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.

• Net profit fell 48% to €5.6 billion, impacted by volume declines, FX, and restructuring costs.

• Management is addressing high R&D/CapEx/M&A expenses, operational flaws, and underperforming marketing, especially in North America, with corrective actions and a major product blitz of over 20 new models in 2024.

• Despite challenges, a double-digit AOI margin was maintained, and €6.7 billion was returned to shareholders in H1, with a full-year target of at least €7.7 billion.

• Commercial vehicle leadership maintained in Europe and South America; top market share in Middle East & Africa.

Financial highlights

• Consolidated shipments down 10% year-over-year to 2.9 million vehicles.

• Net revenues declined 14% to €85 billion, mainly due to lower shipments and adverse mix.

• AOI margin at 10%, down from 14.4% in H1 2023; adjusted AOI was €8.5 billion, down €5.7 billion year-over-year.

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

• Industrial free cash flow was negative €0.4 billion, a sharp contrast to €8.7 billion in H1 2023.

Outlook and guidance

• AOI margin target of 10% reaffirmed for the full year, with management emphasizing operational improvements and positive industrial free cash flow.

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

• Positive industrial free cash flow expected for the full year, with at least €1 billion reduction in investment spending in H2.

• 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 performance in Q4.