Horst Schneider

Horst Schneider inquired about Stellantis' European margin expectations, asking if sequential improvement is also targeted for Europe, given concerns about increasing incentives and BEV share. He also asked about working capital development into year-end, including expected inventory and trade payable increases, and potential chip shortage impacts. Finally, he asked about restructuring needs for Mexico and Canada due to the $13 billion U.S. CapEx and a split of this investment into R&D and property, plant, equipment.

Answer

CEO Antonio Filosa outlined plans to regain European market share and improve profitability through product actions like the Fiat 500 Hybrid, ramping up smart car platform products, and launching the Jeep Compass. He also discussed the need for regulatory flexibility in Europe. Regarding the U.S. investment, he stated it would leverage industrial capacity across North America, with no announced plant shutdowns in Mexico or Canada. CFO Joao Larangeira confirmed expected working capital dynamics due to North American volume increases and highlighted the daily monitoring of chip supply, noting that production disruptions would significantly impact working capital.

Horst Schneider asked if Stellantis aims to improve margins in Europe semester over semester, similar to the U.S., and what implications increasing incentives and BEV shares have on European profitability. He also inquired about working capital development into year-end, specifically expected increases in inventories and trade payables, and potential risks from chip shortages. Lastly, he asked about the restructuring needs for Mexico and Canada due to the $13 billion U.S. CapEx, and a split of the CapEx into R&D and property, plant, equipment.

Answer

CEO Antonio Filosa outlined plans to regain European market share and improve profitability through product actions like the Fiat 500 Hybrid, ramping up smart car platform products, and launching the Jeep Compass. He also commented on the changing European regulatory framework and the company's advocacy for flexibilities. Regarding the $13 billion U.S. investment, he stated it would leverage industrial capacity across North America, with no announced plant shutdowns in Mexico or Canada. CFO Joao Larangeira confirmed expected working capital dynamics (increased inventories due to North American volumes) and acknowledged that production disruptions from chip shortages would have a large negative working capital impact. CEO Antonio Filosa added that the chip situation is managed daily by a cross-functional war room.

Horst Schneider asked for confirmation on regional profitability, specifically if Europe remained profitable in H1. He also inquired about rising competitive pressure in Europe and sought clarity on the H1 tariff impact, asking if the €330 million headwind would intensify in the second half of the year.

Answer

CFO Doug Ostermann deferred specific regional margin details to the upcoming July 29th call. He acknowledged Europe is a tough, competitive market but pointed to a sequential market share gain as a positive sign. On tariffs, Ostermann confirmed the €330 million was only a partial impact for H1 and that he expects the figure to potentially double or more in H2, noting that industry-wide price increases to mitigate tariffs have been slow to materialize but could occur later in the year.

Asked for regional margin details for Europe and North America, commented on the competitive landscape in Europe following a warning from a competitor, and inquired about the nature and future impact of the H1 tariff costs.

Answer

The CFO deferred providing regional margin breakdowns until the next call. He confirmed Europe is highly competitive but highlighted Stellantis's sequential market share gains. He explained the H1 tariff impact of €330M was partial and expects a significantly larger impact in H2, with potential price increases across the industry as a mitigating factor.

Horst Schneider asked for clarification on regional profitability, specifically if Europe remained profitable in H1 2025. He also inquired about the competitive landscape in Europe, referencing a recent warning from a competitor, and sought more detail on the H1 tariff impact, asking if the €330 million figure represented a peak or if more was expected.

Answer

CFO Doug Ostermann deferred the specific question on European margins to the full results call on July 29th. He acknowledged that Europe is a very competitive environment but credited new products for a sequential market share increase despite a weak LCV market. On tariffs, he stated the €330 million H1 impact was not a peak and that a significantly larger impact is expected in H2, consistent with the previously disclosed full-year estimate of €1 billion to €1.5 billion.

Horst Schneider asked for confirmation on whether Europe's H1 margin remained positive, following the H2 2024 trend. He also inquired about rising competitive pressure in Europe and sought clarity on whether the H1 tariff impact represented a peak or just a partial effect.

Answer

CFO Doug Ostermann deferred providing regional margin details until the July 29th call. He acknowledged Europe is a tough, competitive market but credited new products for a sequential market share gain. Regarding tariffs, he explained the €330 million H1 impact was not a peak and expects the figure to more than double in H2, noting that the industry has been slow to pass on costs via price increases.

Horst Schneider from Bank of America Corporation asked about several smaller financial items. He questioned if the strong net interest income is a sustainable run rate, if the positive industrial performance will continue to improve, and whether the foreign exchange headwind is a full-year issue or will fade in coming quarters.

Answer

Executive Harald Wilhelm suggested the positive net interest income might moderate slightly from the Q1 run rate but remain positive. He noted that FX is difficult to predict but the Turkish lira could remain a headwind. Wilhelm confirmed that significant efforts in industrial performance—covering supply chain, raw materials, and operational efficiencies—should continue to provide a tailwind for the coming quarters.