Q2 2026 Stellantis NV Earnings Call

July 30, 2026

Speaker #1: Hello, and welcome to the Stellantis Q2 2026 financial results call. You will have the opportunity to ask questions at the end of the call by typing "pound key 5" on your telephone keypad.

Speaker #1: Please do not exceed 1 question per person, and if necessary, an additional 1. I now give the floor to Mr. Charlie Kreisman, Head of Investor Relations, to begin today's conference.

Speaker #1: Sir, the floor is yours.

Speaker #2: Thank you. Hello everyone, and thank you for joining us today as we review the Stellantis Q2 2026 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.

Speaker #2: Today, our call is hosted by Antonio Filosa, Chief Executive Officer, and João Laranjo, Chief Financial Officer. After their prepared remarks, Antonio and João will be available to answer questions from the analysts.

Speaker #2: 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.

Speaker #2: As customary, the call will be governed by that language. Now, I will hand the floor to Antonio Filosa, Chief Executive Officer of Stellantis.

Speaker #1: Hello, and welcome to the Stellantis Q2 2026 financial results call. You will have the opportunity to ask questions at the end of the call by typing "Q5" on your telephone keypad.

Speaker #3: Thank you, Charlie. And thank you all very much for joining us today as we discuss our Q2 results. Our second quarter execution and financial performance reflect the meaningful progress that the team and I have been focused on delivering over the last 12 months.

Speaker #1: Please do not exceed 1 question per person, and if necessary, an additional one. I now give the floor to Mr. Charlie Kreisman, Head of Investor Relations, to begin today's conference.

Speaker #1: Sir, the floor is yours.

Speaker #3: All key financial metrics are significantly improved year over year. Net revenues are up 13%, EOI margin is up 120 basis points, industrial free cash flow is positive 1 billion euros, up 1 billion euros compared to last year.

Speaker #2: Today, our call is hosted by Antonio Filosa, Chief Executive Officer, and João Laranjo, Chief Financial 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.

Speaker #3: This year over year improvement gives us confidence in our full year 2026 financial guidance, which we are reaffirming again today, including our expectation that we will have positive industrial free cash flow in 2027.

Earlier today, the presentation material for this call along, with the related, press release reported under the investor section of the stellantis group website. Today, our call is hosted by Antonio, fosa, chief executive officer and you all are Angel Chief Financial Officer. After their prepared remarks, Antonio and joah will be available to answer questions from the analysts.

Speaker #3: We set our vessel in 2030 strategy and its financial targets. At our May 21 investor day, and this Q2 results demonstrate that we are very much aligned in our journey toward those targets.

Speaker #2: As customary, the call will be governed by that language. Now, I will hand the call over to Antonio Filosa, Chief Executive Officer of Stellantis.

Speaker #3: In Q2, we made strong and significant progress on industrial execution, through the good work of our operating teams we have started production and are running our plants much more efficiently.

Speaker #3: Year over year, overall production efficiency was improved 870 basis points in North America, and 170 basis points in Europe. We also kept improving quality, with 3 months in service quality improving 38% in North America, and 24% in Europe.

Speaker #3: This year over year improvement gives us confidence in our full year 2026 financial guidance. Which we are reaffirming again today, including our expectation that we will have positive industrial free cash flow, in 2027.

Speaker #3: And we are making encouraging daily progress in the implementation of our value creation program, VCP, and as we shared with you at investor day, partnerships are a key pillar of our vessel in 2030 plan.

Speaker #3: We set out our Fast Lane 2030 strategy and its financial targets. At our May 21 investor day, and this Q2 results demonstrate that we are very much on track in our journey toward those targets.

Speaker #3: The announcements we made give you a strong sense of how attractive Stellantis is as a strategic partner both for OEMs and for leading names in the tech space.

Speaker #3: We are also making good progress with the execution of our large-scale new product plan. One of the key strategies of our vessel in 2030 plan is to invest in our brands, invest in our products, and expand market coverage.

Speaker #3: In Q2, we made strong and significant progress on industrial execution. Through the good work of our operating teams, we have stabilized production and are running our plants much more efficiently.

Speaker #3: In line with this plan, we are excited to have introduced the all-new RAM 1500 TRX SRT, the DS No. 7, and the Fiat Grande Panda IC in H1.

Speaker #3: Year over year, overall production efficiency was improved 870 basis points in North America, and 170 basis points in Europe. We also kept improving quality, with 3-month in-service quality improving 38% in North America, and 24% in Europe.

Speaker #3: Alongside 6 refreshed vehicles, including Opel Astra, Chrysler Pacifica, and Peugeot 408, which is gaining strong momentum in Turkey. The Ram Dakota introduced in Brazil in early 2026 is also delivering strong sales performance in the regions' largest profit pool.

Speaker #3: And we are making encouraging daily progress in the implementation of our value creation program, VCP. And as we shared with you at investor day, partnerships are a key pillar of our Fast Lane 2030 plan.

Speaker #3: We look forward to the 9 remaining new and refreshed vehicles still to come this year, and we are laser-focused on executing every one of these launches on time with the right cost and with the right quality.

Speaker #3: The announcements we made give you a strong sense on how attractive Stellantis is as a strategic partner both to other OEMs and to leading names in the tech space.

Speaker #3: Now, let me touch on some Q2 highlights from a regional perspective. In North America, we keep making significant progress and improving performance, powered by our great brands, our great products, and our great people.

Speaker #3: We are also making good progress with the execution of our large-scale new product plan. One of the key strategies in our Fast Lane 2030 plan is to invest in our brands, invest in our products, and expand market coverage.

Speaker #3: Sales in Q2 were up 6% year over year, for a 4th consecutive quarter of year over year gains, RAM was up 12% year over year, Chrysler was up 54% with the launch of the new Pacifica, and Jeep Grand Wagoneer also posted significant gains.

Speaker #3: In line with this plan, we are excited to have introduced the all-new RAM 1500 TRX SRT, the DS No. 7, and the Fiat Grande Panda IC in H1.

Speaker #3: Alongside 6 refreshed vehicles, including Opel Astra, Chrysler Pacifica, and Peugeot 408, which is gaining strong momentum in Turkey. The RAM Dakota introduced in Brazil in early 2026 is also delivering strong sales performance in the regions largest profit pool.

Speaker #3: Overall, market share was up 40 basis points in North America. Including 50 basis points in the U.S., Canada market share was also slightly up, and Mexico with its strongest second quarter on record.

Speaker #3: We look forward to and refreshed vehicles still to come this year, and we are laser-focused on executing every one of these launches on time with the right cost and with the right quality.

Speaker #3: Let me share a few highlights on RAM. The RAM 1500 was a key driver of both volume growth and profitability in the quarter. With strong demand for the reintroduction of the legendary AME V8 engine.

Speaker #3: Building on that momentum, we are now shipping the highly profitable RAM 1500 TRX SRT to customers. Just 6 months after its unveiling, this is the first off-road product from our SRT performance division, which we relaunched only 1 year ago.

Speaker #3: Now let me touch on some Q2 highlights from a regional perspective. In North America, we keep making significant progress and improving performance. Powered by our great brands, our great products, and our great people.

Speaker #3: Sales in Q2 were up 6% year over year, for a 4th consecutive quarter of year over year gains. RAM was up 12% year over year, Chrysler was up 54% with the launch of the new Pacifica, and Jeep Grand Wagoneer also posted significant gains.

Speaker #3: This product follows the Dodge Durango SRT, launched in December 2025. And the SRT muscle track, the RAM Rumble B, arrived later this year, right on time.

Speaker #3: As we proceed during investor day, SRT brings unique capabilities and a powerful halo effect to all our lineup. While delivering margins from 2% to 3 times higher, than comparable non-SRT variants.

Speaker #3: Still on the product side, we have the upcoming Jeep Recon BV and Jeep Grand Wagoneer REV launch coming this year. Now, a few words also on our U.S.

Speaker #3: dealer inventory. The increase seen in June was the result of a proactive decision to support new product launches and powertrain offerings, such as the RAM Hemi's, for instance.

Speaker #3: Ahead of the sale that we expect to achieve in the coming months. It was also driven by a temporary build-up in advance of our planned summer production shutdowns.

Speaker #3: Based on preliminary sales rates in July, we expect that in July you will see inventory already reduced from June levels. Turning to Europe, growth in Europe was driven by strong demand for smart car platform nameplates, such as Citroën C3 and C3 Aircross, Opel Frontera, Fiat Grande Panda, resulting in a 3% year-over-year increase in Stellantis brand sales in Q2.

Speaker #3: This product follows the Dodge Durango SRT, launched in December 2025. And the SRT Vasco track, the RAM Rumblebee, arrives later this year, right on plan.

Speaker #3: As we presented during investor day, SRT brings unique capabilities and a powerful halo effect across all our lineup. While delivering margins from 2 to 3 times higher than comparable non-SRT variants.

Speaker #3: Including Leap Motor, sales were up 7% year over year, supported by the success of the T03 and the B10. This growth also reflects the acceleration we are seeing in the European passenger car BEV markets.

Speaker #3: Still on the product side, we have the upcoming Jeep Recon BV and Jeep Grand Wagoneer R EV launch coming this year. Now a few words also on our U.S.

Speaker #3: Where Stellantis' BEV sales increased by 20% year over year, and by 61% year over year when including Leap Motor. In light commercial vehicles, our ProOne division maintains the number 1 position in Europe with over 28% market share.

Speaker #3: dealer inventory. The increase seen in June was the result of a proactive decision to support new product launches and powertrain offerings, such as the RAM Hemi's, for instance.

Speaker #3: Ahead of the sale that we expect to achieve in the coming months. It was also driven by a temporary build-up in advance of our planned summer production shutdowns.

Speaker #3: Beyond product offensive in Europe will further strengthen our growth drivers. First, we are one of the smart car portfolio, with the upcoming Fiat Grizzly and Fiat Fastback.

Speaker #3: We will also have broader coverage of the C-SUV segment, with the new Jeep Compass 4Lane as well as the recently launched GS No. 7 and the upcoming Lancia Gamma.

Speaker #3: Finally, Leap Motor represents another important growth lever, and keeps gaining commercial momentum. Q2 2026 sales increased 6-fold year over year, making Leap Motor the 5th largest Chinese automotive brand in the region.

Speaker #3: Resulting in a 3% year-over-year increase in Stellantis brand sales in Q2. Including Leap Motor, sales were up 7% year over year, supported by the success of the T03 and the B10.

Speaker #3: Turning to South America, we maintained our clear overall leadership position in the region, we are number 1 in the region's 2 major markets with over 26% market share in both Brazil and Argentina.

Speaker #3: This growth also reflects the acceleration we are seeing in the European passenger car BV markets. Where Stellantis BV sales increased by 20% year over year, and by 61% year over year when including Leap Motor.

Speaker #3: We also further strengthened our leadership in PKS trial, home of the region's largest profit pool. With RAM sales increasing by 10% year over year.

Speaker #3: In light commercial vehicles, our Pro-1 division maintains the number 1 position in the Euro 30, with over 28% market share. The ongoing product offensive in Europe will further strengthen our growth drivers.

Speaker #3: Moving now to Middle Eastern Africa. We delivered resilience results in a declining market, with market share increasing 20 basis points despite an 8% decline in commercial volumes.

Speaker #3: First through the expansion of the smart car portfolio, with the upcoming Fiat Grizzly and Fiat Fastback. We will also have broader coverage of the C-SUV segment, with the new Jeep Compass 4xe, as well as the recently launched DS No.

Speaker #3: The region achieved number 1 position in light commercial vehicles, and maintained its number 2 position overall. Lastly, in APAC, Jupiter is reached a 6-month high, and we have localized our branded vehicle assembly in Malaysia, for C10, with the B10 launch track for the 3rd quarter.

Speaker #3: 7 and the upcoming Lancia Gamma. Finally, Leap Motor represents another important growth lever, and keeps gaining commercial momentum. Q2 2026 sales increased 6-fold year over year, making Leap Motor the 5th largest Chinese automotive brand in the region.

Speaker #3: We also announced the partnership with Dongfeng to develop and manufacture Peugeot and Jeep models in China. So, in summary, we are continuing the positive trend of Q1, with significant year-over-year improvements in all financial metrics.

Speaker #3: Turning to South America, we maintained our clear overall leadership position in the region. We are number 1 in the region's 2 major markets, with over 26% market share in both Brazil and Argentina.

Speaker #3: And our strong disciplined execution keeps driving significant improvements both in quality and efficiency. Let me now hand you to Joao to walk you through the numbers.

Speaker #3: We also further strengthened our leadership in PCAS track in Brazil, home of the region's largest profit pool. With RAM sales increasing by 10% year over year.

Speaker #3: Joao, thank you, Antonio. Good afternoon and good morning, everyone. Q2 was another quarter of year-over-year improvement online with our full-year guidance for 2026. Let me start with the key financial figures.

Speaker #3: Moving now to Middle Eastern Africa. We delivered resilience results in a declining market. With market share increasing 20 basis points despite an 8% decline in total industry volumes.

Speaker #3: The region achieved number 1 position in light commercial vehicles, and maintained its number 2 position overall. Lastly, in APAC, June deliveries reached a 6-month high.

Speaker #3: Consolidated shipments were 1.6 million units, up 10% per year, with growth driven by North America and Europe. Net revenues were 43.5 billion euros, up more than 5 billion euros, or 13%, compared to Q2 of last year.

Speaker #3: And we have localized Leap Motor branded vehicle assembly in Malaysia, for C10, with the B10 launch on track for the 3rd quarter. We also announced the partnership with Dongfeng to develop and manufacture Peugeot and Jeep models in China.

Speaker #3: This improvement was driven mainly by the higher volume in North America which was up 122,000 units year over year. Adjusted operating income was 773 million in Q2, improving by 560 million compared to Q2 of last year.

Speaker #3: So in summary, we are continuing the positive trend of Q1. With significant year-over-year improvements in all financial metrics. And our strong disciplined execution keeps driving significant improvements both in quality and industrial efficiency.

Speaker #3: AOI margin was 1.8%, representing a 120 basis point improvement year over year. The key drivers of the year-over-year AOI improvement were: volume mix had a positive impact of 376 million, reflecting higher shipments in North America and Europe.

Speaker #3: Let me now hand you to Joao to walk you through the numbers. Joao?

Speaker #2: Thank you, Antonio. Good afternoon and good morning, everyone. Q2 was another quarter of year-over-year improvement in line with our full-year guidance for 2026. Let me start with the key financial figures.

Speaker #3: Mix was unfavorable, mainly due to LEV penetration in Europe, partially offsetting the volume improvement. Net pricing was negative, 456 million, mostly driven by pricing pressure in Europe.

Speaker #3: Industrial costs improved by more than 1.9 billion, this was driven by 3 main factors. First, we continue to improve our operational execution. Manufacturing efficiencies and purchasing savings including those related to VCP more than offset increased raw material and tariff headwinds.

Speaker #2: Consolidated shipments were 1.6 million units, up 10% year over year. With growth driven by North America and Europe. Net revenues were 43.5 billion euros, up more than 5 billion euros or 13%, compared to Q2 of last year.

Speaker #3: Second, we had a known repeat of prior year warranty costs from recall campaigns in Europe. Finally, the reduction of regulatory expenses in North America.

Speaker #2: This improvement was driven mainly by the higher volume in North America, which was up 122,000 units year over year. Adjusted operating income was 773 million in Q2, improving by 560 million compared to Q2 of last year.

Speaker #3: SG&A costs increased by 317 million, largely reflecting higher market expenses to support volume growth. Lastly, foreign exchange and other had a negative impact of 861 million, driven mainly by the Turkish lira devaluation, the known repeat of indirect tax credit in Brazil, and the impact of lower residual value in the used vehicle business.

Speaker #2: AOI margin was 1.8%, representing a 120 basis point improvement year over year. The key drivers of the year-over-year AOI improvement were: volume mix had a positive impact of 376 million, reflecting higher shipments in North America and Europe.

Speaker #3: Moving to industrial free cash flow. Industrial free cash flow was positive, 1 billion in Q2, an improvement of 1 billion year over year. The improvement was driven by 3 factors.

Speaker #2: Mix was unfavorable, mainly due to LEV penetration in Europe partially offsetting the volume improvement. Net pricing was negative 456 million, mostly driven by pricing pressure in Europe.

Speaker #3: First, higher AOI. Second, positive seasonal working capital dynamics associated with higher Q2 volumes. Third, a lower run rate of CAPEX in R&D spending during the quarter.

Speaker #2: Industrial costs improved by more than 1.9 billion, this was driven by 3 main factors: first, we continue to improve our operational execution. Manufacturing efficiencies and purchasing savings, including those related to VCP, more than offset increased raw material and tariff headwinds.

Speaker #3: The time of this investment remains fully aligned with our Fastlane product plan and is reflected in our full-year guidance. We continue to expect full-year CAPEX in R&D spending to be 6.5 to 7% of net revenues.

Speaker #2: Second, we had a known repeat of prior year warranty costs from recall campaigns in Europe. Finally, the reduction of regulatory expenses in North America.

Speaker #3: This benefits were partially offset by provisions, including approximately 300 million of cash outflows related to H2 2025 charts. Now, looking at inventory. Total inventory increased 20% year over year, to 1.4 million units.

Speaker #2: SG&A costs increased by 317 million, largely reflecting higher market expenses to support volume growth. Lastly, foreign exchange and other had a negative impact of 861 million, driven mainly by the Turkish lira devaluation, the known repeat of indirect tax credit in Brazil, and the impact of lower residual value in the usage vehicle business.

Speaker #3: The increase primarily reflects the launch of new and refreshed vehicles, and partnering offerings and its consistent with our expectations for sales growth. As Antonio noted, dealer inventory also includes a temporary build-up ahead of the customary summer production shutdown, as a result we expect July inventory levels to be meaningfully lower than those recorded in June.

Speaker #2: Moving to industrial free cash flow. Industrial free cash flow was positive, 1 billion in Q2. An improvement of 1 billion year over year. The improvement was driven by 3 factors: first, higher AOI.

Speaker #3: Turning to our regional performance. North America delivered AOI of 284 million, with an AOI margin of 1.6%, representing a year-over-year improvement of 724 million.

Speaker #2: Second, positive seasonal working capital dynamics associated with higher Q2 volumes. Third, a lower run rate of CapEx and R&D spending during the quarter. The time of this investments remains fully aligned with our Fastlane product plan and is reflected in our full-year guidance.

Speaker #3: This is mostly driven by higher volume including the RAM 1500, Jeep Grand Wagoneer, Wrangler Ice, and the Chrysler Pacific. Shipments were up 38%, driven as we have already noted by the long cadence of our new products and build ahead in advance of the pre-planned summer shutdown.

Speaker #2: We continue to expect full-year CapEx and R&D spending to be 6.5 to 7% of net revenues. This benefits were partially offset by provisions, including approximately 300 million of cash outflows related to H2 2025 charts.

Speaker #3: It was also driven by year-over-year improvement in industrial costs and the reduction of regulatory expenses. In Europe, AOI was negative, 94 million, an improvement of 265 million year over year.

Speaker #2: Now, looking at inventory. Total inventory increased 20% year over year, to 1.4 million units. The increase primarily reflects the launch of new and refreshed vehicles, and partnering offerings and its consistent with our expectations for sales growth.

Speaker #3: The region continues to experience price pressure. Which partially offset the positive impacts of improved manufacturing efficiency and purchasing costs. And the known repeat of 474 million of recall campaign costs in 2025.

Speaker #2: As Antonio noted, dealer inventory also includes a temporary build-up ahead of the customary summer production shutdowns. As a result, we expect July inventory levels to be meaningfully lower than those recorded in June.

Speaker #3: In South America, we delivered AOI of 402 million, volume was down slightly year over year, a decline in Argentina more than offsetting gains in Brazil.

Speaker #3: The performance of the region remains resilient, despite a challenging market and increasing competition. The AOI was in line with prior year, excluding the known repeat of 334 million euros of indirect tax credits in Brazil.

Speaker #2: Turning to our regional performance. North America delivered AOI of 284 million, with an AOI margin of 1.6%, representing a year-over-year improvement of 724 million.

Speaker #3: In Middle Eastern Africa, we grew market share and delivered an AOI of 329 million euros, this is strong results were achieved despite the ongoing regional conflict, which resulted in a 8% decline in total industry volumes.

Speaker #2: This is mostly driven by higher volume, including the run 1500, Jeep Grand Wagoneer, Wrangler Ice, and the Chrysler Pacific. Shipments were up 38%, driven as we have already noted by the launch cadence of our new products and build ahead in advance of the pre-planned summer shutdown.

Speaker #3: In Asia Pacific, AOI was up 35% to 27 million euros, with industrial cost improvements more than offsetting foreign exchange headwinds. Looking ahead to the rest of the year.

Speaker #2: It was also driven by year-over-year improvement in industrial costs, and the reduction of regulatory expenses. In Europe, AOI was negative 94 million, an improvement of 265 million year over year.

Speaker #3: As previously stated, we are reaffirming our 2026 guidance, as well as our expectation of achieving positive industrial free cash flow in 2027. Before concluding, I'd like to share a few observations regarding the remainder of the year.

Speaker #2: The region continues to experience pricing pressure. Which partially offset the positive impacts of improved manufacturing efficiency and purchasing costs. And the known repeat of 474 million of recall campaign costs in 2025.

Speaker #3: Our guidance assumes net tariff expenses of 1 to 1.2 billion euros, including the impact of the IEPAC credit recognizing Q1. This represents a modest improvement from the 1.3 billion previously communicated.

Speaker #2: In South America, we delivered AOI of 402 million. Volume was down slightly year over year. With a decline in Argentina more than offsetting gains in Brazil.

Speaker #3: Our industrial free cash flow guidance also reflects approximately 2 billion euros of payments related to H2 2025 charts, of which 0.9 billion euros was paid during the first half of 2026.

Speaker #2: The performance of the region remains resilient, despite a challenging market and increasing competition. The AOI was in line with prior year, excluding the known repeat of 334 million euros of indirect tax credits in Brazil.

Speaker #3: CAPEX and R&D spending are expected to be 6.5 to 7% of net revenues in 2026, consistent with the approximately 7% outlined in the Fastlane plan.

Speaker #2: In Middle Eastern Africa, we grew market share and delivered an AOI of 329 million euros, this strong results were achieved despite the ongoing regional conflict, which resulted in an 8% decline in total industry volumes.

Speaker #3: In the second half, we expect performance to be weighted toward Q4. Q3 will be impacted by the summer shutdown and continued raw material inflation, while Q4 is expected to benefit from higher volume and a stronger ramp-up of VCP initiatives.

Speaker #2: In Asia Pacific, AOI was up 35% to 27 million euros, with industrial cost improvements more than offsetting foreign exchange headwinds. Looking ahead to the rest of the year.

Speaker #3: I will now turn it back to Antonio to wrap up before the Q&A.

Speaker #1: Thank you, Joel. Before we move to the Q&A, I would like to step back and reflect on the big picture. I hope all of you either had the opportunity to attend our investor day or to view the presentations online.

Speaker #1: You will see that our Fastlane 2030 strategy addresses in a structured way the core issues that we face as a company, and capitalizes on our biggest opportunities.

Before concluding, I'd like to share a few observations regarding the remainder of the year.

For our guidance. As soon as that terrorist expenses of 1 to 1.2 billion euros.

Including the impact of the ieepa. Credit recognizing q1.

Speaker #1: We are fully focused on executing our plan. Which will deliver significant benefits as we build a stronger Stellantis for the future. Nothing can be fixed overnight, but I would like to highlight three items that are our top three priorities.

This represents a modest improvement from the 1.3 billion previously, communicated.

Speaker #1: First, market coverage. This continued progress of products from 2021 to 2025 led to a reduction in our market share of North America and in Europe.

Our industrial free cash flow guidance also reflects approximately €2 billion of payments related to H2 2025 charts, of which €0.9 billion was paid during the first half of 2026.

Speaker #1: You have seen early progress in our market share gains this year, Fastlane 2030 reinvigorated the product portfolio, getting us to around 90% market coverage in both regions.

Topics and R&D spending are expected to be 6.5 to 7% of net revenue in 2026, consistent with the approximately 7% outlined in the fast lane plan.

In the second half, we expect financial performance to be weighted toward Q4.

Speaker #1: Representing a huge opportunity for growth. Second challenge, industrial cost. We have improved significantly in the past year, and this remains a big opportunity to drive our financial performance.

Q3 will be impacted by the summer shutdown and continued raw material inflation. While Q4 is expect to benefit from higher volume and a stronger ramp up of DCP initiative.

I will now turn it back to Anton to wrap up before the Q&A.

Thank you. All.

Speaker #1: In Fastlane, VCP will deliver 6 billion euros of annual running cost reductions by 2028. We are making strong initial progress on VCP. And we are on track to implement four percent of the initiatives by the end of this year.

Before we move to the Q&A, I would like to step back and reflect on the big picture.

I hope all of you either had the opportunity to attend our Investor Day or to view the presentations online.

You will see that our Festival in 2030 strategy, addresses in a structured way, the core issues that we face as a company.

Speaker #1: This means that in 2027, we enjoy 2.4 billion euros of AOI benefits plus the partial benefits of the initiatives we implement in 2027. Finally, quality.

And capitalizes on our biggest opportunities.

On a executing, our plan.

This will deliver significant benefits as we build a stronger Stellantis for the future.

Speaker #1: Our execution on quality in the past was not what it needed to be. But we have come a long way already in the last year.

Nothing can be fixed overnight, but I would like to highlight three items that are our top three priorities.

Speaker #1: Quality is improved significantly. 8% in North America, and by 24% in Europe. And Fastlane 2030 is in the quality organization the focus and the resources they need to be in the top quartile in all regions and segments where we compete by 2028.

First Mark, a coverage.

Discontinued pro products, from 21 to 25, led to a reduction, in our market, share, both in North America and Europe.

You have seen early progress in our market share gains this year.

Firstly, in 2030 rain, big red is the product portfolio.

Speaker #1: It will take time to fully capitalize on these opportunities, but it is a timeframe that is fully embedded in our 2026 guidance, in our expectation of positive industrial free cash flow in 2027, and in our 2028 Fastlane targets.

Getting us to around 90% Market coverage in both regions.

Representing a huge opportunity for growth.

Second Challenge, industrial cost.

we have improved significantly in the past year,

Speaker #1: The road is long, but we are moving in the right direction, with the right priorities, and with the right pace. Thank you. We will now ask the operator to open the line for questions.

And this remains a big opportunity to drive our financial performance.

In Fast Lane.

Vcp will deliver 6 billion euros of annual run rate cost reductions by 28.

Speaker #2: Thank you. As a reminder to ask a question, please type Pound Key 5 on your telephone keypad. And the first question comes from the line of Stuart Pearson from Oxcap Analytics.

We are making strong initial progress on vcp.

And we are on track to implement 40% of the initiatives by the end of this year.

Speaker #2: Your line is open. Stuart, we can't hear you. You're on mute. Your line is open.

This means that in 27, we expect to enjoy 2.4 billion euros of AI benefits.

Plus the partial benefits of the initiatives we implement in '27.

Finally quality.

Our execution on quality, in the past was not what it needed to be.

Speaker #3: Yes, sorry, good morning. Hopefully you can hear me now. My mistake. Too many calls today. So I guess we have to start with North America and the lack of operating leverage there.

But we have come a long way already in the last year.

Speaker #3: Obviously, very strong shipments coming in. Obviously, we've seen, I guess, some are very expectations another week margin there, despite cost support. So I mean, can you just dig into a little bit more why we're not seeing that?

Quality has improved significantly—by 38% in North America and by 24% in Europe.

Speaker #3: Is it pricing that's really eating into that, whichever bucket in the bridge that might really fall into? And what would it really take to get those North America margins up, and what are the building blocks?

And firstly in 2030 is giving the quality organization, the focus and the resources. They need to be in the top quartile in all regions and segments where we compete by 28.

It will take time to fully capitalize on these opportunities.

Speaker #3: I guess into 2027 that can give us some confidence on that. I guess one of those to sort of partly self-answer, I guess, is going to be the industrial cost drivers.

But it is a time frame that is fully embedded in our '26 guidance.

In our expectation of positive industrial free cash flow in 27.

Speaker #3: Obviously, a huge benefit there that 1.7. Obviously, the team deserves credit for that. But maybe you can help us understand what's really in there, what are the examples of actions that are trying that kind of cost tailwind in the second quarter, and should we expect or what rate should we expect that to continue in the second half and into 2027?

And in our 28 Fast Lane targets.

The road is long, but we are moving in the right direction.

With the right priorities with the right page. Thank you.

We will now ask the operator to open the line for questions.

Thank you.

Speaker #3: I know you've talked about the VCP plan. But could we take the H1 run rate or at least most of it and extrapolate that?

Speaker #3: Thank you.

As a reminder, to ask a question, please type the pound key (#) followed by 5 on your telephone keypad. And the first question comes from the line of Stuart Pearson from OxCap Analytics. Your line is open.

Speaker #1: Okay. I will take part of this question, and then I will pass to Joel the rest. So what is happening in North America is, number one, the trajectory is the right one.

To us. We can't hear you. Maybe you're on mute, your line is open.

Speaker #1: The trend is the right one. So if we compare AOI of Q2 versus AOI of Q1, a net of IEPA refund, then. Significant and meaningful improvement.

Speaker #1: As we see an improvement in shipments, in market share, for instance. Now, it's important to say, to repeat what I just mentioned at my opening remarks.

Speaker #1: We have a plan, Fastlane 2030. It is a good structured and articulated plan. And this plan addresses in North America and globally, the three major challenges that we see in our company.

Speaker #1: One of those is industrial cost. We have an industrial cost gap, and we are addressing that daily with VCP. And VCP will deliver, as mentioned, 6 billion euro of cost saving run rate in 2028.

Ah, yes, sorry, good morning. Hopefully you can hear me now my mistake. Um, too many calls today. So um, I guess we have to start with North America and the lack of operating leverage there, obviously very strong shipments coming in. Um, obviously we've seen, I guess versus some of our expectations and have a weak margin there, despite cost support. So, I mean, can you just dig into a little bit more? Why we're not seeing that? Um, is it? Um, you know, pricing that's really eating into that uh, whichever bucket and approach that might really fall into. And what would it really take to get uh, those North American margins up and and and what are the buildings blocks I guess in the 2027 that can give us some confidence on that and I guess 1 of those sort of partly self answer, I guess is going to be the industrial cost drivers, obviously a huge benefit there at 1.9 billion and obviously the team deserve credit

Speaker #1: We are on track to full implement 40% of the initiatives that we have identified. They are many. By the end of 2026, that means that we'll 2026, we'll enjoy 2.4 billion euro of cost saving plus all the extra that will come from the additional initiatives that will be executed in 2027 itself.

Of that. Um, but maybe you can help us understand what's really in there. What are the examples of actions that are driving, kind of, the second quarter, and should we expect—or what rate should we expect—that to continue in the second half and end of 2027? I know you've talked about the VCP plan. Um, but could we take the H1 run rate, or at least most of it, and extrapolate that? Thank you.

Okay.

Speaker #1: So you asked some tangible example. So VCP when it comes to cost, works mainly on three major drivers in our cost structure. One is direct material cost.

I will uh, take part of this question and then I will pass to you all the rest.

Speaker #1: This is the cost of component and system and source system that we use in our cars. And here we have two leverage. The purchasing leverage, two negotiation, and the technical leverage to implementation of technical savings.

So what is happening in North America is number 1. The trajectory is the right 1, the trend is the right 1. So if we compare AI of Q2 versus say, why or q1 and net of IPA refunds

Then we see a significant and meaningful Improvement as we see an improvement in shipments in market. Share for instance.

Now.

Speaker #1: And those technical saving can be many, for instance, new technologies, that represent the same or better performances of our products with lower cost. For instance, which of material that keep the performance of the product where they are, but they represent a cost saving.

Closing remarks.

We have a plan partially in 2030. It is a good structure that articulated plan and this plan addresses in North America and globally. The 3 major challenges that we see in our company.

Speaker #1: Et cetera, et cetera. The second driver is transformation cost. This is the cost of our manufacturing system in our plants. And on there, we have tons of projects to improve efficiency.

One of those is industrial cost. We have an industrial cost gap, and we are addressing that daily with DCP.

Speaker #1: And this is why our efficiency in our plants in North America is consistently and meaningfully improving since last year. So you see that our efficiency run in around 89%, which is a very good result.

And VC will deliver as mentioned 6 billion Euro of cost savings run rate in 28.

We are on track to full Implement 40% of the initiatives that we have identified and they are many by the end of 26.

Speaker #1: And that represents 870 basis points better than prior year. And here the projects are really thousands. The third driver of cost that VCP address, through projects and initiatives, is logistic and distribution cost.

That means that we will, in '26, enjoy €2.4 billion of cost-saving, plus all the extra that will come from the additional initiatives that will be executed in 2027 itself.

So,

you asked some, some tangible examples.

Speaker #1: And in this case, also the projects are mainly many. For instance, we are optimizing our routing. From suppliers to plants and from plants to yards.

So DCP when it comes to cost.

Works mainly on 3, major drivers in our cost structure.

Speaker #1: We are increasing the loading of our logistic tools. Thus, saving cost. Or simply, we are combining warehouses or we are shutting down warehouses and we are putting that space in our plants.

One is direct material cost, so this is the cost component.

Uh, in the system that we use in our cars.

Speaker #1: And this is the third driver of efficiency that VCP will address. Again, with the objective, this year, to fully implement by the end of 2026, 40% of the main initiative mapped.

And here we have 2 Leverage, The purchasing leverage to negotiation, and the technical leverage to implementation of technical saving and those technical saving can be many for instance, new technologies that represent the same or better performances of our products with lower cost.

Speaker #1: That will deliver 2.4 billion euro of AOI savings improvement into 2027. And then the 6 billion euro in 2028 as a run rate. And Joel, you want to take the rest of the question?

For instance, which of material that keep the performance of the of the product where they are but they represent a cost savings etc, etc.

The second driver is transformation cost. This is the cost of our manufacturing system in our plans.

Speaker #2: Yeah. So on the industrial cost, the 1.9 billion. Likely more than 70%, about 1.4 billion. It's split between purchasing, material cost savings, and on the warranty, the largest piece, it's the recovery recorded in Q2 last year in Europe.

And on there, we have tons of projects to improve efficiency, and this is why our efficiency in our plants in North America has been consistently and meaningfully improving since last year. So, you see that today, our efficiency runs at around 89%, which is a very good result.

And that represents 870 basis points. Better than prior years, a year, the projects are really thousand.

Speaker #2: So most of that, it's because of the non-repeat. On purchasing, it's the work that we are doing to reduce product costs as we have.

The third driver of cost that vcp address through projects and initiatives is logistic and distribution costs.

And in this case also, the projects are mainly, mainly...

Speaker #2: Discussing the investor day. And that is a number that we will continue to see it improving. And accelerating as we evolve with VCP. The other items that also included on the industrial cost to give context are logistic costs and manufacturing, which we also saw improvements, giving the meaningful performance improvement at our plants as Anthony mentioned on the open remarks.

Uh, for instance, we are optimizing our routing from suppliers to plants, from plants to the yard.

We are increasing the the loading of our logistic tools. Uh does uh saving cost.

Or simply. We are combining warehouses or we are shutting down warehouses and we are putting that space in our plants. And this is the third driver of, uh, of of efficiency that vcp will address again with objective this year.

Speaker #2: And we also see benefits on manufacturing costs because of the higher volume. So there is items that are temporarily and also depends on the comparisons year over year.

Speaker #2: But we should expect to see a material cost savings to continue to progress on the second half and beyond. And just to also remind that we expect that raw material continues to be a headwind and growing in the second half versus what we saw in the first half, including Q2.

To fully implement, by the end of '26, 40% of the main initiatives mapped that will deliver €2.4 billion of AI savings, uh, improvement into '27. And then the €6 billion in '28 years, run rate. Enjoy, you want to take the rest of the question? Yeah. So, um,

On the, uh, industrial—industrial cost, the $1.9 billion, uh,

Speaker #2: But yeah, we see a lot of positives on the industrial cost and especially on cost. And we expect to build momentum on that.

Like, in more than 70%, about $1.4 billion is split between purchasing material cost savings and warranties.

Speaker #3: And sorry, on the operating leverage side, in Q2, in North America, just because yeah, 400 million volume of mix implies there's quite a negative mix in there, I guess, in Q2.

On the warranty, the largest piece. It's, uh, the of recovery recorded in. Um,

Future last year in Europe. So, most of that is because of the the non repeat

Speaker #3: Is that fair? In North America, sorry.

Speaker #2: No, no, the mix was not very negative. Some of that, it's chain and product content. But the operating leverage of Q2 is consistent with the margins that we have had on the previous quarters.

On purchasing. It's uh, the work that uh, we are doing, uh, to reduce, uh, product costs. As we have discussed in the investor day.

And uh that is the number that we uh will continue to see it. Improving and accelerating as we uh uh

Speaker #2: The other items that also included on the industrial cost to give context are logistic costs and manufacturing, which we also saw improvements, giving the meaningful performance improvement at our plants as Anthony mentioned on the open remarks.

Speaker #2: To Anthony's point, that is a gradual exercise that we're going to improve as we work on costs and on warranty. But there was nothing anything exceptional to that.

Speaker #2: It's been in the operating leverage in North America other than the challenge that we have in costs and quality that Anthony already mentioned.

Speaker #2: And we also see benefits on manufacturing costs because of the higher volume. So there is items that are temporarily and also depends on the comparisons year over year.

Speaker #3: Okay. Thank you very much.

Speaker #4: The next question comes from the line of Thomas Besson from Kepler Chevreux. Your line is open.

Speaker #2: But we should expect to see a material cost savings to continue to progress in the second half and beyond. And just to also remind that we expect that raw material continues to be a headwind and growing in the second half versus what we saw in the first half, including Q2.

Speaker #3: Thank you very much, good afternoon. I have a question about the shape of H2. I think you're coming out of a relatively easy comes in terms of volumes in the first half.

Speaker #3: It becomes a bit more difficult in the second. Could you help us understand exactly what you're aiming for in terms of quarter and quarter or H1 or H2 and H2 improvement?

Speaker #2: But yeah, we see a lot of positives on the industrial cost and especially on the material cost. And we expect to build momentum on that.

Speaker #3: Are you going to try to improve on the reported minus 1.7% AOI of H2 last year, or are you going to try to improve on the 0.9% underlying AOI?

Speaker #3: And sorry, on the operating leverage side, in Q2, in North America, just because yeah, 400 million volume mix implies it's quite a negative mix in there, I guess, in Q2.

Speaker #3: If we excluded the 2.1 billion unusual items that you couldn't remove, in the second half of last year. And what will be the drivers of improvements as it will be less driven by volumes?

Speaker #3: Is that fair? In North America, sorry.

Speaker #3: And as you will face more headwinds from raw materials. Thank you.

Speaker #2: M2, Anthony's point, that is a gradual exercise that we're going to improve as we work on costs and also on warranty. But there was nothing anything exceptional to that is bringing the operating leverage in North America other than the challenge that we have in costs and quality that Anthony already mentioned.

Speaker #2: Yeah. So the targets for H2, it should deliver the best results possible, align with the full-year guidance. So we are not setting any specific targets for the H2 on this call.

Speaker #2: The dynamics that we're going to see on that we expect to see in the second half, that's the first half, it's a headwind of about a billion euros between raw material and then the non-repeat IEPA credit that recognized in Q1.

Speaker #3: Okay. Thank you very much.

Speaker #4: The next question comes from the line of Thomas Besson from Kepler Chevreux. Your line is open.

Speaker #5: Thank you very much. Good afternoon. I have a question about the shape of H2. I think you're coming out of relatively easy comms in terms of volumes in the first half.

Speaker #2: And volume should be lower as we saw we build up inventory in the first half and we expect as Anthony mentioned to reduce inventory in the second half.

Speaker #5: It becomes a bit more difficult in the second. Could you help us understand exactly what you're aiming for in terms of quarter and quarter or H2 and H2 improvement?

Speaker #2: But then we expect to see positive mix. We expect price to be constructive, especially in North America. And we expect to continue to make progress on cost reduction.

Speaker #5: Are you going to try to improve on the reported minus 1.7% AOI of H2 last year, or are you going to try to improve on the 0.9% underlying AOI?

Speaker #2: So those are the puts and takes for the second half, first half performance.

Speaker #3: Thank you very much. Can I eventually add a follow-up, please?

Speaker #5: If we excluded the 2.1 billion unusual items that you couldn't remove, in the second half of the last year. And what will be the drivers of improvement as it will be less driven by volumes?

Speaker #2: Yes, please.

Speaker #3: Okay. Great. Thank you very much. On the North American business, to follow up on Stuart's question, in your topic has been extremely strong. In H1, and we still don't see a lot of traction.

Speaker #5: And as you will face more headwinds from raw materials. Thank you.

Speaker #2: Yeah. So the targets for H2, it should deliver the best results possible, aligned with the full-year guidance. So we are not setting any specific targets for the H2 on this call.

Speaker #3: Could you help us understand what is still I mean, understand your costs are not where we'd like to be, quality is not perfect yet.

Speaker #3: What are the main negative drivers to your NAFTA margins? Is that channel mix? Is that relative pricing? As well, or is it just your industrial cost and still some remaining quality issues?

Speaker #2: The dynamics that we're going to see on that we expect to see on the second half, that's the first half, it's a headwind of about a billion euros between raw material and then the non-repeat IEPAC rate that recognized in Q1.

Speaker #1: Yeah. So I will take this question and then I will pass Joao for additional info. So as I mentioned in my closing remarks, our plan, which is a good plan, addressing time the major challenges that we see, right?

Speaker #2: And volume should be lower as we saw we build up inventory in the first half and we expect as Anthony mentioned to reduce inventory in the second half.

Speaker #1: And calling on North America, for sure we have a quality gap that translates into warranty cost and campaign cost. And this has been addressed with a very vast quality turnaround plan, which on the new product is already delivering a much improved product quality.

Speaker #2: But then we expect to see positive mix. We expect price to be constructive, especially in North America. And we expect to continue to make progress on cost reduction.

Speaker #2: So those are the puts and takes for the second half, first half performance.

Speaker #1: 38% improvement in three months in service year over year. And then the second challenge that the plan address is a cost gap, as you mentioned, which will are addressing with VCP, with trajectory that I already stated.

Speaker #5: Thank you very much. Can I eventually add a follow-up, please?

Speaker #2: please.

Speaker #5: Okay. Great. Thank you very much. On the North American business, to follow up on Stuart's question, your truck mix has been extremely strong. In H1, and we still don't see a lot of traction.

Speaker #1: 2.4 billion to start in '27, plus all the additional initiatives that we'll implement in '27, up to 6 billion cost-saving rate in '28 and forward.

Speaker #5: Could you help us understand what is still, I mean, understand your costs are not where we'd like to be, quality is not perfect yet, what are the main negative drivers to your NAFTA margins?

Speaker #1: Those are the two things that fast lane address in North America and globally. At the pace and in time, which is already embedded in all our targets.

Speaker #1: In the '26 financial guidance that we reaffirm, in the '27 free cash flow positive that we reaffirm, and in '28 targets that we distribute in fast lane 2030.

Speaker #5: Is that channel mix? Is that relative pricing? As well, or is it just your industrial cost and still some remaining quality issues?

Speaker #1: The total time and the timeframe needed is already embedded in the plan. And we are executing delivery as we showed in quarter two accordingly to the plan.

Speaker #1: We are on track. Joao?

Speaker #4: I don't have anything else to add, Anthony. Thank you.

Speaker #3: Thank you very much.

Speaker #1: And calling on North America, for sure we have a quality gap that translates into warranty cost and campaign cost. And this is have been addressed with a very vast quality turnaround plan, which on the new product is already delivering a much improved product quality.

Speaker #4: The next question comes from the line of José Assumendi from JP Morgan. Your line is open.

Speaker #3: Thank you very much. Anthony, just one question, please, again, on the North American margins. And I'm just wondering is there not a very large support to increase the utilization loading of the plants in North America, which then in turn would unlock the VCP cost savings, right?

Speaker #3: But then when I think about this, you need to win market share in the US. You need to increase production by, let's say, 100, 150,000 units from here, right?

Speaker #3: I mean, when I look at the capacity of your business and I compare it a few years from now, there's a very large opportunity to increase production.

Speaker #3: So can you help me understand a bit better, please, which product cycle, which vehicle cycle drive this increase in production in North America, which I think will drive this cost savings across again, VCP and loading of the plants, which I think is when I go back again to the operating leverage, while we not see the operating leverage, it must be because the loading of the plants is low.

Speaker #1: 2.4 billion to start in '27, plus all the additional initiatives that we'll implement in '27, up to 6 billion cost saving run rate in '28 and forward.

Speaker #1: Those are the two things that fast lane address in North America and globally. At the pace and in time which is already embedded in all our targets, in the 26 financial guidances that we reaffirm, in the 27 free cash flow positive that we reaffirm, and in 28 targets that we distributed in fast lane 2013.

Speaker #3: I would love to hear your thoughts, please. And correct me, please, if I'm wrong. Thank you.

Speaker #1: No, thank you. Thank you very much, José, for this relevant question. So here again, I need to give the notion of what we are doing.

Speaker #1: And on time and on the time that is embedded in the plant itself. So we know that we have a product gap, as you mentioned.

Speaker #1: The notional time and the timeframe needed is already embedded in the plan. And we are executing at delivering as we showed in quarter two, accordingly to the plan.

Speaker #1: And this product gap, obviously, hearted in the past, we are recovering market share in North America, not only. And obviously, capacity utilization. Now we are currently developing very competitive and successful products that we will deliver in high volume starting from '28.

Speaker #1: We are on track. Joao?

Speaker #4: I don't have anything else to add, Anthony. Thank you.

Speaker #5: Thank you very much.

Speaker #4: The next question comes from the line of José Assumendi from JP Morgan. Your line is open.

Speaker #1: So those are the steps. The step is now we focus on improving quality by daily and focused execution by improving industrial cost as we are doing by daily and focused execution happening.

Speaker #5: Thank you very much. Anthony, just one question, please, again on the North American margins. And I'm just wondering is there not a very large opportunity to increase the utilization, the loading of the plants in North America, which then in turn would unlock the VCP cost savings, right?

Speaker #1: And we need to accelerate more. And those will remove warranty cost and campaign cost together with, obviously, increase cost saving and industrial efficiencies. Said that, at the same time, we are introducing and we will introduce more the new products.

Speaker #5: But then when I think about this, you need to win market share in the US. You need to increase production by, let's say, 150,000 units from here, right?

Speaker #5: I mean, when I look at the capacity of your business and I compare it a few years from now, there's a very large opportunity to increase production.

Speaker #1: So we introduced already some. As you see, the Ram TRX SRT that will be a great profit contributor has been recently introduced that distributed to our dealers just six months after unbilling.

Speaker #5: So can you help me understand a bit better, please, which product cycle, which vehicle cycle drive this increasing production in North America, which I think will drive this cost savings across again, VCP and loading of the plants, which I think is when I go back again to the operating leverage, while we're not seeing the operating leverage, it must be because the loading of the plants is low.

Speaker #1: We are developing and we will launch this year Jeep Recon BV, Jeep Grand Wagon REV. And then the high volumes product that we are executing in develop now will be delivered to the market by end of '27, starting from '28.

Speaker #5: I would love to hear your thoughts, please. And correct me, please, if I'm wrong. Thank you.

Speaker #1: No, thank you. Thank you very much, José, for this relevant question. So here, again, I need to give the notion of what we are doing.

Speaker #1: So the steps are those. Quality improving, warranty cost and campaign cost removed. Cost improving, cost saving into our business. Improving commercial efficiency with the lineup that we have, the new product we are introducing to increase volume and saturation.

Speaker #1: And on time and on the time that is embedded in the plant itself. So we know that we have a product gap, as you mentioned.

Speaker #1: And then the big products that are coming by end of '27, starting of '28. So you want to add something?

Speaker #4: No, thank you.

Speaker #3: Thank you, Antonio.

Speaker #1: So those are the steps. The step is now we focus on improving quality by daily and focused execution by improving industrial cost, as we are doing by daily and focused execution both are happening and we need to accelerate more.

Speaker #4: The next question comes from the line of Emmanuel Rosner from Wolf Research. Your line is open.

Speaker #3: Great. Thank you so much. My first question is around the second half puts and takes that you provided before which are extremely helpful. So I understand a lot of the headwinds around raw materials, non-repeat of AIPA, the volume destocking.

Speaker #1: And those will remove warranty cost and campaign cost together with, obviously, increase cost saving and industrial efficiencies. Said that, at the same time, we are introducing and we will introduce more the new products.

Speaker #3: I was hoping you can just give a little bit more color on some of the tailwinds. What will drive the positive mix in the second half, the positive US pricing, in particular?

Speaker #2: Yeah, I start to take the answer and then I will give a word to Joao. So the headwind that we see are the ones that Joao explained.

Speaker #1: We are developing and we will launch this year Jeep Recon BV, Jeep Grand Wagoneer, REV. And then the high volumes products that we are executing in develop now will be delivered to the market by end of '27, starting from '28.

Speaker #2: So we inflation coming, we see memory ship shortage. And we see in quarter three, lower ship and driven by the shutdowns. Both in Europe and seasonality in Europe and in North America.

Speaker #2: Then when we project to half two and quarter was specifically, the major two tailwinds with one, again, VCP so we are meant to implement 40% of the initiative that were mapped by end of '26.

Speaker #2: That means that in quarter four, we will start enjoying an acceleration of cost saving coming from there, for sure. And then we see a constructive environment for pricing in North America specifically.

Speaker #1: And then the big products that are coming by end of '27, starting on '28. So I want to add something.

Speaker #4: No, thank you, Anthony.

Speaker #2: And obviously, we will take that as much as possible. Joao?

Speaker #5: Thank you, Antonio.

Speaker #4: The next question comes from the line of Emmanuel Rosner from Wolf Research. Your line is open.

Speaker #4: Yeah. So on the mix, there are two things. One will be channel mix. Given the seasonality of rental sales, both in North America and Europe more heavily in the first half of the year.

Speaker #5: Oh, great. Thank you so much. My first question is around the second half puts and takes that you provided before which are extremely helpful.

Speaker #5: So I understand a lot of the headwinds around raw materials, non-repeat of AIPA, the volume destocking. I was hoping you can just give a little bit more color on some of the tailwinds.

Speaker #4: And also introduce new vehicles here in North America and other regions as well. We see benefits of mix. One X, obvious example, it's the Ram TRX.

Speaker #4: On pricing, given the inflation pressures and the raw material inflation that everybody's expecting on the second half, we see constructive price again in North America and in stabilization in other regions.

Speaker #5: What will drive the positive mix in the second half, the positive US pricing, in particular?

Speaker #3: Yeah, I start to take the answer and then I will give a word to Joao. So the headwind that we see are the ones that Joao explained.

Speaker #4: And the third one that is very important, it's acceleration of cost reductions as Antoni mentioned. But those are the so it's really operational drivers and that we are working every day to improve our business efficiencies as we develop the new products that Antoni was mentioning before.

Speaker #3: So we see inflation coming. We see memory ship shortage. And we see especially in quarter three, lower shipment driven by the shutdowns both in Europe and seasonality in Europe and in North America.

Speaker #1: Thank you. My follow-up question is, would you be able to describe for us the competitive environment and traction you're seeing in the full-size pickup market in the US, the your inventories of Ram particularly elevated, I think around 110 days at the dealers.

Speaker #3: Then when we project to half two and quarter was specifically, the major two tailwinds will be one, again, VCP so we are meant to implement 40% of the initiative that we have mapped by end of '26.

Speaker #3: That means that in quarter four, we will start enjoying an acceleration of cost saving coming from there, for sure. And then we see a constructive environment for pricing in North America specifically.

Speaker #1: There is some media reports on some pretty large incentives being offered in the months of July. So just curious, how much market traction you're seeing and yeah, could you describe the competitive environment for us?

Speaker #3: And obviously, we will take that as much as possible. Joao?

Speaker #4: Yeah. So on the mix, there are two things. One will be channel mix. Given the seasonality of rental sales, both in North America and Europe more heavily in the first half of the year.

Speaker #2: Yeah, I will take the first part of the answer. And I must say that I'm very happy with Ram 1500 trajectory. So Ram 1500 specifically, which is a corner store as a product for the Ram brand, it was the mining steadily in the previous year.

Speaker #2: And then after introduction of the Ram Hemi V8 engine, then it started climbing up again. In July, it's crossing the line of 20% plus segment share.

Speaker #4: And also, as we introduce new vehicles here in North America, in other regions as well, we see a benefits of mix. One X, obvious example, it's the Ram TRX.

Speaker #2: And has been gaining segment share and market share since 12 months ago. Joao, you want to take the other?

Speaker #4: Yeah. So the specifically on the light duty, what we have on the 26 model year, it's normal model. Transition. And again, we are constructive on price on the second half.

Speaker #4: And the third one that is very important, it's acceleration of cost reductions as Antonio mentioned. But those are the so it's really operational and drivers and that we are working every day to improve our business efficiencies as we develop the new products that Antonio was mentioning before.

Speaker #4: So this is the price position that we have on the light duty right now. It's a specific on the transition of the model. And we are definitely advantage of the strong position that we have on that car, including the stock to accelerate as we transition the model year.

Speaker #1: Thank you. My follow-up question is, would you be able to describe for us the competitive environment and traction you're seeing in the full-size pickup market in the US?

Speaker #1: Great. Thanks for taking my questions.

Speaker #4: The next question comes from the line of Michael Fundukilis from Auto BHF. Your line is open.

Speaker #1: The inventories of Ram particularly elevated, I think around 110 days at the dealers. There is some media reports around some pretty large incentives being offered.

Speaker #5: Yes, good afternoon. So two questions on my side. First, VCP of the 2.4 billion of VCP benefits that are expected in 2027, how much should flow directly to AOI versus invested into pricing gains?

Speaker #1: In the months of July, so just curious, how much market traction you're seeing and yeah, could you describe the competitive environment for us?

Speaker #5: And second question, maybe on North America and following up on your previous answers, how much of North America marginal recovery would you consider depends on higher utilization from new products arriving in 2027, 2028 versus cost reduction alone?

Speaker #3: Yeah, I will take the first part of the answer. And I must say that I'm very happy with Ram 1500 trajectory. So Ram 1500 specifically, which is a corner store as a product for the Ram brand, it was declining steadily in the previous year.

Speaker #5: Thank you.

Speaker #3: And then after introduction of the Ram Hemi V8 engine, then it started climbing up again. In July, it's crossing the line of 20% plus segment share.

Speaker #4: Okay. On the VCP, the 2.4 billion savings we expect all of that will flow to AOI. And then on the second one, the biggest items to improve the AOI in North America are material cost and quality improvement.

Speaker #3: And has been gaining segment share and market share since 12 months ago. Joao, you want to take the other?

Speaker #4: Yeah. So the specifically on the light duty, what we have on the '26 model year, it's normal model year transition. And again, we are constructive on price on the second half.

Speaker #4: Plenty utilization, it's important. And we are seeing already some efficiencies that the magnitude of purchasing material cost efficiency and warranty is much larger than inefficient that we can get on better utilization of the plants.

Speaker #4: So this is the price position that we have on the Ram light duty right now. It's a specific on the transition of the model year.

Speaker #5: Thank you.

Speaker #4: The next question comes from the line of Philip Ushua from Jefferies. Your line is open.

Speaker #4: And we are definitely take advantage of the strong position that we have on that car, including on the stock to accelerate, say, as we transition the model year.

Speaker #3: Thank you and good morning. Two questions on product more. One is on the Cherokee. There was a lot of hope Cherokee would make a difference to market share.

Speaker #1: Great. Thanks for taking my questions.

Speaker #3: We don't really see it. And I know there may be some production issues, but I'm trying to understand, are you emphasizing the product because it is not as meaningful to profitability?

Speaker #4: The next question comes from the line of Michael Fundukilis from Auto BHF. Your line is open.

Speaker #2: Yes, good afternoon. So two questions on my side. First, on VCP of the 2.4 billion of VCP benefits that are expected in 2027, how much should flow directly to AOI versus being reinvested into pricing and market share gains?

Speaker #3: And then it needs to be somewhat redesigned or is it because the tariff in Mexico made it uncompetitive? And in that scenario, any particular expectation of USMCA evolving?

Speaker #3: And at one point, would you be transferring production of Cherokee to Belvedere if that is the case? And if that the answer to Cherokee being a more meaningful contributor to volume and profitability.

Speaker #2: And second question, maybe on North America and following up on your previous answers, how much of North America marginal recovery would you consider depends on higher utilization from new products arriving in 2027, 2028 versus cost reduction alone?

Speaker #3: And the other question I have on product still, but more on the European side is Leapmotor. So we've seen good volume from Stellantis in Europe, but we see negative volume mix impact.

Speaker #2: Thank you.

Speaker #3: Now, I understand the mix can be negative I'm trying to understand how much of contribution we really expect from Leapmotor. And to what extent my understanding of Leapmotor setup and the cost efficiency is that the product could be dilutive to the mix of Stellantis, could still be creative to earnings.

Speaker #3: And is that still the right approach? And what do we try to see that show up in the profitability of Europe? Or do we have to wait for eventually the Peugeot brand to start coming through and contribute more positively to mix as was the case in the past?

Speaker #4: Plenty utilization, it's important. And we are seeing already some efficiencies, but the magnitude of purchasing material cost efficiency in warranty is much, much larger than inefficiency that we can get on better utilization of the plants.

Speaker #3: Thank you.

Speaker #2: Thank you.

Speaker #1: Okay.

Speaker #2: So I will speed the question into I will take the Cherokee question and I will pass to Joao the Leapmotor question. So on Cherokee, first of all, we see high interest from consumer on Cherokee.

Speaker #4: The next question comes from the line of Philip Ushua from Jefferies. Your line is open.

Speaker #5: Yes, thank you. And good morning. Two questions on product more. One is on the Cherokee there was a lot of hope Cherokee would make a difference to market share.

Speaker #2: We map that every time on the funnel management and interest is very high. What we are doing, as you said, it is very exposed to tariffs.

Speaker #5: We don't really see it. And I know there may be some production issues, but I'm trying to understand, are you de-emphasizing the product because it is not as meaningful to profitability?

Speaker #2: So we are balancing volumes with profit generation. We are doing that by limiting some trims and mixing on the highest and more profitable trims.

Speaker #5: And then it needs to be somewhat redesigned or is it because the tariff in Mexico made it uncompetitive? And in that scenario, any particular expectation of USMCA evolving?

Speaker #2: And limiting some channel so improving the quality of the mixed channel. This is what is happening now on Cherokee. What we are doing in parallel is to put it into VCP so we'll be one of the nameplate that will receive cost saving that we are identifying mapping and implementing.

Speaker #5: And at one point, would you be transferring production of Cherokee to Belvedere if that is the case? And is that the answer to Cherokee being a more meaningful contributor to volume and profitability?

Speaker #2: We are introducing more competitive trims. This will happen in a half one next year. And then, as you mentioned, we are impatriating Jeep Cherokee into Belvedere.

Speaker #5: And the other question I have on product still, but more on the European side, is Leapmotor. So we've seen good volume from Stellantis in Europe, but we see negative volume mix impact.

Speaker #2: And that will make Cherokee tariff free almost tariff free. On Leapmotor?

Speaker #5: Now, I understand the mix can be negative I'm trying to understand how much of a contribution would you expect from Leapmotor and to what extent my understanding of the Leapmotor setup and the cost efficiency is that the product could be dilutive to the mix of Stellantis, could still be accretive to earnings.

Speaker #4: Yeah. So Leapmotor's it has been so far very successful. The vehicles are profitable. But as you mentioned, because of the powertrain mix of those vehicles, they have margins that is lower than the average in Europe.

Speaker #5: And is that still the right approach? And when do we start to see that show up in the profitability of Europe? Or do we have to wait for eventually the Peugeot brand to start coming through and contribute more positively to mix as was the case in the past?

Speaker #4: But we continue to expect positive contribution and increasing contribution from Leapmotors as we launch a new vehicles and expand the portfolio in Europe. So far it's very successful and again, it's profitable, but definitely has a negative impact on mix because of the powertrain.

Speaker #5: Thank you.

Speaker #3: Okay. So I will split the question into I will take the Cherokee question and I will pass to Joao the Leapmotor question. So on Cherokee, first of all, we see high interest from consumer on Cherokee.

Speaker #4: Thank you.

Speaker #3: Understood. If I can squeeze in for back to Antonio, but do you have a date for when Belvedere would start production of the Cherokee, please?

Speaker #3: We map that every time on the funnel management and interest is very high. What we are doing, as you said, it is very exposed to tariffs.

Speaker #2: No, we cannot unveil this date in this call. Thank you.

Speaker #3: Okay. Thank you.

Speaker #4: The next question comes from the line of Christophe Laskavi from Deutsche Bank. Your line is open.

Speaker #3: So we are balancing volumes with profit generation. We are doing that by limiting some trims and mixing on the highest and more profitable trims.

Speaker #5: Good afternoon. Thank you for taking my questions. I'd like to ask on cash generation in the second half. Now, obviously, to your point to Q4 being better than Q3 and CapEx ramping up quite a lot, could you comment on the CapEx phasing?

Speaker #3: And limiting some channel so improving the quality of the mixed channel. This is what is happening now on Cherokee. What we are doing in parallel is to put it into VCP so we'll be one of the nameplate that will receive the cost saving that we are identifying mapping and implementing.

Speaker #5: Will it start in Q3 right away with far higher spending? Was it mostly Q4? And with working capital reversing or likely reversing in Q3, should we prepare for a free cash flow which is an outflow of over a billion plus in Q3?

Speaker #3: We are introducing more competitive trims this will happen in half one next year. And then as you mentioned, we are re-impatriating Jeep Cherokee into Belvedere.

Speaker #5: Any comment on free cash flow phasing would be appreciated. Thank you. Yeah. No, thank you for the question. Yeah, the first comment is that if we look at the second half versus first half, we expect to have higher CapEx and we expect the higher CapEx to pick up already in Q3 and then Q4 again.

Speaker #3: And that will make Cherokee tariff free almost tariff free. On Leapmotor?

Speaker #5: So we'll see a gradual improvement as we continue to develop the new programs that were set under best lane 2030. For the second half, we expect working capital to be again positive as usually happens at the end of the year as we reduce especially property stock.

Speaker #5: On season arts between Q3 and Q4, you're right that working capital in Q3, it's negative and you'll have the same not the same amount, but the same dynamic that happened last year because of the summer production shutdowns both in North America and in Europe.

Speaker #4: Thank you.

Speaker #5: Understood. If I can squeeze in for back to Antonio, but do you have a date for when Belvedere would start production of the Cherokee, please?

Speaker #3: No, we cannot unveil this date in this call. Thank you.

Speaker #5: So Q3, it's normal that the working capital is negative and it will be the same this year. Thank you. And if I may follow up just on Europe, you mentioned other regions pricing stabilization.

Speaker #5: Okay. Thank you.

Speaker #4: The next question comes from the line of Christophe Laskavi from Deutsche Bank. Your line is open.

Speaker #2: Good afternoon. Thank you for taking my questions. I'd like to ask on cash generation in the second half. Now, obviously, to your point to Q4 being better than Q3 and CapEx ramping up quite a lot, could you comment on the CapEx phasing?

Speaker #5: Is this seen in Europe or is it actually the competitiveness accelerating given the inflow of local competitors in the market? And do you expect the pricing pressure in H2 essentially to be offset with the industrial savings?

Speaker #2: Will it start in Q3 right away with far higher spending? Was it mostly Q4? And with working capital reversing or likely reversing in Q3, should we prepare for a free cash flow which is an outflow of over a billion plus in Q3?

Speaker #5: Thank you.

Speaker #2: So the industrial saving will have an important role both in North America and as you mentioned in Europe. The pricing environment will be constructive in North America and we believe not deteriorating in Europe.

Speaker #2: Any comment on free cash flow phasing would be appreciated. Thank you.

Speaker #2: And in the other region, we believe that as well VCP and industrial saving will be a major lever. We see some opportunity of pricing in the other regions.

Speaker #3: Yeah. No, thank you for the question. Yeah, the first comment is that if we look at the second half versus first half, we expect to have higher CapEx and we expect the higher CapEx to pick up already in Q3 and then Q4 again.

Speaker #5: Thank you.

Speaker #4: The next question comes from the line of Itai Michaeli from TAD Cohen. Your line is open.

Speaker #3: So we'll see a gradual improvement as we continue to develop the new programs that were set under best lane 2030. For the second half, we expect working capital to be again positive as usually happens at the end of the year as we reduce especially property stock.

Speaker #6: great. Thanks. Hi everybody. Two quick questions for me. First, I was hoping you could maybe share how you're thinking about targeted US inventory levels by year-end, whether it's base supply or absolute units.

Speaker #6: And then secondly, as we think about the achievement of positive industrial free cash flow in 2027, I was curious kind of what kind of volume growth or revenue growth you roughly might need to get to that level of free cash flow next year.

Speaker #3: On season after between Q3 and Q4, you're right that working capital in Q3, it's negative and you'll have the same not the same amount, but the same dynamic that happened last year because of the summer production shutdowns both in North America and in Europe.

Speaker #6: Thank you.

Speaker #2: Okay. So I will answer to the question of the US inventory. So I said we picked in June at 390, moving from January to June plus 70,000.

Speaker #3: So Q3, it's normal that the working capital is negative and it will be the same this year.

Speaker #2: 65,000 of those 70,000 are new product that we expect to accelerate in sale in H2. And then also the anticipation of build-up for the planned summer shutdowns in our North American plant.

Speaker #2: Thank you. And if I may follow up just on Europe, you mentioned other regions pricing stabilization. Is this seen in Europe or is it actually the competitiveness accelerating given the inflow of local competitors in the market?

Speaker #2: July sales rates are already moving the inventory largely down. So we believe that we will end July as US dealer inventory at around 365,000.

Speaker #2: And do you expect the pricing pressure in H2 essentially to be offset with the industrial savings? Thank you.

Speaker #2: And moving forward, we believe that this absolute number can be the one that will allow us to accelerate the sales that we want to do.

Speaker #3: So the industrial saving will have an important role both in North America and as you mentioned, in Europe. The pricing environment will be constructive in North America and we believe not deteriorating in Europe.

Speaker #2: And also introduce the new product that we are doing. Such as the RAM TRX SRT, which will be very profitable, very positive for mix.

Speaker #3: And in the other region, we believe that as well VCP and industrial saving will be a major lever. We see some opportunity of pricing in the other regions.

Speaker #2: The Jeep Recon BV and the Jeep Grand Wagoneer REV. Do you want to take the other one?

Speaker #5: Yes. So the in first lane, we set the revenue target for 2028 at 175 billion euros. So the revenue that we are expecting for 27, it's intermediate between what we're going to close 2026 and the 2028 target.

Speaker #2: Thank you.

Speaker #4: The next question comes from the line of Itai Mikaeli from TAD Cohen. Your line is open.

Speaker #5: Oh, great. Thanks. Hi everybody. Two quick questions for me. First, I was hoping you could maybe share how you're thinking about targeted US inventory levels by year-end, whether it's state supply or absolute units.

Speaker #5: So it's a reasonable volume growth on the back of the products that we continue to launch. The biggest driver for the positive free cash flow next year, it's the earnings.

Speaker #5: And then secondly, as we think about the achievement of positive industrial free cash flow in 2027, I was curious kind of what kind of volume growth or revenue growth you roughly might need to get to that level of free cash flow next year.

Speaker #5: Volume will be a part of that, but the biggest part of the earnings growth next year as we are talking many times here, it's industrial efficiencies including the savings that we expect from VCP.

Speaker #5: Thank you.

Speaker #3: Okay. So we'll answer to the question of the US inventory. So I said we picked in June at 390, moving from January to June plus 70,000.

Speaker #5: So industrial costs and industrial efficiency will be the biggest driver of the earnings improving next year that will drive to the positive free cash flow.

Speaker #3: 65,000 of those 70,000 are new product that we expect to accelerate in sale in H2. And then also the anticipation of build-up for the planned summer shutdowns in our North American plant.

Speaker #6: That's very helpful. Thank you.

Speaker #4: The next question comes from the line of Christian Fren from Goldman Sachs. Your line is open.

Speaker #7: Yes. Hello everyone. Thanks for taking my question. I just want to come back to North America again and specifically on the volume and mix portion.

Speaker #3: July sales rates are already moving the inventory largely down. So we believe that we will end July as US dealer inventory at around 365,000 and moving forward, we believe that this absolute number can be the one that will allow us to accelerate the sales that we want to do and also introduce the new product that we are doing.

Speaker #7: Of the bridge, where you reported 409 million of benefit. That's down sequentially. And I'm just wondering, the drop through, if I look at the drop through from Q1, I think you are 27% on that line item.

Speaker #7: And it's now dropped to 8%. So I'd just like to understand again, if there were any sort of specific reasons for that, or if the recalls, I think you mentioned the recalls were also present in North America.

Speaker #3: Such as the RAM TRX SRT, which will be very profitable, very positive for mix. The Jeep Recon BV and the Jeep Grand Wagoneer REV.

Speaker #7: And I'm not sure if Rahmats would come into this line item, but if you could flag any reason for that significant sequential drop in volume and mix.

Speaker #3: Joy, you want to take the other one?

Speaker #4: Yeah. So in first lane, we set the revenue target for 2028 at 175 billion euros. So the revenue that we are expecting for 2027, it's intermediate between what we're going to close 2026 and the 2028 target.

Speaker #7: Drop through. And then secondly, on the vehicle net price also sticking with North America, we went from a positive number in Q1 to a negative number.

Speaker #7: And just trying to understand, especially on the content side, what happened there and how we should think about the second half. Thank you.

Speaker #4: So it's a reasonable volume growth on the back of the products that we continue to launch. The biggest driver for the positive free cash flow next year, it's the earnings.

Speaker #4: A volume will be a part of that, but the biggest part of the earnings growth next year as we are talking many times here, it's industrial efficiencies including the savings that we expect from VCP.

Speaker #5: Okay. On the sequential drop through impact, the biggest driver of the Q2 versus Q1 mix deterioration is nameplate mix. As we increase shipments of some of the vehicles built especially in Mexico.

Speaker #4: So industrial costs and industrial efficiency will be the biggest driver of the earnings improving next year that will drive to the positive free cash flow.

Speaker #5: So basically, the increase of vehicles built in Mexico were the ones. So it's basically nameplate mix based on the vehicles that we shipped in Q2.

Speaker #5: That's very helpful. Thank you.

Speaker #4: The next question comes from the line of Christian Fren from Goldman Sachs. Your line is open.

Speaker #5: So nothing special other than the specific time of the mix that happened in Q2 versus Q1.

Speaker #6: Yes. Hello everyone. Thanks for taking my question. I just want to come back to North America again and specifically on the volume and mix portion.

Speaker #7: Okay. That's really helpful. Thank you very much. And then if I could just have a follow-up question. On your investment spend, I think you're keeping your investment spend for the full year.

Speaker #6: Of the bridge, where you reported 409 million of benefit. That's down sequentially. And I'm just wondering, the drop through, if I look at the drop through from Q1, I think you are 27% on that line item.

Speaker #7: So it's still intact. And if my calculations are right in H1, you spent about three and a half billion. Which would imply H2 spend investment spend of about 7.4 billion or thereabouts.

Speaker #6: And it's now dropped to 8%. So I'd just like to understand again, if there were any sort of specific reasons for that, or if the recalls, I think you mentioned the recalls were also present in North America, and I'm not sure if raw mats would come into this line item, but if you could flag any reason for that significant sequential drop in volume and mix.

Speaker #7: That's a very significant increase. H1 to H2, which we didn't actually see in the last two years. So again, could you help me understand why there's this significant shift or perhaps I'm making an error in these numbers?

Speaker #7: Thanks.

Speaker #5: Yeah. We can take this offline because I think some of the numbers that you're taking, you're probably not capturing all the parameter. In H1, our total investment as a percentage of revenue and we can reconcile offline, it was 6.3%.

Speaker #6: Drop through. And then secondly, on the vehicle net price also sticking with North America, we went from a positive number in Q1 to a negative number.

Speaker #6: And just trying to understand, especially on the content side, what happened there and how we should think about the second half. Thank you.

Speaker #5: So yeah. So there is over a billion euros of higher capex in the second half versus first half. That's what we are expecting.

Speaker #7: Okay. Thank you.

Speaker #4: Okay. On the sequential drop through impact, the biggest driver of the Q2 versus Q1 mix deterioration is nameplate mix. As we increase shipments of some of the vehicles built especially in Mexico.

Speaker #4: Ladies and gentlemen, this was the last question for today. With this, let me now end the call back to Mr. Antonio Filosa for the conclusion.

Speaker #2: Well, very, very well. And thank you again for joining us today. And for the time and focus you have put into reviewing our results and listening to our business updates.

Speaker #4: So basically, the increase of vehicles built in Mexico were the ones. So it's basically nameplate mix based on the vehicles that we shipped in Q2.

Speaker #4: So nothing special other than the specific time of the mix that happened in Q2 versus Q1.

Speaker #6: Okay. That's really helpful. Thank you very much. And then if I could just have a follow-up question on your investment spend. I think you're keeping your investment spend for the full year.

Speaker #6: So it's still intact. And if my calculations are right in H1, you spent about three and a half billion. Which would imply H2 spend investment spend of about 7.4 billion or thereabouts.

Speaker #6: That's a very significant increase. H1 to H2, which we didn't actually see in the last two years. So again, could you help me understand why there's this significant shift or perhaps I'm making an error in these numbers?

Speaker #6: Thanks.

Speaker #4: Yeah. We can take this offline because I think some of the numbers that you're taking you're probably not capturing all the parameter. In H1 our total investment as a percentage of revenue and we can reconcile offline.

Speaker #4: It was 6.3%. So yeah. So there is over a billion euros of higher capex in the second half versus first half. That's what we are expecting.

Speaker #6: Okay. Thank you.

Speaker #4: Got it.

Speaker #7: Ladies and gentlemen, this was the last question for today. With this, let me now end the call back to Mr. Antonio Filosa for the conclusion.

Speaker #1: Seasons call. You will have the opportunity to ask questions at the end of the call by typing #Q5 on your telephone keypad. Please do not exceed 1 question per person, and if necessary, an additional one.

Speaker #1: I now give the floor to Mr. Charlie Christman, Head of Investor Relations, to begin today's conference. Sir, the floor is yours.

Speaker #2: As customary, the call will be governed by that language. Now, I will hand the call over to Antonio Filosa, Chief Executive Officer of Stellantis.

Speaker #3: Thank you, Charlie. And thank you all very much for joining us today as we discuss our Q2 results. Our second-quarter execution and financial performance reflect the meaningful progress that the team and I have been focused on delivering over the last 12 months.

Speaker #3: All key financial metrics are significantly improved year over year. Net revenues are up 13%. EOI margin is up 120 basis points. Industrial free cash flow is positive €1 billion, up €1 billion compared to last year.

Speaker #3: This year over year improvement gives us confidence in our full year 26 financial guidance. Which we are reaffirming again today, including our expectation that we will have positive industrial fixed flow in 2027.

Q2 2026 Stellantis NV Earnings Call

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