2006 Annual Report - Fiat SpA

(in millions of euros) 2006 2005 % change
Fiat Powertrain Technologies 6,145 4,520 n.s.
Components (Magneti Marelli) 4,455 4,033 10.5
Metallurgical Products (Teksid) 979 1,036 -5.5
Production Systems (Comau) 1,280 1,573 -18.6
Eliminations (493) (435) n.s.
Total 12,366 10,727 n.s.
■ Fiat Powertrain Technologies (FPT) revenues increased
from 4,520 million euros in 2005 (referring to the powertrain
operations previously consolidated in the Iveco Sector and,
starting from May 2005, to the powertrain operations that were
transferred to FPT following the termination of the Master
Agreement with General Motors) to 6,145 million euros in 2006
(an increase of 11% on a comparable basis). Part of FPT’s
output was sold to other Group Sectors, while sales to third
parties and joint ventures represented 26% of revenues in 2006.
In 2006 revenues of the Passenger & Commercial Vehicles
product line totalled 3,447 million euros compared with 1,966
million euros recorded in the May-December 2005 period. The
product line sold 2,328,000 engines, approximately 22% of
which were diesel engines sold to General Motors and Suzuki,
and 1,695,000 transmissions, mainly to Fiat Auto.
The Industrial & Marine product line had revenues of 2,678
million euros in 2006 (+4.9% from 2005). 444,000 engines were
sold (up 1.9%) mainly to Iveco (44%), CNH (19%) and for 24%
to Sevel, the joint venture between Fiat Auto and the PSA
Group. The product line also sold 113,000 transmissions
(-1.4%) and 262,000 axles (+9.3%).
■ Magneti Marelli recorded revenues of 4,455 million euros
in 2006, an increase of 10.5% from 2005. Excluding the impact
of the sale of the Suspension Systems manufacturing and
assembly activities to Fiat Auto in the first half of 2006, the
increase in revenues was 14.2%. This positive performance
28 Report on Operations Financial Review of the Group
is attributable to higher sales of Fiat, Alfa Romeo and Lancia
models and an increase of new applications on car models
of the Group and third parties (online applications, hi-tech
products of the Lighting business area and Selespeed
gearboxes).
■ Teksid had revenues of 979 million euros, down 5.5% from
2005 due to the sale of a French company (SBFM) operating
in the Cast Iron business. On a comparable basis, revenues
increased by 3.5% reflecting higher volumes at the Cast Iron
Business Unit (+1.5% on a comparable basis) and positive
exchange rate effects, which offset lower volumes at the
Magnesium Business Unit (-6.2%) attributable to a slowdown
in its reference markets, in particular that of SUVs in North
America.
■ Comau had revenues of 1,280 million euros. The 18.6%
reduction from 2005 is mainly attributable to the European
Body-welding operations which were negatively impacted
by difficult trading conditions. Revenues also decreased, but to
a lesser extent, at the European powertrain business lines and
at Comau Pico in North America. Conversely, Service activities
reported a revenue increase, especially in the Mercosur area.
Other Businesses
Other Businesses recorded an overall decrease of 2.3%
from 2005 due to a reduction in the scope of consolidation
of Business Solutions.
(in millions of euros) 2006 2005 % change
Services (Business Solutions) 668 752 -11.2
Publishing and Communications (Itedi) 401 397 1.0
Holding companies and Other companies 512 469 9.2
Total 1,581 1,618 -2.3
■ Business Solutions recorded revenues of 668 million euros
in 2006, down 11.2% from 2005. The decrease was due to
a change in the scope of consolidation, in particular the sale of
Atlanet (telecommunication services). On a comparable basis,
revenues would have increased by approximately 11% due to a
higher level of services provided to Group companies. Services
provided to Fiat Group companies represented approximately
68% of the Sector’s revenues.
■ In 2006 Itedi had revenues of 401 million euros, up 1% from
2005. The slight increase is mainly attributable to higher
advertising revenues at Publikompass.
Trading profit by Business Area
Trading profit
Trading profit totalled 1,951 million euros in 2006, nearly
double the 1,000 million euros recorded in 2005, reaching 3.8%
of revenues (2.1% in 2005). The most significant improvements
were recorded at the Automobiles Business Area (+650 million
euros, of which +572 million euros from Fiat Auto) and at Iveco
(+214 million euros). Only the Components and Production
Systems Business Area recorded a decrease, attributable to
Comau’s negative performance.
(in millions of euros) 2006 2005 Change
Automobiles (Fiat Auto, Maserati, Ferrari) 441 (209) 650
Agricultural and Construction Equipment (CNH-Case New Holland) 737 698 39
Trucks and Commercial Vehicles (Iveco) 546 332 214
Components and Production Systems (FPT, Magneti Marelli, Teksid, Comau) 348 358 -10
Other Businesses (Services, Publishing and Communications,
Holding companies and Other companies) and Eliminations (121) (179) 58
Total for the Group 1,951 1,000 951
Report on Operations Financial Review of the Group 29