Stellantis makes $15 billion in its first year
Cost-cutting efforts and strong vehicle pricing fueled the maker of Jeep SUVs and Ram pickup trucks to a $15.1 billion (13.4 billion euro) net profit in 2021.
The results sum up Stellantis NV's first year of existence after Fiat Chrysler Automobiles NV and French rival Groupe PSA closed their transatlantic merger in January 2021. The automaker shared full-year and second-half results early Wednesday morning.
The profits were a 179% increase year-over-year from its predecessors' combined 2020 results as the industry recovered from pandemic-induced shutdowns but battled supply-chain snags.
With an 11.8% adjusted operating income margin, Stellantis beat its increased full-year guidance of 10%. That's despite a global semiconductor shortage, increasing raw material prices and other supply snarls felt throughout the year that sent some plants down for months and limited dealership inventories, increasing vehicle prices.
The automaker is expecting double-digit margin results in 2022, as well. Stellantis shares on the New York Stocking Exchange were rising 6.6% in pre-market trading, while its shares in Milan and Paris were up 5.9%.
"Today’s 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. "Together, we are focused on executing our plans as we race to become a sustainable mobility tech company."
Net revenues for 2021 totaled $172.2 billion (152 billion euro), up 14%, despite losing 20% of planned production because of unfilled semiconductor orders. Adjusted operating income was up 95% to $20.4 billion (18 billion euro).
In the second half of the year, Stellantis' net profit increased 32% to $8.4 billion (7.4 billion euro) on $87 billion (76.8 billion euro) in revenue, down 7% compared to the last six months of 2020. All regions saw growth and positive adjusted operating incomes.
For the full year, industrial-free cash flow was $6.88 billion (6.07 billion euro) from the start of 2021. Stellantis forecasted a positive figure for 2022, as well, with industrial available liquidity at $71 billion (62.7 billion euro). It estimated cost savings from the merger have achieved a net cash benefit of $3.6 billion (3.2 billion euro) in its first year of the $5.7 billion (5 billion euro) total expected.
The automaker also is pursuing a $3.7 billion (3.3 billion) ordinary dividend to shareholders, pending their approval.
Stellantis' adjusted operating income in North America rose 85% to $12.9 billion (11.4 billion euro) in 2021 from selling more large SUVs and pickups and higher pricing. It posted a 16.3% margin in North America compared to FCA's 8.9% margin in 2020. The automaker will give eligible hourly full-time United Auto Workers-represented employees profit-sharing checks of up to $14,670 each this year, an increase of 83% from last year after the union negotiated for uncapped payouts in 2019.
North America dealer inventory decreased by 186,000 units in 2021, sending average transaction prices in the Unites States up roughly 20% to around $47,000. There are signs of recovery, though: Inventory in December was down 59% year-over-year to 791,000 vehicles, but that was up almost 100,000 vehicles from September.
North America achieved a second-half adjusting operating income margin of 16.4%. Stellantis last year launched 10 new vehicles, including in North America the three-row Jeep Grand Cherokee L SUV and the next generation of the two-row Grand Cherokee at its new assembly plant in Detroit. It also began delivering the new Wagoneer and Grand Wagoneer SUVs from Warren and its first plug-in hybrid Jeep in North America with the Wrangler 4xe.
For the full year, all regions saw growth. Stellantis made $6 billion (5.4 billion euro) in Europe, $999 million (882 million euro) in South America, $617 million (545 million euro) in the Middle East and Africa and $500 million (442 million) in China, India and Asia Pacific.
On Tuesday, the automaker will share its long-term strategy plans, including elaborating on turnaround efforts in the world's largest auto market, China, where Stellantis sells few cars. Reforms, however, already have taken a rocky start with one of its joint venture partners.
Separately, Maserati made $116 million (103 million euro) in 2021 with sales increasing 41%. The luxury brand is set to debut a new SUV in its lineup, the Grecale, next month and it's on track for a 2023 launch of the new GranTurismo.
Stellantis also announced a series of partnerships and a commitment to invest $35.5 billion in electrification and software by 2025 in its efforts to transform itself into a mobility technology company. Free2move, its e-mobility services brand, will launch a network in North America in the second half of 2022.
Stellantis' results were mixed compared to its Detroit rivals. It beat General Motors Co., which made $10 billion in profit on revenue of $127 billion and surpassed its forecast. Ford Motor Co. posted a net income of $17.9 billion on $136.3 billion in revenue in 2021, which missed Wall Street expectations.