Chrysler 2005 Annual Report Download - page 6

5
Letter from the Chairman and the Chief Executive Officer
Though much was done in 2005 to set the Company on course
towards a real, lasting rebirth of our Group, the process is far from
over and much remains to be done. Nonetheless, today’s Fiat is a
much different company from what it was just a year ago.
The Group improved all key financial indicators. Our cash position –
about 7 billion euros at 2005 year end – is strong.
The financial markets are showing increased confidence in our
prospects, as demonstrated by the steady appreciation of the Fiat
share price. We have nearly completed the process of making our
Internal Control System fully Sarbanes-Oxley compliant, a move
that will further enhance confidence in the Group at the
international level.
The Fiat weare talking about is a Group with a reinvigorated
managerial structure, a leaner organization, a solid financial structure
and stronger market positions thanks to new products. This new Fiat
can achieve new, challenging targets in 2006.
At Group level, we aim to deliver positive cash flow from operations,
atrading profit between 1.6 and 1.8 billion euros, and net income
of about 700 million euros.
While we do not expect market conditions for our operating Sectors
to change materially this year, we have set high trading margin targets
(trading profit as a percentage of revenues) for all of them: 7% to
7.5% at CNH, 5.5% to 6% at Iveco, and 3.5% to 4% in Components
and Production Systems.
The Automobile Sector should also turn in a positive performance, with
atrading margin of 0.5% to 1%. This result will be supported by the
full-year contribution of new models already rolled out. These will be
joined in coming months by other new models, as we implement our
aggressive product renewal plan calling for the launch of 20 new cars
and the restyling of 23 current models between 2005 and 2008.
We made a clean break with the past, while respecting all
commitments made to stakeholders. We are clearly within reach
of recovering our position as a competitive automotive Group.
This is why we are keeping up the pressure that has enabled us to
get this far, demanding much from ourselves and from all the men
and women of the Fiat community. We have no intention
of lessening the momentum that has allowed Fiat to generate a series
of steady improvements, quarter after quarter, throughout 2005.
Wewill remain focused on reducing costs in non-essential areas,
while continuing to invest in innovation. We will complement our
advanced technological resources with better commercial
organization and more efficient services.
Finally, wewill continue to seek new international opportunities,
implementing our strategy of targeted alliances with key partners
who will help us reduce capital commitments, and share investments
and risks.
It is for all these reasons that wefeel confident about our future.
Turin, February 28, 2006
Luca Cordero di Montezemolo
Chairman
Sergio Marchionne
Chief Executive Officer