Stellantis cuts 2024 income, cash flow targets on industry 'deterioration' - InvestingChannel

Stellantis cuts 2024 income, cash flow targets on industry ‘deterioration’

Stellantis revised its 2024 financial guidance, “reflecting decisions to significantly enlarge remediation actions on North American performance issues, as well as deterioration in global industry dynamics.” The company has accelerated its planned normalization of inventory levels in the U.S., targeting no more than 330,000 units of dealer inventory by year-end 2024, from a prior timing objective of the first quarter of 2025. Actions include North American shipment declines of more than 200,000 vehicles in the second half of 2024, up from the 100,000 prior guidance, compared to the prior year period, increased incentives on 2024 and older model year vehicles, and productivity improvement initiatives that encompass both cost and capacity adjustments. “Deterioration in the global industry backdrop reflects a lower 2024 market forecast than at the beginning of the period, while competitive dynamics have intensified due to both rising industry supply, as well as increased Chinese competition,” the company said in a statement. It expects adjusted operating income margin of 5.5 – 7.0% for fiscal 2024, down from the prior double digit. Roughly two-thirds of the reduced AOI margin is driven by corrective actions in North America. Industrial free cash flow is expected to range from negative EUR 5B to negative EUR 10B, from the prior outlook of “positive.”

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