Chrysler 2006 Annual Report Download - page 17

Components and Production Systems
The aggregate trading profit of the Components and
Production Systems Business Area, 348 million euros, was
10 million euros lower than in 2005 as the decrease recorded
The breakdown of trading profit by Business Area/Sector
is illustrated below.
Automobiles
The trading profit of the Automobiles Business Area improved
by 650 million euros, from a loss of 209 million euros in 2005
Report on Operations Financial Review of the Group 31Report on Operations Financial Review of the Group30
■Fiat Auto had a trading profit of 291 million euros in 2006,
a strong improvement (+572 million euros) from the trading
loss of 281 million euros of 2005. This change is mainly
attributable to higher sales volumes and the positive impact of
amore favourable product mix due to the new models. The
higher production volumes also permitted greater absorption
of fixed production costs. Cost-cutting measures continued in
2006 due to purchasing efficiencies and containment of
governance costs. Conversely, higher volumes were supported
by greater commitment to marketing and sales network
development.
■In 2006 Maserati had a trading loss of 33 million euros, a
significant improvement (+52 million euros) from the trading
loss of 85 million euros recorded in 2005, attributable to major
efficiency gains.
■Ferrari had a trading profit of 183 million euros in 2006,
up 26 million euros from the trading profit of 157 million euros
of 2005. The improvement is mainly attributable to an increase
in sales volumes and efficiency gains, which were partially
offset by higher research and development expenses.
Agricultural and Construction Equipment
In 2006, CNH - Case New Holland had a trading profit of 737
million euros, an increase of 39 million euros from the 698
million euros of 2005. Trading margin reached 7% (6.8% in
2005). Net of one time healthcare renegotiation benefits in
North America (25 million euros in 2006 and 83 million euros
in 2005), CNH trading profit would have increased by 97
million euros due to higher construction equipment volumes,
better pricing and production costs efficiency gains, partially
offset by a reduction in volumes of agricultural equipment.
Trucks and Commercial Vehicles
Iveco had a trading profit of 546 million euros, 6% of revenues,
asignificant improvement (+214 million euros) from the 332
million euros of 2005, when trading margin was 3.9%. The
increase is mainly attributable to higher sales volumes, better
pricing and efficiency gains on materials, production and
governance costs resulting from the streamlining program
undertaken in 2005.
■Fiat Powertrain Technologies had a trading profit of
168 million euros in 2006, against a trading profit of 109
million euros in 2005. The increase is mainly attributable to
purchasing and manufacturing efficiencies which more than
offset higher raw material prices, mainly aluminium and
mineral oils. A different scope of activities also positively
contributed to the improvement.
■Magneti Marelli posted a trading profit of 190 million
euros, 28 million euros higher than in 2005 (162 million euros).
The improvement stemmed from higher sales volumes,
streamlining of the cost base and efficiency gains which
more than offset price pressures.
■Teksid closed 2006 with a trading profit of 56 million euros.
The improvement from the trading profit of 45 million euros
of 2005 is due to efficiency gains.
■Comau’s trading loss was 66 million euros in 2006 with
respect to the trading profit of 42 million euros of 2005.
A particularly sharp decline in volumes and margins was
reported by the Body-welding operations in Europe, but
decreases were also reported by all other Business Areas,
except for the Service activities in the Mercosur area and
the Plastic Moulds operations in Europe.
Other Businesses
The trading loss reported by the Other Businesses totalled 121
million euros, an improvement of 58 million euros from 2005.
(in millions of euros) 2006 2005 Change
Services (Business Solutions) 37 35 2
Publishing and Communications (Itedi) 11 16 -5
Holding companies, Other companies and Eliminations (169) (230) 61
Total (121) (179) 58
to a profit of 441 million euros in 2006. This reflected Fiat Auto’s
performance, higher profits at Ferrari, and lower losses
at Maserati.
(in millions of euros) 2006 2005 Change
Fiat Auto 291 (281) 572
Maserati (33) (85) 52
Ferrari 183 157 26
Total 441 (209) 650
at Comau was not completely offset by improvements at the
other Sectors. Trading margin stood at 2.8%, versus 3.3% in
2005. Excluding Comau, trading profit would have increased
by 98 million euros with a trading margin of 3.7%.
(in millions of euros) 2006 2005 Change
Fiat Powertrain Technologies 168 109 59
Components (Magneti Marelli) 190 162 28
Metallurgical Products (Teksid) 56 45 11
Production Systems (Comau) (66) 42 -108
Total 348 358 -10
■Business Solutions had a trading profit of 37 million euros,
against a trading profit of 35 million euros in 2005. On a
comparable consolidation basis there would have been a
4 million euro increase due to cost efficiency gains.
■In 2006, Itedi had a trading profit of 11 million euros, versus
atrading profit of 16 million euros in 2005. The decrease is
attributable to higher costs for the launch of the new
newspaper in November 2006, and higher paper costs.