Stellantis cautious on turnaround time as it searches for new CEO

MILAN: Stellantis gave a cautious outlook for 2025 after its annual results took a hit from a slump last year in its US business that led to the ousting of Carlos Tavares as CEO.

The group expects a return to revenue growth and positive cash generation this year along with steady margins.

But, it warned the improvement would not really materialise before the second part of the year, when more new models would hit the market, sending its shares down.

"We'll really have the full benefit of all those new vehicles much more in the second-half than we will in the first half," CFO Doug Ostermann told analysts.

"That's why the dynamic this year is going to be stronger and much more weighted towards second-half".

The Franco-Italian-U.S. automaker is being led for now by Chairman John Elkann, who said the process to appoint a new CEO would be concluded within the first half.

"We have excellent candidates, both internally and externally," Elkann told analysts.

Stellantis burnt through more than 6 billion euros ($6.3 billion) in cash last year, while total revenues fell 17%, due to "temporary gaps" in the product range and "now-complete inventory reduction initiatives", it said on Wednesday.

The company expects to generate cash only in the second half.

This "suggests at best only FCF (free cash flow) breakeven or potentially further cash burn in the first half, when the market was expecting production to crank up again," Bernstein analysts said in a note.

They added that Stellantis' forecasts could yet prove optimistic as they are based on the assumption of no changes to current tariffs and global trade.

Stellantis guided towards a "mid-single digit" margin on its adjusted operating profit for 2025.

That is broadly in line with a 5.5% margin 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 later led to the exit of Tavares.

Automakers in Europe, where Stellantis is the second largest group, are battling high costs, sluggish demand and stiff competition from China, as well as complying with stringent carbon regulations and facing the threat of new tariffs.

Last week, rival Renault reported a record operating profit for 2024, slightly beating expectations, while Germany's Mercedes braced for a sharp drop in 2025 earnings.