Chrysler 1999 Annual Report Download - page 46

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45
Report on Operations – Components
GROWTH STRATEGIES
1999 was a year of intense activity for Magneti Marelli, as
it carried out important transactions in pursuit of a strategy
focused on selected business segments and on lengthening
the value chain. In particular:
❚Together with Bosch, it established a 50-50 joint venture
in the field of lighting systems whose mission is to become
the leading producer of these systems in the world.
❚It purchased Fiat Auto’s Suspension Systems operations.
❚It entered into an agreement with Textron Automation
Company, a U.S. corporation, calling for the development
and production of integrated dashboard modules.
❚Working with Mahle, its partner in this venture, it completed
the reorganization of the Cofap operations in Brazil.
❚In December, it began the process of executing
transactions which, in the course of 2000, will result in the
disposal of the Lubricants Division and the acquisition of
Seima, a manufacturer of lighting assemblies for automotive
applications.
RESULTS FOR THE YEAR
Owing to the extraordinary transactions discussed above,
the Sector’s scope of consolidation changed drastically in
1999, reflecting the inclusion of the activities acquired in 1998
(Viasat, Midas) and of the Suspension Systems operations, as
well as the deconsolidation of the divested businesses (Rotary
Devices, Fueling Systems and Piston Rings).
1999 ended with revenues of 4,062 million euros, or 7.1%
more than in 1998.
Operating income increased to 108 million euros (2.7% of
revenues), compared with 56 million euros (1.5% of revenues)
in 1998, as the successful implementation of efficiency
programs produced a substantial reduction in overhead. It
also includes gains on the sale of surplus real estate assets.
Depreciation and amortization totaled 203 million euros (233
million euros in 1998). Research and development costs
amounted to 185 million euros, or 10 million euros less than
in 1998.
Net income was up strongly, rising from 21 million in 1998 to
107 million euros in 1999. The Sector’s interest in net income
totaled 105 million euros (26 million euros in 1998) and cash
flow increased to 310 million euros (254 million euros in 1998).
The efforts made during the year helped Magneti Marelli make
significant progress toward the goal of creating value.
COMPONENTS — MAGNETI MARELLI
Highlights
(in millions of euros) 1999 1998 1997
Net revenues 4,062 3,793 3,451
Operating income 108 56 99
As a % of revenues 2.7 1.5 2.9
Income before minority interest 107 21 78
Cash flow 310 254 271
Capital expenditures 209 222 207
Research and development 185 195 167
Net invested capital 1,289 1,270 991
Number of employees 25,613 29,398 24,352