Stellantis N.V. Q3 FY2025 earnings call

Key Points

• Commercial plan progressing with third quarter return to top line growth.
• Announced $13 billion investment in U.S. manufacturing and product, opening new opportunities.
• Third quarter performance: consolidated shipments and net revenue up 13%, global sales 4% higher YOY.
• Product launches: Citroen C5 Aircross, DS N°8, Jeep Cherokee in North America, and Fiat 500 hybrids, Fiat Grande Panda ICE, Jeep Compass in Europe.
• U.S. momentum: Sales rose 6% Y/Y, with Jeep and Ram products showing gains; received over 43,000 dealer orders for Ram 1500 HEMI V-8 variants.
• Europe progress: Executing product plan despite market mix headwinds, focusing on regaining market share with key product launches.
• Robotaxi collaboration: Partnerships with Pony.ai, NVIDIA, Uber, Foxconn for developing robotaxis.

Consolidated shipments and net revenue both increased 13% compared to prior year, with global sales performance 4% higher year-over-year. In North America, net sales showed sequential market share increase, with U.S. sales rising 6% Y/Y; Jeep products (Wrangler, Gladiator, Wagoneer) and Ram 1500 HEMI V-8 variants contributed. Europe saw market share contraction (down 70 basis points) due to market mix headwinds, but was progressing with product launches like Fiat 500 hybrids, Fiat Grande Panda ICE, and Jeep Compass. Middle East and Africa had a 21% shipment increase, mostly from Algeria. South America had a 5% revenue decline due to tough comps.

Guidance

• Confirmed second half 2025 guidance with continued sequential improvement, expecting low single-digit adjusted operating income margin in second half and working to improve industrial free cash flow.
• Refined net tariff expenses for 2025 to approximately EUR 1 billion (down from prior EUR 1.5 billion).
• Ongoing strategic plan review may lead to further charges in second half; warranty cost estimate change may result in one-time charge.

Risks

• Market mix headwinds in Europe impacting share.
• Chip shortage and potential supply disruptions affecting production plans.
• Regulatory and tariff uncertainties influencing business operations.

Q: Couple of questions on production capacity, pricing power, and free cash generation A: Antonio discussed correcting past strategic decisions with product launches to improve volume and profit; Joao noted volume growth in North America as primary driver for free cash flow improvement Q: Free cash flow dynamics and tariffs A: Joao noted volume growth in North America as primary driver for free cash flow improvement; Antonio discussed new strategy reducing tariff exposure Q: U.S. investments and volume trends A: Joao discussed volume improvement in North America, especially U.S., from product launches; Antonio emphasized product at core of strategy to drive growth Q: Europe margins, working capital, and CapEx A: Antonio discussed Europe product launches to regain market share and improve profitability; Joao discussed working capital dynamics and monitoring chip supply; Antonio provided details on $13 billion U.S. CapEx Q: Charges and emissions regulations A: Antonio and Joao discussed noncash charges from strategic plan review and warranty cost estimate change; Antonio highlighted emissions regulation changes providing opportunity for product expansion