Financial Data and Key Metrics Changes - Consolidated shipments for 2025 were 5.5 million units, up 1% year-over-year, with increases in South America, North America, and the Middle East and Africa [7] - Net revenues were EUR 153 billion, a decrease of 2% year-over-year, with an AOI margin of negative 0.5% reflecting early recovery stages and substantial net tariff expenses [7][8] - Industrial free cash flow saw outflows of EUR 4.5 billion for the full year, but H2 2025 showed a 50% sequential improvement compared to H1 2025 [9][10] Business Line Data and Key Metrics Changes - North America posted a 39% increase in shipments and a 31% increase in revenues in H2 2025, driven by normalized inventory dynamics and higher sales [10][11] - In Enlarged Europe, H2 AOI decreased due to a higher LEV mix and net pricing decline amid a competitive environment [11] - South America experienced a decline in AOI due to increased costs, while the Middle East and Africa saw solid growth in shipments [11] Market Data and Key Metrics Changes - U.S. market share increased year-over-year in January 2026, with European shares also seeing a sequential increase compared to H2 2025 [5] - The order portfolio in North America and Europe combined was up 46%, with North America up 150% and Europe up 18% [16] - South America maintained its number one share position, with the Ram Dakota launched in Argentina and set to launch in Brazil [24] Company Strategy and Development Direction - The company is focused on a decisive reset to put the customer at the center, aiming for profitable growth and execution in 2026 [4][18] - A $13 billion investment over four years is planned to improve market coverage and manufacturing utilization in the U.S., introducing new vehicles and renewing the current lineup [17] - The company is integrating the Maserati business into regional segments to enhance operational efficiency and regional focus [12][54] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging environment in Europe due to unclear regulations, but strong demand for STLA AutoDrive products is expected to support profit building in 2026 [29] - In North America, the company anticipates market share growth and new product launches to drive profitability, particularly with the HEMI V8 engine [30] - The company expects to see progressive performance improvements across all business KPIs in 2026 [25] Other Important Information - The company confirmed its 2026 financial guidance and will start reporting full-year earnings results quarterly [12] - A significant focus on quality improvements has been established, with over 2,000 new engineers hired to drive enhancements [15][63] - The company plans to address competitive pressures in pricing, particularly in Europe, while maintaining a stable pricing environment in North America [80] Q&A Session Summary Question: Need for larger restructuring measures in Europe - Management acknowledged the need for restructuring but highlighted strong demand and a large order portfolio as foundations for profit building in 2026 [29] Question: Operating leverage in North America - Management indicated strong growth in volume and pricing, with expectations for improved mix and profitability in 2026 [35] Question: Revenue growth outlook for 2026 - Management forecasted a slight decline in the North American market and flat conditions in Europe, with growth driven by new vehicle launches [43] Question: Positive AOI in North America for 2026 - Management confirmed that North America is expected to be the largest contributor to profitable growth in 2026 [49] Question: CapEx and investment levels - Management confirmed that investments are expected to remain flat year-over-year, focusing on areas with the highest return potential [55] Question: Quality development trends - Management reported significant improvements in quality metrics across regions, with ongoing efforts to enhance quality further [63]

Financial Data and Key Metrics Changes - Consolidated shipments for 2025 were 5.5 million units, up 1% year-over-year, with increases in South America, North America, and the Middle East and Africa [6] - Net revenues were EUR 153 billion, a decrease of 2% year-over-year, with an AOI margin of negative 0.5% reflecting early recovery stages and substantial net tariff expenses [6][7] - Industrial free cash flow saw outflows of EUR 4.5 billion for the full year, with H2 showing a 50% sequential improvement compared to H1 2025 [8][9] Business Line Data and Key Metrics Changes - North America posted a 39% increase in shipments and a 31% increase in revenues in H2 2025, driven by normalized inventory dynamics and higher sales [9][10] - In Enlarged Europe, H2 AOI decreased due to a higher LEV mix and net pricing decline amid a competitive environment [10] - South America experienced a decline in AOI due to increased costs, while the Middle East and Africa saw solid growth in shipments [10] Market Data and Key Metrics Changes - US market share increased year-over-year in January 2026, with European shares also seeing a sequential increase compared to H2 2025 [4] - The order portfolio in North America and Europe combined was up 46%, with North America up 150% and Europe up 18% [16] - South America maintained its number one share position, with the Ram Dakota launched in Argentina and planned for Brazil [24] Company Strategy and Development Direction - The company is focused on a decisive reset to put customers at the center, aiming for profitable growth through improved quality and product offerings [3][4] - A $13 billion investment over four years is planned to enhance market coverage and manufacturing utilization in the U.S., introducing five new vehicles and renewing the current lineup [17] - The company aims to integrate the Maserati business into regional segments, reflecting a strategic decision to maintain it within the Stellantis group [12][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to profitable growth in 2026, with expectations for improved performance across all business KPIs [25] - The competitive environment in Europe remains challenging, with ongoing regulatory discussions, particularly regarding Light Commercial Vehicles [29] - In North America, management noted strong demand for new products and improvements in inventory management, which are expected to drive profitability [29][34] Other Important Information - The company confirmed its 2026 financial guidance and plans to report full-year earnings results quarterly [11] - A significant focus on quality improvements has been established, with over 2,000 new engineers hired to drive enhancements [62] - The company anticipates a stable to slightly positive pricing environment in the U.S. while facing continued price pressure in Europe [82] Q&A Session Summary Question: Need for larger restructuring measures in Europe - Management acknowledged the need for restructuring but highlighted strong demand for STLA AutoDrive products and a large order portfolio as foundations for profit building in 2026 [28] Question: Operating leverage in North America - Management noted strong growth in volume and pricing, with mix effects due to production constraints now resolved, expecting improved profitability in 2026 [34] Question: Mid-single digit revenue growth outlook for 2026 - Management forecasted a slight decline in the North American market and flat conditions in Europe, with growth driven by new vehicle launches [43] Question: Expectations for profitability in North America and Europe - Management confirmed expectations for both regions to be in positive territory in 2026, with North America being the largest contributor to profitability [47] Question: CapEx and investment levels - Management confirmed that investments would remain flat year-over-year, focusing on areas with the highest return potential [54] Question: Quality development trends - Management reported significant improvements in quality metrics, with a focus on ongoing execution to drive further enhancements [62]

Core Insights - Stellantis is undergoing a significant strategic reset to align its business with customer preferences, focusing on a diverse range of vehicle technologies including electric, hybrid, and internal combustion engines [1][5][9] - The company reported a net loss of €22.3 billion for the full year 2025, primarily due to unusual charges totaling €25.4 billion, reflecting the costs associated with this strategic shift [4][10] - Stellantis aims to return to profitable growth by improving operational efficiencies and enhancing product quality, with a focus on execution in 2026 [1][8][10] Financial Performance - Full year 2025 net revenues were €153.5 billion, a decrease of 2% from 2024, impacted by foreign exchange headwinds and pricing declines in the first half of the year [3][4] - The adjusted operating loss for 2025 was €842 million, resulting in an adjusted operating income margin of (0.5)% [4][10] - Industrial free cash flows were negative €4.5 billion, although there was a 73% improvement in cash flows in the second half of 2025 compared to the same period in 2024 [4][10] Market and Product Strategy - Stellantis is launching a new product wave aimed at broadening market coverage and targeting profitable growth opportunities across various regions, including North America and Enlarged Europe [6][10] - The company plans to re-enter key segments such as mid-SUVs and muscle cars, with notable models like the Jeep Cherokee and Dodge Charger SIXPACK [6][10] - The focus on quality management has led to a significant reduction in vehicle issues reported in the first month of service, with a decrease of over 50% in North America and over 30% in Enlarged Europe since early 2025 [8][10] Future Guidance - Stellantis has reaffirmed its financial guidance for 2026, expecting a mid-single-digit percentage increase in net revenues and a low-single-digit adjusted operating income margin [4][10] - The company anticipates progressive improvements in industrial free cash flows throughout 2026, with expectations of sequential growth from the first half to the second half of the year [10]

Financial Data and Key Metrics Changes - Revenues rose by 10% year-over-year at the preliminary estimate midpoint, driven by an 11% increase in consolidated shipments [12] - AOI was negative in the range of EUR 1.2 billion to EUR 1.5 billion, with industrial free cash flow also negative, ranging from EUR 1.4 billion to EUR 1.6 billion [12] - The company announced EUR 22 billion worth of charges excluded from AOI, primarily related to product plans and resizing the EV supply chain [11] Business Line Data and Key Metrics Changes - Global shipments increased by 11% in H2 2025 compared to H2 2024, with North American shipments up by 39% [8] - The company launched 10 all-new products in 2025, including the Jeep Cherokee Hybrid and Dodge Charger i6 SIXPACK, which received positive market reception [7][10] - The order book in North America increased by over 150%, driven by demand for new Ram, Jeep, and Dodge products [9] Market Data and Key Metrics Changes - In Europe, the company retained segment leadership in the all-hybrids market and the profitable light commercial vehicle market [8] - Order intake in Europe increased by 13% in H1 2025 compared to H1 2024, with a 23% increase in Q4 2025 alone [9] - The company is experiencing growth in South America and the Middle East and Africa [8] Company Strategy and Development Direction - The company is undergoing a decisive reset to empower regional teams, improve stakeholder relationships, and enhance product plans to align with customer demand [4][5] - A significant investment of $13 billion is planned over the next four years in the U.S. to support new product launches [33] - The company aims to improve manufacturing execution and quality governance, with a focus on customer preferences driving the business strategy [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about early signs of recovery in H2 2025, with expectations for positive foundational growth in 2026 [5] - The company anticipates a return to positive industrial free cash flow by 2027, with net revenues expected to rise by a mid-single-digit percentage in 2026 [14][15] - Management acknowledged challenges in Europe due to competitive pressures but remains focused on improving operational performance [75] Other Important Information - The company has a strong balance sheet with approximately EUR 46 billion in industrial available liquidity, representing a ratio of 30% to net revenues [15] - The decision to not pay a dividend this year reflects the net loss, and the board has authorized the issuance of up to EUR 5 billion in hybrid bonds to maintain liquidity [15] Q&A Session Summary Question: Clarification on AOI and margin expectations - Management confirmed that they are not contemplating any equity raise and expects continuous improvement in AOI throughout 2026, driven by volume increases and operational efficiencies [24][26] Question: Need for drastic actions in Europe - Management emphasized a growth strategy in North America and Europe, with ongoing investments and product launches, while also focusing on industrial efficiency [32] Question: Hybrid bond rationale - The hybrid bond is intended to strengthen the balance sheet and protect the investment grade, with competitive costs expected [38] Question: Warranty provisions and cash outflows - Management does not expect warranty spend to increase in 2026 compared to 2025, with improvements in product quality anticipated [100] Question: Market share expectations in the U.S. - Management expressed confidence in growing market share in the U.S. due to new product launches and improving retail performance [58]

Financial Data and Key Metrics Changes - Revenues rose by 10% year-over-year at the preliminary estimate midpoint, driven by an 11% increase in consolidated shipments [10] - AOI was negative in the range of EUR 1.2 billion to EUR 1.5 billion, with industrial free cash flow also negative, ranging from EUR 1.4 billion to EUR 1.6 billion [10] - The company announced EUR 22 billion worth of charges excluded from AOI, with EUR 14.7 billion related to product plans, EUR 2.1 billion for resizing the EV supply chain, and EUR 5.4 billion for other items [9][10] Business Line Data and Key Metrics Changes - The company launched 10 all-new products in 2025, including the return of the HEMI V8 to the Ram 1500 and the rollout of the Smart Car lineup in Europe [5][6] - Global shipments increased by 11% in H2 2025 compared to H2 2024, with North American shipments up by 39% [6] - The order intake in Europe increased by 13% in H2 2025 compared to H2 2024, and the order book in North America rose by over 150% [6][7] Market Data and Key Metrics Changes - The company retained segment leadership in the all-hybrids market and the profitable light commercial vehicle market in Europe [6] - In South America and the Middle East and Africa, the company continued to experience growth [6] - The U.S. retail market share is growing, with a significant increase in order book and market share expected in 2026 [24][54] Company Strategy and Development Direction - The company is undergoing a decisive reset to empower regional teams, improve stakeholder relationships, and enhance product plans to align with customer demand [3][4] - A focus on launching new products and improving manufacturing execution is central to the company's growth strategy [17] - The company plans to invest $13 billion in the U.S. over the next four years, launching five all-new products and 19 relevant products [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about early signs of recovery in H2 2025, with expectations for positive industrial free cash flow by 2027 [4][13] - The company anticipates mid-single-digit revenue growth in 2026, with low single-digit margin guidance [12] - Management acknowledged competitive pressures in Europe but remains confident in the company's ability to return to profitability [70] Other Important Information - The company finished 2025 with industrial available liquidity of approximately EUR 46 billion, maintaining a strong balance sheet [14] - The decision to not pay a dividend this year reflects the company's net loss [13] Q&A Session Summary Question: Can you provide more details on AOI and margin expectations? - Management clarified that they are not contemplating any equity raise and expect continuous improvement in AOI driven by volume increases and operational efficiencies [22][23] Question: Is there a need for more drastic actions in Europe regarding capacity? - Management emphasized a growth strategy with significant investments in new products and a focus on efficiency, indicating that they will share more details in the upcoming Investor Day [29][30] Question: What is the rationale behind issuing hybrid bonds? - Management stated that the hybrid bonds are intended to strengthen the balance sheet and protect the investment grade rating, while also being a competitive financing instrument [35] Question: Can you explain the difference between operating cash burn and industrial free cash flow? - Management provided a detailed reconciliation, indicating that operating cash flow includes performance from the financial services segment, while industrial free cash flow focuses on industrial operations [40] Question: What are the expectations for warranty spending in 2026? - Management expects warranty spending to stabilize and not increase compared to 2025 levels, with improvements in product quality anticipated [92][93]

Preliminary Financial Results H2 2025 SAFE HARBOR STATEMENT This document, in particular references to "FY 2026 Financial Guidance", contains forward looking statements. In particular, statements regarding future financial performance and the Company's expectations as to the achievement of certain targeted metrics, including revenues, industrial free cash flows, vehicle shipments, capital investments, research and development costs and other expenses at any future date or for any future period are forward-l ...

Core Insights - Stellantis is undergoing a significant business reset to align with customer preferences and support profitable growth, with a new strategic plan to be communicated in May 2026 [2][4]. Financial Performance - Preliminary financial results for H2 2025 show improved Net Revenues and Industrial Free Cash Flow (IFCF), although Adjusted Operating Income (AOI) and Net Income were impacted by specific items [2][14]. - H2 2025 Net revenues are estimated between €78 billion and €80 billion, with a projected Net loss of €19 billion to €21 billion [15]. Strategic Shift - The company is focusing on a broader range of vehicles, including electric vehicles (EVs), hybrids, and advanced internal combustion engines, to meet diverse customer needs [3][4]. - A total of approximately €22.2 billion in charges was recorded for H2 2025, primarily due to realigning product plans with customer preferences and new emission regulations [10][11]. Operational Changes - Organizational changes include empowering regional teams to make decisions based on local customer knowledge and creating a more cost-efficient supply chain [6][10]. - Stellantis has seen a return to positive volume growth, with H2 2025 consolidated shipment volume reaching 2.8 million units, an increase of 277 thousand units or 11% year-over-year [7][36]. Market Position - Stellantis maintained a 7.9% market share in the U.S. for H2 2025, a 60 basis point increase sequentially, and retained its 2 market share position in Enlarged Europe [8][10]. - Customer order intake in Enlarged Europe increased by 13% year-over-year in H2 2025, with Q4 2025 orders up 23% year-over-year [8]. Quality Improvements - Initial quality management improvements have led to a reduction in reported vehicle issues by over 50% in North America and over 30% in Enlarged Europe since the beginning of 2025 [9]. Future Guidance - The company anticipates improvements in Net revenues, AOI margin, and cash generation in 2026, with a gradual sequential improvement expected throughout the year [18][19]. - Stellantis has suspended its dividend for 2026 in light of the 2025 Net loss and authorized the issuance of up to €5 billion in non-convertible subordinated perpetual hybrid bonds to maintain a strong balance sheet [16][17].

Core Insights - Stellantis is undergoing a strategic reset to align its business with customer preferences, focusing on a diverse range of vehicles including EVs, hybrids, and advanced internal combustion engines [2][4] - The company reported preliminary financial results for H2 2025, showing improved net revenues and industrial free cash flow, despite a net loss due to specific charges [10][13] Business Strategy and Changes - The reset involves a thorough assessment of the company's strategy and costs to better meet customer needs, with a new strategic plan to be communicated in May 2026 [2][4] - Key actions taken include re-empowering regional teams for decision-making, creating a cost-efficient supply chain, and reallocating capital to support electrified vehicle programs [6][10] Financial Performance - H2 2025 consolidated shipment volume reached 2.8 million units, an increase of 277 thousand units or 11% year-over-year, with North America showing the strongest growth at 39% [7][30] - Preliminary net revenues for H2 2025 are estimated between €78 billion and €80 billion, with a net loss projected between €19 billion and €21 billion [14] Market Position - Stellantis maintained a 7.9% market share in the U.S. for H2 2025, a 60 basis point increase sequentially, and retained its 2 market share position in Enlarged Europe [8] - Customer order intake in Enlarged Europe increased by 13% year-over-year in H2 2025, with Q4 orders up 23% year-over-year [8] Quality Improvements - The company has seen a significant reduction in vehicle issues reported in the first month of service, with a decrease of over 50% in North America and over 30% in Enlarged Europe since early 2025 [9] Charges and Financial Adjustments - The reset resulted in charges of approximately €22.2 billion for H2 2025, including €14.7 billion related to realigning product plans with customer preferences and new emission regulations [10][12] - The company will not pay a dividend in 2026 due to the net loss in 2025 and has authorized the issuance of up to €5 billion in non-convertible subordinated perpetual hybrid bonds [15][16] Future Guidance - Stellantis anticipates improvements in net revenues, adjusted operating income margin, and industrial free cash flows in 2026, with a mid-single-digit percentage increase in net revenues projected [17][19] - The company expects to achieve positive industrial free cash flow in 2027, despite ongoing regulatory uncertainties [18][19]

Summary of Conference Call Company and Industry - **Company**: Stellantis - **Industry**: Automotive Key Points and Arguments North American Market Performance - Stellantis has seen positive trends in the North American market, with market share increasing from 7% in the first half to approximately 8% in the third quarter, attributed to new product launches and strong market acceptance [1][2] - The return of the Ram Hemi V8 engine has been particularly successful, with 10,000 orders on the first day of announcement, growing to 50,000 orders within six weeks [2] - The Jeep Cherokee, a significant model in the midsize SUV segment, is being relaunched with improvements, including hybrid technology for better fuel economy [3][4] Product Launches and Strategy - Stellantis is focusing on a sequence of product launches, including the Jeep Cherokee and Dodge Charger, which are expected to drive volume growth sustainably [4][11] - The company is improving execution on product launches, with a commitment to timely releases [11] - A shift in strategy has been noted, particularly regarding battery electric vehicle (BEV) penetration expectations, which have been revised down from 50% to around 6-7% in the U.S. by 2030 [8][9] Regulatory Environment and Market Dynamics - The regulatory landscape in the U.S. and Europe is evolving, with Stellantis advocating for a balanced approach to CO2 emissions regulations that considers environmental protection, job preservation, and market affordability [12][13] - The company is preparing for upcoming EU regulations and is optimistic about the potential for a milder energy transition [16] Financial Outlook and Profitability - Stellantis is cautious about profitability expectations for the second half of the year, with a focus on closing the year before making definitive statements [5][7] - The company aims to improve cash generation and business KPIs gradually, acknowledging a negative cash flow of EUR 6.6 billion last year [28][29] Competitive Landscape and Future Plans - Stellantis recognizes the competitive threat from Chinese automakers, particularly in South America and the Middle East, and plans to leverage localization strategies to maintain its market position [50][52] - The company is optimistic about its product expansion in North America, particularly for the RAM brand, which is expected to introduce new models and capitalize on existing brand equity [23][44] Market Share Recovery in Europe - Stellantis has lost market share in Europe over the past five years and is implementing strategies to recover, including launching new models and leveraging partnerships like Leapmotor [37][40] - The company is focusing on segments where it has historical strength, such as the A and B segments, and is ramping up production of competitive models [38][41] Other Important Insights - The company is committed to improving its dealer inventory management and product launch rigor, which are critical for maintaining momentum [22] - Stellantis is exploring opportunities in hybrid technology, with a belief that hybrids will be a favored powertrain in the U.S. market [35] - The company is also assessing its brand portfolio and the potential need for streamlining based on each brand's unique strengths and market opportunities [43][44]

Financial Data and Key Metrics Changes - Consolidated shipments and net revenue both increased by 13% year-over-year, with consolidated shipments reaching 1.3 million units, an increase of 152,000 units [19][5] - Net revenues amounted to €37.2 billion, also reflecting a 13% increase compared to the third quarter of 2024 [19][20] - North America saw a 35% improvement in shipments, primarily due to normalized inventory dynamics following previous dealer inventory reductions [19][20] Business Line Data and Key Metrics Changes - North American sales rose by 6% year-over-year, driven by strong performances from Jeep products such as Wrangler, Gladiator, and Wagoneer [9][19] - In Europe, market share decreased by 70 basis points due to softer volumes in key markets, although new product launches are expected to improve performance [10][19] - The company launched two major products in the third quarter, with plans for additional launches in both North America and Europe [6][7] Market Data and Key Metrics Changes - The U.S. market share is showing signs of improvement, while Europe is facing challenges with declining volumes in the French and Italian markets [5][10] - South America experienced a 5% revenue decline, attributed to tough comparisons with the previous year [23] Company Strategy and Development Direction - The company announced a $13 billion investment in U.S. manufacturing, aimed at increasing production capacity by 50% and introducing five all-new vehicles [15][16] - The strategy focuses on correcting past product gaps and enhancing market competitiveness, particularly in the U.S. mid-size SUV segment [33][34] - The company is also engaging with European policymakers to advocate for necessary reforms in the automotive industry [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the return to top-line growth and confirmed guidance for continued sequential improvement in the second half of 2025 [24][27] - The management acknowledged challenges in Europe but emphasized ongoing efforts to regain market share and improve profitability [10][11] Other Important Information - The company is refining its warranty cost estimation methodology, which may lead to one-time charges but is not expected to materially impact future profitability [25][26] - The company is actively monitoring supply chain issues, particularly related to chip shortages, to mitigate potential disruptions [80] Q&A Session Summary Question: Can you discuss production capacity and pricing power improvements? - Management highlighted a return to top-line growth and favorable pricing dynamics, with a focus on correcting past strategic decisions to enhance product offerings [32][33] Question: What are the key levers for improving free cash generation? - The primary driver for free cash flow improvement is expected to be volume growth in North America [35] Question: Can you clarify free cash flow dynamics and expectations for 2026? - Management confirmed that the anticipated cash flow dynamics are correct, with North America being the main region for volume improvement [39] Question: What is the outlook for European margins? - Management confirmed intentions to improve margins in Europe through strategic product launches and market share recovery [71][74] Question: How will the $13 billion U.S. investment impact restructuring needs? - The investment is aimed at leveraging industrial capacity without planned shutdowns, focusing on growth in the U.S. market [77] Question: What are the implications of new U.S. regulations on the company? - Management welcomed the new regulations as opportunities for growth and emphasized a strategy focused on product diversity and customer choice [85]