Inside Stellantis’ brand-new Hybrid and PHEV Vehicles Assembly Plant in Turin, Italy, a worker diligently chugs away, epitomizing the company’s commitment to innovation. This automobile giant, entrenched in a challenging crisis, announced on Wednesday that it expects a resurgence in revenue growth this year following a sharp downturn in earnings in 2024.
This multinational behemoth, which proudly owns iconic brands like Jeep, Dodge, Fiat, Chrysler, and Peugeot, reported a net profit of 5.5 billion euros ($5.77 billion) for the entire year of 2024. This figure represents a 70% decline from the 18.6 billion euros recorded in 2023, reflecting the hefty impact of the ongoing challenges it faces.
Expectations were slightly more optimistic, with analysts anticipating a net profit of 6.4 billion euros for 2024, according to a consensus compiled by LSEG. Despite the hurdles, Stellantis is confident about bouncing back to profitable growth and generating positive cash flow in 2025, hinting at the early stages of a commercial recovery amidst high industry uncertainties.
The company’s search for a new CEO is ongoing, after Carlos Tavares unexpectedly stepped down late last year. They are aiming to appoint a new leader within the first half of this year, with Chairman John Elkann temporarily piloting an interim executive committee to steer the ship.
Let’s break down the earnings details: Net revenues declined by 17% to 156.9 billion euros. Meanwhile, the adjusted operating income margin stood at 5.5%, aligning with the lower end of the company’s revised financial forecasts.
Reflecting on 2024, Elkann admitted it was a year of substantial contrast. While results didn’t quite meet expectations, significant strategic advancements were made. The rollout of both new multi-energy platforms and products has started, and will continue into 2025. Moreover, the initiation of EV battery production through joint ventures and the launch of the Leapmotor International partnership have set the stage for future growth.
Elkann emphasized that Stellantis remains laser-focused on boosting market share and enhancing financial performance as they move towards 2025. However, not all is rosy; shares in the company, listed on the Milan stock exchange, dipped by 4% on Wednesday morning.
Like many in the automotive industry, Stellantis has been navigating through a rough patch lately. Challenges such as performance issues in North America, waning global demand for new cars, and hurdles in China, the world’s largest auto market, have all taken their toll. In September, Stellantis had cautioned investors about lower-than-expected sales across most regions in the later half of 2024, signaling the complex road ahead.
