MESSAGE FROM THE CHAIRMAN AND THE CEO
2019 was a pivotal year for our company.
''Not only did we achieve strong financial results, but we also took decisive steps to lay the groundwork for future growth and profitability as well as to ensure that our company has the scale, expertise and resources to effectively navigate through the dramatic transformation our industry is undergoing.
We want to thank everyone in the FCA organization for their on-going contributions during such an important year. Their relentless hard work and professionalism is crucial to our continued success.
Worldwide combined shipments totaled 4.4 million units and net revenues came in at €108.2 billion.
We achieved Adjusted EBIT for the year of €6.7 billion, with a margin of 6.2 percent.
Across our core business operations by region, North America posted record results for the 5th consecutive year, with Adjusted EBIT at €6.7 billion and margin at a new high of 9.1 percent. In the United States, the Ram brand reached a new sales record and, for the first time, ranked as the number two brand in the large pickup truck segment.
We also delivered another year of strong results in LATAM, with Adjusted EBIT up 40 percent to €501 million and margin increasing by 150 basis points to 5.9 percent. In Brazil, we regained overall market leadership and finished the year in a leading position in key segments such as SUVs, pickups and light commercial vehicles.
Results in APAC significantly improved, despite continued market challenges. Actions to improve vehicle mix and net pricing along with cost savings and restructuring actions significantly reduced our loss compared to prior year.
In EMEA, performance was adversely affected by several factors, including continued commercial challenges and the age of our product portfolio in the region. Lower volumes and higher incentives, together with increased compliance and product costs, led to a decrease in Adjusted EBIT to near break-even. However, during 2019, we took actions to invest in EMEA and improve operating performance. We streamlined headcount and further reduced our cost-base in the region. We also continued our focus on moving away from low-margin sales channels. Finally, we announced significant investments in key new products, which will go a long way towards renewing our product portfolio and improving our competitiveness.
Maserati results - with an Adjusted EBIT loss of €199 million - reflected the impact of important actions we took to start to re-position the business. During the year, a completely new management team was installed, with key talent recruited both internally and externally. We significantly reduced dealer stock and committed to key investments to renew and expand Maserati’s product offering, with a regular cadence of new product launches, including a significant level of electrified powertrains, through 2024. These actions give us a high level of confidence in the future trajectory of the Maserati brand.
The above operating results led the company to achieve a full-year Adjusted net profit of €4.3 billion and net profit from continuing operations of €2.7 billion. These results also drove Industrial Free Cash Flows of €2.1 billion.
On the basis of these strong results, the Board of Directors recommended the payment of an ordinary dividend of €1.1 billion to our shareholders, as previously indicated.
Delivering such strong results is important to support the substantial investments we are making in future products, technologies and facilities.
During 2019 we committed to key projects that are fundamental to our future, and will further strengthen our business in the years ahead.
• In the United States, we are investing $4.5 billion to expand the capacity of our facilities in Michigan and build a new state-of-the-art plant in Detroit that will open later this year. It’s a commitment that will add 6,500 new jobs in Southeast Michigan.
• In Italy, we are executing an ambitious €5 billion plan, centered around electrification, with key new products and a new Battery Hub located inside our historic Mirafiori complex in Turin, that will assemble batteries for our growing line-up of electric models.
• In Brazil, we have started a significant new investment cycle of R$16 billion (approx. €3.4 billion), which will see a renewed product line-up for the Fiat and Jeep brands and add a new state-of-the-art flex-fuel engine plant, which will become the largest powertrain hub in Latin America.
• For Maserati, we are executing a major product-led transformation plan including the launch of new whitespace products as well as several full battery electric and hybridized models.
Undoubtedly, 2019 was another historic year in the evolution of our company because of the agreement we reached with PSA for a 50/50 merger that will create the world’s third largest automaker by revenues and a new global OEM equipped to meet the mobility challenges that lie ahead. We expect to close the transaction with PSA by the end of this year or in early 2021. In the meantime, we will maintain our focus on the flawless delivery of our commitments.
Among the other highlights of the year:
• We finalized the sale of Magneti Marelli, which not only significantly strengthened our balance sheet, but also allowed the Group to distribute a €2.0 billion extraordinary dividend to our shareholders.
• We strengthened our network of partnerships to develop e-mobility solutions for electric vehicles by executing agreements with Enel X and Engie Group in Europe, for both home charging stations and public charging networks.
• With a focus on improving our efficiency and speed to market, we streamlined our Global Product Development team by bringing together vehicle and powertrain engineering under a single, global organization.
• We entered into an agreement to sell our cast iron components business operated through Teksid; this is another important step in the implementation of our supplier business plan and will allow the business to be further developed by a leading player in the cast iron industry.
We also strengthened our product offering with several key launches, including:
• The all-new Ram Heavy Duty, which was awarded Motor Trend’s 2020 Truck of the Year, on the back of the Ram Light Duty winning the previous edition of the award.
• The all-new Jeep Gladiator, which was named 2020 North American Truck of the Year and marked the brand’s return to the pickup truck market.
• The all-new Jeep Commander PHEV, the first electrified vehicle of the global Jeep family, which also represented our entry into China’s rapidly-growing New Energy Vehicle market.
We remain committed to continue to develop our social and environmental responsibilities.
In 2019, we further reduced our environmental footprint on a per-vehicle-produced basis at our plants around the world: compared with 2010, we accomplished a nearly 40 percent reduction in water withdrawal, a 27 percent reduction in our carbon footprint and a 64 percent reduction in waste generated.
We strive to enrich the vitality of the communities where we live and work by creating jobs, giving back through employee volunteering and providing financial support through our charitable initiatives. During 2019, Group employees around the world volunteered thousands of hours in support of a wide range of social projects.
We also aim to offer our employees an inclusive work environment, where everyone feels respected and valued. We are proud that our efforts were recognized by organizations such as the Refinitiv Diversity & Inclusion Index in which FCA was among the global “Top 25 Most Diverse & Inclusive Companies” in the workplace.
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It was also an important year for initiatives with significant positive impact on society.
2019 marked the 15th anniversary of our Árvore da Vida project in Brazil, which provides educational support for young people in Jardim Teresópolis, one of the most impoverished districts in the metropolitan area around the Group’s plant in Betim. The program aims to empower families through education and, to date, has helped more than 20,000 people in the local area.
As part of our sustainability focus, we also provided significant support through the FCA Foundation for an ambitious and innovative project supporting scientific education and outreach to be launched by CERN in Geneva with the Science Gateway, which is expected to host more than 300,000 people every year. In such an occasion, the Aula Magna will be dedicated to our late CEO, Sergio Marchionne. Students from primary to high-school age, and their families, will be able to experience the world of physics and science through interaction and experimentation.
In conclusion, 2019 saw the Group continue to build on its rich legacy, while at the same time laying the groundwork for further transformation and the beginning of another momentous chapter.
We are committed to ensuring we remain a leading global car company and to building a sustainable business for the benefit of all our stakeholders.
We will continue to be guided by the same values that define our Group by linking growth and respect, economic success and social responsibility, industrial development and environmental awareness.
We would like to recognize and thank all of our shareholders and stakeholders for your trust, support and engagement.
February 25, 2020
/s/ /s/
John Elkann Mike Manley
Chairman Chief Executive Officer
