In This Article:
MILAN (Reuters) - Automaker Stellantis aims to return to revenue growth and positive cash generation in 2025 and sees steady margins, it said on Wednesday, as it tries to recover from a slump in its U.S. business late last year that led to the ousting of its CEO.
The Franco-Italian-U.S. automaker forecast a "mid-single digit" margin on its adjusted operating profit for 2025.
That is broadly in line with a 5.5% margin in 2024, down from 12.8% in 2023 and at the bottom of the forecast range it provided in September after a shock profit warning, which dented investor confidence and later led to the ousting of CEO Carlos Tavares.
The Milan-listed shares were down 4.3% by 0925 GMT, the worst performers among Italy's blue-chips.
"We are firmly focused on gaining market share and improving financial performance as 2025 progresses," Chairman John Elkann, who has led the company since Tavares quit in December, said in a statement accompanying 2024 results.
Automakers in Europe are battling high costs, sluggish demand and stiff competition from China, as well as complying with stringent carbon regulations.
Analysts at Citi said margin recovery could be visible only from next year.
"It is very hard to turn around car companies. Replacing the product range and re-pricing it at attractive levels for consumers is a long-term and expensive process," they said in a note.
In the second half of 2024, Stellantis posted an adjusted operating loss of 1.7 billion euros in its North American region, with a negative 6.8% margin that compares with a 13% positive one a year earlier.
The group said on Wednesday the process to appoint the new CEO was "well underway" and reiterated it would be concluded within the first half.
The group burnt through more than 6 billion euros ($6.3 billion) in cash last year, while total revenues fell 17% to 157 billion euros - with a 12% drop in global shipments - due to "temporary gaps" in the product range and "now-complete inventory reduction initiatives", it said on Wednesday.
The automaker proposed a dividend on its 2024 results of 0.68 euro per share after paying 1.55 euros last year.
One of the most profitable groups for years among volume automakers under Tavares, Stellantis was hit in 2024 by slumping sales and bloated inventories, especially in the U.S., its most profitable market, as it raised prices too high, losing longstanding customers.
To revive its U.S. business, the group had to reduce output last year and offer big discounts, hitting its profitability and wiping billions off its market value.