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01/11 07:59
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several challenges: a significant decline in net revenues and EPS, increased industrial costs, and negative cash flow. While there's a partnership with Leapmotor and some optimism for 2025, the current guidance is weak, and the lack of immediate share buybacks is concerning. The Q&A section highlights geopolitical and competitive pressures, with management's vague responses on tariffs and cash flow adding uncertainty. Given these factors, a negative stock price reaction is anticipated over the next two weeks.
Net Revenues EUR157 billion, declined 17% year-over-year due to lower shipment volumes and unfavorable mix, particularly from North America, along with FX headwinds.
Consolidated Shipments 5.4 million vehicles, down 750,000 units or 12% year-over-year, with one-third attributed to inventory reduction actions and two-thirds to lower sales, including temporary hiatus in certain nameplates.
Adjusted Diluted Earnings Per Share EUR2.48, declined 61% year-over-year, with AOI down 64%, partially offset by a 5% lower average share count due to buyback activities.
Adjusted Operating Income (AOI) EUR8.6 billion, down from EUR24.3 billion in 2023, primarily due to lower profitability in the second half of 2024 from inventory clearing and transition gaps.
Industrial Free Cash Flow Negative EUR6 billion, impacted by lower AOI, nearly EUR5 billion growth in working capital, and EUR1.6 billion in higher capital expenditures.
AOI Margin 5.5% to 7%, ended at the bottom of the range due to increased incentives and production cuts to address excess US dealer inventories.
Industrial Costs Increased by EUR1.5 billion, mainly in North America, driven by warranty expenses and volume reduction effects.
FX Impact on Revenue Negative EUR3.6 billion or negative 2%, primarily from declines in the Turkish lira, Brazilian real, and Argentinian peso.
New Product Launches: 20 new products launched in 2024, including Dodge Daytona and Jeep Wagoneer S in the US, and Citroen C3 and Opel Frontera in Europe.
Upcoming Products: In Q1 2025, Stellantis will introduce Citroen C3 Aircross, Opel Frontera, and Fiat Grande Panda.
Market Coverage: Expansion of product offerings in hybrids in Europe, combustion engines in the US, and bio-hybrids in Brazil.
Sales Performance: Consolidated shipments down 12% in 2024, with significant impacts from inventory reduction and lower sales.
Inventory Management: Reduced US dealer stock from 430,000 units to 304,000 units by year-end 2024.
Cost Management: Higher industrial costs by EUR1.5 billion primarily due to warranty expenses and volume reduction.
Strategic Focus: Emphasis on profitable growth, execution, and cash conversion.
Quarterly Reporting Transition: Transition to quarterly reporting expected to begin in Q1 2026.
Inventory Management Risks: In 2024, Stellantis faced significant challenges with excess dealer inventories in the US, leading to increased incentives and reduced production, negatively impacting the Adjusted Operating Income (AOI) margin.
Sales Decline Risks: Consolidated shipments decreased by 12% (750,000 units) in 2024, attributed to inventory reduction actions and lower sales, particularly due to temporary production halts of key models.
Revenue Decline Risks: Net revenues fell by 17% in 2024, driven by lower shipment volumes and adverse foreign exchange (FX) impacts, particularly from the Turkish lira, Brazilian real, and Argentinian peso.
Operational Cost Risks: Industrial costs increased by EUR1.5 billion, primarily in North America, due to warranty expenses and the effects of reduced production volumes.
Regulatory Risks: Stellantis is navigating tougher and divergent regulations, particularly in Europe, with ongoing discussions with the European Commission regarding future regulations.
Competitive Pressures: Increased competition, especially from Chinese manufacturers, poses a significant challenge to Stellantis, necessitating a focus on market share and product competitiveness.
Economic Factors: The company is facing economic headwinds, including FX challenges and market dynamics that have affected revenue and profitability.
Product Launches: 20 new products in 2024 and 10 in 2025, including muscle cars and new models in Europe.
Stakeholder Trust: Focused on building trust with stakeholders including shareholders, suppliers, unions, and dealers.
Market Coverage: Expanding product offerings and powertrains to cover more market segments.
Inventory Management: Improved inventory discipline with significant reductions in dealer stock.
Software and Engineering Integration: Tighter integration of software and engineering to enhance vehicle features.
CEO Selection: Ongoing process to select a new CEO by the first half of 2025.
2025 Revenue Expectations: Full year net revenues expected to improve compared to 2024, with stronger second half.
Adjusted Operating Income Margin: Targeting mid-single-digit AOI margin for 2025, with significant improvement in the second half.
Industrial Free Cash Flow: Expecting to return to positive industrial free cash flow in 2025, particularly in the second half.
Dividend Payout: Proposed dividend of EUR0.68 per share, totaling EUR1.7 billion.
Quarterly Reporting Transition: Transitioning to quarterly reporting starting Q1 2026.
Proposed Dividend: EUR0.68 per share, totaling EUR1.7 billion, which is at the top of the 25% to 30% payout policy.
Share Buyback Program: No stock buybacks expected in the first half of 2025; evaluation will resume as income and cash flow improve.
The earnings call presents a mixed outlook. While there are positive aspects like improved order books and market share gains, the suspension of financial guidance and revenue decline are concerning. The Q&A reveals uncertainties, especially around profitability and cash flow improvements. The lack of clear guidance and the impact of tariffs and FX headwinds contribute to a negative sentiment. Despite some positive developments, the overall uncertainty and financial challenges suggest a negative stock price reaction.
The earnings call reveals several negative factors: a significant EPS miss, 14% revenue decline, and shipment reductions, particularly in North America. Management's unclear responses in the Q&A and lack of guidance further exacerbate concerns. Despite optimistic product launch impacts and a dividend proposal, these positives are overshadowed by economic challenges, supply chain issues, and market share pressures. The lack of a share repurchase program also diminishes shareholder confidence. Overall, these factors suggest a negative stock price reaction in the short term.
The earnings call reveals several concerns: significant revenue and shipment declines, especially in North America and Europe, and challenges with tariffs and product transition gaps. Although there are some positive notes, such as South American revenue growth and strategic product launches, the overall sentiment is negative. The Q&A highlights uncertainties in pricing and tariff impacts, and management's vague responses contribute to a lack of confidence. The absence of a share buyback program further detracts from shareholder returns, leading to an overall negative sentiment.
The earnings call reveals several challenges: a significant decline in net revenues and EPS, increased industrial costs, and negative cash flow. While there's a partnership with Leapmotor and some optimism for 2025, the current guidance is weak, and the lack of immediate share buybacks is concerning. The Q&A section highlights geopolitical and competitive pressures, with management's vague responses on tariffs and cash flow adding uncertainty. Given these factors, a negative stock price reaction is anticipated over the next two weeks.
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