Chrysler 2002 Annual Report Download - page 57

Operating performance
In 2002, the performance of the Sector’s reference market was
characterized, especially during the second half of the year, by
reductions in the capital spending programs of US automotive
manufacturers.
In Europe, the situation remained substantially stable, but was
characterized by strong competition in terms of prices and
financial conditions.
In South America, the downward trend in capital spending
was exacerbated, both as a result of the continuing severe
crisis in Argentina and of the political and economic
uncertainties in other countries in that area.
Demand for production systems has been evolving toward
investments with lower unit value, oriented above all to a
rationalization of existing production capacity (greater flexibility
and modularity), given the economic environment.
In 2002, new orders for contract work totaled 1.8 billion euros,
up 2.5% over 2001 thanks mostly to the contracts booked in
North America (Bodywork Systems) and in Europe (Bodywork
and Painting Systems) which offset the fewer orders on both
markets for Mechanical Systems activities.
An analysis by region shows that 61% of orders were booked
in Europe, 35% in the NAFTA countries, while the remaining
4% was booked in Brazil and on new markets (South Africa
and China).
Fiat Group customers accounted for 17% of total orders
(21% in 2001) and outside carmakers for 83% (79% in 2001).
At December 31, 2002, the order portfolio for contract work
stood at 1,210 million euros, down from last year (1,473 million
euros at December 31, 2001) mainly due to the negative
conversion effect on the dollar denominated portion of the
portfolio, caused by the Euro’s appreciation, and to greater
progress in contract work.
The maintenance service operations (Comau Service) enjoyed
higher revenues in 2002 (about 9% over 2001), due both to
growth in the delivery of services to third parties and to greater
interchanges with other Comau divisions.
Results for the year
In 2002, the Sector had revenues of 2,320 million euros, up
4.6% over the previous year, as a result of the good recovery
in volumes for contract work in the NAFTA area after the crisis of
2001 and of the growth in maintenance services revenues, which
allowed to offset the drop in contract work in Europe and South
America.
The operating loss amounted to 101 million euros (-4.4% of
revenues) compared to an income of 60 million euros recorded
the previous year (+2.7% of revenues) essentially due to
considerable losses for extra costs recorded on an important
contract in Europe.
Research and development outlays totaled 17 million euros
(22 million euros in 2001), while amortization and depreciation
rose slightly to 64 million euros (63 million euros a year earlier).
Net loss for the year was 302 million euros. The performance
decline from the previous year (losses had amounted to 36
million euros in 2001) is due both to the drop in operating
profitability and to non-operating expenses incurred during
the year, amounting to 146 million euros, mainly deriving from
depreciation and amortization for about 82 million euros of
some fixed assets (mainly of the goodwill associated with the
former Pico), and from charges and provisions for restructuring,
amounting to about 23 million euros.
The Sector’s interest in the result was a net loss of 302 million
euros, compared to the loss of 37 million euros in 2001.
In 2002 cash flow (net income plus amortization and
depreciation) was negative for 238 million euros, whereas
in 2001 it had been positive for 27 million euros.
55 Report on Operations
Production Systems — Comau
(in millions of euros) 2002 2001 2000
Net revenues 2,320 2,218 2,440
Operating result (101)60 87
EBIT (247)30 77
Net result before minority interest (302)(36) 6
Cash flow (238)27 63
Capital expenditures 20 38 36
Research and development 17 22 20
Net invested capital 163 378 486
Number of employees 18,186 17,243 17,636
Highlights
050% 100%
Revenues by geographical
region of destination
Italy Rest of Europe Rest of the world
Employees by geographical
region