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.
The outlook is "very vague, but it leaves room" for Stellantis to beat expectations, Banca Akros analyst Gabriele Gambarova wrote in a client note.
Finance chief Richard Palmer told reporters rising prices for raw materials, such as metals, would remain a problem for the industry this year, but the semiconductor shortage, which cost the group around 20% of planned production in 2021, peaked in the third quarter of last year.
"We think this [Stellantis' 2022] guidance is sensible given the difficulty in assessing volume, price, or mix in FY22, and with other headwinds such as raw materials," Morgan Stanley analysts wrote in a client note.
Margins in North America, where Stellantis sells highly profitable Jeep and Ram pickup truck models, climbed to a record 16.3 percent in 2021. Rival General Motors' comparable 2021 margin in North America was 10.2 percent.
Palmer said 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 added Stellantis did not have a significant direct exposure to Russia, which faces fresh international economic sanctions over its actions in 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.
"We just created a new company and that should be enough to start with as long as we manage complexity and diversity," he said.
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.