Chrysler 2001 Annual Report Download - page 12
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position. The model renewal process was completed this past
January with the introduction of the Stralis. The consensus
among industry analysts is that this innovative heavy-range
vehicle will help Iveco significantly expand its market share
in a segment where the leading producers are able to charge
premium prices for their products.
Iveco’s competitive position will also be enhanced by the
purchase this past January of a portion of the interest held
by Renault (50%) in the Irisbus joint venture.
Other Group Sectors
Among the other Sectors, Teksid and Comau were adversely
affected by weak demand from automotive customers
(especially in the United States). Comau was able to offset
this soft demand in part with healthy growth in its
maintenance services business. The performance of Magneti
Marelli was affected by a drop in unit sales and the impact of
a sharp price increase in the cost of electronic components
caused by an unfavorable euro/dollar exchange rate, which
could not be passed on fully to customers.
FiatAvio began to feel the impact of weak demand for air
travel and a reduction in the number of commercial space
launches. Nevertheless, revenues (+9.7%) and operating
income (reaching 186 million euros) improved further, for
a return on sales of 11.4%.
The Toro Assicurazioni Group further consolidated its position
on the Italian insurance market, posting an increase of 25%
in premiums earned (+14% without the contribution of Lloyd
Italico and Augusta Assicurazioni, which in the past was included
with Miscellaneous Companies). The life insurance operations
performed particularly well, with Roma Vita, a joint venture
with Banca di Roma, experiencing growth of 32%. The Sector
earned 68 million euros on an operating basis. Income before
taxes totaled 220 million euros, up sharply from the 163
million euros reported in 2000. This improvement was
achieved even though the carrying value of the Sector’s equity
portfolio had to be written down as a result of unfavorable
conditions in the financial markets.
Business Solutions reported an operating income of 73 million
euros, for a return on sales of 4%. The Sector’s revenues,
more than 40% of which were derived from non-captive
customers, reflect the contribution of Fiat Engineering, which
is being consolidated as of the third quarter of 2001, and the
elimination of Fenice, which was sold in connection with the
Italenergia transaction.
Ferrari was an outstanding performer among the other
companies of the Group. In addition to scoring resounding
successes on the racetrack, it posted sharply higher results, with
operating income rising from 46 million euros to 62 million euros.
FINANCIAL POSITION OF THE GROUP
At December 31, 2001, Group net debt had declined to about
6 billion euros, down from 6.5 billion euros at end of 2000.
This improvement, which was made possible by a sharp
reduction in working capital requirements, is significantly less
than had been anticipated at the beginning of 2001 due to a
virtual halt in divestiture negotiations caused by a significant
deterioration in the international economic environment during
the second half of the year.
The Group’s overall indebtedness, which totaled 33.4 billion
euros, compared with 33 billion euros at the end of 2000,
provides coverage for the following items:
❚about 4.1 billion euros in cash and cash equivalents (3.6
billion euros in 2000), including liquid assets held by the
insurance companies, and
❚financial receivables and leased assets related primarily to
the financing of automotive sales (23.3 billion euros in loans
at December 31, 2001, compared with 22.9 billion euros at
the end of 2000). The increase shown by this item in recent
years reflects not only the acquisition of Case Corporation,
with its sales financing operations, but also expansion into
this field by Fiat Auto and Iveco. This is consistent with the
Group’s strategy of growing its service businesses.
10
Iveco – Tector engine.