Chrysler 2001 Annual Report Download - page 28
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28
FINANCIAL POSITION AND OPERATING RESULTS
OF THE FIAT GROUP
Introduction
During 2001, the structure of the Fiat Group underwent major
changes that had a significant impact on the scope of
consolidation with respect to the previous year:
❚Starting in fiscal 2001, the results of Business Solutions,
the Sector that offers services to companies, are separately
shown in the breakdown of Group Operating Sectors. The
results of the companies that are now grouped together
under Business Solutions were previously reported under
“Miscellaneous Companies.”
❚Effective January 1, 2001, Magneti Marelli deconsolidated the
Climate Control Division following its sale to the Denso Group.
❚The remaining 49% of Alstom Ferroviaria S.p.A. was sold
at the end of March 2001. Effective August 1, 2000,
the Rolling Stock and Railway Systems Sector had been
deconsolidated following sale of the majority stake (51%)
in Fiat Ferroviaria to the Alstom Group of France.
❚In April 2001, Toro Assicurazioni acquired the entire capital
stock of Lloyd Italico Assicurazioni S.p.A. and Lloyd Italico
Vita S.p.A., and fully consolidated these two companies.
During the year, the Sector also consolidated Augusta
Assicurazioni S.p.A., which was previously reported under
“Miscellaneous Companies.”
❚As a result of the strategic agreement reached in June between
Business Solutions and IBM, Global Value was created. This
joint venture, 50% owned by Business Solutions and 50% by
IBM Italia, operates in the sector of high-value Information
Technology services for companies. Business Solutions
contributed the operations of ITS and GSA to Global Value,
which were thus deconsolidated as from the end of June.
❚On June 30, 2001, the activities contributed to Fiat-GM
Powertrain B.V., the 50-50 joint venture with General Motors
operating in the powertrain and transmissions sector,
were deconsolidated following completion of their transfer.
❚In the second half of the year, the Fiat Group and other
industrial and financial partners formed Italenergia, a
company that acquired control of Montedison and Edison
through tender offers. This investment, representing a
38.6% stake in Italenergia, was valued according to the
equity method at the end of the year.
❚As part of the transaction leading to the formation of
Italenergia, Fiat sold Fenice S.p.A. to Electricité de France,
with Fenice S.p.A. consequently being deconsolidated.
To enhance the value of the various businesses and thus
improve the possibility of alliances and/or sales, the activities
of Magneti Marelli have been reorganized. Effective July 1,
2001, it was broken up into five companies: Magneti Marelli
Sistemi Elettronici S.p.A., Magneti Marelli Powertrain S.p.A.,
Magneti Marelli Aftermarket S.p.A., Magneti Marelli Services
S.p.A., and Magneti Marelli Holding S.p.A. At the same time,
Magneti Marelli Services S.p.A., which controls the activities
of Midas, was transferred from the Components Sector to
“Miscellaneous Companies.”
Operating Performance
The worldwide economic slowdown, which worsened in
the second half of the year, negatively affected the Group’s
operating performance, as it confronted declines in some of
its most important markets and the aggressive commercial
policies adopted by carmakers to compensate for lower
demand.
Following is a summary of the main components that
influenced the Group’s operating performance in 2001.
For a more detailed analysis, see the operating reports for
the individual Sectors of activity.
In order to provide a better understanding of the Group’s
performance, the statement of operations has been
reclassified by destination in the table below, providing
a breakdown between Industrial and Insurance Activities.
Net Revenues
Fiat Group net revenues, including changes in contract work
in progress, totaled 58,006 million euros in 2001, slightly
higher (+0.8%) than the previous year.
Revenues from Industrial Activities alone totaled 52,610 million
euros, down 0.9% from 2000 due to the general economic
slowdown in the automotive sector, while Insurance Activities
revenues totaled 5,491 million euros, up by 20.9%, partly as
the result of acquisitions.
Following is an analysis of revenues by operating Sector:
❚Fiat Auto reported revenues of 24,440 million euros for
2001 (25,361 million euros in 2000, -3.6%), against sales
of 2,096,000 units (-10.8% compared with 2000).
The decrease in revenues was less than the contraction in
sales volumes, thanks to a higher average level of revenues
per unit, the increasing contribution of financial and service
activities, and the proceeds from sale of spare parts
inventories to the joint venture with DHL Worldwide Express
and other financial partners.
Analysis of the financial position and
operating results of the Fiat Group and Fiat S.p.A.