Thomas Besson

Thomas Besson asked for a reconciliation between the operating cash burn (EUR 2.4 billion) and industrial free cash flow (EUR 1.5 billion) in H2 2025, and sought confirmation that the EUR 6.5 billion cash portion of charges, payable over four years, has been agreed upon with suppliers.

Answer

CFO João Laranjo clarified that operating cash flow is an IFRS measure including Finco operations but not CapEx, while industrial free cash flow excludes Finco but includes industrial investments. He confirmed that negotiations with suppliers for the EUR 6.5 billion cash payments are ongoing, but closed negotiations, including the U.S. deal, align with the four-year payment terms.

Thomas Besson asked for a reconciliation between the reported operating cash burn and industrial free cash flow, requesting isolation of bank and other items. He also inquired whether the EUR 6.5 billion cash portion of charges, planned over four years, had been fully agreed upon with suppliers or was still under negotiation.

Answer

João Laranjo, Chief Financial Officer, clarified that operating cash flow is an IFRS measure including Finco operations but excluding CapEx, while industrial free cash flow excludes Finco but includes industrial investments. He provided reconciliation figures, including EUR 4.5 billion in CapEx and EUR 5.3 billion from Finco operations. Regarding the EUR 6.5 billion cash payments, he stated that negotiations with suppliers are ongoing, but closed agreements, including the U.S. deal, align with the four-year payment terms, specifically mentioning EUR 700 million.

Thomas Besson requested more granularity on U.S. order intake, including the impact of Hemi relaunch on Q3 volumes, initial reception of the Cherokee, expected Q4 benefits, and when the full impact on registration figures is anticipated. He also asked for an assessment of the overall U.S. market in Q4, specifically if the 16 million SAAR market expectation from GM and Ford is shared. His second question was for Joao, regarding warranty costs and provisions, asking for clarification on the change in methodology, expected recall costs for 2025 versus 2024 and 2023, confirmation of no cash impact on H2 from the provision, and regional variations in costs.

Answer

CEO Antonio Filosa reported strong U.S. order collection, with over 43,000 orders for the Ram 1500 Hemi V8 and full production for the Dodge Charger muscle car sold out until the next model year. He noted that the major positive impact on volumes from these launches would be visible in Q1 next year, and confirmed an expected U.S. industry SAAR of around 16.4-16.5 million units for the next year. CFO Joao Larangeira clarified that the warranty methodology review primarily impacts the U.S. and Europe, resulting in a non-cash provision in 2025. He provided total warranty balance sheet figures for 2023 (€8.9 billion) and 2024 (€9.3 billion) and offered to follow up offline for specific recall details.

Thomas Besson requested more granularity on U.S. order intake, specifically the impact of the Hemi relaunch on Q3 volumes, initial reception of the Cherokee, and expected Q4 benefits and full impact on registration figures. He also asked for Stellantis' Q4 U.S. market outlook and details on warranty costs, including expected recall costs for 2025 versus 2024/2023, and confirmation of no cash impact from the new provision.

Answer

CEO Antonio Filosa reported strong U.S. order collection, with over 43,000 orders for the Ram 1500 Hemi V8 and full production closed for the Dodge Charger muscle car. He expects a U.S. industry SAR of 16.4-16.5 million units for the next year. CFO Joao Larangeira confirmed that warranty methodology changes primarily impact the U.S. and Europe, resulting in a non-cash provision in 2025. He provided total warranty balance sheet figures for 2023 (€8.9 billion) and 2024 (€9.3 billion).

Thomas Besson of Kepler Cheuvreux asked whether the H2 guidance could be considered conservative, given that production should normalize without the major headwinds of inventory destocking or tariff-related downtime seen previously.

Answer

CEO Antonio Filosa framed the guidance as a 'commitment' to a significant sequential improvement from a breakeven H1, rather than conservative. CFO Doug Ostermann elaborated that while volumes and pricing should improve, the business must absorb a substantial headwind from tariffs, with over €1 billion expected in H2 compared to just €330 million in H1, which makes the guided improvement a challenging but achievable goal.

Thomas Besson asked about Stellantis's persistent market share losses in the U.S. and Europe, questioning the effectiveness of recent product launches and the impact of the Smart platform ramp-up. He also inquired about potential industrial actions and followed up on strong performance in the Middle East, Africa, and Latin America, asking if this would lead to higher margins in those regions.

Answer

CFO Doug Ostermann responded that European market share actually increased by 130 basis points compared to the second half of 2024, though he conceded the ramp-up of new products has been slower than anticipated. He identified the sluggish European LCV market, down 13% year-to-date, as a significant headwind due to Stellantis's 30% market share. Regarding other regions, he acknowledged strong business in the Middle East but deferred detailed regional margin discussions to the upcoming July 29th call.

Asked about ongoing market share losses in the US and Europe despite new product launches, the slow ramp-up of new platforms, and whether the strong performance in emerging markets would lead to higher margins.

Answer

The CFO noted a sequential market share increase in Europe from H2 2024, but admitted the product ramp-up was slower than expected. He highlighted the weak European LCV market as a significant headwind. Regarding emerging markets, he acknowledged strong performance but deferred detailed regional margin discussion to the next earnings call.

Thomas Besson asked about Stellantis's persistent market share losses in the U.S. and Europe, questioning the slower-than-expected product ramp-up and potential need for industrial actions. He also inquired if strong performance in the Middle East, Africa, and Latin America translated to higher margins in H1.

Answer

CFO Doug Ostermann noted that European market share actually increased 130 basis points sequentially from H2 2024, despite a slow product ramp-up and a significant 13% decline in the LCV market, where Stellantis has a 30% share. He highlighted the upcoming Fiat Grand Rapanda launch as a key catalyst. Ostermann acknowledged strong performance in other regions but deferred detailed margin discussions to the formal H1 results call on July 29th.

Thomas Besson asked about Stellantis's persistent market share losses in the U.S. and Europe, questioning the effectiveness of recent product launches and the potential need for industrial actions. He also inquired if strong performance in the Middle East, Africa, and Latin America would translate to higher margins.

Answer

CFO Doug Ostermann responded that European market share actually increased by 130 basis points compared to H2 2024, though he conceded that the ramp-up of new products has been slower than anticipated. He highlighted the upcoming Fiat Grand Rapanda launch and noted the weak European LCV market, where Stellantis has a 30% share, as a significant headwind. He deferred detailed regional margin commentary to the upcoming July 29th call.

Thomas Besson inquired whether the reduced hybrid share was due to product changeover or a deliberate strategy to lower overall hybrid presence. He also requested Q3 delivery figures for the Daytona and the number of F80 units planned for Q4.

Answer

CEO Benedetto Vigna clarified that the reduction in hybrid car offerings is a consequence of model changeover and not an underlying trend related to propulsion. He stated that 40 Daytona units were delivered in Q3, and only an initial few F80 units are planned for Q4.

Thomas Besson inquired whether the reduced hybrid share is due to product changeovers or a strategic decision, and requested delivery figures for the Daytona SP3 in Q3 and initial F80 units in Q4.

Answer

Benedetto Vigna (CEO) clarified that the reduction in hybrid car offerings is a consequence of model changeovers, not a strategic shift. He stated that only a few initial F80 units are planned for delivery in Q4.

Thomas Besson asked about the reason for the lower share of hybrid vehicles in the quarter, why the 50 basis point margin cushion was removed from guidance, and whether the 'Other' line in the EBIT bridge would remain elevated.

Answer

CEO Benedetto Vigna stated that the hybrid share fluctuates based on the specific product offering and production volumes in a given quarter. CFO Antonio Picca Piccon explained the 50 bps cushion was removed due to increased confidence from lower-than-expected industrial costs and revised Formula 1 ranking assumptions. He anticipates the 'Other' EBIT line will remain positive in H2 but contribute less than it did in H1.

Thomas Besson asked for more detail on the drivers of the Q4 average selling price increase, inquired if the hybrid share of volumes would continue to grow in 2025, and questioned the long-term plan to offset the eventual phase-out of the high-priced F80 supercar post-2027.

Answer

CFO Antonio Piccon attributed the Q4 ASP increase to the SF90 XX ramp-up, a favorable country mix, and strong personalization, including carbon fiber parts. He clarified that the hybrid share is expected to be slightly lower in 2025 due to deliveries of the ICE-powered 12 Cilindri. CEO Benedetto Vigna deferred the long-term strategy question, stating the post-F80 plan will be unveiled at the Capital Market Day in October.

Thomas Besson questioned if non-car revenues were becoming accretive to profitability, whether the full-year free cash flow guidance was conservative after a strong Q1, and asked for confirmation of the annual tax rate and CapEx.

Answer

CFO Antonio Picca Piccon confirmed the 2025 tax rate guidance of approximately 22% and CapEx between €900-€950 million. Regarding free cash flow, he stated Ferrari is 'never conservative' but noted there are still moving parts. He also indicated that while sponsorship revenues are set, year-over-year comparisons will be uneven.

Asked for details on the Q4 ASP increase, the expected hybrid volume share in 2025, and the long-term plan to replace the F80's contribution after its production ends.

Answer

The Q4 ASP increase was driven by the SF90 XX, carbon fiber personalizations, and country mix. The hybrid share will be slightly lower in 2025 due to the 12 Cilindri. The long-term product plan post-F80 will be revealed at the October Capital Markets Day.

Asked about the potential for average selling price to increase in H2 2024 and the future evolution of the hybrid mix, including the timing of a new hybrid model.

Answer

The ASP in H2 is expected to be stable or slightly lower than H1 due to product mix changes. The hybrid share is expected to remain strong, supported by positive customer feedback and a new battery warranty program.

Thomas Besson questioned whether the average selling price (ASP) could increase in the second half of the year and asked about the expected evolution of the hybrid vehicle share in the sales mix.

Answer

CFO Antonio Piccon projected that the ASP in H2 would be slightly lower than H1, as fewer Daytona deliveries would outweigh an increase in SF90 XX shipments. CEO Benedetto Vigna stated that demand for hybrid models remains strong and is expected to continue at a similar level, supported by a new extended battery warranty program.