Dive Brief:
- Stellantis reported a 70% drop in net profits in 2024 to 5.5 billion euro ($5.76 billion), as well as a 64% decline in adjusted operating income, the automaker announced in its 2024 financial results Feb. 26.
- The automaker’s year-over-year net revenue fell 17% to 156.9 billion euro ($164.5 billion), with consolidated shipment volumes falling 12% due to temporary gaps in product offerings and inventory reduction initiatives to clear dealer lots.
- Stellantis is now focused on improving its performance in 2025, which includes the launch of new electrified models and production of batteries. “While 2024 was a year of stark contrasts for the company, with results falling short of our potential, we achieved important strategic milestones,” said Chairman John Elkann in the release.
Dive Insight:
Stellantis reported that its total vehicle inventories on Dec. 31 were 268,000 units lower year-over-year, including a 20% drop in U.S. dealer stock to 304,000 units. The decline in vehicle sales was a contributing factor for its significant revenue drop last year.
The automaker also reported that its free cash flows were negative 6 billion euros in 2024, which is said was largely due to declines in income and an increase in capital spending capital for production adjustments. The automaker said it will launch 10 new products in 2025 and will prioritize critical launches in key markets, especially in the U.S.
Stellantis’ dismal financial performance in 2024 is a stark contrast from 2023 when it posted record-high sales. The automaker's strong sales in 2023 led to its shareholders approving a 56% pay hike for its former CEO Carlos Tavares last April. However, the automaker’s sales momentum did not last.
Stellantis reported a 48% decline in revenue in North America in the first half of 2024. The automaker’s turnaround strategy included several high-profile leadership changes last June for its Jeep and Dodge brands in the U.S.
The automaker also announced new executive appointments in December, which included the return of Ram CEO, Timothy Kuniskis, who rejoined the automaker after retiring in May 2024.
However, a sales rebound failed to materialize. In October, Stellantis reported a 27% YoY drop in net revenue for Q3, which led to the company lowering its 2024 guidance and initiating corrective actions. Revenue for its Fiat Chrysler division also decreased by 20% YoY in Q3. The company’s poor performance in three consecutive years led to the resignation of Tavares on Dec. 1.
For its 2025 guidance, Stellantis forecasts positive net revenue growth along with a “mid-single digit” adjusted operating income margin. The automaker said it will work closely with its dealers in the U.S. and Europe to accelerate its return to growth.
Stellantis also expects positive industrial free cash flows this year, as a result of its early stage of its recovery, according to the release. However, Stellantis warns of elevated industry uncertainties that could impact its financial performance in the year ahead.
The automaker also announced the process to appoint a permanent CEO to replace Tavares is well underway and will be concluded within the first half of 2025.
