Results for the first half of 2021. For your information, today's conference is being recorded. At this time, I would like to turn the call over to Andrea Bandinelli, who is responsible for Stellantis' Investor Relations. Mr. Bandinelli, please proceed.

Thank you, Courtney, and welcome to everyone joining us today as we review Stellantis first half 2021 results. Earlier today, the presentation material for this call as well as the related press release was posted under the Investors' section of Stellantis's Group website. Today, our call is hosted by Carlos Tavares, the Group's Chief Executive Officer, and Richard Palmer, the Group's Chief Financial Officer. After both Mr. Tavares and Mr. Palmer present, they will be available to answer 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 2 of today's presentation. And, as customary, the call will be governed by that language. Now, I would like to hand over to Carlos Tavares, CEO of Stellantis.

Ladies and gentlemen, welcome. Welcome to this 2021 H1 Stellantis financial results announcement session. We are delighted, Richard Palmer and I, to be with you today, and I would like to thank you for your time. We know that you are highly busy people, and we value your interest in Stellantis. I trust that you and your families are well, and please take care. Let's get started. It's fair to say that Stellantis had a strong start in H1 2021. On a pro forma basis, we were able to achieve a record profitability of 11.4% adjusted operating income margin. It is also clear that we have delivered a 46% improvement in our net revenues. So we are off to a strong start at Stellantis since we closed at the beginning of this year. This is bringing a lot of additional confidence and energy to our teams. It is also fair to mention that we performed exceptionally well in North America, with an adjusted operating income margin of 16.1%, well supported by a robust Enlarged Europe with an 8.8% adjusted operating income margin. Two strong engines, North America and Europe, are pushing the company forward to support the record profitability that I highlighted in my initial comments. The regional teams are proud of this, and rightly so. Additionally, our leadership in South America is noteworthy as we are clearly the market leader in Latin America, holding a market share of 23.6%, up 620 basis points year-over-year, coupled with a robust AOI margin of 6.6%. We are benefiting from a significant tailwind, which is the exciting start of the execution of our synergies plan. This truly differentiates Stellantis from its peers. With no less than EUR 1.3 billion of net cash synergies in H1 2021, we are off to a very strong start, along with a significant additional amount of synergies from a bottom-up perspective, brought to us by our employees. They understand that this new Stellantis is set to benefit from the merger of former FCA and former PSA, and everyone in the organization is now fully supportive of this move, which is great news for all of us. Lastly, we are racing towards electrification. We currently have 11 pure BEVs on sale, and over the next 24 months, we will add another 11, meaning that we will have no less than 22 pure BEVs on sale within 24 months. This demonstrates that we are executing our electrification journey as we presented to you in July this year. I would also like to mention that over the past six months since we created Stellantis, we have set up a new top executive team and a new business governance structure. I am pleased to report that this governance is fully operational. We are making decisions in a highly focused and professional manner. I am happy to see that the teams are very much business-driven, focused, and executing at a high level of synthesis, which is paramount to our success, given the size of the company. Those are some highlights I wanted to share, and now I will move to the regional business highlights, starting with North America. As I said, we achieved an adjusted operating income margin of 16.1% for our North American operations, despite unfilled semiconductor orders, thanks to strong pricing and mix improvement. We know that we are now the highest US retail average transaction price carmaker, with an average transaction price of $48,000 per unit in June, excluding premium carmakers. Our new Jeep Wrangler 4xe technology is the number one selling PHEV in the US retail market, which underscores the attractiveness of our products. The all-new Grand Wagoneer production has started, and the market is responding positively to this product's appeal, with sales and orders growing nicely. We are also preparing for the all-new Jeep Grand Cherokee 2-Row to be presented at the New York Auto Show. Lastly, we are pleased to have entered the top 50 diversity company group, which reflects our commitment to leveraging and welcoming diversity, a point of pride for us and a direction we will continue to pursue. Additionally, yes, we have experienced some limited market share loss, as we manage the channel mix thoughtfully and with a business-focused approach, which I believe is a reasonable trade-off against the excellent AOI margin we have delivered. However, we have grown our market share in Mexico from 5.9% to 6.6%, which is another positive result from our local operations. Let me now move to the Enlarged Europe region, where we achieved a robust profitability with an 8.8% AOI margin, which is an improvement over the best-ever result achieved by former PSA, indicating that the turnaround of the former FCA Europe operations has commenced and is yielding results. We continue to see market share growth in Europe, increasing by 80 basis points up to 23.1% vs H1 2020. Importantly, we are growing market share while simultaneously increasing profitability, demonstrating that Europe is adding value to the company. Additionally, we have remained complaint regarding CO2, with no fines incurred, which is commendable for a large company like Stellantis. We are also turning around the efficiency and rightsizing of our operations in the UK to ensure profitability for the future. I am pleased to share great news about our collaborative efforts with Italian unions, which has enabled us to sign ten performance agreements in Italy. This is a fantastic demonstration of our positive collaboration and the understanding our union partners have regarding the electrification journey. Lastly, we announced plans to establish the third gigafactory of Stellantis in Italy, as we conclude discussions with the Italian government regarding transforming our powertrain facility in Termoli into a gigafactory. These highlights reflect our progress in the Enlarged Europe region. Now, let's move to South America. South America is showcasing strong leadership in market share, increasing from 17.4% in H1 2020 to 23.6% in H1 2021—an outstanding improvement. Our market share is 31.6% in Brazil and 27.7% in Argentina, making us market leaders in the region, particularly in Mercosur. The Fiat Strada is now the best-selling vehicle in Brazil, and we have successfully launched lifecycle events for the Fiat 2-Row and the Jeep Compass in April 2021. In the Middle East and Africa, we are demonstrating significant profitability, with a 9.7% AOI margin while simultaneously growing share by 30 basis points to 11.9% in H1 2021, underscoring our expectation for value creation. In China and the Asia Pacific, we have had a successful launch of the Jeep Compass and Citroen C5 in India, resulting in slightly growing share in that region. We are establishing a new Chinese strategy that will be unveiled in the coming months, including our long-term Stellantis strategic plan. Moving to our brands, I would like to provide an update on the G brand, our global SUV brand. We have strong pricing power, outperforming our competitors. The Wrangler achieved record US retail sales with 115,000 units sold in H1 2021, and we have a 30% LEV sales mix in Europe, which is representative of our strategic approach in the past. Jeep retains a strong leadership in the SUV segment in South America, with a 14.9% market share, and we are enjoying record sales in Japan and Korea as well. Chrysler is still seeing significant performance, remaining the number three selling PHEV in the US, and we are preparing a rebound plan based on new products and technologies. Ram achieved best-ever global and US retail sales since its inception in 2009, and we have significantly improved the attractiveness of the Ram 1500, with an average purchase price of $49,000. Dodge is delivering its strongest H1 market share to date, reinforcing that the muscle car segment remains profitable with robust demand. Opel and Vauxhall continue to improve their market share across Europe, while Peugeot leads the market with a record of H1 sales since 2015, and we are on track to launch new models in the coming months. Citroen is also enhancing its market presence in Europe, having launched the Citroen Ami Cargo for vital last-mile delivery needs. Fiat has achieved remarkable results in sales and marketing, maintaining leadership positions in key markets. The small electrified Fiat 500e has gained traction as the leader in the A-segment of electric vehicles, and we are preparing to introduce more electrified models by 2023. In the LCV business, we are leaders in Europe and South America, with plans to expand our globally competitive portfolio across regions. Stellantis aims to leverage its scale and technology to enhance the electrified business and prepare for upcoming generations. During the end of this year, we anticipate complete electrification for our van portfolio. Lastly, our premium brands demonstrate strong efforts for full electrification, with Alfa Romeo aiming to achieve this goal by 2027. We have significant expectations from Maserati, which is now performing positively following substantial market share improvement. We see growth in both Free 2 Move and Leasys mobility services, which are expanding rapidly and rebuilding operating margins. In conclusion, we expect to launch at least 22 BEVs in the next two years, reflecting our commitment to an electrified future. Now I would like to turn it over to CFO Richard Palmer, who will provide more insight into our financial results.

Thanks, Carlos. Good day to everybody. Moving to Page 17, I'll start by spending a second on the basis of presentation of the numbers today. As previously discussed, the merger of PSA and FCA was legally completed on January 16, 2021, and PSA was determined to be the accounting acquirer. Therefore, the PPA, the purchase price allocation exercise was performed as of that date on FCA's assets and liabilities, and the results of FCA are included in the results of Stellantis from January 17, 2021, for IFRS financial statement purposes. Only the results of PSA standalone are included in H1 2020 accounting comparatives. To aid comparability, today, we will show pro forma figures for both H1 '21 and H1 '20, which are presented as if the merger had occurred on January 1, 2020. Therefore, H1 2021 pro forma results would include the results of FCA for the full period, including the period from January 1 to January 16, 2021. Moving to Page 18, we start with key numbers. So as mentioned by Carlos, consolidated shipments increased 44% to nearly 3.2 million vehicles, despite production losses of around 20% or 700,000 units in the first half. All regions in Maserati were up, with South America up 128%, Enlarged Europe up 41%, and North America up 25%. All brands showed significant improvements, except for Dodge due to the end of production of Journey and Grand Caravan last year. Revenues were up 54% before negative FX impacts, and AOI reached EUR 8.6 billion with margins at 11.4%, a record level compared to both PSA and FCA prior performance. Industrial free cash flow was negative, in line with the expectations mentioned in our Q1 revenue call. This was due to the negative working capital and provision impacts of lower production volumes. Excluding working capital provisions, the cash flow would have been positive EUR 4.5 billion. Industrial net financial position was EUR 11.5 billion of net cash, down from EUR 17.8 billion at the end of 2020 due to extraordinary dividends paid as part of the merger closing of EUR 4.2 billion and 1.2 billion negative H1 cash flow. Industrial liquidity was over EUR 51 billion at the end of June, with EUR 41 billion in cash, down by EUR 6 billion for the reasons stated above. On Page 19, we show the rest of the P&L. H1 included EUR 1.1 billion of unusual charges, with EUR 0.5 billion related to inventory fair value adjustments and restructuring costs offset by EUR 0.2 billion of gains on tax matters in South America. Finance charges were EUR 229 million, including around EUR 150 million of gains on discontinued derivatives. Tax expense was EUR 1.8 billion, with an effective tax rate of around 24%. Income for investments held under equity method was EUR 405 million. Net profit was EUR 5.9 billion, compared to a EUR 0.8 billion net loss in H1 2020. We expect finance charges around EUR 800 million for the full year. Moving to Page 20, we show the drivers of the revenue growth of 46% year-over-year. Volume was up nearly one million units, resulting in a 44% increase, which translated into a 33% increase in revenues due to the negative mix impact of higher relative growth in South America and Enlarged Europe compared to North America. Strong net pricing driven by increases in all regions boosted income, with North America representing around 60% of the group impact. Vehicle line mix was also very positive. Next, we move to Page 21. We review the work to the EUR 8.6 billion adjusted operating income. Volumes increased due to the reduced impact of COVID-19 interruptions, and strong retail demand allowed us to focus on net pricing and vehicle mix improvements, particularly strong in North America, accounting for 60% of AOI. The industrial cost side of the business was well contained despite the significant increase in volumes. Raw material inflation in H1 was EUR 0.75 billion, driven predominantly by North America and South America. I will now look at the performance by region, starting on Page 22.

Thank you, Richard. Thank you for this focused presentation. Before we move to the Q&A, I would like to share the output of our top executive team in Stellantis. As you know, this company is seven months old, still a baby company. We have been working with the top leadership team to clarify the noble purpose and values of our company. We have come up with a very simple, noble purpose, which is to say that, powered by our diversity, we lead the way the world moves, which means that we bring energy, passion to our business. We are powered by our diversity, the diversity of our people and our brand portfolio. We want to lead the way not through arrogance but because we believe our scale allows us to avoid being a follower. We aim to adapt continuously and bring safe, clean, and affordable mobility. We are setting a direction for our company as a fast-moving technology-driven entity. We also selected four major aspirational values: customer-centric, win together, agile and innovative, and care for the future. We recognize the importance of enhancing our business governance. Thank you for your time.

Thank you. We will now begin the Q&A session. Our first question comes from Philippe Houchois at Jefferies. Please go ahead.

Hi, yes. Good afternoon. Can you hear me now? I'm sorry about this. Yeah, the question I have is more general on Europe. We see constraints on sales in the US because of the lack of inventory. It's not that clear in Europe, and I was just trying to get your sense of what the European recovery source running was 25% below 2019 levels. If you could comment on this? And also, in that context as well, as you recently may cancel all your dealer contracts to renegotiate them. Just wondering what is your vision of what the future should look like for Stellantis, at least in Europe? Thank you.

Thank you for your questions. First of all, we are managing the company as a global entity. We can arbitrate the supply of semiconductors between regions. Europe is being managed in a coordinated way, not in isolation. We are closely monitoring inventories on the OEM side; they are limited. However, we still have 700,000 cars in dealer inventory. We expect Q3 to be difficult, but improvement in Q4. We are engaged with many suppliers to explore alternatives, looking for solutions to enhance our supply chain sustainability. Regarding dealer contracts, we recognize electrification is a challenge and an opportunity. We have open discussions with our dealers, who are mature business owners and understand transformation is necessary. Solutions will involve more direct sales, alternative distribution models, and finding the right balance is our goal. We are having productive talks overall. Thank you for your questions.

Yes, thank you for taking my question. So I really wanted to focus on the cash flow. If I take the EUR 4.5 billion you did in the first half, ex-provisions and working capital as a percent of the operating income, it is around 63%. When we think about the full year cash flow, if we apply the same percentage to the implied technical difficulty, only a 10% margin, it would suggest something in the region of EUR 7.5 billion to EUR 8.5 billion of free cash flow. And if we then deduct the incremental EUR 1.5 billion you mentioned for financial charges and taxes, it would leave us EUR 6 billion to EUR 7 billion of free cash flow for the full year. I know you don't have a free cash flow guide. But is it in the right ballpark? Thank you.

Thank you, George, and welcome. You are an optimistic man, and I enjoy discussing with optimistic individuals. Regarding capital allocation, we aim to maintain 8% of turnover for R&D and CapEx spending. We believe we can sustain a 30% efficiency and effectiveness premium against our peers. Now, I will pass to Richard for more technical insight on your cash flow question.

Thank you, Carlos. In terms of your math, George, I think it sounds a little optimistic to me too. We expect H2 to be strong, but there are unknowns around semiconductors. The visibility on supply remains poor. We're being prudent, and cash flow will be positive, but it could be better. Capital allocation discussions will be made during the strategic planning process we will present later this year.

Thank you very much. I'd like to follow up on the line you see that possible? You managed to reach record H1 margins for the first months of your baby company. A lot of companies appear to be reaching big margins already in H1. I'm sure you don't want that to happen. So I'd like to check whether there are any reasons for us to believe that H2 should be lower than H1 with synergies probably rising and a very strong pricing environment. Thank you.

The big uncertainty is the semiconductor supply, which is significant. We will continue to manage pricing, inventory, and costs diligently. It is inappropriate to predict circumstances without more clarity on supply. Our margin should remain strong, and we must remain cautious about potential headwinds.

Hi, there. Thank you, Carlos and Richard. I wanted to ask a question that kind of follows on from Thomas's. How Stellantis faced the chip shortage by prioritizing some of its more profitable range of cars?

By looking at the per unit margins and ensuring compliance, while prioritizing volumes that generate profits.

Congratulations on the strong start of the first six months of the year. I wanted to come back to the cash flow. If you could elaborate a little bit on what are the levers to unleash the cash machine, right and you've got CapEx and D&A still representing a substantial outflow... Thank you.

We have to enhance productivity to balance the need to electrify and the existing resources we utilize.

I think we're working on various efficiencies in CapEx and R&D, emphasizing synergies execution and inventory improvements.

Thank you very much. My focus is on prices. If I look at your Slide 21, am I right in assuming at least 80% of these block comes from net price?

I can’t give you a precise number, but most of it is interpreted positively.

Thank you very much. Hi, Carlos and Richard. My question relates to the guidance and the EUR 1.3 billion in synergies you've reported for the first half of the year. I wanted to reconfirm if that is an annualized number.

Your understanding is correct. The EUR 1.3 billion is strictly the H1 number. We are starting very strong, and it’s indicative of our commitment to achieve more than EUR 5 billion in synergies as planned.

The EUR 1.3 billion includes cash impact of EUR 900 million on R&D and CapEx, and the rest on costs. It’s not all going through the P&L yet. The P&L impact is around EUR 600 million. For H2, I expect raw material headwinds to be around EUR 1.5 billion.

Hi, thanks for taking my question. I just want to ask on NAFTA. Can you give us an idea of the expected impact from the Wagoneer and the Grand Wagoneer?

Those products are highly profitable and will be prioritized in the ramp-up. However, it's early for precise projections on orders.

Production for the year will be around 20,000 to 30,000 units, ramping up into next year with very strong margins expected.

Thank you very much for your thoughtful questions. Stellantis is still a growing company, we are moving quickly. Our employees and the governance of our company are significant assets as we navigate challenges. We expect to continue creating tailwinds to face the existing headwinds and appreciate your support.