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Stellantis Stock Up On Proposed Dividend, Improved FY21 Margin View

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Carmaker Stellantis N.V., created with the merger of Fiat Chrysler Automobiles N.V. and France's Peugeot S.A., on Wednesday announced individual fiscal 2020 results for both the companies. FCA and PSA recorded sharply lower profit and revenues in the year. However, FCA 's fourth quarter adjusted operating margin improved from last year.

Stellantis also announced a dividend, as agreed on the merger deal. Stellantis shares were gaining more than 2 percent in European trading.

Looking ahead to fiscal 2021, adjusted operating income margin is expected between 5.5 percent and 7.5 percent, assuming no significant COVID-19 related lockdowns. In the year 2020, FCA's adjusted EBIT margin was 4.3 percent, while PSA Group's adjusted operating margin reached 6.1 percent with Automotive adjusted operating margin of 7.1 percent.

For the year, the industry is expected to grow 8 percent in North America, 20 percent in South America, 10 percent in Europe, 3 percent each in Middle East & Africa, and India & Asia Pacific, as well as 5 percent in China.

Further, Stellantis' Board of Directors resolved to propose to the AGM on April 15 the approval of a special cash distribution of 0.32 euro per common share.

The combination agreement, as amended in September 2020, contemplated a potential cash distribution of 1 billion euros following the merger completion, which was on January 16. The Board has now approved a 1.0 billion euros distribution to shareholders, subject to shareholder approval at the AGM.

In the year 2020, FCA reported net profit of 24 million euros or 0.02 euro per share, down 99 percent from last year, while adjusted net profit was 1.86 billion euros or 1.19 euros per share. Adjusted EBIT was 3.7 billion euros, down 44 percent. Adjusted EBIT margin was 4.3 percent, down 190 basis points. Revenues fell 20 percent to 86.68 billion euros.

In the final fourth quarter, FCA recorded net profit of 1.56 billion euros or 0.99 euro per share, down 1 percent from last year, and net revenues fell 4 percent to 28.59 billion euros. Adjusted EBIT margin was 8.2 percent up 110 basis points. North America margin in the quarter was 11.6 percent, up 160 basis points.

PSA reported fiscal 2020 net result group share at 2.17 billion euros, down from 3.20 billion euros last year. Earnings per share fell to 2.33 euros from 3.40 euros last year.

Group adjusted operating income amounted to 3.69 billion euros, 41.7 percent lower than last year. Automotive adjusted operating income fell 33 percent to 3.38 billion euros. The company said the 7.1 percent Automotive adjusted operating margin level was reached despite the sharp decline of automotive markets and thanks to a positive product mix and costs savings.

PSA's Group adjusted operating margin reached 6.1 percent, down 2.4 percentage points versus 2019. Group revenue amounted to 60.73 billion euros, down 18.7 percent from last year's 74.73 billion euros.

Stellantis shares were trading at 14.22 euros in Italy, up 2.32 percent, and at 14.27 euros in France, up 2.7 percent.

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