Stellantis, the parent company of Opel, experiences significant decrease in earnings
Stellantis' 2024 Struggles and Future Plans
Last year, Stellantis shed a significant 20% off its revenue, with profits also waning at the Opel parent company. Looking ahead to 2025, the automotive giant is counting on fresh models to turn things around.
The financial year 2024 were a rollercoaster ride for Stellantis. The company's net revenue dipped to €156.9 billion, marking a 17% decline compared to 2023. The slip was partly due to a 12% drop in consolidated shipment volumes, a consequence of product offerings gaps and efforts to trim inventory levels. Consequently, profits plummeted by 70% to €5.5 billion, while adjusted operating income fell by a staggering 64% to €8.6 billion, boasting a margin of 5.5%. Additionally, Stellantis grappled with negative industrial free cash flows of €6 billion, reflecting operational challenges and working capital pressures.
Recognizing these setbacks, Stellantis has laid out strategic plans for 2025. The company is committed to launching ten innovative models next year, filling gaps in its product lineup, especially in North America. This includes models like the Dodge Charger Daytona and Jeep Wagoneer S, targeting high-margin segments. Furthermore, Stellantis plans to leverage its STLA Medium and Large platforms to introduce new vehicles, catering to diverse powertrain technologies and regulatory requirements.
In 2025, Stellantis anticipates positive revenue growth, a mid-single-digit AOI margin, and positive industrial free cash flows. These projections include the initial stages of commercial recovery and industry-wide uncertainties. The hunt for a new permanent CEO is scheduled to conclude in the first half of 2025, crucial for ensuring strategic continuity and investor confidence. Lastly, Stellantis' inventory management strategy, which yielded a 18% drop in 2024, will continue to enhance operational efficiency.
Sources: [1], [2], [4]
[1] Stellantis Annual Report 2024[2] Stellantis 4Q2024 Results[4] Stellantis News Release, Market response, and Financial Analyst coverage
Despite the significant challenges faced in 2024, where Stellantis' net revenue decreased by 17% and profits dropped by 70%, the automaker is optimistic about the future. In 2025, they aim to turn things around by launching ten innovative models, filling gaps in their product lineup, and leveraging their STLA Medium and Large platforms. This strategic approach is expected to result in positive revenue growth and a mid-single-digit AOI margin, as well as positive industrial free cash flows, despite ongoing industry uncertainties.
