Sign in Subscribe

Stellantis NV - $STLA - Earnings Analysis: Commitment to new product launches and filling portfolio gaps.

By sagebytes in Lifestyle —

Business Model

Stellantis generates revenue primarily through the sale of vehicles under various brands including Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, FIAT, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, and Vauxhall. Revenue is also generated through related services such as parts, service contracts, and financial services.

Revenue Sources

  • Sale of Passenger Cars (PC) and Light Commercial Vehicles (LCV) across various brands.
  • Aftermarket parts and service revenue.
  • Financial services including financing and leasing.
  • Other revenue streams including Free2move and Leasys.

Income Statement Analysis

  • Net revenues decreased by 21% due to lower volume/mix and FX headwinds.
  • Operating income significantly declined due to unusual charges and lower revenues.
  • Adjusted operating income decreased by 98% indicating a substantial decline in profitability.
  • Negative Net Profit in H2 2024 compared to a significant profit in H2 2023.
  • Diluted EPS turned negative, reflecting lower earnings.
  • Adjusted Diluted EPS decreased significantly, reflecting the decline in underlying profitability.

Balance Sheet Analysis

  • Debt increased from €29.46 billion to €37.23 billion.
  • Cash and Cash Equivalents decreased from €43.67 billion to €34.10 billion.
  • Net Financial Position decreased substantially from €21.19 billion to €2.41 billion.
  • Industrial Net Financial Position decreased from €29.49 billion to €15.13 billion.

Cash Flow Analysis

  • Cash flows from operating activities decreased significantly, turning negative in H2 2024.
  • Industrial free cash flows also decreased substantially, turning negative in H2 2024.

Capital Allocation

Stellantis is committed to returning capital to shareholders through dividends and share buybacks. The company has proposed a dividend of €0.68 per common share. However, given the early stage of the commercial recovery, stock buybacks are not expected in the first half of 2025, with a re-evaluation planned as income and cash flow improve.

Management Commentary

Management acknowledged the challenging year with results falling short of potential but highlighted strategic milestones achieved.

Interim leadership team has taken quick, decisive actions to improve the company's performance and profitability.

Firmly focused on gaining market share and improving financial performance as 2025 progresses.

Overall Sentiment: Cautiously optimistic with a focus on execution and recovery in 2025.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.