Financial Performance Overview for the Previous Year
The past year's financial performance revealed revenues amounting to €153.5 billion. This represented a 2% decrease from the previous year, predominantly due to foreign exchange rates and a drop in net pricing during the first half of the year.
Unfortunately, there was a net loss of €22.3 billion. This was mainly due to €25.4 billion in unusual charges for the year, reflecting a shift in strategy to prioritize customer preferences and freedom of choice.
The operating loss, after adjustments, was €842 million with an adjusted operating income margin of -0.5%. A series of specific items negatively affected the operating income.
Industrial free cash flows were in the negative at €4.5 billion. To maintain a strong balance sheet, the Board approved the suspension of the following year's dividend and the issue of hybrid bonds up to €5 billion.
Return to Revenue Growth in Second Half
The latter half of the year, under new leadership, saw improvements in revenue growth and industrial free cash flows. There was a 10% year-over-year increase in net revenues. The negative €1.5 billion industrial free cash flows represented roughly a 50% improvement compared to the first half of the year, and a 73% improvement compared to the same period in the previous year.
New Market Opportunities with Expanded Product Line
A wave of new products broadened market coverage and provided more powertrain options across North America, Europe, South America, and the Middle East & Africa. This expansion sought to capitalize on profitable growth opportunities.
The CEO stated, “Our financial results for the full year reflect the cost of overestimating the pace of the energy transition and the need to reset our business around our customers’ freedom to choose from the full range of electric, hybrid, and internal combustion technologies.”
In the second half of the year, he noted, "we started to see the beginning of progress with our drive to improve quality, strong execution of the launches of our new product wave, and a return to top-line growth."
Company's Financial Guidance for the Coming Year
The Company is confident in its ability to gradually improve Net revenues, adjusted operating income margin, and industrial free cash flows in the coming year. The Company expects to see progressive improvements from the first half to the second half of the year.
All these reported data have not been audited and are subject to change.
Major Strategic Business Reset
The Company announced a major business reset earlier this year, leading to charges of approximately €22.2 billion. These charges included resetting the product plan and electric vehicle supply chain to meet shifting customer demand and regulations, a change in the process for estimating contractual warranty provisions, and other charges, mainly related to workforce reductions in Europe.
Upcoming Events
- Full Year Results Management Call
- Annual General Meeting
- Investor Day
Starting from the first quarter results of the coming year, the Company will transition to quarterly reporting of earnings and other financial results.