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 group said the margin on its adjusted operating profit rose to 11.8 percent last year, above its target of about 10 percent, because of strong execution on synergies, which generated around 3.2 billion euros ($3.6 billion) in net cash benefits.
“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.
Tavares next week will present the group’s business plan, just over 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 percent.
Margins in the North America region climbed to a record 16.3 percent last year.
Banca Intesa analyst Monica Bosio said 2021 results “materially” exceeded expectations and that guidance for 2022 was based on a prudent market outlook.
Chief Financial Officer Richard Palmer told reporters that cash synergies booked last year put the group ahead of schedule to reach 80 percent of its 5 billion euro 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 percent of its planned production in 2021, had peaked in the third quarter of 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 billion euros last year, proposed to pay out 3.3 billion euros in ordinary dividends, equal to 1.05 euros per share.
Tavares has so far mapped out a 30 billion euro 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 percent.
In a separate statement, Stellantis said it was paying out 1.9 billion euros in benefits to employees based on last year’s results, up 70 percent on 2020.