Chrysler 2013 Annual Report Download - page 114

113
Report on
Operations
Outlook
As already announced and now increasingly relevant following the acquisition of the minority stake in Chrysler previously held by the VEBA
Trust, the Group will be presenting an updated business plan in early May 2014 that will give increased visibility of the Group’s strategic direction
and execution priorities. Notwithstanding that process, the Group indicates the following guidance for 2014:
Revenues: ~€93 billion, representing a 7% increase over reported revenues for 2013. It is expected that the increase will be primarily
driven by commercial activities in NAFTA where, as illustrated in the financial results presentation given on 29 January 2014, the market is
expected to register continued growth, albeit at a lower rate than for prior years, and where the Group expects revenue growth as sales of
new models introduced over the past 12 months gain increased momentum, mainly the Jeep Cherokee and also the new Chrysler 200,
which will be available in the second quarter of 2014. The year-over-year revenue contribution from APAC is also expected to be higher in
2014, driven by both increased market demand and penetration in the Group’s key markets in the region, particularly China and Australia. For
EMEA, the Group’s volumes and revenues are expected to be substantially in line with 2013, primarily due to the industry outlook that overall
demand will remain flat and that competitive pricing pressures, particularly in the mass-market segments, will continue to be a key factor.
In Latin America, it is expected that overall car demand will remain at 2013 levels, with the Group expecting to maintain its market position
substantially unchanged despite increased competition. The Group’s luxury brands are also expected to contribute to revenue growth in
2014 on the strength of volume growth for new models launched in 2013, particularly for Maserati.
Trading profit: ~€3.6 to €4.0 billion.
Net income: ~€0.6 to €0.8 billion, with EPS to improve from ~€0.10 (ex-unusuals) to ~€0.44-€0.60. Includes increased deferred tax
charge of ~€0.5 billion due to the recognition of net deferred tax assets at year-end 2013 related to Chrysler.
The net industrial debt target for year-end 2014 is between €9.8 and €10.3 billion. Excluding disbursements for the purchase of the VEBA
interest in Chrysler, totaling €2.7 billion and the €0.3 billion negative effect from the consolidation of the debt related to joint operations due
to the application of the new accounting standard IFRS 11(1) cash used in investing activities for the period is expected to exceed cash from
operating activities(2) in a range between €0.1 and €0.6 billion. The targeted increase in EBITDA reflects the expectation for higher trading
profit together with an increase in depreciation and amortization. Working capital is expected to generate positive cash flow for the period,
although below the 2013 level. The year-over-year comparison reflects an expected increase in export activity, resulting in higher finished
inventories, and exceptional seasonality in 2013, which resulted in higher sales volumes and production levels for Chrysler in the fourth
quarter, primarily relating to the launch of the new Jeep Cherokee.
(1) See Notes to the Consolidated Financial Statement – “New standards and interpretations not yet effective”.
(2) Cash from operating activities consists of EBITDA less interest and cash taxes expected for the year in addition to changes in working capital and provisions.