Stellantis CEO vows steady cash flow improvement after quarterly miss hits shares
Stellantis Quarterly Financial Performance and CEO Response
By Giulio Piovaccari and Gilles Guillaume
MILAN, April 30 (Reuters) - Stellantis CEO Antonio Filosa pledged to improve the group's free cash flow performance quarter-by-quarter after the automaker's January-March results sent its shares sharply lower on Thursday.
The group, which includes such brands as Jeep, Ram, Fiat and Peugeot in its lineup, nearly tripled in first-quarter adjusted operating income, helped by U.S. tariff refunds, but a disappointing cash flow sent its shares down over 10% at opening.
Cash Flow and Operating Income Analysis
Industrial free cash flow was more than 1.9 billion euros ($2.2 billion) negative in the quarter, still an improvement from a cash burn of more than 3 billion euros a year earlier.
"We will keep improving, as we did this quarter. Quarter-by-quarter and year-over-year," Filosa told reporters.
"Improvement is there, commercial momentum is there, and discipline in the way we are managing price and cost is there. That encourages me and says that this is a long journey for sure, but will be a journey of progressive gradual improvement," he said.
Analyst Reactions and Expectations
Oddo BHF analyst Michael Foundoukidis described the cash performance in the first quarter as "more negative than expected." He said it only included 700 million euros in charges out of a total of 1 billion euros expected for this year.
Despite relief from expected U.S. tariff refunds, Stellantis maintained forecasts for 2026 it provided earlier this year, reiterating it expected its industrial free cash flow to turn positive next year.
More challenges could come this year from higher raw material costs and supply-chain disruptions, should the current Middle East crisis persist, Filosa said.
Impact of U.S. Tariff Refunds
Tariff Refund Inflates Result
TARIFF REFUND INFLATES RESULT
Milan-listed shares in Stellantis recovered some ground and were down 3.5% at 1250 GMT.
Adjusted earnings before interest and taxes (EBIT) rose to 960 million euros in January to March from 327 million euros a year earlier. That number, however, included around 400 million euros in expected refunds after a U.S. Supreme Court ruling in February that struck down some of President Donald Trump's tariffs.
Regional EBIT Performance
Adjusted EBIT in Stellantis' key North American market, which came in at 263 million euros, would have been negative without tariff refunds, Bernstein analysts said in a note.
Filosa told analysts in a post-earnings call the North American margin would improve during this year.
In Europe, Stellantis' other major market, adjusted EBIT was near zero, down from 292 million euros a year earlier.
Future Strategies and Business Plan
New Business Plan in May
NEW BUSINESS PLAN IN MAY
The results underscore the challenges still facing Filosa, who was appointed last year to revive the automaker after several quarters of falling sales, as he prepares to unveil the group's new long-term business plan on May 21.
Brand Strategy and Production Plans
Filosa said on Thursday that Stellantis will rely on all of its current 14 brands for its future strategies and hinted at actions to absorb its excess production capacity in Europe, including increased cooperation with Chinese counterparts.
"Our brands represent our strongest asset for our customers and for our markets," he said.
Stellantis in February announced more than 22 billion euros ($26 billion) in charges as the group scaled back its electric-vehicle ambitions.
($1 = 0.8559 euros)
(Reporting by Giulio Piovaccari in Milan and Gilles Guillaume in ParisEditing by Alvise Armellini, Mark Potter and Tomasz Janowski)
