Stellantis (STLAM) Q2 2024 earnings summary

Executive summary

• Net revenues declined 14% year-over-year to €85 billion, driven by lower shipments, adverse mix, and FX headwinds, with shipments down 10% to 2.9 million units.

• Adjusted operating income (AOI) fell 40% to €8.5 billion, with AOI margin at 10%, reflecting volume/mix declines, regional headwinds, and high R&D, CapEx, and M&A expenses.

• Adjusted diluted EPS dropped 35% to €2.36, impacted by lower AOI but partially offset by share buybacks.

• Management is addressing operational flaws, especially in North America, with corrective actions, cost savings, and a major product blitz of over 20 new models in 2024.

• The company remains committed to its Dare Forward 2030 plan, targeting double-digit AOI margins and positive free cash flow.

Financial highlights

• Consolidated shipments down 10% year-over-year to 2.9 million vehicles; net revenues declined 14% to €85 billion.

• AOI margin at 10%, down from 14.4% in H1 2023; adjusted AOI margin declined 440 bps.

• Adjusted diluted EPS was €2.36, down 35% year-over-year.

• Industrial free cash flow was negative €0.4 billion, reflecting lower AOI and higher investment spend.

• Net profit decreased 48% year-over-year to €5.6 billion; operating income down 50% due to restructuring charges and impairments.

Outlook and guidance

• Double-digit AOI margin and positive industrial free cash flow reaffirmed for FY 2024, with at least €1 billion reduction in investment spending in H2.

• Over 20 new product launches planned for 2024, including key electric and hybrid models.

• Management expects product portfolio coverage gaps to have peaked, with performance improvements targeted for H2 2024 and 2025.

• Market outlook shifted from supportive to neutral, with low single-digit industry growth expected.

• Q3 expected to be weaker due to inventory management and product transitions, with stronger Q4 performance anticipated.