Half Year 2025 Stellantis NV Earnings Call
Speaker: year 2025 results.
Edward Ditmire: And I hand it over to your host today, Mr. Ed Ditmire, Head of Investor Relations, to begin today's conference.
Hello, and welcome to salatis, half year 2025 results.
Speaker: Thank you.
Speaker: Thank you, George.
And I hand it over to your host today, Mr. Ed Dyer, Head of Investor Relations. Speaking at today's conference, thank you.
Edward Ditmire: Hello, everyone, and thank you for joining us today as we review Stellantis' first-half 2025 results.
Speaker: Earlier today, the presentation material for this call, along with the related press release, were posted under the Investors section of the Stellantis Group website.
Antonio Filosa: Today, our call is hosted by Antonio Filosa, Chief Executive Officer, and Doug Ostermann, Chief Financial Officer. After their prepared remarks, Antonio and Doug will be available to answer questions from the analysts.
Speaker: 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 in page 2 of today's presentation. As customary, the call will be governed by that language.
Thank you, George. Hello everyone. And thank you for joining us today as we review Stella's, first, half 2025 results earlier today, the presentation material for this, call along, with the related press release were posted under the investor section of the stellantis group website. Today, our call is hosted by Antonio fosa, chief executive officer and Doug Osterman Chief Financial Officer after their prepared remarks, Antonio and Doug will be available to answer questions from the analyst.
Antonio Filosa: Now I'll hand over the call to Antonio Flosa, Chief Executive Officer, Stellantis. Thank you.
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'll hand over the call to Antonio Fosa, Chief Executive Officer.
Thank you.
Antonio Filosa: Good afternoon and good morning to everyone and thank you all for joining us today.
Good afternoon, good morning to everyone, and thank you all for joining us today.
Antonio Filosa: Before we dive into the presentation, I just want to say that it is a great privilege for me to talk to you today for the first time as Stellantis CEO. I want to thank you for your interest in our company and the time and effort you put into understanding our performance, our perspectives, and our plans.
Before we dive into the presentation, I just want to say that it is a great privilege for me to talk to you today. For the first time as CEO.
I would like to thank you for your interest in our company and the time and effort you put into understanding our performance, our perspectives, and our plans.
Antonio Filosa: Just a few words about me before I start. I have spent over 25 years working at this company. I have learned a lot about what drives performance and what gets in the way of performance. as well as the enduring value of our brands and the need to constantly ensure that they remain relevant. Most importantly, I have learned about the importance of our people and our culture. I believe in empowering our team. encouraging them to be thoughtful. I don't like blame, I like responsibility and accountability. And I'd like to be clear with our teams about the challenges we face and the opportunities we can unlock by acting with courage.
Just a few words about me before I start.
I have spent over 25 years working at this company.
I have learned a lot about what drives performance.
And what gets in the way of performance.
As well as the enduring value of Our Brands.
And the need to constantly ensure that they remain relevant.
Most importantly, I have learned about the importance of our people and our culture.
I believe in empowering our teams.
encouraging them to be thoughtful, open and decisive
I don't like blame. I like responsibility and accountability.
Antonio Filosa: with energy and, yes, with joy. These are simple observations, I know. but they are not simplistic. They will be at the heart of the way we will work together. If we have lost some of these in recent times... We are here to put that right. rolling up our sleeves. running towards the difficult decision.
And I like to be clear with our teams about the challenges we face and the opportunities we can unlock by acting with courage.
With energy and yes, with joy.
These are simple observations. I know.
But they are not simplistic.
They will be at the heart of the way. We will work together.
if we have lost some of these in recent times,
We are here to put that right.
Rolling up our leads.
Speaker: and Movin Hyde.
Running towards the difficult decisions.
And moving higher.
Speaker: So let's begin with a summary overview of each one. and the Outlook for it.
So, let's begin with a summary of view of each 1.
And the outlook for H2.
Antonio Filosa: 2025 has been and will be a tough year. and these H1 results make that very clear. At the same time, we are making progress on our product way. and beginning to see early but encouraging improvement.
2025 has been and will be a tough year.
And this H1 results make that very clear.
At the same time, we are making progress on our product wave.
And beginning to see early, but encouraging Improvement.
Antonio Filosa: Our new leadership team is in place and is committed to taking decisive action. Our key commercial KPIs are much stronger now than they were six or 12 months ago. and the second alpha is a range of new products that will catalyze growth.
Our new leadership team is in place and is committed to taking decisive actions.
Our key commercial kpis are much stronger. Now that there were 6 or 12 months ago,
Products that will catalyze growth.
Speaker: We are establishing our financial guidance. What we want to achieve for the rest of the year is a gradual, sequential acceleration. We do that by launching new products. improving our execution. and by taking all the tough decision needed. as we start doing in H1.
We are establishing our financial guidance.
What we want to achieve for the rest of the year is a gradual,
Sequential acceleration.
We do that by launching new products.
Improving our execution.
and by taking all the tough decision needed,
As we start doing in H1.
Doug Ostermann: Now, I will ask Doug to walk us through the H1 Financial Review.
Doug Ostermann: Thanks, Antonio.
Now, I will ask that you walk us through the H1 financial review.
Doug Ostermann: So let's walk through the numbers, starting with the focus financial figures on page seven, which fully reflect what a tough period it was. Consolidated shipments of 2.7 million units fell 7% with declines in North America and in large Europe, slightly mitigated by growth in South America and Middle East and Africa. Net revenue of 74 billion euros saw a larger 13% decline. as adverse regional mix and lower pricing added to the change in volume. AOI margins were compressed. as the early stage of our recovery actions was negatively impacted by external factors like tariffs.
Thanks Antonio.
So let's walk through the numbers. Starting with the Focus Financial figures on page 7, which fully reflect what a tough period it was.
Consolidated. Shipments of 2.7 million units fell 7% with the clients in North America and in large Europe, slightly mitigated by growth in South America and Middle Eastern Africa.
Net revenue of €74 billion saw a larger 13% decline.
as adverse Regional mix and lower pricing added to the change in volumes,
Aoi, margins were compressed.
Doug Ostermann: Foreign Exchange Headquarters. Our adjusted diluted earnings per share generally track our AOI development and our industrial free cash flow was an outflow of three billion euros in the first half.
As the early stage of our recovery actions was negatively impacted by external factors like tariffs and foreign exchange headwinds.
Our adjusted diluted earnings per share generally track our aoi development and our industrial free. Cash flow was an outflow of 3 billion euros in the first half.
Doug Ostermann: While nowhere near our potential, each of these five figures did, in fact, improve in H1 2025 compared to the second half of 2024, as we benefited from new products, improved inventory discipline, and more stable production schedules compared to the prior Now let's look at the factors that drove the net revenue decline. The 13% decline year-over-year was the combination of volume, mix, Pricing, and Forex. all presenting headwinds for the period. But some of these factors are evolving in positive ways.
While nowhere near our potential, each of these five figures did, in fact, improve in H1 2025 compared to the second half of 2024, as we've benefited from new products, improved inventory discipline.
And more stable, production schedules compared to the prior 6 months.
now, let's look at the factors that drove the net revenue decline,
The 13% decline year-over-year.
Is the combination of volume mix.
Pricing.
And Forex.
All presenting headwinds for the period.
But some of these factors are evolving in positive ways.
Doug Ostermann: First on volume. Consolidated shipments were down 7%, as just mentioned. While materially negative, the first half year-over-year decline did represent a substantial improvement from the H2 2024 figure of minus 14 percent, and there's encouraging progression within this first half. as the second quarter of 2025, year-over-year, declined, reduced further to six.
First on volumes.
Consolidated shipments were down 7% as just mentioned.
While materially negative in the first half, the year-over-year decline did represent a substantial improvement from the H2 2024 figure of minus 14%. Additionally, there is encouraging progression within the first half.
Doug Ostermann: Next on pricing, which was down 2% in the first half of 2025. That negative 2% figure reflects first a minus 3% in the first quarter of 2025 and then a smaller headwind of negative 1% in the second quarter. Most of this improvement comes from North America.
As the second quarter of 2025 year-over-year, the decline reduced further to 6%.
Next on pricing, which was down 2% in the first half of 2025.
That negative -2%. Figure reflects first of minus 3%, in the first quarter of 2025 and then a smaller headwind of negative 1% in the second quarter.
Most of this improvement comes from North America.
Doug Ostermann: Let's look at the AOI bridge now from prior years. This is a particularly challenging walk, considering the H1 2024 comparison period, wherein the company ran at a 10% mark. AOI came in this year in the first half at 540 million euros with a 70 basis point margin. Reflecting the aforementioned volume, mix, pricing, and FX headway. These combined with a 1.6 billion euro increase in industrial costs. Industrial costs were impacted by higher warranty expense and lower volumes that reduced the spread of our fixed overhead, as well as a net €330 million of tariff expenses.
Let's look at the aoi bridge now, uh, from prior year.
This is a particularly challenging walk considering the H1 2024 comparison, period, where in the company ran at a 10% margin.
Aoi came in, uh, this year in the first half at €540 million with a 70 basis point margin.
Reflecting the aforementioned volume, mix, pricing, and FX headwinds.
These combined with a €1.6 billion increase in industrial costs.
Doug Ostermann: I think it's important to emphasize here that the prior year period that we're comparing to from H1 of 2024 was the last with pricing of the supply-constrained era, and the last before a very significant reset in the second half of 2024 to address what at the time were outsized inventories and declining market share.
Industrial costs were impacted by higher warranty expenses and lower volumes that reduce the spread of our fixed overhead, as well as a net €330 million in tariff expenses.
Doug Ostermann: With that in mind, we're now going to take a look at the sequential improvement.
I think it's important to emphasize here that the prior year period that we're comparing to from H1 of 2024 was the last with pricing of the supply, constrained era and the last before, a very significant reset in the second half of 2024 to address. What at the time were outsized, inventories, and declining market share.
Doug Ostermann: in AOI comparing the first half of 2025 to the second half of 2024. In particular, volumes improved sequentially as new product launches helped the European business and North America move past successful inventory reduction initiatives. Pricing improved 1% sequentially, with North America being the big driver. And it's encouraging to see Industrial Cross moving in the right direction. as our production schedules became more steady in both North America and in large Europe in the first half of this year.
With that, in mind, we're now going to take a look at the sequential Improvement.
in aoi, comparing the first half of 2025, to the second half of 2024 in particular, volumes improved sequentially as new product, launches helped the European business and North America move past successful inventory reduction initiatives,
Pricing and improved, 1% sequentially.
With North America being the Big Driver.
And it's encouraging to see industrial cross moving in the right direction.
Large Europe's performance in the first half of this year.
Doug Ostermann: Now let's turn to industrial free cash. Obviously a very difficult result for the first half of 2025 with 3 billion euros in cash outflow. The main reason for this was AOI generation that was simply too low. Even adding back the DNA. This figure was too low to cover our CapEx and R&D spending in the period. But we did manage to lower investment expenditures versus the prior year. There was also a headwind of 1.3 billion euros of working capital increase due in part to production disruptions related to our initial tariff response.
Now, let's turn to Industrial free. Cash flow.
Obviously, a very difficult result for the first half of 2025, with 3 billion euros in cash. Outflows
The main reason for this was aoi generation, that was simply too low.
Even adding back the DNA.
This figure was too low to cover our capex and R&D spending in the period.
But we did manage to lower investment expenditures versus the prior year.
There was also a headwind of 1.3 billion euros of working capital, increase due in part to production disruptions related to our initial tariff response.
Doug Ostermann: Looking at inventories now. We can see that our corrective actions in 2024 have gotten us back to healthy levels. And as you can see, we're now maintaining that discipline through 2025.
Looking at inventories now.
Doug Ostermann: Globally, the trend for the following months should be flattest to perhaps a slight increase, including impacts of ramping the recently introduced B and C-segment vehicles in Europe, but also the planned North American launches such as the new Cherokee.
We can see that our corrective actions in 2024 have gotten us back to healthy levels. As you can see, we're now maintaining that discipline through 2025.
Globally the trend for the following months, should be flat as to perhaps a slight increase, including impacts of ramping, the recently introduced B and C7 vehicles in Europe.
But also the planned North American launches, such as the new Cherokee.
Doug Ostermann: Now let's review a few of the specifics on each of our regional segments. North America and Europe remain in their turnaround phase. But the other regions are delivering very consistent results in the In North America, performance was impacted by tariffs, as well as from lower fleet performance. and Improved Inventory Statistics.
Now let's review a few of the specifics on each of our regional segments.
North America and Europe.
Remain in their turnaround phases, but the other regions are delivering very consistent results. In the meantime in, North America performance was impacted by terrorists as well as from lower Fleet performance.
Doug Ostermann: In Europe, results reflect 13% lower industry volumes in LCVs, which is a stronghold for us in Europe. shrinking but still meaningful product transition gap. and a roughly 500 million euro provision for a campaign on a 1.5 liter diesel engine.
And improved inventory. Des discipline.
In Europe.
Results. Reflect 13%, lower industry billions in lcvs.
Which is a stronghold for us in Europe.
Shrinking, but still meaningful product. Transition gaps.
Doug Ostermann: Our results in South America reflect our continued market share leadership, coupled with industry growth in two of the key markets, Brazil and Argentina.
And a roughly 500 million euro provision for a campaign on a 1.5 L diesel engine.
Doug Ostermann: And in Middle Eastern Africa, a couple of notable items, first we experienced FX headwinds to AOI due to a decline in the Turkish Lira that constituted around 600 million Euros. And second and importantly, we continue to have a lot of momentum on the business side, including continued shared leadership in Turkey and ramping local production in Algeria.
Our results in South America, reflect our continued market share leadership, coupled with industry growth. In 2 of the key markets, Brazil and Argentina
And in Middle Eastern Africa, a couple of notable items. First, we experienced FX headwinds to AOI due to a decline in the Turkish lira, which constituted around €600 million.
The second and importantly, we continue to have a lot of momentum on the business side, including continued share leadership in Turkey.
And ramping local production in Algeria.
Doug Ostermann: Moving to our summary financial figures table, let's focus on the balance sheet for a minute. Industrial liquidity finished the first half at 47 billion euros, consisting of a positive 31 billion euros of cash and liquid securities. That 31 billion euros was bolstered by first-half bond issuances of 3.6 billion euros. In addition, the liquidity figure includes 16 billion euros in undrawn committed credit. This puts our industrial liquidity to trailing 12-month revenues. at 32 percent. That's a little above our targeted range of 25 to 30 percent and certainly in a very strong position.
Moving to our summary financial figures table, let's focus on the balance sheet for a minute.
Industrial liquidity finished the first half at €47 billion, consisting of a positive €31 billion in cash and liquid securities. That €31 billion was bolstered by first half bond issuances of €3.6 billion.
In addition, the liquidity figure includes €16 billion in undrawn committed credit facilities.
This puts our industrial liquidity to trailing 12-month revenues.
At 32%, that's a little above. Our targeted range of 25 to 30% and certainly in a very strong position.
Doug Ostermann: Now let's just talk a little bit about tariffs. Previously, we have provided a range of 1 to 1.5 billion euros as the expected net tariff expense for this year. With the increased production levels expected in the second half of the year, we believe that we will be at the upper end of that range, or approximately 1.5 billion Euros.
Now, let's just talk a little bit about tariffs.
Previously we had provided a range of 1 to 1.5 billion euros as the expected net tariff expense for this year.
Doug Ostermann: The Sheriff dynamic, as you know, continues to evolve. We're of course engaged in discussions with various policy makers and will continue to provide updates. things evolve over time.
With the increase production levels, expected in the second half of the year, we believe that we will be at the upper end of that range, or approximately 1.5 billion euros. The sheriff dynamic, as you know, continues to evolve,
Doug Ostermann: As Antonio mentioned in his opening remarks, we are reestablishing financial guidance. With H1 in the books, we want to provide a clear view of how we see the rest of the year developing, and our second half 2025 guidance tells a story of continued improvement. Net revenues are expected to increase half over half and AOI margin is expected to be in the low single digits. Lastly, we expect improvements in industrial free cash flow as compared to the first half of 2025.
We're, of course, engaged in discussions with various policymakers, and we'll continue to provide updates as things evolve over time.
As Antonio mentioned, it is opening remarks. We are re-establishing financial guidance.
With H1 in the books, we want to provide a clear view of how we see the rest of the year developing, and our second half 2025 guidance tells a story of continued improvement.
Net revenues are expected to increase half over half an aoi margin. Is expected to be in the low single digits.
Lastly, we expect improvements in industrial free cash flow as compared to the first half of 2025.
Doug Ostermann: were not, of course, anywhere near or close to the full potential of this company. We're making the tough decisions and executing on fundamental issues to build on our first half progress in the second half and beyond.
Antonio Filosa: So now I'll hand it back to you, Antonio. Thank you, Doug.
We're not, of course, anywhere near or close to the full potential of this company, but we're making the tough decisions and executing on fundamental issues to build on our first half, progress in the second half, and beyond.
So I'll now hand it back to you. Antonio
Thank you, Doug.
Antonio Filosa: Let's start with the Renewable Leadership Team at Stellantis, and now we are operating.
Let's start with the renewal of the leadership team at Stellantis. And now we are operating.
Antonio Filosa: The Stellantis leadership team I have appointed on my very first day as CEO. is made of proven performance. several joining the top team for the first time, and others taking on expanded responsibilities. These are leaders that know us. know our brands, know our people and team. understand our customer and will bring the energy that this moment demands. As a team, we will also take together the tough decision to accelerate the business.
The stellantis leadership team, I have appointed on my very first day as CEO.
Is made of proven performers.
Several are joining the top team for the first time.
Expanded responsibilities.
These are leaders; they know us.
Know, our brands know our people and teams.
Understand our customer and will bring the energy that this moment demands.
Antonio Filosa: Let me go through some of the actions we have taken already, each one in detail, to give a clear picture of how we are operating moving forward. We made the decision to end our fuel cell initiatives in Europe. Why? because it was clear that in the absence of any reasonable prospect to develop a market for this product. There is no path to profitability. We have also stopped product initiatives that we understood were poorly suited to customer needs. at the same time. We are already taking actions to develop and launch products that we know represent a clear opportunity for us.
As a team, we will also take the tough decision to accelerate the business.
Let me go through some of the actions. We have taken already in each 1. In detail to give a clear picture of how we are operating moving forward.
We made the decision to end our fuel cell initiatives in Europe.
Why?
Because it was clear that, in the absence of any reasonable prospect to develop a market for these products.
There is no path to profitability.
We have also stopped product initiatives that we understood, we are poorly suited to customer needs.
At the same time.
We are already taking actions to develop and launch products that we know represent a clear opportunity for us.
Antonio Filosa: A small but good example of this is the RAM 1500 express stream level. very affordable and very appealing to the customer. It will substitute the RAM DS Classic that we have discontinued the last year. It will help for sure regain its share in the entry-level light-duty track segment.
A small, but good example of this is the Ram 1500 Express, trim level.
Very affordable, and very appealing to the customer.
It will substitute the RAM DS Classic.
That we have discontinued the last year.
It will help for sure. Regaining, share in the entry-level, light duty truck segment.
Antonio Filosa: I said that Schwan was tough. but I also said we made meaningful progress. Let me give some details on that. We were able to decrease total inventory by 16% in Europe and North America combined. that is over the last year. maintaining discipline on inventories as we are shown from December 24 to June 25. is key to prepare the ground for the great new product launches that are coming very soon. on the Combined Order Book. for both regions, North America and Europe. We increased 14% in the last year. and 34% in only the last six months.
I said, H1 was tough.
But I also said, we made a meaningful progress.
Let me give some details on that.
We were able to decrease total inventory by 16% in Europe and North America combined.
That is over the last year.
Maintaining discipline on inventories as we are shown from December 24th to June 25.
Is key to prepare the ground for the great new product launches that are coming very soon.
On the combined order books.
For both regions, North America and Europe.
We increased 14% in the last year.
Antonio Filosa: a very good dynamic with our dealers and with our customers. And then, in our other regions, in particular South America, Middle East, and Africa. We are delivering very well. showing a combined 6% improvement of AOI from H2-24 to H1-25.
And 34% in only the last 6 months.
A very good Dynamic with our dealers and with our customers.
And then, in our other regions, in particular, South America, the Middle East, and Africa,
we are delivering very well.
Showing a combined 6% improvement over AI from h224 to H1 2125.
Antonio Filosa: At the beginning of the year, we set three priorities, growth, execution, and profitability. Let's see how we are doing. first growth. where we have an exciting lineup of new vehicles and new powertrains recently launched or on their way. Let's start with our new product. We have 10 new products for this year, along with several important refreshes or relevant nameplates. In H1, we launched already four of the new products, including three very competitive B-segment products in Europe. the Citroën Citroën Aircross, the Opel Frontera, and the Fiat Grande Panda. These have been very well received in terms of reviews and in terms of customer hoarding.
At the beginning of the year, we set 3, priorities, grouped execution and profitability.
Let's see how we are doing.
First growth.
Where we have an exciting lineup of new vehicles and new powertrains recently launched or on their way.
Let's start with our new products.
We have 10 new products for this year.
Along with several important refreshes or relevant nameplates.
in each 1, we launched it already 4 of the new products, including 3, very competitive B, segment products in Europe,
The Citroen citrate across the opal frontiera.
And the Fiat Grand Panda.
These have been very well received in terms of reviews and in terms of customer orders.
Antonio Filosa: and we have much more for the rest of the year. First three old, new Stella Medium products in Europe. Later in the year, we will welcome back some very iconic nameplates with a variety of IG, HEV, and MHEV powertrains. correcting decisions that removed those nameplates from our lineup for significant periods.
And we have much more for the rest of the year.
First 3 old.
New Stella medium products in Europe.
Later in the year, we will welcome back some very iconic name plates with a variety of icing.
HV and mhv powertrains.
Correcting, the decisions that removed those name plates from our lineup for significant periods.
Antonio Filosa: Let me talk more about the three Stella medium products for Europe. These vehicles are exciting midsize cars. each targeting a distinctive customer segment. Their launches also strengthen our platform consolidation strategy. since they are all on the Stella Medium platform, which they share already with Peugeot 3008, Peugeot 5008, and Opel Grandlin. As you know, historically, we have been strong in Europe on A, B, and like commercial vehicle segments but not as strong in midsize. So here is a good example of Stellantis moving to introduce cutting-edge products that will boost our market coverage and will accelerate sales.
Let me talk more about the 3A medium products for Europe.
These vehicles are exciting midsize cars.
Each targeting a distinctive customer segments.
Their launches also strengthen our platform consolidation strategy.
Since they are all on the Stella medium platform which they share already with piju, 30008.
Peso 50008 and Opel grandland.
But not as strong in midsize.
So here is a good example of stellantis, moving to introduce Cutting Edge Products that will boost our Market coverage and will accelerate sales
Antonio Filosa: Moving to North America. We will return with some truly iconic vehicles that have been absent for far too long. This is extremely exciting to us.
Moving to North America.
We will return with some truly iconic vehicles that have been absent for far too long.
This is extremely exciting to us.
Antonio Filosa: Let me talk first about the all-new Jeep Cherokee. We will begin production in H2 after more than two years of absence. The all-new Jeep Cherokee will mark our return into the midsize SUV segment. the larger segment in the U.S. industry. and this will happen with a substantially upgraded product. with our first ever HEV powertrain and of course a full dose of distinctive Jeep design and all-terrain capability.
let me talk first about the old new Jeep Cherokee
We will begin production in H2 after more than two years of absence.
The all-new Jeep Cherokee will mark our return to the midsize SUV segment.
The larger segments in the US industry.
And this will happen with a substantially upgraded product.
With our first ever HV powertrain. And of course,
A full dose of distinctive, Jeep design and all terrain capability.
Antonio Filosa: Moving to DODGE, we will begin production in late 2025. that will be of the exciting IZ Dodge Charger 6-Pack in both 2 and 4-door configuration. after nearly two years of absence. This will be critical to reinvigorating our strong connection with the incredible community of Dodge enthusiasts in the United States. and much more is coming.
Moving to dodge.
We will begin production, Elite 2025.
And that will be of the exciting Dodge Charger 6-Pack in both 2- and 4-door configurations.
After nearly two years of absence.
This will be critical to Rave big raiding. Our strong connection with the incredible community of Dodge enthusiasts in United States.
And much more is coming.
Antonio Filosa: To better illustrate what I mean by reconnecting with our customer base and our community. Let me share with you this beautiful campaign.
To better illustrate, what I mean by reconnecting with our customer base and our community.
Speaker: Enjoy. Last year, Ram killed the Hemi V8, and people had opinions. The same people that killed the Hemi sent me out here with these comments. That's not happening. We own it. We got it wrong, and we're fixing it. You hear that? That's our Hemi, and it's saying, I'm back. Did he say what I think he said? That's saying, got a Hemi. You want more? Buckle up.
Let me share with you this beautiful campaign, enjoy.
Last year, Ram killed, the Hemi V8 and people had opinions. The same people that killed the Hemi sent me out here with these comments. That's not happening. We own it, we got it wrong.
Fixing it, you hear that? That's our Hemi and it's saying come back.
We say what? I think he said that thing got to hear me.
Speaker: Ram's coming back to NASCAR. Let's go, baby. We're back in America's motorsports. The Hemi's back, and we ain't going anywhere. Beautiful, isn't it?
You want more buckle up Rams, coming back to NASCAR.
We're back in America's motorsports. The hems back and we ain't going anywhere.
Speaker: Welcome back, Emily.
Beautiful, isn't it? Welcome back, Emmy.
Antonio Filosa: This marketing campaign also tells us a different story. story about our organization's ability to take quick Smart Impactful Corrective Action. As you may know, up to 40% of full-size truck buyers will not look at a truck brand unless this brand has a D804. So this one was not a difficult decision. Actually, it was a very obvious one. By acting decisively and quickly, we are reactivating many buyers who have been screaming to have the AME back. What is remarkable here is the speed with which the team has been able to move. In less than 10 months from getting the green light, they will have the AME back in H2 2025.
This marketing campaign. Also, tell us a different story.
A story about our organization's ability to take quick action.
Smart impactful. Corrective actions.
As you may know, up to 40% of full side, struck buyers.
Will not look at a truck brand unless this brand has a d8 offer.
So this one was not a difficult decision.
Actually, it was a very obvious 1.
By acting decisively and quickly.
We are reactivating. Many buyers who have been screaming to have the Emmy back.
What is remarkable here is the speed with which the team has been able to move.
In less than 10 months, from getting the green light.
They will have the Emmy back in H2 2025.
Antonio Filosa: and the response to our announcement was very, very large and immediate. with more than 10,000 orders placed in the very first 24 hours.
And the response to our announcement was very, very large and immediate.
With more than 10,000 orders placed in the very first 24 hours.
Antonio Filosa: Now let's move to industrial security. First, let's talk about where things are in North America. Here we are at a relatively early stage of commercial recovery.
Now, let's move to Industrial security.
First, let's talk about where things are in North America.
Antonio Filosa: as most of the new models will come later in the year. But we have set the stage for our next action. In particular, as I said earlier, The inventory and ordering dynamics have completely changed in a positive way from the prior year. We now have linear inventory. and the Healthier Order book with a 90% year-over-year improvement. Rem is showing particularly encouraging early signs. with retail sales up 25% in each one. including the benefits of a successful quarter one refresh of the light duty and heavy duty models.
Here we are at a relatively early stage of commercial recovery.
As most of the new models will come later in the year.
But we have set the stage for our next actions.
In particular, as I said earlier.
The inventory and ordering Dynamics have completely changed in a positive way from the prior year.
We now have linear inventories.
and the healthier order book with a 90 percentage,
Ram is showing particularly encouraging early signs.
Including the benefits of a successful quarter 1, refresh of the live Beauty and heavy duty models.
Antonio Filosa: But let's be clear. We still have tons of work to do. In particular, we are focused on bringing products back to segments where we have been absent. on Improving Industrial Execution, Starting with Product Quality. and Raym Vigorating Fleet Channels Performance.
But let's be clear.
We still have tons of work to do.
In particular, we are focused on bringing products back to segments where we have been absent.
On improving industrial execution, starting with product quality and reinvigorating. Fleet channels performance.
Antonio Filosa: Now let's move to enlarger you. the other key region for our commercial recovery. Here we are beginning to benefit in terms of market share. from a wave of recently launched products. H125 market share at 17% is up 1.3 percentage points from H2 2024. and I am also very pleased with our progress ramping BEVs and hybrid vehicle sales. We took the second spot in European BEV volumes. And for the very first time, we are now number one in European IBEV.
Now, let's move to a larger Europe.
The other key region for our commercial recovery.
Here we are beginning to benefit in terms of market share.
From a wave of recently launched products,
Each 125 market share at 17% is up 1.3 percentage points from each to 20 2024.
And I am also very pleased with our progress in ramping up BVS and hybrid vehicle sales.
We took the second spot in European BV volumes.
And for the very first time, we are now number 1 in European hybrids.
Antonio Filosa: As we move forward, several things are priorities for Europe. We have to improve the customer experience through elevated product quality, as in North America. Second, we have to improve our industrial execution. For example, we need to be quicker in ramping the very well-received new products, such as the new Fiat Grande Panda. And then, exactly as in North America, we need to increase profitability.
As we move forward, several things are priorities for Europe.
First.
We have to improve the customer experience through elevated product quality, as in North America.
Second, we have to improve our industrial execution.
For example, we need to be quicker in ramping. The very well-received, a new products such as the new Fiat Grand Panda.
and then exactly as in North America,
we need to increase profitability.
Antonio Filosa: So let's talk about profitability. Here you may appreciate six sections, among many others. that we have taken or are taking, and I would like to highlight maybe a few of them.
So, let's talk about profitability.
Here, you may appreciate 6, sections, among many others that we have taken, or are taken, and I would like to highlight maybe a few of them.
Antonio Filosa: We recently announced the return of the SRT division for the North American branch. to create the most distinctive high-performance products our fans are most passionate about. And this will be a credit to the EOI. We are also in the process of launching model year 26 products in North America with evolved, much improved trim lineups, in each case expected to be margin accredited.
We recently announced the return of the SRT division for the North American brands.
To create the most distinctive high-performance products. Our fans are most passionate about and this will be a credit to the AI.
We are also in the process of launching model year. 26 products in North America.
We've evolved much improved the trim lineups. In each case, we're expected to be marginally creative.
Antonio Filosa: Finally, Europe. We will benefit from the full ramp-up of our smart card program. That means higher volumes and higher profits.
Finally, in Europe.
We will benefit from the full ramp-up of our Smart Car progress.
That means higher volumes and higher profits.
Antonio Filosa: So, before opening to your questions... I will just recap the key points I would like you to take away from this presentation.
so, before opening to your questions,
I will just recap the key points. I would like you to take away from this presentation.
Antonio Filosa: H1 was incredibly tough and nowhere near where we want and we need to be. But the sequential improvement on issue 2024 is indeed encouraging. It includes the impact of tough decisions. decisions that will continue in the second half of this year.
First.
H1 was incredibly tough and nowhere near where we want to be.
But the sequential improvement on issue 2024 is indeed encouraging.
It includes the impact of tough decisions.
Decision that will continue in the second half for this year.
Antonio Filosa: Second, we are maintaining the discipline on inventories. We are healthier, older. and the product launch cadence is in progress. In Europe, ramping production of new smart car platform models will be a big lever. And in the U.S., we will begin welcoming back iconic products and powertrains, such as the Jeep Cherokee. the Dodge Charger IC, and the legendary AMI V8 engine.
Second.
We are maintaining the discipline on inventories.
We have healthier order books.
And the product launch credits are in progress.
In Europe, ramping production of new smart car. Platform models will be a big liver.
And in the US, we will begin welcoming back iconic products and Powertrain.
Such as the Jeep Cherokee.
The Dodge Charger IC and the legendary me V8 engine.
Antonio Filosa: Third. We expect gradual and sequential improvement in the second half. We have established H2 guidance that frames this clearly and we are intent on delivering against it.
Third.
Respect, gradual and sequential Improvement in the second half.
We have established H2, guidance that frames this clearly.
And we are intent on the delivering against it.
Antonio Filosa: One final note. We are also in the process of updating our long-term strategic plan, which we will have the pleasure to present to you at the Capital Markets Day in early 2026.
1 final note. We are also in the process of updating our long-term strategic plan.
Which we will have the pleasure to present to you.
At a capital markets day in early 2026.
Speaker: With that, thank you for your attention and let's go to the Q&A.
With that, thank you for your attention, and let's go to the Q&A.
Speaker: Ladies and gentlemen, if you'd like to ask a question, please press star 1 or your definite keypad. please limit yourselves. And if you have any...
Ladies and gentlemen, if you would like to ask a question, please press *1 on your telephone keypad.
Jos Asumendi: Place yourselves back in a queue to allow other people to ask Our very first question today is coming from Jose Asumendi, coming from J.P. Morgan. Please go ahead, your line is open. Thank you very much, Jos Asumendi from JP Morgan. Thank you, Antonio, for the comments and Doug as well. Just one question, please. I would like to focus a bit more on the U.S. market. And I think you've, you know, provided, I think, you know, compelling arguments with regards to how to get the company back to growth in the second half of the year. Can you talk a little bit more about the levers to improve the profitability excluding growth levers?
Please limit yourself to 1 question each. And if you have any additional questions, can you please Place yourself back in a queue to allow other people to answer questions.
Our very first question today is coming from Jose Asumendi, calling from JP Morgan. Please go ahead, your line is open.
Speaker: What are the actions you plan to take when it comes to maybe, you know, taking down capacity, any restructuring elements, actions you may take also in the U.S.? Any actions excluding growth? Thank you.
Antonio Filosa: Very well, and thank you for your question, Horst. So as you said, priority number one for Stellantis growth of business will be growth in North America, which is a key market for us. And what are the key actions? Number one, obviously it's volumes as well, but we are launching new products that will be all accredited in AOI margins. For instance, the V8 engine on a version such as the RAM 1500 TRX. will deliver to us additional volumes, as you said, but you want as kudos, but also a credit margin per unit. Sagan, the recently signed by President Trump.
On the US market. Um, and I think you've, you know, provided, I think, you know, compelling arguments with regards to how to get the company back to growth in the second half of the year. Can you talk a little bit more about the Believers to improve the profitability? Uh, excluding growth livers? What are the, uh, actions you plan to take? When it comes to maybe, you know, taking down capacity any restructuring elements actions. You may take. Also in the US uh any any actions excluding growth. Thank you.
Oh, very well, and thank you for your question, Jose.
So, you said priority number one for sales, Lantus growth or business will grow in North America, which is a key market for us. What are the key actions?
Number 1, obviously, it's volumes as well. But we are launching new products that will be all accredited in AI margins.
For instance, the V8 engine on versions such as the Ram 1500 TRX.
Will deliver to us additional volumes as you said, but you want a scooters, but also a creative margin per unit.
Second.
Antonio Filosa: big beautiful bill of 4th of July give us more flexibility in choosing better margin-optimized mix in between IZ version and electrified version of the models that we sell. And this will mean to us a lot of additional profit and also volumes that are much closer to the end customer demand. We are launching now in the U.S. model year 26 products, and we are starting from a much healthier inventory situation. That means that we might, we will enjoy net prize opportunities by doing this. Finally, we are engaging our technical teams in several programs and projects of total production cost reduction.
The recently signed by President Trump.
Big, beautiful bill of July 4th! Give us more flexibility in choosing a better margin-optimized mix between the icy version and the electrified version of the models that we sell.
And this will mean to us a lot of additional profit and also volumes that are much closer to the end customer demand.
First.
We are launching now in US model year. 26 products. And we are starting from a much healthier inventory situation.
That means that we might, we will enjoy net price opportunities by doing that.
Speaker: Those are technical changes in our current life products, but also in the ones that are about to launch. to maintain the value proposition, decrease technical costs. So those are the four actions that we are, among other, very strong in pursuing and this is my answer. Thank you very much. Thank you.
Finally, we are engaging our technical teams in several programs and project of total production cost reduction.
Those are technical changes in our current Life Products.
But also in the ones that are about to Launch.
To maintain the value proposition.
Decreased technical cost.
So, those are the 4 actions that we are among other.
Very strong in pursuing. And this is my answer. Thank you very much.
Thank you.
Thank you, sir.
Patrick Hummel: We will now be moving to Patrick Hummel, calling in from UBS. Please go ahead. Yes, thanks. Good afternoon, everybody.
We will now be moving to Patrick ho
calling in from UBS. Please go ahead.
Antonio Filosa: Antonio, my first question to you is about, you know, the lack of commentary on cash flow and balance sheet strength in your strategic priorities. I get it that the better AOI improves also the cash generation, but it looks like there's a high likelihood of further cash burn in the second half. And I think it's fair to say that at least out of the Detroit three players, Stellantis' balance sheet is the least solid by now. You had a pretty high cash burn on group level of more than about $9 billion in the first half. So I wonder in terms of the balance sheet priorities, what are you going to do about it?
Yes, thanks. Uh, good afternoon everybody. Um, Antonio my first question to you. Um,
Doug Ostermann: Can you still keep growing the FinCo, which seems to be quite cash absorbing? How should we think about cash returns to shareholders short term and medium term in light of the, well, let's say somewhat stretched balance?
Antonio Filosa: Thank you very much and I will take the first part of the answer and then I will leave to Doug the rest. So as we said, the first business priority is to grow. That means volume through the expansion of our lineup with the addition of new products that are much closer to customer demands and also healthier in terms of margin per unit. By growing volumes, by growing profit, we will automatically grow the top line of cash generation, which is AOI.
Is about, uh, you know, the lack of commentary on on on cash flow and balance sheets, uh, strength. And in your strategic priorities. I, I get it that a better aoi improves, also the cash generation, but it looks like there's a high likelihood of further cash burn in the second half. And I think it's fair to say that at least out of the Detroit 3 players santisis balance sheet is, is a lease solid by now, you had a pretty high cash burn on group level of more than or about 9 billion in the first half. So I wonder in terms of the balance sheet. Uh priorities. Uh, what are you going to do about it? Uh can you still keep growing the feno which seems to be quite uh cash absorbing? Um, how should we think about cash returns to shareholders short-term and medium-term in light of the, well, let's say somewhat somewhat stretch balance sheet situation. Thank you. Well, thank you very much. And I will take the first part of the answer and then I will leave to Doug.
Rest.
So, as we said, the first business priority is to grow.
And that means volume.
Through the expansion of our lineup with the addition of new products that are much closer to customer demands.
And also healthier in terms of margin per unit.
Doug Ostermann: Then on the rest, please, Doug, if you want to add something. Yeah, just to address a couple of different items that you had in there. One, of course, we were encouraged by the fact that the cash burn rate is reducing, right? So we reduced it in about, you know, half from what we saw second half last year to first half this year. We expect a significant decrease again in the second half of this year as we, you know, chart our path positive operations. I think that's, you know, a big focus for us in the near future.
By growing volumes, but I will grow in profit. We will automatically grow the top line of cash generation which is AI. Then on the rest please dug, if you want to add something,
Doug Ostermann: That being said, you know, we will continue to invest in the business and invest in the product plan. The way to achieve the positive cash flow turnaround is really through a couple of different things. One, of course, increasing the AOI generation of the company and also stabilizing working capital. So if you look at the working capital trend as well, you see more stability in the working capital piece of our cash flows over time. And so I think, you know, we're making good progress on this front. In terms of your question about the FinCo, of course, we're very excited about the FinCo, particularly the growing piece that we have that's growing so rapidly in the United States and its ability to help us and our customers get into our vehicles, the potential to use it as a loyalty tool over time and, of course, help us connect more closely with our customers and also, of course, finance our dealers.
Doug Ostermann: When we talk about capital, though, you know, we also have to recognize that we have inflows from that business, particularly in Europe, where we get received dividends. We do, of course, have outflows as we build the balance sheet on the U.S. FinCo. You know, I think the net of those will be less than half a billion of outflow. So, you know, this year, while it will be an outflow, it's not a huge drag on the industrial free cash flow at this point. But I think that's a great business that we continue to see a lot of potential.
Achieve the positive uh cash flow turnaround is really through a couple of different things. 1, of course, increasing the aoi generation in the company and also stabilizing working capital. So if you look at uh, the working capital Trend as well, you see more stability, uh, in the working capital piece, uh, of our cash flows, uh, over time. And so, uh, I think, you know, we're making good progress on this front. Um, in terms of your question about the finco, of course, we're very excited about the the finco, uh, particularly, uh, the growing, uh, piece that we have, uh, that's growing so rapidly in the United States. Um, and its ability to help us and our customers, uh, get into our vehicles. Uh, the the potential to use it as a as a loyalty Tool, uh, over time and of course, helped us connect more closely with our customers. Uh, and also of course Finance our dealers. Um, when we talk about Capital though, you know, we also have to recognize
Recognize that we have inflows uh, from that business. Um, particularly in Europe. Um, where we get received dividends, uh it we do of course have outflows as we build the balance sheet on the US finco. Uh, you know, I think the net of those, uh, will be less than half a billion of outflow. So, uh, you know, this year, while it will be an outflow. It's it's not a huge drag on the industrial, uh, free cash flow at this point. But I think that's a great business that
Speaker: So, hopefully that answers the different pieces of your question. it doesn't.
We continue to see a lot of potential in. Um, so hopefully that answers the different pieces of your question.
Antonio Filosa: Antonio, if you allow me a follow up, in terms of your brand portfolio, would the CMB be the event when we get Your latest thoughts and your strategy regarding your brand portfolio, which probably many people would expect to see some streamlining. Very well. Thank you again for your second question. So we all realize and recognize within Stellantis that our large portfolio of very iconic brands is one strength that we have against our competitors. For instance, the new Chinese Antiques. And we want to work it better. We want to be more effective and efficient in our brand portfolio management.
It it does. And Antonio if you allow me a follow-up, um, in terms of your brand portfolio with the CMD, the the the event when we get
Your latest thoughts and and your strategy regarding your brand portfolio, which um probably many people would expect to see some streamlining.
Oh, very well. I think you again for your second question.
So, we all realize and recognize within the land is that our large portfolio of very iconic Brands is 1 strand that we have against our competitors. For instance, the new Chinese entrance
Antonio Filosa: That's why, for instance. You may have observed us recruiting a lot of talents to take care of our brands from the market. So you see, for instance, on Citroën, the new head of Citroën, Xavier. on Peugeot, the new head of Peugeot, Alain Favet, and then you see Tim Kuniski as head of all the North American brands. You see Gilles Vidal, recently recruited to take care of design for the European brands at the European Design Center, plus Davide Mele, who is in my top executive team, that will help us in better managing our product portfolio, but also our brand portfolio.
and we want to work it better. We want to more to be more effective and efficient in our brand portfolio management. That's why, for instance,
You may have observed us recruiting a lot of talent.
To take care of our brands from, from the market. So you see, for instance, on citro and the new head of Citroen Xavier,
On the page of the new ad on all, you see Tim Kuniskis as head of all the North American brands. You see Jill Vidal, who was recently recruited to take care of the design for the European brands and the European design center, plus David Miller, who is in my top executive team that will help us in better managing our product portfolio.
Speaker: And yes, we are working intensively on that, and all the answers will be provided in the capital market day of quarter 1-26. Thank you. Thank you, Antonio. Thank you, Doug.
Brand portfolio. Yes, we are working intensively on that and all the answer will be provided in the Capital Market day of quarter 1. 26. Thank you.
Thank you Antonio. Thank you, Doug.
Michael Fodukidis: We now move to Michael Fodukidis of Auduby VHF. Please go ahead. Yes, hi, Michael from AudioBHF. So one question on Europe. You mentioned in your presentation some price cuts on your side, as well as a strong pricing pressure overall. Is it something that you think continues or deteriorates? And how would you position Stellantis in this environment, meaning that you see yourself as a follower or maybe more an active player, given your price position, which was too high? Thank you. Well. Now, thank you for your questions. So we all know that. Europe is a large but complex market for all the automakers, right?
Thank you, much sir.
When I moved to Michael for kiddies of Auto V VHS, please, go ahead, sir.
Yes. Hi Michael from Adobe HF. So 1 question on Europe, you mentioned in your presentation some price cuts on your side as well as a strong price in pressure overall.
Uh, is it something that you think continues or deteriorates and how would you position, uh, stellantis in this environment? Meaning that you see yourself as a follower? Or maybe more an active player? Given your previous price position which was uh too high. Thank you.
Well.
No, thank you for your question, so we all know that.
Antonio Filosa: But we understand with Stellantis that we are turning the corner. Talking of market share now before price. You see that the introduction of the new products that have been launched recently and are still in ramp-up, they already are growing in the market share significantly from H2 to H1 2025. We are now at 17% market share, that is 1.6 percentage point better than H2 2025. So market share is coming, volume are coming. Second, as profit action, but also volume action, we are now in the phase, in the ramp-up of the old, new smart car product. They have already a very large bank of orders and we are ramping up the two plants that are producing one in Slovakia, the Citroën C3 and the Opel Frontera, the other one in Serbia, the Fiat Grande Panda.
Europe is a large, but complex market for for all the automakers, right?
But we understand, we Face the land is that we are turning at the corner.
for instance, talking of market share now, before pricing
You see that introduction of the new products that have been launched at recently and are still a ramp up?
They already are, um, growing in the market share, significantly from H2 to 2024 to H1 2025. We are now at 17% market. Share, that is 1.6 percentage Point better than H2 2025. So market share is coming, volume are coming.
Second as profit action but also volume action. We are now in the phaser in the ramp up of the old new smart car products.
Antonio Filosa: So what we expect for Europe is an H2 better than H1 in terms of volumes, market share, but also profit generation.
The other one in Serbia: the Fiat Grand Panda.
Speaker: on the industry itself, we are observing some deterioration. especially in space that are very important to us, such as light commercial vehicles. And on that, we understand that one key point is also regulation on CO2 emission. For that, we are in constant and productive dialogue with the institution. And we believe that the important decision will be taken also to unlock the full potential of light commercial vehicle industry for Europe. Thank you.
So what we expect for Europe is an H2 better than H1, in terms of volumes market share but also profit generation.
On the industry itself.
We are we are observing some deterioration.
Especially in space, that are very important to us such as Light commercial vehicle.
And on that, we understand that 1 key point is also regulation on co2 emission for that. We are in constant and productive dialogue with with the institution.
And we believe that important decision will be taken also to unlock the full potential or Light commercial vehicle industry for for Europe.
Thank you.
Thank you.
Thank you very much, sir.
Stuart Pearson: Next question will be coming from Mr. Stuart Pearson, calling from BNP Paribas. Yeah thank you for taking my question. So I guess for Antonio to start with, I mean Stellantis has obviously gone from being the benchmark for profitability in both Europe and North America not so long ago to now pretty much loss making in both and Pearson earning reasonable returns. So I mean you've had a front row seat on all of this. I mean what's your diagnosis of what's gone wrong and what kind of response should we expect from you? I know we've got to wait for CMD but I mean when we look at what you're saying today it looks like more of the same.
Next question, will be coming from Mr. Stuart Pearson, calling from fb&t pariba. Please go ahead.
Antonio Filosa: That might be unfair but more incremental actions but I wonder are you considering anything more radical that you think might be required to get the company back to benchmark levels? And maybe just link to that possibly for Doug just on the restructuring charges and exceptional items. You know we've had three billion on average now over the last five years, another three billion in H1 this year. I mean what can you say about H2 as things stand today? Do we expect anything more there? And then you know when will those continued charges perhaps finally moderate?
Yeah, thank you for taking my question. Um, so I just ran Antonio to start with. I mean, Scientis is obviously gone from being the benchmark for profitability in both Europe and North America. And not so long ago, it's now pretty much lost, making him, both and Pierre any reasonable return. So, I mean, you've had a front-row seat on all of this. I mean, what's your diagnosis of what's gone wrong and what kind of response that we expect from you? I know we've got to wait for the CMD, but I mean, when we look at what you're saying today, it looks like more of the same that might be on.
Antonio Filosa: And then maybe to finish with a request Doug, perhaps now the financial services is becoming such a bigger part of the business we could get some separate disclosure between Industrial and the FinCo and I'm sure there'll be lots to look at and analyse there. Thank you. Thank you for your question. I will take the first part and then I will hand to Doug for the second part. So the first part, the diagnosis, both in Europe and North America. Well, diagnosis itself is large and complex, but for sure one important root cause of our market share deterioration, both in North America especially, but also in Europe.
Fair bit more incremental actions, but I wonder, are you considering anything more radical that you think might be required to get the company back, uh, to benchmark levels? And maybe just link to that, possibly, for Doug, just on the restructuring charges and exceptional items. You know, we've had $3 billion on average over the last 5 years, and another $3 billion in H1 this year. Um, I mean, what can you say about H2 as things stand today? Do we expect anything more there? Uh, and then, you know, when will those continued charges perhaps finally moderate? Uh, and then maybe to finish for a Crest dog prep. So, now, the financial services is becoming such a bigger part of the business, could we get some separate disclosure between industrial and The Thinker? And, uh, I'm sure there will be lots to look at and analyze there. Thank you.
Well.
Thank you for your question. I will take the first part, and then I will learn to come back for the second part.
so the first part that they are noses both in Europe and North America,
Well, they are noses. Itself is large and complex.
But for sure 1 important root cause of our market share deterioration.
Antonio Filosa: is the fact that in the past we decided to phase out many important, relevant, and successful name-pages. For instance, in North America, U.S. specific. We phased out seven successful name Jeep Cherokee, Jeep Renegade, Chrysler 300, Ram DS Classic, Ram ProMaster CD, no Charger, the muscle car of the past, no Challenger, SimFamily. Those seven nameplates were granting to us 300,000 units per year. sold, and several billions of gross commercial results per year. So now, we are restoring that lineup. Jeep Cherokee is coming, much improved than the previous one, with two years of absence but coming strong.
Both in North America especially but also in Europe.
Is the fact that in the past, we decided to phase out many important relevant and successful name plates.
for instance, in North America us specifically
We phased out seven successful nameplates: Jeep and Cherokee.
Jeep Renegade, Chrysler 300, Ram 1500 Classic, and Ram 1500. Charger, the muscle car of the past. Don't challenge her; same family.
Those 7 inlets. We are granting to us, 300,000 units per year.
Sold and 7 billion of of gross commercial result per year.
So now we are restoring that lineup.
Doug Ostermann: The powertrain that we have discontinued in the past, they are coming back, starting with the legendary MED-8 engine that has been shared before, and this means volumes and this means margin per unit, and also in Europe we are correcting some initial all-in-BD powertrain decisions into multi-energy offers to our customers, because we believe that both in Then on the rest of the question, I will leave Doug answering. Thanks, Antonio. Just to address the other pieces of the question, when you talked about one-time charges, when we look at the $3.3 billion of one-time charges that we saw in the first half, as I've mentioned in my comments on the 21st, roughly $2 billion of that, I think, represents some tough decisions and changes in strategy that have been made by this new management.
Jeep Cherokee is coming much improved than the previous 1 with 2 years of of absent but coming strong
The power train that we have this container in the past, they are coming back, starting with the legendary me8 engine has been shared before, and this means volumes. And this means margin per unit. And also in Europe, we are correcting some initial
All inbd powertrain decisions into a multi-energy offers to our customers because we believe that both in North America and Europe to be, multi-energy means to be closer to the real customer demand.
Then on the rest of the question, I will leave that answering. Okay.
Doug Ostermann: Antonio certainly mentioned one significant one, which was, you know, our decision to stop our investment, continued investment in fuel cell programs in Europe, but there are other shifts in strategy that are, you know, all a part of that number, including some restructuring, as you mentioned in your question itself. You know, in terms of, you know, now there are other factors built in there, changes in our environment, for instance, there's some recognition of the changes of the one big beautiful bill passed in the United States that impacted cafe fines and the like. So there's some, certainly I think the majority of it represents us getting after those tough decisions and changes in strategy, but there are also some pieces related to changes in our environment.
Doug Ostermann: In terms of, we don't typically forecast, you know, kind of one time items for the future, but, you know, looking forward, given that I think the new management team still has a fair amount of work to do in looking at our strategies and preparing for all the announcements that will come forward on the capital markets day, you know, we could see other strategic shifts that could lead to one time charges in the second half. And then, you know, on FinCo, you know, there is a lot of disclosure on the financial services piece of the business as opposed to the industrial piece in the 6K, but I think, you know, you raise a good issue, which is something we're always looking at is at what point will that piece of the business be so large that we need to maybe break it out as a separate segment, etc.
Um, you know, in terms of uh, you know, now there are other factors built in their changes in our environment. For instance, there's some recognition of the changes of the 1, big, beautiful Bill, uh, passed in the United States that impacted Cafe fines and the like. So there's some uh certainly I think the majority of it represents us getting after those tough decisions and changes in in strategy. But there are also some pieces related to changes in our environment. Um in terms of we don't typically forecast, you know kind of 1 time items for the future um but you know looking forward given that I think the man new management team still has a fair amount of uh work to do and looking at our strategies and preparing for all the announcements that will come forward on the on the capital markets day. Um, you know, we could see other strategic shifts that could lead to 1-time charges in the second half. Um, and then, you know, well on finco. Uh, you know, there is a lot of disclosure on on the financial services piece of the business as opposed to the industrial piece in the 6.
Doug Ostermann: But that's something that we look at kind of every quarter and think about. But, you know, I would say there is a lot of disclosure in the 6K and, you know, offline, obviously, I'd be happy to have a session with you to walk through some of that.
K. But I think, you know, you raise a good issue which is is something we're always looking at is at what point will that piece of the business be so large that we need to maybe break it out as a separate segment Etc but that's something that we we look at kind of every quarter and think about. Um but you know I would say there is a lot of disclosure in the 6K and you know offline, obviously be happy to to have a session with you to to uh to walk through some of that.
Steven Reitman: Next question will be coming from Mr. Steven Reitman of Bernstein. Please go ahead, Gillian. Good morning. Could you talk about your relationship with the U.S. dealers? Obviously, that was a significant issue leading up to the whole blow-up of S24. Can you comment on any metrics you have in terms of how their confidence and trust in the brand has been changing since the management changes? Thank you very much.
Thank you. What? Sir? Thank you. Next question. Will be coming from Mr. Stephen Reitman of Bernstein, please go ahead. Your line is open sir.
Yes, good morning. Um
Antonio Filosa: Very well, good morning and thank you for your question. Well, since January. Myself and my team committed in a much better dialogue with our dealer network, especially in the U.S., but not only. And good things are starting to come. For instance, the new versions of RAM that I mentioned in my presentation, the RAM 1500 Express. is basically an idea that came out of our team that deal with the brand, talking to the dealers. We have decided to discontinue more than one year ago RAM DS Classic that was attacked in the entry level of RAM of light-duty segment in US.
Can you talk about um, your relationship with the USD? There's obviously that was a significant issue, um, leading up to the whole blower 24. Um, can you comment on kind of any metrics you have in terms of how, um, their confidence and Trust in the brand has been changing? Um, since uh, since management changes. Thank you very much.
Oh, very well. Good morning. Thank you for your question.
well, since January, uh, myself and my team committed in a much better dialogue with our dealer Network specially in us, but not only,
And good things are starting to come.
For instance, the new versions of Ram that I mentioned, the Ram 1500 Express.
Is basically an idea that came out of our team, that deal with the brand talking to the dealers.
Antonio Filosa: And now this version, that again came out from a constructive dialogue of the network with the brand team, is now restoring our presence there, and we see good orders coming in. And when you ask what is a quantitative indicator of this restored confidence... I must say that the order inflow is one of those. So our order book, mainly driven by retail orders, that's our dealer network. grew more than 90% year over year. And this is a clear demonstration that confidence, which is an enduring process to build day by day through relationship and also through good business, good mutual business, while it's coming back.
We had decided to discontinue more than 1 year ago. Ramadas classic that was attacked in the entry level or Ram of light duty segment in uh in US. And now this version that again, came out from a constructive dialogue of the network with the brand team is now restoring our presence there.
And we see good orders coming in.
and when you ask what is a quantitative indicator of this restored confidence,
I must say that the order inflow is 1 of those.
So, our order book, mainly driven by retail orders from our dealer network, grew more than 90% year-over-year.
Speaker: Thank you. Thank you very much.
And this is a clear demonstration that confidence which is an enduring process to build day by day through relationship and also through good business through good. Good Mutual business while it's coming back.
Thank you.
Thank you.
Philippe Houchois: Next question will be from Mr. Philippe Houchois, colleague from Jefferies. Please go ahead. Thank you and good afternoon. My question is on the guidance you gave us on free cash flow in the second half. Improvement, yes, that's fine. It doesn't give us a sense whether the H2 might compensate for what happened in the first half. And what struck me is maybe a certain reluctance to guide on working capital. I would expect there's an improvement in volume coming in the second half. That usually does wonders for working capital or cash inflow generation. So is that just reluctance on your part or lack of visibility or is there an obstacle, a reason why there wouldn't be a meaningful inflow?
Thank you very much, sir.
Next question will be from Mr. Philip Usha calling from Jeff. Please, go ahead.
Antonio Filosa: And I appreciate it may not be the same as earnings in terms of quality, but meaningful inflow of cash from working capital. And then kind of supporting that, wondering, we know about the express, we know about the HEMI coming back on the RAM. But when do we actually see those numbers meaningfully? I mean, can I see a RAM V8 in the dealership in the U.S. right now, in a few months, or is that coming later? Where are we in the restock or the supply chain? Are we in production? Are we delivering to customers or just to dealers?
No, thank you and good afternoon. Um, my question is on the guidance you gave us on 32nd, half. Um, improvements. Yes, that's fine. It doesn't give us a sense, whether the H2 might compensate for, what happened in the first half. And what, what struck me is, maybe a certain reluctance to guide on working capital. Um, I would expect know there's an improvement in volume coming in the second half. That usually does wonders to um, to for working capital or cash inflow uh, generation. So is that just reluctance on your part or lack of visibility? Or is there an obstacle or reason why there wouldn't be a meaningful inflow and I appreciate it may not.
They'll be the same as earnings in terms of quality but meaningfully inflow um, cash from working capital and then kind of supporting that wondering.
Speaker: If you can give us a sense, that would be helpful. Thank you for your question.
Dealers, if you can, give us a sense that would be helpful.
Oh well.
Antonio Filosa: I will take the first part and then I will give the technical answer too. So let's start. First of all, industrial cash flow, but generally speaking on the progression of results that we are committing to in our guidance. We need to understand and to remind ourselves that we close at H1 nearly breakeven, right, in AOI for instance, and with the free cash flow, the outflow that you saw. And in H2 we will have the highest portion of impact of tariffs in the United States. which I believe in H2 only will be around 1.2 billion. That means that through the additional volumes driven by the launch.
Thank you for your question. I will take the first part and then I will give the technical answer to, to that.
So, let's start.
First of all, industrial cash flow. But generally speaking, on the progression of results that we are committing to in our guidance.
we need to, to understand and to, to remind ourself that we closed at each 1, nearly break, even right in a way for instance, and with the freakish flow, the outflow that you saw
And in H2, we will have the highest portion of impact or tariffs in the United States.
Which I believe in H2 will be around $1.2 billion.
Doug Ostermann: through the accredited profit per unit that those launches but also the cost action will deliver to us. We need to offset those impact and we are committed to accelerate. So it's not reluctance. Actually, it's considering that Alpha 1 was in the numbers that you saw. And Alpha 2, the way it has been expressed in the guidance, represents a very relevant acceleration, which we intend and commit to do, but also to go forward in the next year. on the RAM launches that you mentioned. So on V8, for instance, after a green light, the team was unbelievably quick and fast in delivering the full development and the manufacturing adjustments.
That means that through the additional volumes, even by the launches,
Through the accredited profit per unit that those launches but also the cost action will deliver to us. We need to offset those inputs. And we are committed to accelerate
So it's not reluctant actually is considering that alpha 1 was in the numbers that you saw enough. To the way it has been expressing. Its guidance represent.
A very relevant acceleration, which we intend and commit to do but also to go for forward in the next years.
On the ram. Launch is that you you mentioned?
Doug Ostermann: in less than 10 months. So we will have very soon start of production. Thus, you will see both the V8 versions, but also the express version by quarter four mainly in the dealers of this year.
So on the 8th for instance after green light, the team was unbelievably quick and fast in delivering the full development and the manufacturing adjustments.
In less than 10 months. So we will have very soon. Start of production does you will see both the V8 versions but also the espresso.
Doug Ostermann: Doug, the rest. Yeah. On your question on cash flow and working capital, you know, I agree with some of your comments. It's a tough period in which to forecast a business, I'm sure, as auto analysts, all of you on the call can relate. You know, as I mentioned, there are some significant external headwinds. You know, we saw in the first half about a billion euro impact to our AOI just from changes in FX, right, with, you know, the value of the euro changing against currencies like the Turkish lira, the Brazilian real, you know, Argentinian peso, etc.
Doug Ostermann: So those things are very tough to forecast, as well as tariffs. The tariff impact, you know, has moved substantially and, you know, we're still getting more updates on tariff negotiations that, you know, could impact those numbers. And they're big, right? We talked about the full tariff impact for the year. Right now, our estimate is 1.5 billion. So it's difficult to be too definitive on a lot of these figures. In terms of working capital, you're right, of course, with increased volumes in the second half, we would expect that to be positive for working capital. But one thing to keep in mind, of course, is that what really has a big impact from production and working capital is because of the payment terms that we have in this business is really your production kind of in the last six to eight weeks of the of the period.
By quarter for mainly, in the dealers of this year, that the rest. Yeah, I I on your question on cash flow and working capital, um, you know, I agree with with some of your comments. It's, it's a tough period in which to forecast a business. I'm sure. As, as Auto analysts, uh, all all of you on the call, uh, can relate. Um, you know, as I mentioned, there are some significant external headwinds, you know, we we saw in the first half about a billion Euro impact, uh, to our aoi just from changes in FX, right? With uh, you know, the the value of the Euro changing against, uh, currencies like the the Turkish ler the Brazilian Royale, uh, you know, Argentinian, peso Etc. So those things are very tough to forecast um as well as tariffs, the Tariff impact you know has moved substantially and and you know, we're still getting more updates on tariff. Negotiations. That that, you know, could
Impact those numbers and they're big, right? We talked about the full tariff impact for the year, right? Now, our estimate is 1.5 billion. Um, so it's it's difficult to be too definitive on. A lot of these figures in terms of of uh of working capital. Um you're right. Of course with increased volumes in the second half. We would expect that to be, uh, positive for working capital. But 1 thing to keep in mind, of course, is that
Doug Ostermann: And so when we look at that dynamic from mid-year, where we run in the last two months of the first half versus year-end, because of the year-end holidays around Christmas, et cetera, we oftentimes have some downtime. It's tough to see significant improvement from, you know, the end of where kind of how we run end of first half versus end of second half. But in general, you're correct. In general, with increased volumes, we should see working capital at least mitigate and balance out, if not potentially be a positive. Thank you.
What really has a big impact from production and where you can capitalize because of the payment terms that uh we have in this business is really your production kind of in the last 6 to 8 weeks of the of the period. And so when we look at that Dynamic from mid year uh where we run in the last 2 months of the first half versus year end because of the year-end holidays around Christmas Etc. We often times have some downtime, it's tough to see significant Improvement, um from uh, you know, the end of where kind of how we run end of of first half versus end of second half. But in general, you're correct in general uh with increased volumes. We should see uh working capital at least mitigate and and balance out uh if not potentially be a positive,
Thank you. Thank you. Thanks for your question.
Thomas Besson: Our next question will be coming from Thomas Besson, calling from Cambridgeshire, go ahead. Thank you. I'd like to come back to your guidance, please. Is it fair to say that you're trying to be conservative for the second half, as you should be able to produce normally for the first time in a long time without downtime for tourists or without having to substantially cut your inventories? Or is that... a lot related to the USMCA uncertainty or the willingness not to have to warn again. And to follow up on Philippe's question on... pre-cash flow, it is fair to assume that the H2 capex has little reason to rise sequentially.
Our next question will be coming from Thomas. Bissell, calling from conversion with, please go ahead.
Thank you. Uh, I'd like to come back to uh, your guidance please. Uh, is it fair to say that you're trying to be conservative for the second half as you should be able to to produce normally for the first time in a long time without downtime for s or without having to substantially, get your uh inventories uh, or is that
Lots of related to the USMCA.
Uncertainty, or the willingness not to have to warn again and to follow up on Philip's question.
Free cash flow. Uh,
is it here to assume that H2 capex has a little reason to write sequentially?
Antonio Filosa: Thank you for your question, and as I mentioned a little bit before in my previous... Yes, we need to consider that H1 was basically a break-even for our business. And we are committed to drive the business into a gradual, sequential improvement that needs to be evident quarter by quarter in all our business KPI, that means AOI, industrial free cash flow generation, volumes, shipments, etc. So this is our commitment and considering that As Doug said, around 1.2, 1.3 billion of the overall 1.5 billion of initially estimated tariffs, if things don't change, will be paid in the second half.
Okay.
In my previous answer.
Uh, yes, we need to consider that H1 was basically break even for our business.
And we are committed to drive the business into a gradual, sequential improvement that needs to be evident quarter by quarter in all our business KPIs. That means year-over-year, industrial-free cash flow generation, volumes, shipments, etc. So this is our commitment, and considering that...
Antonio Filosa: This is a commitment. I would not call conservative, but we are very committed to do that. As we are committed to transition in acceleration into the next year, keep going.
As Doug said, around $1.2 billion to $1.3 billion of the overall $1.5 billion of initially estimated tariffs, if things don't change, will be paid in the second half. This is a...
Doug Ostermann: I study Phonetics with technical part. Yeah, no, I think that's exactly right. Antonio, when we when we think through the dynamics, first half versus second half, you know, we think about where we can guide the business where we see the business performing. You know, I think we can step up production, I think we can make progress on volumes, I think we can make progress on pricing, particularly in the United States, I think a lot of the pre tariff vehicles that were on dealer lots are running out, I think we'll see industry dynamic that should be supportive of price pricing.
A commitment that I would not call conservative, but we are very committed to doing that. As we are committed to transitioning in acceleration into the next year and keeping going.
Study, if you want to take the technical part of the answer.
Doug Ostermann: When we look at, you know, industrial, of course, our fixed costs will spread a bit better with the higher volumes. But there are some significant headwinds as well, right? Because we only paid as Antonio outlined 330 million euros, the expected 1.5 was impact in the first half. Part of that is just because the timing of when the when the tariffs came in, right? But, but yeah, we're looking at a step up in that expense from, you know, 330 million to more like a billion plus in the second half. So that's a significant headwind for us.
Yeah, no, I I think that's exactly right. Um, Antonio when we when we think through the Dynamics first after the second half. Uh, you know, we think about where we can guide the business and where we see the business performing, um, you know, I think we can step up production. I think we can make progress on volumes. I think we can make progress on pricing, particularly in the United States. I think a lot of the pre-charged that were on dealer. Lots are running out. I think we'll see, uh, industry Dynamic. That should be supportive of pricing, uh, when we look at, uh, you know, Industrial
Doug Ostermann: Now offsetting that we also should be able to run a richer mix, that probably more lines much better with customer demand that we see in the United States with cafe fines going to zero, that that's going to be a positive, but there are certainly, you know, a lot of headwinds still to be handled in the second half. You know, I think our guidance is reasonable, and and achievable, but, but certainly there are challenges in meeting it. Thank you.
As far as our fixed costs will spread a bit better uh with the higher volumes. But there are some significant headwinds as well, right? Because we only paid as Antonio outlined 330 million euros of the expected. 1.5 was impact in the first half part of the part of that is just because the timing of when the, when the tariffs came in, right? Um, but uh, but yeah, we're looking at a step up in that expense from, you know, 330 million to more like a, a billion plus in the second half. So, that's a significant, uh, headwind for us now, offsetting that we also should be able to run a richer mix, um, that probably more lines much better with customer demand that we see in the United States with Cafe finds going to zero, uh, that that's going to be a positive. But there are certainly, you know, uh, a lot of, uh, headwinds still to be uh, handled in the second half. Um, you know, I think our our guidance is reasonable, uh, and and achievable but, uh, but certainly there are
are challenges in meeting it.
Thank you.
Itay Mikaeli: Thank The next question will be coming from Itay Mikaeli of TD Cowen. Great. Thanks.
Thank you, sir.
Our next special will be coming from ete mikeli of. TD Cowen. Please go ahead.
Antonio Filosa: Good afternoon, everybody. I was hoping we could dig in back to North America on fleet sales, and maybe if you could quantify the impact in H1 and give us a bit more detail about some of the action plans you have to improve fleet sales, how would you think about timing and potential impact to both top line as well as bottom No, very well. and thank you for your questions. I believe that we can quantify the overall impact of lower fleet sales that has been a decision driven by profit optimization logics in around half point of market share, overall market share in North America.
Uh, great thanks. Good afternoon, everybody. Um, I was hoping we could dig in, uh, back to North America on on Fleet Sales and maybe if you can quantify the, the impact in H1 and give us a bit more detail about um some of the action.
You have uh to improve Fleet Sales, how would you think about timing and potential impact to both Topline as well as bottom line. Thank you.
No, very well.
And thank you for your question.
I believe that we can quantify the overall impact of lower Fleet Sales that has been a
Antonio Filosa: And what we are doing is, number one, we have recruited from the market a very strong leader to handle the team, to manage the team. He comes from the field, his name is Michael Ferreira, and immediately took action and decisions on changing our strategy in fleet sales. For instance, as you know very well, fleet sales is divided into three, I would call them sub-channel, the rent-a-car, the commercial, that means small and mid-sized business, and the governmental. We were too much focused on rent-a-car, also because the costrain era of semiconductor was delivering high volumes and very decent margins.
a decision driven by profit optimization Logics in around half point of market share overall market share in North America.
And what we are drawing is number 1.
We have recruited from the market, a very strong leader to handle the team to manage the team.
Uh, he comes from the field. His name is Michael Ferrara.
And immediate uh 2 action and decisions on changing our strategy in Fleet Sales.
For instance, as you know very well, Fleet is still divided into three.
I would call it, I would call them subchannels: the rental car, the commercial, which means small and midsize business, and the governmental.
We were too much focus on rent a car.
Antonio Filosa: Now with the new leadership and a new team, we are diversifying our offensive in fleet into the three channels. also putting a lot of effort in governmental and putting a lot of effort in commercial that are both higher margin than rent-a-car. We expect to already initial growth and a partial recovery of what we lost, and obviously we expect to accelerate as we transition in the next year. Thank you for your questions.
Also, because the cost train hero semiconductor was delivering High volumes and very decent margin.
Now, with the new leadership and the new team we are diversifying our offensive in Fleet into the 3 channels, also putting a lot of effort in governmental and putting a lot of effort in commercial that are both higher margin than than rental. We sped up to already initial growth and a partial recovery of what we lost. And obviously we spread to accelerate as we acceleration as we transition in, in the next year.
Thank you for your question.
Thank you.
Mike Tindall: We'll now be moving to Mike Tindall of HSBC. Please go ahead. Yeah, thanks. It's Mike Tindall from HSBC.
Will not be moving to Mike 10 of HSBC. Please go ahead.
Antonio Filosa: I wonder if we could just talk a bit about tariffs and about Mexico and what are you hearing? Obviously, we've seen trade deals around the rest of the world, but we haven't heard much on that front and then within that question What does it mean for the economics of the new Cherokee? Because if I'm not wrong, that's going to be built in Mexico. Does that product work under the new tariff structure? And if not, what can you do to compensate for that?
HSBC, I wonder if we could just talk a bit about tariffs and about Mexico. What are you hearing?
Um, obviously we've seen trade deals around the rest of the world, but we haven't heard much on that front. And then within that question.
What does it mean for the economics of the new Cherokee? Because if I'm not wrong, that's going to be built in Mexico. Does that product work?
Under the new tariff structure, um, and if not, is there what can you do to kind of compensate for that? Thanks.
Antonio Filosa: Very well, I thank you for your question, so Tariq. It's a little bit of a long answer, but I will try to be short. Number one, since day one, we understand and we support the general strategy of President Trump's administration. to boost job creation and U.S. production both in the automotive OEM but also in the automotive suppliers. using also tariff as a tool, and we want to support this strategy. Second, we are in a very constructive dialogue with American institutions and policy makers, as well as with the Mexican and Canadian institutions and policy makers. Now we are observing a phase when tariffs have been negotiated.
Oh, very well very well. I, thank you for your question. So tariffs.
It's a little bit long, but I'll try to be short.
Number 1 since day one. We understand and support the general strategy of President Trump's administration.
to boost job creation and U.S. production, both in the automotive OEM and in the automotive suppliers.
Using, also if, as a tool, and we want to support this strategy.
Second.
We are in a very constructive dialogue with American institutions and policymakers, as well as with the Mexican and Canadian institutions and policymakers.
Antonio Filosa: U.S. with individual countries or group of countries, right? and what we understand. is that we need to request, we would like to request to properly recognize the high American U.S. content in some vehicles. just to make numbers. U.S. industry is around 16 million units of cars sold per year. 8 million of those 16 million... are built in U.S. plants. So obviously, they carry a very high U.S. content. Four million are built in Mexican and Canadian plants. but they use a lot of components coming from U.S. supplies. So also those units carry a lot of U.S.
Now, we are observing a face when tis have been negotiated.
Us with individual countries, so a group of countries, right?
And what we understand.
Is that we need to to request. We would like to request through properly recognized, the high American us content in some vehicles.
Just to make numbers.
Us industry is around 16 million units of car sold per years.
8 million of those 16 million units are built in US plans.
So obviously they carry a very high us content.
4 million are built in a Mexican and Canadian plants.
But they use a lot of components coming from us suppliers.
Antonio Filosa: content. Finally, four mediums, they come from Europe, they come from Asia, and they have virtually zero U.S. contact. So what I believe should be done is to recognize also using the tariff setup. that the American bills, but also the Mexican and Canadian bills, they carry a lot of U.S. content.
So also those units, carry a lot of us content.
Finally 4 mediums. They come from Europe, they come from Asia and they have virtually zero us content.
So, what I believe should be done is to recognize also using the tariffs set up.
That the American bills but also the US and Canadian as a Mexican and Canadian bills.
Antonio Filosa: And by the way, we salute the flexibility that has been recently introduced by the U.S. government and institutions into the tariffs of Mexico and Canada. They expand the U.S. content, for instance, or other tax offset credits. on the charity, you are right.
They carry a lot of us content. And by the way, we salute, the flexibility, that has been recently introduced by the US government and institution into the Tis of Mexico and Canada. They spend the US content, for instance, or others, tax offset credits.
Antonio Filosa: Cherokee has been developed and will be built in Mexico to start. and we are working a lot in transformation costs. and also on total production costs with technical studies and projects to decrease the cost of the platform, the components, and the overall top hat and vehicle in order to boost profitability. It will come with large volumes because we understand that it is a key move of returning into the largest U.S. segment in the industry, 3.6 million units sold in the midsize SUV segment, which is the equivalent of the entire Germany industry, just to make an example.
On the charity. You are right.
The Cherokee has been built has been developed and will be built in Mexico to start.
And we are working a lot on transformation costs.
Antonio Filosa: And we need to work on cost, and we are doing that, to increase profits so we can totally offset the tariffs. That is my answer.
And also on total production cost with technical studies and projects to decrease, the cost of the platform, the components and the overall top head and vehicle in order to boost profitability, it will come with a large volumes because we understand that it is a key move of returning into the largest US segment in the industry 3.6 million units sold in the midsize SUV segment, which is the equivalent of the entire Germany industry just to make an example.
And we need to work on calls that we are doing that to increase profits. So we can totally offset that. That is a Fed.
Speaker: Thank you very much.
That is my answer. Thank you very much.
Speaker: Ladies and gentlemen, due to time constraints, that was our last question for today's conference.
Antonio Filosa: I'd like to hand the call over to Mr. Antonio Filosa to conclude this call. Thank you. Thank you very much, George, for your help today. Thank you very much. And thank everybody, everybody, for your time and focus on the Stellantis story. I look forward to updating you on our progress in the coming months and in Capital Market Day that we will have. in quarter one, 2026. Thank you, see you later. Bye-bye. Thank you very much.
Thank you, Mr. Ladies and gentlemen. Due to time constraints, that was our last question for today's conference. I'd like to hand the call over to Mr. Antonio Felosa to conclude this call. Thank you. Thank you very much, George, for your help today. Thank you very much.
And thank everybody everybody for your time and focus on the salanti story. I look forward to updating you on our progress, in the coming months, and in coming on Market day, that we will help.
In Q1 2026, thank you. See you later. Bye bye. Thank you.
Speaker: Ladies and gentlemen, that will conclude today's conference. Thank you for your attendance. You may disconnect. Have a good day. END
Thank you very much. Ladies and gentlemen, this conference. Thank you for your T. Have a good day and goodbye.