Stellantis outdoes first year with $17.9B profit in 2022

Cost-cutting measures and few discounts fueled the maker of Jeep SUVs and Ram pickup trucks to a $17.9 billion (16.8 billion euro) net profit in 2022, surpassing Stellantis NV's first-year profits in 2021 by 26%.

With a 13% adjusted operating income margin compared to 11.8% a year ago, Stellantis achieved its double-digit margin expectations for the year. Its Dare Forward 2030 strategy to double revenues introduced almost a year ago calls for a 12% margin. Cost-cutting measures, including the decision to leave the Jeep Cherokee plant in Belvidere, Illinois, idle starting next week, as well as strong transaction prices because of parts constraints contributed to the profits.

The automaker, the creation between the January 2021 merger of Fiat Chrysler Automobiles NV and French rival Groupe PSA to survive in a transformational time toward zero-emission and smart vehicles, is expecting another double-digit margin year in 2023.

“In addition to our record financial results and the focused execution of the Dare Forward 2030 strategicplan, we also demonstrated the effectiveness of our electrification strategy in Europe," CEO Carlos Tavares said in a statement, noting the company has 23 all-electric models worldwide with nine coming this year, including the launch late this year of the first in North America: the Ram ProMaster commercial van in Saltillo, Mexico.

"We now," Tavares continued, "have the technology, the products, the raw materials, and the full battery ecosystem to lead that same transformative journey in North America."

Stellantis shares on the New York Stock Exchange were rising almost 3% in pre-market trading to $17.15 each, while its shares in Milan and Paris were both up 1.6%.

Net revenues for 2022 totaled $191.4 billion (179.6 billion euro), up 18% from a year ago. Adjusted operating income was up 29% to $24.8 billion (23.3 billion euro). All regions also saw positive results.

Stellantis also reported second-half results for 2022. Its net profit increased 19% to $9.4 billion (8.82 billion euro) on $97.6 billion (91.6 billion euro) in revenue, up 19% compared to the last six months of 2021. All regions saw growth and positive adjusted operating incomes.

For the full year, industrial-free cash flow was up 78% to $11.5 billion (10.8 billion euro) from the start of 2021. It expects to nearly double that by 2030 with Stellantis forecasting a positive figure for 2023. Industrial available liquidity was at $65.3 billion (61.3 billion euro), down 2%.

It estimated cost savings from the merger have achieved a net cash benefit of $7.6 billion (7.1 billion euro) in its second year with projections for a steady annual $5.7 billion (5 billion euro) in savings expected. That's two years ahead of schedule, according to the company.

The automaker also is pursuing a $4.5 billion (4.2 billion) ordinary dividend to shareholders, pending their approval. That's $1.43 (1.24 euro) per share. The company's board additionally approved a $1.6 billion (1.5 billion euro) share buyback by the end of 2023.

Stellantis' adjusted operating income in North America rose 23% to $14.9 billion (14 billion euro) in 2022, despite U.S. sales declining. It posted a record 16.4% margin in North America compared to the 16.3% margin in 2021.

The automaker will give eligible hourly full-time United Auto Workers-represented employees profit-sharing checks of up to $14,760 each this year, an increase of less than 1% from last year. Company representatives will return to the bargaining table with UAW leaders this summer.

Average transaction prices in the United States were up 13% to $53,000. But recent months offered signs of improvement: Dealer inventory in North America was up by 69,000 vehicles from December 2021.

North America achieved a 3% increase in second-half adjusted operating income to $6.72 billion (6.31 billion euro) with a margin of 14.7%, down from 16.4% for the last six months of 2021. New vehicles last year included the Jeep Grand Cherokee 4xe plug-in hybrid and the longer-wheel base Wagoneer L SUV.

For the full year, all regions saw growth in adjusted operating income. Stellantis made $6.71 billion (6.29 billion euro) in Europe, $2.18 million (2.05 million euro) in South America, $1.15 million (1.08 million euro) in the Middle East and Africa and $697 million (654 million) in China, India and Asia Pacific.

Stellantis has opted for an "asset-light" approach in China, the world's largest vehicle market that has precarious relations with western nations. Discussions last year broke down to take a majority share in its joint venture there for Jeep with the Guangzhou Automobile Group Co. Ltd., and the JV filed for bankruptcy. Tavares said a similar path could be taken for the company's brands there like Peugeot and Citroën, describing reform talks with its other partner Dongfeng Motor Corp. Ltd. as difficult.

Separately, Maserati made $214 million (201 million euro) in 2022 with shipments increasing 7%. Stellantis forecasts a double-digit adjusted operating income margin in the second half of the year, up from 8.7% in 2022.

The luxury brand in January made its new SUV, the Grecale that starts at $63,500, available in North America with a Folgore all-electric version coming in the latter half of the year. In the fall, customers will be able to buy the company's first all-electric vehicle in the region, the new GranTurismo sportscar, which also is available with a V6 Nettuno engine derived from the MC20 super sportscar.

Stellantis will invest $35.5 billion in electrification and software between 2020 and 2025 in its efforts to transform itself into a mobility technology company. It sold about 288,000 all-electric vehicles in 2022 mostly in Europe, a 41% increase.

Although the company claimed the top sales spot for plug-in hybrids in the United States in 2022 with 64,000 vehicles, 4.1% of its sales in the country, launches of all-electric vehicles in North America don't really start happening until next year. More plug-in hybrids, however, including the Italy-built Alfa Romeo Tonale and Dodge Hornet R/T crossovers, are arriving in the next few months.

All-electric launches confirmed for 2024 here include the Jeep Recon and smaller Wagoneer codenamed "S." There's also the new two-door Dodge Charger, whose top-of-the-line Banshee concept was revealed last year. Ram earlier this month unveiled the production 1500 REV pickup truck during a Super Bowl commercial after putting on display the 1500 Revolution concept, a vision for the brand's future, at the CES consumer electronics trade show in January.

The company is building battery manufacturing plants in Windsor, Ontario, with LG Energy Solution and Kokomo, Indiana, with Samsung SDI to support that production. The announcement of a third is expected in the coming months. It also has made a series of supply agreements for raw materials to go into those batteries.

This year also marks the final year for a number of treasured nameplates as they exist today, including the Dodge Challenger and four-door Charger muscle cars and the Chrysler 300 sedan. Ontario's Brampton and Windsor assembly plants are set to undergo a combined $2.8 billion retooling for new platforms. Windsor builds the Chrysler Pacifica.

Stellantis' results surpassed its Detroit rivals. It beat General Motors Co., which made $9.9 billion in net income on revenue of $156.7 billion and met its projections. Ford Motor Co. lost $2 billion on $158.1 billion in revenue in 2022 from losses on its Rivian Automotive Inc. stock valuation and the absorption of its Argo AI autonomous vehicle investment with Volkswagen AG.

bnoble@detroitnews.com

Twitter: @BreanaCNoble