Chrysler 2000 Annual Report Download - page 62

Report on Operations – Commercial Vehicles
Irisbus continued to invest in product innovation, placing
particular emphasis on the development of the Civis, a new
mass transit vehicle with an electric or hybrid propulsion
system.
Capital expenditures in 2000 were earmarked for the
completion of a factory in Brazil, where a joint venture with
Fiat Auto will manufacture vehicles of the Daily and Ducato
lines, and for the production of Iveco engines at Sete Lagoas,
in the Brazilian state of Minas Gerais. These facilities were
inaugurated in September 2000.
Substantial resources were devoted to expanding the pool of
leased vehicles. Of the total investment of 306 million euros,
277 million euros were allocated to the fleet operated by the
Fraikin Group. For the year as a whole, capital expenditures rose
to 656 million euros, compared with 359 million euros in 1999.
RESULTS FOR THE YEAR
Iveco’s net revenues totaled 8,611 million euros in 2000, or
16.6% more than the 7,387 million euros reported in 1999.
When the data are restated on a comparable consolidation
basis, the increase amounts to 9%.
Operating income increased to 489 million euros, compared
with 311 million euros in 1999. At the same time, the return
on sales improved by 1.5 percentage points, rising from 4.2%
to 5.7%. This positive performance is the result of higher unit
sales and a reduction in overhead made possible by gains in
operating efficiency. It also reflects the inclusion of the Fraikin
Group in the scope of consolidation and the contribution of a
nonrecurring gain of 88 million euros on the sale of real estate
in connection with the divestiture of industrial facilities that
were no longer needed for the Sector’s manufacturing
operations.
Consolidated net income came to 147 million euros (180
million euros in 1999), after depreciation and amortization of
423 million euros (253 million euros in 1999) and research and
development outlays of 227 million euros (215 million euros in
1999). The Sector’s interest in net income came to 146 million
euros, down from 163 million euros in 1999.
The decline in net income reported in 2000 was due to
the writedown of the carrying value of investments in certain
subsidiaries and associated companies and to an increase
in financial expenses. Toward the end of the year, Iveco also
incurred extraordinary expenses due to the interruption in
the supply of essential components caused by the flood that
occurred in Northern Italy during the second half of October.
In 2000, cash flow increased to 569 million euros, or 136
million euros more than in 1999.
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In recent years, Iveco has accelerated the pace of its
international expansion, establishing a steadily growing
presence in the emerging markets of South America, Eastern
Europe and Asia.
Iveco’s growth strategy is based primarily on the renewal
of its product lines and the introduction of new services.
In addition, Iveco is devoting increasing attention to strengthening
its position in the diesel engine market, where it ranks among the
top producers in the world.
Revenues by business unit
Light commercial vehicles
Intermediate commercial vehicles
Heavy-load commercial vehicles
Buses/Special vehicles
Engines
Services
7%
11%
14%
13%
29%
26%
Iveco worldwide
Rest Rest of
Italy of Europe the world Total
Production facilities 10 22 8 40
R&D centers 13 15 2 30
Dealers 80 330 202 612