Stellantis reported its net revenue for the first quarter of 2021 increased by 14% to $44.4 billion, as shipments increased by 11% with increased market share in both North America and Europe where it was market share leader.
“In our first quarter since the merger, Stellantis posted strong Q1 2021 revenues with the diverse brand portfolio driving increased volumes, positive pricing and improved product mix, despite the headwinds from the global semiconductor crisis,” said Richard Palmer, the company’s chief financial officer, who noted the company was only 100 days old.
While Stellantis does not report earnings on a quarterly basis, Palmer did acknowledge that the company would experience negative cash flow during the first half of the year as it struggled with the semiconductor shortage that was exacerbated by a fire at plant in Japan and problems at another chip-making plant in Texas.
Impact of stoppages on production
Stellantis lost 11% or 190,000 units in the first quarter, Palmer disclosed and expects to lose an even larger percentage of its planned production in the second quarter. The outlook should improve during the second quarter, he said.
In North America., the home of Fiat Chrysler Automobiles, Stellantis reported that shipments dropped by 4% but revenue increased by 9%.
Palmer said FCA dealer inventory has dropped by 82,000 units since the end of December and is down to 53-days supply, compared to the 60-days supply at the end of 2020 due to strong demand. The strong demand boosted prices while reducing incentives, Palmer said.
“We do have some cost inflation we have to recover, and the market is being very supportive of that,” Palmer said.
Fleet deliveries in North America, primarily in the U.S, have declined by 37%, Palmer told analysts during a conference call with analysts.
“I don’t think we’ll bid stocks significantly,” he said. Higher inventory levels could be beneficial in North America. However, the organization is learning to operate with lower levels of stock, Palmer said. Stellantis/FCA also moving forward on capturing the synergies created by the merger. “We’re making good progress,” he said, despite the inflationary pressure on raw material.
By the numbers
Overall revenues in on a pro forma basis increased to $44.4 billion compared to $38.9 billion in Q1 2020, primarily due to higher overall volumes, positive net pricing, improved market mix, mainly in North America and Enlarged Europe, as well as favorable vehicle mix, partially offset by negative foreign exchange translation effects.
Commercial launch of all-new Opel Mokka began in March 2021 to European consumers, representing a return to the market after being discontinued in 2019.
The all-new Grand Wagoneer/Wagoneer and next generation Jeep Grand Cherokee production launches remain on track for late second quarter of 2021 and third quarter 2021. All-new Grand Cherokee L production is underway, with commercial launch in late second quarter of 2021.
Palmer said the for Group’s key regions unchanged, with North America growing by 8%, South America by 20% and Enlarged Europe by 10%. In addition, Middle East & Africa is expected to increase 15%, up from 3% previously, India & Asia Pacific by 10%, up from 3% previously, and China by 5%.Palmer also confirmed Stellantis guidance for 2021 with adjusted operating income margin of between 5.5% to 7.5%. “We’re seeing the business perform very well,” he said.