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Stellantis Proceeds Cautiously in Search for New CEO

Stellantis, a multinational automaker, has outlined its objectives to achieve revenue growth and positive cash flow by 2025, aiming for consistent profit margins as it works to bounce back from challenges faced in its U.S. operations that resulted in the departure of its CEO.

The company has projected a "mid-single digit" margin on its adjusted operating profit for 2025, aligning with its 2024 performance. This marks a decrease from its 2023 margin of 12.8% and falls within the lower range of its initial forecast following setbacks that led to the change in leadership.

Stellantis' shares on the Milan stock exchange experienced a 4.3% decline by 0925 GMT, ranking as the weakest performers among Italy's major companies.

Chairman John Elkann emphasized the company's commitment to enhancing market share and financial standing throughout 2025, as indicated in the accompanying statement to the 2024 results.

Industry analysts, such as those at Citi, foresee potential margin recovery beginning in the coming year, emphasizing the challenges associated with restructuring and repositioning products to attract consumers.

In the latter part of 2024, Stellantis faced a 1.7 billion euro operating loss in its North American sector, resulting in a negative 6.8% margin, contrasting sharply with the previous year's 13% positive margin.

Stellantis announced that the process of appointing a new CEO is well underway and is expected to be finalized within the first half of the year.

The group disclosed a cash outflow exceeding 6 billion euros last year, coupled with a 17% revenue decline to 157 billion euros and a 12% reduction in global shipments, attributing these figures to temporary product range gaps and completed inventory reduction activities.

Furthermore, the automaker proposed a dividend payment of 0.68 euro per share for its 2024 financial results, following a distribution of 1.55 euros per share the previous year.

Stellantis, previously known for its profitability under Tavares' leadership, encountered sales declines and surplus inventory issues in 2024, particularly in the U.S. market, necessitating measures such as output cuts and substantial discounts, which impacted its earnings and market capitalization.

Following the resignation of its former CEO, Stellantis shares plummeted from around 27 euros to below 12 euros by early December 2024.