Chrysler 2002 Annual Report Download - page 56

54 Report on Operations
(in millions of euros) 2002 2001 2000
Net revenues 3,288 4,073 4,451
Operating result (16)(74) 55
EBIT (348)208 292
Net result before minority interest (435)82 139
Cash flow (245)289 353
Capital expenditures 148 240 231
Research and development 162 227 213
Net invested capital 524 1,073 1,131
Number of employees 20,716 24,228 25,975
Highlights
Revenues by geographical
region of destination
050% 100%
Italy Rest of Europe Rest of the world
Employees by geographical
region
Operating performance
In 2002, the reference market was characterized by
general disappointed expectations for the improvement
of the macroeconomic environment, accompanied by the
continuation and, in certain cases, worsening of trends that
had first appeared in late 2001.
This situation was aggravated by weakening demand on
the part of OE manufacturers, especially in Europe and South
America, which had a negative impact on production volumes.
The shareholder’s strategy, in consideration of the above factors,
was therefore aimed at portfolio focusing and completing the
sector’s corporate restructuring.
In this extremely challenging environment, the Sector continued
its successful commercial and manufacturing activities and
moved farther along on its technological excellence path,
which has always characterized its actions.
This is attested by the new customer assignments (PSA,
Daimler-Chrysler, BMW, Volkswagen, Fiat/GM), the completion
of the phases for the launch of new products (new
generation Diesel Common Rail System and variable light
beam headlights), as well as the renewed successes in
sports competitions (Formula 1, Rally and Superbike).
Results for the year
In 2002, the consolidated net revenues of Magneti Marelli
amounted to 3,288 million euros: on a comparable
consolidation and foreign exchange basis, the figure
declined by 5.9% from 2001, due to the production
slowdowns mentioned above.
The operating loss came to 16 million euros (compared to
a20-million-euro loss in 2001, on a comparable basis): the
negative impact of the severe contraction in volumes was more
than offset by the efficiency gains achieved in the manufacturing
processes, as well as by the favorable trend in the cost of
materials.
Depreciation and amortization totaled 190 million euros (190
million euros in 2001 on a comparable basis) while research and
development outlays amounted to 162 million euros (170 million
euros in 2001 on a comparable basis).
The performance of the markets and the consequent impact on
production capacity in the various businesses made it necessary
to implement an important industrial plan whose costs
significantly impacted the net result.
In particular, 320 million euros were recorded during the year
for costs and provisions connected to restructuring plans and
consequent writedowns of assets.
The non-operating entries described above are the reason
for the net loss for the year, which came to 435 million euros,
compared to the net income of 82 million euros posted in 2001,
which, however, benefited from the 355 million euros in capital
gains realized by the Sector from the sale of the Climate
Control Division.
The Sector’s interest in the net loss was 432 million euros,
as opposed to an interest in net income of 84 million euro
ayear earlier.
Cash flow was negative for 245 million euros, due to the severe
impact of the non-operating costs described above.
Components — Magneti Marelli