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The truck, bus and engine maker completed a spin-off process from former parent CNH Industrial (NYSE:CNHI) and listed at the beginning of this year, under Chief Executive Gerrit Marx.
Presenting 2021 results, Marx told analysts the supply chain issues and component shortages hit preformance in the second half of last year and particularly in the fourth quarter.
“We expect a gradual recovery to normality during the first half of 2022 regarding the supply chain issues,” Marx said.
Shares closed down 3.7%, among the worst performers in Milan’s blue-chip basket.
Net revenues of industrial activities grew 21% in 2021 to 15.52 billion euros ($17.7 billion) on a pro-forma basis, while Marx said the company expected them to rise “up to 5%” in 2022.
Adjusted operating profit from industrial activities stood at 302 million euros versus a 89 million euro loss in 2020, with increased production costs, driven by supply chain constraints and higher raw material prices, which had a 241 million euro negative impact.
Cash generation was negative by 125 million euros last year.
“Raw material prices and supply chain issues have the power to affect out margins at least in the first part of this year,” Chief Financial Officer Francesco Tanzi told analysts.
In the business plan unveiled in November, Iveco targeted revenue of 16.5 billion-17.5 billion euros by 2026.
CNH Industrial, which presented its last quarterly results before splitting from Iveco that showed a 23% drop in operating profit, said on Tuesday it saw protracted supply chain issues this year.
CEO Scott Wine said the group had to manage supply chain issues in the fourth quarter and specifically microchip shortages.
But the company saw net sales from industrial activities grow 30% last year, topping its forecast, and generated a free cashflow of more than $1.75 billion in the period.
As it focused on agriculture and construction machinery after the Iveco demerger, CNH guided for an increase in net sales from industrial activities of 10%-14% this year.
Shares in CNH, which proposed a dividend of 0.28 euros per share, closed up 2.45%.
($1 = 0.8758 euros)
