Full Year 2023 Stellantis NV Earnings Call

I'll now hand, the call over to our host at the fire head of Investor Relations to begin today's conference. Thank you.

Hello, everyone and thanks for joining us today as we review still Amis as full year 2023 results earlier today the presentation materials for this call as well as a related press release were posted under the investors section of the scientists group website today. Our call is hosted by Carlos Tavares, The company's Chief Executive Officer and Dan.

Ed Ditmaier: Thanks for joining us today as we review Stellantis' full year 2023 results. Earlier today, the presentation material for this call, as well as a related press release, were posted under the Investors section of the Stellantis Group website. Today, our call is hosted by Carlos Tavares, the company's Chief Executive Officer, and Natalie Knight, the company's Chief Financial Officer. After both Mr. Tavares and Ms. Knight present, they will be available to answer questions. Before we begin, I want to point out that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbors statement included on page 2 of today's presentation. As customary, the call will be conducted in Dutch.

Italy night, the company's Chief Financial Officer. After both Mr. Tavares I missed night present there'll be available to answer questions. Before we begin I want to point out that any forward looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor statement included on page two of today's presentation.

As customary the call will be governed by Dutch language now I would like to hand over the call to Carlos Tavares CEO of scientists.

Carlos Tavares: Now, I would like to hand over the call to Carlos Tavares, CEO of Stellantis. Thank you, Ed. And good morning and good afternoon to all of you.

Carlos Tavares: Thank you Ed and good morning, and good afternoon to all of you are not pretty and myself. We are delighted to host this session.

Carlos Tavares: Natalie and myself, we are delighted to host this session, the Stellantis 2023 Financial Results Announcement Session. We know that you are very busy people, and therefore, we value your time, and we thank you warmly for your interest in Stellantis. Let's get started.

72023 financial results announcement session. We know that you are very busy people and therefore, we value your time and we thank you wore me for your interest in Celanese.

Speaker Change: Let's get started.

Carlos Tavares: First of all, 2023 was one more record year for our company. A record in net revenues, plus 6%, a record in net profit, plus 11%, and a record in free cash flow, plus 19%. So, a record year in, of course, a very challenging year that demonstrated once again that we are a highly resilient company. We are an all-weather company, as I'm sure you already know. We are so happy to be here with you today to comment on what has been done and to answer your questions.

Speaker Change: First of all at 2023 was one more record year for our company.

Speaker Change: Our records in net revenues plus 6% our records in net profit plus 11% and that record.

Speaker Change: Free cash flow plus 19%. So a record year in are of course, a very agitated year that demonstrated once again that we are a highly resilient company. We are I know, where the company as I'm sure you already know.

Speaker Change: So happy to be here with you today to commence what has been done and to answer your questions. It is fair to say that not Tony we were able to go through a very agitated a year with the record results that we have demonstrated to you that we are ready for the future we are executing our transformation.

Carlos Tavares: It is fair to say that not only were we able to go through a very challenging year with record results, but we have demonstrated to you that we are ready for the future. We are implementing our transformation. We are doing what we have told you, what we have explained in the Deaf4 2030 plan, and we are ready. We are ready for 2024, and we are ready for the next steps of our transformation, and we are ready with a very, very flexible capability. And this is, I'm sure, something that we will discuss amongst ourselves today. So, from here, I would like to move to the second slide, which is about a real game-changer, and I'm focusing on this specific game-changer, which is the car you have on the screen, the brand-new EC3 from Citron. This is a B hatchback, a pure BEV, that is now going to be sold in the European market at €23,300 for the mid-trim, while the entry trim will be sold for €19,990.

Speaker Change: We are doing what we have told you what we have explained in the deck for 2030 plan and we are ready we are ready for 24, and we are ready for the next steps of our transformation and we are ready with a very very flexible capability and this is I'm sure something that we will discuss all of us.

Speaker Change: So from here I would like to move to.

The second slide which is about.

Speaker Change: A real game changer, and I'm focusing on this specific game changer, which is the call you have on the screen that brand New E C. Three from Ctrip.

Speaker Change: This is a b hatchback at.

Pure BV that is now going to be sold in the European market at 23300 euros for the mid trip.

Speaker Change: <unk> will be sold from 19919 euros why is this important well this is important because at this price.

Carlos Tavares: Why is this important? Well, this is important because at this price... this product is profitable for our company. At this price, this product is going to represent an affordable offering to our middle-class customers, which is exactly the most difficult thing that we have to do right now in the Western world is to bring, to make it simple, BVs at the price of ICEs to our middle-class customers. This is where we are. We are going to be able to offer for this €23,300 EC3 mid-trim 320km of WLTP range, which is a very competitive range for this kind of product.

Speaker Change: This product is profitable for our company.

Speaker Change: At this price this product is going to represent an affordable offering to our middle class customers, which is exactly the most difficult thing that we have to do right now in the western World is to bring to make it simple bvs at the price of Ice's far or neither.

Speaker Change: Class customers and this is where we are.

Speaker Change: We are going to be able to offer for these 23300 Euro E C suite midstream.

Speaker Change: 320 kilometers off W. LTP range, which is a.

Speaker Change: Very competitive range for this kind of product and later on we are going to bring in even more price competitive product at 19990 euros for 200 kilometers of range. This is demonstrating that we are getting prepared.

Carlos Tavares: And later on, we are going to bring an even more price competitive product at €19,990 for 200km of range. This is demonstrating that we are getting prepared to deliver the most difficult part of our mission. As you know, our mission is to deliver clean, safe, and affordable products to protect the freedom of mobility. With this BEV product at a very competitive price with very, very good features, you see that we are now ready for the race. And this is what I wanted to convey to you today. If we step back a little bit and look at what happened this year.

Speaker Change: To deliver the most difficult part of our mission as you know our mission is to deliver clean safe and affordable.

Speaker Change: To protect our freedom of mobility with this b V product at a.

Speaker Change: Very competitive price with a very very good features you'll see that we are now ready for the race and this is what I wanted to convey to you today, if we step back a little bit and if we look at what happened this year.

Carlos Tavares: First of all, we have to recognize that we are a growing company. Our strategy is not about shrinking. Our strategy is about growing profitably. You can see that we could grow our net revenues by 6%, and we have a very efficient overall AOR amount of $24.3 billion with a 12.8% margin. Our free cash flow is a record free cash flow, industrial free cash flow of 12.9 billion euros. As you remember, last year we were at 10.8%.

Speaker Change: First of all we we have to recognize that we are a growing company our strategy is not about shrinking.

Speaker Change: Strategy is about growing profitably you can see that we could grow our net revenues by 6%.

Speaker Change: And we have a very efficient overall AOR amount of $24 3 billion with a 12, 8% margin or free cash flow is a record free cash flow industrial free cash flow of $12 9 billion.

Speaker Change: Billion euros as you'll remember last year, we were at $10 eight at this up 19%.

Carlos Tavares: It is up 19%, which once again demonstrates that Stellantis is a very efficient organization to generate cash, and this is something that you have been seeing over the first three years of life of Stellantis, as our cash generation has increased every year compared to the previous one. As a consequence of this, we are today confirming a very outstanding capital return to all of you, the 2023 capital return of 6.6 billion euros, which is a 16% number compared to the January 1st, 2023 market capitalization. This very significant return is something that we believe we own to you, and you will see that for 2024, we have even better news for all of you. If we look at our therefore commitments, one of them is very strong.

Which are once again demonstrates that our stellar piece is a very efficient organization to generate cash and this is something that you have been seeing over the first fears of a life of certainties as our cash generation has increased every year compared to the previous one as a consequence of this.

Speaker Change: We are at today are confirming a very outstanding capital return to all of you. The 2023 capital return of $6 6 billion euros, which is a 16%.

Speaker Change: The number compared to the January one 'twenty three market capitalization. This a very significant return is something that we believe we own to you and you will see that for 24, we have even better news for all of you. If we look at all of them.

Speaker Change: Therefore, the commitments one of them is very strong it's about growing our EBV cells are zero emission vehicle sales and I'll leave yourselves.

Carlos Tavares: It's about growing our BEV sales, our zero emission vehicle sales, and our LAV sales. On this front, at the moment, we are making profit on those sales. We can show you that the BV cells are up 21%, the LEV cells are up 27%, we are number 3 in Europe, we are number 2 in the LEV cells in the US, and, by the way, we are number 1 in PHEV cells in the US.

Speaker Change: On this front at the moment, where we are making profit with those sales.

Speaker Change: The show to you that the BV sales are up 21%. The <unk> sales are up 27%. We are number three in Europe. We are number two in the <unk> sales in the U S and by the way we are number one in ph EV sales in the U S.

Carlos Tavares: If we continue, we can comment that we are the undisputed leader of light commercial vehicles in Europe and Latin America, with respectively a 30.4% share and 28.6% share. But more than that, we are also the leaders of electrified mobility in LCVs with, in Europe, no less than 38.8% share. So we are clearly the leaders of clean mobility for light commercial vehicles. Last but not least, in terms of their forward commitments, we are ahead of schedule in what relates to the third engine, what we call the Overseas Club. We want to bring a third engine to our North American engine and our European engine.

Speaker Change: If we continue we can commence that we are.

Speaker Change: The undisputed leader of light commercial vehicles in Europe, and Latin America, with respectively, 34% share.

And a 28, 6% sure but more than that.

Speaker Change: We are also the leaders of electrified mobility in Ltvs, we the in Europe, no less than 38, 8% share. So we are clearly the leaders of clean mobility for the light commercial vehicles.

Speaker Change: Last but not least in terms of therefore commitments. We are ahead of plan.

Speaker Change: In what relates to the third engine, what we call the overseas club.

Speaker Change: We want to bring a third engine to our North American engine in our European engine and it is fair to say that the third and then it could grow at twice the pace of the whole company in terms of net revenue plus 13% compared to six.

Carlos Tavares: And it is fair to say that the third engine could grow at twice the pace of the whole company in terms of net revenue, plus 13% compared to plus 6. And you'll see later on that the profitability is stellar. And that's right now; the third engine is getting very, very close to the profits that we have in Europe, which is excellent news. And that just means that our strategy to go for a third engine is not only being executed but ahead of schedule. For the third part of this slide, we want also to confirm to you that we are increasing our BOV offensive, our BEV offensive. We already have 30 models on sale in 23 countries, and we are going to move from 30 to 48. Of those 18, additional models, eight will be dedicated to the U.S. market, which just confirms what we told you last year, telling you that in 2024, we will be very strong in revving up this BEV offensive

Speaker Change: And you'll see later on that profitability is stellar and that's right now the third engine is getting very very close.

Speaker Change: Two the profits that we have in Europe, which is excellent news and that just means that our strategy to grow a third engine is not only being executed but ahead of plan.

Speaker Change: For the third part of this slide we want also to confirm to you that.

Speaker Change: We are increasing our Bureau V offensive of BV offensive, we already have 30 models.

Speaker Change: On sale in 'twenty, three and we are going to move from 32 48 on.

Speaker Change: <unk> 18.

Speaker Change: Additional models eight will be dedicated for the U S market, which just confirms what we told you that last year.

Speaker Change: Telling you that in that 24, we will be very strong on the Red thing up this BV offensive.

Carlos Tavares: We keep our commitment, the commitment that was made to you in March 2022 when we presented to you the Dare Ford nine-year strategic plan. We are totally aligned with our commitment to double net revenue by 2030 and keep our AOI margin above double digits. Last but not least, coming back to capital return, what we are going to propose to you is a 3 billion euro share buyback for next year, which means doubling the share buyback of 23 and a dividend that is also going to increase by 16%. So a very significant increase in capital return to our shareholders, which is absolutely normal given this is your company at the end of the day. Moving from here, let's have a look at the regions, starting with North America.

Speaker Change: We keep our commitment the commitment that has been made to you in March 2022, when we presented to you. Therefore, it's not in your strategic plan, we are totally aligned with our commitment to double the net revenue by 2030, and keeping our NOI margin above double digits.

Speaker Change: Last but not least coming back to capital return.

Speaker Change: What we are going to propose to you is a 3 billion euro share buyback for next year, which means doubling the share buyback of 23 and a dividend that is also going to increase right, 16%. So a very significant increase of capital returned to our shareholders.

Speaker Change: Which is absolutely normal given this is your company at the end of the day.

Speaker Change: Moving from here, let's have a look at the regions and starting with North America North America has delivered a very robust 15, 4% NOI margin.

Carlos Tavares: North America has delivered a very robust 15.4% AOI margin. Despite everything you know about the events in September and October 2023, we are able to protect 15.4%, which is 100 basis points less than last year, which I believe is a very robust result given what has happened. And I want to take this opportunity to convey to our North American teams my warm thanks and very sincere appreciation for everything that has been done.

Speaker Change: Despite everything you know about the events in September and October 2023, we were able to protect 15, 4% which is.

Speaker Change: 100 basis points less than last year, which I believe is a very robust result, given what has happened and I want to take this opportunity to convey to our north American teams by warm thanks, and the very sincere appreciation for everything that has been done of course, we did not everything we need to do everything well as well.

Carlos Tavares: Of course, we did not do everything well, as we lost some market share. However, we believe that we have understood what did not go well in terms of operations, and we believe that we are now on track to fix that. And all the things we did not do well in 2023 are opportunities to do much better in 2024, and we believe that we have the tools for that. From here, we also have to recognize that we have been protecting the value of what we are doing in our company, which is reflected by the fact that we have the best U.S. average transaction price in the industry, at least compared with our direct competitors. We are number one in PHEV sales. Actually, it's more than being number one; we just doubled our year-over-year sales to 136,000 units in 2023, and we are number two in LEV sales.

Speaker Change: We have lost some market share.

Speaker Change: We believe that we have understood.

But did not went well in terms of operations and that we believe that we are now on track to fix that and all the things we did not do well in 'twenty three are opportunities to do much better in 'twenty four and we believe that we have the tools for that from.

Speaker Change: From here, we also have to recognize that we have been protecting the value of what we are doing in our company, which is translated by the fact that we have the best U S average transaction price of the industry.

At least compared with our direct competitors, we are number one.

Speaker Change: B cells.

Actually it's more than being number one we just doubled.

Speaker Change: Our year over year sales to 136000 units in 2023, and we are number two in LTV cells. What this tells US is that for the transient periods that we may have a head we are perfectly positioned to perform with our plug in hybrid technology before by a technology.

Carlos Tavares: What this tells us is that for the transient periods that we may have ahead, we are perfectly positioned to perform with our plug-in hybrid technology, the 4xE technology that has proven to be a great success and is still in the U.S. market. Last but not least, commercial fleet sales, we are up 20 percent. We are bringing more ProMasters to the market, which is a great offering to many of our corporate fleet customers. And this is now live.

Speaker Change: That's proven to be a great success and still he is in the U S market last but not least the commercial fleet sales we are up 20%.

Speaker Change: We are bringing more pro masters, we are bringing pro master EV to the market, which is a great offering to many of our corporate fleet customers and this is now life, we are able to ramp up but.

Carlos Tavares: We are able to ramp up. We are ready for this competition, and we expect to gain significant volume in 2023. And last but not least, in terms of pickup trucks, which is, as you know, a big profit provider for our operation in North America, we have presented to you and to the world a wide spectrum of our technologies. We are going to bring ICE.

Speaker Change: We are ready for this competition and we are gaining significant volume in 'twenty three we expect to gain more volume in the 'twenty four and last but not least in terms of pickup trucks, which is as you know a big profit provider for our operation in North America. We have presented to you went to the world the large spectrum.

Our technologies, we are going to bring ice we're going to bring pure B V. With a fantastic range of 500 miles we are going to ring range extenders for different kinds of customer segments across the market. We believe we have the largest the most efficient market coverage in pickup trucks.

Carlos Tavares: We are going to bring PureBV with a fantastic range of 500 miles, and we are going to bring range extenders for different kinds of customer segments across the market. We believe we have the largest and most efficient market coverage in pickup trucks in the U.S. So, great results, robust results in North America, and opportunities to do even better, mostly in the US and Canada. If we move from here and have a look at Europe, the first great thing about Europe is that it was able to sustain a stable 9.8% AUI margin and grow its profit to $6.5 billion. This is good because the competition was much sharper than it was in the previous years and because we had a significant increase in our LEV cells and BEV cells. So the mix of electrified cells increased significantly, and at the same time, we could maintain the AUI margin, and at the same time, we could grow the amount of profit. So a great performance there, even though, a little bit like in the US, we suffered on the share. We lost 140 basis points.

Speaker Change: In the U S. So great results robust results in North America and opportunities to do even better.

Mostly in U S and Canada, if we go from here and I have a look at Europe the.

Speaker Change: First the great thing about Europe is that Europe was able to sustain a stable nine 8% a wide margin and grew the profit to $6 5 billion.

Speaker Change: This is good because the competition was much more <unk>.

Speaker Change: <unk> than it was in the previous years and because we had a significant increase on our LTV sells an EV cells. So the mix of electrified sales increased significantly and at the same time, we could maintain the yoga a wide margin and at the same time, we could grow the amount of profit so a great performance there even though.

Speaker Change: A little bit like in the U S. We suffered on the share we lost 140 basis points.

Carlos Tavares: We believe that this is coming back quite strongly, and we'll have the opportunity to discuss it because we see that our order book is now being filled in a very efficient manner. One thing that we see in Europe, which is quite stunning and quite demonstrative of the power of our products and the power of the appeal of our products and the power of our technology, is that as soon as we communicate a little bit more on marketing communications, we get a very good response from the market. And that's what we have been doing over the last few weeks.

Speaker Change: We believe that this is coming back quite strongly and we will have the opportunity to discuss because we see that our order book is now being filled in a very efficient manner.

Speaker Change: One thing that we see in Europe, which is a quite a stunning and quite a demonstrative of the power of our products. The power of the appeal of our products and the power of our technology is that as soon as we communicate.

Speaker Change: It's more on marketing communications, we have a very good response from the market.

And that's what we have been doing over the last few weeks and we see that the response from the market is very strong and we see our order book getting field week. After week. So we believe that we can do a better drop in Europe in 2024 from here, we have to recognize that.

Carlos Tavares: And we see that the response from the market is very strong, and we see our order book getting filled week after week. So we believe that we can do a better job in Europe in 2024. But from here, we have to recognize that our 14.2% BV market share is below the total market share.

Speaker Change: Our 14, 2% <unk> BV.

Speaker Change: BV our market share is below the total market share.

Carlos Tavares: Of course, this has also to do with the fact that we want to protect profitability while we grow sales, as we have seen. So there was a significant growth in sales. But at the same time, we are protecting the pre-unit margins to make sure that we protect our earnings vis-à-vis the BV sales mix as we are reducing the cost every single day.

Speaker Change: Of course. This has also to do with the fact that we want to protect the profitability, while we grow the sales as we have seen so there wasn't significant growth on sales at the same time, we are protecting the per unit margins to make sure that we protect our earnings vis vis the BV sales mix is we are reducing the cost every single day.

Carlos Tavares: As we will see later on, so number three in Europe in BV sales with a significant number that was increased by 38 kilo units year over year. Online sales are a big success, a very big success. This new sales channel is something that we believe is very promising for the future. It is a much lower cost of distribution.

Speaker Change: As we will see later on so number three in Europe in BV cells with a significant number but that was increased by 30 eights keto units year over year.

Speaker Change: Online sales is a big success.

Speaker Change: Big success. This new sales channel is something that we believe is very promising for the future. It is a much lower cost of distribution. It is meeting the expectations of the customers who have the need for a hassle free customer journey, and we are offering exactly that a hassle free customer.

Carlos Tavares: It is meeting the expectations of customers who have the need for a hassle-free customer journey, and we are offering exactly that, a hassle-free customer journey with all the services online. The result is here, up 55%, a very strong number overall in the world. We are at 360,000 sales for the whole world. We are at 188,000 sales in Europe, and specifically in Europe, a very good response to the very nice customer journey, hassle-free, that we are offering on this specific channel. In terms of LCV, our leadership is undisputed, with a 30.4% market share, and as I have already mentioned, a 38.8% market share for the BEV Pro 1 vans in Europe, which is a very strong position. As you know, the LCVs represent one-third of the total net revenues of the company.

The journey with older services online. The result is here up 55%.

Speaker Change: Stronger number overall in the world.

Speaker Change: Our at 360000 sales for the whole World. We are at 800 188000 sales in in Europe, and specifically in Europe, a very good response to the very nice customer journey Hustle free that we are all free on this specific channel.

Speaker Change: In terms of LTV or neither shippers is undisputed 34% market share.

Speaker Change: As I already mentioned at 38, 8% market share for the BV Pro one Vance.

Speaker Change: In Europe, which is a very strong position as you know the ltvs represent one third of the total net revenues of the company last but not least we are executing on our plans to bring <unk> giga factories to our markets and be able to source battery cells.

Carlos Tavares: Last but not least, we are executing on our plans to bring gigafactories to our markets and be able to source battery cells from regions to regions. It is quite clear that we have, with ACC, not only taken the leadership, in terms of shareholding, but also that we are executing on the plan. And this is very important.

Speaker Change: From the regions to the regions. It is quite clear that we have with ACC not only taken the leadership.

Speaker Change: In terms of shareholding, but also that we are executing on plan and this is very important we are on track on plan for the first plant into law in France that is now making manufacturing the preliminary production on schedule and by the end of this year, we will start the <unk>.

Carlos Tavares: We are on track, on plan, for the first plant in Duvrin, in France, that is now making and manufacturing the primary production on schedule. And by the end of this year, we'll start delivering to our vehicle plants the final battery cells that we need for our European sourcing. It is a very big achievement, and I would like to congratulate the ACC top executive team, and namely its CEO, Yann Vincent. From here, we will move to the other regions. And here you have a really very nice picture about what our leaders are doing. The Middle East and Africa are quite outstanding.

Living to our vehicle plants, the final battery cells that we need for our European sourcing.

It is a very big achievement and I would like to congratulate the ACC top executive team and namely its CEO young vessel from here, let's move to the other regions.

Speaker Change: And here you have a.

Speaker Change: Really a very nice picture about.

Speaker Change: What are our leaders are doing middle East in Africa is quite outstanding.

Carlos Tavares: We could double it. The overall amount of profit, the AOI amount, has doubled to reach $2.5 billion. The AOI margin of Middle Eastern Africa is by far the most profitable business that we have across the regions at 23.7%, with number two being North America at 15.4%. And then you have South America at an AOI margin of 14.8, it's number three, with an AOI that was up 16%, so a leading region both in automotive group sales, in brand sales with Fiat, and here also 2.4 billion of additional profits. And last but not least, China and India, Asia Pacific, with a very respectable margin of 14.2%, stable despite net renews, and stable in net renews. And we have, of course, still some things, some good things to do in terms of planning to leverage the Lip Motor Strategic Partnership, which is a big opportunity as we are controlling all the exports outside of China and consolidating the profits that will come from the exports outside of China for Lip Motor sales.

Speaker Change: We could double.

Speaker Change: The overall amount of profit.

Speaker Change: The amount has doubled to reach $2 5 billion.

Speaker Change: The margin of Middle East and Africa is by far the.

The most profitable business that we have across the regions. That's 23 seven.

Speaker Change: 7%.

Speaker Change: The number two being.

Speaker Change: The North America at 15.4.

Speaker Change: And then you have South America at.

Speaker Change: In a way a margin of 14 eight it's the number three.

Speaker Change: We then a why that was up 16% so a leading region. Both in automotive group sales in brand sales with Fiat and hero. So $2 4 billion of additional of profit and last but not least China and India Asia Pacific with a very.

Speaker Change: Respectable margin of 14, 2% stable despite net revenues stable net renews.

And we have of course.

Speaker Change: Still some things some of the good things to do in terms of planning to leverage the leap motor strategic partnership, which is a big opportunity as we are controlling all the exports outside of China and consolidating the profits that will come from the exports outside of Germany for the lip motor sales.

Carlos Tavares: We are also in a position to see that the C-trend, C3 sales in the Asia Pacific are going by 30%, which means that our smart car platform strategy is now bringing some results in terms of growth for our company. This is what we can say here, but the most important thing is that the Middle East, Africa, South America, India, and Asia Pacific represent the third engine of our company.

Speaker Change: We are also in a position to see that.

Speaker Change: The Citron C. Three sales in the India Asia Pacific are growing by 30%.

Speaker Change: Which means that our smart car platform strategy is now bringing some results in terms of growth for our for our company. This is what we can say here, but the most important thing is that.

Speaker Change: Middle East and Africa, South America, India Asia Pacific represents the third engine of our company and we see that in 2023. This third engine was very close to the profit that we get out of Europe.

Carlos Tavares: And we see that in 2023, this third engine was very close to the profit that we get out of Europe. So I expect that very soon, we will have this third engine active, which means three big engines of profitability for our company with Europe and the third engine at a similar amount at the end of the day, which gives our company even more robustness and even more capability to be an all-weather company given the risk that we could face of regional crises. If we move from here, I would also like to comment on our very acquisitive businesses that are expanding across the world. I will start with financial services. First to say that our U.S. Financial Services are now live. They are very active.

Speaker Change: I expect that very soon we will have this third engine active.

Speaker Change: Which means three big engines of profitability for our company with the Europe and third engine at the similar amount at the end of the day, which gives our company even more robustness and the even more capability to be old whether a company <unk>.

Speaker Change: Given the risk that we could face of regional crisis.

Speaker Change: If we move from here.

Speaker Change: I would like to comment also are very accretive businesses.

Speaker Change: That are expanding across the world I will start with financial services.

Speaker Change: To say that our U S financial services are now life.

Speaker Change: They are very active they are growing we ought to $7 billion of receivables.

Carlos Tavares: They are growing, We are at $7 billion in receivables. We expect that this is going to exceed the $10 billion target of 2024. And this already represents a tripling of what we did in 2022. So, very fast growth, very efficient growth. And this is going to give us a very important tool for the comeback to the share that we expect in North America and the U.S. It's an important tool for sales and marketing, as you know. Now we have it, now it's growing, and now it's competitive enough to support our sales and marketing teams. We have also completely concluded the restructuring of our European financial services business. They are now much more simple. One financial service per country

Speaker Change: We expect that this is going to exceed the 10 billion target of 2024 and this already represents a tripling of what we did in 2022.

Speaker Change: So very fast growth very efficient growth and this is going to give us a very important tool on the come back on the share that we expect in the in North America and the U S. It's an important tool for sales and marketing as you know now we have it now its growing and now it's competitive to support our system.

Speaker Change: Marketing teams. We have also completely concluded the restructuring of our European financial services. They.

Speaker Change: They are now much more simple.

Speaker Change: One financial service per country, we have been improving.

Carlos Tavares: We have been improving our receivables, and now we are at 56 billion euros of receivables. That is 21 percent more than last year. So, growing and now totally live and totally efficient. And we have also reinforced our presence in Brazil. In the circular economy business, this is really a fantastic opportunity for us. As you know, we have created the first circular economy hub in Italy. We will soon announce another one, and we are so excited about this for a very simple reason. It's a growing business. We grew by 18%.

Speaker Change: Improving our receivables and now we are at 56 billion euros of receivables. It is 21% more than last year, so growing and now totally life and totally efficient and we have also reinforced our presence in Brazil.

Speaker Change: On the circular economy business. This is really a fantastic opportunity for us as you know we have created the first circular economy hub in Italy.

Speaker Change: We will soon announce another one and we are so excited about this for a very simple reason, it's a growing business, we grew by 18% and it's extremely accretive to our.

Carlos Tavares: And it's extremely accretive to our overall AY margin of the company, very accretive, pulling us up. And we see that there is a lot of growth that we have ahead of us. I would mention remanufacturing, with a 14% sales increase, with 38 product lines that we remanufacture, and reuse, where we increased by 63% our sales in 160 countries. We have now set up in the repair 24 battery repair centers across Europe, and the recycling, where we increased by 84% the number of parts that we are recovering for recycling.

Speaker Change: Overall, a wide margin of the company very accretive putting us up.

Speaker Change: We see that there is a lot of growth.

Speaker Change: That we are ahead of us I would mention the the remanufacturing with 14% sales increase with 38 product lines that we remain remanufacture.

Speaker Change: The reuse where we increased by 63% are sales in 160 countries.

Speaker Change: We have now set up in the repair twenty-four battery.

Speaker Change: Per centers across most of Europe, and the recycle where we increased by 84%.

Speaker Change: A number of thoughts that we are recovering for recycling.

Carlos Tavares: This is a highly equitable business. This is growing, and this is going to be growing even more when we announce an additional circular economy hub on top of the one we already have in Italy. So on this page, great businesses that are growing represent big opportunities for the future. Let me move from here and talk a little bit about product. Product is our passion. Technology is the way to express appeal.

Speaker Change: This is a highly accretive business. This is growing and this is going to be growing even more when we will announce.

Speaker Change: Additional circular economy hub on top of the one we already have you meet a shortage in Italy. So on this page.

Speaker Change: Great businesses that are growing represents a big opportunity for the future.

Let me move from here and and talk a little bit about product.

Speaker Change: Product is our passion technology.

Speaker Change: Technology is the way to express appeal.

Carlos Tavares: It is quite clear on this slide that not only do we have this fantastic example of the Alfa Romeo Stradale 33, which has been a fantastic project that comes with great brand equity to add to the great brand equity of Alfa Romeo, but more than that, it supports the fact that our sales across the world in Alfa Romeo could grow by 33%. 33% of global sales growth for Alfa Romeo. Great job done by the team!

Speaker Change: It is quite clear on this slide that not only you have this fantastic example of the Alfa Romeo Saadallah thirty-three, which has been a fantastic project. That's a great comes with a great brand equity to add to the greater brand equity of Alfa Romeo but more than that.

Speaker Change: It supports the fact that our sales across the world in after a meal could grow by 33%.

Speaker Change: 33% of global sales growth for Alfa Romeo great job done by the team and it has been of course.

Carlos Tavares: And it has been, of course, put at a high level of visibility by the Stradale 33 project, which is completely sold even before we deliver the first car. So a great brand equity reinforcement. For the pickup trucks, we have everything we need.

Speaker Change: <unk>.

Speaker Change: Put in a high level of visibility by the straddle a thirty-three project, which is a completely sold even before we deliver the first scar so a great brand equity reinforcement.

Speaker Change: On the pickup trucks, we have everything we need that we have all the technologies. We are now going to start ramping up.

Carlos Tavares: We have all the technologies. We are now going to start ramping up with the pure BVs, with the range extenders, with the ICEs, with the model year 25 RAM 1500. We see that there is very significant potential there for our comeback on profit and share. And we see that we are going to be able to offer up to 500 miles of range on the pure BEV and also more than 700 miles of range for the range extender. So 500 miles of range for the BEV, and 700 miles of range for the range extender.

With the pure bvs, we the range extenders with the Ics with <unk>.

Speaker Change: Model year 'twenty five around 1500.

Speaker Change: We see that there is.

Speaker Change: A very significant potential there.

Speaker Change: For our comeback on profit and share.

Speaker Change: And we see that we are going to be able to offer up to 500 miles of range.

Speaker Change: On the pure BV and.

Speaker Change: Also 500 more than 500 miles of.

Speaker Change: More than 700 miles of range, sorry for the range et cetera, So 500 miles of range for the BV 700 miles of range for the range Extender. This is outstanding from a technology mastering perspective. This means that we're going to continue to wash out any range anxiety syndrome. This is going to this.

Carlos Tavares: This is outstanding from a technology mastering perspective. This means that we are going to completely wash out any range anxiety syndrome. This is going to disappear, and that should bring a solution to all the pickup truck customers, not only in the coastal areas, most probably with BEV, but also in the deep countryside areas, possibly with more range extenders. If you look at the lower part of this slide, you have the first application of our Stellar Medium platform with the Peugeot e3008. 700 kilometers of WLTP range.

Speaker Change: Appear and that should bring a solution to <unk>.

Speaker Change: The pickup truck customers not only on the coastal areas, most probably we'd be EV, but also in the deep countryside areas, possibly with more range extenders.

If you look at the lower part of the slide you have the first application of our stellar medium.

Form with the official E 3008.

Speaker Change: 700 kilometers of W. LTP range. This is a product that is going to use the battery cells from ACC.

Carlos Tavares: This is a product that is going to use the battery cells from ACC, so it's going to be fully supported by our local sourcing of battery cells in the European market, a huge pillar for the business of Peugeot, now ramping up in our social plant, a very strong product, as you may imagine. In terms of the Opel brand, the remarkable performance of the Opel brand is not only the fact that the BEV cells could grow by 27%, but because Opel is the first brand of the 14-brand portfolio of Stellantis that has a total market share for the BEV that is on par with the total market share all in of the brand. So this is the first brand of our brand portfolio that has been able to deliver in the BEV market the same market share as the total market share in the market.

Speaker Change: So it's going to be fully supported by our local sourcing of battery cells in the European market.

Speaker Change: Huge pillar for the business off the show now ramping up.

Speaker Change: Now social plant.

Very strong products as you may imagine in terms of Opel brand. The remarkable performance of Opal is not only the fact that the BV cells could grow by 27%, but because Opel is the first brand of the 14 brand portfolio of therapies that has a total market share on BV.

Speaker Change: That is on par with the total market share all in of the brand. So this is the first brand of our brand portfolio that has been able to deliver in the BV market. The same market share as the total market share in the market. It is important to see that the pure BV cells.

Carlos Tavares: It is important to see that pure BEV cells could grow by 27%, whereas total sales could grow by 15%, which is an excellent result. Knowing where we are coming from back in 2017, it is good to see that Opel is in great shape, with great growth, great profit, and great technology. Now, I would like to hand over to Nathalie.

Speaker Change: <unk> grew by 27%.

Speaker Change: Whereas the total sales could grow by 15%, which is an excellent result, knowing where we are coming from back in 2017. It is good to see that Opel is in great shape.

Speaker Change: Great growth great profit great technology.

Speaker Change: From here.

Speaker Change: I'd like to hand over to Natalie She is going to give you all the details on offense.

Natalie Knight: She's going to give you all the details on offer. But let me start with a focus on four key metrics that highlight the major developments of our financial performance over the last 12 months. The first one is consolidated shipments, which are up 7% in 2023 to 6.2 million vehicles. Net revenues grew 6% to reach €190 billion.

Natalie: Actual results not only the Frazier, let me start with a focus on four key metrics that highlight the major developments of our financial performance over the last 12 months.

The first one is consolidated shipments, which is where we're up 7% and 2023 to $6 2 million vehicles.

Natalie: Revenues grew 6% to reach 190 billion Euro ally, it's another key metric for us in that group and here, we delivered a strong 12, 8% and last but definitely not least Atlantis delivered an industry, leading industrial free cash flow of 12.9 billion euros at that 19% Carlos spoke about versus 2022.

Natalie Knight: AOI, it's another key metric for us in the group, and here we delivered a strong 12.8%. And last but definitely not least, Stellantis delivered an industry-leading industrial free cash flow of €12.9 billion, up that 19% Carlos spoke about versus 2022. I'll now discuss each of these KPIs in a little more detail. On the top line, for the group, we increased by 6% in 2023. Volume and mix were the biggest movers, supported by higher shipments, especially in enlarged Europe and the Middle East and Africa.

Natalie: <unk>.

Natalie: I'll now discuss each of these kpis in a little more detail.

Natalie: On the top line and the grille pre increased by 6% in 2023 volume and mix were the biggest movers supported by higher shipments, especially in like Europe, and the Middle East and Africa.

Natalie Knight: This, along with our full-year pricing improvements of 4%, allowed us to offset significant FX headwinds due to the strengthening Euro versus the Turkish Lira, the U.S. dollar, and the Argentine peso, which reduced revenue by 6.5 billion euros. With respect to H2, you can see that along the bottom of the chart, you see that revenues were essentially unchanged due to higher FX impacts and some pricing moderation. Now let's shift our attention to AOI, which came in at 24.3 billion euros. The main positive driver here is the strong pricing I just mentioned, bringing an additional 6.7 billion euros of margin benefit. Our total net cash synergies were €8.4 billion in 2023, and out of those, more than €5 billion had positively impacted our EOI, showing that, once again, the benefits of the merger are really coming through. But there were headwinds, too.

Natalie: This along with our full year pricing improvements of 4% allowed us to offset significant FX headwinds due to the strengthening euro versus the Turkish lira. The U S dollar the Argentine peso, which reduced revenue by $6 5 billion Euro.

Natalie: With respect to each two and you can see that along the bottom of the chart you see that revenues were essentially unchanged due to higher FX impacts from pricing moderation.

Natalie: Now, let's shift our attention to ally, which came in at 24 3 billion year out. The main positive driver here is the strong pricing I just mentioned, bringing an additional $6 7 billion your own margin benefit.

Natalie: Our total net cash synergies were $8 4 billion Euro in 2023 and out of those more than 5 billion had positively impacted our ally showing that once again the benefits emerge as the merger are really coming through.

Natalie: But there were headwinds Taylor FX had the biggest negative impact as you can see at $3 8 billion Euro industrial costs were also negative as we experienced higher logistics and warranty costs offsetting sizable manufacturing and purchasing improvements as well as positive benefits from raw.

Natalie Knight: FX had the biggest negative impact, as you can see, at 3.8 billion euros. Industrial costs were also negative, as we experienced higher logistics and warranty costs, offsetting sizable manufacturing and purchasing improvements, as well as positive benefits from raw materials, with respect to SG&A expenses. This is a spot where it was nearly unchanged versus the full year prior year and lower on a year over year basis if you look at the second half. Cost discipline is a rock hard discipline at Stellantis. As a result, we have reduced our SG&A as a percent of sales from 6.1% in 2021 to 5% today.

Natalie: Yes.

Natalie: With respect to SG&A expenses and this is the spot where it was nearly unchanged versus the full year prior year and lower on a year over year basis. If you look at the second half.

Cost discipline is a rock hard discipline out still on test as a result, we have reduced our SG&A as a percent of sales from six 1% in 2020, 1% to 5% today.

Natalie Knight: I think that's really unique in the industry. Looking at H2 AOI development, as you see below, the net pricing gains were smaller, FX headwinds increased, and the industrial cost became margin-accretive thanks to lower raw material costs. Now let's move on to inventories. Inventories at year-end rose by 72,000 units sequentially, or 5% compared to the end of the third quarter.

Natalie: That's really unique in the industry.

Natalie: Looking at each to ally development as you see below the net pricing gains were smaller FX headwinds increased and the industrial cost became margin accretive thanks to lower raw material cost.

Natalie: Now, let's move on to inventories inventories at year end rose by 72000 units sequentially or 5% compared to the end of the third quarter.

Natalie Knight: This represents the net impact of a 15% reduction in company inventories due to improved delivery logistics in Europe but, at the same time, higher dealer inventories due in large part to changes in the EV production schedules and regulations. On a year-over-year basis, where we were higher than we had been at the end of 2022, inventories still remain below the levels of our pre-merger predecessor companies. I think that's important to note. Going forward, despite our continued focus on pricing discipline, we don't expect further inventory increases of any materiality in 2024. So let's focus now on industrial free cash flow, which reached that 12.9 billion euros. It's up 19 percent versus 2022 and five billion euros versus 2021. The strong development was driven by higher AOI, lower negative impact of DNA, and positive developments in financial charges and taxes.

Natalie: This represents the net impact of a 15% reduction in company inventories due to improve delivery logistics in Europe, but at the same time higher dealer inventories due in large part to changes in the EV production schedules and regulation.

Natalie: On a year over year basis, which we were we were higher than we had been at the end of 'twenty two inventories still remain below the levels of our pre merger predecessor companies I think that's important to note.

Natalie: Going forward. Despite our continued focus on pricing discipline, we don't expect further inventory increases of any materiality in 2024.

Natalie: So let's focus now on industrial free cash flow, which reached at 12.9 billion Euro.

Natalie: It's up 19% versus 2022, and 5 billion euro versus 2021.

Natalie: This strong development was driven by higher ally lower negative impact of DNA, and a positive development and financial charges and taxes.

Natalie Knight: And this allowed us to accelerate our investments, which grew 2 billion euros higher year over year, driven by battery JVs, as well as our U.S. FinCo. We're also able to further reduce our factoring activities as part of our working capital normalization plan. This next chart finishes out our discussion on the major items of our 2023 IFRS income statement, as well as our financial position and liquidity. Diluted EPS grew 12% year over year, driven by a 10% gain in our operating income due to the non-repetition of unusual charges in 2022, mainly related to the Takata recall and CAFE penalty adjustments. Our first-ever net financial income also supported this development. However, offsetting this modestly were higher tax expenses with a 17 percent tax rate versus 14 and 22 due to lower recognition of deferred tax assets.

Natalie: And this allowed us to accelerate our investments, which grew 2 billion euro higher year over year, driven by battery JV as well as our U S income.

Natalie: We're also able to further reduce our factoring activities as part of our working capital normalization plan.

Natalie: This next chart shows and our finishes out our discussion on the major items in 2023, I FRS income statement as well as our financial position and liquidity.

Natalie: Diluted EPS grew 12% year over year, driven by a 10% gain in our operating income due to the non repetition of unusual charges in 2022, mainly related to the takata recall.

Natalie: And cafe penalty adjustment.

Natalie: Our first ever net financial income also supported this development offsetting this modestly where higher tax expenses with a 17% tax rate versus 14 in 'twenty two due to lower recognition of deferred tax assets.

Natalie Knight: I'd also like to call out to your attention that, going forward, in 2024, we are introducing a new financial metric, adjusted EPS, to our reporting. This highlight metric should be useful as a complement to our AOI, making clear the significant impact that our share buybacks drive for investors. In the appendix of today's presentation, if you look back on chart 48, we show how adjusted EPS would have been calculated in 2022 and 2023, and we'd really appreciate it if our analysts start to incorporate this in their published estimates going forward. Moving on to the liquidity front, our net financial position grew nearly by nearly 4 billion to €29 billion at the end of 2023. As free cash flows more than offset our increasing capital returns, and our industrial available liquidity was stable year over year at €61 billion.

Natalie: I'd also like to call out to your attention that going forward in 2024, we are introducing a new financial metric adjusted EPS to our reporting both highlight metrics should be useful as a complement to our ally, making clear the significant impact that our share buybacks drive for them.

Natalie: Investors and the appendix of today's presentation. If you look back on chart 28.

Natalie: We show how adjusted EPS would've been calculated in 'twenty, two and 'twenty three and we really appreciate it.

Natalie: Our analysts start to incorporate this in their publishing published estimates going forward.

Natalie: Moving on to the liquidity front, our net financial position grew nearly 4 billion Euro to 29 billion Euro at the end of 'twenty three.

Natalie: Free cash flows more than offset our increasing capital returns and our industrial available liquidity was stable year over year at 61 billion.

Natalie Knight: Along with industrial free cash flow, these KPIs prove that we are in a position to both ensure strong resiliency as well as continue to deliver substantial capital returns. Speaking of capital returns, in 2023, Stellantis delivered a record €6.6 billion to shareholders, including €4.2 billion in dividends, €1.5 billion in our first ever open market share buyback, and a €900 million share repurchase from Dongfeng Group, who, as a result, now only retain 1.5% of Stellantis' outstanding shares. For 2024, the company intends to propose a one-year-on-55-cent dividend per share at our upcoming AGM. This is a 16 percent increase and represents 25 percent of prior year income, consistent with our dividend payout guidelines.

Natalie: Along with the industrial free cash flow. These kpis crew that we are in a position to both ensure strong resiliency as well as continued to deliver substantial capital returns.

Natalie: Speaking of capital returns in 2023 used Atlantis delivered a record $6 6 billion euro to shareholders, including $4 $4 2 billion in dividends $1 5 billion Euro in our first ever open market share buyback and a 900 million euro share repurchase from down.

Natalie: Same group, who as a result, now only retain 1.5% of still onto his outstanding shares.

Natalie: For 2024, the company intends to propose a one year round 55 cent dividend per share at our upcoming AGM. This is a 16% increase and represents 25% of prior year income consistent with our dividend payout guidelines.

Natalie Knight: Today, we are also announcing plans to pursue a new 3 billion euro open market share buyback program, doubling the size of last year's program. We will start executing this repurchase very soon based on our current shareholder authorization and intend to remain active in the market throughout the year. In total, we intend to deliver returns of 7.7 billion euros, representing a 26 percent increase year over year, equivalent to an 11 percent yield on the Stellantis market cap at the beginning of 2024. We also retain the option to repurchase any and all of the remaining shares held by the Dong Fang Group, subject, of course, to their decision and timing.

Natalie: Today, we are also announcing plans to pursue a new 3 billion Euro open market share buyback program doubling the size of last year's program. We will start executing this repurchase very soon based on our current shareholder authorization and intend to remain active in the market throughout the year.

Natalie: In total we intend to deliver a return to $7 7 billion euro representing 26% increase year over year equivalent to an 11% yield on the still on test market cap at the beginning of 2024.

Natalie: We also retain the option to repurchase any and all of the remaining shares held by the Dongfeng group subject of course to their decision and timing.

Natalie Knight: I'd like to wind up my section today with some comments on the financial outlook and our guidance for 2024. As we begin fiscal year 24, let me emphasize that we see a largely supportive revenue backdrop for the industry. With moderating interest rates as the year progresses, which should support improving affordability and, therefore, higher consumer demand, we also believe supply conditions are nearing pre-COVID and semiconductor crisis levels and that our own delivery logistics have improved significantly. And now, most importantly, we have a strong product portfolio lined up. You've heard all about it from Carlos, including not only the expanded EV lineup that addresses what were previously untapped segments, but also updates to some of our most important ICE products. Moving next to AOI, we are reiterating our commitment to a double-digit margin in 2024. While we are always working to maintain or improve our performance, we know that 24 results will be subject to the impacts of significant headwinds, some of which I'll detail in just a moment. But let me start with the positives.

Natalie: I'd like to wind up my section today with some comments on the financial outlook and our guidance for 2024.

As we begin 24, let me emphasize that we see a largely supportive revenue backdrop for the industry.

Natalie: With moderating interest rates as the year progresses, which should support improving affordability and therefore higher consumer demand. We also believe supply conditions are nearing pre COVID-19 and semiconductor crisis levels and that are our own delivery logistics has improved significantly.

Natalie: And now most importantly, we have a strong product portfolio lined up you've heard all about it from Carlos including not only these expanded easy lineup that addresses what was previously untapped segment, but also with updates to some of our most important ice products.

Natalie: Moving next to ally, we are reiterating our commitment to a double digit margin in 2024, while we are always working to maintain or.

Natalie: Or improve our performance, we know that 24 results will be subject to the impacts of significant headwinds some of which I'll detail in just a moment, but let me start with the positives lower raw material costs are expected to be positive in an amount of about 1 billion euros to our ally over the course of 2024, our logistic costs.

Natalie Knight: Lower raw material costs are expected to be positive, adding an amount of about a billion euros to our AOI over the course of 2024. Our logistics costs should also continue to improve. In the second half, we will lap the 1.1 billion euros of strike impacts and new contract expenses of 2023. While those are all important 2024 positives for Stellantis, there are also several AOI headwinds, which we'll be working hard to mitigate. Competitive market conditions leave less room for price increases.

<unk> also continued to improve in.

Natalie: In the second half will lap the $1 1 billion euro of strike impacts in new contract expenses of 2023.

Natalie: Well those are all important 2024 positive for scientists there are also several ally headwinds, which will be working hard to mitigate.

<unk> market conditions leaves less room for price increases a higher mix of Leds, while we're proud to say that he sees in ph vehicles deliver solid profit profitability for us they are still not yet at the levels of ice vehicles.

Natalie Knight: A higher mix of LEVs. While we're proud to say that EVs and PHE vehicles deliver solid profitability for us, they're still not yet at the levels of our ICE vehicles. The last area that I'd like to mention and talk about here is our continued expectations for strong industrial free cash flow. Here we will remain very disciplined on CapEx and R&D spend.

Natalie: The last area that I'd like to mention and I'm talking about here is our continued expectations for strong industrial free cash flow.

Natalie: Here, we will remain very disciplined on Capex and R&D spend we all of a sudden should benefit from the moderating working capital headwinds because of the progress we've made already improving the quality of the balance sheet and moving closer to neutral working capital objective we set.

Natalie Knight: We also should benefit from the moderating working capital headwinds because of the progress we've made already in improving the quality of the balance sheet and moving closer to the neutral working capital objective we set. So summing up these three topics, first, we see the macroeconomic backdrop as one that we can and intend to grow revenues against, especially with our exciting new product wave. Second, we reiterated our double-digit margin minimum commitment and understand the challenges we have to mitigate to maintain this top-ranked profitability in the context of our peers. And third, we expect to continue generating the strong and continuous positive free cash flow that will enable us to deliver very significant capital returns. So, lastly, I'd like to briefly remind you about some coming investor events in the first half of 2024.

Natalie: So summing up these three topics first we see the macroeconomic backdrop is one that we can and intend to grow revenues against especially with our exciting new product with <unk>.

Natalie: Second we've reiterated our double digit margin minimum commitment and understand the challenges we have to mitigate to maintain the top ranked profitability in the context of our peers.

And third we expect to continue generating strong and continuous positive free cash flow that will enable us to deliver very significant capital returns.

Natalie: Lastly, I'd like to briefly remind you about some coming investor events in the first half of 'twenty 'twenty four most importantly is our Investor day, which is planned for June 13th in Auburn Hills, where we intend to share more detail about our products and services that are evolving about what.

Natalie Knight: Most importantly, is our Investor Day, which is planned for June 13th in Auburn Hills, where we intend to share in more detail about our products and services that are evolving, about what goes on in evolving and consistently delivering high levels as we work to transform ourselves and the industry going forward. That concludes my financial section, so I'll now turn over the podium back to Carlos for some concluding remarks. Thank you, Nathalie.

Goes on an evolving consistently delivering high levels as we work to transform ourselves and the industry going forward.

Natalie: That concludes my financial section, so I'll now turn it over the podium back to Carlos for some concluding remarks. Thank.

Carlos Tavares: Thank you for this super clear presentation. I just would like to share with our investors a couple of small things. First of all, in 24, we are going to enjoy a very strong LCV business, our ProOne business, with the six brands you see on this slide. It's quite remarkable to see that we are number one in Europe, with a 30.4% market share. We are number one in BEV in Europe with a 38.8% market share. We are number one in South America with a 28.6% market share.

Carlos Tavares: Thank you Natalie Thank you for this.

Carlos Tavares: Super clear.

Carlos Tavares: Presentation that just would like to share with our investors.

Carlos Tavares: A couple of small things first of all in the 'twenty four.

Carlos Tavares: We are going to enjoy a very strong.

Carlos Tavares: L C V based business our program business with the six brands you see on this slide.

Carlos Tavares: It's quite a remarkable.

Carlos Tavares: To see that we are number one in the <unk>.

Carlos Tavares: Europe.

Carlos Tavares: With a 34% market share we are number one in Bev in Europe, with a 38, 8% market share.

Carlos Tavares: Number one in South America with 28, 6% market share. We are number two in middle East and Africa at 21, 8% market share and growing seven points over the year.

Carlos Tavares: We are number two in the Middle East and Africa at 21.8% market share and growing seven points over the year. And we are number three in NNA in North America with 18.2% market share. There is significant potential here, and what I would like to share with you is the fact that if you break down H1 of 23 and H2 of 23, you will see that in H2 of 23, we are on an uptrend in terms of gaining highly profitable market share. And we expect that to continue as we have significant new products coming in. I already commented on the Ram Offensive with the 2025 Ram model year, the 1500, and, of course, the Promaster BEV which is now live and being manufactured out of our plant.

Carlos Tavares: And we are number three in a in an a in.

Carlos Tavares: In North America, with 18, 2% market share there is a significant potential here.

Carlos Tavares: What I would like to share with you is the fact that if you breakdown H one of 'twenty, three and H two of 20 feet.

Carlos Tavares: You will see that teenage to 'twenty three we are in the uptrend in terms of gaining highly profitable market share and.

Carlos Tavares: And we expect that to continue as we have significant new products coming in I already commented the Rambo fences, we did 2025.

Carlos Tavares: Model year 1500.

Carlos Tavares: Of course, the pro Master B V, which is now life and being manufactured out of our plants.

Carlos Tavares: We also have a full van lineup renewal with 13 Mayplanes worldwide, and significant MCAs coming out of our plants. And we are now reinforcing our sourcing of one ton pickup trucks in the third engine that is going to represent additional potential for growth and, of course, a very strong competitive sourcing that we'll have over there. Last but not least, we are possibly the only automotive company that is proposing in our LCV offering BVs, fuel cells, and range extenders. So in terms of technology, we have the best coverage of the market moving forward. So there is a lot of potential there.

Carlos Tavares: We will save for van lineup renewal renewal with 13 nameplates worldwide.

Carlos Tavares: Significant MCA is coming out of our plants.

Carlos Tavares: We are now reinforcing our sourcing of one ton pickup trucks in the third engine.

Carlos Tavares: This is going to be representing an additional potential for growth and of course, a very strong competitive sourcing that we will have over there.

Carlos Tavares: Last but not least.

Carlos Tavares: We are possibly the only automotive company that is proposing.

Carlos Tavares: L C D offering bvs fuel cells and range extenders.

Carlos Tavares: So in terms of technology, we have the best coverage of the markets moving forward. So a lot of potential there not to forget that from 'twenty to 'twenty four what percent of new events and pickup trucks will be connected.

Carlos Tavares: Not to mention that from 2024, 1% of our new vans and pickup trucks will be connected and activated at the moment of delivery. So there is a very strong opportunity there, and hopefully, we'll execute properly. If we move to our BEV offerings, It is going to be a very good year. We are going to move from 30 models by the end of 2023 to 48 models by the end of 2024, i.e. A 60% increase, with some very strong iconic models in iconic brands like the Peugeot e3008, the Ram 1500 model year 2025, as has been mentioned, the Citron EC3, but also the Jeep Rekon and the Wagoneer S, not to mention the brand new Dodge Charger with more power, more torque, more burnouts, and more donuts.

Carlos Tavares: <unk> activated at the moment of delivery so very strong.

Carlos Tavares: Opportunity, there and hopefully we'll execute the property if we move to our BV offerings.

Carlos Tavares: It is going to be a very strong year, we are going to move from 13 models.

Carlos Tavares: By the end of 'twenty three to 48 models by the end of 'twenty four I E a 60%.

Carlos Tavares: Increase with some very strong iconic models in our iconic brands like the <unk> 3008, the run in the 1500.

Carlos Tavares: Model year 'twenty five.

Carlos Tavares: It was already mentioned the Sichuan EC three but also the Jeep record and also the wagoneer S. Not to forget the brand new Dodge Charger with more power more talk more burnouts and more donuts. This is exactly what we are going to bring so very very.

Carlos Tavares: This is exactly what we are going to bring. So, very, very powerful new products. I have driven all of these cars.

Carlos Tavares: Powerful new products I have driven all of these cars.

Carlos Tavares: I can tell you that this is an outstanding product, outstanding technology, outstanding dynamic performance. And I'm very excited about what is coming here and very confident that the customers will ultimately agree with us on the journey and the experience that they can enjoy with this product. So the product pipeline of Stellantis is now in full motion, just three years after we created this company. Now, if we look at technology and platforms, I would like to share with you a couple of things. We have already launched, and we held a specific event to present them to you, the Stellar Medium, with 700 kilometers of WLTP range, and the Stellar Large, with 500 miles of WLTP range.

Carlos Tavares: I can tell you that this is outstanding products.

Outstanding Technology outstanding dynamic performance and I'm very excited about what is coming here and very confidence that the customers will ultimately agree with us on the journey and the experience that they can enjoy with this product. So the product pipeline of Sterling is now in full motion.

Carlos Tavares: Just three years after we created this company.

Carlos Tavares: If we look at technology and platforms.

Carlos Tavares: I would like to share with you a couple of things, we already launched and we made a specific event.

Carlos Tavares: To present them to you the stellar medium with a 700 kilometers of W. LTP range and instead of launch with the 500 miles of W. RTP range dose too.

Carlos Tavares: Those two platforms, Stellar platforms, out of the four platforms we intend to launch, are demonstrating to you the execution capability of our company, three years after we created Stellantis. It demonstrates that we have the engineering power, demonstrates that we have the agility, and it demonstrates that we work very, very hard. In a nutshell, it demonstrates that we are ready for the fight. If we look at Stellar Lodge only for D and E segments, you can see that we can make front-wheel drive cars, rear-wheel drive cars, all-wheel drive cars, sedans, crossovers, and SUVs.

Carlos Tavares: Platform stellar platform out of the four platforms that we intend to launch.

Carlos Tavares: Demonstrating to U D.

Carlos Tavares: Execution capability of our company.

Carlos Tavares: Three years only after we created the Senates. It demonstrates that we have the engineering power demonstrates that we have the agility. It demonstrates that we work very very hard.

Carlos Tavares: In a nutshell it demonstrates that we are ready for the fight if we look at still at large only four D and E segments. You can see that we can make front wheel drive cars.

Carlos Tavares: Rear wheel drive cars, all wheel drive cars sedans crossovers and Suvs.

Carlos Tavares: So the amount of brains that we have put into this platform is absolutely outstanding, and I would like to congratulate our engineering teams. I think they are really giving us the best weapons we need to have to be competitive in the marketplace.

Carlos Tavares: So the amount of brains.

Carlos Tavares: We have put in these platforms is a absolutely outstanding and I would like to congratulate our engineering teams I think they are really giving us the best weapons, we need to have to be competitive in the marketplace of course, we will continue to reduce costs.

Carlos Tavares: Of course, we will continue to reduce costs because we understand that as long as we cannot offer BEVs at the price of ICEs, the job is not done. And we have a very strong plan to achieve that. But it is also showing that we are delivering on the commitments of the DARE forward plan as it relates to the ramp-up of BEV products, not to say that they are multi-energy products. And this is a great decision that we made three years ago.

Because we understand that as long as we cannot offer b visa the price of Ice's. The job is not done and we have a very strong plan to achieve that.

Carlos Tavares: But it is also showing that we are delivering on the commitments of their forward plan.

Carlos Tavares: As it relates to the ramp up of <unk> B V products, but not to say that they are multi energy products and this is a great decision that we have made three years ago and given the uncertainties of the market.

Carlos Tavares: And given the uncertainties of the market, given the uncertainties that I'm sure you are going to question us on, the fact that we have multi-energy platforms is certainly a very strong competitive edge for Stellantis. I would also like to mention that of the 18 BVs that we are going to bring in 2024, eight of them are for the North American markets.

Carlos Tavares: Given the uncertainties that I'm sure you are going to question us on the fact that we have multi energy platforms is certainly a very strong competitive edge for certainties.

Carlos Tavares: I would like also to mention that on the 18th Bvs.

Carlos Tavares: That we are going to bring in 2024 eight of them are for the North American markets to conclude this presentation just would like to tell you that.

Carlos Tavares: To conclude this presentation, I just would like to tell you that, first of all, I am absolutely grateful. Sincerely grateful to our employees, to our union partners, to our board for everything they have done to support our... Strategic Plan Execution. We are on plan, we are on track, we are delivering record results. Nothing here has been easy.

Speaker Change: First of all I am absolutely grateful.

Speaker Change: Sincerely grateful to our employees.

Speaker Change: Our Union partners to our board.

Speaker Change: For everything they have done to support our strip.

Strategic plan execution, we are on plan.

Speaker Change: We're on track we are delivering record results.

Nothing here.

Speaker Change: It been easy.

Carlos Tavares: Absolutely nothing. But we have proven to you and to ourselves that we can stick together, that there is cohesiveness in this very diverse company with more than 170 different citizenship. We are sticking together. We are moving all in the same direction at the same pace, executing the same plan. And this is visible.

Speaker Change: Absolutely nothing, but we have proven to you and to ourselves that we can stick together that there is cohesiveness in this very diverse company with more than a 170 different citizenships.

Speaker Change: We are sticking together, we are moving all in the same direction at the same pace executing the same plan.

Speaker Change: This is visible in the in the early 25, we will comment to you. The results we have achieved on the first leg.

Carlos Tavares: And in the early 25, we'll comment to you on the results we have achieved on the first leg of the plan before we move to the second leg, the second three-year leg of the plan. We are highly profitable among the most profitable companies that you can find in this business. And we are, for sure, the most resilient, with the lowest break-even point.

Speaker Change: Off the plan before we move to the second leg the second.

Speaker Change: Leg of the plan.

Speaker Change: We are highly profitable among the most profitable companies that you can find it is in this business we are.

Speaker Change: For sure the most resilient.

Speaker Change: With the lowest breakeven point, we are working very very hard to bring our per unit margins of LTV sells to the same level of IC and we believe we are on the right track as those cells are already profitable not as profitable as we would wish but movie.

Carlos Tavares: We are working very, very hard to bring our pre-unit margins of LEV sales to the same level as ICE. And we believe we are on the right track, as those sales are already profitable, not as profitable as we would wish, but moving. It's moving every day, and that's good for all of us. So, I'm very happy to congratulate our employees. I would also like to express my sincere appreciation for your support. Nothing here could have been done without your support and without the stability that you are offering us. So thank you for that. Let's now move on to your Q&A. I'm sure you have a lot, so I'll hand it over to Ed.

Speaker Change: It's moving every day and that's a that's good for us for all of us or <unk>.

Speaker Change: Very happy to have them to congratulate to our employees I would like also to express to you will the investors my sincere appreciation for your support.

Speaker Change: Nothing to you could have been done without your support and without the stability that you are offering us. So thank you for that let's now move to your Q&A I'm sure you have a lot soil and I'll go back to Ed.

Ed: If you do have a question please signal by pressing star one on your telephone keypad.

Ed Ditmaier: If you do have a question, please signal by pressing star 1 on your telephone keypad. To allow all participants the opportunity to signal for questions, please limit yourselves to one question. The first question today comes from Daniel Ruska of Bernstein Research. Hi, gentlemen. Hi, Natalie.

Speaker Change: To allow all participants the opportunity to Sigma for questions. Please limit yourself to one question.

Speaker Change: The first question today comes from Daniel Russia of Bernstein Research.

Daniel Russia: Hi, gentlemen.

Daniel Ruska: Good afternoon. Good morning. Carlos, market shares have declined in some parts of the business, and I was just wondering how important it is for your long-term positioning to, let's say, carefully regain some of those points. And in, you know, order of priority, what's most important to you? And then there is OPA's yardstick of reaching share parity between ICE and BEV; is that a benchmark for other Stellantis brands that you would like to see them achieve as well? Two great questions.

Daniel Russia: Good afternoon, good morning.

Daniel Russia: Cause market shares have declined in some parts of the business and I was just wondering how important is it for your long term positioning to let's say carefully regain some of those points.

Daniel Russia: In order of priority I think what's what's most important to you.

Daniel Russia: Then his opens yardstick of reaching share parity between ice and B V is that a benchmark for others to atlanticist brands that you would like to see them achieve as well.

Speaker Change: Two great questions. Thank you well first of all it's very important.

Carlos Tavares: Thank you. Well, first of all, it's very important that we protect our share if we don't increase the share because we don't have a shrinking strategy. We committed to you that we would double the net revenue of the company by 2030 compared to 2021. So it is very important for us to protect our share. And we want to do it in a way that is going to be respectful of net revenues and respectful of profitability.

Speaker Change: We protect our share if we don't increase this year.

Speaker Change: Because.

Speaker Change: We don't have a shrinking strategy.

Speaker Change: We committed to you that we would double the net revenue of the company by 2030 compared to 2021.

Speaker Change: So it is very important for us.

Speaker Change: To protect our share.

Speaker Change: And when you want to do it in a way.

Speaker Change: That is going to be respectful of.

Speaker Change: The net revenues and respectful of the profitability.

Carlos Tavares: So, to be very clear, this is important for us, and we are now reacting to that. You have a first answer in the share that we delivered in January 2024 in Europe, which is much better than it was at the end of 2023. And we want to regain that share in a way that is representative of the value that we create, which means protecting the profitability and, at the same time, making sure that it is sustainable. This is what we want to do. The good thing is that in 2023, we did many things right.

Speaker Change: So to be very clear it is important for us and we are now reacting to that you have the first answer.

Speaker Change: And the share that we delivered in January 2020 for Europe, which is much better than it was by the end of 2023, and we wants to regain that share in a way, which is a respectful of the value that we create which means protecting the profitability.

Speaker Change: And at the same time, making sure that it is sustainable.

Speaker Change: This is what are we want to do the good thing is that in 2023.

Speaker Change: We did many things wrong.

Carlos Tavares: And I can tell you that many of our business reviews were not a walk in the park, which means that we are starting 2024 with a significant number of things that we can do better. We can also benefit from the fact that we have fresh products coming, not only new models but also new powertrains. Like, for instance, right now, we are deploying in Europe, across the different brands, a fantastic mild hybrid technology that is going to support a lot of additional profitable sales at the core of the market. So this is to answer your question.

Speaker Change: And I can tell you that many of our business reviews.

Speaker Change: We're not a walk in the park.

Speaker Change: Which means that we are starting 2024.

Speaker Change: With a significant number of things that we can do better.

Speaker Change: We can also benefit from the fact that we have for fresh product coming.

Speaker Change: Not only about new models, but also about our new powertrains like for instance, right now we are deploying in a in Europe across the different brands of fans.

Speaker Change: Plastics.

Speaker Change: The hybrid technology that is going to support.

Speaker Change: A lot of additional profitable sales at the core of the market.

Speaker Change: So this is to answer your question, yes. It is important to regain market share because we do not have a shrinking strategy and this is visible in the commitment of doubling the net revenues by 2030, and we want to do it in a wise way, which is protecting the profitability and protecting the value of our brands and the brand equity that we have.

Carlos Tavares: Yes, it is important to regain market share because we do not have a shrinking strategy, and this is visible in the commitment of doubling net revenues by 2030. And we want to do it in a wise way, which is to protect the profitability and protect the value of our brands and the brand equity that we have for supporting their pricing power.

Speaker Change: For supporting their pricing power.

Carlos Tavares: So that's my answer to your first question. Second question, margin parity is something that we believe we need to do, and we believe we need to do it fast, because it is the best protection against the Chinese offensive, which is going to be, of course, very powerful.

Speaker Change: So that's my answer to your first question second question the margin parity.

Speaker Change: It's something that we believe we need to do.

Speaker Change: And we believe we need to do it fast.

Speaker Change: Because it is the best protection against.

Against the Chinese offensive Chinese offensive is going to be of course, a very powerful it already as you can see it in the European market in the U S. You could compare to what happened in the Seventy's when the Japanese carmakers game and to act up and in the Ninety's when the Korean Skype.

Carlos Tavares: It already is. You can see it in the European market. In the U.S., you could compare it to what happened in the 70s when the Japanese carmakers came and to what happened in the 90s when the Koreans came. So we may not want to see the same movie a third time with the Chinese coming.

Speaker Change: So we may not want to see a third time the same movie with the Chinese gaming coming so it's important that we put ourselves in a business model that is immune.

Carlos Tavares: So it's important that we put ourselves in a business model that is immune to the mix of pure BEV cells. As we expect that mix to grow, even though there could be some bumps on the road, the fact that for the last ten months, we have been experiencing more than 1.5 degrees of global warming is bringing a lot of education to people and to public opinion about the urgency to do something about global warming. Even if passenger vehicles and light commercial vehicles are only 12 percent of the emissions, we need to make our contribution to fix that.

Speaker Change: To the mix of pure B V sales as we expect that mix to grow.

Speaker Change: Even though there could be some bumps on the road.

Speaker Change: Fact that for the last 10 months, we are experiencing more than one five degrees of global warming is bringing a lot of education to the people and to the public opinion about the urgency to do something about the global warming, even if the passenger vehicles and Suvs are only 12% of the emissions we need to.

Speaker Change: Our contribution to fix that and I believe that the BV electrified sales ramp up is going to continue eventually with some bumps on the road. So it's important that we protect our business model vis vis that sales mix increase and that we equalize liberalize the margins between the two right now we are working on that and we are.

Carlos Tavares: And I believe that the ramp-up of BEV electrified cells is going to continue eventually, with some bumps on the road. So it's important that we protect our business model vis-à-vis that cell mix increase and that we equalize, or levelize the margins between the two. Right now, we are working on that, and we are progressing quite quickly. By 2023, the pace of total process production cost on BEVs will be much better than the pace of total production cost reduction on ICEs, and it is being helped by the fact that many people are talking about the slowdown in BEV demand, which has had a huge impact on the raw material cost, which has come down, and that is helping us to reduce the total production cost on BEVs faster than on ICEs. So it's important for us to do that, but it is important to do it fast. This is where we stand on those two questions. Let's go to the next one. Our next question comes from Philippe Houchois of Jeffreys. Good afternoon,

Speaker Change: Progressing quite quickly.

Speaker Change: 2023, the pace of total process.

Speaker Change: <unk> costs on the bvs was much better than the pace of total production cost reduction on Ics.

Speaker Change: And it is being helped.

Speaker Change: By the fact that many people are talking about the slowdown on the BV demand, which has had.

Speaker Change: Huge impact on the raw material cost.

Speaker Change: <unk>, which has come down and that is helping us to reduce the total production cost on bv's faster than the IC. So it's important for us to do that but it is important to do it fast this is where we stand on those two questions.

Speaker Change: To the next one.

Speaker Change: Our next question comes from Felipe who show of Jefferies.

Felipe: Good afternoon, and thank you very much.

Philippe Houchois: Thank you very much. I have a question about the EV adoption. It's a big topic right now, a slowdown. But it seems to me that EV adoption is not just about dropping the price. We've seen aggressive price drops, and that hasn't really worked. And at the same time, we need healthy used car markets, you know, reasonable values to hold up, more leasing, et cetera. And I'm curious to have your thoughts because I think Stellantis is more involved in the whole value chain and distribution than most other car makers. You probably have a better handle on those issues.

Felipe: A question on on the EV adoption.

Felipe: Big topic right now a slowdown.

Felipe: It seems to me that EV adoption is not just about dropping the price we've seen aggressive price drops and that hasn't really worked.

Felipe: At the same time, we healthy used car market. The rusal that used to hold up more leasing et cetera, and I'm curious you have your you'll saw its because I think still answer is more involved in the whole value chain in distribution than most other carmakers.

Felipe: If you have a better handle on those issues.

Carlos Tavares: And I'm kind of wondering what your view is on what needs to be done to make sure that there is a gradual progression of EVs, that we're not just waiting for cheap cars to come around; that there is more smoothness in the process. Thank you. Well, thank you, Philippe. This is a very, very great question. It's a $1 million question.

Felipe: And I'm kind of wondering what's your view on what needs to be done to make sure that there is a gradual progression of evs that we're not just waiting for cheap cars should come around that is more smoothness in the process.

Speaker Change: Thank you.

Speaker Change: Thank you Felipe this is a very very great question, It's a 1 million dollar question.

Carlos Tavares: I would like to try to answer you by saying that the EV adoption is mostly driven by the alignment of four different stars. The first star that we need to..., take under our hands, in our hands is the clean energy star. We need clean energy. Whatever you do in terms of CO2 emission reduction, you need to start with clean energy. Assuming that we have clean energy, the second star that we need to have is a visible, highly dense charging network, which means a charging network that goes into your customer journey at the moment when you don't need to look for the charging spot, which means when you go to the shopping mall, when you go to the supermarket, when you go to the restaurant, when you go to the gym, in the parking areas of those services, you find charging units. So, we need a second star, which is about a visible and dense charging network that fits your customer journey and your citizen journey. That's star number two.

Speaker Change: I would like to try to answer you.

Speaker Change: By saying that the easy adoption is mostly driven by the alignment of four different stars.

The first thought that we need to.

Speaker Change: To take the.

Speaker Change: Under our hands in our hands is the clean energy star.

Speaker Change: We need to clean energy whatever you do in terms of sue to emission reduction you need to start with clean energy.

Speaker Change: <unk> that we have the clean energy.

The second star that we need to have is about a visible.

Speaker Change: Highly dense charging network, which means a charging network that comes to your customer journey.

Speaker Change: At the moment, where you don't need to look for the charging spot, which means when you go to the shopping mall. When you go to the supermarket when you go to the restaurant.

Speaker Change: When you go to Jim.

Speaker Change: In the Parking's of those services you find charging units. So we need a second star, which is about a visible and dense charging network that comes to your customer journey and yard citizen journey. That's still number two star number three is the product the product itself.

Carlos Tavares: Star number three is the product, the product itself. The product needs to be enjoyable: NVH, acceleration, range. All of this is something that needs to make the product simply appealing, and I think we are there with the Stellar platform, Stellar Medium, Stellar Large, Stellar Frame, and very soon, Stellar Small. All of these are going to demonstrate to you that the product is absolutely outstanding. And I can tell you, after 42 years of automotive life, the BEV products are better products if we solve the inconvenience of range or the inconvenience of not always finding the charging spot that we would like to find. So that's the third star.

Speaker Change: Product needs to be enjoyable N V H acceleration a range all of this is something that needs to make the product simply appealing and I think we are there with the seller platform stellar medium stellar stellar large stellar Stella.

Speaker Change: Frame and very soon Stella small all of this are going to demonstrate to you that the product is absolutely outstanding and I can tell you after 42 years of automotive life.

Speaker Change: The BV products are better products.

Speaker Change: If we solve the inconvenience of range.

Speaker Change: The inconvenience of not finding always the charging spots that we would like to find so that's the sort of stock in the fourth Saar is affordability and you are right to say I share your perspective to say that it's not only about the affordability.

Carlos Tavares: And the fourth star is affordability. And you are right to say I share your perspective to say that it's not only about affordability, but I would say that on the first three topics, the first three stars, some progress is being made on clean energy. Some progress, probably not enough, is being made on the density of the charging network. The products are here. The products are coming, at least on Stellantis. They are now here, a big offensive in the U.S., and already very, very present in Europe.

Speaker Change: But.

Speaker Change: I would say that on the first three topics the first three stars.

Speaker Change: Progress is being made on clean energy.

Speaker Change: Some progress probably not enough is being made on the density of the charging network the products out here.

Speaker Change: <unk> saw coming at least on Sterling is they are now here a big offensive in the U S and already very very present in our Europe and at the end of the day, we need to bring affordability.

Carlos Tavares: And at the end of the day, we need to bring affordability. The first example of affordability is the Citron EC3. And we'll bring more, and we'll keep on working on reducing the costs of the BEV technology. So when those four stars are aligned, I agree with you.

Speaker Change: The first example of affordability if the Citron E C III and will bring more and we'll keep on working on reducing the costs of the BV technology. So when those four stars are going to align.

Speaker Change: I agree with you things are going to move and they will move faster and they will move it.

Carlos Tavares: Things are going to move, and they will move faster, and they will eventually move very, very fast. We have a big stimulus that is coming. It's the Chinese offensive.

Speaker Change: Eventually very very fast.

Speaker Change: A big stimulation that is coming as the Chinese offensive, so big stimulation for us to go faster in aligning those four stars.

Carlos Tavares: It's a big stimulus for us to go faster in aligning those four stars. And I was asked a question this morning about if we are going to take any decisions like some of our U.S. competitors in terms of slowing down what we are doing in electrification. And my answer is crystal clear: no, we keep it flat out.

Speaker Change: And then I was asked the question this morning.

Speaker Change: About if we are going to take any decision.

Speaker Change: Like some of our U S competitors in terms of slowing down what we are doing in electrification and my answer is crystal clear no we keep it flat out.

Carlos Tavares: Because we believe that the education of the citizens and the education of the consumers about the urgency of contributing to fixing the global warming issue is going to grow from the fact that we are already seeing that we are above 1.5 degrees of global warming much sooner than we had predicted. So public opinion is going to push in that direction, whatever happens. You may have some bumps on the road, some slowdowns on the road, but anyway, it's going to move. It's going to keep it flat out in the execution of their forward plan. Thank you, Philippe. That's a great question.

Because we believe that the education of the citizens in the education of the consumer about the urgency of contributing to fixing the global warming issue is going to grow from the fact that we are already seeing that we are above one five degrees of global warming much sooner than what we had predicted so the public.

Speaker Change: Opinion is going to push in that direction. Whatever happens you may have some bumps on the road some slowdowns on the road, but anyway, it's going to move so we keep it flat out in the execution of the therefore plan.

Speaker Change: Thank you Philip that's a great question. Thank you. Thank.

Carlos Tavares: Thank you. The next question comes from George Galliers of Goldman Sachs. Thank you for taking my question. I'm going to ask quite a direct question, if I may, as I know you are very keen competitors and experts in benchmarking, some of your U.S. and European peers who have already reported have suggested that they will grow operating income in 2024, albeit off a lower base than yourself. I know you've described this year as turbulent, but do you think flat AOI or indeed AIO growth is feasible for yourselves this year? And maybe related to that, you do mention it as being a supportive revenue backdrop. From your capital markets day in 2022, you set a revenue target for this year of 200 billion euros. Is that still something which might be achievable based on what you can see today? Thank you. That's a great question.

Speaker Change: Thank you.

Speaker Change: The next question comes from George <unk> of Goldman Sachs.

George: Yes. Thank you for taking my question I'm.

George: I'm going to ask quite a direct question if I may as I know you are breaking competitors experts and benchmarking.

George: Some of your U S and European.

George: As you have already reported have suggested that they will grow operating income in 2024.

George: Be it off a lower base than yourself I know you've described this year as turbulence, but do you think flat AOE or indeed, AI AI AI growth is feasible for yourselves this year and maybe related to that you mentioned it as being a supportive revenue backdrop from your capital Mark.

George: Stay in 2022, you set a revenue target for this year of 200 billion euros is that still something which might be achievable based on what you can see today. Thank you.

Speaker Change: Thank you that's a great question and let me give you first the high level answer and then I will hand over to Natalie for any more precise comments she would like to add.

Carlos Tavares: And let me give you a first high-level answer, and I will hand over to Nathalie for any more precise comments she would like to add. First of all, let's make it super simple. The average transaction price of BEVs is higher than for ITs. That's the first thing in terms of growing the top line. So let's take that as a given. The second thing is that, as I already mentioned, we made a lot of mistakes in 2023. I'm not going to mention all of them to you because I don't want to hurt my team and if we are doing what we are doing, it's because of their talent, and I want to keep things as smooth as they can be.

Speaker Change: First of all.

Natalie: Let's make it super simple the average.

Natalie: On section price offer B visa is higher than the Ics.

Natalie: That's the first thing in terms of growing the top line.

Natalie: So, let's let's take that as a given.

Natalie: Second thing is that.

Natalie: As I already mentioned, we have done a lot of mistakes in 2023.

Natalie: I'm not going to mention all of them to you because I don't want to hurt my team and the.

Natalie: If we are doing what we are doing is because of their talent and I want to keep things.

Natalie: As smooth as they can be but there are many things we did well we did well.

Carlos Tavares: But many things we did well, other things we did poorly, and we have to fix those things. So all of those things represent potential for improvement. One thing that makes me smile is that, given the competitiveness of what we are creating and launching in the market, we see that each time that we put a little bit more money in media communications, we end up spending a little bit less money on the hood.

Natalie: Other things, we did poorly and we have to fix it so all of those things represent potential for improvement.

Natalie: One thing that makes me smile.

Natalie: Is that given the competitiveness of what we are creating and launching in the market we.

We see that each time that we put a little bit more money in their media communications.

Natalie: Eventually a little bit less money on the hood there.

Carlos Tavares: The response is very good, which means the products are competitive, the products are appealing, and the technology is there. So we believe that there is a better way to go to market, and this is what we are doing right now in Europe, and it's working very well. As you know, we have set up a new leadership, top leadership team in North America with great executives leading Ram, leading Jeep, leading the region. I believe that those three executives are going to do a very, very good job to bring back the profitable share that we may have lost this year. So my point is, we don't have to be more aggressive than ourselves. I mean, you know who you are; you know how we act.

Natalie: The response is very good.

Natalie: Which means the products are competitive.

Natalie: Next our appealing and the technology is there so.

Natalie: So we believe that.

Natalie: There is a better way to go to market and this is what we are doing right now in Europe, and it's working very well.

Natalie: As you know we have a set up a new leadership thought leadership team in North America with great executives, leading Ram leading jeep, leading the region.

Natalie: Believe that those three executives that are going to be.

Natalie: Doing a very very good job to bring back the profitable share that we may have lost this year. So my point is.

Natalie: We don't have to be more aggressive than ourselves I mean, you know who you are.

Natalie: You know how we act.

Carlos Tavares: You have been looking at us for many years now, and we are sports people. We are always looking for ways to do better, pushing the limits. This is what we will try to do, and... You have seen the results over the last few years, more than three, by the way, which means that we will continue to push very hard. And I will start by fixing everything we did poorly in 2023. And you see that the product offensive that we are now bringing is expected to have some impact, even if we have to recognize that there is always a window that is the ramp-up window, which is there, and we cannot do anything else than just protect quality in those important periods. Natalie, anything you would like to add?

Natalie: You have been looking at us for many years now and we are sports people.

Natalie: We are looking for always doing better are pushing the limits, but this is what we will try to do in the.

Natalie: You have seen the results over the last three years more than three by the way.

Natalie: Which means that we will continue to push very hard.

Natalie: I will start by fixing everything we did poorly in 2023.

Natalie: And you see that the product.

Natalie: Sensitive that we are now bringing.

Natalie: Is expected to have some some impact even if we have to recognize that there is always a window that is the ramp up window.

Natalie: She is there and we cannot do anything other than just to protect quality in those in those two important periods. Natalie anything you would like to add yeah, I think what I would add on both of them is one when it comes to the revenue and I think we have you know we asked the ltvs are great, but there's a lot of other positives out there that we are executing.

Carlos Tavares: Yeah, I think what I would add to both of them is, one, when it comes to revenue, I think we have, you know, yes, LEVs are great, but there are a lot of other positives out there that we are executing well, we've got great products coming to market, and it really is something where we feel like we're starting in a strong position. We also believe, if you look at it on a regional level, that you're going to continue to see strength coming mainly from our third engine, but we believe there's positive revenue opportunity in all of the regions. So, I think that's an exciting place to start the year. On the AOI piece, I think this is really more about the mentality of how we give guidance, and that's really something we start every year, and we look at what's going on, how competitive it is, what we think the pluses and the minuses are, and I tried to give you some of those examples in my earlier comments. But I think we look at this year as saying, starting today, we think there are more headwinds than there are tailwinds.

Natalie: Well, we've got great products coming to market.

Natalie: And it really is something where we feel like we're starting in a strong position and we also believe if you look at it on a regional level that youre going to continue to see strength coming from our third engine.

Natalie: But we believe there's positive revenue opportunity in all of the regions. So I think that's an exciting place to start the year on.

Natalie: On the AI piece I think this is really more about the mentality of how we give guidance and that's really something we start every year and we look at what's going on how competitive is it what do we think the pluses and minuses are and I tried to give you some of those examples and the earlier comment, but I think we look at this year is saying starting to.

Natalie: We think there's more headwinds than there are a tailwind and the way we work as a management group as we say we have to show what we can do in terms of cutting price cutting our costs, making sure we manage our prices effectively really driving all those positives and only when we do that do we earn the right to look at being more aggressive.

Natalie Knight: And the way we work as a management group is, we say, we have to show what we can do in terms of cutting our costs, making sure we manage our prices effectively, really driving all those positives. And only when we do that do we earn the right to be more aggressive in terms of how we guide the market and what we entrust in terms of our ability to deliver. But you heard me, there really are a lot of things, I'll say, whether it's the logistics or the raw materials, those type of things that are helping us, and we are going to be focusing very hard on every single thing that's in our control to deliver the best possible results. Thank you, Natalie.

Natalie: In terms of how we guide the market and what we entrust in terms of our ability to deliver but you heard there really are a lot of things I'll say, whether it's logistics or the raw materials. Those type of things that are helping us and we are going to be focusing very hard on every single thing that's in our control to deliver the best possible results.

Speaker Change: Thank you Natalie let's move to the next one thank you.

Carlos Tavares: Let's move to the next one. Thank you. Thank you, George. Our next person in the queue is Patrick Hummel of UBS. Yeah, thank you. Good afternoon. Good morning, everybody.

Natalie: Thank you George.

Natalie: The next person in the queue is Patrick Hummel of UBS.

Patrick Hummel: Yeah. Thank you good afternoon, good morning, everybody if.

Patrick Hummel: If I may start, Carlos, you alluded to this at the very beginning, the production flexibility, and the platform flexibility that Stellantis has. Can you just elaborate on that in a bit more detail? Is it right that basically every plant, every production line can make the best version and the ICE and hybrid version at the same time? So there is nothing really dedicated in terms of manufacturing assets. And how do you deal with that on the supplier side? As in, you know, you have different parts going into the ICE car than in the BEV, on the powertrain side, needless to say, the battery itself.

Patrick Hummel: If I may start Carlos you alluded to this at the very beginning the production flexibility of the platform flexibility. That's the launches has.

Patrick Hummel: Can you just elaborate on that in a bit more detail is it right that basically every plant every production line can do with these stellar architectures the best operation in the IC and hybrid version at the same time. So there is nothing really dedicated in terms of our manufacturing assets and how do you deal with that on the suppliers.

Patrick Hummel: Site as in you know you have different parts going into the ice car then in and then in the Bev.

Patrick Hummel: And the powertrain side Needless to say the battery itself. So how can you make sure you've got enough flexibility on that front should we go through a phase of temporary weaker bathroom at and if I just may one for Natalie.

Carlos Tavares: So how can you make sure you've got enough flexibility on that front should we go through a phase of temporary, weaker BEV demand? And if I just may, one for Natalie, on the share buyback decision and the balance sheet situation: great to see improved or higher shareholder returns. Net of those payments that are yet to come for the buyback and the dividend, you still have a really solid balance sheet with more than $20 billion of cash left. Should we consider that like a war chest for any potential M&A opportunities? Or is there anything specific you have in mind on the investment front that needs to be taken into account in the budget?

Speaker Change: On the share buyback decision on the balance sheet situation great to see.

Speaker Change: Improved or higher shareholder returns.

Speaker Change: Of those payments that are yet to come for the buyback and the dividend you still have a really solid balance sheet with more.

Speaker Change: More than 20 billion of net cash left should we consider that a like a war chest for any potential M&A opportunities or is there anything specific you have in mind on the investment front that needs to be taken into account in.

Patrick Hummel: Thank you. Thank you, Patrick. Those are three great questions.

Speaker Change: And in the budget. Thank you.

Thank you Patrick those are three great questions.

Carlos Tavares: On the third one, I will comment on the M&A so that we don't get trapped, but of course, Natalie will be free to jump in. On the first two ones, first of all,

Speaker Change: On the third one I will commence on the M&A. So that we don't get trapped but of course naturally will be a free to jump in.

Speaker Change: The first two ones first of all.

Carlos Tavares: One suggestion that we'll have for our IR team is to invite you to visit one of our plants, so that you can see with your own eyes the flexibility that we are able to demonstrate in dealing with a very uncertain world. Yes, I can confirm that we have multi-energy platforms that can accommodate ICE and BEVs. A few years ago, I'm sure you remember Patrick, perhaps not with you personally, but with the community of investors two or three years ago.

One suggestion that we'll have for our IR team is to invite you to visit one of our plants.

Speaker Change: So that you can see with your eyes, the flexibility that we are able to demonstrate in dealing with a very uncertain world.

Speaker Change: Yes, I can confirm that we have multi energy platforms.

Speaker Change: That can accommodate to ITE and and bvs.

Speaker Change: A few years ago I'm sure you remember Patrick perhaps not with you personally with the community of investors two or three years ago.

Carlos Tavares: The message we were getting was, if your platforms are multi-energy... Then they are not optimized for pure BEV, which means that the performance of your BEVs is not as good as the competitors. That's the message we were getting three years ago. I remember at that point in time.

Speaker Change: The message we were getting was.

Speaker Change: If your platform as a multi energy.

Speaker Change: Uh huh.

Speaker Change: They are not optimized for pure BV.

Speaker Change: Which means that the performance of your bvs.

Speaker Change: And not as good as the competitors.

Speaker Change: That's the message we were getting three years ago I remember at that point in time.

Carlos Tavares: I asked our team... to demonstrate to me what was exactly the trade-off of having a multi-energy platform against dedicated BEV or dedicated IC platforms. And we did that study. We had several mock-ups. I want to give you the conclusion, which is quite simple. The only difference is the way you position the AC system. The Air Conditioning System, which, generally speaking, is below the instrument panel.

Speaker Change: I asked our team to.

Speaker Change: To demonstrate to me what was the exactly the tradeoff.

Speaker Change: Avi multi energy platform.

Speaker Change: Against a dedicated BV, our dedicated IC platforms.

Speaker Change: And we made that study we had several mock ups.

Speaker Change: Want to give you the conclusion.

Speaker Change: Which is a quite simple in fact.

Speaker Change: The only difference is.

Speaker Change: In the way you position the AC system.

Speaker Change: The air conditioning system, which generally speaking is below the instrument panel.

Carlos Tavares: And below the instrument panel, above the tunnel, you have... The shape of the AC system that is there on the firewall. If you make a dedicated BEV platform, you can push that AC system a little bit forward. Let's say about two to three inches max.

Speaker Change: And below the instrument panel over the above the tunnel you have.

Speaker Change: Somewhere the shape.

Speaker Change: Of the AC system that is there on the firewall.

Speaker Change: If you make a dedicated EV platform.

Speaker Change: You can you can push that AC system, a little bit forward.

Let's say about two to three inches Max Max.

Carlos Tavares: Mack. So you take the AC, and you push it forward in the engine compartment because the electrical components are smaller than a pure IC engine. And then you can compare two markets, one with the AC as it is positioned for a multi-energy platform and another one where you say, well, this is a dedicated platform, so I'm going to push the AC forward. Generally speaking, what is below the IP?

Speaker Change: So you take the AC.

Speaker Change: And you push it forward in the engine compartment, because the electrical components are smaller than the pure IC engine.

Speaker Change: And then you can compare to mock ups.

Speaker Change: One with D. A C as it is.

Speaker Change: <unk> for a multi energy platform and another one where you say well. This is a dedicated platform so I'm going to push the AC for it.

Speaker Change: Generally speaking.

Speaker Change: But is below the IP.

Carlos Tavares: Mostly on top of the tunnel is an area that you don't use because you have the driver and you have The Code Rifle. And generally speaking, everything which is below the IP instrument panel is dark. So the visual impact of moving that AC forward is marginal, and the actual performance in Ruminus is marginal, off marginal. This means that the benefit to the consumer of having a dedicated platform is almost nil, compared to the diversity and complexity that you generate if you have two kinds of. We made that decision three to four years ago, despite the criticism. It happens that in a certain world today, it's the right decision. It is proven to be the right decision. And we could show you those mock-ups so that you can make your own opinion, but it's crystal clear when you do that study.

Speaker Change: Mostly on top of the tunnel is an area that you don't choose because you'll have the driver and you have.

Speaker Change: Core driver.

Speaker Change: And generally speaking everything which is below the the IP instrument panel is dark.

Speaker Change: So the visual impact.

Speaker Change: Of moving that AC forwards is marginal.

Speaker Change: And the actual performance and Roominess is marginal of marginal.

Speaker Change: Which this means that the benefit to the consumer off having a leak.

Speaker Change: The platform is almost nil.

Speaker Change: Compared to the diversity complexity that you generate if you have two kinds of platforms.

Speaker Change: We made that decision three to four years ago. Despite the criticism.

Speaker Change: It happens that in in a certain way a world.

Speaker Change: And those sorts of the world today, its the right decision. It is proven to be the right decision and.

Speaker Change: And we could show to you those mock ups. So that you can make your own opinion, but it's crystal clear when you make that study. So we are very fine.

Carlos Tavares: So we are very fine with that multi-energy decision on the platforms. The second thing is, when you go to a plant where you are making BEVs, and you can go, for instance, to Ordin, where we make the LCVs, and we make, right now, in Ordin, the ICEs, the BVs, and the fuel cells. Same plant, same line. So we can show it to you easily, and we see what you have to prepare. Upstream of the main line is the module that you call a battery pack. Yes, you have a dedicated small shop where you bring the trays, you bring the modules, you bring the harnesses, and you assemble the battery pack. Then you move the battery pack in the line, on the main line, as if it were an exhaust system or a gas tank, and you put it on the floor of the car.

Speaker Change: We've got multi energy decision on the platforms. The second thing is when you go in a plant where you are making b visa you can go for instance to our to all of that where we make the ltvs and we make right now you know that the Ics.

Speaker Change: The bvs and fuel cells.

Speaker Change: Plant same line.

Speaker Change: So we can show it to you easily.

Speaker Change: And we see that what you have to prepare.

Speaker Change: Extreme of the mainline is the module that you call a battery pack.

Speaker Change: Yes, you have a dedicated small shop.

Speaker Change: Where you bring the trays you bring the modules you bring to the harnesses and you assembled the battery pack then you move to the battery pack in the line.

Speaker Change: On the mainline as if it was an exhaust system.

Speaker Change: I guess, a gas tank and you assemble it on the Honda who's on the handful of pickup.

Carlos Tavares: So, yes, this works because the level of expertise that we have in manufacturing and the overall layout of our platforms is very, very high. And you can visit any time. I would like to be there to invite you so that you can see it for yourself.

Speaker Change: So yes this works because.

Speaker Change: The level of expertise that we have in manufacturing and overall layout of our platforms is very very high.

Speaker Change: You can visit any time I would like to be there to invite you. So that you can see it.

Carlos Tavares: On the M&A stuff, we have already commented right now. Nothing is ongoing. It is clear that if we are among the most profitable car makers in the world, we are in a better shape to face the Chinese offensive than the ones who have half, half of our profitability, to face that competition. And if that is to come, then the guys who are the most profitable today are the guys who will be in a good position to eventually capture any opportunity. Nothing more than that. Everything else is speculation. This is our thinking on that front. I don't know, Natalie, if you want to add something to that.

Speaker Change: On the.

Speaker Change: On the on the M&A stuff, we have already committed right now nothing is ongoing.

Speaker Change: It is clear that if.

Speaker Change: If we are among the most profitable.

Speaker Change: Carmakers in the world.

Speaker Change: We are in a better shape to face the Chinese offensive.

Speaker Change: Then the ones who have the half half of our profitability.

Speaker Change: To face that competition and if that was to come than the guys who are the most popular today are the guys who would be in a good position to the eventual capture any opportunity nothing more than that everything else. There's speculation. This is our thinking on that front or the battery if you want to add something to that.

Carlos Tavares: I think when we look at everything that has to do with the balance sheet, the capital structure, the things that I would focus on are, think about this as something where we're on a journey. You know, if you look at our business a couple years ago, this is something where we had never done a share buyback. We started that last year.

Speaker Change: And I think when we look at everything that has to do with the.

Speaker Change: Balance sheet the capital structure of the things that I would focus on are think about this as something where we're on a journey and if you look at our business. A couple of years ago. This is something where we have never done a share buyback. We started that last year, we looked at and opportunistic.

Natalie Knight: We looked at an opportunistic ability to capture more shares when Dong Feng offered them in the second half of the year. We've now increased our dividend. We've increased our share buyback. And one of the things that's kind of been really central to that thinking this year was we said, hey, we want to move from something where we're building that position to a place where we're maintaining it. And we've done that.

Speaker Change: To capture more share went down king offered them in the second half of the year. We've now increased our dividend we've increased our share buyback and one of the things that's kind of been really central in that thinking. This year was we said hey, we want to move from something where we're building that.

Speaker Change: That position to a place where we're maintaining it and we've done that as we look going forward. We will see how this moves along I think we're very proud of what we're doing now it depends obviously on what happens with our business performance and that we keep delivering at this high rate, but think of this as something where I think it's a great position to be in today. It is a real sigma.

Natalie Knight: As we look going forward, we'll see how this moves along. I think we're very proud of what we're doing now. It depends, obviously, on what happens with our business performance and that we keep delivering at this high rate. But think of this as something where I think it's a great position to be in today. It is a real signal as to what we want to deliver to the market, but it's by no means the end of the journey.

Speaker Change: So as to what we wanted to deliver at the market, but it's by no means the end of the journey.

Natalie Knight: Thank you, Natalie. Let's move on. Thank you, Patrick. Thank you. And, as a reminder, please limit yourself to one question in order to allow all participants the opportunity to ask a question.

Speaker Change: Thank you Natalie let's move on thank you Patrick.

Speaker Change: Thank you and as a reminder, please limit yourself to one question in order to allow all participants the opportunity to ask a question.

Operator: The next person in the queue is Dorothy Crestwell of BNP Paribas XA. Hi there, and thank you for taking my question. It's actually a follow-on to Daniel's earlier one, but honing in on the US electrification strategy, because your NAFTA BEV launches obviously aren't that far away now, so I wondered how quickly you will be able to replicate the BEV profitability that you already generate in Europe today in North America. Thank you. Well, thank you, Dorothee. That's a great question. You know, the short answer, which would not be as respectful as it should be because it's too short, is 2025. That's the short answer.

Speaker Change: The next person in the queue is Dorothy Cresswell of BNP Paribas Exane.

Dorothy Cresswell: Hi, Dan. Thank you for taking my question and it's actually a follow on to Daniel's Andy at one <unk>.

Dorothy Cresswell: Indications.

Speaker Change: It gives you enough to back into what she said.

Speaker Change: Our way now.

Speaker Change: How quickly will you be able to replicate the best pathetic.

Speaker Change: Ricky generate in Europe today in North America. Thank you.

Speaker Change: Well. Thank you Dorothy that's a that's a great question.

Speaker Change: The short answer which would not be as respectful as it should be because it's too short as the 2025.

Speaker Change: That's the short answer.

Dorothy Crestwell: In fact, most of the launches will happen in the second half of 2024, at least for the US market, except for the Promaster EV, which is already on sale and is already ramping up. So it's fair to say that, given the sequence we have. The full positive impact of our new BEV launches will be visible in 2025 full year. You will see some of it in 2024 by the end of the year, given the ramp-up that we will have. But that's the short answer. We will see that in 2025's full-year scope, and the second half of 2024 will be the ramp-up. That's for NA.

Speaker Change: In fact, the most of the launches will happen in the second half.

Speaker Change: For 'twenty 'twenty four at least for the U S market.

Speaker Change: Except for the pro Master EV, which is already on sale and already ramping up so it's fair to say that given the sequence we have.

Speaker Change: The full impact a positive impact of our BV, new launches will be visible in 2025 full year.

Speaker Change: You will see some of it in 24 by the end of the year given the ramp up to that we will have but that's the short answer.

Speaker Change: We will visit but we will see that in 2025 full year scope and second half of 'twenty four will be the ramp up that's for an eight four for Europe you see it today you have it today you are going to see the ramp up of the puzzle E 3000 rates, which is going to be a very important pillar of our business in Europe.

Carlos Tavares: For Europe, you see it today. You have it today. You are going to see the ramp-up of the Peugeot e3008, which is going to be a very important pillar of our business in Europe. This will start in the next few weeks, as we are going to bring the cars to the showroom very soon. So in Europe, you will see a full year of BEV power. One of the good things you can already see is that when you look at the BEV market share in Europe for the B segment, if my memory is correct, we have more than 60% of the BEV market share in the B-segment and the BSUV segment, both in Europe, which means that it demonstrates the competitiveness of our B-segment, B- When you look at the numbers on segment share, where you see the weakness in Europe is the C-segment. You see that in the C segment, we don't have enough BEV market share. That's why we are now bringing the 308 E version, the Astra E version, and, of course, in the C crossover CSUV, the Peugeot E 3008.

Speaker Change: This is going to start in the next few weeks.

Speaker Change: We are going to bring the cost of the showroom very soon so Europe, you will you'll see a full year of <unk>.

Speaker Change: BP power one of the good things that you can already see is that.

Speaker Change: When you look at the BV marketshare.

Speaker Change: In Europe on the beef segment.

If my memory is correct, we have more than 60% B V marketshare in the beef segment and the SUV segment both Europe.

Speaker Change: Which means that it demonstrates the competitiveness of our B segment.

Speaker Change: Segment, the hatch and B SUV.

Speaker Change: Product in Europe, when you look at the numbers on the segment share.

Speaker Change: Where you see the weakness in Europe is the C segment.

Speaker Change: You see that in the C segment.

Speaker Change: We don't have enough the EV market share. That's why we are now bringing that fee Oh wait.

Speaker Change: E version, the Australia E version and the of course in the C crossover C. SUV the official E. T thousand nights. So you should see hopefully with us that our BV.

Carlos Tavares: So you should see, hopefully with us, that our BEV share in the C segment is going to grow, and there is no reason why we would not bring it closer to the share that we already have in the B hatch and the B SUV, which, from the top of my memory, in Europe is above 60% of the share in the B segment. So that's the power of what we have in Europe.

Speaker Change: Sure in the C segment is going to grow and there is no reason why we would not bring it closer to the share that we already have in the B hatch and the B SUV, which from the top of my memory in Europe is above 60% of share in the B.

Speaker Change: Segment in Europe. So that's that's the power of what we have Europe and we are doing this with profit we are doing this with profit.

Carlos Tavares: And we are doing this with profit. Last but not least, if I add to the competitiveness of our products and the market coverage we have with our brands, the power of our sales financing arm, you end up with something that may be meaningful for you, which is the fact in the social leasing channel that has been created by the French government. We have more than 70% market share from the recollection of data that we have been doing, which means that when you add the competitiveness... of the, It's a perfect demonstration of our ability to converge in affordability, profit, and product appeal. That's what this is.

Speaker Change: Last but not least if I add to the competitiveness of our products in the market coverage, we have with all brands the power of.

Speaker Change: Our sales financing arm.

Speaker Change: You end up with something that may be meaningful for you, which is the fact in the social leasing channel.

Speaker Change: That has been created by the French government.

Speaker Change: We have more than 70% market share from the recreation of data that we have been doing which means that when you add the competitiveness of our products and the power of our financing arm you end up with a very competitive offering.

Speaker Change: To our customers that they immediately accept at 70% 70% market share.

Speaker Change: Using 10 eligible products that we put on the market, which is about 50% of all the eligible products that were put in the market. This is to say that.

Carlos Tavares: Now we have to do the same thing in the U.S. We have to be as appealing as... affordable, and as profitable as they should be. And that's what we are preparing for the future. But the full picture will be visible in 2025. Thank you, Dorothy.

Speaker Change: It's a perfect demonstration of our ability to converge in affordability prop.

Speaker Change: Profit and product appeal.

Speaker Change: That's what this is they must now we have to do the same thing in the U S.

Speaker Change: We have to be as appealing as.

Speaker Change: Affordable and as profitable as it should be and that's what we are preparing for the future, but the full picture will be visible in 25. Thank you Dorothy.

Natalie Knight: Next in line is Michael Jacks of Bank of America. Hi, good morning, good afternoon; thanks for taking my question and congratulations on the great results and a big step forward on shareholder returns. Going back to an earlier question on AOI, I'm sure pricing is the most difficult variable to predict, but it would be great if you could give us your take, Carlos, on the pricing environment in Europe and the US, including the dynamics between BEVs and ICE. And in conjunction with that, Natalie, whether CEBs are included in the equation of puts and takes laid out in the guide, or if this is one of the weapons you have at your disposal to help fight against the various segments.

Speaker Change: Okay.

Speaker Change: Next in queue is Michael Jacks Bank of America.

Michael Mark Manley: Hi, Good morning, good afternoon, and thanks for taking my question and congrats on the great results and Big step forward on shareholder returns going back to an earlier question on a O I I'm sure pricing isn't the most difficult variable to predict but it would be great. If you could give us your take.

Michael Mark Manley: All of us on the pricing environment in Europe, and the U S including the.

Michael Mark Manley: Thanks.

Michael Mark Manley: And then ice and in conjunction with that Nathalie weather.

Michael Mark Manley: Included in that equation puts and takes that you know the guide or if this is one of the lessons you have at your disposal to help fight against the various headwinds. Thank you.

Michael Mark Manley: Thank you. Thank you, Michael. Let me take the first part, and Nathalie will take the second one.

Speaker Change: Thank you Michael let me take the first part and the Natalie will take the second one you know.

Carlos Tavares: The BEV story is an interesting one because we all know that we need to fix affordability, which means the BV story is a story about the race to reduce the total production cost in order to give back to the market more affordability while protecting the market. So, surprisingly, when we talk about the pricing power of BEVs, in fact, we are talking about cost reduction. That's what we are talking about.

Natalie: The BV story is an interesting one because we all know.

Natalie: That we need to fix the affordability.

Natalie: Which means.

Natalie: The BV story is a story about the race.

Natalie: So we use the total production cost.

Natalie: In order to give back to the market more affordability, while protecting the margins.

Natalie: So surprisingly when we talk about the pricing power of Bvs. In fact, we are talking about cost reduction.

Speaker Change: That's what we are talking about.

Carlos Tavares: And it's interesting to see that one of the drivers of the total production cost reduction of BEVs right now is the fact that a great number of people are talking about the fact that BEV sales growth is not as strong as some would predict. And that has an impact on the raw material price, which means the raw material price is going down, which means the total production cost of BVs is going down, which means it's opening the road for more affordability, and then affordability will bring more customers, and then there will be a reverse situation at one point in time. So what I want to say is that if we want to bring the affordability of EVs to the market, as we should.

Speaker Change: And it's interesting to see that one of the drivers of the total production cost reduction of Bvs right now is.

Speaker Change: Is the fact that the.

Speaker Change: A number of a great number of people are talking about the fact that the BV sales growth is not as strong as what some would predict and that has an impact on the raw material.

Speaker Change: Price.

Speaker Change: Which means the raw material prices going down which means total production cost of BV is going down which means it's opening the rules for more affordability and then affordability will bring more customers and then there will be a reverse situation at what point in time, so what I want to say is that if we want to bring the affordability.

Speaker Change: Of Evs to the market as we should we need to accelerate the pace of of total production cost reduction.

Carlos Tavares: We need to accelerate the pace of total production cost reduction. We have tons of ideas for that. What I can communicate to you is that right now the pace of total production cost reduction of BEVs is higher than the pace of total production cost reduction of ICEs, which means we are converging. Are we converging fast enough or not fast enough? I would always want it faster.

Speaker Change: We have tons of ideas for that what I can.

Speaker Change: Communicate to you is that right now the pace.

Speaker Change: Of total production cost reduction of Bvs is higher.

Speaker Change: And the pace of total production cost reduction of Ice's.

Speaker Change: Which means we are converging.

Speaker Change: We are converging fast enough or not fast enough I would always want faster.

Carlos Tavares: My team is doing a great job. I think we are among the best at doing that. We still need some time to converge fully, but I think that what we are going to see over the next two or three years is that affordability is going to be driven by the speed at which we reduce the total production cost, as we want to protect our margins. And the people that are not going to protect their margins, they are going to put themselves in trouble, which is obvious. And some of them have communicated the profitability of their BEVs, and most of them are red. Ours is black, and significantly so.

Speaker Change: My team is doing a great job I think we are among the best in doing that we still need some time to convert fully but I think that what we're going to see over the next two or three years is that is the affordability is going to be driven by the speed at which we reduce the total product production cost.

Speaker Change: As we want to protect our margins and the people that we're not going to protect their margins are going to put themselves in trouble, which is obvious and some of them have communicated on the profitability of their bvs and most of them are red ours is black and significantly black that's what I can share with you because I thought it maybe.

Carlos Tavares: That's what I can share with you. Nicole, Nathalie, anything to add to that? Maybe just from my side, the thing I would add on the pricing topic is, you know, it is part of our AOI guidance, and it's one of those items where, you're right, there are positives and negatives to that. When we look at North America, I think what's important to call out is that, you know, we haven't seen any radical pricing drops. You know, people have been pretty disciplined; perhaps after everything that happened in the fall of last year, it's in everyone's best interest to be disciplined there.

Speaker Change: Just from my head the thing I would add on the pricing topic is yes.

Speaker Change: Yes. It is part of area like guidance and it's one of those items were you're right, there's positives and negatives to that when we look at North America I think what's important to call out is we.

Speaker Change: We haven't seen any radical pricing drops you know people have been pretty disciplined perhaps after everything that happened in the fall of last year. It's in everyone's best interest to be disciplined there and the place where you do see it and I'm sure. That's what you were alluding to is when you look at Evs, particularly in Europe. There is a different position there, but what we.

Natalie Knight: The place where you do see it, and I'm sure that's what you were alluding to, is when you look at EVs, particularly in Europe, there is a different position there. But what we think about is always what we can control, and what we can control is that we want to maintain a strong pricing differential vis-a-vis our peers. This is something we've built up over the last several years, and it's really one of our key USPs. So expect, if the market goes up and down, we're going to use that ability that we have as a company with the cost savings, with the efficiencies, all those things that we're known for, to be able to maintain that relative distance, but also to have the flexibility to make sure we don't use it to Thank you, Natalie. Next question. Thank you, Michael. The next question comes from Jose Asamendi of J.P. Morgan. Thank you very much. A question, please, on the third engine.

Speaker Change: Think about it is always what can we control and what we can control is that we want to maintain our strong pricing differential vis vis our peers. This is something that's built up over the last several years and where it's really one of our key U S piece. So we expect if the market goes up and down we're going to use that ability that we have as a company with the cost savings.

Speaker Change: With the efficiencies all of those things that we're known for to be able to maintain that relative distance, but also to have the flexibility to make sure. We don't use it to the detriment in terms of how it impacts sharing our position.

Speaker Change: Thank you Natalie next question. Thank you Michael.

Speaker Change: The next question comes from.

Speaker Change: So many of J P Morgan.

Speaker Change: Thank you very much pushed in place in the third engine. If you could please comment on the rate of growth. We are sticking to the three regions in 'twenty than before and also if you expect the margin or the profitability to remain so high in 'twenty for US has delivered in 2023 thank you.

Jose Asamendi: If you could please comment on the rate of growth you're expecting for the three regions in 2024 and also if you expect the margin or the profitability to remain so high in 2024 as it was in 2023. Thank you. That's a great question, Jose.

Speaker Change: While the great question Jose Thank you.

Carlos Tavares: Thank you. The only thing I would like to share here is that if you go back to my statements last year or a couple of years ago, it is fair to say that the results that we presented to you with Natalie are ahead of schedule. We have seen such a tremendous response from the overseas club, which of course creates inside of the company some kind of competition, which is nice and healthy, where the third engine is indeed growing faster, and in profits; they doubled their profit in 2023 against 2022. So on that front, we are ahead of plan. What does it mean?

Speaker Change: The only thing I would like to.

Speaker Change: To share here is that if you go back to my statements last year or a couple of years ago.

Speaker Change: It is fair to say that the results that we presented to you with Natalie are ahead of plan.

Speaker Change: We have seen such a tremendous.

Speaker Change: Response from.

Speaker Change: The overseas club.

Speaker Change: Which of course creates inside of the company has some kind of competition, which is a which is nice and healthy.

Speaker Change: The third engine is indeed growing faster.

Speaker Change: And in profit they double the profit in our in the 2023 against 2022. So on that front. We are ahead of plan what does it mean it means that.

Carlos Tavares: It means that I don't foresee that we would have our third engine at the level or close to the level of Europe later than 25, and it could happen in 24, because that's really what we see. We see that we have the right products. We have the right prices. We have the right teams.

Speaker Change: I don't I don't foresee that we would have our third engine at the level or close to the level of Europe later than 'twenty, five and it could happen in 'twenty four.

Speaker Change: Because that's really what we see we see that we have the right products.

Speaker Change: We have the rights.

I think.

Speaker Change: We have the right teams and.

Carlos Tavares: And most importantly, we are reinforcing significantly local sourcing for the local market. You may have seen that we have taken many initiatives. We are already 90 percent plus sourced in Latin America for Latin America. We have now upgraded our objective for... African sourcing for Africa and the Middle East to 90% in 2030. Previously, we were at 70. We just moved it to 90 because it's the same recipe we want to source in the region for the region to be able to have in the region the right technology that the region wants. This is what we are doing. We have manufacturing entities in Morocco, in Algeria, in Tunisia, in Egypt, in Turkey, and very soon in South Africa.

Speaker Change: And most importantly, we are reinforcing significantly the local sourcing for the local markets.

Speaker Change: You may have seen that we are taking many initiatives.

Speaker Change: We are already 90% plus sourced in Latin America for Latin America.

Speaker Change: We have now upgraded our objective for.

Speaker Change: African sourcing for Africa, and Middle East to 90% in 2013.

Speaker Change: Previously we were at 70, we just move it to 90, because it's the same it's the same recipe we want to source in the region for the region to be able to have in the region. The right technology that the recent ones.

Speaker Change: This is what we are doing we have manufacturing entities are in.

Speaker Change: In Morocco in Algeria, and Tunisia in Egypt, and Turkey, very soon in South Africa.

Carlos Tavares: So we have a very strong manufacturing footprint plan for Africa and the Middle East, as the market is responding very, very well to our product offering. So we'll keep on doing that as fast as we can. We have a fantastic, fantastic position right now in Algeria, with more than 80 percent of the market share. And we are now moving with a plant that is already in operation, and we have more steps to go. So we see that, yes, the third energy is a big competitive differentiator against some of our other peers that have a more shrinking strategy.

Speaker Change: So we have a very strong manufacturing footprint plan for Africa Middle East as the market is responding very very well to our product offering. So we will keep on doing that as fast as we can and we have a fantastic fantastic position right now in a in a in Algeria with more than 80% market share.

Speaker Change: And when we are now moving with the plant, which is already in your in operations and we have more steps to go. So we see that yes, there is a big.

Speaker Change: Competitive differentiator.

Speaker Change: Against some of our other <unk>.

Speaker Change: Fears that have more of a shrinking strategy. So we are there are we will keep on moving and I would be disappointed if we were not on par with Europe by 2025, and I think that we have a good chance that it will happen in 2024. This is what I wanted to.

Carlos Tavares: So we are there. We'll keep on moving. And I would be disappointed if we were not on par with Europe by 2025. And I think that we have a good chance that it will happen in 2024.

Carlos Tavares: This is what I wanted to share with you, José. Thank you. This is, I believe, the last question.

Speaker Change: So shall we do Jose thank you.

Speaker Change: This is a I believe the last the question.

Carlos Tavares: I just would like to close by expressing to you all my sincere appreciation for your support and for the quality of your questioning because the quality of your questioning is making us think better. I would like to thank my employees. I would like to thank my top leadership team because they give me the privilege of challenging them, and that's a big privilege I have, to be able to challenge them. And they are working super hard to create the returns that Nathalie presented to you today. Nathalie has brought us a breath of fresh air. In the way we understand you, we understand your expectations, so we expect to be doing a better job in the future. Thank you.

Jose: Question I, just would like to close by expressing to you will my sincere appreciation for your support for.

Jose: For the quality of your questioning.

Jose: Because the quality of your questioning is making us think better I.

Jose: I would like to thank my employees I would like to thank my top leadership team because.

Jose: Because they give me the privilege of challenging them.

Jose: That's a big privilege I asked to be able to challenge them.

Jose: And they are working super hard to create the returns that Natalie presented to you today and to Nathalie has brought us a breath of fresh air in the way we understand you we understand your expectation. So we expect to be doing a better job in the future. Thank you have a great day.

Jose: [music].

Jose: Okay.

Jose: Hum.

Jose: [music].

Jose: Hum.

Jose: Hum.

Jose: [music].