Chrysler 1999 Annual Report Download - page 45

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44
GROWTH STRATEGIES
During 1999, Teksid continued to pursue its growth strategy
by carrying out transactions designed to strengthen its
leadership position in the global market and restructure
its European manufacturing operations. In particular:
❚With a transaction involving a capital increase reserved for
the Renault Group, it completed the purchase of Renault’s
foundry activities. Following this transaction, Fiat S.p.A. will
continue to hold a controlling interest of 66.5% in Teksid,
while the french Company will own the remaining 33.5%.
❚In the United States, it established Teksid Aluminum
Components (100% Teksid) and laid the groundwork
for an expansion of manufacturing capacity at Meridian
Technologies Inc. (51% Teksid, 49% Norsk Hydro
Produksjons).
❚In China, construction continued at the Hua Dong factory
(cast iron crankcases), while the activities of two other joint
ventures (cast iron and aluminum components) progressed
on schedule.
❚It started the process of integrating into its organization
the former Renault facilities with the goal of increasing
the product specialization of the individual manufacturing
locations. Accordingly, it created two centers of excellence
in Italy: Crescentino for cast iron and Carmagnola for
aluminum. The output of the Carmagnola cast-iron production
unit, which will be phased out in July 2001, will be picked
up by other Sector locations in Italy or abroad.
RESULTS FOR THE YEAR
In 1999, the Sector booked revenues of 1,682 million euros,
for a gain of more than 44% over 1998. Changes in the
scope of consolidation are the main reasons for this increase.
Sales were up 28% to 729 million euros at the Cast Iron
Division and 45% to 718 million euros at the Aluminum
Division. The Magnesium Division reported revenues of
230 million euros.
Operating income reached 76 million euros (4.5% of
revenues), up from 42 million euros (3.6% of revenues) in the
previous fiscal year. This gains reflects changes in the scope
of consolidation and the beneficial impact of the sustained
efforts made to improve operating efficiency, offset in part
by the consequences of an unfavorable product mix.
Net income amounted to 26 million euros, up from 4 million
euros in 1998. The Sector’s interest in net income rose to
24 million euros, compared with a loss of 4.4 million euros
in the previous fiscal year.
Cash flow totaled 123 million euros (74 million euros in 1998).
The return on average net invested capital was about 8%,
short of the level required to create value.
METALLURGICAL PRODUCTS — TEKSID
Highlights
(in millions of euros) 1999 1998 1997
Net revenues 1,682 1,165 1,190
Operating income 76 42 54
As a % of revenues 4.5 3.6 4.5
Income before minority interest 26 4 20
Cash flow 123 74 98
Capital expenditures 182 73 78
Research and development 23 16 15
Net invested capital 793 504 521
Number of employees 14,522 10,981 11,730