Stuart Pearson

Stuart Pearson asked about working capital expectations for 2026, specifically if it would be a tailwind excluding cash costs of restructuring, and if free cash flow could be positive in 2026 excluding restructuring. He also asked if the upcoming Investor Day would present an operational plan or a broader strategic reset with more radical decisions.

Answer

CFO João Laranjo confirmed that excluding EUR 2 billion in cash payments for charges in 2026 (EUR 1 billion in Q1), working capital would be a tailwind due to volume growth. He reiterated existing guidance for cash flow. CEO Antonio Filosa anticipated the Investor Day would cover both a strong focus on operational execution and efficiency improvements (quality, time to market, industrial productivity) and answers to broader strategic items, suggesting a comprehensive approach.

Stuart Pearson from Oxcap Analytics asked about working capital expectations, specifically excluding any impact from restructuring cash costs, and if it would be a tailwind. He also questioned if industrial free cash flow could be positive in 2026, excluding restructuring costs. Finally, he asked if the upcoming Investor Day would focus more on operational plans or a broader strategic reset.

Answer

CEO Antonio Filosa stated that the Investor Day on May 21st will cover both a strong focus on operational execution and efficiency improvements (quality, time to market, industrial productivity) and answers to broader strategic items. CFO Joao Laranjo clarified that of the EUR 6.5 billion cash out from the announced charge, EUR 2 billion is in 2026 (EUR 1 billion in Q1). Excluding these EUR 2 billion payments, working capital would be a tailwind primarily due to forecasted volume growth. He had no further comments on positive cash flow for 2026, excluding payments, beyond existing guidance.

Stuart Pearson asked about the trend in warranty cash outflow, noting that spending was relatively flat despite high provisions, and if this gap is expected to narrow. He also inquired about Stellantis's thoughts on capacity-sharing partnerships with Chinese OEMs, similar to its Leapmotor JV, and if this model could expand to other regions or legal entities.

Answer

CEO Antonio Filosa emphasized dramatic improvements in product quality, evidenced by over 50% improvement in one-month in-service KPI in North America and over 30% in Europe in 2025, supported by 2,000 new engineers. He stated that Stellantis is pioneering capacity sharing with Leapmotor in Europe, South America, and Middle East/Africa, benefiting both parties. CFO João Laranjo confirmed that warranty spend in 2026 is not expected to increase beyond 2025 levels, anticipating benefits from quality improvements.

Stuart Pearson raised questions about warranty, noting that spending remained relatively flat despite significant provisions. He asked if the warranty cash outflow rate was stabilizing and if it was expected to increase in 2026/2027, and whether the gap between provisioning and outflow would narrow. He also inquired about capacity strategies beyond closures, specifically regarding partnerships with Chinese OEMs for capacity sharing, similar to the Leapmotor JV.

Answer

Antonio Filosa, Chief Executive Officer, emphasized dramatic improvements in product quality, citing a 50%+ improvement in one-month in-service KPI in North America and 30%+ in Europe for 2025, supported by recruiting over 2,000 engineers. On capacity sharing, he noted Stellantis's pioneering role with Leapmotor International, already selling their cars and planning capacity sharing in Europe and South America. João Laranjo, Chief Financial Officer, confirmed that warranty spend in 2024 and 2025 was flat and is not expected to increase in 2026 versus 2025, anticipating eventual benefits from quality improvements.

Stuart Pearson from Exane BNP Paribas asked for a diagnosis of why Stellantis's profitability fell from benchmark levels to near loss-making in key regions. He also questioned the significant restructuring charges and requested separate financial disclosures for the industrial and financing businesses.

Answer

CEO Antonio Filosa attributed the performance decline primarily to past decisions to discontinue seven popular nameplates in North America, a move that is now being reversed. CFO Doug Ostermann explained that a majority of the H1 restructuring charges reflect strategic shifts by the new management team, such as exiting fuel cell initiatives, and noted more could occur. He acknowledged the request for separate Finco reporting, stating it's under regular review.