MILAN (Reuters) -Automaker Stellantis said on Wednesday it would return to revenue growth and positive cash generation in 2025 as it tries to recover from a crisis which engulfed its U.S. business late last year and knocked its shares.
While pointing to an improvement this year, the results may not completely reassure investors that the worst is over for Stellantis, as Europe’s automakers also have to battle high costs, sluggish demand and stiff competition from China.
“We are firmly focused on gaining market share and improving financial performance as 2025 progresses,” Chairman John Elkann, who has led the company since CEO Carlos Tavares quit in December, said in a statement.
The Franco-Italian-U.S. automaker predicted no major improvement in its profitability, as it forecast a “mid-single digit” margin on its adjusted operating profit for 2025.
That was broadly in line with a 5.5% margin it achieved in 2024, down from 12.8% in 2023 and at the bottom of the forecast range it provided in September after a shock profit warning, which dented investor confidence and later led to the ousting of Tavares.
One of the most profitable groups for years among volume automakers under Tavares, Stellantis was hit in 2024 by slumping sales and bloated inventories, especially in the U.S., its most profitable market, as it raised prices too high, losing longstanding customers.
To revive its U.S. business, the group had to reduce output last year and offer big discounts, hitting its profitability and wiping billions off its market value.
After peaking at around 27 euros early last year, Stellantis shares fell below 12 euros after Tavares left, at their lowest since July 2022.
The group burnt through more than 6 billion euros ($6.3 billion) in cash last year, while total revenues fell 17% to 157 billion euros — with a 12% drop in global shipments — due to “temporary gaps” in the product range and “now-complete inventory reduction initiatives”, it said on Wednesday.
In the second half of 2024, Stellantis said its adjusted earnings before interest and taxes (EBIT) fell to just 185 million euros, from 10.2 billion euros in the same period of 2023.
The automaker proposed to pay investors a 0.68 euro per share dividend on 2024 results.
($1 = 0.9530 euros)
(Reporting by Giulio Piovaccari in Milan and Gilles Guillaume in Paris, editing by Alvise Armellini, Louise Heavens and Jane Merriman)
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