Q2 2024 Stellantis NV Earnings Call

Speaker Change: Okay.

Were posted under the investors section of the stars group website today, our call is hosted by Karl.

Unknown Executive: 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 Harbor Statement included on page 2 of today's presentation. As customary, the call will be governed by that language. Now, I would like to hand over the call to Carlos Tavares, CEO of Stellantis. Good morning and good afternoon to all of you.

Speaker Change: The virus, the company's Chief Executive Officer, and Natalie Knight, the company's Chief Financial Officer. After both Mr. Tobias unless night 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 Harbor statement.

Speaker Change: On page two of today's presentation.

Speaker Change: Customary the call will be governed by that language now I would like to hand over the call to Carlos to virus CEO scientists.

Speaker Change: Good morning, and good afternoon to all of you welcome to this 2024 H one set up these financial results announcement session.

Carlos Tavares: Welcome to this 2024 H1 Stellantis Financial Results announcement session. We perfectly recognize that you are highly busy people and therefore value your time. Thank you for attending, and thank you for your interest in Stellantis.

Speaker Change: We perfectly recognize that you are highly busy people and therefore value all the time. Thank you for attending and thank you for you all.

Speaker Change: Got it.

Carlos: Well, let's get started.

Carlos Tavares: So let's get started. It is an understatement to say that the H1 2024 results were disappointing and humbling. It represents a perfect convergence of several headwinds, which I will describe to you in a very transitional period, that opened the road for a product blitz of 20 new products. This is a bump on the road that we are now fixing and that we are going to fight against to make sure that we can rebound from here and that we fix the operational issues that we face.

Speaker Change: It is.

Speaker Change: Great.

Speaker Change: Say that the H, one point to 24 results.

Speaker Change: A disappointing.

Yeah.

Speaker Change: It represents a perfect convergence of.

Speaker Change: Several headwinds.

Speaker Change: That that will get quite to you.

Speaker Change: Transitional period.

Speaker Change: That's open to the road for our product.

Speaker Change: 20, new products.

Speaker Change: It is a.

Speaker Change: The bump on the road.

Speaker Change: We are now fixing and that we are going to fight against it make sure that we can rebound from here.

Speaker Change: Six new operational issues that we say so what happens in each one is a convergence of all three.

Carlos Tavares: So what happened in H1 is a convergence of three major factors that I would like to share with you. Number one, we were in a dynamic of R&D, CapEx, and M&A expenses that proved to be too high, and we are now fixing that. That's point number one.

Speaker Change: Major factors.

Speaker Change: We'd like to share with you number one we work in a dynamic of R&D Capex and M&A expenses that proved to be too high.

Carlos Tavares: Point number two, we faced operational flaws which were totally internal to Stellantis, and we are fixing that. And number three, some of our marketing tactics, namely in the U.S. market, did not deliver the expected results. The perfect convergence of those three factors, in a transitional year which is a product blitz that I will detail to you moving forward as delivering the disappointing results that we are committing to you today, but in the fourth year of Stellantis. This is the Resilient team. Fighting Team

Speaker Change: We are now fixing that.

Speaker Change: Question number one.

Speaker Change: Number two we faced operational floors, which was totally internal.

Speaker Change: We are fixing that and number three it's all off our marketing tactics, namely in the U S market did not deliver the expected results that perfect convergence of those three factors.

Speaker Change: In that transitional year, which is a product that I will detail for you moving forward.

Speaker Change: But then he said well I think the results that we are committing to you today.

In the fourth.

Got it.

Speaker Change: So.

Speaker Change: Jim.

Speaker Change: Yes.

Carlos Tavares: We are addressing those issues, and we'll get to that, So this is what I want to share on this first one. As you have a look at this fantastic new Grande Panda, and here, the new Ram 1500RHO delivers the highest horsepower per dollar of any performance truck. And I would like to remind you all that the Ram brand was again number one in the GD Power Quality Survey results. From here, let me move into a summary of what has happened during this period.

Speaker Change: Jim.

Speaker Change: We are addressing those issues.

Speaker Change: We'll get through.

Speaker Change: This is what that wants to show this first one.

Speaker Change: You'll have a look fantastic youll granted panda and here then you run the 1500 R. H O.

Speaker Change: The highest horsepower per dollar of any performance struck and I would like to remind you all that the Ram brand was again.

Speaker Change: Number one.

Speaker Change: You need power quality survey.

Speaker Change: Results.

Speaker Change: Well, let me.

Move into the.

Speaker Change: The summary of what has happened in this period.

Carlos Tavares: I will not detail the numbers on the profit; Natalie will comment on that in detail, but still 8.5 billion in AUI and a double-digit margin, and as you know, the double-digit AUI margin represents our commitment to you in the framing of DerfWord 2035, program, and strategic plan. We are near zero in the industrial free cash flow.

Speaker Change: I will not detail the numbers on the on the drop it naturally will come at that in detail.

Speaker Change: Hill eight five.

Speaker Change: Are you why.

Speaker Change: And a double digit margin as you know.

Speaker Change: A wide margin represents.

Speaker Change: Our commitment to you.

Speaker Change: Framing of the debt for 2013.

Speaker Change: Program.

Speaker Change: And strategic plan.

Speaker Change: Our near zero in the industrial free cash flow.

Speaker Change: And we know that there's something about the technicalities of.

Carlos Tavares: And we know that a certain number of technicalities have made an impact on this number. We are around zero, and this is not good enough, as we all know. We will deliver on our commitments by giving you the return that we have committed to in terms of keeping a very strong capital return with 6.7 billion that has been returned to shareholders and with a plan to deliver what has been committed to 7.7 billion, which we are executing on schedule.

Speaker Change: And in fact this number we are around zero and this is not good enough and we all know.

Speaker Change: We will deliver on our commitments.

Speaker Change: By giving us the return that we are committed to himself keeping a very strong capital return with $6 7 billion stuff. That's been that had been returned to shareholders.

Speaker Change: With a plan to go deeper what has it been committed seven 7 billion and we are executing and on schedule.

Carlos Tavares: In terms of products, we will come back to you later on, 20 new products. That means a significant product blitz that explains some of the significant cash-outs that you can see in the free cash flow. A lot of expense has been done to invest in the future, not only in the product but also in the technology, and this is a turnaround for our company in terms of transformation. We see that we are now coming very strong in the C-segment in Europe.

Speaker Change: In terms of products, we will come back to you later on 'twenty.

Speaker Change: <unk>.

Speaker Change: Products.

Speaker Change: That means it's significant.

Speaker Change: Blitz that explains some of the significant cash outs that you can see the free cash flow a lot of expense.

Speaker Change: Been done to invest in the future not plenty of the product, but also on the technology.

Speaker Change: This is a turnaround for our company in terms of transformation.

Speaker Change: We see that we are now coming to a very strong in the CS segment Europe. It is quite clear that after being dominant.

Carlos Tavares: It is quite clear that after being dominant in the B segment, the B hatchback and the B SUV, we are coming back very strong in the C segment with different brands, starting with the Peugeot brand with the 6008 and 5008, very soon. They represent the first applications of the First Stellar Medium Platform, and it proves to be a highly, highly competitive platform, as you have seen on the first slide with a significant range of 680 kilometers.

Speaker Change: In the beef segment, the hatchback and B SUV, we are coming back very strong on the CS segment with different brands, starting with the social grant with the 6080 5000, a day to day soon.

Speaker Change: That represents the first applications of the.

Speaker Change: First media.

Speaker Change: Media platform and it proves to be a highly highly competitive platform as you have seen on the slide with a significant range of 680 kilometers.

Carlos Tavares: We are going through this transition; you will see that we are going to bring very strong products, very appealing products; you will judge them for yourself. But it's quite clear that everybody is recognizing that our products are highly appealing. We have a significant number of third-party accolades, and the first ones: each year, our products are audited. Last but not least, we know that we have done part of the job but not all the job in terms of stabilizing our share.

Speaker Change: We are going through this transition you'll see that we are going to bring very strong products very appealing products will judge by yourself.

Speaker Change: It's quite clear that everybody is recognizing that our products are highly appealing.

Speaker Change: She got number of third party accolades and the first one.

Speaker Change: All products are all leaders.

Speaker Change: But not least we know that we have done part of the job, but not all the jobs.

Speaker Change: In terms of stabilizing our share you can see that in Europe are in H. One our share is up 60 basis points against the second half of 'twenty three we see that we have fixed the inventory problem of Europe still to be done in the U S. As we will come out later on.

Carlos Tavares: We see that in Europe, in H1, our share is up 60 basis points against the second half of 23. We see that we have fixed the inventory problem in Europe, still to be done in the US, as we will comment later on. This inventory discipline is the biggest point of focus in the US market right now. We are working very hard. I am personally involved with our North American teams to fix it.

Speaker Change: This inventory discipline is in the U S market right now the biggest point of focus we've got.

Speaker Change: We're working very hard I am personally involved with our north American teams to fix it.

Carlos Tavares: We believe we understand what happened, and I will explain that to you, and if we understand well what the problem is, then 50% of the journey is done to fix it, and this is what we are now preparing for. Last but not least, we still have a lot of cost-saving actions ahead of us. We plan for no less than $1,500 million in the rest of the world, the year, sorry, the rest of the year.

Speaker Change: We believe we understood what happened and I will explain that to you.

Speaker Change: If we understand well what the problem is then 50% of the.

Speaker Change: Germany is done to fix it and this is what we are now guiding for.

Speaker Change: Last but not least we still have the head office a lot of cost.

Speaker Change: Actions, we plan for no less than 50, how did you get in the rest of the world.

Speaker Change: So the rest of the year so.

Carlos Tavares: So from here, let me move to the product. The project leads are quite outstanding. You see here. The first 10 products we are now launching in H1. Here you have the electric versions of the Maserati Grecale.

Speaker Change: So let me move to the program.

Speaker Change: The progress is quite outstanding do you see here.

Speaker Change: The first set of products. We are now launching in each one you have the electric versions of Maserati great colleagues for anybody that has driven those scars. It is another statement to say that they are gorgeous and to himself dynamics in terms of agility in some sort of acceleration we are now bringing to the market the full glory.

Carlos Tavares: For anybody that has driven those cars, it is another statement to say that they are gorgeous in terms of dynamics, in terms of agility, in terms of acceleration. We are now bringing the full-gory versions of the Maserati Bercale to the market. Later on, we'll bring the full-gory versions of the GT and Grand Cabrio Maserati luxury cars. We are bringing the new Ram 1500, not only in the ICE version, but all the different applications, including the high-output applications that our customers are willing to buy. But also later on, you'll see on the second slide, other more electrified applications.

Speaker Change: Since all of the Maserati a great colleague later on we'll bring the full go ahead versions of the GT and grant Cabriole lots Iraqi luxury costs, we are bringing the new around 1500.

Speaker Change: Tony in the ice versions.

Speaker Change: Bringing all the different applications, including the high output applications that our customers are willing to buy but also later on you'll see on the second slide are there more electrified applications.

Carlos Tavares: The Peugeot 3008 is now on sale. We have no less than 36,000 orders right now. It is already a success, both in the DEV versions, highly profitable, and in the MHV versions, even more profitable. So it is very rewarding to see that with 680 kilometers of WLTP range, customers are willing to pay for that. And we are delivering the performance; a smooth ride, great acceleration, and the performance on body roll control is also visible to our customers.

Speaker Change: 2008 is now on sale, we have no less than 36000 orders right now it is already a success both in the D V versions highly profitable.

Speaker Change: And India Beachy version it makes you be versus even more profitable. So it is very rewarding to see that with 680 kilometer yourself W. LTV range that customers are willing to pay for that and we are delivering the performance.

Speaker Change: Right.

Speaker Change:

Speaker Change: Acceleration and that's the Assortments on body control is also visible by our customers at the end of the day.

Carlos Tavares: At the end of the day, profitable BEV sales, properly recognized by our customers. The rebound of the Lancia brand as a premium brand is now ongoing with the launch of the Lancia Epsilon that you have already seen. We are bringing the best-in-class sales of the European Peugeot 2008 to Latin America, and we are now investing in this product in Latin America to contribute to the profitability of this region, which is already outstanding. We are bringing the third car of the smart car platform family, the Citron Basalt, in June, starting with the Indian market, and the Peugeot 5008 as a derivative of the 3008.

Speaker Change: Profitable D V sells property recognized by our customers the rebound of the luxury brand as a premium brand is now ongoing with the launch of the lunch Epsilon that you have already seen we are bringing that.

Speaker Change: Best in class sales of Europe, There's about 2008 to Latin America, and we are now.

Speaker Change: Investing this projects in Latin America to contribute to the profitability of this region, which is already outstanding we are bringing the third car of the smart car platform family.

Speaker Change: Baxalta in June starting with the market that there's all 5008.

Speaker Change: The reason you go up with the 3008 three.

Carlos Tavares: The three new LCVs, the compact, the medium, and the large van, are now in the market with strong improvements and upgrades, so this should be a tool for profitable market share growth. Those are the first ten products of this product blitz. Let me move to the second part of the product blitz, coming soon, and here you have an array of focused products. The new Dodge Charger Daytona, BEV, and ICE will come later, in the later part of this year. I have driven this car, and it is absolutely thrilling to see how dynamic it is, how powerful it is, and how easy to drive it is.

Speaker Change: Pre rolled seater.

Speaker Change: And then the three new F series to come back to the medium and the large fans are now in the market with a strong.

Speaker Change: Our improvements and upgrades. So this should be a tool for.

Speaker Change: Our profitable market share growth those are the first 10 products of this product, let's let me move to the second part of the product.

Speaker Change: Coming soon and heal yachts and array of Fantastic U S focused products, the new Dodge Charger Daytona Beach.

Speaker Change: B E.

Speaker Change: And the ice.

Speaker Change: We'll come later I'll say the.

Speaker Change: Part of this year I have driven the scar it is absolutely thrilling how dynamic it is how powerful it is easy to drive it is so great great engineering work from our North American team. We will also bring the wagon U S, which is a perfect compared.

Carlos Tavares: Great engineering work from our North American team. We will also bring the Wagoneer S, which is a perfect competitor to our respected Tesla competition. And this car is also a fantastic product in terms of a smooth ride and performance acceleration capability. Then we have the electrification of RAM, first the REV and then the 1500 RAM charger. The 1500 RAM charger has no less than 690 miles of range, while the pure BEV version goes from 350 to 500 miles.

Speaker Change: It took two hours respect to Tesla.

Speaker Change: Competition and this score is also a fantastic product and some self smooth right and performance acceleration capabilities.

Speaker Change: Then we have the electrification of ramp.

Speaker Change: First the Rev. And then the 1500 rapid charger.

Speaker Change: 15 run the 15 under our grandchildren as no less than 690 miles of range, while the pure Bev version goes from 50 to 500 miles.

Carlos Tavares: Needless to say that the power of Stellantis technology in terms of electrification is now visible and can be appreciated by consumers, and we believe that this is going to give a boost to our sales. We will also bring the Jeep Rekon. This is a fantastic outdoor-oriented BEV.

Speaker Change: Needless to say that's the power of the certainties technology in terms of electrification is not feasible and can be appreciated by the consumers and we believe that this is going to give a boost to ourselves. We will also bring the jeep record.

Speaker Change: Fantastic.

Speaker Change: Oriented BV.

Carlos Tavares: This product is bringing the best of Jeep, not only the off-road capability, but also the zero emission that is still aligned with the natural focus of this off-road customer. This is now coming to the US market. It's part of the EV offensive and electrification offensive that I have commented on several times in the past. It's real.

Speaker Change: This product is bringing the best of chips not only the offload capability, but also the zero emission that is still aligned with that nature focus of these offload customers. This is now coming to the U S market at spot of the EV offensive and it actually is.

Speaker Change: Your question offensive that I have committed to you several times in the past it's real it's Scott I mean, we are not ready for this for the splits on the lower part of the slide you have the brand New C C.

Carlos Tavares: It's coming. We are now ready for this, for this blitz. On the lower part of this slide, you have the brand new Citron C3 with the electric version, at €23,000, starting from €20,000. This demonstrates that we can be profitable and affordable while being a zero-emission vehicle. This is a demonstration that we can fight against our Chinese competitors. We have the highly successful Alfa Romeo Junior. You can see in the expert media that they have appreciated enormously the performance of this product, and the accolades are very numerous. We will bring the new Opel Grandland as a derivative of the Peugeot 3008. Again, a great platform, great capabilities. And then there is the very affordable, off-road-oriented Opel Frontera, a C-segment crossover.

Speaker Change: C III.

Speaker Change: The electric versions at 23000 euros stopping from 20000 users.

Speaker Change: Demonstrates that we can be profitable and affordable while being a zero emission vehicle. This is the demonstration that we can fight against all Chinese competitors, we have the highly successful after a meal junior you can see indeed experts media debt.

Speaker Change: They are appreciated.

Speaker Change: Obviously the performance of these products and the accolade are very numerous we will bring the new Opel brand land are the reasons.

Speaker Change: You've got the control thousands of nights.

Speaker Change: Great platform, great capabilities, and then the very affordable offload oriented Opel Frontera.

Speaker Change: Our CS segment crossover you'll.

Carlos Tavares: You'll see that this product will meet the expectations of young families who have a very diverse and active life, both urban and off-road. And last but not least, presented this week in Serbia, the Fiat Grande Panda, which makes a big comeback of the Fiat brand in the B-segment with a highly modern, trendy, and zero-emission product that will also be available with MH-EV. I'll take this opportunity to say that many of those products, the Citron, the Fiat Grande Panda, the Opel Frontera, the Fiat 600, all of these products will be offered in around €25,000 versions. So the affordability of the electric technology of Stellantis is now going to be..., visible to customers and something that you can buy in the showrooms. So this is to demonstrate that this product is real.

Speaker Change: You'll see that this product will meet the expectations of young families, who have a very diverse and active life both on and.

Speaker Change: And off road oriented.

Speaker Change: Last but not least presented this week.

Speaker Change: Said, yes, the Fiat Panda, whereas the big comeback of the Fiat brand in the beef segment with a highly more than 20 and zero emission.

Speaker Change: Product that's a little boat will be also available with MH I'll take this.

Speaker Change: The opportunity to say that.

Speaker Change: Many of those products the Citron.

Speaker Change: The fear that granted panned out the old El Fonterra that she had 600 all of these products will be offered around 25000 euros versions.

Speaker Change: For the ability.

Speaker Change: Off the electric technology.

Speaker Change: So it is not going to be.

Speaker Change: Feasible by the customers and that you can buy in the shops. So this is to demonstrate that.

Speaker Change: This product Blitz, Israel 20, new models coming to the market and this is of course absorb a significant part of our resources. Hence the results that you see on the free cash flow. It's in investments for the near future profitability of the company if I look at the technology.

Carlos Tavares: Twenty new models are coming to the market. And this has, of course, absorbed a significant part of our resources. Hence the results that you see in the free cash flow. It's an investment in the near future profitability of the company. If I look at the technology.

Speaker Change: The technology, we have four big themes.

Carlos Tavares: The technology, we have four big themes that we can highlight to you. First, we keep our flexibility by giving choice to our customers through the multi-energy platforms and the flexibility of our manufacturing facilities. We can align with what the customers are asking us. This flexibility is a huge differentiator that will give us the capacity to swallow and absorb the bumps on the road, the accelerations, or the pauses of electrification through, mainly, the North American European market. So this choice is real important.

Speaker Change: We can highlight to you Chris we keep our flexibility by giving the choice to our customers through that multi energy platforms and the flexibility of our manufacturing facilities, we can align.

What the customers are asking us this flexibility is a huge differentiator that will give us the capacity to swallow and absorb the bumps on the road.

Speaker Change: Accelerations, all deposits of electrification through mostly the north American and European market. So this choice is real the choice is there are new platforms are now being used in our manufacturing facilities are ready in terms of affordability.

Carlos Tavares: This choice is there. Our new platforms are now being used, and our manufacturing facilities are ready. In terms of affordability, I already mentioned the E-C3 Citron at €23,000, but other B-segment cars will be sold under €25,000.

Speaker Change: Already commented the E C. Three seatrain out 23000 euros, but other b segment costs will be sold under 25000 euros. So the affordability is there and now we are ready to compete without Chinese peers, but certainly we are ready for the fight we have been.

Carlos Tavares: So the affordability is there, and now we are ready to compete with our Chinese peers. Certainly, we are ready for the fight.

Carlos Tavares: We have been working on this for many years now. It does not make us very popular in terms of reducing the cost, but now we are ready for the fight, and we believe that we have a good chance to win in this fight because we have the technology, we have the products, and we have the affordability with profit. This is important because it relates to the sustainability of our company. In terms of performance, we are bringing benchmark performance, including the brand new i6-2 Hurricane engine, but also in class-leading platforms with... best-in-class autonomies like the 680 kilometers range for the Stella-M platform. And I can tell you that some of the applications coming soon will cross the 700-kilometer line.

Speaker Change: Working on this for many years now.

Speaker Change: Like is very popular in terms of reducing the cost of it now we are ready for the fight and we believe that we have a good chance to win August side, because we have the technology, we have the products and we got to the airport.

Speaker Change: With profits this is important because it relates to the sustainability of our company.

Speaker Change: Himself performance, we are bringing benchmark performance.

Speaker Change: <unk> in the brand new I six two hurricane engine, but also in the class leading slot.

Speaker Change: Platforms with.

Speaker Change: Best in class autonomy is like the 680.

Speaker Change: Kilometers range for the seller platform and I can tell you that some of the applications coming soon we'll cross the 700 kilometers of lines. So it will be absolutely away from any kind of range anxiety syndromes in the micro power customers and of course, we are going to bring the range extender.

Carlos Tavares: So we'll be absolutely away from any kind of range anxiety syndrome in the minds of our customers. And, of course, we are going to bring the range extender versions, both for the RAM charger, but also for Jeep and Wagoneer applications. They will represent the perfect combination of the best of both worlds, a very significant range for those who want to enjoy long trips and, at the same time, the capability to use zero emission mobility for smaller trips in day-to-day commuting.

Speaker Change: The Russians both from the rents for the random children, but also from some Jeep wagoneer applications. They will represent the perfect.

Speaker Change: Perfect combination of the best Wells.

Speaker Change: Very significant range for those lots to enjoy long trips and at the same time, they get the ability to use zero emission mobility for smaller trips on the day by day commuting. This is going to be the perfect offering to accommodate the diverse needs of many of our customers last but not least.

Carlos Tavares: This is going to be the perfect offering to accommodate the diverse needs of many of our customers. Last but not least, in terms of productivity, our software division is becoming more and more efficient, not only with efficient and smart navigation systems like eRoute to support the EV trips but also the Connect Fleet services to support the fleet management of our customers. And last but not least, applications coming from chat GPT to make our services even more attractive.

Speaker Change: In terms of productivity, our software division is becoming more and more efficient not only with us, but efficient and smart navigation systems like your routes to support the easy trips, but also that connects sleek fleet services to support the fleet management.

Speaker Change: Our customers and last but not least applications.

Speaker Change: Coming from chat G P T to make.

Speaker Change: Our services, even more attractive overall, you'll have your four pillars of our technology.

Carlos Tavares: Overall, you have here four pillars of our technology, the foundation that each of the brands is using in a productive way to make our customers happy. If I move from here, now that I have explained to you what is ongoing in terms of a product blitz with no less than 20 products in 24, and the perfect convergence of several headwinds in a highly competitive market, I would like to comment on the regions, starting with the number one region in terms of concern, which is North America.

Speaker Change: Foundation that each of the brands is using in a productive way to make our customers happy.

Speaker Change: If I move from here now that I have explained to you.

Speaker Change: What is ongoing it's himself product Blitz with no less than 20 products in 'twenty four.

Speaker Change: And the perfect convergence of several headwinds in the highly competitive market I would like to come into the regions starting with the number one.

Speaker Change: In terms of concern to the North American one as you see we have lost a wide margin as a consequence of the hurdles that we faced our margins are down to 11, 4% you can see that our share is all slowed down to eight 2%, but in May and June.

Carlos Tavares: As you can see, we have lost AOI margin as a consequence of the hurdles that we have faced. Our margins are down to 11.4%. We see that our share is also down to 8.2%. But in May and June, against April, we were up 130 basis points in share, which means that something is moving there, and we think we can do better on the tactics and on the cost of those factors. And I'm sure that through your questions, I will have the opportunity to give you precise answers about what we found that went wrong.

Speaker Change: June against April we were up 130 points basis points off share, which means that something is moving there.

Speaker Change: It's not to move efficiently is the economic consequences of the marketing tactics and we think we can do better on the tactics and on the cost of those tactics and I'm sure that through your questions I would have the opportunity to give you precise answers about what did we find that that went wrong.

Speaker Change: And what are we doing today to fix it in the in the near term.

Carlos Tavares: And what are we doing today to fix it in the near term? That's for market share. We also see that in electrification, we are number one in PHEV sales, and we are number two in LEV cells in North America, and the LEV cells are up 27%, which means that growing by 27% our LED cells just demonstrates that our technology here, mostly the 4 by E technology, is being recognized by consumers, and that's a very good thing for the credibility of our technology.

Speaker Change: That's for the market share. We also see that in electrification we are number one in <unk>.

Speaker Change: Achieving sales and we are number two in their leave yourselves in North America.

Speaker Change: And the LTV sales are up 27%.

Speaker Change: Which means that's growing by 27% our LTV cells just demonstrates that.

Speaker Change: Our technology here, mostly full by E technology is being recognized by the consumers and that's a very good thing for the credibility of our technology.

Carlos Tavares: We are also recognizing that we are in a transitional period, which is not easy because we are introducing new technologies and electrified technologies. As such, the discontinuation of a certain number of vehicles over the last month represents no less than 100,000 units of shipments that we have lost. As a consequence of those discontinuations, of course, those discontinuations are going to vanish as we are launching the new products, but it is one of the reasons why we suffered in the first half.

Speaker Change: We are also recognizing that we are in a transitional periods.

She is not easy because we are introducing.

Speaker Change: New technologies in an electrified technologies as such the discontinuation of a certain number of vehicles.

Speaker Change: Over the last months represents no less than 100000 units of shipments that we have lost.

Speaker Change: Sequence of those discontinuation.

Speaker Change: Of course, those things cause discontinuation is all going to vanish as we are launching the new products, but is one of the reasons why we started on the first on the first half hour.

Carlos Tavares: Our brand equity remains very strong. And this is, by the way, what the dealers are telling me. And as an evidence of that, Ram has been awarded number one in the GD Power 2024 U.S. initial quality study. It has been the case four times over the last five years we have been on the podium, and two times over the last five years we have been number one.

Speaker Change: Our brand equity remains very strong.

Speaker Change: And this is by the way what the dealers are telling me and as an evidence of that ramp has been awarded a number one in the J D power 2024 U S initial quality study.

This is important to notice it has been the case four times over the last five years, we were on the podium.

Speaker Change: And two times over the last five years, we were number one.

Carlos Tavares: So our brand equity on the RAM pickup truck brand is very, very strong, and it is a big foundation on which we can build the future. If we look at Jeep, Jeep has been awarded the most patriotic brand for the 23rd year in a row, and that is very meaningful to the heart of our U.S. consumers. We keep on fueling that, we keep on nurturing that, and what you are going to see with the Jeep Wagon RS and with the Jeep Rekon is evidence of that focus, total focus on the U.S. market expectation.

Speaker Change: Our brand equity on the Ram pickup truck brands is very very strong.

Speaker Change: He is a big foundation on which we can build.

Speaker Change: Future.

Speaker Change: If we look at Jeep Jeep has been awarded the most patriotic brand for the 23rd year in a row and that is very meaningful to the heart of all U S. Consumers. We keep on that's fueling that we keep on nurturing that and what youre going to see with a Jeep Wagga nurse and we did achieve record is.

Speaker Change: Evidence of that.

Speaker Change: Total focus on the U S market expectations.

Carlos Tavares: Last but not least, we are addressing the commercial challenges. What I can tell you at this stage is that, from my own personal studies with the dealers and with our teams in the U.S., that the way we have been managing the purchase funnel is suboptimal, and a certain number of flaws have been identified in the way we are managing the purchase funnel for our U.S. sales. That is clear. This is what we are now addressing in terms of countermeasures. We believe that we have the right diagnosis.

Speaker Change: But not least we are addressing the commercial challenges, but what I can tell you at this stage is that.

Speaker Change: It is quite obvious from my own personal studies with the deal.

Speaker Change: And with our teams in the U S. That's the way we have been managing the purchase funnel.

Speaker Change: Is sub optimal.

Speaker Change: I spoke to another all floors have been identified in the way we are managing the purchase funnel of our U S sales that is clear.

Speaker Change: What we are now addressing its himself control measure we believe that we have the right diagnosis, we need to make sure that we have the right answer both in terms of marketing tactics and of course, you know cost consequences to generate the appropriate profitability.

Carlos Tavares: We need to make sure that we have the right answer, both in terms of marketing tactics and, of course, in cost consequences to generate the appropriate profitability. This is what I can tell you about the North American market so far. I'm sure I will come back to this at a later stage.

Speaker Change: What I can tell you for the North American market, So far I'm sure I will come back to this.

Speaker Change: The late at the later stage.

Carlos Tavares: One of the things that we need to say here is that the major topic to be addressed is, of course, the inventory. This is what you have been highlighting, and rightly so. By the end of June, we are at 94 days of supply.

Speaker Change: But if there's things that we need to say here is that.

Speaker Change: The nature topics to be addressed as of course the inventory.

Speaker Change: This is what you have been highlighting and rightly so.

Speaker Change: By the end of June we are at 94 days of supply.

Carlos Tavares: Quite similar to our closest U.S. competitor, 10 ballparks of inventory, but still twice as much. And this is what we are now addressing. We are going to work on three different directions. One is to make sure that we are aligning, are production planning, who the market maker, and we see that what we have in inventory is not always aligned with what the market mix requires. That means that we need to make sure that we bring all the versions that the market is asking for from us, and the perfect example is the new RAM 1500. The DT version where some of the highest output versions were not available; some of the highest stream levels were not available at the right timing.

Speaker Change: Quite similar to our closest U S competitor there.

Speaker Change: Same ballpark of the inventory, but seal twice and this is what we are now addressing but we see that.

Speaker Change: We are going to work on screen.

Speaker Change: The directions.

Speaker Change: Once one is to make sure that.

Speaker Change: We are aligning.

Speaker Change: Our production planning mix.

The market mix and we see that what we have in inventory is not always aligned with what the market requires.

Speaker Change: That means that we need to make sure that we bring all the versions.

Speaker Change: That's the market is asking from us.

Speaker Change: And the Perfect example is the new run 15 hundreds.

Speaker Change: D G 's auction, where some of the highest occupancy versus we're not available some of the highest trim levels will not available and the right timing.

Carlos Tavares: This has created a distortion in the inventories that are ticking. And this is what we are correcting right now, now that we have validated all the versions that we need to make the market response more appropriate. We are, of course, looking at the incentives and any price adjustments that will be eventually needed. There is no dogmatism in our approach.

Speaker Change: <unk> created a distortion.

Speaker Change: In the inventories that are sticky and this is what we are correcting right now.

Speaker Change: We have validated all the versions that we need to make.

Speaker Change: The market response to be more appropriate.

Speaker Change: We are of course looking at the.

Speaker Change: The incentives and any twice.

Speaker Change: Price adjustments that will be eventually needed.

Speaker Change: There is no dogmatism.

Speaker Change: In our approach.

Carlos Tavares: There is just a sense that we need to take care of spending your money in the appropriate way. What we have seen so far... from what we are told by the dealers, is that once the customers reach the showroom, The conversion rate in the showroom is excellent, which means the conversion rate we have in the showroom is meeting the expectations of our dealers because they tell me that the product is appealing, the product is great, and we have just to make sure that we have more people that go through the door. So the conversion rate in the showroom is considered by our dealers as being the right one and even a good one. What is not good right now is that we are not generating enough leads.

Speaker Change: That is just the sense that we need to take care of spending your money in the appropriate way, what we have seen so far.

Speaker Change: From what we are told by the dealers is that once the customers reached the shore.

The conversion rate in the showroom.

Speaker Change: Excellent.

Speaker Change: Which means the conversion rates, we have in the film.

Speaker Change: Is meeting the expectations of our dealers because they tell me that the product is appealing.

Speaker Change: It is great.

Speaker Change: We have just to make sure that we have more people that go through the door.

Speaker Change: So the conversion rate in the showroom is considered by our dealers.

Speaker Change: Being the right one and even the goosebumps.

Carlos Tavares: When we look at the purchase funnel and we try to understand why we are not generating enough leads, we come up with two clear trailers that we need to, And then the one is to make sure that the floor of the purchase funnel where we have the strongest bottleneck needs to be unlocked with a specific lateral marketing activity to unlock the bottleneck that we have in the purchase funnel. Each brand, each American brand has its own. Locked at one point of the Petrus funnel.

Speaker Change: What is not good right now is that we are not generating enough fleets.

Speaker Change: When we look at the purchase funnel and we tried to understand why we are not generating enough fleets, we come up with to clear.

Speaker Change: Failures that we need to fix and number one is to make sure that.

Speaker Change: The floor of the places on the web we have the strongest bottleneck need.

Speaker Change: It needs to be unlocked with the specific lateral marketing activity to unlock the bottleneck that we are in the purchase funnel each brand each American brand as its own.

Carlos Tavares: That lock needs to be unlocked. It's like taking off your tie to breathe better. You need to take that tie off.

Speaker Change: At one point off the purchase funnel that lock needs to be unlocked, it's like taking off your tie to greet debtors you need to take that off and I ask all brand seals.

Carlos Tavares: And I have asked our brand CEO to find a way to unlock the lowest conversion rate at the appropriate floor of the purchase funnel for each of those brands, and that lock is different from one brand to the next. That is obvious, and this is now something that we are preparing for. The other thing we have discovered, which is, I think, very interesting, and I would like to thank our teams and our dealers for pointing that fact out, is that we see that when you increase the share of voice, and we did so.

Speaker Change: And out of way to unlock the lowest conversion rates.

Speaker Change: The appropriate floor of the purchase funnel of each of those events and that block is different from one brand to the other brands that is August and this is now something that we are preparing for the other thing we have discovered which is I think very interesting and I would like to think.

Speaker Change: Our teams and our dealers for pointing out that fact is that we see that when you increase the share of voice and we did so when.

Carlos Tavares: When we increase the share of voice, and we fill the processing funnel with more prosperity, we see an abnormal rate of people that opt out of the journey very soon in the purchase. And why are they opting out as we are bringing more prospects to a higher share of voice? They are opting out because the initial... The initial offerings are sort of. Many offerings are just showing the sticker price, but they are not showing.

Speaker Change: When we increase the share of voice and we feel.

Speaker Change: The precision persisting funnel with more prospects, we see an abnormal rate of people that.

Speaker Change: Out of the journey very soon in the purchase funnel and.

Speaker Change: And why are they opting out as we are bringing more prospects were higher share of voice they are opting out.

Speaker Change: Cause the initial.

Speaker Change: The initial.

Speaker Change: Offerings are.

Speaker Change: Optimal many offerings are just showing the sticker price, but they are not showing.

Carlos Tavares: The commercial offers that we add to the sticker price, for instance, an attractive APR or even any kind of discount. And as we are only showing the sticker price, in some cases, our sticker price happens to be higher than the competition, but of course, the sweeteners are here to make that acceptable for the consumer. So we see that we are having an abnormal number of prospects that are opting out of the purchase funnel at the beginning of the journey because we are not bringing the sweetener strong enough and soon enough in the process to keep them engaged. That's an obvious flaw.

Speaker Change: Commercial offers that really adds to the sticker price for instance, an attractive a PR or even any kind of discounts and as we are only showing the sticker price in some cases of sticker price happens to be higher than the competition, but of course, the sweeteners are here to make that to accept them.

Speaker Change: For the consumer so we see that we are having an abnormal number of prospects that are opting out of the purchase funnel at the beginning of the journey because we are not bringing the sweetener.

Speaker Change: It's long enough and.

Speaker Change: Soon enough in the process to keep them engaged that's an obvious flaw.

Carlos Tavares: The other one is that we are not unlocking the lowest conversion rate of the funnel, and that needs a specific market. These are some of the things that... We have seen. As I said, we are not dogmatic. We will adjust it as it should be to make the metal flow. And this is going to be something that we conclude very soon, as soon as we have all the diagnosis and the appropriate proposal. I will go to the U.S. in the next couple of weeks.

Speaker Change: One is that we are not unlocking the lowest conversion rate of the funnel and that needs to specific marketing plans.

Speaker Change: Some of the things that's.

Speaker Change: We have seen.

Speaker Change: As I said, we're not dogmatic, we'll adjust as it should be.

Speaker Change: To make the metal flow and this is going to be something that we are going to conclude very soon as soon as we have all the diagnosis and the appropriate.

Speaker Change: Appropriate proposals I will go to the U S. In the next couple of weeks.

Carlos Tavares: I will spend time with my U.S. teams so that together we find the most appropriate reaction to the inventory problem that was fixed in Europe but not in the U.S., and this is going to be the number one priority moving forward. If we go to the product portfolio, then we have the BV Offensive. That's obvious from the products I have already commented on, both Jeep and Ram.

Speaker Change: Tying in with my U S teams, so that together, we find the most appropriate reaction to.

Speaker Change: The inventory problems that was fixed in Europe, but not the U S. And this is going to be the number one priority moving forward.

Speaker Change: If we go to the product portfolio than we have.

Speaker Change: The divi offensive that's obvious from the products I have already commented.

Speaker Change: On Jeep and Ram.

Carlos Tavares: I already said that we are now bringing all the trims, all the engines, including the ICEs that are requested by the market, starting with the high output engines. And, of course, we are preparing for this fantastic. Charger that is going to be absolutely aligned with the brand positioning of Dodge. A lot of torque, a lot of power, fantastic agility, both ICE and DEV, and of course, both two and four doors at one point in time.

Speaker Change: I already said that we are now bringing to ramp all the trains older engines, including the Ics that are requested by the market starting with a high output engines and of course, we are preparing for this fantastic Dutch.

Speaker Change: Charger that is going to be absolutely.

Absolutely aligned with the brand positioning of <unk>.

Speaker Change: A lot of talk out of power fantastic agility, both ice and deaths and of course the bulk.

Speaker Change: Two and four doors at one point in time, and we will bring back a jeep mid sized SUV.

Carlos Tavares: And we will bring back a Jeep mid-size SUV in 2025. We are now preparing for that, and that, of course, will help to have better coverage of the market. Last but not least, we'll keep on reducing the cost to make sure that we create room, in terms of margin protection, to give back to the market what the market needs to absorb more of our products. We will continue to adjust the capacity, and we may have to do some of these things.

Speaker Change: Five we are now preparing for that and that of course will have helped to have a better coverage of the market last but not least we will keep on reducing the costs.

Speaker Change: Make sure that we create room.

Speaker Change: In terms of the margin protection.

Speaker Change: Protection to give back to the market what the market needs to absorb more of our products. We will continue to adjust our capacity and we may have to do some of this because some of our inventory is going to sell down naturally, but some of that inventory as it been built as a bridging to the nuts.

Carlos Tavares: Because some of our inventory is going to sell down naturally, but some of that inventory has been built as a bridge to the new generation models, which is the case for the Dodge Charger and Challenger. On purpose, we had built a significant inventory just to bridge with the new generation; those models are going to sell down. We also had a problem, as I said, in aligning the production mix to the market mix with a light-duty pickup truck.

Speaker Change: Net the new generation model, which is the case of Dodge Charger and challenger on purpose, we had built a significant.

Speaker Change: Inventory just to bridge with a new generation.

Carlos Tavares: We are now fixing that, and we stopped the plant for a few weeks to make sure that we bring everything we need for the electrified versions of the RAM pickup truck, like the REV and the RAM charger.

Speaker Change: Those models are going to sell down.

Speaker Change: We also had a problem as I said in aligning the production mix to the market mix with the light duty pickup truck.

Speaker Change: We are now fixing that and we stopped the plant for a few weeks.

Speaker Change: We'll make sure that we bring everything we need for the electric versions of the Ram pickup truck like the Red and the Ram Charger.

Carlos Tavares: This is something we will do, and we will do more if it is needed, just to adjust to the reality. In the meantime, we are also progressing on the best cost country content for the parts we buy because we need to generate more cost reduction to give back to the market what the market needs while protecting the margins of our business. So these are some of the actions that we are now preparing for and will do in the next few weeks with our North American team.

Speaker Change: This is something we will do and we will do more if it is needed just to adjust to the reality.

Speaker Change: In the Meanwhile, we are also progressing on the best cost country content for the parts, we buy because we need to generate more cost reductions to give back to the market what the market needs, while protecting the margins of our business.

Speaker Change: So these are some of the actions that we are now preparing for the next few weeks.

Speaker Change: With our North American team, we will be deciding most of these actions if not all to.

Carlos Tavares: We will be deciding most of these actions, if not all, to fix the inventory issue in North America that we fully recognize and that we are going to fix as our number one priority moving forward. If we go to a large rural area, Inaugural is now under the heavy pressure of the Chinese offensive, a highly competitive market with pressure from the Chinese car makers, but not only, but also facing a slowdown in BEV demand, that has, of course, made the business even more challenging.

Speaker Change: To fix the inventory issue of North America that we fully recognize that we are going to fix as our number one priority moving forward.

Speaker Change: If we go to enlarge fuels.

Speaker Change: In Algeria is now under the heavy pressure of the Chinese.

Speaker Change: Chinese offensive.

Speaker Change: Highly competitive markets with the pressure from the Chinese carmakers, but not only.

Speaker Change: Also facing a slowdown in BV demands that.

Speaker Change: That is of course make the business even more challenging so it's the perfect combination of.

Carlos Tavares: So it's a perfect combination of customers hesitating on the easy purchasing decision and the arrival of a very strong Chinese offensive. This overall very, very challenging environment has created a Payne on the AOA margin, which is down to 6.9.

Speaker Change: Customers educating on the EV.

Speaker Change: <unk> decision and.

Speaker Change: The arrival of a very strong Chinese offensive. This overall very very challenging environment as a created.

Speaker Change: On the aggregate margin, which is down to $6 nine.

Speaker Change: We also done on the share by 80 basis points year over year, but comparing each one 2020 428 to 2023.

Carlos Tavares: We are also down on the share by 80 basis points year-over-year, but comparing H1 2024 to H2 2023, we are up by 60 basis points. In the meantime, we have reduced inventory by no less than 40%, and days of sales are down to 64 days. We consider that the inventory is now normalized, and that we have, to a certain extent, stabilized. Thomas Houchois, George Galliers, Daniel Roeska, Hanna Cresswell, Daniel Dossena, Bruno Dossena, the Junior from Alfa Romeo, the new Lancia, the new Opel Frontera, the new Fiat Panda.

Speaker Change: By 60 basis points in the Meanwhile.

Speaker Change: We have reduced inventory by no less than 40%.

Speaker Change: Days of sales down to 64 days, we considered that the inventory is now normalized and that we are off to a certain extent copied ice.

Speaker Change: Not to say that we should not the law just to say that the situation is from my perspective stabilize and as we are bringing a very significant.

Speaker Change: Product Blitz suite of high volume models.

Speaker Change: 2000 and eighths.

Junior: Junior from offer of mail.

Speaker Change: New Landshark that you will pull from Tara then.

Speaker Change: New Fiat Panda all of this is growing of course puts us in a much better position to gain profitable share.

Carlos Tavares: All of this is going, of course, to put us in a much better position to gain profitable share. I believe that this is going to work as we have stabilized the most difficult point of this transition for European business. Not to say that it's not a challenging market. It will continue to be a challenging market, and, most probably, it will be even more challenging in the future. But we are ready for the fight. In the meantime, we keep on having leadership in the LCVs, and the good thing will come on the next slide, which is that we are now number one. LTV seller in Africa and the Middle East.

Speaker Change: I believe that this is going to work.

Speaker Change: We have stabilized the most difficult point of this transition for the European business not to say that it's not that challenging market. It will continue to be a challenging market and most probably it will be even more challenging in the future, but we are ready for the fight in the Meanwhile, we keep we keep on having the leadership.

Speaker Change: In our in the Ltvs and the good thing will come on the next slides.

Speaker Change: Which is that we are now number one.

Speaker Change: L C V seller in Africa Middle East.

Carlos Tavares: Which means that in the LCV business, we are number one in the Middle East and Africa, we are number one in South America, and we are number one in Europe. So, in three of our six regions, around the world, we are number one. And, of course, this is good for business. This is good for volumes. This is good for everything.

Speaker Change: Which means that on the LCD business. We are number one in middle East and Africa. We are number one in South America, and we are number one in Europe.

Speaker Change: All three of our six regions.

Speaker Change: World, We are number one and of course. This is good for the business. This is good for the volume. This is good for everything.

Carlos Tavares: And I just would like to congratulate the Middle East and Africa team. They have done a wonderful job with a more than 20% AY margin, the most profitable region of the company. While we are facing some strong reactions from our competitors, as we are number 2 on the share chart, we keep on pushing, and we keep on moving. And it is fair to recognize that we have had some instability in Turkey and some administrative delays in Algeria. Had not we had those headwinds, the results would have been even better than they are already.

Speaker Change: I just would like to congratulate the middle East and Africa team. They have done a wonderful job with a more than 20% NOI margin. The most profitable region of the company.

Speaker Change: While we are facing some strong reaction from our competitors as we are number two on the share we keep on pushing and we keep on moving and it is fair to recognize that we had some instability in Turkey and some.

Speaker Change: Administrative delays in Algeria.

Speaker Change: Not we had those headwinds the results would have been even better than what they are already but we are a very of course are supportive of the 29% that we're marching off middle Eastern Africa.

Carlos Tavares: Another thing that we need to say is that, as we predicted and as we told you, The Third Engine, which is the combination of the Middle East and Africa, South America and India, and Asia Pacific, is now delivering a bigger profit than the European region. So, in fact, we have a third engine that is delivering its full power at the same level of profitability as Europe. Not to say that Europe should not do better, but still, this is the reason why we created this third engine, to reduce the risk coming from the business footprint, and we have it. We have it now, and we intend to continue to grow it profitably. South America has also done a fantastic job with a record AUI margin of 15.6%.

Speaker Change: Another thing that we need to say is that.

Speaker Change: As we predicted and as we told you.

Speaker Change: The third engine, which is the combination of needles, Eastern Africa, South America, and India and Asia Pacific.

Speaker Change: Is now delivering a bigger profits than the European region.

Speaker Change: So in fact, we have a third engine that is delivering its full power.

Speaker Change: Same level of profitability is Europe, not to say that Europe should not do better but still.

Speaker Change: Is there a reason why we created the third engine is to reduce the risk coming from the business footprint and we have it we have it now and we intend to continue to grow it profitably South America has also done a fantastic job with a record margin of 15, 6%.

Speaker Change: Yeah why is ups.

Carlos Tavares: VOA is up, as much as revenues are up in Middle Eastern Africa by 7%. We have strong leadership in automotive share and in brand leadership with Fiat. And we were able to grow our pickup sales, where we also lead by 25% thanks to the success of the rampage. So our lineup of pickup trucks in South America is getting bigger and bigger. And that supports profitability and that supports the market share leadership that we have in Latin America. In China and in the Asia-Pacific, a more difficult period, AOI at a little bit more than 5%.

Speaker Change: As much as the revenues or Middle East Africa by sort of a sense.

Speaker Change: We have a strong leadership team.

Speaker Change: In automotive share in the brand's leadership with Fiat.

Speaker Change: And we were able to grow.

Speaker Change: Pick up sells where we also lead by 25%. Thanks to the success of the rampage. So our lineup of pickup trucks in South America is getting bigger and bigger and that supports the profitability and that supports the market share leadership that we have in Latin America in Chile.

Speaker Change: In India Asia Pacific about difficult period, a wire.

Speaker Change: A little bit more than 5%.

Carlos Tavares: We see that we are increasingly using our sourcing of parts in those highly cost-competitive areas to protect the margins and give back to the market the affordability that the consumers are asking from us. While we do this, our regional presence is expanding thanks to the deployment of the smart car platform-based family on Citron, the C3, the EC3, now the C3 Aircross, and very soon, one more model in this family that I have already commented on.

Speaker Change: We see that we are using more and more.

Speaker Change: Our sourcing of parts in those highly cost competitive areas.

Speaker Change: Yes, and Oh, so China, and we see that this local sourcing is going to deliver for.

Speaker Change: For the next couple of years, a very significant contribution.

Speaker Change: Production cost reduction that we need.

Speaker Change: Take the margins and give back to the market the affordability that the consumers are asking from us.

Speaker Change: While we do this.

Speaker Change: So presence is expanding.

Speaker Change: Thanks to the deployment of the smart car platform based family owned citrus.

Speaker Change: Three the ECC now the C suite across and so very soon.

Speaker Change: Our model on this family that's already connected so we are now starting a new national sales company in Malaysia.

Carlos Tavares: So we are now starting a new national sales company in Malaysia, and the good news is that we have started selling products coming from India. If we go to the accretive market, accretive businesses, we see that financial services and independent aftermarket offenses are still on. We see that the results are very rewarding for financial services.

Speaker Change: And the good news is that we have started selling products coming from India in the Indonesian market starting with the BV.

Speaker Change: If we go to the accretive markets.

Speaker Change: Critics businesses, we see that are financial services and independent after market offenses are.

Speaker Change: We see that the results are very rewarding on the financial services. Our U S. Finkel is scaling up ahead of plan.

Carlos Tavares: Our U.S. FinCo is scaling up ahead of plan, more than $10 billion in receivables, which represents the target we had for ourselves in December. We are ahead of plan and delivering quite nicely. We also see that our leasing company is expanding in Europe and getting very close to the 1 million mark that we committed to in 26. We probably will achieve that sooner, and we are up 7% year over year in this period at $887,000, so we are very close to 1 million very soon. In Brazil, we now have a Finco which has all the products.

Speaker Change: More than $10 billion receivables, which represents the target we set for ourselves in December we are ahead of plan and delivering.

Speaker Change: Quite nicely, we also see that our leases leasing company is expanding in Europe, and getting very close to the 1 billion Mark that we committed to in 2006 was probably will achieve that sooner and we are up 7%.

Speaker Change: Year over year in the spirits at 880 centers thousands so very close to what meeting very soon.

Speaker Change: In Brazil.

Speaker Change: We have now a thing called <unk>, which has all the products.

Carlos Tavares: The receivables have doubled, and we see that our financial services are going, generally speaking, ahead of plan. And that's great news, given the way the markets are going. In terms of independent aftermarket business.

Speaker Change: Receivables of Dugald.

Speaker Change: And we see that our financial services are growing generally speaking ahead of plan and that's great news given the way the markets are going.

Speaker Change: In terms of independent after market.

Speaker Change: Business.

Carlos Tavares: 27% of sales growth year over year. And this is the combination of organic growth and also M&A with the acquisition of DePasquale in South America. All of this has delivered a 17% increase in private label sales. So 27% of sales growth for our independent aftermarket offensive, which meets perfectly the expectations of our middle class consumers. We see that our multi-brand offering, in terms of products, is also growing, and we now cover 90% of the vehicles in operation for the high-turnover parts, which means 90% coverage means not only, of course, Stellantis parts but also the parts of our competitors, which means that we do business independently of the brand, and we are now offering our independent repairers a very nice portfolio of products that they can use for their daily business with a very high level Last but not least, our affiliate network, the Europar.

Speaker Change: 27% of sales growth year over year.

Speaker Change: And this is the combination of organic growth and also of M&A with the acquisition of the basketball in South America.

Speaker Change: This has delivered a 17% increase in private label sales, so 27% of sales growth for our independent aftermarket offensive, which meets perfectly the expectations of our middle class consumers, we see that our multi brand offering in terms of products.

Speaker Change: Also are growing and we now cover.

Speaker Change: 90% of the vehicles in operation for the heightened over thoughts, which means 90% coverage means not only of course, the certainties thoughts, but also the thoughts of our competitors, which means that we are making business independently of the brands and we are now.

Speaker Change: Offering to our independence.

Speaker Change #104: Terrorists, a very nice portfolio of products that they can use for their daily business with a very high level of customer service.

Speaker Change: But not least our affiliate network Euro parks.

Speaker Change: Got service network cost service is also growing and growing profitably in the business is up.

Carlos Tavares: Car Service Network Car Service is also growing and growing profitably; the business is up. We see that we have reached the 6500 garage mark worldwide. I call it the fast sister; business is growing.

Speaker Change #100: We see that we have reached the 6500 garage mark worldwide.

Speaker Change: We call it the fastest Vista.

Carlos Tavares: It is highly profitable. We are already number three in Latin America and level three in Europe, and it's moving in the right direction, we believe. It's a good way to capture a bigger piece of value from customers that do not go to our brand dealerships, and this strategy is delivering results. From here, I would like to hand over to our CFO, Natalie Knight. She will comment on the detailed financial results. Natalie, the floor is yours.

Speaker Change: Business is growing it is highly profitable we are already number three in Latin American led the three groups and it's moving in the right direction. We believe it's a good way to capture a bigger piece of value.

Speaker Change: Some customers that did not go through our brand dealerships and this strategy is delivering results.

Natalie M. Knight: From here I would like to hand over to our CFO Natalie Knight. She will commit to you the detailed financial results not read the floor is yours.

Natalie M. Knight: I really complement the operational outlook, we've heard from Carlos today with five key metrics that really capture the big developments you've seen in our business over the last six months I'll start with the consolidated shipments which were down 10% in the first half at $2 9 million vehicles.

Natalie M. Knight: Thanks, Carlos. I want to complement the operational outlook we've heard from Carlos today with five key metrics that really capture the big developments that you've seen in our business over the last... I'll start with the consolidated shipments, which were down 10% in the first half at 2.9 million vehicles. Next, we've got our net revenues, which came in at 85 billion euros and declined 14% as the mix of lower shipments, FX, and mix also worked against that.

Speaker Change #101: Next we've got our net revenues, which came in at 85 billion Euro and declined 14% as the next lowest shipments FX and mix also worked against US Andi Eli might change you saw 10%. This is tracking at the low end right in line with our full year guidance and it's down.

Natalie M. Knight: On the AOI margin, you saw 10 percent. This is tracking at the low end, but right in line with our four-year guidance. And it's down, obviously, versus H1-23, that record 14.4 percent we had achieved. We've also included a new KPI for you here, the Adjusted Diluted EPS. This was 236 euros during the period. It's down 35%. But that is favorable to our

Speaker Change: Honestly the persons each 123 that record 14, 4% we can achieve.

Speaker Change: We've also included a new Kpis for you here the adjusted diluted EPS. This is 236 and euro during the period down 35%, but that is favorable.

Speaker Change: And that's basically due to the 4% reduction in our shares we were able to take training periods because of our share buybacks.

Natalie M. Knight: And that's basically due to the 4% reduction in our shares that we were able to take during the period because of our share buyback. Lastly, I want to talk about industrial free cash flow. This is something you can see came in at a negative 0.4 billion euros. This reflects the lower ALI, our investment timing, and, of course, the first half of 2024, which was really heavy with fluctuations in working capital and our investment.

Speaker Change #103: Lastly, I wanted to talk about industrial free cash flow. This is something he came in at a negative 0.4 billion Euro. This reflects the lower yellow ally our investment timing and of course, the first half of 'twenty 'twenty, four which was really heavy with fluctuations in working capital and our investments.

Natalie M. Knight: Now I'll talk about each of these in a little more detail, starting with revenue. If you look here, you see the 14% decline I mentioned for the first six months of the year. The biggest driver by far is volume and mix, which were driven by revenue headwinds, and part of that was driven really by lower ship prices. When we look at the 10% shipment and volume decline, there's three things that stand out to me.

Speaker Change #102: Now I'll talk about each of these in a little more detail starting with revenue. If you look here you can see the 14% decline I mentioned for the first six months of the year. The biggest driver by far is the volume mix, which were driven by revenue headwinds and part of that driven really by the lower shipments when we look at the 10 per short ton.

Speaker Change #102: <unk> shipment volume decline and there's three things that stand out to me first is when we look at North America. The declines were relatively higher versus other regions and that also plays a double whammy on us in terms of.

Natalie M. Knight: First, when we look at North America, the declines were relatively higher versus other regions. And that also plays a double whammy on us in terms of because those products have a higher ASP, it also impacts the mix of the... Second, we really have made strong improvements in our inventory in the first half of the year versus the end of the year versus that same period last year. So if you compare it to March, it's pretty stable.

Speaker Change: Because those products have a higher ASP. It also impacts the mix of the business.

Speaker Change: Second is we really have made strong improvements in our inventory in the first half of the year versus the end of the year versus that same period last year.

Speaker Change: You compare it to March it's pretty stable, but when we look at it versus the ended the year you can see about a 50000 chest and this is something that in contrast to that 20% build it we had going last year also impacted the volumes.

Natalie M. Knight: But when we look at it versus the end of the year, you see about a 50,000 shift. And this, in contrast to that 28% build that we had going last year, also impacts volume. Lastly, on this point, as Carlos mentioned, we're operating a portfolio that's really enduring some temporary product transition gaps. This is something of a headwind in North America alone.

Speaker Change: Lastly on this point as Carlos mentioned, we're operating a portfolio that's really enduring some temporary product transition gaps. This is something of a headwind in North America alone. It was over 100000 units in the first half of the year and we do believe that will be progressively reduced in the second half of the year and beyond.

Natalie M. Knight: It was over 100,000 units in the first half of the year, and we do believe that that will be progressively reduced in the second half of the year and beyond. I also want to talk about FX. It's not a huge item on the page, but you can see here that it had an impact of about 2% on our top line. This was driven primarily by the Turkish lira.

Speaker Change: Thanks.

Speaker Change #107: I also wanted to talk about ethics, it's not a huge item on the page that you see here it had an impact of about 2% on our top line. This was driven primarily by the Turkish lira.

Speaker Change: Yeah.

Natalie M. Knight: Now I'll move on to the AOI. And on the AOI, what you see is that we came in at 8.5 billion euros. This is a significant decline versus our record H1 2023 results, but it's also something where, thanks to consistent cost reduction initiatives, we were able to continue to deliver double-digit AOI. Now I've covered volume, the mix, and the effects on the preceding slides, so here I'd like to just spend a moment talking about pricing.

Speaker Change #105: Now I'll move onto the ally and Aneel Island issues that we came in at $8 5 billion Euro Chris is a significant decline versus our record H one 'twenty between clean it out, but it's also something where thanks to consistent cost reaction initiatives, we were able to continue to deliver the double digit in your lives.

Speaker Change #105: Now, let's cover the volume the next the FX on the preceding slide so here I'd like to just spend a moment talking about pricing.

Natalie M. Knight: This was something that was marginally positive for us in the first half, but let me make clear this was because of the strong performance of the third engine market in both North America and Europe. However, pricing was negative.

Speaker Change #105: This was something that was marginally positive for us in the first half, but let me make clear. This is because of the strong performance of the third engine markets in both North America and Europe heightened.

Speaker Change: Yes.

Natalie M. Knight: When I come to a couple of other items on the chart, first starting with the industrial cost, you see that it was about 159 million euros higher than it had been in the prior year. This was despite lower raw material costs and logistics expenses, but those were offset by, on the one hand, higher warranty costs, but, in particular, just higher manufacturing fixed costs against lower volume environments. SG&A is something that improved during the period based on our ongoing cost measures, and our R&D declined by $133 million year over year.

Speaker Change: When I come to a couple of the other items on the chart first starting with the industrial costs you see that it was about 159 million hero and higher than it had been in the prior year. This is despite lower raw material costs and logistics expenses, but those were offset by on one hand.

Speaker Change: Higher warranty cost, but in particular, just higher manufacturing fixed cost against lower volume environment.

Speaker Change: SG&A is something that improved during the period based on our ongoing cost measures and R&D declined by $133 million year over year.

Speaker Change: I'll now move on to our inventory. This is a spot where I do think we're making good progress versus where we thing and in the last year. Our inventories were reduced by 51000 units or 3% at the end of June compared to the end of 'twenty three.

Natalie M. Knight: I'll now move on to our inventory. This is a spot where I do think we're making good progress versus where we were in the last year. Our inventories were reduced by 51,000 units or 3% at the end of June compared to the end of last year. And this was really driven by progress on the European side. Our inventories in Europe were reduced significantly during the period.

Speaker Change: And this was really driven by progress on the European side, our inventories in Europe.

Speaker Change: He is significantly in the period. This is due to improving outbound logistics lower production and it allowed us to exit the first half at a healthy level of days of sales in the mid sixties about 64 I believe.

Natalie M. Knight: This is due to improving outbound logistics and lower production. In contrast, if you look at the U.S., this is a spot where our days of sales are still over 90, despite the fact that we have come down from our April peak; it's still an area where we clearly have work to do in the region. In the second half, Carlos has already mentioned that we're going to be focusing on a variety of enhanced go-to-market initiatives that we'll be implementing in the U.S., but I want to also emphasize the fact that we will take a strong hand in terms of our production.

Speaker Change: In contrast, if you look at the U S. This is a spot where our days of sales are still over 90. Despite the fact that we have come down from our April peak, it's still an area, where we clearly have work to do them in the region.

Carlos: In the second half Carlos has already mentioned that we're going to be focusing on a variety of enhanced go to market initiatives and that will be implementing in the U S. But I want to focus all of a sudden the fact that we will take a strong hand in terms of our production, we will be reducing at least a thousand units and that in the third quarter and that's.

Natalie M. Knight: We will be reducing at least 1,000 units in the third quarter, and that's something that is important in terms of how we think about the phasing of the second half of the year as well. Let me now focus on free cash flow. I know this has been a hot topic today and definitely, for me, the most disappointing performance metric of the first half. It's a spot where we came in close to zero. Yes, there was a negative 0.4 billion.

Speaker Change: Something that is important in terms of how we think about the phasing of that second half of the year as well.

Speaker Change #106: And let me now focus on the free cash flow I know this has been a hot topic today and definitely for me. The most disappointing performance metric of the first half it's a spot where we came in close to zero, yes, there was a negative.

Speaker Change #106: <unk> 4 billion, that's really the result of a.

Natalie M. Knight: That's really the result of a cutoff issue related to the end of the period. So we have about 800 million euros that came in right at the beginning of July that will help us as we start the second half. Regardless, though, the first half of 2024 presented a stark contrast to the success that we saw in 2023 when we had a record free cash flow of 8.7 billion euros. So, as previously discussed, obviously, UCAOI was the biggest driver with a $5 billion decline.

Speaker Change #106: Cut off issues related to the end of the period. So we have about 800 million euros. It came in right at the beginning of July that help us as we start into the second half.

Speaker Change #106: Regardless, though the first half of 'twenty 'twenty four presented a stark contrast to the success that we saw in 2023, when we had a record free cash flow of $8 7 billion euros.

Speaker Change #109: So as previously discussed obviously you see a lie.

Speaker Change #109: The biggest driver with a 5 billion decline.

Natalie M. Knight: But the bridge on the industrial AOI to the free cash flow says there are two other big items that played and had an impact. First, there was nearly a $2 billion increase in our investment spend. This mainly is a result of the busy new product launch calendar that we have in the first half, but also the cash that we invested in our battery manufacturing JVs played a big role. Second, the other piece that I think you can see very clearly on the page is working capital.

Speaker Change #112: Rich on the industrial ally to the free cash flow says there's two other big items that had an impact first is there was nearly 2 billion increase in our investments and this mainly as a result of the busy new product launch calendar that we have in the first half, but also the cash that we invested in our battery manufacturing.

Speaker Change #108: He has played a big loss.

Speaker Change #114: I think the other piece that I think can see very clearly on the page is working capital here. There are two important impacts to now one as a result of our improving inventory position and that brings unfortunately with it and impact on sales provisions, which was a big swing in the period and secondly is the fact that we had lower.

Natalie M. Knight: Here, there are two important impacts to note. One is a result of our improving inventory provision, and that brings, unfortunately, with it an impact on sales provisions, which was a big swing in the period. And secondly, is the fact that we had lower production in the period, which led to lower pay. As I look at this next chart, you see a really a roundup of all of our key IFRS KPIs. But the ones, there are a few here I'd like to talk about that really jump out to me in particular.

Speaker Change #114: In the period, which led to lower payables.

Speaker Change #106: As I look at this next chart you see here really a round up of all of our key I FRS kpis and but the ones. There are few here I'd like to talk about that really jumped out to me in particular.

Natalie M. Knight: The first one is, if you look at our operating income, you see that it's down 50%. This reflects both the minus 40% of the AOI but also 1.8 billion in unusual charges. This relates largely to our restructuring efforts that are ongoing in Europe, but also a 300 million charge related to resetting the Maserati business plan with an impairment on a platform. In addition, the other notable figure here is the net financial income, which you can see is up significantly. This is the spot where we benefited from higher interest on our cash holdings. The last line on this chart talks about our liquidity, and the available industrial liquidity came in at 54 billion euros.

Speaker Change #106: The first one is if you look at our operating income you see that it's down 50%. This reflects odd both the minus 40% of the ally, but also $1 8 billion in unusual charges.

Speaker Change #106: This relates largely to our restructuring efforts that are ongoing in Europe, but also a 300 million charge related to resetting the mountain motto. Randy. This is planned with an impairment on our platforms.

Speaker Change #106: Edition the other notable figure here is the net financial income that you see is up significantly. This is the spot where we benefited from higher interest on our cash holdings.

Randy: The last line on this chart is talks about our liquidity and the available industrial liquidity.

Natalie M. Knight: This is something at 31% of the trailing 12 month number from our net revenues. It's down a point from 2023, which shows we are moving closer to the guideline I gave you at our investor day in June of getting into that 25 to 30% range. So now let's review the capital returns for the period. This is something where, if you look at our activities, we've returned dividends of 4.7 billion euros. We started our share buyback, the big tranche, and took advantage of some of the weakness in the share price and have now already repurchased 2 billion euros to date.

Randy: It came in at 54 billion Euro this is something like 31% of the trailing 12 months.

Randy: Number from our net revenues is down a point from 2023, which shows we are moving closer to the guideline I gave you and at our Investor Day in June is getting into that 25% to 30% range.

Natalie M. Knight: As we look at the rest of the year, we remain fully committed to the 7.7 billion euro. As I mentioned at Investor Day, we really want to recognize that when we look at 2020-2024, we have a full year plan that gets us to the 7.7 billion euros. And as we look into 2025, we know that this is also something that continues to be important and something that we can fund, and something that you see in our dividend approach, where we have a policy of 25 to 30%.

Natalie M. Knight: And we've already committed, especially based on the lower AOI expectations, to go to the higher end of that dividend range for the next year. So, I'm going to wrap up my comments today by talking a bit about our outlook. When you look at the numbers here, there's one piece which is, I'll call it, the external side of our outlook.

Natalie M. Knight: That is something where we've moved from saying we think the revenue backdrop is supportive to neutral. This isn't about our businesses; this is just what we're seeing in the market, which is probably very low single-digit growth for the broader industry in a year that's being characterized by higher cost consciousness from the consumer and rising industry supply. When it comes to AOI, I want to emphasize that we are working very hard to continue to deliver an AOI of 10%.

Randy: This is just what we're saying is seeing in the market, which is probably very low single digit growth.

Speaker Change #106: For the broader industry in a year, that's being characterized by higher cost consciousness from the consumer and rising industry supply.

Carlos: When it comes to <unk> I want to emphasize that we are working very hard to continue to deliver an ally of 10%, but I also wanted to make sure. It's clear that even more important is that we're making sure that we're delivering the substantial progress on our operational improvement initiatives every can carlos talked about to make sure that we.

Natalie M. Knight: But I also want to make sure it's clear that even more important is that we make substantial progress on our operational improvement initiatives, everything Carlos talked about, to make sure that we normalize our U.S. inventories, that we improve our go-to-market effectiveness, and that we're driving a stronger business as we finish the year and go into 2025. I think it's important to say here also that we made tough decisions in the first half, and we will not hesitate to make them again in the second half, as that is needed.

Carlos: <unk>, where are you with inventories and we approve our go to market effectiveness that we're driving a stronger business as we finish the year and go into 'twenty five.

Speaker Change #106: I think it's important to say here also that we've made tough decisions in the first half and we will not hesitate to make them again in the second half as that isn't needed. We're confident that by doing so we can put a company an improved position for the rest of the year and on our journey for me therefore with 2030.

Natalie M. Knight: We're confident that by doing so, we can put the company in an improved position for the rest of the year and on our journey for DARE Forward 2030. The last area I want to share some thoughts on is free cash flow. I know this is a topic of lots of interest.

Speaker Change #106: The last area I want to share some thoughts on is the free cash flow I know this is the topic as I said lots of interests. We believe we will deliver and are confident in a positive result for the full year in the second half first and foremost that means we need to continue on our ally performance, which is obviously one of the best in the sector.

Natalie M. Knight: We believe we will deliver and are confident in a positive result for the full year and the second half. First and foremost, that means we need to continue with our AOI performance, which is obviously one of the best in the sector. But we also need to deliver further working capital normalization, and we believe that's very much in the cards. And also, as we look at reducing our investment spending in the second half compared with the first half, this is again something I called out to you early in the year. You'll see a reduction versus the first half of at least a billion euros.

Natalie M. Knight: So putting this all together, it's something that we believe sets us up for meaningful industrial free cash flow in the second half and a stronger position for the full year. The last thing I want to say on guidance is just to make sure that it's clear, given all these comments that we've talked about today, there will be a different split between Q3 and Q4 performance versus what you've seen in the last year.

Natalie M. Knight: In the last year, you'll remember that we had a relatively balanced split between Q3 and Q4, but this is not typical for our business. In Q3, we were building inventories ahead of the labor negotiations in North America, and then in the fourth quarter, we experienced significant strike disruption.

Natalie M. Knight: In 2024, you'll see us return to typical seasonality and then some, and that's because our North America inventory management and the product transition are going to have more negative impact in the third quarter. So just making sure that's noted. That concludes my finance comments for you today. I'll hand back to Carlos for some closing remarks. Thank you. Thank you, Natalie.

Carlos Tavares: Let's go back to our last investor day on June 13th, just to confirm some of the things we have told you. First of all, we believe that our differentiators against the rest of the industry are intact, and all of those differentiators will continue to form part of the road map that we need to execute to stay on the leading path of the industry in terms of profitability. We believe we have what we need, and so far, the double-digit margin seems to confirm that we are in the leading pack. In terms of challenges, we confirm our guidance. It has always been the case for our therefore 2030 strategic plan, double digit and positive free cash flow. This is what we are fighting for.

Speaker Change #106: <unk> that we need to execute to stay on the leading fast pack of the industry in terms of profitability. We believe we have what we need.

Speaker Change #106: And so far the double digit margins seems to confirm that we are on the leading pack in terms of challenges we confirm our guidance.

Speaker Change #106: It has been always the case for our therefore 2030 strategic plan double digits and positive free cash flow. This is what we are fighting for this is what we believe we can deliver.

Speaker Change #106: As we fix the operational flows that I was describing to you in terms of value creation, we will deliver on our commitments. That's a very simple statements that will be 11% annual return a year old.

Carlos Tavares: This is what we believe we can deliver as soon as we fix the operational flows that I was describing. In terms of value creation, we will deliver on our commitments. That's a very simple statement; that will be 11% annual return on yield. And in terms of technology, we are dedicating 60% of our investments to multi-energy and software-related technologies, which make the difference in the minds of our consumers. So if I step back... From this, which is fundamentally a confirmation of what was told to you on June the 13th, I will just add that if we step back significantly... I would say that in terms of inventory, Europe is 6th.

Speaker Change #106: And in terms of technology, we are dedicating 60% of our investments to multi energy in software related technologies, which makes a difference in the mind of our consumers. So if I step back.

Speaker Change #106: This which is fundamentally a confirmation of what has been told to you on June 13th I will just add that.

Speaker Change #116: If we step back significantly we could say that in terms of inventory you're at the sixth.

Carlos Tavares: The U.S. is on the way. We are now addressing it as the number one priority of the management team. This is what we are going to do in the next few weeks, in terms of understanding and triggering the right action. In terms of Europe, it is stabilized, and is a very, very challenging market with a strong Chinese offensive.

Speaker Change #116: U S is underway we are now addressing it as the number one priority of the management team.

Speaker Change #116: Is what we are going to do in the next few weeks in terms of understanding and treating the right actions.

Speaker Change #106: In terms of Europe It is stabilized.

Carlos Tavares: In addition to that, we have a specific problem to solve in the UK. The UK has shown to be, with the ZEV mandate, a very difficult market; the ZEV mandate is hurting our business model significantly, and this is triggering a strategic review of our business model, including the manufacturing footprint. We Cannot Accept

Speaker Change #106: Very very challenging market with a strong Chinese offensive.

Speaker Change #106: Addition to that we have a specific problem to solve in the U K.

Carlos Tavares: As we have two plants in the UK making BVs, and as the UK government is asking for more BVs, we cannot be in a position where our business model is damaged by the ZEF mandate, something that we have been discussing with the UK government, recognising that it changed a few weeks ago. I must say that we have had an intensive and productive dialogue. However, so far, we don't have the answers we need. We'll see what comes next.

Carlos Tavares: And I have decided to trigger a strategic review of our business model in the UK, because we cannot be making these in the UK and being the victims of the ZERF mandate. And, of course, everything we do will be done with our union partners, and this is always our way of doing things. That's the specific case for the UK.

Carlos Tavares: For Europe, we'll continue to keep our inventories under control, as they are today, and we'll make sure that we improve the efficiency and effectiveness of the business model, because, as you saw, it has been damaged over the last few weeks. The de-homologation process is moving properly ahead and delivering the expected approvals. We know that we will start selling the LEAP motorcars in September in Europe. We have already decided on several vehicle assemblies in Europe to face the tariffs and the local content that have been decided.

Speaker Change #106: In Europe, we have already decided.

Speaker Change #111: All right.

Speaker Change #111: He called assemblies in Europe, who face the tariffs and the local contents that are being decided.

Carlos Tavares: This is now already decided, and it is already being executed, and we expect to see the first benefits of this strategic move in September. And, as I said, the first shipment of 800 cars is now on the way from China to Europe. It is also clear that we are going to launch the product by the end of this year in nine European countries. We already have more than 200 sales points. And we believe, through the excitement of our leaders, that there will be much more than that. I would like to close this presentation with two happy moments, two celebrations. The first one with Chancellor Schultz in Rosh Hashanah was the 125th anniversary of Opel Automobile.

Speaker Change #111: It is now already decided already being executed and we expect to see the benefits of the strategic move from September.

Speaker Change #111: As I said the first shipment of 800 calls is now underway from China to Europe. It is also clear that we are going to launch.

Speaker Change #111: By the end of this year in nine European countries, we have already more than 200 sales points and.

Speaker Change #111: We believe through the excitement of ideas that there will be a much more than that.

Speaker Change #111: I would like to close this presentation with two happy moments.

Speaker Change #119: Two celebrations the first one with Chancellor thoughts in Osha time was the one in 25 years of Opel automobile.

Carlos Tavares: This is an acquisition that we made back in 2017. Thanks to the trust of Sensular Macro, it has worked perfectly, it is highly profitable, it is a cool brand, a modern brand focused on electrification. Things are moving well. Of course, we all have the ups and downs of the normal life of a brand. It's profitable. It's moving.

Speaker Change #134: This is an acquisition that we made back in 'twenty.

Speaker Change #111: 17.

Speaker Change #123: Thanks to the trust of sensor counselor macro it doesn't work perfectly is highly profitable is a cool brand and modern brands focus on electrification things.

Speaker Change #111: Things are moving well of course, we'll have that the ups and downs of the normal life of the offer.

Speaker Change #111: Brian It's profitable it's moving we created significant value since we made this acquisition in the 2017 and we were pleased to see that.

Carlos Tavares: We have created significant value since we made this acquisition in 2017. And we were pleased to see that the central shorts totally supported the direction in which we are moving with this brand. And we're happy to celebrate the 125 years of OPPO with him.

Speaker Change #132: Central assaults totally support the direction in which we are moving with this brand and we happy to celebrate the 125 years of Opal with him.

Speaker Change #113: It was quite clear that we will.

Carlos Tavares: That was quite clear. We will launch the new Frontera, both electric and hybrid. Very, very soon. The second happy moment was the celebration of the 126th anniversary of FIAT in Torino, here in Lingotto, which is an iconic place, as we all know, and this has been reinforced by the launch of the new Grand Panda, which is bringing back Fiat in the B-segment with a highly efficient product that is cost-competitive, affordable, and carries the best of Stellantis technology.

Speaker Change #117: Alongside the new frontier at both electric and hybrid.

Speaker Change #117: Soon second happy moments was the celebration of the 126th anniversary of fear.

Carlos Tavares: This is going to bring us the volumes and the profitability that the Fiat brand needs. And the Fiat brand is already the number one brand of Stellantis, with more than 1.35 million cars sold and with a growing profitability. That has been excellent work done by the brand team.

Carlos Tavares: I would like to conclude this presentation before we go to the Q&A with this slide. You have here the Fiat Grande Panda where we relaunch a Fiat icon for less than €25,000 for a pure BEV. We would like to confirm our double-digit AY margin. We would like to confirm our capital return as it has been committed. We are in a transition. A difficult period.

Carlos Tavares: We know less than 20 models will be launched this year. It's a transitional period. It's a period that has used up a lot of our resources. This is the reason why, in the past, you have seen us reasonably cautious in the way we manage all the returns, but you see that we can at the same time manage the returns to you, the capital returns, and at the same time bring the appropriate technology and the appropriate products to the markets.

Carlos Tavares: This is what we are doing. It's difficult. I would like to thank our team. They are doing an outstanding job, both at the top management level and all of our employees, our management lines. They are focused, they are working very hard. From time to time, they suffer, but they are holding on, and I would like to thank them and pay tribute to their courage, their focus, and their energy.

Carlos Tavares: This has been the strongest engine of this company. The people are the engine of this company. We know what the challenges are. We are taking action, not only on the operational floors but also on the marketing tactics, mostly in the U.S., and we will keep on fighting for you and delivering the best possible results within the commitments that we have already told you. Thank you very much.

Speaker Change #137: We know what the challenges are we are taking action not only on the operational flows but also on the marketing tactics, mostly in the U S and we will keep on fighting for you and delivering the best possible results within the commitments that we have already told you. Thank you very much let's go to the Q&A.

Unknown Executive: Let's go to the Q&A. Thank you. If you'd like to ask a question on today's call, please press star 1 on the telephone keypad. Everyone is limited to one question per call, and you may rejoin the queue for further questions.

Speaker Change #121: Thank you if.

Speaker Change #136: If you'd like to ask a question on todays call. Please press star one on your telephone keypad, everyone is limited to one question per time and you may rejoin the queue for further questions.

Speaker Change #113: Yeah.

Speaker Change #118: We will take our first question from George Gellius Goldman Sachs. Your line is open. Please go ahead.

George Anthony Galliers: We will take our first question from George Galliers, Goldman Sachs. Your line is open, please go ahead. Yeah, thank you for taking my question. The question I had was with respect to North American markets. When I looked at the market, I can observe that there have been two segments showing strong growth this year, which have been the compact and small SUV segments, where it looks like you're somewhat underrepresented with the Renegade, Compass, and Cherokee.

Speaker Change #113: Yeah.

George Anthony Galliers: Thank you for taking my question.

George Anthony Galliers: The question I had was with respect to the North American market when I look at the market.

Speaker Change #124: I can observe that there have been two segments showing strong growth this year, which had been the compact and small SUV segment, where it looks like you're somewhat under represented with the renegade the compass and Cherokee.

Carlos Tavares: Could you maybe talk? You mentioned in your opening remarks plans to bring a mid-size Jeep to the market. Do you have something to address this smaller market segment? And would there be any opportunity to bring the Jeep Avenger to the US? Or is that difficult to get homologated or simply not suitable?

Speaker Change #139: Could you maybe talk you mentioned in your opening remarks plans to bring a midsize cheap to the markets.

Speaker Change #115: Do you have something to address the smaller market segments and with the B any opportunity to bring the cheap Avengers in the U S or is that difficult to get from obligated or simply not feasible. Thank you.

Speaker Change #122: Well. Thank you George that's those are two excellent questions.

Carlos Tavares: Thank you. Well, thank you, George. Those are two excellent questions. Well, first of all, what you say is absolutely correct. One of the things we are missing right now in the US is the brand new Cherokee compact SUV.

Speaker Change #138: Of all our what you say is absolutely.

Speaker Change #115: Correct.

Speaker Change #115: The things we are missing right now in the U S is the brand new Cherokee.

Speaker Change #115: Compact SUV.

Speaker Change #115: We'll bring it into 2025.

Carlos Tavares: We will bring it in 2025, the Cherokee that will complement the Grand Cherokee. It's in the making, it's on the right track. So that's what we would call right now the white space, is going to be filled in 2025. And this is absolutely appropriate to highlight that myth.

Speaker Change #115: The Cherokee that flu complements the Grand Cherokee, it's making it's on the right track. So that's that's what we would call right now the white space is going to be filled in 'twenty five.

Speaker Change #115: And this is absolutely.

Speaker Change #115: Appropriate to highlight that that is a it's underway and it's going to be done.

Carlos Tavares: It's on the way, and it's going to be done in a very proper and exciting way, as they have seen the designs of this product. Secondly, no regrets on the renegade. The renegade was not making money.

Speaker Change #129: A very proper unexciting way I say I've seen the designs of these products.

Speaker Change #154: No regrets on the renegade the renegade was not making money.

Carlos Tavares: So no regrets on the Renegades. We are going to bring you a product that you would call the Renegade successor. So far, we have not yet decided what the name will be, but that will come in 26. And it will come with a customer structure and a cost structure that will make the model profitable. This is going to be the model that will be sold for $25,000 as an EV. It is benefiting from everything we have learned on the smart car platform families.

Speaker Change #115: So no regrets on the renegade.

Speaker Change #115: We are going to bring a product.

Speaker Change #115: That you would call the renegade successor.

Speaker Change #115: So far we have not yet decided what then would be but that will come in 'twenty six and it will come with a customer structure and a cost structure that will make the model.

Speaker Change #115: <unk>. This is going to be the model that will be sold at $25000 as an EV. It seemed to making it is benefiting from everything we have learned on the smart car platform families.

Carlos Tavares: And this product is going to bring them profitability and the price point of $25,000, and zero emission mobility. So the two points you address are absolutely those that we are working right now on. We agree with your point that Avenger has proven to be less attractive for the U.S. market.

Speaker Change #115: And this product is going to be bringing their profitability.

Speaker Change #128: The price points of $25000 and the zero emission mobility. That's 426. So the two points you address are absolutely those that we are working right now on we agree with your points Avenger as proven to be less attractive for the U S market.

Speaker Change #115: So we have decided to bring a venture to Latin America.

Carlos Tavares: So we have decided to bring Avenger to Latin America. Latin America is going to be the place where we introduce the Avenger very soon. It has already been decided a few months ago, and it will come, I believe, let's say within 18 months, as a Latin American version of a compact Jeep that will complement the Jeep Renegade that we already have in Latin America. So those are the things we are doing right now to address your very fair remarks. We will take our next question from Michael Jacks, Bank of America. Your line is open, please go ahead. Hi, good afternoon, everyone.

Speaker Change #125: Latin America is going to be the place where we are going to introduce the adventure very soon it has already been decided a few months ago and he will come I believe let's say within 18 months as a Latin American sourcing of compact Jeep that will complement the jeep renegade that we already have you know.

Speaker Change #125: In America. So those are the things we are doing right now to address your very fair remarks. Thank you George.

Speaker Change #115: Yeah.

Speaker Change #115: We will take our next question from Michael Jacks Bank of America. Your line is open. Please go ahead.

Michael Shawn Jacks: Thank you for taking my question as well. Carlos, unfortunately, I'm going to touch on one of your favorite topics again, pricing, but I can't help but notice the significant deterioration in pricing in Europe, North America, and South America in Q2. How much of this can we attribute to working through old model year inventories? And, you know, is this now the baseline that we should expect for the rest of the year? Are prices going to deteriorate further from this point? Or, you know, could there be a bit of a moderation in the coming quarters? Thank you. Well, thank you, Michael. You are right.

Michael Shawn Jacks: Hi, Good afternoon, everyone. Thank you for taking my question as well and call. It Unfortunately, I'm going to touch on one of your favorite topics again.

Speaker Change #115: Pricing.

Speaker Change #127: Can't help but notice the significant deterioration in pricing and in Europe, North America, and South America.

Speaker Change #126: In Q2, how.

Speaker Change #133: How much of this can we attribute to working through old model year inventories and is this now the pace.

Speaker Change #130: You would expect for the rest of the year prices going to deteriorate further from this point or.

Speaker Change #131: Could there be a bit of a moderation in the coming quarters. Thank you.

Speaker Change #144: Well. Thank you Michael you are right. It is a one off or preferred topics because it's a way to monetize the value that we create and there is no sense.

Carlos Tavares: It is one of our preferred topics because it's a way to monetize the value that we create, and there is no sense in destroying the value that we create through pricing that does not represent what the customers should recognize in terms of pricing power. What we believe is that pricing power is not an absolute concept. It is about when you are in a price band, your competition, making sure that through the appeal of the products and through the quality of the products, you can position yourself at the high end of the related price band.

Speaker Change #131: In destroying the value that we create through pricing that does not represent.

Speaker Change #141: Customers should look organized.

Speaker Change #142: In terms of pricing power.

Speaker Change #140: What we believe is the pricing power is not an absolute concept.

Speaker Change #140: It is about when you are in a price band.

Speaker Change #131: With your competition.

Speaker Change #131: Ensure that through the appeal of the products and the quality of the products you can be positioning ourselves in the eye and of that related to price them.

Carlos Tavares: So it's a relative concept where, in the price band where you are competing, you look at your competitors in that segment, and for the price band that that segment represents, you want to monetize the value that you have created and the appeal that you have created with your teams.

Speaker Change #131: So it's a related concept where in the price band.

Speaker Change #131: Where you are competing you look at your competitors in that segment.

Speaker Change #131: For the price band that that segment represents.

Speaker Change #131: You want to monetize the value that you have created and the appeal that you have created with your teams. So indeed, what we tried to do and we don't always succeed is for a given segment.

Carlos Tavares: So indeed, what we try to do, and we don't always succeed, is for a given segment and the related price bands to be at the high end of that price range. Now, what we do not say is that this is frozen, that the price band of a given segment may move up and down, depending on the competition. You can expect that some Chinese competitors will try to bring the price band down.

Speaker Change #131: And the related price band.

Speaker Change #131: At the high end of that price that now what we do not say.

Speaker Change #143: Is that this is a frozen.

Speaker Change #143: The price band of forgiven segments may move up and down.

Speaker Change #131: Depending on the competition.

Speaker Change #131: You can expect that some Chinese competitors will try to bring the price band down.

Speaker Change #131: And if the price and that is down for that given segments. We will have to adapt because if we don't do that then you will tell me that we ought to pricing.

Carlos Tavares: And if the price band is down for that given segment, we have to adapt. Because if we don't adapt, then you will tell me that we are too pricey. So what we can do is, for a given price band, for a given segment, we can monetize at the high end of that price band by bringing more appealing products that, hopefully, we can sell with smarter tactics. This is what we are trying to do, but we don't always succeed.

Speaker Change #131: So what we can do is for a given price band for a given segment.

Speaker Change #131: Can monetize at the high end of that price then by bringing more appealing products that hopefully we can sell with smarter tactics. This is what we are trying to do and we don't always succeed but that's what we are trying to do now is the price that moves because of the offering.

Carlos Tavares: That's what we are trying to do. Now, if the price band moves because of the offering, because of the competitive set that is coming to the market, obviously, we have to recognize that the market is the market. And then if that happens, and if that price band goes down because of competitive offerings, then we just need to recognize that and work harder in the cost reduction to the market to protect your competitiveness. So how are price bands going to move in the future for the segments in which we are competing? Obviously, it's very hard to answer that question.

Speaker Change #131: Cause of the competitive set that is coming to the market. Obviously, we have to recognize that the market is the market and then if that happens and if that price then goes down because of the competitive offerings. Then we just need to recognize that and work harder in the cost reduction to create the margins that you can then give back.

Speaker Change #131: <unk> to the market, while you protect your base margins. So if you want to protect your best margins and the price is going down you have to accelerate your cost reduction and gave that cost reduction back to the market to protect your competitiveness.

Speaker Change #131: How are the price downs are going to move in the future for the segments in which we are competing obviously, it's very hard to answer that question. We can expect that the European market will contribute will be under significant pressure because of the Chinese offensive bus.

Carlos Tavares: We can expect that the European market will contribute, and will be under significant pressure because of the Chinese offensive. But it is also true that the Import Tariffs are going to slow down that pressure or reduce that pressure. Because from 31 to 38% custom duties, that has an impact on price positioning because it absorbs the 30% cost competitive edge of the Chinese ex-work vehicles.

Speaker Change #145: It is also true that Florida.

Speaker Change #145: Civic European markets, the import tariffs are going to slow down that pressure or reduce that pressure.

Carlos Tavares: That means that possibly that pressure will be within the price band of the competitive set in which each vehicle is competing. The import tariffs in Europe may create some kind of ease. Hopefully, they will.

Speaker Change #145: From 31% to 38% cause some beauties that has an impact on the price positioning because it absorbs the 30% cost competitive edge of the Chinese ex work vehicles, so that means that possibly that pressure will be.

Speaker Change #145: Slightly less strong than what we could expect without tariffs that is going to help the profitability and of course, we will try to maximize our margins within.

Speaker Change #131: The price then of the competitive set in which each vehicles is competing so the import tariffs in Europe may create some kind of ease hopefully they will we will see but anyway in the rest of the world will be competing harsh head on with the Chinese which we are currently doing.

Carlos Tavares: We'll see. But anyway, in the rest of the world, we'll be competing harshly head-on with the Chinese, which we are currently doing. In the US, the situation is different.

Speaker Change #131: In the U S. The situation is different and you can see that.

Carlos Tavares: And you can see that, for the time being, the results of our competitors are not demonstrating that price pressure is going to vanish. So we will just try to be smarter in our marketing tactics. And we will adjust in a non-dogmatic way wherever we have to adjust, but still keeping in mind that for a given segment, for the competitive set of that segment, there is a price band, and in that price band, we'll be trying to position ourselves at the high end of that price band with the appeal of the product that we bring to the market.

Speaker Change #131: For the time being the results of our competitors are not demonstrating that that price pressure is going to vanish.

Speaker Change #131: So we will just try to be smarter in our marketing tactics and we will adjust in a non dogmatic way.

Speaker Change #131: We have to adjust but still keeping in mind that for given second segments.

Speaker Change #131: Competitive set of that segments that is the price bands and at that price band will be trying to position ourselves at the high end of that price band with the appeal of the products that we bring to the market. So everything starts with product and this is why I was so proud.

Carlos Tavares: So everything starts with the product, and this is why I was so proud to show you the 20 brand new models that we are bringing to the market. Thank you. Thank you, Michael. We will take our next question from Thomas Besson, CEO of Kepler Children's. Your line is open, please go ahead. Thank you very much.

Speaker Change #131: Show you the 20 brand new models that we are bringing to the market.

Speaker Change #131: Thank you thank you Michael.

Speaker Change #147: We will take our next question from Thomas Besson Kepler tune. Your line is open. Please go ahead.

Speaker Change #146: Thank you very much.

Thomas Besson: I'd like to come back to a topic we discussed during investor day, but I'd like to get an update on that, Carlos, please. Could you discuss the wrap-up for your four new platforms and how much it has, or is still impacting, the launch of new products? It seems to be, to some extent, delayed. I'm not sure if it's effectively similar by region or by platform, but maybe you could share with us some elements on this when I think about Europe, 3.0.8, and 5.0.8.

Speaker Change #149: I'd like to come back to a topic, we discussed during investor day.

Thomas Besson: I'd like to get an update on the Colo space.

Speaker Change #151: Could you discuss for the wrap up for your four new platforms and how much it has or HDD impacting.

Speaker Change #148: The launch of new products.

Speaker Change #155: It seems to be to some extent delayed I'm not sure. If it's two securities to me, though by region or by platform, but maybe you could share with us some elements of what I think are booked europes readable way trying to avoid.

Carlos Tavares: I have the impression that this is something that should be more in the market than it is for the first of these products. And I think the same applies for LCDs, but maybe you could share some thoughts with us on this topic. Thank you. Absolutely, Thomas, and thank you for that question. I think it's very relevant.

Speaker Change #146: The impression that.

Speaker Change #146: This is something that should be.

Speaker Change #146: More in the market.

Speaker Change #146: Which is effectively for the first of these products.

Speaker Change #157: As Hugo Soma place for Ltvs, but maybe you can you can chalk themselves with us.

Speaker Change #150: Understood. Thank you.

Speaker Change #156: Absolutely and thank you for that question.

Speaker Change #152: I think it's very relevant.

Carlos Tavares: It is quite clear that against the usual process of launching our vehicle. Um, we are, presenting, unveiling the vehicles and showing them to the world at a given point, and then, a few months later, we have the production ramp up. It is absolutely clear, and there is no reason to hide that, that we are being extremely cautious in the launch pattern of the new vehicle. So it is not because we are late. Sometimes we are, but not always.

Speaker Change #152: It is quite clear that.

Speaker Change #152: Against the usual.

Speaker Change #152: Process of law since launching our vehicles.

Speaker Change #152: We are.

Speaker Change #152: Presenting unveiling the vehicles and showing them to the world.

Speaker Change #152: Given point and then.

Speaker Change #152: A few months later, we have the production ramp up.

Speaker Change #152: It is absolutely clear.

Speaker Change #152: And there is no reason to hide that that's we are being extremely cautious in the launch partner of the new vehicles. So it is not because we are late.

Speaker Change #152: Sometimes we are that's not always it is because we are trying to be seamless.

Carlos Tavares: It is because we are trying to be merciless with quality, and if we are not happy with quality, then we pause, or we stop, and we fix it before we go, we go again. So we are being extremely prudent on the launch pattern of the new products. And we control the quality at each step of the process. The reason why we are doing this, of course, is that we want our customers to be happy. But we also see significant inflationary pressure on the warranty cost.

Speaker Change #152: With quality and if we are not happy with quality.

Speaker Change #152: We pause or we stopped and we fix before we go we go again so.

Speaker Change #152: So we are being extremely prudent.

Speaker Change #152: On the on the launch partner of the new products and we control the quality at each step of the process. The reason why we are doing this of course is because we want our customers to be happy.

Speaker Change #152: We also see a significant inflationary.

Speaker Change #158: Sure on the warranty costs.

Carlos Tavares: There is inflation out there, and we want to recognize that that inflation needs to be countermeasured with much better quality. And therefore, we are raising the standard. And we are raising the demands in terms of ramp-up quality control to make sure that if something is not meeting the standards, then we slow down or we stop the ramp-up.

Speaker Change #152: There is inflation out there.

Speaker Change #152: And we wanted to recognize that that inflation needs to be.

Speaker Change #152: Counter measure it with a much better quality and therefore, we are raising the standards and we are raising the demand in terms of ramp up quality control to make sure that if something is not meeting. The standards, then we slow down or we stopped around the ramp up that means that.

Carlos Tavares: That means that the launch and the visibility of the models that we launch may be, to a certain extent, showing to be slower because of that caution, and that caution is coming from the fact that it is for us a no-brainer that we need to make our customers happier and recognize that there is pressure on the warranty, which is the best measurement of that demand and any potential disconnect between the demand and what we are offering to the market. So we are quite cautious with that. You may hear from that, Thomas, including from our own people. It is normal.

Speaker Change #152: The launch and the visibility.

Speaker Change #152: Of the models that we launched maybe to a certain extent.

Speaker Change #152: Showing to be slower.

Speaker Change #152: Because of that caution and that caution is coming from the fact that it is for us and no brainer that we need to make our customers happier.

Speaker Change #152: And recognize that there is pressure on the warranty cost, which is the best measurement of that demand and any potential disconnects between the demand and what we are offering to the market. So we are we are quite cautious with that.

Speaker Change #152: You may hear from that tomorrow.

Speaker Change #159: Including from our own people.

Carlos Tavares: We intend to, and you may hear more of this in the near future. We are going to raise the bar. We are going to be totally merciless in terms of quality.

Speaker Change #171: It is normal we intend.

Speaker Change #159: And you may hear more of this in the near future. We are going to raise the bar, we are going to be totally merciless in terms of quality, we want the quality to continue to improve as it did.

Carlos Tavares: We want the quality to continue to improve as it has since we created Stellantis, but we see that despite the strong progress that we have made since we created Stellantis, I think that customer demand is growing even faster. That's what I am measuring with my warranty cost threshold.

Speaker Change #159: Since we created guarantees, but we see that despite the strong progress that we have done since we create uncertainties I think that the customer demand is growing even faster and that's what I am measuring on my warranty cost pressures. So we are going to raise the bar now one of the things, we can do which possibly.

Carlos Tavares: So we are going to raise the bar. Now, one of the things we can do, which possibly will at least fix part of what you feel, is that possibly we need to unveil our cars closer to the ramp-up and not as anticipated as it is today. Perhaps that is something we can do is to bring the unveiling and the official launch of the car closer to the ramp-up so that once you see the car, you can see the impact quicker than what you have experienced so far. But your point is absolutely valid.

Speaker Change #160: <unk> will at least the fixed part of what you feel is that possibly we eat Wednesday, our cars closer to the ramp up and not as anticipated as it is today.

Speaker Change #160: That is something we can do is to bring the unveiling and the official launch of the car closer to the ramp up so that once you see the car you can see the impact a quicker than what you have experienced so far but your point is absolutely valid and the judge.

Patrick Hummel: And just trust the fact that we are going to be merciless with quality. We want to improve the quality because we believe the customers are asking for more. Thank you, Thomas. Thank you. We will take our next question from Patrick Hummel, UBS. Your line is open, please go ahead. Yeah, thank you. Good afternoon.

Speaker Change #164: Just the fact that we are going to be immersive sound quality, we wanted to improve the quality because we believe the customers are asking from us. Thank you very much.

Speaker Change #159: Thank you.

Speaker Change #162: We will take our next question from Patrick Hummel UBS. Your line is open. Please go ahead.

Natalie M. Knight: I would like to double check with you, Natalie, when you say the operational measures are more important than the 10% AOI margin in the second half. Does that mean we should look at that 10% now as an ambition for H2, or would you still make it a clear commitment? And is it fair to say that the US margin will be lower than H1 because of the lower outputs, so other regions like Europe should be performing better as the de-stocking has come to an end here?

Patrick Hummel: Yeah. Thank you good afternoon.

Speaker Change #161: I would like to double check with you not Lee when you say the operational measures are more important than the 10% Oi margin in second half does it mean, we should look at that 10% now as an ambition for H two or would you still make it a clear commitment and is it fair to say that.

Speaker Change #166: <unk> margin will be lower than H, one because of the lower output. So that other regions like Europe should be performing better as the Destocking has come to an end here and if I can on the free cash flow.

Natalie M. Knight: And if I can, on the free cash flow, Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show. He is a licensed financial professional both in the U.S. and Israel. His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered at www.profile-financial.com.

Speaker Change #163: Taking you know the items of working capital minus 4 billion an H one the settlement 800 million and then you mentioned investments will come down in the second half is it fair to say that the free cash flow in the second half should be order of magnitude 6 billion euros are give or take any color would be much appreciated and very lastly would you be willing to.

Speaker Change #169: To give a billion euro amount how much dealing with maybe if I may call. It that way the commercial mistakes you made in terms of production mix.

Natalie M. Knight: All information on this website is purely information and should not be used as the sole basis for making financial decisions. Please see the complete disclaimer at https://sites.google.com. Thank you. I'm so happy to hand over these questions to Natalie. Okay. There were a few in there.

Speaker Change #167: How much is the total amount. This will cost you. This year. The background of that question is I want to get an idea of whats the clean sheet for building a bridge into 2025. Thank you very much.

Patrick Hummel: Thank you Patrick.

Speaker Change #170: Happy to hand over discretionary naturally. Thank you. Okay. There were a few in there so and the first one was that conversation about the 10% and how does that work with our operational targets and the commentary in there with from my side was chest to make very clear is that a.

Natalie M. Knight: So the first one was the conversation about the 10% and how that works with our operational targets. The commentary in there, from my side, was just to make very clear that a 10% is not a walk in the park for us. We're going to be fighting for this every day as we look at the second half.

Speaker Change #168: 10% is not a walk in the park Kras, we're gonna be fighting for this every day is when you look at the second half and it is our commitment to the markets and where we are working hard every day at that to make sure that we can deliver the best results possible, but what I wanted to emphasize was I think one of the critiques that we've gotten as we looked at the last.

Natalie M. Knight: It is our commitment to the market, so we're working hard every day to make sure that we can deliver the best results possible. But what I wanted to emphasize was that one of the critiques that we've gotten as we looked at the last six months or so has been the question of, hey, are you really going after the topics that are going to move the needle for you going forward?

Harry: Six months or so was the question of Harry really going after the topics that are going to move the needle for you going forward and that was the piece that I wanted to make very very clear is that that is our priority and you heard I think great. Examples from Carlos in terms of how we're going to approach that whether it's the go to market approach, whether it's the marketing.

Natalie M. Knight: And that was the piece that I wanted to make very, very clear, that that is our priority. And you heard, I think, great examples from Carlos in terms of how we're going to approach that, whether it's the go-to-market approach, whether it's the marketing tactics.

Patrick Hummel: And I think the production topic in the U S is going to be a key lever to that so those are some of the things that we're doing and I hope the opportunity is very much we're going to be able to do both of those topics slip and the ally and deliver on this and the health of the business, but I just wanted to emphasize that that piece is really key.

Natalie M. Knight: I think the production topic in the U.S. is going to be a key lever to that. So those are some of the things that we're doing. I hope the opportunity is very much that we're going to be able to do both of those topics with the AOI and deliver on the health of the business. But I just wanted to emphasize that that piece is really key, and I don't want people to see us as doing something where we would ever trade off improving health versus getting. So that was question number one. Question number two was on the North American margin and what that looks like in the second half of the year. And I'd say it's a little too early to say.

Patrick Hummel: And I don't want people to see us doing something where we would ever tradeoff, improving the health versus getting the profitability.

Speaker Change #173: That was question number one question number two is on the North American margin and what that looks like in the second half of the year and I'd say, it's a little too early to say we're focused on how do we make North America as strong as you can where team here at Symantec and everything that we need from North America, we get from the rest of our business as needed and we're at.

Natalie M. Knight: We're focused on how we make North America as strong as we can. We're a team here at Stellantis, and everything that we need from North America, we get from the rest of our business as it's needed. And we're asking all of our businesses to step up as we go into this position where, as you saw, for example, in Europe, we made a big effort in the first half to clean up the inventory. It's now, you know, 90,000 lower in terms of units.

Patrick Hummel: All of our business to step up as we go into this position where as you saw for example in Europe, We made a big effort in the first half to clean up inventory, it's now and 90000 lower in terms of units that puts us in a much better place to be able to say here's now the time, we need to focus on how does that business and how does this news.

Natalie M. Knight: That puts us in a much better place to be able to say, here's now the time we need to focus on how that business does and how this new strong third engine that's there helps if needed. But we are pushing hard in North America. It's the biggest piece of our business. And they're also going to have to contribute to how we get to those numbers. It doesn't work without North America.

Patrick Hummel: Long, they're an engine there how if needed but we are pushing hard in North America. It's the biggest piece of our business and they're also gonna have to contribute to how we get to those numbers doesn't work without North America.

Natalie M. Knight: Let's see, you also asked about free cash flow and how we see that for the year. I'm not going to answer a specific number in terms of the second half, because that would be pretty forward-looking.

Speaker Change #174: Let's see you also asked about free cash flow and how we see that for the year and I'm not going to answer a specific number in terms of the second half that would be pretty forward looking what I can say is I think is giving you clear guidance that we believe there is opportunity in the second half that wasn't here in the first half and you talked about.

Natalie M. Knight: What I can say is I think I've given you clear guidance that we believe there's opportunity in the second half that wasn't here in the first half. You talked about $800 million in terms of what's come in the second half already. You talked about R&D, CapEx, and M&A, where we see at least a billion move out of the second half into the first, tied to our timing. The other big key is working capital, where we are going to continue to make progress.

Patrick Hummel: And the 800 million in terms of what's come into the second half already and you talked about the R&D Capex and M&A, where we see a billion at least civilian move in the out of the second half into the first title timing. The other big key is working capital, where we are going to continue to make progress I think that's one when you look at just.

Natalie M. Knight: I think that's one, when you look at just the development of our business, you're going to see continued reduction in inventories. And I think also the trend in production being more something that's moving in the positive, what the commercial mistakes cost us this year in terms of what the upside for next year is. Exactly. What you see in our results is what it cost us in the first half of the year. And there is something in terms of, you know, we started the year with inventory that was too high that we were working on cleaning up.

Patrick Hummel: The development of our business, you're going to see continued reduction of inventory and I think also the trend in production being more something that's moving in the positive direction in the second half versus as we looked at the first half we saw that declining over the period and that was a big working capital cost to us and I think the last question was.

Speaker Change #175: Can we will we quantified.

Speaker Change #175: The commercial mistakes cost us this year in terms of what's the upside for next year exactly what you see in our results is and what it cost us in the first half of the year and there is something in terms of when we started the year with inventory that was too high that we were working on cleaning up and we talked about the product transition and you see.

Natalie M. Knight: We talked about the product transition. And you see that we called out, just in North America alone, 100 of the 185,000 vehicles were things because we had new product coming, but we had old product that was gone, and we had that mix. That will be something that improves visibly as we go into 2025. When we look at the second half of the year, I ask you to stay with us. You're going to see a lot more as we go into the third quarter, where you say, hey, what we do there in production and those 100,000 vehicles that we take out, that's also something that I certainly don't anticipate being repeated in the next year. So those are my comments. Did you want to add anything, Carlos?

Patrick Hummel: That we called out just in North America alone 100 to 185000 of those vehicles, where things because we had new product coming that we had old product that was gone and we had that mix that will be something that improves visibly as we go into 2025, when we look at the second half of the year I'd ask you.

Patrick Hummel: With us you're going to see a lot more as we go into the third quarter, where you say hey, what we do there and the production and that 100000 vehicles that we take out that's also something that I certainly don't anticipate being repeated in the next year. So those are my comments did you want to add anything Carlos.

Natalie M. Knight: Fine. Okay, good. Then we're on to the next one. Thank you. Bye, Patrick.

Carlos: Okay. Good.

Patrick Hummel: Yeah.

Patrick Hummel: Hi, Patrick.

Speaker Change #176: As a reminder, please limit yourself to one question with time.

Unknown Executive: As a reminder, please limit yourself to one question per time. We will take our next question from Bruno Dossena, Wolf Research. Your line is open, please go ahead.

Speaker Change #184: We will take our next question from Bruno Dossena Wolfe Research. Your line is open. Please go ahead.

Bruno Nikolai Dossena: Hi, thank you for taking the questions. I wanted to step away from the near-term cyclical dynamics and, and Gage, how you're thinking about your capital base over the next several years because your US peers are seeing massive losses from their EV business, and the majority of those losses stem from high structural costs. And I appreciate your multi-energy approach helps with capital efficiency. But now, over the next few years, you're ramping up EV volumes and internal battery capacity. I was wondering if you could help us understand how you're thinking about this, the trajectory of net structural costs going forward. Thanks.

Bruno Dossena: Hi, Thank you for taking the questions.

Bruno Dossena: Wanted to step away from the near term cyclical dynamics and <unk>.

Speaker Change #177: And gauge how youre thinking about your capital base over the next several years because your U S peers are seeing massive losses from their <unk> business and.

Speaker Change #185: The majority of those losses stem from high structural cost basis.

Speaker Change #178: And I appreciate your multi energy approach helps on capital efficiency, but now over the next few years, you're ramping EV volumes, an internal battery capacity.

Speaker Change #177: And.

Speaker Change #186: I was wondering if you could help us understand how you're thinking about the trajectory of net structural costs going forward. Thanks.

Speaker Change #186: Oh, that's a 1 million dollar question Indeed, Bruno Thank you for asking.

Carlos Tavares: Oh, that's a $1 million question indeed, Bruno. Thank you for asking. Several things we can say are, from a pure engineering standpoint and from a customer expectation standpoint, we are absolutely comfortable with the multi-energy platform strategy. The benefit of having a dedicated EV platform is marginal. In the eyes of the consumer, from everything I have studied, and I spend many hours with our engineers looking at that. We are very comfortable, as you can see with, for instance, the example of the...

Speaker Change #182: Several things we can say is.

Speaker Change #179: From a pure engineering standpoint.

Speaker Change #179: And our customer expectations.

Speaker Change #179: Expectation standpoint, we are absolutely.

Speaker Change #179: Comfortable with the multi energy platform strategy.

Speaker Change #179: The benefit of having a dedicated EV platform is marginal.

Speaker Change #179: The eyes of the consumer from everything I have studied and I spent many hours with our engineers looking at that.

Speaker Change #179: We are very comfortable.

Speaker Change #181: And what.

Speaker Change #181: What you can see with for instance, the example of the.

Carlos Tavares: The Resort 3008, is that with a multi-energy platform, the Stella-M, we are best in class in terms of performance. You just have to test the vehicle to enjoy the autonomy, to see the accelerations, and the body roll control.

Speaker Change #181: There's all 3008.

Speaker Change #181: Is that a multi energy platform the seller and we are.

Speaker Change #181: Best in class in terms of performance.

Speaker Change #194: Just have two test vehicles, who enjoy the autonomy to see the acceleration and the body roll control.

Carlos Tavares: It's best in class. There is nothing left that the customer would be willing to have on the car. So that is obviously the right thing to do. I don't think it is a debate anymore.

Speaker Change #181: It's best in class there is nothing left that's the customer.

Speaker Change #188: They're willing to have on.

Speaker Change #195: On the costs. So that is obviously the right strategy.

Speaker Change #181: But I don't think it is a debate anymore I think it's obvious that given the uncertainties of the world.

Carlos Tavares: I think it's obvious that given the uncertainties of the world, given the fact that it's easy to anticipate there will be bumps on the electrification pauses, it is quite easy to see that this is the right strategy. Hopefully, the longer those hesitations, the more time we'll have to make sure that we depreciate those assets, which, of course, we all need. In terms of strategy with those hesitations, the good thing about what we are doing, and, obviously, you understand that I'm not happy with the H1 result, is that by investing. The product attributes, the platforms, the electric motor, and the Electrified Transmission. I have no, The Component.

Speaker Change #181: And given the fact that is easy to anticipate there will be bumps on.

Speaker Change #181: The electrification pauses.

Speaker Change #181: It is quite easy to see that this is the right strategy and <unk>.

Speaker Change #187: Hopefully the longer those excitations the more time it will have.

Speaker Change #187: We'll make sure that we depreciate those assets, which of course, we all need.

Speaker Change #187: In terms of strategy with those visitations.

Speaker Change #187: The good thing about what we are doing and the.

Speaker Change #183: Obviously, you understand that I'm not happy with the H one results is that by investing.

Speaker Change #197: The product attributes the platforms the electric motors the electrified transmissions.

Speaker Change #183: No.

Speaker Change #190: The components I am.

Carlos Tavares: I have the components to make electrified cars, which make the mild hybrids for the middle classes, and the BEV, high-performance BEVs for the more affluent. So I have the components. So I can compete both on the dev and on the eye. What is left in my pocket?

Speaker Change #190: The components to make electrified kos, who make that might hybrids for the middle classes that would be the high performance bvs for the more affluent customers do I have the components.

Speaker Change #183: So I can't compete both on the debt and on the ice.

Speaker Change #189: What is left in my pockets.

Carlos Tavares: is that I don't have to spend. The capacities now, because of the hesitation. So the capacity side of it is still in my pocket, means I will invest the capacity in the function of the Editation. I'm not going to spend the money on the capacity if I don't have clear... That's the capacity that's going to be used.

Speaker Change #189: Is that I don't have to spend.

Speaker Change #189: That capacity is now.

Speaker Change #183: Because of the hesitation.

Speaker Change #183: So the capacity side of it is.

Speaker Change #183: Is still in my pockets.

Speaker Change #183: Which means I will invest in capacities in function.

Speaker Change #193: He is he patients and not going to spend the money of the capacity if I don't have clear signs that the capacity is going to be used.

Carlos Tavares: This, of course, is going to relate to batteries, to electric motors, to raw materials, to anything that has to be invested in to support a steep ramp-up. So the good thing is that we have the product. We have the basic brick of electrified technology. All of this is allowing us to compete in the market, to learn, and to improve. And we will invest the capacities of those components in functions of the agitation, in functions of the regulations, in functions of the unpredictable things that we are unable both of us to anticipate today.

Speaker Change #193: This of course is going to relate to batteries electric motors.

Speaker Change #183: Materials to anything that has to be invested to support the steep ramp up.

Speaker Change #183: So the good thing is we have the <unk>.

Speaker Change #183: <unk>.

Speaker Change #191: You have the base bricks.

Speaker Change #191: The electrified technology all of this is allowing us to compete in the market to learn to improve.

Speaker Change #191: And we will invest the capacities of those components in function of the agitation.

Speaker Change #191: In function of the regulations and functions of the unpredictable things that we.

Speaker Change #191: We are enable both of us to anticipate today so.

Carlos Tavares: So that's one, that's an obvious one, and I feel good about the fact that I'm not wasting your money because I'm just investing in the products that I can sell. I'm not investing in capacities that I, eventually, would not. That's question number one. On question number two, structural costs are like variable costs.

Speaker Change #198: So that's one that's an obvious one and I feel good.

Speaker Change #198: But the fact that I'm not wasting your money because I'm just investing on the products that they can sell I'm not investing in capacities that eventually I would not use.

Speaker Change #192: That's question number one on the question number two.

Speaker Change #196: Structural costs are like variable costs.

Speaker Change #196: You continuously need to reduce them further.

Carlos Tavares: You continuously need to reduce them for a very simple reason: the market right now for electrified products is not at the level of affordability that customers are expecting. So, for the near future, the expectations of our customers are extremely clear. What they want from us is that we sell BEVs at the price of ICs. So anybody thinking that in the near future, being able to achieve PV cells at any other price than IC prices is not facing reality.

Speaker Change #196: For a very simple reason is that the <unk>.

Speaker Change #196: Market right now for the electrified products is not at the level of affordability that the customers are expecting from us.

Speaker Change #196: So for the near future the expectations of our customers are.

Speaker Change #196: Extremely clear.

Speaker Change #201: What they want from US is that we sell DVS at the price of Ics.

Speaker Change #196: Simply put.

Speaker Change #196: So anybody thinking that for the near future being able to achieve.

Speaker Change #196: He sells with any other price than IC pricing.

Speaker Change #196: Is not facing reality.

Carlos Tavares: And we believe that we have to face that reality. So we will keep on working on our structural costs. We'll keep on making sure that we reduce not only the fixed but also the variable costs. That relates to everything we do in GNA, everything we do in real estate, everything we do in sourcing, and investing-cost campaigning. I believe that at the price of being unpopular.

Speaker Change #192: And we believe that we have to face that reality. So we will keep on working on our structural costs.

Speaker Change #192: We will keep on making sure that we reduce not only the fixed but also the variable costs that relates to everything we do in G&A everything we do in real estate.

Speaker Change #192: Everything we do in the sourcing and best cost countries I believe that.

Speaker Change #192: The price.

Speaker Change #192: Of being unpopular.

Carlos Tavares: We have a competitive edge in the speed and the magnitude at which we are moving to the best cost, and this is going to be paramount. Rebuild the margin that you need to rebuild when you are giving back to the market some of the affordability that our consumers are expecting. Do I feel good about that? Hopefully, I have answered your question. Thank you.

Speaker Change #192: We have a competitive edge in.

Speaker Change #192: In the speed and the magnitude at which we are moving to best cost countries and this is going to be Paramount.

Speaker Change #192: Rebuild the margins.

Speaker Change #192: You need to build rebuild when you are giving back to the market. Some of the affordability that our consumers are expecting from us So I feel good about that.

Speaker Change #192: Hopefully I answered your question. Thank you. Thank you Bruno.

Speaker Change #204: Next question.

Speaker Change #209: We will take our final question from Daniel Roff Com.

Carlos Tavares: Thank you, Bruno. We will take our final question from Daniel Roeska, Bernstein Research. Your line is open, please go ahead.

Speaker Change #200: <unk> Research. Your line is open. Please go ahead.

Daniel Roeska: Hey, good morning, good afternoon, and thanks for taking my question.

Daniel Roeska: Hey, good morning, good afternoon. Thanks for taking my question. Carlos, can we take a step back? Investors have long viewed automotive stocks skeptically due to their typical nature, high capex, and low returns. I mean, we can go back to Sergio's concession of the capital junkie of 2015 here.

Daniel Roeska: Carlos can we can we take a step back.

Speaker Change #202: Investors have long viewed automotive stock skeptically due to the cyclical nature of high Capex low returns I mean, we can go back to a scheduled confession of the capital Junkie of 2015 here.

Carlos Tavares: With Stellantis, you've executed on one of the key demands that Sergio had back then, which was consolidation. Yet today, with this Q2, it kind of feels that you and the Stellantis team still fall prey to what feels like a typical auto sector dynamic. So my question is, how do you think the sector, or more specifically, Stellantis, will demand better valuations from investors? Well, that's also a very difficult question, but I will candidly answer to you. First, I am old enough to remember the time when the average profitability of the auto sector was 3%, and the best guys were at 6%. I still remember that.

Speaker Change #203: With the Lantus you've executed on one of the key demands that third you had back then.

Speaker Change #212: Is consolidation yet today with this Q2, it kind of field.

Speaker Change #206: You want to sell onto this team still fall prey to what feels like a typical auto sector dynamic.

Speaker Change #199: So my question, how do you think the sector or more specifically the London.

Speaker Change #208: Demand better valuation from Investor.

Speaker Change #207: Well that's a that's also a very difficult question that I will candidly answer to you.

Speaker Change #213: First I am old enough to remember.

Speaker Change #207: At the time, where the average profitability of the auto sector was 3% and the best guys were at six.

Speaker Change #207: But I still remember that.

Carlos Tavares: Secondly, I would say that the returns to you, the shareholders, at an 11% annual return yield are strong, strong ones, and we are going to deliver the 7.7 billion euros of return that we committed to you. That's a fact, and that's a commitment that, as always, we honor. And third, it is true that there is one thing that an investor should think about, which is to what extent is the regulatory chaos going to challenge the profitability of this industry. I have been very transparent to you about what I call the Darwinian period.

Speaker Change #199: Secondly, I.

Speaker Change #199: I would say that.

Speaker Change #199: The returns to the shareholders at 11%.

Speaker Change #199: Annual return yield.

Speaker Change #199: Our strong strong ones and we are going to deliver.

Speaker Change #199: Seven 7 billion euros of Richard that we committed to you.

Speaker Change #199: That's that's effects and that's the commitment that as always we honor.

Speaker Change #199: And third it is true that there is one thing that's an investor should think about.

Speaker Change #199: Which is to which extent.

Speaker Change #199: Is the regulatory chaos.

Speaker Change #199: Going to challenge the profitability of this industry.

Speaker Change #199: <unk> been very transparent to you on what I call that Darwinian period.

Carlos Tavares: I've been very transparent to you on the fact that one of our major differentiators is that we have a low breakeven point. By the way, the breakeven point of Stellantis in H1 is much better than the commitment that we have made to you, which is less than 50%. So we are there, and we are protecting that. Of course, as we are funding an enormous number and others. Our free cash flow in H1 does not meet my expectations, but we are funding a 20 product split, which, of course, we need to recognize. And we are doing this at a point where the convergence of headwinds is absolutely visible for all of us. So if I were going back to the capital junkie presentation by our respected Sergio.

Speaker Change #199: I've been very transparent to you on the fact that one of our major Differentiators is that we have a low breakeven point by the way.

Speaker Change #215: I keep on point of sale in Houston H, one is much better.

Speaker Change #215: Then the commitments that we have made to you which is less than 50%. So we are there and we are protecting that of course.

Speaker Change #199: As we are funding and enormous.

Speaker Change #199: Product Blitz, all free cash flow in each one does not meet my expectations, but we are funding at 20 products Blitz.

Speaker Change #199: Which of course, we need to recognize.

Speaker Change #199: And we are doing is.

Speaker Change #199: In a point, where the convergence of headwinds is a is absolutely a visible for all of us.

Speaker Change #219: If I was going back to the capital junkie presentation of a respected schedule.

Carlos Tavares: I would say that Stellantis is what you need to have to use the resources of your shareholders in a meaningful way. So that's what we did. FCA was too small. PSA was too small. Stellantis is the right scale.

Speaker Change #210: I would say that's certainties is the concrete expression of the scale.

Speaker Change #210: That you need to have.

Speaker Change #210: To use the resources of your shareholders in a meaningful way.

Speaker Change #210: So that's what we did.

Speaker Change #199: FCA was too small.

Speaker Change #199: PSA was too small.

Speaker Change #199: Guarantees are the right scale.

Speaker Change #214: That's an answer that I'm sure schedule with recognized.

Carlos Tavares: That's an answer that I'm sure Sergio would recognize. The second one is that, despite the fact that we are humbly disappointed, it's much higher than the profitability of FCA and the profitability of PSA on a standalone basis.

Speaker Change #214: The second one is that if you look at the profitability that we delivered in each one despite the fact that we are humbly disappointed.

Speaker Change #214: It's much higher.

Speaker Change #214: Then the profitability of FCA.

Speaker Change #214: And the possibility of PSA on a standalone basis.

Speaker Change #214: So that's the second answer.

Carlos Tavares: So, that's the second option to your question. Now, of course, you are looking forward, and you are right to do so. And now we are both bumping into one thing: where is this world going? Where is the fragmentation going?

Speaker Change #214: But to your question now of course, you are looking for then you are right to do so.

Speaker Change #211: And now we are both bumping.

Speaker Change #211: One thing is where is this world going.

Speaker Change #211: Whereas the fragmentation growing whereas the trade war going where are the wars going.

Carlos Tavares: Where is the trade war going? Where are the wars going? And on that front, I'm not better than you. I'm certainly worse than you are in being able to anticipate those moves.

Speaker Change #211: And on that front and not that the new certainly worse than you are in being able to anticipate those moves what I can tell you is that.

Carlos Tavares: What I can tell you is that our company is highly profitable in a disappointing half year. In fact, our company is significantly below the 50% breakeven point. Our company is executing a product that has never existed in the past history of the two families, and our company is in a much better profitability situation than the two families in a standalone position. We have over-delivered on the synergies that we have committed to use, and we see clearly what the problems we need to solve.

Speaker Change #217: Our company is highly profitable in a disappointing half year.

Speaker Change #223: Our company is significantly below 50% breakeven point in a disappointing half year.

Speaker Change #217: Our company is executing a product that's never existed.

Speaker Change #217: In the past history of the two families and our company is in a much better profitability situations in the two families in a standalone position.

Speaker Change #218: We have over delivered on the synergies that we have committed to you.

Speaker Change #218: And we see clean.

Speaker Change #220: What other problems we need to solve.

Carlos Tavares: But what that would say is, in this first half, the perfect convergence of the Product Blitz funding, with Operational Flaws, and the specific problem of the inventory in the U.S., combined perfectly at the same time to make our life difficult.

Speaker Change #216: But what I would say is.

Speaker Change #211: In this first half the perfect convergence.

Speaker Change #211: Of the product with funding.

Speaker Change #211: With operational flows and the specific.

Speaker Change #211: Problem of the inventory in the U S combined perfectly on the same timing.

Speaker Change #211: Our life difficult.

Carlos Tavares: That doesn't mean that we are not fighting and that we have lost any energy. We are just on vote, and to a certain extent, even more angry than we were before. Because we want to prove to you that this is just a bump in the road. And this is what we are working for. And this is the reason why I will spend some of my vacations in the US to make sure that I work with my US teams.

Speaker Change #211: That doesn't mean that we are not fighting it that we have lost any energy.

Speaker Change #211: We are just unbilled.

Speaker Change #211: And to a certain extent even more.

Speaker Change #211: Yeah.

Speaker Change #211: Then we were before because we want to prove to you that this is a bump in the road.

Speaker Change #211: And this is what we are working for them. This is the reason why.

Speaker Change #221: I will spend some of my vacations in the U S to make sure that I work with my U S seems to find out what the answer is this is what I can share with you.

Carlos Tavares: This is what I can share with you, and both Natalie and myself, we are humbled and focused on making things better for the second half. Thank you for your trust, and thank you for your great questions. Hopefully, we can answer them clearly. See you soon. Bye everyone.

Speaker Change #225: And both naturally and myself we are.

Speaker Change #211: Although <unk> and.

Speaker Change #224: And focused in making things better for the second half. Thank you for your trust and thank you for your great questions. Hopefully, we could answer them clearly too soon bye bye.

Speaker Change #222: Hi, everyone.

Speaker Change #211: Hum.

Speaker Change #211: Yes.

Speaker Change #211: Okay.