Stellantis N.V.

Q2 consolidated shipments were 1.6 million units, up 10% year over year. Net revenues were EUR 43.5 billion, up more than EUR 5 billion, or 13%, versus Q2 last year. Adjusted operating income was EUR 773 million, up EUR 560 million year over year, and AOI margin was 1.8%, up 120 basis points year over year. Industrial free cash flow was positive EUR 1 billion, an improvement of EUR 1 billion year over year. Management reaffirmed full-year 2026 guidance, including expected net tariff expenses of EUR 1 billion to EUR 1.2 billion, CapEx and R&D spending of 6.5% to 7% of net revenues, and positive industrial free cash flow in 2027. They also said Q3 will be affected by the summer shutdown and raw-material inflation, while Q4 should benefit from higher volume and a stronger ramp in VCP initiatives.

Antonio Filosa framed the quarter as evidence that Stellantis is making meaningful progress on its turnaround, saying all key financial metrics improved year over year and the business is on track for the FaSTLAne 2030 targets. He emphasized three priorities: restoring market coverage, reducing industrial cost through VCP, and improving quality, noting that North America and Europe service quality improved 38% and 24%, respectively. His tone was constructive but measured, repeatedly stressing that the turnaround will take time and that the plan’s benefits are embedded in the company’s 2026, 2027 and 2028 targets.

Joao Laranjo highlighted the hard numbers behind the quarter: EUR 43.5 billion of revenue, EUR 773 million of AOI, 1.8% AOI margin and EUR 1 billion of industrial free cash flow. He said the AOI improvement was driven by EUR 376 million of volume/mix benefit and more than EUR 1.9 billion of industrial cost improvement, partly offset by EUR 456 million of negative pricing and EUR 861 million of FX and other headwinds. He also noted total inventory rose 20% year over year to 1.4 million units, CapEx and R&D should stay at 6.5% to 7% of net revenues in 2026, and net tariff expenses are now expected at EUR 1 billion to EUR 1.2 billion.

Analysts focused heavily on why North America margins remained weak despite stronger shipments, asking about pricing, plant utilization and product mix. Management answered that the main issues are the cost and quality gaps, not any single unusual item, and pointed to VCP, warranty reductions and future high-volume launches as the main margin drivers. Questions also covered the second-half shape, inventory, Cherokee, Leapmotor and cash flow; management said July U.S. inventory should fall to around 365,000 units, Cherokee is being managed for profit while repatriation to Belvidere is planned but not dated, and Leapmotor is profitable but dilutive to mix because of its powertrain. On cash flow, management said the biggest driver for positive 2027 industrial free cash flow will be earnings improvement from industrial efficiencies and VCP, not just volume growth.