Q Results November 2 nd, 2017

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Transcription:

Q3 2017 Results November 2 nd, 2017 11

SAFE HARBOUR STATEMENT This document, and in particular the section entitled 2017 Outlook, contains forward-looking statements. These statements may include terms such as may, will, expect, could, should, intend, estimate, anticipate, believe, remain, on track, successful, grow, design, target, objective, goal, forecast, projection, outlook, prospects, plan, or similar terms. Forward-looking statements are not guarantees of future performance. Rather, they are based on the Group s current expectations and projections about future events and, by their nature, are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including: the Group s ability to preserve and enhance the value of the Ferrari brand; the success of Ferrari s Formula 1 racing team and the expenses the Group incurs for Formula 1 activities; the Group s ability to keep up with advances in high performance car technology and to make appealing designs for its new models; the challenges and costs of integrating hybrid technology more broadly into Group s car portfolio over time; the Group s ability to preserve its relationship with the automobile collector and enthusiast community; the Group s low volume strategy; the ability of Maserati, the Group s engine customer, to sell its planned volume of cars; changes in client preferences and automotive trends; changes in the general economic environment and changes in demand for luxury goods, including high performance luxury cars, which is highly volatile; the impact of increasingly stringent fuel economy, emission and safety standards, including the cost of compliance, and any required changes to its products; the Group s ability to successfully carry out its growth strategy and, particularly, the Group s ability to grow its presence in emerging market countries; the Group s ability to service and refinance its debt; competition in the luxury performance automobile industry; reliance upon a number of key members of executive management, employees and the ability of its current management team to operate and manage effectively; the performance of the Group s dealer network on which the Group depend for sales and services; increases in costs, disruptions of supply or shortages of components and raw materials; disruptions at the Group s manufacturing facilities in Maranello and Modena; the Group s ability to provide or arrange for adequate access to financing for its dealers and clients, and associated risks; the performance of the Group s licensees for Ferrari-branded products; the Group s ability to protect its intellectual property rights and to avoid infringing on the intellectual property rights of others; product recalls, liability claims and product warranties; continued compliance with customs regulations of various jurisdictions; labor relations and collective bargaining agreements; exchange rate fluctuations, interest rate changes, credit risk and other market risks; changes in tax, tariff or fiscal policies and regulatory, political and labor conditions in the jurisdictions in which the Group operates; ability to ensure that its employees, agents and representatives comply with applicable law and regulations; the adequacy of its insurance coverage to protect the Group against potential losses; potential conflicts of interest due to director and officer overlaps with the Group s largest shareholders; ability to maintain the functional and efficient operation of its information technology systems and other factors discussed elsewhere in this document. Any forward-looking statements contained in this document speak only as of the date of this document and the Company does not undertake any obligation to update or revise publicly forward-looking statements. Further information concerning the Group and its businesses, including factors that could materially affect the Company s financial results, is included in the Company s reports and filings with the U.S. Securities and Exchange Commission, the AFM and CONSOB. 22

A RECORD THIRD QUARTER Solid revenues of 836 million (+7%) driving adj. EBIT (1) to 202 million (+17%) Ferrari Portofino presented in September, already with a robust waiting list Strong success of Ferrari s client relations activities 2017 Outlook revised upward ON THE WAY TO 1 BILLION EURO ADJ. EBITDA Note:(1) Reconciliations to non-gaap financial measures are provided in the appendix 3

Q3 2017 HIGHLIGHTS Shipments (units) Q3 '17 Q3 '16 2,046 1,978 Net revenues ( M) Q3 '17 838 836 +3.4% +6.7% Q3 '16 783 783 Total shipments up 68 units mainly driven by 27% increase in V12 models. Few units decrease of V8 mostly due to the California T phase-out: The GTC4Lusso and the 488 families The California T and the F12berlinetta continue to perform strongly phasing-out, as well as F12tdf finishing its LaFerrari Aperta fully contributing limited series run The 812 Superfast just arrived in EMEA Deliveries of the Ferrari Portofino will commence in 2018 Net revenues up 6.7% (9.3% at constant currencies, mainly due to USD weakening vs. Euro) Cars and spare parts leading the way with volume, mix and pricing Partially offset by Engines due to the termination of the rental agreement with a Formula 1 racing team and slightly lower sales to Maserati due to a different production schedule as well as the deconsolidation of the European Financial Services business (November 2016) Adjusted EBITDA (1) ( M and margin %) Q3 '17 Q3 '16 266 31.8% 234 30.0% Adjusted EBIT (1) ( M and margin %) Q3 '17 202 24.2% +13.2% +17.3% Q3 '16 172 22.0% Adjusted EBITDA (1) grew by 13.2%, primarily driven by higher volumes, mix thanks to LaFerrari Aperta and pricing. Partially offset by higher R&D expenses for innovation, components and hybrid technology. Adjusted EBIT (1) margin increased by 220 bps driven by strong adjusted EBITDA (1) Industrial free cash flow (1) ( M) Q3 '17 Q3 '16 147 178 Industrial free cash flow (1) driven by strong adjusted EBITDA (1), partially offset by net change in working capital, capex and lack of contribution from advances of LaFerrari Aperta. Second 2017 tax advance payment will impact next quarter. Net industrial debt (1) ( M) Sept. 30, 2017 Dec. 31, 2016 (653) (485) -17.4% -25.7% Net industrial debt (1) reduced to 485 million thanks to positive industrial free cash flow (1) generation Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix. Q3 2017 Results Certain totals in the tables included in this document may not add due to rounding. November 2 nd, 2017 4

Q3 2017 SHIPMENTS BY REGION (2) Americas (36% vs. 35% PY) China, Hong Kong and Taiwan, on a combined basis (7% vs. 9% PY) Rest of APAC (13% vs. 12% PY) EMEA (44% vs. 44% PY) Americas +5.0% USA increased by 1% with a strong performance of the 488 family, the GTC4Lusso and the limited edition LaFerrari Aperta. Partially offset by California T and the F12berlinetta phasing-out. The F12tdf is finishing its limited series run. The GTC4Lusso T and the 812 Superfast yet to arrive on the market EMEA: +5.1% UK up almost 3% thanks to the 488 and the GTC4Lusso families while the 812 Superfast is yet to arrive on the market. The California T and the F12berlinetta phasing-out, while the F12tdf is finishing its limited series run. Double-digit growth in Italy (+24%) and France (+23%) thanks to the 488 and the GTC4Lusso families as well as the 812 Superfast just arrived on the market. Germany flat due to the California T and the F12berlinetta phasing-out. Other European countries up double-digit, while Middle East recorded a decrease due to reallocation triggered by tough market conditions China, Hong Kong and Taiwan, on a combined basis: -15.6% China mid single-digit growth supported by the GTC4Lusso family. 812 Superfast is yet to arrive on the market. Hong Kong slowdown as the new dealership became fully operational in Q3 2017 Taiwan few units decrease due to the California T and the F12berlinetta phasing-out Rest of APAC: +7.1% Japan shipments up 16% thanks to V8 models, the GTC4Lusso and LaFerrari Aperta. Partially offset by the F12berlinetta phasing-out and the F12tdf finishing its limited series run. Australia substantially in line with prior year Other APAC shipments in line with prior year SOLID PERFORMANCE OF THE 488 AND THE GTC4LUSSO FAMILIES AS WELL AS LAFERRARI APERTA. 812 SUPERFAST JUST ARRIVED IN EMEA Q3 2017 Results Note: (2) Refer to notes to the presentation in the Appendix November 2 nd, 2017 5

NET REVENUES BRIDGE Q3 2016-2017 ( M) 783 24 125 97 +12.7% -9.8% -1.3% -18.8% 68 (9) (1) (5) 836 19 124 88 +6.7%, + 53 million (+9.3% at constant currencies, mainly due to USD weakening vs. Euro) 537 605 (3) (4) Q3 2016 Cars and spare parts Engines Sponsorship, commercial and brand(5) (6) Other Q3 2017 Cars and spare parts Engines Sponsorship, commercial and brand Other Cars and spare parts: higher volumes and positive mix led by the 488 and the GTC4Lusso families, as well as LaFerrari Aperta along with a greater contribution from personalization programs and pricing increases. Partially offset by the non-registered racing car FXX K completing its limited series run in 2016. Engines: slight decrease due to the termination of the rental agreement with a Formula 1 racing team and slightly lower sales to Maserati due to a different production schedule Sponsorship, commercial and brand: almost in line with prior year mostly due to lower 2016 championship ranking compared to 2015. Partially offset by higher sponsorship revenues and brand related revenues. Other: decrease mostly due to the deconsolidation of the European Financial Services business since November 2016 Q3 2017 Results Note: Refer to notes to the presentation in the Appendix November 2 nd, 2017 6

( M) 172 ADJ. EBIT BRIDGE Q3 2016 2017 (1) 23 7 14 0 179 185 (8) (2) (21) 17 202 Margin 22.0% Margin 22.7% (7) Margin 22.6% (7) Margin 24.2% Adj. EBIT Q3 2016 FX hedges Q3 2016 Adj. EBIT Q3 2016 w/o FX hedges Adj. EBITDA Vol. Mix Ind. Costs / R&D SG&A FX Other Adj. EBIT Q3 2017 w/o FX hedges Adj. EBITDA FX hedges Q3 2017 Adj. EBIT Q3 2017 Top high end Adj. EBITDA w/o FX hedges (7) w/o FX hedges (7) Adj. EBITDA EBITDA 234 241 249 266 Margin (8) 30.0% 30.5% 30.4% 31.8% 33% - 37% Volume increase of approx. 55 cars (excluding LaFerrari Aperta) thanks to the GTC4Lusso and the 488 families, together with positive contribution from personalization. Partially offset by the California T and the F12berlinetta phasing-out. Positive mix impacted by LaFerrari Aperta as well as pricing increases. This was partially offset by the non-registered racing car FXX K that completed its limited series run in 2016. Industrial costs / R&D increased mainly due to higher R&D expenses to support product range and components innovation for hybrid technology. Partially offset by lower spending in F1 activities. SG&A slightly higher than prior year, impacted by costs related to the 70 th anniversary and the approved Long-Term Incentive plan. Partially offset by the deconsolidation of the European Financial Services business since November 2016. FX, excluding hedges, negatively impacted mostly due to USD, JPY and GBP depreciation Other in line with previous year due to positive contribution from supporting activities, offset by lower 2016 championship ranking compared to 2015, the termination of the rental agreement with a Formula 1 racing team and the deconsolidation of the European Financial Services business since November 2016 luxury peers (8) Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix Q3 2017 Results (7) Margins without FX hedges have been calculated excluding FX hedges impact from net revenues, adjusted EBIT and adjusted EBITDA (8) Ferrari s elaboration on FY 2016 publicly available data on a panel of high end luxury peers November 2 nd, 2017 7

NET INDUSTRIAL DEBT BRIDGE (1) JUN 30, 2017 SEPT 30, 2017 ( M) Industrial FCF 147m 266 (627) 9 (34) (1) (93) (1) (4) (485) June 30, 2017 Net Industrial Debt EBITDA Net working capital Tax paid Capex Other Cash distribution and dividends paid FX and other September 30, 2017 Net Industrial Debt Net change in working capital: decreases in trade payables and inventory due to seasonality in conjunction with the scheduled summer shutdown Tax paid: second 2017 tax advance payment will impact Q4 2017 Other: positively impacted by accruals and reserves related to deferred compensations as well as provisions, partially offset by lack of contribution from advances of LaFerrari Aperta Q3 2017 Results Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix November 2 nd, 2017 8

A GT that represents a unique combination of sportiness, elegance and on board comfort The renowned Ferrari V8 turbo, part of the engine family that was nominated International Engine of the Year in both 2016 and 2017, now punches out 40 cv more than the California T s power unit Capable of unleashing a massive 600 cv, the Ferrari Portofino is the most powerful convertible to combine the advantages of a retractable hard top, a roomy boot and generous cockpit space plus two rear seats suitable for short trips. 99

Q3 2017 CLIENT RELATIONS ACTIVITIES WORLD TOUR China, August 12 th 17 th USA, August 18 th 20 th Italy, September 2 nd 3 rd Italy, September 8 th 10 th Maranello Weekend September 8 th 10 th RM Auction Concours d Elegance Celebration of 70 th anniversary at home Portofino World Premiere September 7 th - 8 th Frankfurt Motorshow September 12 th - 24 th Florence, Italy September 25 th 30 th 10

Q3 2017 ATTIVITA SPORTIVE GT COMPETIZIONI GT FIA WEC 1 st - 6 Hours of Circuit of the Americas (GTE-Pro) IMSA 2017 Team, Drivers and Manufacturer Champions (GTD) FERRARI CHALLENGE Average entries per round EUROPE 41 (round 5) NORTH AMERICA 45 (round 6) ASIA PACIFIC 29 (round 6) XX PROGRAMS / F1 CLIENTI Average entries per round XX: 23 F1: 8 CONTINUOUSLY ENGAGING WITH OUR CUSTOMERS 11

Q3 2017 OTHER ACTIVITIES Licensing Launch of Bianchi for Scuderia Ferrari project with SF01 world premiere at Eurobike show New license agreement with Cybex for Scuderia Ferrari infant car seats and a collection of strollers Retail At the end of September 2017, managing 18 directly operated stores and 29 franchised locations (including 7 Ferrari Store Junior). New Store at Scalo Milano opened in September 2017 Museums More than 432,000 visitors since the beginning of the year between Maranello and Modena, up 11% vs. prior year 12

2017 OUTLOOK REVISED UPWARD Revised Outlook Previous Outlook 2017 Drivers Shipments ~ 8,400 (9) Same Strong contribution from range models (including special liveries) and LaFerrari Aperta Net Revenues ~ 3.4 billion > 3.3 billion Top line growth driven by Cars and spare parts as well as Engines, partially offset by different F1 ranking and deconsolidation of the European Financial Services business Adj. EBITDA (1) ~ 1 billion > 950 million Positive contribution from both Volume and Mix, partially offset by R&D and SG&A (F1, new stores and 70 th anniversary) Net Industrial Debt (1) < 500 million (10) ~ 500 million (10) Strong adj. EBITDA, partially offset by capex to support continuous product range renewal and R&D for hybridization, taxes, lack of advances on limited edition supercars and cash distributions to holders of common shares Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix (9) Including supercars (10) Including a cash distribution to the holders of common shares and excluding potential share repurchases 13

Q&A 14

Appendix

NOTES TO THE PRESENTATION 1. Reconciliations to non-gaap financial measures are provided in the appendix 2. Shipments geographical breakdown EMEA includes: Italy, UK, Germany, Switzerland, France, Middle East (includes the United Arab Emirates, Saudi Arabia, Bahrain, Lebanon, Qatar, Oman and Kuwait) and Rest of EMEA (includes Africa and the other European markets not separately identified); Americas includes: United States of America, Canada, Mexico, the Caribbean and Central and South America; China, Hong Kong and Taiwan includes, on a combined basis: China, Hong Kong and Taiwan; Rest of APAC includes: Japan, Australia, Singapore, Indonesia and South Korea 3. Includes the net revenues generated from shipments of our cars, including any personalization revenue generated on these cars and sales of spare parts 4. Includes the net revenues generated from the sale of engines to Maserati for use in their cars, and the revenues generated from the rental of engines to other Formula 1 racing teams 5. Includes the net revenues earned by our Formula 1 racing team through sponsorship agreements and our share of the Formula 1 World Championship commercial revenues and net revenues generated through the Ferrari brand, including merchandising, licensing and royalty income 6. Primarily includes interest income generated by our financial services activities and net revenues from the management of the Mugello racetrack 7. Margins without FX hedges have been calculated excluding FX hedges impact from net revenues, adjusted EBIT and adjusted EBITDA 8. Ferrari s elaboration on FY 2016 publicly available data on a panel of high end luxury peers 9. Including supercars 10.Including a cash distribution to the holders of common shares and excluding potential share repurchases 16

V12 V8 STRONG TRACK-RECORD IN NEW MODELS INTRODUCTION Product Line-Up (at least a new model launched every year) F430 F430 Spider F430 Scuderia California Scuderia Spider 16M 458 Italia 458 Spider California 30 458 Speciale California T Portofino 458 Speciale A 488 GTB 488 Spider GTC4Lusso T 612 Scaglietti Superamerica 599 GTB Fiorano 599 GTO SA APERTA FF F12berlinetta F12tdf GTC4Lusso 812 Superfast Supercars LaFerrari LaFerrari Aperta 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Special series and one-offs not included 17

LIMITED SERIES In and out from our portfolio 2015 2016 2017 2018 F12tdf LaFerrari LaFerrari Aperta FXX K (11) F60 America (11) J50 (11) Q3 2017 Results Note: (11) Models not included in the total shipments figure provided November 2 nd, 2017 18

GROUP SHIPMENTS (2) 1,978 238 180 +3.4% 2,046 255 152 6,074 818 496 1,998 +5.1% 6,381 912 453 2,078 8,014 1,098 619 2,687 ~8,400 ~1,150 ~650 ~2,800 701 736 859 903 2,762 2,938 3,610 ~3,800 Q3 2016 Q3 2017 9M 2016 9M 2017 FY 2016 FY 2017E EMEA Americas China, Hong Kong and Taiwan, on a combined basis Rest of APAC Note: (2) Refer to notes to the presentation in the Appendix Graphs not to scale. Shipments including supercars LaFerrari and LaFerrari Aperta 19

KEY PERFORMANCE METRICS Q3 '17 Q3 '16 M, unless otherwise stated 9M '17 9M '16 2,046 1,978 Worldwide shipments (units) 6,381 6,074 836 783 Net revenues 2,577 2,269 266 234 EBITDA (1) 778 619 - - Adjustments - 10 266 234 Adjusted EBITDA (1) 778 629 64 62 Amortization and depreciation 197 180 202 172 EBIT 581 439 202 172 Adjusted EBIT (1) 581 449 8 11 Net financial expenses 25 25 194 161 Profit before taxes 556 414 53 48 Income tax expense 155 126 27.6% 29.8% Effective tax rate 28.0% 30.4% 141 113 Net profit 401 288 141 113 Adjusted net profit (1) 401 295 0.74 0.59 Basic and diluted EPS ( ) 2.11 1.52 0.74 0.59 Adjusted EPS (1) ( ) 2.11 1.56 Note: (1) Reconciliations to non-gaap financial measures are provided in the appendix. Certain totals in the tables included in this document may not add due to rounding. 20

DEBT AND LIQUIDITY POSITION Cash Maturities Gross Debt Maturity Profile ( M) 442 500 383 4 4 302 240 169 181 2 101 41 500 29 99 199 199 199 2017 2018 2019 2020 2023 Term Loan Bond US Securitizations Other Financial Liabilities Net Cash/Net Industrial Debt ( M) Cash and Marketable Securities ( M) Sep. 30 Jun. 30 Mar. 31 Adj. ( M) 2017 2017 2017 FY 2016 FY 2015 (12) FY 2015 Euro 443 280 394 318 137 22 US Dollar 60 24 59 16 21 1 Chinese Yuan 57 61 66 58 106 106 Japanese Yen 31 28 19 37 41 41 Other Currencies 28 30 31 29 17 13 Total ( equivalent) 619 423 569 458 322 183 Net Industrial Debt ( M) At Sep. 30 At Jun. 30 At Mar. 31 At Dec. 31 ( M) 2017 2017 2017 2016 2015 Gross Debt (1,798) (1,755) (1,870) (1,848) (2,260) Cash & Cash Equivalents 619 423 569 458 183 Deposits in FCA Cash Management Pools - - - - 139 (Net Debt)/Net Cash (1,179) (1,332) (1,301) (1,390) (1,938) Funded Self-Liquidating Financial 694 705 723 737 1,141 Receivables Portfolio (Net Industrial Debt)/Net Industrial Cash (485) (627) (578) (653) (797) Undrawn Committed Credit Lines 500 500 500 500 500 (1,179) September 30, 2017 Net Debt 694 o/w 79% securitized (13) Funded Self-liquidating Financial Receivables Portfolio (485) September 30, 2017 Net Industrial Debt Total Available Liquidity 1,119 923 1,069 958 822 Note: (12) After settlement of deposits on FCA Group cash management pools and financial liabilities with FCA Q3 2017 Results (13) Portion of the Self-liquidating Financial Receivables Portfolio funded through securitizations Certain totals in the tables included in this document may not add due to rounding. November 2 nd, 2017 21

NON-GAAP FINANCIAL MEASURES Non-GAAP financial measures Operations are monitored through the use of various Non-GAAP financial measures that may not be comparable to other similarly titled measures of other companies Accordingly, investors and analysts should exercise appropriate caution in comparing these supplemental financial measures to similarly titled financial measures reported by other companies We believe that these supplemental financial measures provide comparable measures of our financial performance which then facilitate management s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions EBITDA is defined as net profit before income tax expense, net financial expenses and depreciation and amortization. Adjusted EBITDA is defined as EBITDA as adjusted for income and costs, which are significant in nature, but expected to occur infrequently. Adjusted Earnings Before Interest and Taxes ( Adjusted EBIT ) represents EBIT as adjusted for income and costs, which are significant in nature, but expected to occur infrequently Adjusted net profit represents net profit as adjusted for income and costs, which are significant in nature, but expected to occur infrequently Adjusted earnings per share represents earnings per share as adjusted for income and costs, which are significant in nature, but expected to occur infrequently Net Industrial Debt defined as Net Debt excluding the funded portion of the selfliquidating financial receivables portfolio, is the primary measure to analyze our financial leverage and capital structure, and is one of the key indicators used to measure our financial position Free Cash Flow and Free Cash Flow from Industrial Activities are two of management s primary key performance indicators to measure the Group s performance. Free Cash flow is defined as net cash generated from operations less cash flows used in investing activities. Free Cash Flow from Industrial Activities is defined as Free Cash Flow adjusted for the change in the self-liquidating financial receivables portfolio. 22

RECONCILIATION OF NON-GAAP MEASURES: ADJUSTED EBIT Q3 '17 Q3 '16 M 9M '17 9M '16 202 172 EBIT 581 439 - - Charges for Takata airbag inflator recalls - 10 202 172 Adjusted EBIT 581 449 23

RECONCILIATION OF NON-GAAP MEASURES: EBITDA Q3 '17 Q3 '16 M 9M '17 9M '16 141 113 Net profit 401 288 53 48 Income tax expenses 155 126 8 11 Net financial expenses 25 25 64 62 Amortization and depreciation 197 180 266 234 EBITDA 778 619 24

RECONCILIATION OF NON-GAAP MEASURES: ADJUSTED EBITDA Q3 '17 Q3 '16 M 9M '17 9M '16 266 234 EBITDA 778 619 - - Charges for Takata airbag inflator recalls - 10 266 234 Adjusted EBITDA 778 629 25

RECONCILIATION OF NON-GAAP MEASURES: ADJUSTED NET PROFIT Q3 '17 Q3 '16 M 9M '17 9M '16 141 113 Net profit 401 288 - - Charges for Takata airbag inflator recalls (net of tax effect) - 7 141 113 Adjusted net profit 401 295 26

BASIC AND DILUTED EPS Q3 '17 Q3 '16 M (unless otherwise stated) 9M '17 9M '16 140 113 188,954 188,923 Net profit attributable to owners of the Company Weighted average number of common shares (thousand) 400 288 188,951 188,923 0.74 0.59 Basic EPS ( ) 2.11 1.52 189,759 188,923 Weighted average number of common shares for diluted earnings per common share (thousand) 189,759 188,923 0.74 0.59 Diluted EPS ( ) 2.11 1.52 27

RECONCILIATION OF NON-GAAP MEASURES: ADJUSTED EPS Q3 '17 Q3 '16 per common share 9M '17 9M '16 0.74 0.59 EPS 2.11 1.52 - - Charges for Takata airbag inflator recalls (net of tax effect) - 0.04 0.74 0.59 Adjusted EPS 2.11 1.56 28

RECONCILIATION OF NON-GAAP MEASURES: FREE CASH FLOW AND FREE CASH FLOW FROM INDUSTRIAL ACTIVITIES Q3 '17 Q3 '16 M 9M '17 9M '16 227 250 Cash flow from operating activities 515 566 (93) (75) Cash flows used in investing activities (14) (247) (232) 134 175 Free Cash Flow 268 334 13 3 Change in the self-liquidating financial receivables portfolio 47 17 147 178 Free Cash Flow from Industrial Activities 315 351 Note: (14) Cash flow used in investing activities for the nine months ended September 30, 2017 excludes proceeds from exercising the Delta Topco option of Euro 8 million 29

RECONCILIATION OF NON-GAAP MEASURES: NET INDUSTRIAL DEBT M September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 Net Industrial Debt (485) (627) (578) (653) Funded portion of the self-liquidating financial receivables portfolio 694 705 723 737 Net Debt (1,179) (1,332) (1,301) (1,390) Cash and cash equivalents 619 423 569 458 Gross Debt (1,798) (1,755) (1,870) (1,848) 30