Chrysler 1999 Annual Report Download - page 25

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represents a gain of 2.3% over the previous year, reflecting
the appreciation of the U.S. dollar versus the single
European currency.
Stated in euros, sales were down about 5.5% on a
comparable consolidation basis. The decrease is due
mainly to lower unit sales, particularly in North America
where CNH was penalized by an unfavorable sales mix.
The contraction in sales of agricultural equipment was
offset in part by strong sales of construction equipment.
Had Case’s sales been consolidated for the full year on
aproforma basis, the Sector’s revenues would have
increased to about 10,000 million euros.
❚The other industrial Sectors had combined revenues
of 9,173 million euros, compared with 7,551 million euros
in 1998. Changes in the scope of consolidation account
for most of this 21.5% increase.
The best gains were recorded by Teksid, where revenues
rose to 1,682 million euros (+44.4%, but -5.2% on a
comparable consolidation basis); Magneti Marelli, which
posted revenues of 4,062 million euros (+7.1%, but
practically unchanged on a comparable basis); and
Comau/Pico, which reported revenues of 1,693 million
euros (+100.8%, but -5.5% on a comparable consolidation
basis).
The performance of the Service Sectors is reviewed below:
❚Toro Assicurazioni wrote premiums totaling 3,922 million
euros, or 32.5% more than the 2,959 million euros reported
in 1998. Strong sales of life insurance accounted for most
of the increase.
❚Itedi had revenues of 413 million euros. The sale of Satiz,
a company providing publishing activities, is the main
reason for this 5.5% decline.
Gross operating result
At 7,318 million euros, the gross operating result was about
the same as in the previous fiscal year (7,249 million euros),
but its relative amount to revenues declined from 15.8% in
1998 to 15.2% in 1999. For the Industrial Activities alone,
the gross operating result was equivalent to 16.9% of sales
in 1998 and 16.4% in 1999, mainly as a result of extremely
keen price competition and the continuing crisis in the
Mercosur countries.
Overhead
Overhead came to 5,084 million euros in 1999 (+1.1% over
1998), equivalent to 10.6% of revenues (11% in 1998).
The programs implemented under the Nova Project to
reengineer the Group’s business support activities and
simplify its organization were major factors in reducing the
ratio of overhead to revenues. Cost savings exceeded 500
million euros (an 11.8% reduction), well ahead of the 1999 target.
Research and development outlays
Research and development outlays, which were charged
in full to income, totaled 1,406 million euros, or 11.2% more
than in 1998. This increase demonstrates the Group’s ongoing
commitment to innovation and technological excellence.
Operating Income
Operating income before extraordinary, financial and tax
components totaled 788 million euros in 1999, or 42 million
euros more than in 1998. When measured separately from
the Group’s insurance operations, which are characterized by
a structurally negative operating performance, the return on
sales of the industrial activities was 1.9% (2.2% in 1998).
1999 1998
(in millions of euros) Revenues Revenues % change
Automobiles (Fiat Auto) 24,101 24,859 (3.0%)
Commercial Vehicles (Iveco) 7,387 6,649 11.1%
Agricultural and Construction Equipment(CNH Global) 5,2465,127 2.3%
Metallurgical Products (Teksid) 1,682 1,165 44.4%
Components (Magneti Marelli) 4,062 3,793 7.1%
Production Systems (Comau/Pico) 1,693 843 100.8%
Aviation (FiatAvio) 1,361 1,361 –
Rolling Stock and Railway Systems (Fiat Ferroviaria) 375 389 (3.6%)
Publishing and Communications (Itedi) 413 437 (5.5%)
Insurance (Toro Assicurazioni) 3,922 2,959 32.5%
Miscellaneous and eliminations (2,119) (1,813) 16.9%
Total for the Group 48,123 45,769 5.1%