Stellantis net profits nearly triple to US$15.2 billion in 2021; N.A. margins surge to 16.3%

MILAN -- Stellantis made a fast start in its first year after the merger of Fiat Chrysler Automobiles and PSA Group, with the world's No. 4 automaker reporting profitability and benefits from the combination that exceeded targets.

The Chrysler parent company said net profit nearly tripled to $15.2 billion (all figures in USD) in 2021 while total revenue improved 14 per cent to $172.4 billion.

Following PSA's French reporting policies, Stellantis did not report quarterly results.

"Record results prove that Stellantis is well positioned to deliver strong performance, even in the most uncertain market environments," CEO Carlos Tavares said in a statement on Wednesday.

Shares in Stellantis gained six per cent to $19.53 in premarket trading.

The group said the margin on its adjusted operating profit rose to 11.8 per cent last year, above its target of about 10 per cent, because of strong execution on synergies, which generated around $3.6 billion in net cash benefits.

Tavares next week will present the group's business plan, a bit more than a year after Stellantis was created through the merger of Fiat Chrysler Automobiles and PSA Group.

Stellantis forecast a double-digit margin again this year. The pro-forma figure for 2020 was 6.9 per cent.

In North America, Stellantis said adjusted operating income rose 85 per cent to $12.8 billion. Revenue increased 15 per cent to $79 billion. Margins in North America climbed to a record 16.3 per cent last year from 10.1 per cent in 2020.

The North American results generated profit-sharing for UAW members of $14,670.

"UAW Stellantis members are proud of the product they create every day especially during challenging environments over the past two years," UAW Vice President Cindy Estrada said in a statement. "We continue to make sure that this dedication in the face of pandemic and unforeseen parts shortages is recognized properly.”

UAW members at General Motors received $10,250 while Ford members earned $7,377.
 

Banca Intesa analyst Monica Bosio said 2021 results "materially" exceeded expectations and that guidance for 2022 was based on a prudent market outlook.

CFO Richard Palmer told reporters that cash synergies booked last year put the group ahead of schedule to reach 80 per cent of its $5.7 billion cost saving run-rate target by 2024.

He said raw material inflation would remain a problem for the whole industry this year, while the semiconductors shortage, which cost the group about 20 per cent of its planned production in 2021, had peaked in the third quarter last year.

He added that Stellantis did not have any significant direct exposure to Russia, which is being hit by international economic sanctions over Ukraine.

"We have flexibility in production," Palmer said. "We are confident we can manage the Russia crisis."

The group, which generated an industrial free cash flow of over $6.8 billion last year, proposed to pay out $3.7 billion in ordinary dividends, equal to $1.19 per share.

Tavares has so far mapped out a $34 billion electrification strategy, and formed alliances with Amazon and iPhone assembler Foxconn to accelerate development of software and semiconductors for future connected vehicles.

He has also drawn up plans for five battery plants and cut deals with unions to keep streamlining its European operations -- side-stepping potential labor conflicts and pushing the company's operating profit margin up to about 10 per cent.

Reuters and Philip Nussel of Automotive News contributed to this report.