Car maker Stellantis aims to return to revenue growth and positive cash generation in 2025 and sees steady margins, it said today, as it tries to recover from a slump in its US business late last year that led to the ousting of its CEO.
The Franco-Italian-US car maker forecast a “mid-single digit” margin on its adjusted operating profit for 2025.
That is broadly in line with a 5.5% margin in 2024, down from 12.8% in 2023 and at the bottom of the forecast range it provided in September after a shock profit warning, which dented investor confidence and later led to the ousting of CEO Carlos Tavares.
“We are firmly focused on gaining market share and improving financial performance as 2025 progresses,” Chairman John Elkann, who has led the company since Tavares quit in December, said in a statement accompanying 2024 results.
Car makers in Europe are battling high costs, sluggish demand and stiff competition from China, as well as complying with stringent carbon regulations.
Analysts at Citi said margin recovery could be visible only from next year.
“It is very hard to turn around car companies. Replacing the product range and re-pricing it at attractive levels for consumers is a long-term and expensive process,” they said in a note.
In the second half of 2024, Stellantis posted an adjusted operating loss of €1.7 billion in its North American region, with a negative 6.8% margin that compares with a 13% positive one a year earlier.
The group said today the process to appoint the new CEO was “well underway” and reiterated it would be concluded within the first half.
The group burnt through more than €6 billion in cash last year, while total revenues fell 17% to €157 billion – with a 12% drop in global shipments – due to “temporary gaps” in the product range and “now-complete inventory reduction initiatives”, it said today.
It has proposed a dividend on its 2024 results of €0.68 a share after paying €1.55 last year.
One of the most profitable groups for years among volume automakers under Tavares, Stellantis was hit in 2024 by slumping sales and bloated inventories, especially in the US, its most profitable market, as it raised prices too high, losing longstanding customers.
To revive its US business, the group had to reduce output last year and offer big discounts, hitting its profitability and wiping billions off its market value.
After peaking at around €27 in early 2024, Stellantis shares fell below €12 in early December, in the aftermath of Tavares’ resignation.
