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05 May 2020

FCA: 2020 First Quarter Results

FCA: 2020 First Quarter Results

FCA reports first quarter results reflecting impacts from COVID-19, with Net loss from continuing operations of €1.7 billion, Adjusted net loss of €0.5 billion. Despite the significant impact of COVID-19, the Group delivered a positive Adjusted EBIT. Available liquidity at March 31, 2020 at €18.6 billion, further strengthened with additional €3.5 billion facility signed in April.

Fully prepared to restart production as conditions allow, with actions taken to protect our employees and support our communities, while managing liquidity and financial strength of the Group.

 

"Throughout this unprecedented adversity, FCA's first priority has been the health and safety of its employees and communities. The pandemic has had, and continues to have, a significant impact on our operations. With our experienced leadership team and dedicated employees, I have the utmost confidence in our ability to navigate through this crisis and emerge well positioned to grow and prosper on the other side."
- Mike Manley, CEO

 

COVID-19 pandemic had significant impact on Group results:

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Worldwide combined shipments (7) of 818 thousand units, down 21%, due to temporary suspension of production in all regions and disrupted global demand
Adjusted EBIT at € 0.1 billion; North America at € 0.5 billion, with 3.8% margin
Industrial free cash outflows of € 5.1 billion; with negative working capital impact of € 3.5 billion partially due to normal negative seasonality and exacerbated by the COVID-19 disruption. Capex at € 2.3 billion, up € 1.0 billion
• Adjusted results exclude pre-tax impairments of €0.6 billion and write-offs of deferred tax assets of €0.5 billion. Available Liquidity of €18.6 billion at March 31, 2020, which included €6.25 billion revolving credit facility, which was fully drawn down in April. In addition, liquidity further strengthened in April with a new €3.5 billion incremental bridge credit facility, which remains fully undrawn

 

As the severity of the COVID-19 epidemic became apparent, FCA leadership took quick and decisive actions to protect our employees and communities, as well as to safeguard our earnings power and liquidity. Among these steps were temporarily suspending production at all of our plants, implementing remote working where feasible and enhancing sanitation protocols for all facilities. In addition, the Group delayed non-essential spending, significantly reduced our marketing spend and salaries for substantially all salaried employees were reduced or deferred. To further strengthen our
liquidity, a new €3.5 billion incremental credit facility structured as a bridge to capital markets was secured in April. We continue to assess all funding options and expect to access funding as and when available on reasonable terms to further strengthen
our balance sheet and enhance our liquidity to optimize our financial flexibility.

Despite our current operational challenges created by the crisis, the Group is leveraging its resources and ingenuity through a broad range of community support initiatives in each region. The Group is producing protective masks for healthcare workers and first responders, with over 1 million shipped. In addition, the Group has partnered with U.S. and Italian medical equipment manufacturers to support production of ventilators, other medical equipment and personal protective equipment. The Group has also funded scholarships at medical schools, created a makeshift field hospital in Brazil, with a further
two under construction in Argentina and Brazil, and financially supported community efforts such as providing 1.5 million meals to children in need.

We have worked closely with all relevant stakeholders to develop and implement robust plans to effectively restart production and vehicle sales once  governments in various jurisdictions permit such activities. Given the successful restart of operations in our joint venture in China along with the dealership network and the resumption of production in our LCV plant in Atessa, Italy, on April 27, which is operating at ~70% of its
normal run rate, we are confident about our prospects.
Production in other regions will be phased in over a period of time and aligned to consumer demand. Return to work procedures for our offices and other facilities have commenced and will be phased in, with continued widespread use of remote working practices.

Notwithstanding these unexpected and unprecedented times, FCA and Groupe PSA remain committed to our 50/50 merger
that will create a leading global mobility company. Together, we continue to push ahead on the various merger workstreams and we remain committed to completing the transaction by the end of this year or early 2021.

As previously disclosed on March 18, 2020, due to the continued uncertainty of market conditions and regional operating restrictions related to the evolving COVID-19 pandemic, the Group has withdrawn its FY 2020 Guidance and will provide an update when it is possible to have better visibility of the overall impact of the crisis.

 

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Reconciliations

Net (loss)/profit to Adjusted EBIT