EL DORSINO È DA DEFINIRE - FIAT SpA

COMPONENTS — MAGNETI MARELLI
During the first half of 2000, automotive production proceeded
at a gratifying pace, with increases in all producing countries,
including those of the Mercosur Region. This trend is
consistent with an international macroeconomic environment
characterized by continued economic expansion in the United
States and the beginning of a turnaround in Europe.
Against this background, Magneti Marelli continued to
implement a strategy based on the divestiture of non-core
operations, while focusing on businesses with a higher
systems and technology content and on service activities.
In particular:
❚ It started the integration of the Seima Group, a European
leader in the production of automotive rearlights, into the
Automotive Lighting joint venture (50% Magneti Marelli, 50%
Bosch), which was thus able to strengthen its position as
a global producer of lighting systems for motor vehicles.
Upon completion of this transaction, Magneti Marelli will
hold a majority stake in Automotive Lighting. The Seima
Group has manufacturing facilities in Italy, France, Spain,
Russia and Mexico, and technical/commercial centers in
Germany and the United States. It is a supplier to all the
major international carmakers and is considered the
benchmark producer in its industry in terms of technological
innovation.
❚ It reached an agreement for the sale of its Rearview Mirror
activities to the Ficosa International Group in Spain and
completed the sale of its Mechanical Components operation
to Kolbenshmidt Pierburg, a German company. In addition,
it sold its Lubricants business to Doughty Hanson, a British
investment fund, and its European Carburetor operations,
which it had concentrated at the plant in Guadalajara,
Spain, to Finmek, a group based in Padua, Italy.
The Sector continued to streamline its industrial activities. In
particular, its Suspension Systems business (integration and
standardization of the production flows with Fiat Auto, and
definition of its operating flows and its logistics and production
methods) and the Electronic Systems operations (shutdown
of the Polish manufacturing units).
The commitment of the Fiat Group to help its Sectors achieve
leadership positions in the industries where they operate and
the need to assure itself maximum strategical flexibility so as
to negotiate from a stronger position future agreements with
other major international partners were the main reasons
behind Fiat’s decision to launch a Tender Offer for the shares
of Magneti Marelli it did not own. The purpose of this
transaction was to enable the Group to increase from 80%
to 100% its ownership of Magneti Marelli’s capital stock.
The characteristics of the Tender Offer, which lasted from
July 3 to July 24, 2000, and its outcome are described in
the section of this report that discusses Significant Events
Occurring Since the End of the Period and Business Outlook
for the Balance of the Fiscal Year.
OPERATING PERFORMANCE
In the first half of 2000, the Sector had consolidated net
revenues of 2,413 million euros, or 18% more than in the
same period last year. On a comparable consolidation
and foreign exchange basis the gain amounts to 13.3%.
All Business Units contributed to this improvement, with the
exception of the Aftermarket and Services operations, which
were affected by the divestiture of the Lubricants Division.
Operating income for the first half of the year totaled 15 million
euros (0.6% of revenues), compared with 63 million euros
(3.1% of revenues) in the same period a year ago. On a
comparable consolidation basis and if the 1999 figure is
restated to eliminate gains earned on the disposal of buildings,
the operating result for the first six months of 2000 is about 20
million euros higher than in the corresponding period last year.
Performance of the Operating Sectors – Components
21