Release Date: July 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stellantis NV (STLA, Financial) reported net revenues of approximately EUR74.3 billion for the first half of 2025, indicating strong sales performance.
- The company launched several new products, including five new B and C segment entries in Europe, which are expected to drive future growth.
- Stellantis NV (STLA) saw sequential improvement from the second half of 2024, with increased volumes and revenues, improved AOI margin, and reduced cash flow outflows.
- The Middle East and Latin America regions showed strong performance, contributing positively to the company's AOI.
- Stellantis NV (STLA) plans to reestablish financial guidance on July 29, 2025, indicating a proactive approach to addressing current challenges.
Negative Points
- The company reported a bottom line net loss of approximately EUR2.3 billion for the first half of 2025, reflecting significant financial challenges.
- Stellantis NV (STLA) experienced lower-than-expected volumes due to a sluggish European LCV market and lower production ramp-up of newly launched products.
- Higher industrial costs, including increased fixed asset absorption and warranty costs, negatively impacted profitability.
- Foreign exchange fluctuations, particularly involving the Turkish lira and euro, resulted in a negative impact of just under EUR1 billion year-over-year.
- Tariffs had a net impact of approximately EUR330 million in the first half, with expectations of increased impact in the second half.
Q & A Highlights
Q: Can you explain the continued market share losses in the U.S. and Europe, and how the ramp-up for the Smart platform has been an issue?
A: Douglas R. Ostermann, Stellantis NV - Chief Financial Officer: Our market share in Europe is up by about 130 basis points compared to the second half of last year, thanks to new product launches. However, the ramp-up has been slower than expected. The sluggish European LCV market, where we hold a 30% share, has also impacted us. We are addressing these issues with new product launches, including the Fiat Grande Panda, and are working on programs to encourage fleet renewals.
Q: Should we expect higher margins in the Middle East, Africa, and LatAm regions due to strong performance?
A: Douglas R. Ostermann, Stellantis NV - Chief Financial Officer: We continue to have a strong business in the Middle East, supported by a young and affluent population. Our brands are well-received, and we are well-positioned in these regions. Detailed regional performance will be discussed in the upcoming call on July 29.
Q: Can you comment on the gap between operating cash flow and free cash flow?
A: Douglas R. Ostermann, Stellantis NV - Chief Financial Officer: The difference is due to the inclusion of the financial services business in operating cash flow, which saw increased capital use, particularly in North America. The industrial free cash flow, which excludes financial services, was negative due to insufficient AOI to cover R&D and CapEx.
Q: What actions are being taken to regain market share in the Ram fleet segment?
A: Douglas R. Ostermann, Stellantis NV - Chief Financial Officer: We are reintroducing the V8 engine in the Ram pickup truck and launching the Express model to address the lower end of the market. We are also improving production numbers to regain fleet market share and have reintroduced Ram into NASCAR to boost brand excitement.
Q: How do you view the liquidity of the business, and what are your expectations for cash generation in the second half?
A: Douglas R. Ostermann, Stellantis NV - Chief Financial Officer: We aim to maintain liquidity at 25% to 30% of trailing 12-month revenues. Despite first-half cash burn, we remain within this range. We issued debt in the U.S. and European markets to cover upcoming maturities. We plan to generate positive industrial free cash flow in the second half, with more details to be provided on July 29.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.