The Fiat Group this morning reported a fourth quarter loss of 283 million euros and a full year loss of 848 million euros, its performance for a difficult 2009 for all carmakers dragged down in particular by sales slumps at its Iveco and CNH Global divisions.

Fiat put a chunk of this loss down to one-off charges and the Italian carmaker is buoyant about making a profit this year subject, its size being subject to the continuation of government incentive schemes. The divided will be restored and 237 million euros will be distributed. Net industrial debt was also reduced by 1.5 billion euros during 2009.

The financial markets weren't overly impressed by the data released today and on the Milan bourse Fiat Group Ordinary Shares closed down 3.69 percent at 9.53 euros each, up slightly from a day trading low of 9.45 euros.

Fiat Group 4th Quarter & Full Year

Group revenues for 2009 totalled €50.1 billion, a 15.9% decrease over 2008. Demand was impacted significantly by the global economic slowdown. The levels of decline experienced in the second half of the year, however, were more contained than for the first six months. For the fourth quarter of 2009, Fiat Group recorded €13.6 billion in revenues, representing a 3.6% increase over the final quarter of 2008, when the effects of the economic downturn had already begun to heavily impact volumes.

The Group’s full year trading profit was €1,058 million, compared with €3,362 million for 2008. Decisive cost containment measures helped mitigate the impact of revenue declines, contributing to the achievement of a 2.1% trading margin.

Operating profit was €359 million for 2009, compared with €2,972 million for 2008. The decrease reflected the lower trading profit for the year (-€2,304 million). Net unusual expense of €699 million (net unusual expense of €390 million for 2008) consisted of €312 million in restructuring costs (€165 million for 2008), in addition to €391 million in other unusual items (€245 million for 2008), which included write-downs by the Automobiles business of certain investments in platforms and architectures related to the strategic realignment with Chrysler Group LLC, in addition to other asset write-downs recognized by various Sectors as a consequence of the current global economic crisis. Net financial expense totalled €753 million (€947 million for 2008) and included a €117 million gain in the mark-to-market value of two stock option-related equity swaps (a €263 million loss in 2008). Excluding the effect of those equity swaps, financial expense for the year increased €186 million, primarily due to a higher level of debt during the year.

The Group recorded a loss before taxes for the year of €367 million (profit before taxes of €2,187 million for 2008). This reflects a significantly lower operating result (down €2,613 million) and a decrease in investment income (down €135 million), which were partially offset by lower net financial expense. Income taxes totalled €481 million (€466 million for 2008) and related to the taxable income of companies operating outside Italy and employment-related cash income taxes (IRAP) in Italy.

2009 closed with a net loss of €848 million (€267 million loss excluding the impact of unusuals), compared with a profit of €1,721 million for the prior year. Despite the considerable decrease in business volumes and consequent effect on profitability, the realignment of production levels (which impacted positively on the level of working capital) and disciplined management of capital expenditure resulted in an improvement in net industrial debt to €4.4 billion, down €1.5 billion compared to yearend 2008.

At 31 December 2009, Group liquidity was at €12.4 billion (€3.9 billion at year-end 2008), therefore covering contractual cash maturities well beyond 2011 and ensuring the Group significant financial flexibility. Four major bond issues were completed in the second half, providing a total of €4.7 billion in financing. Furthermore, during the year the Group also took advantage of the progressive restoring of the North American ABS market.

The dividend distribution will be proposed as follows: €0.17 per ordinary share, representing a total distribution of €186 million (€179 million excluding the treasury shares currently owned); €0.31 per preference share, representing a total distribution of €32 million; and  €0.325 per savings share, representing a total distribution of €26 million.

For 2009, Fiat Group Automobiles posted revenues of €26.3 billion, a 2.4% decrease over 2008 (substantially unchanged at constant exchange rates). After the sharp volume declines experienced in the first half resulting from the significant contraction in demand, the Sector achieved year-on-year volume increases for passenger cars in the second half. Fiat Group Automobiles delivered a total of 2,150,700 passenger cars and light commercial vehicles for the year, in line with 2008 (2,152,500). There was a significant divergence, however, between performance for passenger cars (+5.7%) and light commercial vehicles (-24.8%). In Western Europe, total deliveries were unchanged at 1,238,100 units. Performance was positive in Italy (+0.5%) and the UK (+5.2%) and very strong growth was achieved in Germany (+46.2%). There was a decrease in France (-7.3%) and a sharp decline in Spain (-48.3%), with the latter also impacted by measures adopted to realign dealer inventory levels to market demand.

For passenger cars only, FGA delivered a total of 1,843,400 units (+99,600 units over 2008). For Western Europe, passenger car deliveries rose 8.9% to 1,085,100 units, with the level of demand increasing slightly (+0.5%) over 2008. Deliveries were up 6.2% in Italy, 17.7% in the UK, and doubled in Germany (+96.6%), significantly outpacing overall growth in those markets. Deliveries increased 1% in France and were down 43.9% in Spain. After a particularly negative start to the year, the introduction of incentives in several major markets led to a gradual recovery in demand in Western Europe, where the passenger vehicle market closed the year slightly higher than 2008 (+0.5%). These schemes had a very positive impact on demand levels in Germany, where the market was up 23.2% for the year, and France, which grew 10.7%. In Italy, government incentives helped maintain demand substantially in line with 2008 (-0.2%). There was a fall in demand in both the UK (-6.4%) and Spain (-17.9%), where incentives were introduced toward the end of the first half. In Brazil, demand was up 12.6%, aided by government incentives on new car purchases and a generally favourable economic environment.

FGA's strong offering of environmentally friendly cars enabled the Sector to fully benefit from eco-based government incentives. Fiat Group Automobiles continued to make positive share gains in the passenger vehicle market, reaching 32.8% in Italy (+0.9 percentage points over 2008) and 8.8% in Western Europe (+0.6 percentage points). FGA's relative performance was particularly strong in Germany (+1.5 percentage points to 4.7%) and positive also in the UK (+0.6 percentage points to 3.5%). The Fiat brand increased its market share to 7.1% in Western Europe (+0.5 percentage points over 2008) and 25.5% in Italy (+0.4 percentage points). Lancia and Alfa Romeo both improved Western European market share by 0.1 percentage points, to 0.9% and 0.8% respectively.

A total of 307,300 light commercial vehicles were delivered in 2009, representing a 24.8% decrease over 2008. In Western Europe, where the overall market fell 27.4%, deliveries were down 36.5% to 153,000 units. This was partially due to measures implemented to realign dealer inventory levels with the significant slowdown in demand. Fiat Professional increased market share 0.3 percentage points in Western Europe to 12.6%. Share was down 3.4 percentage points in Italy (39.9%), driven by the phase out of Doblò (market supply of the new Doblò in early 2010) and sharp drop in the camper segment, where Fiat Professional has the lion’s share of the market. In Brazil, deliveries for cars and light commercial vehicles increased 12.6% over 2008. FGA maintained its leadership of the market, recording a 24.5% share.

Fiat Group Automobiles recorded a €470 million trading profit for 2009 (trading margin of 1.8%), compared to the €691 million figure for 2008 (2.6% margin). The decrease was primarily attributable to weaker demand for light commercial vehicles which was partially offset by cost containment measures.

For Q4 2009, Fiat Group Automobiles had revenues of €7.2 billion, representing a 27.1% increase over the same period in 2008, when the economic crisis had already begun to reflect significantly on sales volumes. Trading profit was €190 million for the fourth quarter (2.6% trading margin), compared to €65 million for the same period in 2008. A total of 556,100 passenger cars and light commercial vehicles were delivered during the quarter, up 30.1% over the same period in 2008 (+36.2% for passenger cars only). In Western Europe, FGA delivered a total of 318,900 units, an increase of 27% (+33.1% for passenger cars only).

In the fourth quarter, the passenger vehicle market recorded significant growth in Western Europe (+21.5%) and Italy (+21.2%) compared to Q4 2008, a period marked by a severe deterioration in economic conditions. Fiat Group Automobiles had a 31.5% share in Italy (-0.2 percentage points over Q4 2008) and an 8.4% share in Western Europe (+0.1 percentage points). For the Fiat brand, 2009 was the year of the Punto Evo, a companion to the Grande Punto, which sets a new standard in innovation, safety and style in the B segment. The name Evo underscores the advancement and excellence in automotive technology expressed, above all, by the extensive range of Euro 5 engines offered, including the 1.3 MultiJet II, 1.4 MultiAir and the bifuel CNG/gasoline engines. December saw the press launch of Fiat's new Doblò, with renewed styling, range of engines and technical specifications. Other products launched during 2009 include the Fiat 500C cabriolet with an electrically controlled soft-top. Toward the end of the year, the new Euro 5 1.3 MultiJet II engine, equipped with the Start&Stop system as standard, was made available on the Fiat 500C and Fiat 500. Fiat also expanded its offer of bi-fuel vehicles (LPG/gasoline or CNG/gasoline), adding versions of the Qubo, Punto Classic and Idea to the existing Panda, Grande Punto and Bravo line up. In addition, the Sedici underwent styling and engine upgrades. In September 2009, after two years of leadership, JATO Dynamics once again confirmed the Fiat brand as having the lowest average CO2 emissions amongst the top 25 selling brands in Europe.

In 2009, Alfa Romeo launched the 105 hp and 135 hp MiTo 1.4 MultiAir, the Group's first vehicle to be equipped with this new technology for application on gasoline engines. Also of note was the 170 hp “Quadrifoglio Verde” version. The range of engines available on the MiTo was further expanded to include the 120 hp 1.4 Turbo gasoline, the first bifuel (LPG/gasoline) turbo produced directly by the Group, and the 95 hp 1.3 JTDM-2 diesel engine with the Start&Stop system as standard. During the year, Alfa Romeo also launched two new Euro 5 engines: the 170 hp 2.0 JTDM diesel and the 200 hp 1750 Turbo gasoline (TBi) which are available on the Brera, Spider and 159 nameplates. Lancia released the new Delta Executive, equipped with numerous advanced technological features and the new 200 hp, 1.8 Di TurboJet, a Euro 5 direct injection gasoline engine which offers the Delta more power and lower emissions. In October, Lancia presented the Delta Turbo LPG, with its 120 hp 1.4 bifuel (LPG/gasoline) TurboJet engine. In 2009, Abarth presented two new models: the Abarth 695 "Tributo Ferrari" and the Abarth 500 R3T, which will feature in an upcoming promotional street-racing trophy. Fiat Professional released the Ducato 140 Natural Power at the beginning of the year followed in the Autumn by the launch of the Fiorino Metano, a bi-fuel (CNG/gasoline) vehicle which is the only one of its type in the segment. Capping off the year was the arrival of the new Doblò Cargo, the latest and significantly upgraded version of a commercial vehicle which to date has sold more than one million units.

For 2009, Maserati reported revenues of €448 million, down 45.7% over the previous year. A total of 4,489 cars were delivered to the network during the year, a 48.7% year-on- year decrease attributable to the significant decline in demand in the company's reference markets. Maserati maintained its overall market share, with an improvement in the Quattroporte’s segment. For 2009, Maserati had a trading profit of €11 million (€72 million for 2008) with a realignment of production levels and rigorous cost containment measures partly offsetting the significant decline in volumes. Maserati reported €129 million in revenues for Q4 2009, down 43.7% over the same period for the prior year. Despite continued volume declines, Maserati succeeded in posting a trading profit of €5 million for the quarter (€41 million for Q4 2008). During the year, Maserati presented the Quattroporte Sport GT S, the best optimization ever achieved by Maserati between a luxury sedan and a sports car. This was followed by the GranTurismo S Automatic, a powerful 8-cylinder with highly evolved automatic transmission, and then the GranCabrio, the marque's first ever 4-seater cabriolet. This soft-top convertible, the result of an extensive study in aerodynamics, offers a more spacious interior than the average in its segment and is equipped with a 4.7 litre V8 engine (440 hp) coupled with a 6-speed transmission with torque converter.

For 2009, Ferrari had revenues of €1,778 million, down 7.4% over 2008 due to lower sales volumes and a less favourable sales mix. A total of 6,235 vehicles were delivered to the network during the year, a decrease of 4.5% against an approximate 40% drop for Ferrari's reference segment globally. In particular, deliveries of 8-cylinder vehicles benefited from the success of the Ferrari California, while the new 458 Italia, presented in the latter part of the year, did not contribute to 2009 results, but has already recorded a significant order intake. A total of 6,294 units were sold to end customers (-5.5% over 2008). Ferrari closed 2009 with a trading profit of €238 million, compared to €339 million for 2008. The year-on-year decrease reflects the negative impact of volumes and product mix (both particularly favourable in 2008), in addition to unfavourable currency movements. These negative effects were partially offset by efficiency gains. For Q4 2009, Ferrari recorded revenues of €491 million, down 2.2% over the same period for the prior year. Trading profit was €62 million. The decrease over the €96 million figure for Q4 2008 was attributable to the negative impact of product mix and unfavourable currency impacts which were partially offset by increased efficiencies. In 2009, Ferrari presented several new products. First and foremost the 458 Italia, a vehicle that represents Italy in both name and spirit: from its creativity to its capacity to innovate. This vehicle, which made its debut at the Frankfurt Motor Show in September, represents a new generation. It is powered by a rear centre-mounted 4.5-litre 8-cylinder engine capable of delivering 570 hp. The vehicle offers exceptional performance: a top speed of more than 325 kilometres per hour and acceleration from 0 to 100 kph in under 3.4 seconds. In addition, with Ferrari’s extensive competition experience, this extraordinary concentration of innovation boasts outstanding fuel performance for a supercar consuming just 13.3 l per 100 km. Also of note is the Handling GT Evoluzione (HGTE) package on the 599 GTB Fiorano, which provides a decidedly sportier driving experience. Also presented in 2009 was the 599XX, a non-type approved car for on-track use, targeted at a select customer base who desire the highest level of performance and technological innovation, some of which has been applied on a vehicle for the first time ever.

Notwithstanding the steep volume declines, Iveco delivered a trading profit of €105 million in 2009 (€838 million in 2008), due to realignment of production levels and rigorous cost containment measures, as well as margin support from the after-sales activities, Latin America and special vehicles business. For Q4 2009, Iveco had revenues of €2.2 billion, down 8% over the same period in 2008, when the economic crisis had already impacted volumes. Iveco reported a €77 million trading profit for the fourth quarter, compared to €187 million for Q4 2008.

In 2009, Iveco launched the EcoDaily, the latest evolution of an extremely successful model, with enhancements to both look and comfort. The vehicle is now available with four ecological engines: two diesel engines which meet the strict EEV (Enhanced Environmentally-friendly Vehicle) standard, a bifuel CNG/gasoline engine and an electric engine. Iveco Irisbus presented the Magelys HDH, a coach that belongs to an elite class of sophisticated buses designed for the luxury tourist market in Europe. Meanwhile, Beijing saw the presentation of the Genlyon, the new “heavyweight” from SAIC-Iveco Hongyan Commercial Vehicles (SIH). In the latter part of the year, Iveco presented the new Vertis medium-segment vehicle (9-13 tons) at the Fenatran Trade Show in São Paulo. In Latin America, Iveco also presented an electric prototype of the Daily, the first zero-emission light commercial vehicle produced in this region. During the year, Iveco products received numerous awards in various parts of the world. In the United Kingdom, the Daily CNG was named ‘Green Van of the Year 2009’. Iveco won the international ‘Transport Innovation of the Year’ award for Blue&Me Fleet, an advanced telematic fleet management system. In Ireland, the Daily was named “Green Commercial of the Year 2009” and in Brazil Iveco won the "Truck of the Year" award for the 3rd year running with the medium-segment Tector. Similar recognition was received in China, where the new heavy segment Genlyon was named "Truck of the Year" by a leading Chinese trade journal.

For 2009, FPT Powertrain Technologies had revenues of €4,952 million, down 29.3% over 2008 due to a decline in sales volumes which was particularly pronounced for the Industrial & Marine product line. Sales to external customers and joint ventures accounted for 16% of the total (22% for 2008). The Passenger & Commercial Vehicles product line reported revenues of €3,372 million, a 7.6% decline over 2008, which was contained by a recovery in many major car markets during the second half of 2009. Sales to Fiat Group companies accounted for 92% of revenues with the remainder consisting principally of diesel engines sold to external customers. A total of 2,290,000 engines (-2.7%) and 2,208,000 transmissions (+9.4%) were sold during the year. Industrial & Marine reported revenues of €1,580 million, down 53% over 2008 due to the sharp volume declines experienced. A total of 268,000 engines (-50.9%) were sold, primarily to Iveco (38%), CNH (25%) and Sevel (26%), the JV in light commercial vehicles. In addition, 53,000 transmissions (-50.2%) and 105,000 axles (-61.5%) were delivered.

FPT closed 2009 with a trading loss of €25 million, compared to a profit of €166 million for 2008. The decrease was principally the result of a contraction in volumes and more importantly, a less favourable sales mix. Significant efficiency gains achieved in overhead, manufacturing and purchasing costs only partially offset those negative impacts.

FPT's revenues for the fourth quarter of 2009 were €1,342 million, up 3.6% over the same quarter in 2008 when the economic crisis had already begun to have a significant effect. There was a significant difference in performance between the two product lines: revenues for Passenger & Commercial Vehicles increased 37% to €911 million, while Industrial & Marine experienced a decrease of 31% to €439 million. Sales to external customers and joint ventures accounted for 16% of the total (22% for 2008). FPT reported a trading profit of €40 million for Q4 2009, compared to €11 million for Q4 2008. The increase is attributable to the combined effect of cost reduction measures and slightly higher sales volumes.

During 2009, FPT Powertrain Technologies presented numerous new products. One of the most important was the MultiAir system that offers direct control of the air intake and combustion for gasoline engines. Recipient of the “Technobest 2009”, “ADAC – Gelber Engel 2010” and “Engine Development Team of the Year” (from Automotive Testing Technology International) awards, this system generates 10% more power and 15% more torque than a traditional engine of equivalent cubic capacity, while at the same time delivering a 10% reduction in both fuel consumption and CO2 emissions. For diesel engines, developments included the Euro 5 1.3 Small Diesel Engine (in both 75 hp and 95 hp versions), complete with the innovative Common Rail MultiJet II injection system. The Sector also released a bifuel CNG/gasoline engine for the Fiat Ducato 140 Natural Power and two new engines for the Alfa MiTo (the 120 hp, 1.4 Turbo gasoline and the 90 hp, 1.3 JTDM). In September, production also commenced on a heavy duty Euro 5 version of the 107 kW F1C engine (with variable geometry turbo) for the Ducato. Four engines ranging in output from 106 hp to 170 hp were released for the new EcoDaily. These engines meet the strict EEV (Enhanced Environmentally-friendly Vehicle) standard and guarantee a 10% reduction in both fuel consumption and CO2 emissions. The range of FPT engines for the EcoDaily was further expanded to include a bifuel engine (CNG/gasoline) that is also EEV compliant. Other developments include launch of production for the Cursor (C87) diesel engines by SAIC Fiat Powertrain Hongyan joint venture at its new site in Chongqing (China) and, FPT’s presentation of the 380 hp and 620 hp versions of the new C90 at the 2009 Genoa International Boat Show. This engine expands the range of FPT marine engines for both recreational and professional use. For transmissions, the plant in Verrone (Piedmont) commenced production on the new C635 family created for the medium segment vehicles (both gasoline and diesel) of FGA and Chrysler.

For 2009, Magneti Marelli posted a trading profit of €25 million (€174 million for 2008). The positive effect of reductions in overheads and increased production and purchasing efficiencies enabled the Sector to contain the impact of lower revenues. For Q4 2009, Magneti Marelli reported revenues of €1,280 million (+11.7% over Q4 2008). Trading profit was €43 million, an improvement over the €9 million figure for the fourth quarter of 2008, which had already been significantly impacted by volume declines attributable to the economic downturn.

During the year, Magneti Marelli completed development on the instrument panel and LED tail lights for the Ferrari 458 Italia and instrument panel, mobile information system, front lights and tail lights for the Maserati GranCabrio. It also designed and produced instrument panels and LED tail lights for the Punto Evo, “intelligent” suspension systems for the Lancia Delta and Alfa MiTo, latest generation integrated navigation systems for many FGA products (such as the Alfa MiTo and Fiat Bravo), and an engine control unit and exhaust system for the Alfa MiTo with 1.4 MultiAir. In addition, several new engine control and lighting system components were developed and produced for other major European automakers.

On 10 June 2009, Chrysler Group LLC and Fiat finalized an agreement for a global strategic alliance and the new Chrysler became operational on the same date. The agreement grants Chrysler access to Fiat's world-class technology, platforms and powertrains for small and medium-sized cars, which will enable the US automaker to expand its product offer, including through the addition of several low environmental impact models. Chrysler will also have access to Fiat’s international distribution network. The alliance represents an important step toward positioning both Fiat and Chrysler among the next generation of leaders of the global auto industry. As consideration, Fiat received an initial equity interest of 20% in the newly-formed Chrysler Group LLC, which could increase up to a total of 35% upon achievement of specific pre-established targets. The agreement does not contemplate any cash investment in Chrysler by Fiat or commitment to fund Chrysler in the future. Fiat will also have the right to acquire a majority interest in Chrysler once all government loans have been fully repaid. The alliance is expected to bring enormous benefits to both companies by giving them the critical mass necessary to compete on a global level. Fiat will also be able to expand its geographical footprint by leveraging new market opportunities such as a return to the US market and introduction of new models in Europe. In addition, the presence and experience of Fiat in the smaller car segments combined with that of Chrysler in the medium and larger segments will enable the Group to offer a full product range. Chrysler's strategic business plan, presented at the beginning of November 2009, projects the launch of 21 new models over the next five years and sales volumes increasing to 2.8 million cars in 2014 (40% higher than in 2008 and more than double 2009 volumes). Approximately 60% of those vehicles are to be based on Fiat platforms. By 2014, Chrysler expects to achieve annual revenues of approximately USD 68 billion and operating income of USD 5 billion, with its current debt level halved and loans from the American and Canadian governments fully repaid.

At the beginning of July, Fiat and Guangzhou Automobile Group Co., Ltd. (GAC Group) signed a framework agreement for the establishment of a 50/50 joint venture to produce cars and engines for the Chinese market. The agreement calls for the construction of a new plant with an expected total investment by the joint venture of more than €400 million. Upon completion of the first phase of development, the plant will have a production capacity of 140,000 cars and 220,000 engines per year. There is an option to subsequently increase capacity to 250,000 cars and 300,000 engines per year. Production is scheduled to commence in the second half of 2011. At the beginning of October, CNH and KAMAZ (the leading heavy truck manufacturer in Russia and one of the largest globally) signed a letter of intent to form an industrial and commercial alliance that will further strengthen CNH’s leading position in Russia’s agricultural and construction equipment sectors. Under the agreement, the two companies will set up an industrial joint venture whose initial objective will be the local production of CNH agricultural and construction equipment for distribution in Russia. Production is scheduled to commence in 2010. The two companies will also integrate their respective sales networks that will distribute the full range of CNH products (both locally-produced and imported) in the Russian Federation.

In September, Fiat entered the Dow Jones Sustainability World and Dow Jones Sustainability STOXX Indexes - recognition of the fact that sustainability forms an integral, daily part of the Group’s way of doing business. The Company received a score of 90/100 compared with an average of 72/100 for the sector. The DJSI World and DJSI STOXX, two of the most prestigious equity indexes, only admit companies that are demonstrated leaders in terms of economic as well as social and environmental performance.

On December 22, Chief Executive Sergio Marchionne met in Rome with representatives of the Italian government and unions to discuss Fiat's activities in Italy. The meeting focused particularly on Fiat Group Automobiles, as well as on its alliance with Chrysler.

After a particularly difficult 2009, with uneven trading conditions across the Group’s international scope of operations, 2010 is positioning itself as a year of transition and stabilization. We expect all of our sectors to improve performance over the prior year, with the exception of the Automobiles business the performance of which will depend on the continued availability of reliable eco-incentives programs to underpin demand in Western Europe. Our forecasts include a continuation of the rigorous cost containment action initiated as early as the latter part of 2008, and which were implemented vigorously throughout 2009. The capital expenditures programs which formed part of the 2007-2010 industrial plan outlined to the financial community in November 2006 underwent a severe contraction in 2009, in response to the uncertainty of the demand function for our various businesses and the tightening of credit markets. This contraction is expected to ease in 2010, with the resumption of a normalized level of capital commitments across all sectors, yielding a 30% to 35% rise in expenditures over 2009.