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IM: F NYSE: Expected October 2014 Michael Guichon, Columbia Business School
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Page 1: FCA Presentation Sohn

IM: FNYSE: Expected October 2014

Michael Guichon, Columbia Business School

Page 2: FCA Presentation Sohn

2

Share Price (as of 5/2/14) 8.71€ Shares outstanding (mm) 1,251 Equity Market Cap (mm) 10,894€ Add: Debt (mm) 29,306€ Less: Cash (mm) 19,439€ Total Enterprise Value 20,761€ Add: Underfunded Pension 6,000€ Adjusted Total Enterprise Value 26,761€

52 Week Range 3.91€ 8.85€ Dividend Yield 0.0%Average Daily Volume (mm) 12.2

2014E 2015E 2016EEV/EBITDA 3.08x 2.79x 2.46x P/E 13.15x 8.08x 6.25x P/CPS 1.75x 1.53x 1.42x Note: Consensus as of 5/2/14

Current Capitalization

Trading Statistics

Summary Valuation

Investment Thesis

• Market significantly underestimating transformative nature of Chrysler consolidation and the value of the company’s business units. Chrysler alone is conservatively worth €16.5bn and Ferrari/Maserati are worth €6.9bn (~90% of current EV), minimizing downside

• Chrysler acquisition improves the firm by reducing management distraction, leveraging future production and R&D synergies and FCA’s improved credit profile

• FCA’s value is misunderstood due to a cumbersome capital structure, several obscured assets and economic weakness in key markets

• FCA has great brands managed by excellent capital allocators and they are taking share in key markets

• FCA trades at 4.0x normalized earnings• Fair Value: €16.50 (8.0x base normalized EPS of €2.05)

Recommend investors buy Fiat shares with a target share price of €16.50; over 90% upside

Page 3: FCA Presentation Sohn

China; 55.2%

Japan; 9.8%

Australia; 22.7%

Other; 12.3%

US; 84.1%

Canada; 12.1%Mexico; 3.8%

Brazil; 82.6%

Argentina; 11.7%Other; 5.7%

Company Overview• FCA is the 6th largest automobile manufacturer globally1

• CEO Sergio Marchionne hired in 2004 by founding Agnelli family (31% owners) and encouraged to sell the Fiat Auto subsidiary• Finding no buyers interested in a low margin, Italian focused car company, he began growing the business with the goal of expanding Fiat’s presence

globally

• Fiat acquired 20% of Chrysler after its 2009 bankruptcy. On January 21, 2014 it acquired 100% ownership• Fiat and Chrysler have been run by CEO Sergio Marchionne since 2004 and 2009 respectively

3

Source: Fiat 2013 Annual Report

FCANorth America

% of Sales: 53%% of EBIT: 77%

Europe% of Sales: 19%% of EBIT: -25%

LatAm% of Sales: 11%% of EBIT: 17%

Asia-Pac% of Sales: 5%% of EBIT: 11%

Ferrari/Maserati% of Sales: 4%% of EBIT: 16%

Components and Other% of Sales: 8%% of EBIT: 5%

Geographical Breakdown of Segment Unit Volumes: Breakdown by Type:

Italy; 48.0%

France; 9.9%

Germany; 11.4% U.K.; 9.9%

Rest of Eu-rope; 20.8%

Magneti Mareli - Auto Parts; 74.1%

Teksid - Metal Casting; 8.5%

Comau - Automation Sys-tems; 18.1%

North Amer-ica; 40.5%

Europe; 23.2%

China; 18.9%

Other; 17.4%

1By revenues

Page 4: FCA Presentation Sohn

4

How the Chrysler deal is transformational

• The Chrysler purchase was a very value accretive deal; Fiat paid $4.4bn in cash for a business that generated $3.1bn in EBIT in 2013

• The addition of Chrysler changed Fiat from a regional car manufacturer into the 6th largest in the world

1. Operational synergies – a larger manufacturing base with a more diverse group of product cycles will allow the combined company to achieve higher average levels of capacity utilization and increase sales in formerly underserved areas around the world

2. The use of common components and vehicle platforms between Fiat and Chrysler will reduce design and manufacturing costs

3. Increased scale allows FCA to generate high ROI from investments in R&D, i.e. R&D synergies with Ferrari and Maserati

Marchionne inherited a loss making Italian car/tractor/parts maker in 2004 and created a global automotive giant

Page 5: FCA Presentation Sohn

Key Drivers of Normalized Earnings

Page 6: FCA Presentation Sohn

6

Normalized Earnings Potential• €2.05 with Europe at Breakeven (base

case, expected in 2016)• €2.55 long term with modest European

recovery• Normalized earnings yield

of 24%-30%• Continued strong performance/market

share gains of Chrysler in North America• Return to high single digit/low double

digit margins in LATAM• Cash balance reduced by €10bn to

delever. Average weighted cost of debt falls 120bps to 5.3%

A return to normal earnings driven by Italian/Brazilian recoveries, Chrysler performance and capital structure rationalization

2014 Earnings

NAFTA

LATA

MAPAC

EMEA

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Luxury

Brands

Interest

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rnings

EMEA

- Reco

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€ -

€ 500

€ 1,000

€ 1,500

€ 2,000

€ 2,500

€ 3,000

€ 3,500

€ -

€ 0.50

€ 1.00

€ 1.50

€ 2.00

€ 2.50

€ 3.00

€ 0.63

€ 0.36

€ 0.37 € 0.01

€ 0.24 € 0.04

€ 0.40 € 2.05

€ 0.50 € 2.55

Net

Inco

me

(€m

m)

EPS

Page 7: FCA Presentation Sohn

Capital Structure

Page 8: FCA Presentation Sohn

8

2013A Normalized ChangeDebt 29,875€ 20,039€ (9,836)€ Cash 19,439€ 10,000€ (9,439)€ Net Debt 10,436€ 10,039€ (397)€ Interest Expense (1,995)€ (1,062)€ 933€ Interest Income 97€ 100€ 3€ Cost of Debt 6.7% 5.3% -1.4%Income Interest Rate 0.5% 1.0% 0.5%Net Interest Margin -6.2% -4.3% 1.9%Net Debt Expense (1,898)€ (962)€ 936€ ETR 40.0% 40.0% 40.0%Net Income Impact (1,139)€ (577)€ 562€ EPS Impact (0.91)€ (0.46)€ 0.45€

Capital Structure Optimization

Capital Structure• Previously, complicated ownership structure and debt covenants prevented Fiat from

accessing Chrysler’s liquidity and led to an excessive cash balance at Chrysler and a highly inefficient overall capital structure

• With full ownership of Chrysler, cash will start to be more fungible between Fiat and Chrysler, FCA can begin to reduce its gross debt burden

• The simplified company has a much better credit profile and this has been reflected in an improvement in credit default swap levels

• FCA’s cost of 7 year debt is currently 4.3% in EUR• FCA is rated BB-/B1/BB- (S&P, Moody’s, Fitch)• Debt/EBITDA = 3.9x, interest coverage = 1.5x• In 2017, Debt/EBITDA = 2.4x, interest coverage = 3.4x• Future credit rating upgrades are likely

Rationalizing the company’s capital structure will increase pre-tax earnings significantly

Page 9: FCA Presentation Sohn

North America

Page 10: FCA Presentation Sohn

10

Chrysler/North America (Value: €16.6bn)

• Given Chrysler’s 2013 EBITDA of approximately €4.4bn, FCA’s EV is trading at 5.8x Chrysler’s LTM EBITDA

• Chrysler has maintained steady margins in recent years while growing revenue in the US and Canada by taking market share

• Since Marchionne took control, North American market share grew from 9.2% in 2009 to 11.5% in 2013, which is still below 2007 pre-crisis level of 12.6%

• Chrysler’s previous underperformance can largely be attributable to management, which is no longer a concern given Marchionne’s strong track record

1US, Canada and Mexico respectively represent 83%, 12% and 5% of North American Chrysler vehicles sold

Q1

'10

Q2

'10

Q3

'10

Q4

'10

Q1

'11

Q2

'11

Q3

'11

Q4

11Q

1 12

Q2

12Q

3 12

Q4

12Q

1 13

Q2

13Q

3 13

Q4

13

$0

$5,000

$10,000

$15,000

$20,000

$25,000

0.0%2.0%4.0%6.0%8.0%10.0%12.0%

QoQ Chrysler Group Performance

Qtly Revenue (mm USD) EBITDA Margin EBIT Margin

Chrysler has steadily improved operations in North America versus Ford and GM …

2007 2008 2009 2010 2011 2012 20136.00%

8.00%

10.00%

12.00%

14.00%

16.00%Chrysler Market Share1

US Canada Mexico

Marchionne Takes Control

Page 11: FCA Presentation Sohn

11

Chrysler/North America (Value: €16.6bn)

• Were Chrysler to trade in the market on a standalone basis at peer multiples, it would be valued significantly higher than 16.6bn

• From 2010 to 2013, Chrysler grew EBITDA at a 21.0% CAGR versus -5% for Ford and -1% for GM

• Ford and GM’s TEV/EBITDA LTM are 11.5x and 4.8x respectively

• Given EV/EBIT and EV/EBITDA multiples for Ford and GM, Chrysler would be worth between €24.0bn and €37.1bn, or 90% to 138% of FCA’s current EV with net pension obligations

… yet still trades at a discounted valuation

2010 2011 2012 2013$0

$2,000$4,000$6,000$8,000

$10,000$12,000$14,000$16,000

Annual EBITDA (mn USD)

Chrysler GM Ford

2010 2011 2012 2013$0

$2,000$4,000$6,000

$8,000$10,000

Annual EBIT (mn USD)

Chrysler GM Ford

Page 12: FCA Presentation Sohn

12

How you improve a brand

2007 Jeep Grand Cherokee V8

• Base price: $34,690

• 13 mpg city, 20 mpg highway

• 0-60 in 9 seconds

2014 Jeep Grand Cherokee V8

• Base price: $36,790

• 18 mpg city, 26 mpg highway

• 0-60 in 7 seconds

• Chrysler’s reorganization strategy is focused on improving its products and relying on existing brands to drive consumer demand and take market share

• FCA’s global reach will help Chrysler sell into new markets and increase penetration in emerging markets

• Producing Chrysler brands for European markets in Italy will reduce idle capacity and have a meaningful impact on profitability

Chrysler does not need to completely reinvent itself in order to succeed

Page 13: FCA Presentation Sohn

13

Valuation of North America• Chrysler has steadily gained market share and maintained consistent margins since Marchionne

took over in 2009• Jeep is the #1 SUV brand in the US; Ram trucks sales have experience double digit growth rates since 2009

• New Jeep and Ram models will help Chrysler continue top line growth

Segment Financials 2013A 2017E Normalized Low HighRevenue 45,777€ 54,690€ 55,000€ 50,000€ 60,000€ EBIT Margin 5.0% 5.8% 5.8% 5.0% 6.5%EBIT 2,290€ 3,149€ 3,190€ 2,500€ 3,900€ EBITDA 3,820€ 4,985€ 5,026€ 4,336€ 5,736€ NOPAT 1,489€ 2,047€ 2,074€ 1,625€ 2,535€ ETR 35.0%Net Income 968€ 1,330€ 1,348€ 1,056€ 1,648€ EPS 0.77€ 1.06€ 1.08€ 0.84€ 1.32€

Fair Value Base Bear BullEBIT Multiple 5.20x 4.23x 6.50x EBITDA Multiple 3.30x 2.44x 4.42x NOPAT Multiple 8.00x 6.50x 10.00x EV of Segment 16,588€ 10,563€ 25,350€ As % of Current Adjusted EV 62.2% 39.6% 95.0%Value Per Share 13.26€ 8.44€ 20.27€

NAFTA

Page 14: FCA Presentation Sohn

International

Page 15: FCA Presentation Sohn

15

2003 2005 2007 2009 2011 2013 2015 201780.0%

100.0%

120.0%

140.0%

160.0%

180.0%

-7.0%

-5.0%

-3.0%

-1.0%

1.0%

3.0%

Revenue/Assets (lhs)Revenue/Assets Forecast (lhs)EBIT Margin (rhs)

Fiat - Focus on Capacity Utilization• A recovery in European automotive demand,

particularly in Italy, will naturally increase Fiat’s capacity utilization and lead to margin expansion

• Increasing demand of higher margin luxury brands in Italy will improve profitability significantly

• Plans to shut high cost production facilities in Italy will remove the only assets that are losing money on an operating basis

• The forecast shown incorporates a further 12% drop in Brazilian sales, after a 10% drop in 2013 from 2012, and a significant decrease in EBIT margin

Marchionne becomes CEO

In this high fixed cost business, utilization = profitability

Page 16: FCA Presentation Sohn

Europe

Page 17: FCA Presentation Sohn

17

1000

1200

1400

1600

1800

2000

2200

2400

2600

-5%

0%

5%

10%

15%

20%

25%

30%

Italian New Car Sales (in thousands, YTD)Net Mortgage Lending (YoY % Change)

Fiat Europe (Value: €4.2bn) Italian Recovery

• Automotive demand has fallen more in Italy than in peer countries that avoided severe dislocation in local credit markets

• Fiat’s Italian sales were worth €7bn in 2013 (29% market share), making it the most exposed to the European PIIGS among large auto manufacturers

• Reduced banking solvency concerns will lead to a recovery in automotive financing

• Fiat is very well placed to benefit from the recovery in Italian demand for durable goods

• A recovery to 2.2mn sales per year would imply a €5bn increase in Fiat’s revenue if market share remains roughly constant

A return to normalcy in Italian credit markets will drive a recovery in automotive demand

Page 18: FCA Presentation Sohn

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How to relaunch Alfa Romeo

A timeless brand and key technology from Ferrari/Maserati gives Marchionne the wherewithal to turn around Alfa Romeo

• Increasing volumes of higher margin luxury brands by employing idle capacity in Italian plants will have a meaningful impact on profitability

• Goal of tripling production to 300,000 units/year would add nearly €1bn of EBIT

2007 Alfa Romeo GT Q2

• Base price: $42,400

• 0-60 in 8.2 seconds

2014 Alfa Romeo 4C

• Base price: $55,000

• 0-60 in 4.2 seconds

Page 19: FCA Presentation Sohn

19

Valuation of Europe• Improved capacity utilization and gradual rollbacks of sales incentives should lead a return to

profitability• Operational synergies with Chrysler will improve overall efficiency and allow for higher

normalized EBIT margins in the future

Prior PeakSegment Financials 2007A 2013A 2017E Normalized Low HighRevenue 26,812€ 17,420€ 24,911€ 23,000€ 21,000€ 27,000€ EBIT Margin 3.0% -4.2% 3.7% 3.3% 2.5% 4.0%EBIT 803€ (737)€ 910€ 748€ 525€ 1,080€ EBITDA 180€ 2,414€ 2,251€ 2,029€ 2,584€ NOPAT 562€ (516)€ 637€ 523€ 368€ 756€ ETR 30.0%Net Income 393€ (361)€ 446€ 366€ 257€ 529€ EPS 31.5% (0.29)€ 0.36€ 0.29€ 0.21€ 0.42€

Fair Value Base Bear BullEBIT Multiple 5.60x 4.55x 7.00x EBITDA Multiple 1.86x 1.18x 2.93x NOPAT Multiple 8.00x 6.50x 10.00x EV of Segment 4,186€ 2,389€ 7,560€ As % of Current Adjusted EV 15.7% 9.0% 28.3%Value Per Share 3.35€ 1.91€ 6.04€

Europe

Page 20: FCA Presentation Sohn

Latin America

Page 21: FCA Presentation Sohn

21

Latin America/Brazil (Value: €5.5bn) • Fiat is the largest auto manufacturer in Brazil

and had the highest reported profit in the region in 2013

• In Brazil, low interest rates led to unsustainable growth in consumer and business lending

• The coming recession will likely involve sharp increases in non-performing loans and a significant reduction in the availability of credit

• Long-term fundamentals of Brazilian automotive demand (growing population and gradually increasing living standards) remain positive

Fiat has a dominant position in Brazil where long term fundamentals remain positive

12/1/1995

10/1/1996

8/1/1997

6/1/1998

4/1/1999

2/1/2000

12/1/2000

10/1/2001

8/1/2002

6/1/2003

4/1/2004

2/1/2005

12/1/2005

10/1/2006

8/1/2007

6/1/2008

4/1/2009

2/1/2010

12/1/2010

10/1/2011

8/1/2012

6/1/20130.0%

10.0%

20.0%

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80.0%

90.0%

100.0%

Government Debt/GDPPrivate Debt/GDPTotal Debt/GDP

Page 22: FCA Presentation Sohn

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Valuation of Latin America• Fiat’s Brazilian business has a history of being fast growing and consistently profitable with high

returns on capital, and it deserves a higher multiple• Fiat has 22% market share in Brazil and a large domestic manufacturing base – a necessity in a

country with high local content requirements

While 2011 EBIT margins may not be sustainable, the Brazilian business is very profitable and total market demand will grow

Prior PeakSegment Financials 2011A 2013A 2017E Normalized Low HighRevenue 11,068€ 9,973€ 12,125€ 12,000€ 11,000€ 14,000€ EBIT Margin 12.5% 4.9% 8.6% 8.5% 7.5% 11.0%EBIT 1,385€ 492€ 1,040€ 1,020€ 825€ 1,540€ EBITDA 1,890€ 1,136€ 1,673€ 1,654€ 1,459€ 2,174€ NOPAT 928€ 330€ 696€ 683€ 553€ 1,032€ ETR 33.0%Net Income 622€ 221€ 467€ 458€ 370€ 691€ EPS 0.50€ 0.18€ 0.37€ 0.37€ 0.30€ 0.55€

Fair Value Base Bear BullEBIT Multiple 5.36x 4.36x 6.70x EBITDA Multiple 3.31x 2.46x 4.75x NOPAT Multiple 8.00x 6.50x 10.00x EV of Segment 5,467€ 3,593€ 10,318€ As % of Current Adjusted EV 20.5% 13.5% 38.7%Value Per Share 4.37€ 2.87€ 8.25€

Latin America

Page 23: FCA Presentation Sohn

Luxury & Performance Brands

Page 24: FCA Presentation Sohn

A unique, obscured asset with the best operating and financial performance in the industry

Luxury Brands – Ferrari & Maserati (Value: €6.9bn)

• Stable, high margin business with real pricing power• Very attractive R&D synergies found using 2-3 year old Ferrari technology

in Maserati cars• Uncertain if Fiat willing to monetize but given margin, growth and

pricing power Ferrari is a €4bn - €7bn asset (€3.50- €5.50/sh) 1,2 • Agnelli family has been supportive of value maximizing spinoffs (Fiat Industrial spun off to shareholders in late 2010)

• Using the valuation of Ferrari peer Aston Martin’s sale of 37.5% of the company to Investindustrial in 2013 would value Ferrari alone at €7bn 3

• Successful relaunching of Maserati in 2002 gives confidence in Fiat’s ability to reestablish the Alfa Romeo brand outside of Europe

24

1Net to Fiat’s 90% ownership of Ferrari.2No true public comparable companies exist. Toyota and BMW have the highest margins of public automakers (9.5-10.5%) and trade at 9.0-9.5x EBIT Multiples3http://www.bloomberg.com/news/2012-12-07/investindustrial-to-purchase-37-5-stake-in-aston-martin.html

Page 25: FCA Presentation Sohn

Luxury Brands – Ferrari & Maserati (Value: €6.9bn)

• EBIT to grow from €535mm in 2013 to €923mm in 2015 as Maserati production increases from 15,400 units/year – 50,000 units/year (all capacity is online and Maserati gross margins now higher than Ferrari)

• Pricing power:• 12% and growing EBIT margin business (vs.

3.5% for FCA) • Two year waiting list for Ferrari (intentionally

limiting sales to 7,000 units/year)• 22,500 orders outstanding for Maserati1

• Maserati currently participates in only 22% of luxury market segments

• Launch of Luxury SUV and E segment high end sedan in 2015 provides exposure to 100% of 1 million unit/year market

25

1October 15, 2013 Fiat Group Luxury and Finance – Borsa Italiana, Milan

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013€ 0

€ 500

€ 1,000

€ 1,500

€ 2,000

€ 2,500

€ 3,000

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Ferrari

Revenue (lhs) EBITDA (lhs) FCFEBITDA Margin (rhs) FCF to sales (rhs)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

-€ 500

€ 0

€ 500

€ 1,000

€ 1,500

€ 2,000

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

Maserati

Revenue (lhs) EBITDA (lhs) FCFEBITDA Margin (rhs) FCF to sales (rhs)

After relaunching in the US in 2002, Maserati has now primed the market for even more rapid, profitable growth

Page 26: FCA Presentation Sohn

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Valuation of Luxury Brands - Ferrari• Business deserves premium multiple given brand is one of the few with real pricing power• Margins are highly resilient• Ferrari intentionally supplying below actual demand, models assumes no growth in units

Prior PeakSegment Financials 2008A 2013A 2015E Normalized Low HighRevenue 1,921€ 2,300€ 2,569€ 2,575€ 2,200€ 3,000€ EBIT Margin 17.6% 15.8% 16.0% 16.0% 15.0% 18.0%EBIT 339€ 364€ 412€ 413€ 330€ 540€ EBITDA 497€ 406€ 710€ 711€ 628€ 838€ NOPAT 220€ 237€ 268€ 268€ 215€ 351€ ETR 35.0%Net Income 143€ 154€ 174€ 174€ 139€ 228€ EPS 0.11€ 0.12€ 0.14€ 0.14€ 0.11€ 0.18€

Fair Value Base Bear BullEBIT Multiple 9.30x 8.57x 9.78x EBITDA Multiple 6.00x 5.00x 7.00x NOPAT Multiple 14.31x 13.18x 15.05x EV of Segment1 3,839€ 2,827€ 5,281€ As % of Current Adjusted EV 14.4% 10.6% 19.8%Value Per Share 3.07€ 2.26€ 4.22€

Ferrari

1Net to Fiat’s 90% ownership

Conservative multiples relative to peers yields significant value

Page 27: FCA Presentation Sohn

27

Valuation of Luxury Brands - Maserati• Maserati was relaunched in the US in 2002, and after absorbing several years of start up costs

now exhibits similar gross margins as Ferrari• Capacity has been expanded to support 50,000 units/year in 2015 from 15,400 last year• Significantly higher room for growth in this segment of the market

AnnualizedSegment Financials 4Q13 2013A 2015E Normalized Low HighRevenue 3,104€ 1,659€ 4,911€ 5,000€ 4,000€ 5,750€ EBIT Margin 7.5% 6.4% 10.0% 10.0% 7.5% 15.0%EBIT 232€ 106€ 491€ 500€ 300€ 863€ EBITDA 424€ 298€ 683€ 692€ 492€ 1,054€ NOPAT 151€ 69€ 319€ 325€ 195€ 561€ ETR 35.0%Net Income 98€ 45€ 208€ 211€ 127€ 364€ EPS 0.08€ 0.04€ 0.17€ 0.17€ 0.10€ 0.29€

Fair Value Base Bear BullEBIT Multiple 6.23x 4.92x 6.11x EBITDA Multiple 4.50x 3.00x 5.00x NOPAT Multiple 9.58x 7.57x 9.40x EV of Segment 3,113€ 1,476€ 5,272€ As % of Current Adjusted EV 11.7% 5.5% 19.8%Value Per Share 2.49€ 1.18€ 4.21€

Maserati

A highly profitable, high growth business

Page 28: FCA Presentation Sohn

Asia

Page 29: FCA Presentation Sohn

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Valuation of Asian Business• Despite being late to Asia, the Jeep products have been hugely successful in recent years and

consumer demand remains very strong• Shipments increased 58% year over year to 163,000 in 2013• FCA has sales points in 126 Chinese cities and there are nearly 500 cities with populations over

500,000Prior Peak

Segment Financials 2011A 2013A 2017E Normalized Low HighRevenue 2,086€ 4,621€ 5,670€ 5,600€ 5,000€ 8,000€ EBIT Margin 6.2% 6.9% 7.9% 7.5% 6.75% 8.0%EBIT 129€ 319€ 448€ 420€ 338€ 640€ EBITDA 224€ 617€ 790€ 762€ 680€ 982€ NOPAT 97€ 239€ 336€ 315€ 253€ 480€ ETR 25.0%Net Income 73€ 179€ 252€ 236€ 190€ 360€ EPS 0.06€ 0.14€ 0.20€ 0.19€ 0.15€ 0.29€

Fair Value Base Bear BullEBIT Multiple 6.00x 4.88x 7.50x EBITDA Multiple 3.31x 2.42x 4.89x NOPAT Multiple 8.00x 6.50x 10.00x EV of Segment 2,520€ 1,645€ 4,800€ As % of Current Adjusted EV 9.4% 6.2% 18.0%Value Per Share 2.01€ 1.32€ 3.84€

Asia-Pacific

Current penetration only focused on 1st tier cities, future growth to be driven by build out in 2nd and 3rd tier cities

Page 30: FCA Presentation Sohn

Management Track Record

Page 31: FCA Presentation Sohn

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Management & Track Record• Fiat under Marchionne has a great track record of

creating value for shareholders• Some market participants point to missed goals from

the 2010 5-year plan as a sign that management is unreliable, but this is unfair because the Euro crisis could not have been predicted by management a year in advance

• Marchionne’s incentives are fully aligned with shareholders as he has vested options on 5mn shares with a strike price of €13.37 in addition to 10.7mn shares with a strike of €6.583

Fiat Ford Toyota VW Renault

-15%

-10%

-5%

0%

5%

10%

15%

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-9%

3%

6%

0%

9%

-9%

0%

8%

-1%

CAGR (2004-2013)

Revenue/Share EBITDA/Share

Under Marchionne’s stewardship, FCA has generated best in class financial performance

Page 32: FCA Presentation Sohn

Valuation

Page 33: FCA Presentation Sohn

33

Fair ValueTEV Per Share TEV Per Share TEV Per Share

Chrysler 16,588€ 13.26€ 10,563€ 8.44€ 25,350€ 20.27€ Fiat-Europe 4,186€ 3.35€ 2,389€ 1.91€ 7,560€ 6.04€ Fiat-Brazil 5,467€ 4.37€ 3,593€ 2.87€ 10,318€ 8.25€ Asia-Pac 2,520€ 2.01€ 1,645€ 1.32€ 4,800€ 3.84€ Luxury Brands1 6,952€ 5.56€ 4,303€ 3.44€ 10,553€ 8.44€ Parts 1,000€ 0.80€ -€ -€ 2,000€ 1.60€ Total 36,714€ 29.35€ 22,492€ 17.98€ 60,581€ 48.43€

TEV Per Share TEV Per Share TEV Per ShareLess: Debt (29,306)€ (23.43)€ (29,306)€ (23.43)€ (29,306)€ (23.43)€ Add: Cash 19,439€ 15.54€ 19,439€ 15.54€ 19,439€ 15.54€ Total Equity Value 26,847€ 21.46€ 12,625€ 10.09€ 50,714€ 40.55€ Less: Underfunded Pension (6,000)€ (4.80)€ (6,000)€ (4.80)€ (6,000)€ (4.80)€ Adjusted TotalEquity Value% Upside 91.4% 91.4% -39.2% -39.2% 310.4% 310.4%

Sum of the Parts

35.75€

Base Bear Bull

2013A

44,714€ 5.30€ 6,625€ 16.67€ 20,847€

Sum-of-the-PartsRecommend investors buy Fiat shares with a target share price of €16.50; over 90% upside

• Market significantly underestimating transformative nature of Chrysler consolidation. Chrysler alone is conservatively worth €16.5bn and Ferrari/Maserati are worth €6.9bn, which minimizes downside

• Chrysler acquisition improves the firm by reducing management distraction, leveraging future production and R&D synergies and FCA’s improved credit profile

• FCA’s value is misunderstood due to a complicated capital structure and several obscured assets

• FCA has great brands managed by excellent capital allocators and they are taking share in key markets

• FCA trades at sub 4.0x normalized earnings• Fair Value: €16.50 (8.0x base normalized EPS of €2.05)

1Net to Fiat’s 90% ownership of Ferrari

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Special Thanks To

Thomas Schweitzer

Sam White

[email protected]

[email protected]

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Appendix

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Ticker Name CUR EV '14 P/E '15 P/E '16 P/E '14 EV /

EBIT '15 EV /

EBIT '16 EV /

EBIT '14 EV / EBITDA

'15 EV / EBITDA

'16 EV / EBITDA

Gross Margin

EBIT Margin

NI Margin

VOW GR VOLKSWAGEN AG € 165,980 8.31 7.39 6.80 13.05 11.30 10.34 6.59 6.10 5.66 18.1% 6.3% 4.6%7203 JT TOYOTA MOTOR CORP € 219,355 9.42 8.80 7.97 12.63 11.37 10.39 9.28 8.44 7.80 18.8% 9.4% 4.4%DAI GR DAIMLER AG € 143,601 11.81 10.06 9.19 14.88 12.87 11.80 9.81 8.74 8.03 21.6% 6.7% 5.8%GM GENERAL MOTORS CO € 38,617 9.20 6.95 6.17 6.64 5.15 4.90 3.82 3.18 2.95 13.2% 3.6% 3.4%F FORD MOTOR CO € 44,495 11.80 8.51 8.01 9.44 6.24 4.58 5.93 4.60 4.48 12.8% 3.7% 4.9%BMW GR BAYERISCHE MOTOREN WERK € 114,009 10.53 10.02 9.67 13.64 13.19 12.84 9.38 9.06 7.94 20.1% 10.4% 7.0%7201 JT NISSAN MOTOR CO LTD € 60,110 10.59 8.95 7.69 16.43 13.10 11.33 9.28 8.10 7.38 16.9% 4.7% 3.6%UG FP PEUGEOT SA € 28,342 11.22 8.37 64.63 24.33 18.50 10.08 7.81 6.63 15.0% -0.3% -4.3%RNO FP RENAULT SA € 43,632 9.29 7.10 6.14 31.48 22.39 18.09 9.80 8.54 7.88 17.9% 3.0% 1.4%

F IM FIAT SPA € 31,138 13.15 8.08 6.25 8.61 7.34 6.49 3.59 3.26 2.87 14.1% 3.9% 1.0%

Mean Peer Group (EX FIAT): 10.12 8.78 7.78 20.31 13.33 11.42 8.22 7.17 6.53 17.2% 5.3% 3.4%FIAT Valuation Differential vs. peer group: 29.9% -7.9% -19.6% -57.6% -45.0% -43.2% -56.3% -54.6% -56.1% -17.8% -26.0% -69.6%

Fiat Ex Luxury Brands € 24,186 7.72 4.04 2.87 8.47 7.24 6.21 3.15 2.96 2.56 14.1% 3.0% 1.0%

Mean Peer Group (EX FIAT): 10.12 8.78 7.78 20.31 13.33 11.42 8.22 7.17 6.53 17.2% 5.3% 3.4%FIAT Valuation Differential vs. peer group: -23.7% -54.0% -63.1% -58.3% -45.7% -45.7% -61.6% -58.7% -60.9% -17.8% -42.8% -71.4%

Relative Valuation

Source: Bloomberg as of 5/2/2014. Luxury Brands valued at €6.952bn

Across most metrics, Fiat trades at a sizeable discount to peers

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Bear Case• Despite success of Chrysler, FCA remains free cash flow negative and the company

needs a recovery in Europe to return to positive cash flow• FCA is operating in a cyclical and capital intensive industry and the company carries

substantial leverage• Obstructive European labor laws will prevent FCA from rationalizing production and

achieving high levels of capacity utilization• Credit overhang and rising non-performing loans could lead to a funding stop in Brazil• High expectations for Jeep and Maserati leave room to disappoint

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Risks and Mitigants• Continued troubles in the global economy, particularly Italy and Brazil, could hurt automobile sales

• Consumers will eventually need to purchase new cars as maintaining older ones becomes prohibitively expensive

• Large ownership by Agnelli family – approximately 31% of the company. If they look to exit their position, problems could arise

• John Elkann, who is Gianni Agnelli’s grandson, is Chairman of the company. The family has mostly been passive, but is looking to maintain its large stake. Elkann has demonstrated considerable faith in Marchionne’s abilities

• Marchionne has said he will stay through 2016, but it is uncertain what will happen if he decides to leave then. He said it is highly likely that his successor will be an internal candidate

• Marchionne’s options give him substantial incentives to stay and improve shareholder value

• There are large pension liabilities, with approximately €6bn in unfunded employee benefits and other provisions

• The trend here is positive as unfunded amount decreased from €8bn in 2012 to €6bn in 2013

• Should the company issue convertible debt, there could be potential dilution in share value• Unsubstantiated rumor, no real need for additional equity in the business

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Chrysler Acquisition• Fiat acquired Chrysler through a series of transactions between June

2009 and January 2014 for a total cash outlay of approximately $4.4bn

• The initial transaction was a Section 363 bankruptcy sale for 20% of Chrysler, which occurred after it declared Chapter 11 bankruptcy

• Creditors appealed the sale, but were eventually overruled to preserve going concern value and prevent liquidation

• Fiat increased its ownership by meeting performance targets and shrewd negotiating with the US Treasury, Canadian Government and VEBA Trust

• Fiat purchased the remaining 41.5% from VEBA trust for $4.35bn in January 2014, which included $1.75bn in cash from Fiat, $1.9bn from Chrysler and an additional $700mn in contributions over the next four years

• Fiat’s cash outlay of approximately $4.4bn compares with $7.4bn that Cerberus paid for 80% of the company in 2006 and $37bn that Daimler-Benz paid in 1998, although these amounts include Chrysler Financial, which Cerberus sold to TD for $6.3bn in December 2010

20%

5%5%

16%

7.5%5%

41.5%

363 Bankruptcy Sale (4/30/2009)

Performance Event 1 (1/10/2011)Performance Event 2 (4/11/2011)

UST Call Options (5/24/2011)

Remaining Call Options (7/21/2011)Performance Event 3 (1/5/2012)

Purchase From VEBA Trust (1/5/2014)

Fiat Ownership Stake

Marchionne’s negotiating prowess secured Chrysler at an extremely attractive valuation

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Overview of Ownership• The Agnelli family is the largest shareholder in the company, holding just under 31%• Once the firm lists on the NYSE (expected in October), there will likely be a large shift in

shareholder base

Source: Capital IQ

Common % of Market Value

Holder Stock Held Common (EUR in mm)Giovanni Agnelli e C. S.a.p.az. 375,972,150 30.9% 3,267.6€ Baillie Gifford & Co. 61,286,212 5.0% 532.6€ BlackRock, Inc. (NYSE:BLK) 38,449,885 3.2% 334.2€ Norges Bank Investment Management 25,139,854 2.1% 218.5€ Capital Research and Management Company 22,982,403 1.9% 199.7€ Grantham, Mayo, Van Otterloo & Co. LLC 12,992,183 1.1% 112.9€ Oldfield Partners LLP 11,880,608 1.0% 103.3€ The Vanguard Group, Inc. 11,034,209 0.9% 95.9€ Sunamerica Asset Management, LLC 11,028,138 0.9% 95.8€ Bessemer Investment Management LLC 5,734,633 0.5% 49.8€

Agnelli family has a history of supporting value creative initiatives at its companies

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Overview of Management

• Sergio Marchionne:• Has been CEO of Fiat since 2004 and has led Chrysler since 2009• Oversaw the turnaround of SGS1, which is the world’s leading inspection, verification,

testing and certification company, over 13 years. The Agnelli family sold its 15 percent SGS holding in 2013 at a 14x EBITDA valuation for €2bn, netting a capital gain of €1.5bn

• Unusually nonconformist style and acts as an owner of the business• Focuses on creating a more collaborative culture between units to enhance

shareholder value

• John Elkann:• Grandson of Gianni Agnelli and current scion of the Agnelli dynasty• Has served as Chairman of Fiat SpA since 2010• He is currently CEO and Chairman of Exor2

• Member of the Board of Directors of News Corp and is a board member of Fiat Industrial, The Economist Group and Banca Leonardo

Best in class management operating business as an owner

1Agnelli family portfolio company2Agnelli family holding company for Fiat, Fiat Industrial shares

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Current Bear Base BullOption Number of Shares Strike Expiry € 8.65 € 5.30 € 16.50 € 35.75

1 10,670,000 6.583€ 1-Jan-16 22,054,890€ -€ 105,814,390€ 311,211,890€ 2 5,000,000 13.370€ 3-Nov-14 -€ -€ 15,650,000€ 111,900,000€

Total: 15,670,000 8.749€ 22,054,890€ -€ 121,464,390€ 423,111,890€ % Change: -100.0% 450.7% 1818.4%

CEO Incentives• Marchionne currently has options to purchase 10,670,000 shares at a

strike of €6.583 per share with expiration of January 1, 2016 and other options to purchase 5,000,000 shares at a strike of €13.37 per share with expiration of November 3, 2014

Management’s interests are well aligned with shareholders

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Debt Maturity Schedule

2014 2015 2016 2017 2018 2019 2020 2021€ 0.00

€ 0.50

€ 1.00

€ 1.50

€ 2.00

€ 2.50

€ 3.00

€ 3.50

€ 4.00

€ 4.50

€ 5.00

Corporate Debt Maturity Schedule (€ bn)Weighted Average Interest Rate: 6.7%

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Summary Model

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2011 2012 2013 2014 2015 2016 2017 2018 2019FY FY FY FY FY FY FY FY FY

(€ million) 365 366 365 365 365 366 365 365 365

Net revenues 59,559€ 83,957€ 86,816€ € 93,321 € 97,749 € 98,545 € 104,403 € 105,199 € 110,167% Grow th 66.0% 41.0% 3.4% 7.5% 4.7% 0.8% 5.9% 0.8% 4.7%

Cost of sales 50,704 71,474 74,570 80,537 83,191 83,219 87,636 88,133 92,291 SG&A 5,047 6,731 6,689 7,094 7,430 7,491 7,936 7,997 8,374 Research and development costs 1,367 1,835 2,231 2,498 2,617 2,638 2,795 2,816 2,949 Other income/(expenses) (49) (103) 68 - - - - - - TRADING PROFIT/(LOSS) 2,392 3,814 3,394 3,440 4,745 5,414 6,253 6,470 6,770

Result from investments:Share of equity method the profit/(loss) 146 94 87 - - - - - - Other income/(expenses) from investments (15) 13 10 - - - - - -

Gains/(losses) on the disposal of investments 21 (91) 8 - - - - - - Restructuring costs (102) (15) (28) - - - - - - Other unusual income/(expenses) 1,025 (138) (499) (300) - - - - - Total 1,075 (137) (422) (300) - - - - -

EBIT 3,467 3,677 2,972 3,140 4,745 5,414 6,253 6,470 6,770

DD&A 3,358 4,134 4,574 4,822 5,055 5,272 5,489 5,705 5,922 EBITDA 6,825 7,811 7,546 7,962 9,800 10,686 11,741 12,175 12,692

Financial income/(expenses) (1,282) (1,641) (1,964) (1,859) (1,600) (1,351) (1,120) (987) (987) EBT 2,185 2,036 1,008 1,281 3,145 4,063 5,133 5,483 5,783 Income taxes (534) (625) (943) (513) (1,258) (1,625) (2,053) (2,193) (2,313) ETR 24% 31% 94% 40% 40% 40% 40% 40% 40%PROFIT/(LOSS) FROM CONTINUING OPERATIONS 1,651 1,411 1,951 769 1,887 2,438 3,080 3,290 3,470 Post

‐tax profit/(loss) from Discontinued Operations - - (943) - - - - - -

PROFIT/(LOSS) FOR THE PERIOD 1,651 1,411 1,008 769 1,887 2,438 3,080 3,290 3,470    PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO:   Owners of the parent 1,334 348 904 769 1,887 2,438 3,080 3,290 3,470 Non

‐controlling interests 317 1,063 1,047 - - - - - -

     (in €)     BASIC EARNINGS/(LOSS) PER ORDINARY SHARE 1.10€ 0.29€ 0.74€ 0.63€ 1.55€ 2.01€ 2.53€ 2.71€ 2.85€

Income Statement

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2011 2012 2013 2014 2015 2016 2017 2018 2019FY FY FY FY FY FY FY FY FY

(€ million) 365 366 365 365 365 366 365 365 365

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES:Profit/(loss) for the period 1,651€ 1,411€ 1,951€ 769€ 1,887€ 2,438€ 3,080€ 3,290€ 3,470€ Amortisation and depreciation 3,358 4,134 4,574 4,822 5,055 5,272 5,489 5,705 5,922 (Gains)/losses from disposal of non

‐current assets - 105 23

Other non

‐cash items (1,106) 47 522

Dividends received 105 89 92 Change in provisions (116) 77 444 Change in deferred income taxes (19) (72) (1,578) Change in items due to buy

‐back commitments (62) (51) 92

Change in operating lease items (28) (10) 1 Change in w orking capital 1,412 714 1,468 122 830 150 - - - TOTAL CASH FLOWS FROM OPERATING ACTIVITIES: 5,195 6,444 7,589 5,713 7,772 7,860 8,568 8,995 9,392

CASH FLOWS FROM/(USED IN) INVESTMENT ACTIVITIES:Investments in:     Property, plant and equipment and intangible assets (5,528) (7,534) (7,440) (7,000) (6,500) (6,500) (6,500) (6,500) (6,500) Investments in consolidated subsidiaries and other investments (22) - (19) Proceeds from the sale of non

‐current assets 329 139 48

Net change in receivables from financing activities (1,218) (24) (449) Change in other current securities (43) (64) (10) Other changes 5,624 (30) (216) TOTAL CASH FLOWS FROM INVESTMENT ACTIVITIES: (858) (7,513) (8,086) (7,000) (6,500) (6,500) (6,500) (6,500) (6,500)

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES:     Issuance of bonds 2,500 2,535 2,866 1,750 (2,500) (2,500) (2,500) (2,500) - Repayment of bonds (2,448) (1,450) (1,000) Issuance of medium

‐term borrow ings 2,149 1,925 3,188

Repayment of medium

‐term borrow ings (3,895) (1,528) (2,549)

Net change in other financial payables and other financial assets/liabilities2,761 197 686 Capital increase 143 22 4 Dividends paid 41 (58) (1) Distribution for tax w ithholding obligations on behalf of non

‐controlling interests (181) (6)

Purchase of ow nership interests in subsidiaries (438) TOTAL  CASH FLOWS FROM FINANCING ACTIVITIES:    632 1,643 3,188 1,750 (2,500) (2,500) (2,500) (2,500) -

Translation exchange differences (419) (909) - - - - - -

TOTAL CHANGE IN CASH AND CASH EQUIVALENTS  4,969 155 1,782 463 (1,228) (1,140) (432) (5) 2,892 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 11,967 17,526 17,657 19,439 19,902 18,674 17,534 17,102 17,097 CASH AND CASH EQUIVALENTS AT END OF PERIOD 17,526 17,657 19,439 19,902 18,674 17,534 17,102 17,097 19,989

STATEMENT OF CASHFLOWS

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2011 2012 2013 2014 2015 2016 2017 2018 2019FY FY FY FY FY FY FY FY FY

(€ million) 365 366 365 365 365 366 365 365 365

ASSETS     Inventories 9,123€ 9,295€ 10,230€ € 10,997 € 11,518 € 11,612 € 12,302 € 12,396 € 12,982Trade receivables 2,625 2,702 2,406 2,586 2,709 2,731 2,893 2,915 3,053 Receivables from financing activities 3,968 3,727 3,671 3,946 4,133 4,167 4,415 4,448 4,658 Current tax receivables 369 236 291 291 291 291 291 291 291 Other current assets 2,088 2,163 2,302 2,302 2,302 2,302 2,302 2,302 2,302 Current financial assets: 789 807 815 815 815 815 815 815 815 Current investments 33 32 35 35 35 35 35 35 35 Current securities 199 256 247 247 247 247 247 247 247 Other financial assets 557 519 533 533 533 533 533 533 533 Cash and cash equivalents 17,526 17,657 19,439 19,902 18,674 17,534 17,102 17,097 19,989 Total Current assets 36,488 36,587 39,154 40,839 40,442 39,452 40,121 40,265 44,090

Intangible assets 18,200 19,284 19,509 19,509 19,509 19,509 19,509 19,509 19,509 Property, plant and equipment 13,213 22,061 22,843 25,021 26,466 27,694 28,705 29,500 30,078 Investments and other financial assets: 4,987 2,287 2,260 2,260 2,260 2,260 2,260 2,260 2,260 Investments accounted for using the equity method 20,785 1,507 1,561 1,561 1,561 1,561 1,561 1,561 1,561 Other investments and financial assets 2,660 780 699 699 699 699 699 699 699 Leased assets 1,579 1 1 1 1 1 1 1 1 Defined benefit plan assets 1,081 93 105 105 105 105 105 105 105 Deferred tax assets 45 1,738 2,893 2,893 2,893 2,893 2,893 2,893 2,893 Total Non

‐current assets 39,105 45,464 47,611 49,789 51,234 52,462 53,473 54,268 54,846

Assets held for sale 1,690 55 9 - - - - - - TOTAL ASSETS 77,283 82,106 86,774 90,628 91,676 91,914 93,594 94,533 98,936

EQUITY AND LIABILITIES       Equity:Equity attributable to ow ners of the parent 8,727 6,187 8,326 12,623 15,262 17,836 20,813 24,089 27,472 Non

‐controlling interest 3,533 2,182 4,258 750 750 750 750 750 750

Provisions:Employee benefits 7,026 11,486 8,265 8,265 8,265 8,265 8,265 8,265 8,265 Other provisions 8,598 8,790 9,095 9,095 9,095 9,095 9,095 9,095 9,095 Debt:Asset

‐backed financing 710 449 596 596 596 596 596 596 596

Other debt 26,062 27,440 29,306 31,056 28,556 26,056 23,556 21,056 21,056 Other financial liabilities 429 201 137 137 137 137 137 137 137 Trade payables 16,418 16,558 17,235 18,526 19,405 19,563 20,726 20,884 21,871 Current tax payables 230 231 314 338 354 356 378 380 398 Deferred tax liabilities 760 801 278 299 313 316 334 337 353 Other current liabilities 7,538 7,781 8,943 8,943 8,943 8,943 8,943 8,943 8,943 Liabilities held for sale - 21 - - - - - - TOTAL EQUITY AND LIABILITIES 80,031 82,106 86,774 90,628 91,676 91,914 93,594 94,533 98,936

BALANCE SHEET

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2011 2012 2013 2014 2015 2016 2017 2018 2019FY FY FY FY FY FY FY FY FY

(€ million) 365 366 365 365 365 366 365 365 365

Revenues:NAFTA 33,800€ 43,521€ 45,777€ 49,091€ 52,644€ 51,136€ 54,690€ 53,182€ 56,735€ LATAM 11,068 11,062 9,973 8,976 9,448 9,973 10,498 11,023 11,548 APAC 2,086 3,128 4,621 5,670 5,670 5,670 5,670 5,670 5,670 EMEA 20,078 17,800 17,420 19,573 21,352 23,132 24,911 26,691 27,580 Luxury Brands 4,000 8,512 7,134 7,134 7,134 7,134 7,134 Components and Production Systems 1,500 1,500 1,500 1,500 1,500 1,500 Other activitiesUnallocated items & adjustments

Total net Revenues 67,032 75,511 81,791 93,321 97,749 98,545 104,403 105,199 110,167

EBIT:NAFTA 1770 2,491€ 2,290€ 2,456€ 2,891€ 2,944€ 3,149€ 3,062€ 3,267€ LATAM 1385 1,025 492 269€ 373€ 570€ 800€ 945€ 990€ APAC 119 255 318 390€ 410€ 430€ 450€ 470€ 490€ EMEA -897 (470) (737) (489)€ 120€ 520€ 910€ 1,050€ 1,085€ Luxury Brands 470€ 762€ 903€ 903€ 903€ 903€ 903€ Components and Production Systems 146 145 145 145 145 145 145 Other activitiesUnallocated items & adjustments (93)€ (98)€ (99)€ (104)€ (105)€ (110)€

EBIT: 2,377 3,301 2,979 3,440 4,745 5,414 6,253 6,470 6,770

EBIT Margin (%):NAFTA 5.2% 5.7% 5.0% 5.0% 5.5% 5.8% 5.8% 5.8% 5.8%LATAM 12.5% 9.3% 4.9% 3.0% 4.0% 5.7% 7.6% 8.6% 8.6%APAC 5.7% 8.2% 6.9% 6.9% 7.2% 7.6% 7.9% 8.3% 8.6%EMEA -4.5% -2.6% -4.2% -2.5% 0.6% 2.2% 3.7% 3.9% 3.9%Luxury Brands 11.8% 15.0% 12.7% 12.7% 12.7% 12.7% 12.7%Components and Production SystemsOther activitiesUnallocated items & adjustments (as % of revenue) 0.0% 0.0% 0.0% -0.1% -0.1% -0.1% -0.1% -0.1% -0.1%

EBIT Margin (%): 3.5% 4.4% 3.6% 3.7% 4.9% 5.5% 6.0% 6.2% 6.1%

Segment Economics

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2011 2012 2013 2014 2015 2016 2017 2018 2019FY FY FY FY FY FY FY FY FY

(€ million) 365 366 365 365 365 366 365 365 365

Vehicle Shipments (000s)NAFTA 1783 2,115 2,238 2,400 2,574 2,500 2,674 2,600 2,774 LATAM 929 979 950 855 900 950 1,000 1,050 1,100 APAC 74 103 163 200 200 200 200 200 200 EMEA 1180 1,012 979 1,100 1,200 1,300 1,400 1,500 1,550 Luxury Brands - 22 48 57 57 57 57 57

Vehicle Shipments (000s) 3,966 4,209 4,352 4,603 4,931 5,007 5,331 5,407 5,681

Revenues per vehicle:NAFTA 20,577€ 20,454€ 20,454€ 20,454€ 20,454€ 20,454€ 20,454€ 20,454€ LATAM 11,299€ 10,498€ 10,498€ 10,498€ 10,498€ 10,498€ 10,498€ 10,498€ APAC 30,369€ 28,350€ 28,350€ 28,350€ 28,350€ 28,350€ 28,350€ 28,350€ EMEA 17,589€ 17,794€ 17,794€ 17,794€ 17,794€ 17,794€ 17,794€ 17,794€ Luxury Brands 179,195€ 179,195€ 125,163€ 125,163€ 125,163€ 125,163€ 125,163€

Total net Revenues 17,940€ 18,792€ 20,276€ 19,824€ 19,681€ 19,585€ 19,456€ 19,393€

EBIT per vehicle:NAFTA 993€ 1,178€ 1,023€ 1,023€ 1,123€ 1,178€ 1,178€ 1,178€ 1,178€ LATAM 1,491€ 1,047€ 518€ 315€ 415€ 600€ 800€ 900€ 900€ APAC 1,608€ 2,476€ 1,951€ 1,951€ 2,051€ 2,151€ 2,251€ 2,351€ 2,451€ EMEA (760)€ (464)€ (753)€ (445)€ 100€ 400€ 650€ 700€ 700€ Luxury Brands 21,055€ 16,050€ 15,840€ 15,840€ 15,840€ 15,840€ 15,840€

EBIT: 599€ 784€ 684€ 747€ 962€ 1,081€ 1,173€ 1,197€ 1,192€

Vehicle Economics


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