(News Bulletin 247) – The car manufacturer saw its sales increase by 7% in the third quarter to 45.1 billion euros. The resumption of volumes and still high prices allowed the impact of the strike in the United States, estimated in total at 3 billion euros at the end of October, to take a back seat.

“Still a beacon in a struggling sector.” This is how the Stifel bank recently described the automobile manufacturer Stellantis, known for its excellent results and its operational efficiency which leads it to post record margins. This is despite Brexit, Covid, production disruptions or other headwinds that have been blowing in the automotive industry in recent years.

The third quarter activity, published this Tuesday by the automobile manufacturer born from the merger between PSA and Fiat Chrysler, illustrates this once again.

Over the period from the beginning of July to the end of September, Stellantis generated revenues of 45.1 billion euros, compared to 42.1 billion a year earlier, an increase of 7%. The Stifel bank was counting on more limited growth, of 5%, to 44.3 billion euros.

UBS for its part notes that revenues exceeded the consensus by 3% which stood at 43.8 billion euros.

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Pricing is still positive

Stellantis was significantly helped by improving volumes. Its 14 brands sold a total of 1.4 million vehicles over the period, reflecting year-on-year growth of 11%. In North America, Stellantis’ largest region by revenue, volumes grew 7% while revenue increased 2% to €21.5 billion. In Europe, volumes grew by 11% and revenues by 5%. Growth is strongly driven by the “Middle East and Africa” region with sales up 102% in volume and revenues up 128% to 3 billion euros.

In total, the volumes had a positive impact of 3.6 billion euros on the evolution of turnover over one year. The group’s ability to push prices upwards once again contributed positively, to the tune of 1.6 billion euros, once again illustrating the company’s “pricing power”. Conversely, currency effects penalized turnover by 2.8 billion euros.

The automobile group also indicated that its sales of electric vehicles had increased by 37% over one year.

The group has confirmed its annual objectives which still remain quite vague. The group is targeting a double-digit current operating margin and “positive” free cash flow from its industrial activities.

The company has, in passing, raised its market forecasts for North America and Europe, counting on growth of 8% for the first (compared to 5% previously) and 10% for the second (compared to 7% previously). For South America, Stellantis now anticipates a stable market versus growth of 3%.

Strikes in North America have had an impact of 3 billion

This publication comes as the group managed last week to stop the strikes which affected its factories in North America, as part of the large movement which affected the “Big Three” of Detroit (Ford, GM, Stellantis) employees. demanding significant wage increases. Agreements in principle have been reached with the UAW unions in the United States and Unifor in Canada.

Stellantis specified in its financial communication that these walkouts had, until their cessation during the month of October, caused an impact on its revenues of approximately 3 billion euros.

“We were in a good position from the start (in terms of profitability),” said the group’s financial director, Natalie Knight, during a press conference call, cited by Reuters.

“And when we look at the impacts of the strikes, they’re actually the lowest of the big three (Detroit automakers). From a profitability standpoint, we expect them to be less than $750 million ( euros).

Enough to reinforce the idea that Stellantis should be able to maintain high margins despite the obstacles. Stifel recently noted that the company could even be able to increase its profitability in the second half of 2023 compared to the same period last year, when the group recorded a current operating margin of 12%.

Note that the company also provided an update on the progress of its share buyback program of 1.5 billion euros. As of September 30, Stellantis had repurchased 1.2 billion euros of its own shares and the group plans to complete this program by the end of the year.

On the Paris Stock Exchange, Stellantis shares rose 2.2% to 17.42 euros in reaction to this publication, once again illustrating the group’s ability to publish solid results.

UBS considers the publication “solid in all areas”, considering that the group’s performance as well as the “limited negative impact of strikes” constitute positive elements.

Royal Bank of Canada shares this constant, and notes that the “pricing” (the group’s prices) have remained “solid” which the establishment attributes to the fact that Jeep and Ram models represent the majority of volumes in the United States .