Magneti Marelli is an
international leader in the design and production of high-tech components
systems, and modules for the automotive industry.
With a turnover in 1999 of more than 4.1 billion Euros, and a workforce
of 25,600 - including an R&D staff of 2,200 - Magneti Marelli ranks among
the major Companies in the manufacture of electronic fuel-injection systems,
air-conditioning and engine cooling systems, cockpit modules, exhaust systems,
on-board information and communication systems, lighting systems, shock
absorbers, suspensions.
Second Quarter and HY 2000
Results - Board of Directors Meeting (Milan, July 24, 2000)
The Board of Directors of Magneti
Marelli met under the chairmanship of Carlo Camerana to examine the consolidated
results of the second quarter 2000 and of the first semester 2000
The main components of the
consolidated statement of operations were as follows:
in millions
of
euros
2nd quarter
2000
2nd quarter
1999
1st semester
2000
1st semester
1999
Net revenues
1,263
1,189
2,413
2,042
Operating income
14
50
15
63
Income
before taxes
(5)
50
317
100
The consolidated financial position at June 30, 2000 as compared to the
first semester and the entire fiscal year 1999, was as follows:
in millions
of euros
12.31.1999
06.30.2000
06.30.1999
Working
capital
328
191
298
Net fixed
capital
1,267
1,370
1,287
Deferred
taxes activities
36
34
29
Reserves
(342)
(322)
(344)
Net invested
capital
1,289
1,273
1,270
Net financial
position
(205)
98
(134)
Stockholders'
equity of the Group and minority interest
1,084
(*) 1,371
(*) 1,136
(*)half-year results are recorded before taxes
Magneti Marelli carried out relevant operations of portfolio selection
thanks to a market situation that recorded a positive trend in motor vehicles
production, also in South America. More specifically, it finalized the acquisition
of the Seima Group, - European leading manufacturer in the production of
automotive rear lights - which will be integrated in Automotive Lighting
(joint venture with Bosch), so consolidating its position of global system
supplier in the field of motor vehicle lighting systems. This transaction
will allow Magneti Marelli to acquire the majority of Automotive Lighting.
On the other hand, in the course of the first semester, Magneti Marelli
sold its carburetors activities and finalized the disposal of the mechanical
components and lubricants activities.
Performance of the Group during the second quarter 2000
On a comparable consolidation and exchange rate basis, revenues for the
second quarter increased by 2.2% compared with the corresponding period
of 1999. On the same basis mentioned above and excluding gains realized
from the disposal of real estates, operating income improved as compared
with 1999. Income before taxes is negative by 5 million euros due to nonrecurring
expenses for the restructuring of the carburetors activities which were
subsequently sold.
Performance of the Group during the first semester 2000
In the first six months of 2000 the Group's net revenues amounted to 2,413
million euros, or an 18% increase compared to the corresponding period last
year. On a comparable consolidation and exchange rate basis, there was a
13.3% increase.
Revenues for each business area were as follows:
in milions
of euros
1st semester
2000
1st semester
1999
Powertrain
systems
663
646
Suspension
systems
532
316
Interior
and body systems
605
396
Electronic
systems
209
179
After
market and services
385
490
Others/Elisions
19
15
Total
2,413
2,042
There was an increase in all business areas, apart from the After Market
and Services due to the disposal of the Lubricants activities.
Operating income for the semester amounted to 15 million euros (0.6 per
cent of
revenues) as compared with 63 million euros (3.1 per cent of revenues) of
the corresponding period of 1999. On a comparable consolidation basis and
excluding the positive effect that the disposal of real estates had in 1999,
the operating income of the first semester 2000 recorded an increase of
about 20 million euros compared with the corresponding period last year.
Income before taxes, positive by 317 million euros, included the net gains
(334 million euros) realized from the disposal of activities and excluded
the costs sustained for the restructuring of the carburetors activities.
Cash flow from operations (income before taxes depreciation and amortization)
consequently improved from 205 million euros in 1999 to 440 million euros
in 2000.
Capital expenditures (96 million euros) and R&D outlays (116 million euros)
represent the same revenue percentage as last year.
Net financial position recorded a debt of 134 million euros at June 30 1999
and was a positive 98 million euros at the end of June 2000.
Magneti Marelli's employees numbered 27,253 at June 30 2000, as against
25,613 at the end of 1999. This increase is substantially due to the change
in the scope of consolidation.
Outlook for the full year
Total revenues for the entire fiscal year are expected to exceed 4.2 billion
euros.
Operating income should be approximately 2% of revenues due to the initiatives
already started in the first semester for efficiencies and cost containment.
There is still a strong pressure on prices due to an increased competitiveness
and to the negative effects on acquisitions deriving from the continued
weakening of the euro.
The half-yearly report will be published by mid-September, according to
ConsobRegulations.
