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01/11 07:55
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Consolidated Shipments 2.7 million units, fell 7% year-over-year due to declines in North America and Europe, slightly mitigated by growth in South America and Middle East and Africa.
Net Revenue EUR 74 billion, declined 13% year-over-year due to adverse regional mix, lower pricing, and volume changes.
AOI Margins 70 basis points, compressed due to volume, mix, pricing, FX headwinds, and a EUR 1.6 billion increase in industrial costs.
Adjusted Diluted Earnings Per Share Tracked AOI development, reflecting the same challenges as AOI margins.
Industrial Free Cash Flow Outflow of EUR 3 billion, driven by low AOI generation, insufficient to cover CapEx and R&D spending, and a EUR 1.3 billion working capital increase.
Pricing Down 2% in H1 2025, with a 3% decline in Q1 and a smaller 1% decline in Q2, showing improvement primarily in North America.
Industrial Liquidity EUR 47 billion, consisting of EUR 31 billion in cash and liquid securities and EUR 16 billion in undrawn committed credit facilities.
Inventory Levels Decreased by 16% in Europe and North America combined over the last year, reflecting improved inventory discipline.
Order Books Increased by 14% year-over-year and 34% in the last 6 months in North America and Europe.
South America AOI Improved by 6% from H2 2024 to H1 2025, driven by market share leadership and industry growth in Brazil and Argentina.
Middle East and Africa AOI Impacted by a EUR 600 million FX headwind due to the Turkish lira decline, but supported by share leadership in Turkey and ramping local production in Algeria.
New Product Launches: 10 new products planned for 2025, with 4 already launched in H1. These include Citroën C3 Aircross, Opel Frontera, and Fiat Grande Panda in Europe. Upcoming launches include 3 STLA Medium products in Europe and iconic vehicles like the Jeep Cherokee and Dodge Charger in North America.
Platform Consolidation: Introduction of STLA Medium platform for midsize cars in Europe, shared with Peugeot 3008, Peugeot 5008, and Opel Grandland.
Reintroduction of Iconic Products: Return of Jeep Cherokee and Dodge Charger ICE in North America, along with the Hemi V8 engine.
Market Share in Europe: Market share increased to 17% in H1 2025, up 1.3 percentage points from H2 2024. Stellantis is now #1 in European hybrids and #2 in BEV volumes.
South America and Middle East/Africa: Continued market share leadership in South America and share leadership in Turkey. Local production ramping in Algeria.
Inventory Management: Total inventory decreased by 16% in Europe and North America combined over the last year. Order books increased by 14% year-over-year and 34% in the last 6 months.
Cost Management: Reduced investment expenditures compared to the prior year. Actions taken to address tariff expenses, which are expected to reach EUR 1.5 billion in 2025.
Leadership Changes: New leadership team appointed, focusing on accelerating business and making tough decisions.
Strategic Shifts: Ended fuel cell initiatives in Europe and discontinued poorly suited product initiatives. Reintroduced the SRT division for high-performance products in North America.
Decline in Consolidated Shipments: Shipments fell by 7% in H1 2025, with significant declines in North America and Europe, impacting revenue and operational efficiency.
Revenue Decline: Net revenue dropped by 13% due to adverse regional mix, lower pricing, and foreign exchange headwinds.
Tariff Expenses: Tariffs added a EUR 1.5 billion expense, significantly impacting North American performance and overall profitability.
Industrial Free Cash Flow Deficit: A EUR 3 billion cash outflow in H1 2025 due to low AOI generation and increased working capital requirements.
Higher Industrial Costs: Industrial costs increased by EUR 1.6 billion, driven by higher warranty expenses, lower production volumes, and tariff-related disruptions.
Foreign Exchange Headwinds: The Turkish lira's decline caused a EUR 600 million AOI impact in the Middle East and Africa region.
Product Transition Gaps in Europe: Product transition gaps and lower industry volumes in light commercial vehicles negatively affected European performance.
Absence in Key Market Segments: The absence of key products like the Jeep Cherokee and Dodge Charger in North America for extended periods weakened market presence.
Quality and Execution Challenges: Issues with product quality and industrial execution in both North America and Europe hindered operational efficiency and customer satisfaction.
Regulatory and Market Challenges: The decision to end fuel cell initiatives in Europe highlights challenges in aligning product strategies with market and regulatory demands.
H2 2025 Financial Guidance: Net revenues are expected to increase half-over-half, AOI margin is expected to be in the low single digits, and improvements in industrial free cash flow are anticipated compared to the first half of 2025.
Tariff Expense: Expected net tariff expense for 2025 is approximately EUR 1.5 billion, at the upper end of the previously provided range.
Product Launches: 10 new products are planned for 2025, with 4 already launched in H1. Key launches include 3 STLA Medium products in Europe and the return of iconic vehicles like the Jeep Cherokee and Dodge Charger in North America.
North America Market Recovery: Production of the all-new Jeep Cherokee will begin in H2 2025, marking a return to the midsized SUV segment. Dodge Charger SIXPACK production will also start in late 2025, targeting the U.S. market.
European Market Strategy: Focus on ramping production of new Smart Car platform models and launching 3 midsized STLA Medium products to strengthen market coverage in Europe.
Inventory and Order Book Management: Maintaining disciplined inventory levels with a 16% decrease in Europe and North America combined over the last year. Order books increased by 14% year-over-year and 34% in the last 6 months.
Long-Term Strategic Plan: An updated long-term strategic plan will be presented at the Capital Markets Day in early 2026.
The selected topic was not discussed during the call.
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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