in the First Half of 2004 99th Fiscal Year - FIAT SpA

Though the outlook for the worldwide economy is more
favorable than it was in 2003, the high cost of raw materials
and unfavorable exchange rates have continued to generate
tension. Despite these difficulties, Teksid’s efforts to diversify
its customer base and markets, together with its constant
search for efficiency gains in products and logistics, enabled
the Sector to improve overall performance.
The Sector gained a number of major orders from Fiat Group
companies and external firms, as a result of the marketing
actions it implemented during the first half of 2004:
❚ The Cast Iron business unit received orders from Renault,
Garrett, D.Chrysler, Cummins, Toyota, GM, CDC and Hyundai.
❚ The Magnesium business unit received orders from GM,
Borg Warner, D.Chrysler, Land Rover and Intier.
Teksid’s commitment to product and process innovation and
development continued with the aim of offering customers
the most highly competitive conditions possible, in line with
market demands and more stringent technological and
environmental regulations.
31
Metallurgical Products — Teksid
Operating performance
Net revenues for the first half of 2004 totaled 466 million euros,
up 6.2% from the same period in the previous year thanks to
significant growth in sales volumes, which was only partially
offset by adverse exchange rates. The Cast Iron business unit
increased its volumes by 11.5%, benefiting from increased
demand in North America and Brazil. The Magnesium business
unit also significantly improved volumes by 11% thanks to
stronger sales in North America and increased demand in
Europe, where the Sector availed itself of the output of a
new plant in the United Kingdom that started production
during 2003.
Sales to non-captive customers accounted for 87%, in line with
the first half of 2003.
Operating income was 16 million euros, as against 5 million
euros in the first six months of 2003, and accounted for 3.4%
of net revenues as opposed to 1.1% in the first six months of
2003. The improvement is attributable to efficiency gains and
to higher sales volumes, which helped offset the unfavorable
impact of exchange rates and the rising cost of raw materials.