Stellantis Confirms 2021 Margin Target Despite Declining Third Quarter Sales
MILAN – Stellantis has confirmed its full year target of a 10% operating profit margin despite a 14% drop in third quarter sales due to the microchip supply crisis.
Revenue for the quarter was 32.6 million euros ($ 37.8 million), Stellantis said in a statement Thursday. Vehicle deliveries fell 27 percent to 1.131 million.
Like most automakers, Stellantis was forced to shut down some production lines during the quarter due to the lack of automotive semiconductors. The automaker lost 30 percent of its planned production – or 600,000 vehicles – in the quarter.
“The level of chip shortage was probably slightly above what we expected during our last conversation with the market in August,” said CFO Richard Palmer.
The annual toll of lost production due to the chip crisis would exceed previous forecast by 1.4 million units, he said.
Palmer said the company saw a “moderate” improvement on the chip supply front in October compared to the previous month and expected this trend to continue through the fourth quarter.
“Visibility into semiconductors continues to be a difficult subject for the industry,” added Palmer.
Palmer said Stellantis expected a moderate improvement in shipments in the last quarter. “We are seeing positive pricing in all regions,” he said, adding that he had seen good progress on post-merger synergies and cost management.
Palmer confirmed the annual target of an adjusted operating profit margin of around 10%, assuming that there will be no further deterioration in semiconductor supply and that there will be no further deterioration in semiconductor supply. no other significant COVID-19 blockages in Europe or the United States. The forecast was raised in August to 10% from 5.5. percent and 7.5 percent after strong first half results, which included record margins in North America and progress in cost savings.
Stellantis was created in January from the merger of Fiat Chrysler Automobiles and the PSA group. The automaker does not release quarterly profit figures. In the first half, its adjusted margin was 11.4%. The 2020 margin was 1.5%, a pro forma result because in 2020 FCA and PSA were operating independently.
Stellantis has revised its industry growth outlook for the full year for some of its regions. The company lowered the outlook for North America, South America and Europe, while improving the forecast for the Middle East and Africa region. He kept the outlook unchanged for India, Asia-Pacific and China.