Chrysler 2003 Annual Report Download - page 59

58 Report on Operations
(in millions of euros) 2003 2002 2001
Net revenues 3,206 3,288 4,073
Operating result 32 (16) (74)
EBIT (*) (41)(348) 208
Net result before minority interest (90)(435) 82
Cash flow (net result +
depreciation and amortization) 83 (245) 289
Capital expenditures 148 148 240
Research and development 158 162 227
Net invested capital 540 524 1,073
Number of employees 19,879 20,716 24,228
(*) It includes non-operating income and expenses
Highlights
Revenues by geographical
region of destination
Employees by geographical
region
Italy Rest of Europe Rest of the world
0 50% 100%
Operating performance
In 2003 the production of cars and light commercial vehicles
increased by 1.2% over the previous year at the global level,
with production volumes reaching 57.8 million units.
Performance varied across countries and geographical areas.
The increase was mainly concentrated in the Asian countries
and Eastern Europe, with China and Turkey in particular
exceeding 2002 output levels by 30%. Output in the rest of
the world was adversely affected by the general fall-off in sales.
The Western European markets for cars and light commercial
vehicles registered an overall contraction of 1.4% (with 16.2
million vehicles manufactured). Most of the major European
countries saw their production levels decline, including Italy,
which registered a fall of 9.4%. The sole exception was Spain,
where output increased by 4.6%.
Last year saw a recovery in the activities of Magneti Marelli,
which, having completed the portfolio selection process it has
been conducting over the last few years, embarked on a new
phase of consolidation and business growth.
The priority guidelines include a strong customer focus in all
activities of the Sector and a firm emphasis on strengthening
the brand and leveraging the market position of products,
while at the same time re-affirming the company’s fundamental
unity.
Against this background, it is important to note that all the
business units booked a significant number of orders in 2003,
testifying to customers’ renewed confidence in Magneti
Marelli’s capacity for technological innovation.
Orders for direct injection systems, which are the new
frontier in engine control units, were particularly significant.
The most noteworthy new product lines include the AFS
lighting system, at its first application ever, and Flex Fuel
(a combined petrol and alcohol combustion system), again
developed in-house for the Fiat Auto, Ford and VW customers.
Results for the year
In 2003 Magneti Marelli posted consolidated net revenues
of 3,206 million euros; on a comparable consolidation and
exchange rate basis this represents an increase of 3.4% on the
previous year. This improvement, which was achieved despite
weak market conditions, is attributable to an increase in orders
booked by certain businesses, in particular the engine control
unit with the introduction of the diesel system, and the lighting
area thanks to new applications.
Operating income of 32 million euros (compared with an
operating loss of 16 million euros in 2002) reflects the cost
structure improvement measures implemented by the Sector
in all areas of activity.
Significant cost-cutting measures were adopted in the materials
and structures area. This made it possible, against a background
of weak volumes, to restore operating profitability.
Depreciation and amortization of 173 million euros (compared
with 190 million euros in 2002) and research and development
expenditures of 158 million euros (162 million euros in 2002)
amounted to 10% of revenues.
The net loss of 90 million euros (compared with a loss of 435
million euros in 2002 as a result of signification depreciation
and amortization of tangible and intangible assets) was in part
determined by provisions connected with restructuring plans
that have been launched.
Cash flow, which amounted to 83 million euros (-245 million
euros in 2002) continued to be affected by restructuring
charges.
Components — Magneti Marelli