Stellantis Reports Q1 Net Revenue Increase But Remains Cautious On Outlook

Key Highlights

• Stellantis reported a 14% increase in Q1 net revenue to €47.2 billion ($52 billion), driven by improvements in chip supply and price increases.
• It remains cautious about the outlook for the rest of the year due to growing vehicle inventories and challenges in transforming stock into dealer stock, particularly in Europe.

Q1 Results Show Improvement in Revenue, But Challenges Remain

Stellantis, the world’s third-largest carmaker by sales, reported a 14% increase in net revenue to €47.2 billion ($52 billion) for the first quarter of 2023, driven by improvements in chip supply and price increases. 

Growing Vehicle Inventories and Logistical Challenges Impact Stellantis’ Outlook for the Year

The consolidated shipments of Stellantis rose 7% to approximately 1.48 million units. However, it remained cautious about its outlook for the remainder of the year due to growing vehicle inventories.

CFO Richard Palmer said: 

• Stellantis expects mid-single-digit growth for the market in 2023 but added that “the macro situation is still complex.” 
• The company’s total inventories rose to around 1.3 million units at the end of March as logistical problems from the previous year continued to be resolved.
• Palmer cited challenges in transforming Stellantis’ stock into dealer stock in Europe and fulfilling customer orders as the main obstacle to market share growth. 

Banca Akros analyst Gabriele Gambarova also pointed out that: 

• The average selling prices for Stellantis vehicles in North America fell 0.7% in the first quarter, marking the first year-on-year decline in 10 years. 
• This decline could “pose some doubt on the sustainability of margins in this important area,” Gambarova said.

Stellantis’ Inventory Levels and Market Performance Impact Outlook for 2023

Analysts at RBC noted that Stellantis’ inventory levels were higher than peers in North America, the company’s largest market. As a result, Stellantis’ shares fell by 1.8% by 1030 GMT, placing it among the worst performers of Italy’s blue-chip companies.

Despite the cautious outlook, Stellantis confirmed its forecast for a double-digit margin on adjusted operating profit and positive cash generation this year. 

However, as the company faces logistical challenges in fulfilling customer orders and as pricing pressures persist, it remains to be seen how these factors will impact its performance for the rest of the year.