Christian Frenes

Christian Frenes from The Goldman Sachs Group, Inc. asked about the expected change in warranty run rate for North America and Europe from 2025 to 2026 following the significant H2 2025 charge. He also inquired about the opportunity presented by new CAFE regulations and a housekeeping question regarding restated profit bridge components for North America and Europe in H1 2025.

Answer

CEO Antonio Filosa clarified that the main opportunity from new CAFE regulations is to improve Stellantis' mix of production and sales, optimizing profit in North America by selling less PHEV and more ICE, including increasing V8 engine production by 100,000 units in 2026. CFO Joao Laranjo stated that there was no restatement of the profit bridge components; the differences arise from using average margins for H1, H2, and full year periods, which means stacking walks do not work. For warranty, he referred to the detailed schedule provided on February 6th, suggesting that excluding EUR 500 million related to H1 from the H2 P&L booking would provide a good run rate going forward.

Christian Frenes asked if the announced provisions capture all risks to European operations from increased pricing pressure, for a breakdown of the EUR 6.5 billion cash out (specifically the cash portion of the EUR 1.3 billion workforce reductions), and for the Finco's cash investment in 2025 and expected for 2026.

Answer

CFO João Laranjo stated that regular closing processes consider risks like residuals in Europe, but no exceptional provisions for European pricing were made. He clarified that restructuring cash out was EUR 1.3 billion in 2025 and is expected to be around EUR 1 billion in 2026. He deferred detailed Finco cash investment figures for 2026 to the full-year earnings call.

Christian Frenes asked if the announced provisions fully capture all risks to European operations, particularly from increased pricing pressure. He sought clarification on the cash component of the EUR 1.3 billion workforce reductions within the EUR 6.5 billion cash out. Lastly, he requested details on the Finco's cash investment for 2025 and expectations for 2026.

Answer

João Laranjo, Chief Financial Officer, stated that the listed provisions are what has been accounted for, and while regular closing processes consider residual risks in Europe, there are no exceptional provisions for European pricing. He confirmed that the cash out for restructuring was EUR 1.3 billion in 2025 and is expected to be around EUR 1 billion in 2026 (slightly lower). He deferred detailed Finco cash investment figures for 2026 to the full-year earnings call.

Christian Frenes from Goldman Sachs inquired about Ferrari's R&D capitalization ratio, which was lower than expected, asking if this represents a new run rate or if mean reversion is anticipated. He also sought clarification on whether any additional actions have been taken to address softening residual values outside of the UK.

Answer

Antonio Picca Piccon, Ferrari's CFO, explained that the R&D capitalization ratio is influenced by overall CapEx and innovation expenses, particularly racing activities, and he expects a 'relatively stabilization' moving forward. Benedetto Vigna, CEO, clarified that actions to address residual values, specifically reduced shipments, were confined to the UK, with no further measures being implemented for other global markets.

Christian Frenes inquired about Ferrari's R&D capitalization ratio, asking if the recent lower rate is a new run rate or if mean reversion is expected, and sought clarification on whether any additional actions have been taken to address softening residual values outside of the UK.

Answer

CEO Benedetto Vigna confirmed that actions to address residual values were specific to the UK market, with no additional measures taken for other regions. CFO Antonio Picca Piccon explained that the R&D capitalization ratio depends on overall capital expenditure and innovation expenses, particularly related to racing activity and FIA financial regulations, and he expects a relatively stable ratio going forward.