ferrari’s classification
as a discontinued operation for the year ended December 31, 2015
September 2016 16Regional margin update
INDUSTRY SALES NAFTA & U.S.
(total vehicle sales including medium/heavy trucks) NAFTA ADJUSTED EBIT MARGIN
Units (M) ~ 9%
7.5%
21.1 21.0 – 21.5
19.5-20.5 6.4%
19.9 Improved
portfolio mix
17.5 – 18.0 4.2%
17.8 Cost
16.8 16.0-17.0
reductions and
operational
efficiencies
2014 2015 2016E 2018E
Source: IHS & Group estimates NAFTA U.S. 2014 2015 H1 2016 2018 Plan
INDUSTRY SALES LATAM & BRAZIL LATAM ADJUSTED EBIT MARGIN
(passenger cars and LCVs)
Units (M) 5.2 > 7%
4.2
4.2 – 4.7
3.6 – 4.1
3.3%
Mix shift to
3.3 products
0.4% built in
2.5 2.6 – 3.0
2.0 – 2.5 Pernambuco
-1.4%
2014 2015 2016E 2018E 2014 2015 H1 2016 2018 Plan
Source: IHS & Group estimates LATAM Brazil
September 2016 17Regional margin update
INDUSTRY SALES APAC & CHINA Units (M)
(passenger cars and LCVs) APAC ADJUSTED EBIT MARGIN
Units (M)
> 10%
43.0 – 43.5 8.6%
39.2 39.5 – 40.0
38.1
26.7 – 27.2
24.4 2.8% Continued
24.0 – 24.5
23.2 transition to
1.1% localized Jeep
JV production
2014 2015 2016E 2018E
Source: IHS & Group estimates APAC China 2014 2015 H1 2016 2018 Plan
INDUSTRY SALES EMEA & EU28+EFTA EMEA ADJUSTED EBIT MARGIN
(passenger cars and LCVs)
Units (M)
> 4%
24.5-25.0
2.2%
22.7-23.2 Continued
22.0 product mix
21.4
16.7 -17.2 improvements
16.1 16.1 – 16.6 1.0% from Jeep and
14.7 Fiat 500 family
Maintain focus
on cost control
2014 2015 2016E 2018E -0.2%
2014 2015 H1 2016 2018 Plan
Source: IHS & Group estimates EMEA EU28+EFTA
September 2016 18Maserati and Components margin update
MASERATI
ADJUSTED EBIT MARGIN
~ 15%
9.9%
4.4% 4.8%
All-new Levante SUV
QP and Ghibli return
to normal margins
2014 2015 H1 2016 2018 Plan
COMPONENTS
ADJUSTED EBIT MARGIN
> 6%
4.0% 4.1%
3.3% Driven mainly by
Magneti Marelli
Mix shift to higher
profit lines
Leverage from higher
volumes
2014 2015 H1 2016 2018 Plan
September 2016 19Key actions to strengthen balance sheet
since May 2014 Business Plan
RESULTS
Net industrial debt
reduced by €3.8B
ACTIONS
2014 2015 2016
Removed FCA US
• FCA listed on
NYSE
• Issued $3.0B U.S.
unsecured notes
• Spin-off of remaining
80% of Ferrari
ring-fencing and certain
shareholding to FCA restrictive payment covenants
• Issued 100M • Redeemed $6.0B
shares of FCA U.S. senior
shareholders and
MCS holders
on FCA US Term Loans
common stock secured notes due
on NYSE 2019 and 2021 • Amended and
pre-paid $2.0B of
• Issued $2.875B
Mandatory
• Entered €5.0B
revolving credit facility
FCA US Term Loan Unified Group
Convertible • Removed FCA US financing platform
• Terminated $1.3B
Securities (MCS) ring-fencing
FCA US revolving
credit facility • Issued €1.25B senior
unsecured global
• Completed IPO of
medium term notes
10% of Ferrari shares Free flow of capital
within Group
Credit Ratings Raised
“B1” to “Ba3”
“BB-” to “BB”
September 2016 20Liquidity and debt update
€B Liquidity
With the elimination of ring-fencing and a more
26.2 efficient capital structure, plan to repay capital
24.6
3.2 ~ 20 market debt as it matures until targeted liquidity
3.4
level is reached
23.0 21.1
Manageable debt maturity profile
Dec 31 Dec 31 Target Net industrial cash position by 2018
2014 2015
Cash and marketable securities Undrawn committed revolving facilities Finance charges reduced from €2.4B in 2015
Note: Dec 31 2014 includes Ferrari to ~€1.3B in 2018
Figures may not add due to rounding
€B €B
Net Industrial Cash (Debt) Debt Maturity Profile
As of June 30, 2016
4.0 – 5.0
(face values)
Capital 13.8 2.4
Market 5.0
1.7 1.9
Bank + 11.2
EBITDA growth Other Debt
(5.0)Differentiated value proposition
UNIQUE AND BROAD-BASED BRAND PORTFOLIO
Broad-based
brand
portfolio
VOLUME GROWTH MARGIN EXPANSION STRENGTHENING
BALANCE SHEET
Unique and broad-based brand portfolio Continue to close NAFTA competitive $4B equity raised in Q4 2014 mitigates
targeting specific market segments margin gap Business Plan execution risk
Leverage Jeep's global appeal with Localized Jeep production in EMEA (Italy), €1.5B net industrial debt reduction from
increased segment coverage and LATAM (Brazil), APAC (China) Ferrari IPO and spin-off
Accelerating
geographic expansion in EMEA, APAC and
financial Continue to grow Maserati and launch Alfa Debt restructuring removed FCA US ring-
LATAM
Romeo worldwide fencing in H1 2016
trajectory Portfolio expansion into white-space
Repurpose Italian manufacturing footprint Significant reduction in targeted liquidity
opportunities
to luxury and premium vehicles with elimination of FCA US ring-fencing
Clear focus on APAC mainly through Jeep
NAFTA capacity realignment to produce Target to have investment grade credit
and Alfa Romeo brands
more SUVs and trucks in response to shift metrics by 2017
in market demand
Target to have positive net industrial cash
by end of 2018
MANAGEMENT TRACK RECORD OF VALUE ENHANCEMENT
Focused Fiat and Chrysler turnarounds – brand, product and operational revitalization
execution Integration of Fiat and Chrysler – leveraging synergies for global expansion
Spin-off of Fiat Industrial and Ferrari – unlocking value to shareholders
Decisive and flexible in reacting to market trends
Long-standing management team continuity
September 2016 22APPENDIX
Supplemental financial measures
FCA monitors its operations through the use of various FCA’s supplemental financial measures are defined as follows:
supplemental financial measures that may not be comparable Adjusted Earnings Before Interest and Taxes (“Adjusted
to other similarly titled measures of other companies. EBIT”) is computed as EBIT excluding: gains/(losses) on the
disposals of investments, restructuring, impairments, asset
Accordingly, investors and analysts should exercise write-offs and other unusual items that are considered rare
or discrete events that are infrequent in nature
appropriate caution in comparing these supplemental
financial measures to similarly titled financial measures Adjusted Net Profit is calculated as Net Profit excluding
after-tax impacts of the same items excluded from
reported by other companies. Group management believes Adjusted EBIT
these supplemental financial measures provide comparable Net Industrial Debt is computed as debt plus other
measures of its financial performance which then facilitate financial liabilities related to Industrial Activities less (i) cash
and cash equivalents, (ii) current securities, (iii) current
management’s ability to identify operational trends, as well as financial receivables from Group or jointly controlled
financial services entities and (iv) other financial assets.
make decisions regarding future spending, resource
Therefore, debt, cash and other financial assets/liabilities
allocations and other operational decisions. pertaining to Financial Services entities are excluded from
the computation of Net Industrial Debt
September 2016 24Reconciliation of EBIT to Adjusted EBIT and
Net profit to Adjusted net profit
€M
FY 2014 FY 2015
EBIT to Adjusted EBIT
EBIT – excluding Ferrari 2,834 2,625
Change in estimate for future recall campaign costs - 761
NHTSA Consent Order and Amendment - 144
Currency devaluations – LATAM 98 163
Tianjin (China) port explosion - 142
NAFTA capacity realignment - 834
Other impairments and asset write-offs 115 118
Other 315(1) 7
Total adjustments - excluding Ferrari 528 2,169
Adjusted EBIT - excluding Ferrari 3,362 4,794
Adjusted EBIT – Ferrari 404 473
Adjusted EBIT - including Ferrari 3,766 5,267
Adjusted net profit – continuing operations (i.e. excluding Ferrari)
Net profit from continuing operations 359 93
Adjustments (as above) – excluding Ferrari adjustments 528 2,169
Tax impact of adjustments (115) (554)
Total adjustments, net of tax – excluding Ferrari 413 1,615
Adjusted net profit – continuing operations 772 1,708
Adjusted net profit – including Ferrari
Net profit 632 377
Adjustments (as above) - including Ferrari adjustments 543 2,203
Tax impact on adjustments (115) (554)
Total adjustments, net of taxes 428 1,649
Adjusted net profit 1,060 2,026
(1) Primarily includes the €495M charge in Q1 ‘14 recognized in connection with the UAW Memorandum of Understanding entered into by FCA US in January 2014 partly
offset by the €223M gain on the re-measurement to fair value of the previously exercised options on ~10% of FCA US' equity interest in connection with FCA's acquisition of
the remaining 41.5% ownership interest in FCA US that was not previously owned
September 2016 25Reconciliation of EBIT to Adjusted EBIT and
Net profit to Adjusted net profit
€M
Six months ended
Jun 30 ’16
EBIT to Adjusted EBIT
EBIT 2,367
Recall campaigns - airbag inflators 414
NAFTA capacity realignment 156
Venezuela currency devaluation 19
Restructuring costs 67
Gains on disposal of investments (5)
Other (11)
Total adjustments 640
Adjusted EBIT 3,007
Net profit to Adjusted net profit
Net profit 799
Adjustments (as above) 640
Tax impact on adjustments (202)
Total adjustments, net of taxes 438
Adjusted net profit 1,237
September 2016 26Reconciliation of Net industrial debt to Debt
€M
Dec 31 ’14 1 Dec 31 ’15 1 Jun 30 ‘16
Net industrial debt - including Ferrari 6,012
Effect of Jan 3 ‘16 Ferrari spin-off (963)
Net industrial debt 7,654 5,049 5,474
Net financial services debt 3,195 1,499 1,689
Net debt 10,849 6,548 7,163
Intercompany financial receivables/(payables), net — (39) —
Current financial receivables from jointly-controlled
58 16 50
financial services companies
Other financial assets/(liabilities), net (233) 117 (397)
Current securities 210 482 414
Cash and cash equivalents 22,840 20,662 18,144
Debt 33,724 27,786 25,374
(1) The assets and liabilities of Ferrari have been classified as Assets held for distribution and Liabilities held for distribution within the Consolidated
Statement of Financial Position at December 31, 2015 and are not included in the figures presented above except as specifically noted. The assets and
liabilities of Ferrari are included within the balances presented at December 31, 2014.
September 2016 27June 7, 2016 28
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