Stellantis N.V.

Hello and welcome to the Stellantis Q3 2026 Financial Results Call. You will have the opportunity to ask questions at the end of the call by typing poundkey5 on your telephone keypad. Please do not exceed one question per person and, if necessary, an additional one. I now give the floor to Mr. Charlie Christman, Head of Investor Relations, to begin today's conference.

Sir, the floor is yours. Thank you. Hello, everyone, and thank you for joining us today as we review the Stellantis Q3 2026 results. Earlier today, the presentation material for this call, along with the related press release, were posted under the investor section of the Stellantis Group website. Today, our call is hosted by Antonio Filosa, Chief Executive Officer, and Joao Laranjo, Chief Financial Officer. After their prepared remarks, Antonio and Joao will be available to answer your questions. Before we begin, I want to point out that any forward-looking statements we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor Statement included on page two of today's presentation. As is customary, the call will be governed by that language. Now I will hand the call over to Antonio Filosa, Chief Executive Officer of Stellantis.

Thank you, Charlie. Thank you all for joining us today as we discuss our quarter three results. As we anticipated in our second quarter call, several factors have weighed in our third quarter performance, such as lower volumes due to the planned summer shutdowns, particularly in North America, and raw material inflation. That said, we are beginning to see early benefits as we execute our Fast Lane 2030 strategy. For example, we are heavily focused on implementing our Value Creation Program, or VCP, with many initiatives being implemented ahead of schedule The strategy is delivering. And despite the headwinds, we improved across all our financial metrics year over year. Net revenues are up 1% despite volume being down 1%. AOI margin is up 50 basis points, and it is positive in all regions except Europe, where the pricing environment remains challenging. and industrial free cash flow, which is negative in quarter three to the seasonality of our business, is up 300 million compared to last year. Importantly, our industrial execution also continues to improve. Overall production efficiency was up year over year, with North America improving by more than 10 percentage points. Three months in services quality improved significantly year over year. by 43% in North America and 13% in Europe. We continue to expand market coverage by introducing new products, which is a key pillar of our fast lane strategy. In the third quarter, we launched the Jeep Recon BV and the Peugeot E208 GTI. And we look forward to launching seven more products in the coming months on time with the right cost and with the right quality. At the same time, we are making great progress with VCP. Based on what we have implemented already, I am confident that we will exceed our plan to implement 40% of the initiatives comprising the $6 billion target by the end of this year. VCP already contributed to our results in Q3, and it will provide even more of a tailwind in quarter four. With this, I can say we are on track to realize more than €2.4 billion in 27, plus the partial benefits of all the initiatives we will implement in 27. In addition to this progress in market coverage and VCP, we are also accelerating our work with strategic partners, which is a key pillar of our fast lane plan. These partnerships are reducing fixed costs by absorbing excess of capacity, while at the same time allowing us to be more efficient in capital spending. We look forward to sharing more in the coming months. With this, and despite the market challenges you are all aware of, I am pleased to again reaffirm our guidance for 26. including that we expect to be free cash flow positive in 27. Now let me touch on some Q3 regional highlights. In North America, Stellantis is among the fastest growing OEMs year to date, once again gaining share year over year. REM has led the way as the fastest growing brand in the region, both in the quarter and year to date. In the U.S. alone, the Ram 1500 light-duty pickup grew 73% year-over-year. Next, Ram will launch the Rumble B Sport Truck, which is already generating strong customer demand. Its initial allocation sold out within 24 hours of orders opening. We have also now launched the Jeep Recon. The first and only BEV to be trail rated. And soon, we will be the first to market with two new products where no one else is competing today. The Ram Promaster City will be the only mid-size commercial van available in the U.S. And the Jeep Grand Wagoneer Rev will be the first and only large SUV to offer range-extended hybrid technology. Turning to Europe, The region remains challenging, with ongoing Chinese competition and a difficult pricing environment. Despite this, we continued to grow in the region, with strong demand for the smart car platform nameplates and surging demand for BDs, particularly in France, Germany and the UK. Our Euro 30 passenger car BV sales grew 65% year-over-year, or 93%, including LEAP model. Shifting to Pro1, we remain the market leader in light commercial vehicles with almost 27% market share. In November, we will expand our light commercial vehicle lineup with the introduction of the Pro1 Smart Car Compact van. In parallel, LEAP model continues to grow rapidly, with volumes up fourfold year over year, demonstrating our festival in partnership strategy in action. Production of the C segment cars, starting with the B10, have begun at our Zaragoza plant in Spain, with the B05 planned to follow in the first half of 27. Bringing these vehicles into our manufacturing footprint helps improve capacity utilization and absorption of fixed costs. Finally, it is important to note that threatening our competitiveness will also require the right conditions in Europe. Despite the strong growth in VV demand, timely action on CO2 flexibility and the Made in Europe framework are essential to creating a level playing field. Turning to South America, in a challenging market, sales decline 2% year-over-year when you include Leap Model. That said, we maintain our clear overall leadership position with almost 19% market share, including Leap Model. Importantly, we also remain number one in the region's two major markets, Brazil and Argentina. with more than 25% market share. We increased sales in the region for important models, including a 33% increase for the Ram brand, driven by the all-new Dakota midsize pickup. And in Brazil, we increased sales 5% year-over-year to over 200,000 units, mostly driven by Fiat and Ram pickups, which represent the largest profit pool in the region. Moving to Middle Eastern Africa, we remain resilient despite weaker market conditions, particularly in Turkey, where the transition from the Fiat Tegea to the upcoming Fiat Grizzly contributed to a 1.5-point year-over-year decline in regional market share. At the same time, as planned in Fastlane 2030, we are increasing localization in the region. Small van production began in Turkey in October, and sales of locally produced vehicles in Algeria, a very important profit pool, increased 22%. Lastly, in APAC, while market share declined by a tenth of a point, reflecting the increased competition in the region, it is important to note that the region is enabling the rapid advancement of our fast lane partnership strategy. For example, in Quarter 3, We began localizing production of the LEAP model B10 and C10 in Malaysia. We also officially established our new joint venture, Don Feng Stellantis Automotive Technology, allowing for the development of two new Jeep and two new Peugeot models to be sold in markets around the world. In summary, we navigated a challenging quarter, including lower planned volumes and raw material headwinds, all while improving year over year across every key financial and operational metric. We are reaffirming our 26 guidance and our commitment to positive free cash flow in 27. The challenges are real, but our industrial performance shows that we have a firm grip on the business. Our structured, evidence-based recovery is progressing. We are taking decisive action to lower industrial costs and build the foundation for stronger financial performance in 27. Let me now hand you to Joao to walk you through the numbers. Joao?