It was last July 25. That day, Stellantis reported a sharp drop in its sales for the first half. Over the period, the Franco-Italian-American manufacturer was however pleased to have preserved an operating margin of 10% of turnover, thanks to its policy of strong cost reduction. Carlos Tavares, the boss of Stellantis, on this occasion recalled his “engagement with investors” of “maintain a double-digit operating margin”.
Two months later, woes. This Monday morning, just before the markets opened, the manufacturer warned that it was revising downwards its financial objectives and its outlook. For the current financial year, it only forecasts a current operating margin of between 5.5% and 7%.
For investors and financial analysts alike, it’s a cold shower. « The scale of this reduction is a shock”confirms Michael Foundoukidis, analyst at Oddo BHF.
“Given its magnitude, such a warning should have been issued much earlier,” he wrote in a note. It therefore raises too many questions about governance at the head of the group for us to expect a rapid recovery. This confirms that the confrontational approach taken with all stakeholders (employees, dealers, suppliers, governments and now even investors) was not the right one. »
Surprising timing
The timing of the announcement concerns Michael Foundoukidis. He recalls in particular that“less than a week ago”Natalie Knight, the financial director of Stellantis, described“ambitious”the group’s forecasts for the current fiscal year… Same story for UBS analysts.
“If the revision of the objectives was expected, its scale is surprising and turns out to be much higher than the warnings observed so far among German manufacturers”they specify in a note.
Stellantis is suffering from the sluggish automotive market in Europe, where its sales fell by 6% in the first half. But it is especially in North America, its flagship market, where it is suffering serious setbacks, with turnover falling by no less than 18%.
To remedy these “performance issues”affirms the group in a press release, this one counts “accelerate” son “plan to normalize stock levels in the United States, aiming not to exceed 330,000 vehicles in dealerships at the end of 2024”. Ses « actions » understand “a decline in network sales in North America”coupled with a “increase in promotions”as well as “cost and capacity adjustments”.
Investors are disillusioned
Not enough to reassure investors. This Monday, the stock fell by more than 14% on the stock market, to 12.38 euros, around 5 p.m. It lost half its value in six months. Stellantis is not the only manufacturer in the dark. In Germany, Volkswagen, BMW and Mercedes-Benz have all, in recent weeks, revised their annual forecasts against a backdrop of slowing sales across the Rhine, where competition is increasingly fierce, but also in China, their first market to export.
