Hello, and welcome to Stellantis Full Year 2021 Results. I will now hand over to your host, Andrea Bandinelli, Head of Investor Relations to begin today's conference. Thank you.

Thank you, Susan, and welcome to everyone joining us today as we review Stellantis' full year 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 group website. Today, our call is hosted by Carlos Tavares, the company's Chief Executive Officer; and Richard Palmer, the company'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 in 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.

Thank you, Andrea, and good morning, good afternoon and good evening to you all. Welcome to this Stellantis 2021 financial results announcement session. Richard Palmer and myself, we are delighted to host you today. And it is our privilege to present to you some highlights and a few comments about this year's results, 2021 results. Please be aware that we really appreciate your time. We know that your time is very valuable and I would like to thank you accordingly for your interest in Stellantis. So indeed, 2021 was a very heavy year, a year where we had to do 3 different kinds of things. First one, in January 2021, we created Stellantis. We had to set up a new business governance way with 9 dedicated committees. We set up the top leadership team of this company and we created new organizations up to CEO level [indiscernible] with more than 2,500 new assignments in the company. So we started a very busy year in setting a brand-new company called Stellantis. That's point number 1. Point number 2, we had to fight all the headwinds that you know, mainly 3 the semiconductor supply shortage, the raw material cost inflation and more stringent CO2 regulations. Those were the headwinds that we had to face. And point number 3, we spent significant amount of time working with our cross-functional teams on the long-term initiatives that I will be presenting to you on March 1, meaning next week, to describe what our long-term strategic plan is and what are the initiatives that we are going to take over the next few years. So those 3 layers of activities represented for our teams and for our employees a very significant workload. And I would like to take this opportunity to thank them all very sincerely, very warmly I very much appreciate what they have done. I thank them enormously and I congratulate them for the results that you already know. As you know, the results for 2021 were very encouraging, with nearly the double of operating income amount, the triple of net income compared to last year. A record operating income margin of 11.8%, and also quite rewarding €6.1 billion of positive free cash flow. Those are the results. You know them. You have seen them in the press release. What I would like now to do with the Richard is to comment some of those results so that you can understand how we could, as an organization, come up with those numbers. So beyond the record 11.8% adjusted margin, it is fair to notice that on the second half of the year, we were even slightly better with 12.2% which says a lot about the initiatives that were taken in the company. Needless to say that we were able to finish this year with a breakeven point, which is below 50% which, as you know, is a very important guideline for the way we are managing the company. It is also important to see that the €6.1 billion of industrial free cash flow were significantly supported by a very significant level of cash synergies, no less than €3.2 billion, which is aligned with what we have committed to the market, which is the fact that the merger will generate on a run rate €5 billion per year, which represents a €25 billion value creation as the result of this merger. And of course, this first result of €3.2 billion just means that we are going to deliver on our commitments. I hope this is not going to surprise you because this is the pattern of our management. We also could demonstrate that our low emission vehicle sales are growing significantly by 160% year-over-year to reach 388,000 units in '21 and we can say that we are now moving and moving faster and faster on the LEV sales, which is, of course, good news when we anticipate what may happen very soon in the markets where we operate. We were still, and I would say, even more the leaders of the LCV market in Europe and South America, with, respectively, 33.7% and 30.9% market share. We are very solid leaders, and we have a very strong product plan, as you will see later on with a perfect coverage of the market, not only on vehicles themselves but also on powertrains. Last but not least, as you already know, we were pleased and privileged to present to you in July our Electrification Day, electrification journey during the Capital Day and in December. We could present to you the software, the software Capital Day, our software plans to give you 2 of the most important pillars of what will be the framing of our long-term strategic plan. Last but not least, we have made several deals in 2021 with some highly technological partners with whom we want to accelerate our transformation from a legacy carmaker to an automotive tech company, which is what we are doing right now. So those are some of the highlights. And again, I would like to express to our employees, to our management team, to our top leadership team to you, the investors, to the media and to the Board members, all the support we received from them over this quite critical here, the first year of Stellantis with record results. This is what I would like you to keep in mind. You see on this slide also that we are going to bring Maserati back to racing. It is a significant opportunity for our company. It's the unique luxury brand of Stellantis. And we are going to make this brand, of course, electrified and bringing back Maserati to the world e-formula for the e-Championship is also meaningful of the strategic direction that we are taking for this luxury brand. Let's move to the next one. And comment on the regions. Let's start, of course, with North America. Why? Because North America is right now the most profitable region of the company with a record 16.3% AOI margin, which says a lot about the way our North American team is mastering the business model of North America. It's important that they take the best out of the market conditions, and this is exactly what they have been doing. We can see it that we have been able to deliver the highest U.S. retail average transaction price among the Detroit 3 OEMs, with a significant improvement of 20% year-over-year to reach no less than $47,000 per car, significant result that also highlights the fact that our North American teams are mastering the business model. We have entered into at least 2 separate MOUs for battery joint ventures with the Korean partners to bring to the North American market the appropriate level of battery supply no less than 63 gigawatt hours by 2025. This is, as you may imagine, strategically important to secure the profitable growth of our electrified vehicles in the near future. We can also demonstrate that we have been launching very successful products, starting with 2 white space products like the Jeep Grand Cherokee, long version and also the Wagoneer and brand Wagoneer. Those are white space products that are very profitable. We have launched those products, and we expect that to be a significant profit contributor for our North American operations. Our all-new Jeep Wrangler 4xe is now the #1 selling PHEV in U.S. retail, which means that the brand -- the Jeep brand has been able to make the appropriate and the right decisions on the right timing to be demonstrating our competitiveness in the market right now with the #1 selling position on the PHEV for the U.S. retail. It is important to see that the jeep brand is absolutely on the right tempo to serve on the successful electrified technology of our company. We can also see that in terms of the highly profitable pickup truck market, we have been delivering the best-ever U.S. commercial fleet market share at 18.7%, which represents an improvement of 340 basis points year-over-year. So as you can see, North America, it's record profitability with some significant sales and successes. Good strategic agreements to support electrification in the near future and the best average transaction pricing against the Detroit 3 in the marketplace. If we move now to the next region, which is in large Europe, we can say that Europe has demonstrated a very strong profitability with no less than 9.1% AOI margin for the full year, but also in the second half, an improvement to 9.4%. So some of the initiatives that we're taking to improve the efficiency of the business model are now visible. We see that we are now in Europe totally compliant in terms of CO2 on a stand-alone basis, meaning that Stellantis is now able to embrace the full scope of our iconic brand portfolio while being fully compliant and we are delivering a good result at 110.6 grams per kilometer, which is a little bit better than what we expected and that's good. It means that most probably, we are in the leading pack, if not the leader, in terms of CO2 emission reduction in the European market, which is some of our DNAs. In Eurasia, we are growing. We grew to 1.6% market share. 50 basis points year-over-year. And I'm sure that you have some questions about that later on. So I will skip here. On the European market, our market share was stable at 22.1%. we see that some of our Western competitors have lost market share. Some of our Asian competitors were able to gain market share as it regards Stellantis, we were stable at 22.1% market share, which represents the #2 position in the European market. We also see that we have been making very significant improvements and progress on our LEV sales mix in Europe. And we moved in 1 year from 9% sales mix to 18.1% sales mix, which means that we are moving fast and strong in our ability to sell fewer LEVs which is good because, of course, the market 1 day will turn totally to the LEV technology, which means that we are now ramping up fast and strong in Europe from 9% to 18% LEV sales mix over the year. Last but not least, we completely reengineered our distribution model. In fact, we are currently discussing with our dealer, network dealer associations in a highly constructive and I would say encouraging way to adapt our distribution model to a higher level of quality in the way we make the customer enjoy its journey with our company and with our brands and at the same time, reduce the cost of distribution as we need to fund the electrification of our portfolio. So this is for Europe. If we move now to the other regions, starting with South America, South America is a strong winner. It's #1 in Latin America for our Stellantis. It's #1 in Brazil for Stellantis. It's #1 in Argentina for Stellantis with respectively, 22.9%, 32.0% and 29.1% of market share. So we are the clear leader in Latin American markets. It is good because at the same time, where we are leading the market and increasing our market share against last year. We have also significantly improved the profitability. As we have now multiplied by 5 the amount of profit that we could extract from the Latin American markets with an AOI margin of 8.3%, which is much, much better than what we could experience in the past. While this was happening, Fiat was the #1 selling brand in South America and in Brazil, enjoying namely the success of Strada as a top-selling vehicle. So South America, a leader more share, more profitability and #1 selling brand with Fiat a big success. Let's move now to Middle East and Africa. Here, we have also a very rewarding double-digit AOI margin of 10.5%, which nearly doubled against the previous year. We have the potential to grow market share in some markets, major markets. We had some headwinds in Egypt and Turkey. But for the other markets, we could increase the market share significantly. And we are now introducing out of Morocco the Opel Rocks-e, which is a downtown mobility device that has been facing big success under the Citroën brand and the Citroën Ami and the Citroën Ami Cargo, which is the LCV variation of the Citroën Ami. We see that the production is growing. We see that this is profitable and that we have a good potential to continue to grow profitably on this downtown mobility devices. Last but not least, China and India and Asia Pacific, so the Asian regions. We see that the AOI margin is also quite rewarding with north of 11% AOI margin, which combines with the net revenue that is up by 24%, which is good. We see that we are now clear on the agreement we have with GAC to create Stellantis Jeep JV that we will control in China to add to the very profitable Jeep CBU business, some CKD complement from this JV and despite some bumps in terms of communication the deal is inked and we expect now that the Chinese authorities will approve the deal so that we can go live. And last but not least, in India, we have the all new Citroën C3, which has been developed from India to India and to other parts of the world. It is a very cost competitive project with a very modern and attractive design as you can see on this photo. We expect to launch this program from H1 2022. And that will give the company a significant capability to bring high value and affordable products for the overseas markets and not only, of course, but mainly for those markets. Now we have this very important tool to grow profitably on some overseas markets moving forward. So that was for the regions. Let me now move for the brands and, of course, start with Jeep, our global SUV brand. A lot of great things in terms of achievements for this brand. First of all, let's keep in mind that Jeep means freedom. It's all about a very sharp positioning on the marketplace all over the world. The pricing power is fine, either better than the benchmark or very close to the benchmark. We see that in '21, we could launch the Compass, the Renegade and the Wrangler 4xe variations in 4 regions, which means that the electrification of the Jeep brand is now a reality. It's not a plan. It's a reality and you can see it because -- if I take the example of the European market, we have a 25% LEV mix in Europe, whereas the total sales of LEVs in Europe represent as I said 18% LEV mix. So Jeep is pulling the LEV mix of Stellantis in Europe up, which is a great thing. We see that this is a trend that we will reinforce in the near future as it is exactly what the customers are expecting from us. We also can notice that the Grand Cherokee has delivered the best U.S. sales since 2000, that we are with the Jeep brand, the SUV market leader in South America with 14.1% segment share in 2021 and that we could also enjoy the highest ever Wrangler, Jeep Wrangler sales in Middle East in '21. So you see a lot of great achievements in terms of sales and marketing, in terms of electrification. Needless to say that this is a very profitable brand. Needless to say that the positioning of Jeep is the same all over the world including in China and it has demonstrated a high potential for profitable growth in our company. If we move to the next brands, which are the American brands, while we are preparing the rebound of Chrysler with some exciting products that we have been discussing design studios. We noticed that the brand from Chrysler has announced that the brand will be 100% BEV from 2028. The pricing power is fine and the Pacifica is achieving the best U.S. sales on record for this brand with a PHEV variation, which means that with the PHEV electrified variation, we are doing fine in terms of sales. Ram is a success story, a significant success story with the best full-size pickup share ever in the United States with an impressive 26.2% share in 2021. So it's a growing share. It's a growing profit. The products are extremely appealing, and the customers are very excited about all the variations that we have been bringing to the marketplace. Pricing power is ahead of the benchmark. And we have with the Ram 1500, the highest U.S. average transaction price with a $51,000 per unit number in 2021, which means that we are taking the best out of the market given the appeal and the market conditions that we have right now. Last but not least, the Dodge brand very high satisfaction with the fact that the challenger was the #1 selling muscle car in the U.S., which means [indiscernible] with 54,000 units sold in 2021, a very nice pricing power, 7 points ahead of the benchmark. And for Charger and Challenger, the highest ever market share with more than 50% market share in the full size sedan segment in 2021. Not only those numbers are extremely rewarding, but we are very, very excited about the electrification of the Dodge brand, which is coming up very, very nicely. And I can tell the fans of this brand that they will enjoy even more excitement and thrilling experiences with the electrification of the Dodge that will bring the American e-muscle car to the market. If we move now to the upper mainstream brands with 2 European brands, our German brand Opel delivered market share that was up in Europe and Germany with respectively 4.3% and 6.2% market share. It's good that we have an improving market share in the home country of the brand, which is Germany that demonstrates that we are properly rooted in that market. The Mokka-e model was awarded Golden Steering Wheel in 2021. best car under $25,000, which is attributed to the very attractive design and the performance of this car, which I believe is a great success. Pricing power is at the benchmark level and we have also to mention that in their respective segments, Corsa was #1 sales in Germany and in the U.K. with 16.5% and 15.1% segment share, which means that the Corsa, which is as you know well, a derivative of another car from our company has been delivering a very high level of appeal, great quality and great performance to our customers. And you can see it as the #1 selling car in Germany and U.K. in its own segment, beating of course, the equivalence of other brands including the German brands. If we look at Peugeot, Peugeot is also a big success with 208 being the #1 selling vehicle in Europe and the 2008, the #1 selling B-SUV in Europe, which means that they are demonstrating a very nice overall package design, appeal, performance, reliability and quality. We also see that Peugeot has now become the #1 brand in France, which didn't happen for many, many years. So Peugeot is now #1 in France for this important market, for this home market. Globally worldwide the sales were up 5%. The pricing power is above the benchmark. And we see that the Euro 30 LEV order is increasing. This means that Peugeot very soon will have a total market share of LEV in the LEV market, which will be above the total market share of this brand in Europe, which is rewarding we moved from 9% order mix to 25% order mix on LEV for this year of 2021. So moving fast and strong on the electrification without, of course, forgetting the very nice start of the Peugeot 308 brand new Peugeot, that is attracting a lot of customers, thanks to a very attractive and aggressive design. If we move to the next one, and let's talk about the core brands, namely Citroën and Fiat. Citroën has been enjoying a great success with the C segment C4 Hatchback top-selling C Hatch in France and Spain for '21, but also a very nice performance on the BEV variations, which were multiplied by 4 year-over-year with EC4 at 8.7% of its segment in terms of BEV competition. So the EC4 is receiving a very good support from the market and from the customers. The share in South America is up and the pricing power is above benchmark. So more to come on the Citroën brand, but already with the C4 a big success right now. Fiat has demonstrated a strong leadership with the 3 remarkable results, market leader in Brazil as a brand, market leader in Italy as a brand and market leader in Turkey as a brand. Overall, #1 brand in South America with 13.9% share in 2021. So great achievement from our teams in terms of leadership for those markets. The 500e is now the #1 selling BEV in 12 countries for the A segment, so perfectly in the leading seat for the electrification of Fiat, pricing power ahead of the benchmark and the commitment from the brand CEO that we would be 100% BEV portfolio by 2027 in Europe, which means that we have now in the pipe, all the pure EV products that we need to be having a strong position in the different markets in which the Fiat brand is operating. If we move to the next one, we can now address the light commercial vehicle business, highly profitable, where we are perfectly leading Europe with a 33.7% market share and South America with a 30.9 % market share. We have sold 1.9 million cars globally, which means this is a big, big business for our company. We are also now preparing the all new Pro Master BEV RAM van, which will be launched in 2023 with Amazon as our first commercial customer, which means that we were able to convince Amazon that we had the best van with the best features perfectly suited for the logistic expertise that exists in our customers and we are meeting those needs with a very fine tuned and very sharp van in this process. Starting, of course, with the EV powertrain that we will bring to the United States in 2023. We have also, in Europe, the #1 BEV sales position on vans which just demonstrates that by having the EV variation on the 3 vans, compact, midsize and full size, we are now leading the market not only on total share, but also on the BEV sales for electrified vans in Europe. We could also deliver the best ever performance in terms of sales for the pickup sales with more than 1 million vehicles sold in 2021, which demonstrates that not only our vans are extremely successful, mostly in Europe. Our pickup trucks are now demonstrating on compact again, midsize and full-size pickups that we are extremely competitive. And by adding the vans to the pickups, we will be soon competing for the #1 position in the world. It is also clear that one of the good things that was brought by the merger is the fact that we are now launching and as you can see, very fast, the all new Fiat Scudo and Fiat Ulysse as a derivative of the other vans of our company. It has been launched. It will bring even more competitiveness and surely more profit to Stellantis. Last but not least, in December 2021, we delivered to our first customers, our midsized van with a hydrogen fuel cell technology. It was delivered in December. We are now moving up, both in the orders and the manufacturing capacity. And next week, I will tell you more about this, but I just want here to put a stake in the ground by saying that in December 2021, we start selling mid-sized vans, hydrogen powered in the Stellantis brand portfolio. Here, we have the picture the Opel, but it also exists for other brands in Europe. It's a significant technological leadership that we are focusing on the LCVs. And I'm so glad that our teams could deliver those first vans in December 2021. If we move ahead, we can now talk about the premium brands, saying that the Alfa Romeo brand CEO has committed that he will be 100% BEV portfolio from 2027and that he is now not only fixing the business model as it was able to bring the Alfa Romeo brand to profitability in 2021, moving from red ink to black ink with the pricing at the benchmark level. And it's clear that the turnaround is on track and we are now gaining a new momentum with the launch of the Alfa Romeo Tonale that will happen in 2022 with its first electrified vehicle, which means that the electrification journey of Alfa Romeo is just starting, which means that we have a significant potential to grow profitably with this brand now that the business model has been fixed. For the Lancia brand that we are now preparing for the rebound, we can say that we'll be 100% electrified in 2024. And that from 2026, all the launches will be purely BEV. The pricing power is minus 20%. And against the benchmark, which is a way to say that there is a significant potential to improve moving forward, which is great news. And this is exactly what we are going to do and that means that the Lancia brand will represent a significant profit driver for the company moving forward. While we are preparing for this rebound, I think we need to congratulate the Lancia teams for the fact that the Lancia Ypsilon is still the #1 selling car in Italy in the B segment, which is a very significant sales and marketing performance with a 6.3% share in 2021. Last but not least, the DS brand, the DS Automobile, the unique French premium brand. We will make 100% BEV launches from 2024. It's better than the benchmark in pricing power. And as the second best LEV sales mix of the premium industry with no less than 37% mix for 2021. So here is one other brand that is bringing the LEV sales mix of Stellantis up with a quite impressive 37% sales mix. To finalize this part, I think we are going to comment now the Maserati brand, the unique luxury brand of Stellantis. The first great news is that we were able to bring the brand back to the black with a 5% AOI margin in '21. Needless to say that our goal is to bring the profitability of Maserati in the midterm, above 15% of AOI margin so a significant potential to improve. It's clear that the Maserati team has been doing a great, great job because they were able to grow the sales by 41%, to grow the market share globally in North America and in China and at the same time improve the profitability, which is the perfect demonstration that they are creating value for the company. While we are doing this, we are putting the level of demand on quality at a very high level. We are demonstrating that we are absolutely stiff in quality, making sure that any new model that we are going to launch in any brand of Stellantis and specifically on Maserati, we'll be meeting all the very demanding standards, quality standards that we have in the company. This is the reason why we decided to delay a few months the old new Grecale. We want the car to be perfect. We have tested the car many times and now the car is ready, and it will be unveiled in March '22, and the deliveries will begin by mid-2022. So the all-new Grecale is, of course, a turning point, a cornerstone for the Maserati brand. As I already mentioned on the opening, we'll bring Maserati to the world formula E championship in 2023 as a testimony of our electrification and the fact that we love to compete on this brand, which is positioned as the Gran Turismo brand of Stellantis. In 2023, we will also bring the all-new Gran Turismo, which is right now on track. The car is gorgeous and you will see that you will be surprised when it will come up to the market at the moment where we will consider that the quality is top-notch, meeting all the standards and therefore, at the right level to be enjoyed by our customers. So Maserati is the starting point of a great story, more sales, more market share, more profit, more quality and more competition. This is what we are now doing and I'm quite confident this is going to be a success story for the future. So those were the brands for the cars and the products. Let's now talk about the services. The mobility business is now expanding. The good news is that the growth is there and the numbers are black. It is important in the way we think that we grow our performance while we keep things in the black, which is quite rare among our competitors in this kind of services. As you can see, free to move is now growing by 38%, while we keep the business in the black, thanks to the fact that we are introducing more and more cities, namely in the United States that can enjoy this mobility service. We see that the long-term rental originations are growing up 15%. It is also the case on the leases side with an even more impressive number of 45% driven by B2C growth. We see that the growth is there, both in free to move and leases. In both cases, we are in the black, and we will keep it in the black. There is some acceleration to come in terms of electric mobility. As you can see, the mix of LEV is growing by the day, not only on lease sales but also in short and midterm rental. It is also the case on the lease side. But on top of that, on the less side, we have made some acquisitions as we can see here, [indiscernible] to expand our mobility ecosystem. The reason why we are aggressive on these areas because we believe with some humility that we have found the way to keep the business profitable and at the same time grow our presence, which is from my perspective the right way to go. And I'm very pleased with this direction and let's continue to do more of the same so that we can enjoy a better business from this mobility service activities. If we move now to the affiliates, 3 major businesses. One is the financial services. We were blessed to create the Stellantis U.S. Financial Services from the acquisition of an existing entity. And this captive is now formed and we are moving ahead. And I think that we will start seeing the first benefits of this strategic move from next year. So Stellantis has now a financial service in the U.S. to support sales, which is going to be a great tool for our sales and marketing people. We are also creating a fully dedicated multi-brand leasing company in Europe, which will go live in the beginning of 2023. There is enormous potential here compared to our peers. And this is something that we are very excited about trying to move as fast as we can. And we will do this in partnership with Crédit Agricole. We have achieved -- while we were completely reengineering our strategy in terms of sales finance. We are achieving a record profitability with no less than €662 million in '21, which is attributed to the expertise and the focus of our financial teams and congratulations to them. If we look at the pre-owned vehicle business, of course, the business model has been improving given the market conditions. It's good that we do it. We didn't do it only on the top line. We did it also on the costs because we could reduce the logistic cost by 40% by executing a certain number of synergies coming out of the merger. We had a very successful IPO of the Aramis group, with the valuation of the company at €1.9 billion, knowing that our initial investment was a 2-digit number, so a limited investments that triggered a lot of value creation over the years. So a successful IPO of Aramis. And we will continue to expand our preowned car brand called Spoticar across the different countries. And here, we are now starting the operations in Turkey, which is a significant market for us. In the parts and service business, we could enjoy double-digit sales growth, which is not very common, significantly fueled by the independent aftermarket business, which was up by 25%. And by the circular economy business, which was up 40%. We could create through the merger of 3 entities that we have acquired in the past. The fourth largest IAM distributor in China with a sales growth of 30%. And the global business is in the black, even though it's not a big number, it's still in the black and we are growing as a distributor in China, which is a success of Stellantis in China right now. And we selected Mopar as the brand to sell the OEM parts when needed to some of our partners. So this is a significant profit provider for Stellantis. And as you can see through the different columns here, everything was growing profitably, which is, of course contributing to the excellent results that you could see this morning. Let's move to the next one, which is about electrification. I know that this is a topic that is very important for you and I wanted to give you more transparency and more details about what is going to happen in the next couple of years. First, let's just recognize that as we speak, we are selling 34 LEVs in the markets where we operate. which include 19 BEVs. So as we speak, we are selling 19 BEVs all over the world, 19 BEVs, included in 34 LEVs. As you know, for us, LEVs mean BEVs plus PHEVs. So 19 BEV are actually and right now on sale for the different Stellantis brands. If we look at what is going to happen this year and next year, within '22 and '23, we are going to add to those 19 BEVs, 13 additional BEVs, which means that by the end of '23, we will have 32 BEVs on sales, which means roughly 1/3 of the total model portfolio of Stellantis, which is, I believe a significant achievement from our engineering, purchasing and manufacturing teams. And I would like to thank them and congratulate them for that. So please keep in mind, right now 19 BEVs on sales. And for the next couple of '22 and '23, we will add 13 more and we'll, therefore, have by the end of '23, 32 BEVs on sale. This is what we have in our pipe. You can see through this slide, the power of Stellantis with our 14 iconic house of brands. We have a very powerful capability to launch new technologies and cover the profit pool of our markets. So please keep in mind the 32 BEVs that will be soon on sale and right now 19, no less than 19. This is to clarify one of the questions I got from you after the EV Capital Day. We got the feedback that you wanted more visibility and more transparency on the pure BEV launches. This is the answer. Hopefully, it is clear enough for all of you. Let's move on. Let's now move to the numbers and for the numbers that needs a lot of rigor and focus and now we'll be happily handing over to our CFO, Richard Palmer. Richard, please?

Thank you very much, Carlos. So just quickly to remind everybody, given the merger, the numbers we'll be focused on today are the pro forma numbers for 2021 and for 2020, which effectively means that they're prepared as if the merger had occurred on January 1, 2020, including FCA's numbers in the 2020 comparatives and including the first 16 days of 2021 for FCA in the 2021 numbers, all adjusted for PPA, Purchase Price Accounting exercise. So we can move to the next page. So here we show the main financial metrics. As we mentioned, consolidated data shipments increased 4% to 5.9 million units with the impact of unfilled semiconductor orders largely offsetting the reduced impact of COVID-19 compared to 2020. North America and extended Europe regions were down 2% and 3%, respectively, with strong growth in South America, China and Indonesia Pacific, Maserati and Middle East and Africa. All brands were up except for Dodge due to discontinued Grand Caravan and Journey Alpha due to brand repositioning and discontinued [indiscernible] and Opel Vauxhall. Revenues were up 14% to €152 billion due to strong commercial performance on pricing and product mix. This strong commercial performance drove AOI to nearly double year-over-year to €18 billion with margins at a record level compared to prior PSA or FCA performance at 11.8%. Industrial free cash flows reached €6.1 billion, up 85% year-over-year due to the strong AOI margins and to synergies and industrial net financial position therefore improved to €19.1 billion of net cash. Industrial liquidity at year-end reached nearly €63 billion of which €12.7 billion related to the undrawn RCF and committed credit lines. On Page 20, we show the rest of the P&L. H1 2021 included unusual charges of €1.1 billion due to the inventory fair value adjustments for PPA of €0.5 billion, restructuring of €0.7 billion and gains for resolution of tax matters in South America of €0.2 billion. In the full year, the unusual charges totaled €2.7 billion with an additional €1.6 billion in H2 due to further restructuring of €0.3 billion, a change in accounting estimates for certain types of warranties of €0.7 billion and asset impairments of €0.3 billion. Financial charges for the year were €746 million, up 11% versus 2020, mainly due to lower levels of interest capitalization on investments in progress and lower yields on cash balances. Full year tax expense was €1.9 billion with an effective tax rate of 13% and included the deferred tax assets recognized for tax loss carryforwards of around €1.4 billion. Excluding this one-off DTA amount and some other smaller tax adjustments, the ETR normalized would have been around 23%. As a result, the net profit for the year, as Carlos mentioned, nearly tripled to €13.4 billion. Turning to Page 21. We show the drivers of revenue growth for the year, which drove a 14% increase or 16% ex-negative FX impacts, mainly due to the U.S. dollar versus the euro, the real versus the euro and the Turkish lira. Full year volumes were up 207,000 units driven by South America, plus 270,000 units with China and India Asia Pacific, MEA and Maserati all positive, offsetting North America down 32,000 and extended Europe down 80,000. Net pricing was strong throughout the year with all segments positive and North America, South America and EMEA, the standout performers. Vehicle line mix was also strong and driven at 65% by North America and 30% by extended Europe. Moving to Page 22. We focus on the AOI development. As we said, volumes were up around 200,000 units or 4% with significant production losses throughout the year due to chip shortages. In this context, we focused on margin maximization. The commercial teams did a great job with a net price up of around 6.5% for the group and all regions positive. Vehicle line mix was also very strong, particularly in North America, where we had key new products with the Grand Cherokee and Grand Wagoneer and also focused production through the year on higher margin vehicles in particular Ram. These top line actions offset raw material inflation for the year of around €2.25 billion and industrial and efficiencies due to the stop-go nature of 2021 due to chip shortages, inflationary pressure and FX impacts, particularly in South America. SG&A was flat also due to synergies from indirect purchasing and media buying. R&D increased mainly due to the launch of new products in North America increasing the depreciation and amortization and increased spend for new products compared to prior year. The resulting AOI margin at 11.8% was up 70% year-over-year. Now we move to the regional performance, starting on Page 23 with North America, which had a record performance for the year with margins at 16.3% and H2 at 16.4%. Industry volumes reached 18 million vehicles, up 4% and our sales were down 3% at 2 million units, mainly due to U.S. fleet down 13% and Canadian fleet down 40%, impacted by supply constraints and the discontinuation of the Dodge Journey and Grand Caravan. Our North America share was down from 11.8% to 11.1%. And shipments reached 1.8 million units down 2% year-over-year, with Dodge, down 30%; Jeep, down 5%; and Ram, up 16%.-- revenues increased 15% to nearly €70 billion with a strong increase in ATPs as mentioned earlier driven by net price and strong product mix from Ram volume and increase Grand Cherokee and New and Gran Wagoneer volumes. Industrial costs were negative due to raw material inflation and logistics and other industrial efficiencies due to the stop of chip shortages, increased [indiscernible] product launches and increased labor costs for variable pay due to the strong results. R&D increase relates to amortization of program costs for the new model launches. On Page 24, we show our South America performance where in an industry up 14%, our sales reached 812,000 vehicles with share up 3.8 percentage points to 22.9%. In Brazil our share reached 32%, in Argentina, 29%. With our overall sales up 37%, Fiat brand was up 34%; Jeep, 35%, Peugeot, up 56%; and Citroën, up 40%. So all brands performing very positively. Shipments increased 48% to 830,000 units with our South America business less impacted than North America and Europe by chip shortages. Revenues increased 71% to over €10 billion with very strong net price performance offsetting negative inflation in industrial costs and G&A. This strong performance resulted in an AOI increasing by fivefold to €882 million with margins at 8.3% for the year. In large Europe results are shown on Page 25. In a flat 2021 industry, Stellantis EU [indiscernible] remained at 22.1%, #2 in the industry. H2 share was down compared to H1 due to continued focus on improving price/mix and reduction in total stock levels through the year of around 40%. In fact, AOI was up 76% to €5.4 billion,and margins were 9.7% from 2.4% in the prior year. Shipments for the year were down 3% with semiconductor availability impacting the 4 highest volume brands at similar levels and newly launched Open Mokka, Citroën C4 and Fiat 500d performing well. Despite shipments being down, revenues were up 5% with positive price and mix driven in particular by increased lead volumes, which more than doubled in the year and by the Peugeot brand portfolio and new model launches as mentioned for Citroën, Opel and Fiat. Costs were well managed with raw material inflation, offset by purchasing savings and inefficiencies due to stop-go of chip supply offset by manufacturing actions and by reduced compliance costs. FX was marginally positive due to sterling strengthening and other impacts included the improvements to parts and service and used car profitability. Turning to Page 26, where we review Middle East and Africa, where the region achieved double-digit margins and AOI increased over 80% to €545 million for the year. The industry was up 19%, with all major markets up strongly with the exception of Turkey, down 5%. Our regional market share was down to 11.9% from 13.6% in the prior year as vehicle shortages and strong pricing actions in Turkey impacted sales performance, which was still up 4% to 412,000 units. Consolidated shipments were up 6% and positive pricing offset significant negative FX impacts due to the Turkish lira, resulting in revenues up 9%. On Page 27, we move to China and India and Asia Pacific, where consolidated shipments increased by 26%, with China up 17% and India and Asia Pacific, up 28%. Jeep brand increased 30% and represents around 50% of the 120,000 shipments. Peugeot was up also 30% to 30,000 units. Revenues increased in line with shipments to nearly €4 billion for the year and actions on mix improvement and pricing offset negative FX to improve margins to 11.1% and nearly double AOI to €442 million. Moving to Maserati on the right, Maserati sales increased 41%, as mentioned, to 24,000 units with sales up 20% in Europe and over 40% in China and U.S. Improved pricing and residual values due to the refreshed versions in market as well as the improvement in volumes, allowed our Maserati to close with AOI at €103 million and 5.1% margins. On Page 28, we show the industrial free cash flow, which reached €6.1 billion for the year, despite the slow start in H1 due to net working capital and provisions, which closed the year negative €2.9 billion, an improvement of €2.8 billion compared to H1. This resulted in H2 in industrial free cash flow of €7.2 billion. Looking at the elements of the cash flow, AOI, before D&A reached 15.7% margin, a further improvement from a strong H1 of 15.3%. CapEx and R&D capitalized totaled €10.2 billion of the €10.9 billion in investments which also includes the acquisition of the U.S. Finco and other equity injections into joint ventures. Total CapEx and R&D spend was €13 billion or 8.6% of revenues. The negative working capital was driven by lower year-over-year payables with November, December production of 1.04 million cars, down over 100,000 units year-over-year, partly offset by improved inventory levels. Changes in provisions were driven down by the reduction in dealer inventories through the year of 390,000 units. And on Page 29, you can see that reduction in inventory, we continue to operate at historic low levels of inventory with total inventory down 37% in the year and dealer inventory in line with that reduction. This has allowed us to sustain sales performance by increasing turn rates and offsetting some of the chip shortage impacts. The reduction is at similar percentages in North America and extended Europe and does show some increase since the low point in September, which was due both to summer shutdown seasonality and particularly bad chip shortages in the June through September period. The last page of the financial section shows our outlook for the industry, where we see moderate growth in our key regions, also heavily dependent on supply volatility. As regards AOI margins, we expect to continue to operate with double-digit margins and to offset headwinds in 2022, which include continued semiconductor scarcity, supply chain constraints due to labor costs and absenteeism, particularly in North America, and raw material inflation of around €4 billion year-over-year, up from the €2.25 billion in 2021. Industrial free cash flow will be positive and allow us to continue to invest 8% to 9% of revenues in CapEx and R&D to execute on the numerous LEV and BEV launches that we mentioned earlier. Thank you for listening, and I will turn the call back to Carlos.

Well, thank you -- thank you, Richard, for this very focused explanations. To wrap up on this first part before we go to your questions, I just would like to highlight a couple of things. First, in 2021, we were blessed by the fact that our company is enjoying very thrilling diversity. Our company is very diverse. As you know, historically, our company has built out of many other car companies with different brands, different home countries. And therefore, diversity for our Stellantis is a differentiator. But more than that, diversity at Stellantis is a way to enjoy a very exciting journey for all of us. We see it through the immense number of resumes that we receive. We received enormous amount of resumes of people who want to join this journey. Very surprisingly, many of those resumes are people currently working in tech companies, and they see a breathing space, they see opportunity to change, they see opportunity to build, and they see the opportunity to enjoy an exciting journey as a team. This diversity has been really a very important factor of our good results in 2021. We also see that, of course, the challenges that we have ahead, which are most of them external challenges can be overcome in a more efficient way. If we understand the world in which we operate, more focused way and a more sharp way. And of course, diversity is also very helpful to understand the world in which we are operating. That's point number one. Point number two, we are blessed by the fact that we have a strong bottom-up support from our people. Our people understand why we did this merger. They understand that Stellantis makes total sense from a scale perspective, from a diversity perspective. And you can see that the very high level of synergies that we could deliver in 2021, no less than €3.2 billion is the result of a significant bottom-up trend. Our people understand why we do this. And our people are rewarding us with many, many synergies, even though those that we couldn't think of during the discussion that was done prior to the deal of the merger. So this accelerated pace of synergies is demonstrating that we have a significant bottom-up support which, of course, is also a very important driver for the profitability -- the record profitability that could deliver in 2021. Last but not least, as we are steering the company fast and strong towards an automotive tech company, we need to recognize that some of the key strategic partnerships with the tech companies are going to be boosting the transformation of this company, not only on electrification, but also on software. And I will be pleased to explain to you all the details of this shift during our long-term strategic plan presentation next week, so it will come very soon on March 1. Thank you for your attention. Greatly appreciate it. And let's now go for the Q&A, please.

[Operator Instructions]. The first question comes from the line of José Asumendi from JPMorgan. José Asumendi: José from JPMorgan. A couple of questions, please. I'm trying to understand the opportunity to maintain the margins in North America at the current elevated levels. So Carlos, can you comment a little bit around the opportunity to maybe sell another 50,000 vans in North America and continue to take market share there. And Richard, can you split, please, the industrial costs in North America between raw material, depreciation and stop and go roughly how much was that across the 3 buckets. And then the second question, Carlos, I'd love to get some insight, please. As you think about the business in Europe, clearly, there are 2 big opportunities. One, to reduce the R&D expenditure of Fiat -- the old Fiat brand. And second, to capitalize on the launch of the Doblo on -- in Europe as you launched it on Peugeot platform. Can you comment, please, on those 2 opportunities? And how can that basically help your earnings development in 2022?

Well, thank you, José. Thank you for your thoughtful questions, as always. Let me answer first on the U.S. situation. What we have seen in 2021 is that we are operating in the U.S. under what we would call a pull model instead of a push model as a consequence of the semiconductor supply shortage as you surely understand. So we could leverage this situation in a very efficient way in terms of pricing power, while we were fighting against the costs and the inflation on the costs, namely the raw materials. This is what we have been doing, which means somewhere, the operating point of the U.S. is moving upwards, better transaction pricing, and I gave you some numbers compared to the other 2 Detroit competitors, and with, of course, a big fight on the cost side to try to compensate for the raw material cost increase. So we are operating at a point which is quite profitable because we prioritize the most profitable sales and the most profitable channels. And while we are doing this, we are operating at a higher transaction price with some kind of cost reduction that could compensate some of the inflations that we are victims of. When we combine the 2 factors, at the end of the day, we could deliver a record profitability because we were quite fast at enjoying a better pricing while pushing back on some of the costs and compensating with additional cost reductions. So it's a very specific situation, which we are in right now, as you can understand from your deep experience of this market. We are enjoying a pull market rather than a push market. The core reason of this are 2. The first one is that there is an imbalance between the offer and on demand. And the second one is very simply the expertise and the skills and the agility of our North American team, which has been doing a fantastic job in terms of taking the best out of the market. That's what I can right now tell you. On your final question on the LCV before I give the floor to Richard, I would say that not only we intend to keep our leadership in LCVs in Europe and grow our performance in the U.S., and the deal with Amazon is very representative of how focused we are to make some of our major customers happy with the features that we can imagine an engineer, but of course, we have also a global ambition because we are growing at a good pace, and we believe that we can do much more on connectivity, much more on some of the features that make the logistic companies improve their own efficiency. We can bring the 0-emission mobility to those fleet and the good example next year is the ProMaster EV, which, by the way, is leveraging the electrification that already exists on the same van in Europe, and therefore, we can go reasonably fast. So we will continue to work hard for our LCV business to grow not only on the van sector in Europe, but adding the vans and the pickups all over the world. And for that purpose, we intend to give to our LCV business more breathing space so that they can go faster. And I don't want to forget a very important point which is the fact that we are now cutting-edge efficiency on the hydrogen version of our vans. We are, I believe, the only one that on the same van can offer to the market diesel versions, EV versions and fuel cell versions, which says a lot about the way we are implementing the technology on those vans. All of this is going to be available for all the brands of Stellantis regardless of the family where they are coming from. And of course, the efficiency that you can find in one specific brand you can expect that, that efficiency will be expanded and made available for all the brands of our iconic house of brands, including the model that you commented. Richard?

Thanks, Carlos. So on the industrial cost bucket, José, I would say that the 3 biggest effects. Obviously, there were other sort of offset, but the 3 biggest are the inflation effect, which is about €1.1 billion of the €1.7 billion, the inefficiencies on stop-go was about €0.4 billion and then extra D&A was about €0.2 million for the €1.7 billion of impact. So I think clearly, there's some opportunity to continue to work on the industrial cost base in North America. So you see we effectively offset similar issues in Europe to 0. And think that the team is very focused on trying to improve that net performance in North America as we go forward. I think the other point on the profitability is we launched the Grand Cherokee, the new one in H2, basically. So in 2022, we have a full year. And we launched the Grand Wagoneer and the Wagoneer basically in Q4. So we have a full year in 2022. So there is, I think, still some important product news related to those launches and also the second version of the Grand Cherokee coming in 2022 as well with the 2 rows. So we have, I think, some good product, news to continue to manage our mix and our margin in 2022 as we capitalize on those new cars.

The next question comes from the line of Michael Foundoukidis from ODDO.

Michael Foundoukidis from ODDO. Two questions on my side. First one on synergies. Could you give us maybe more color on what you achieved in 2021 and what were the main buckets. And it was an excellent start in this context, any idea what we should expect for this year before new platforms kick in? That's the first one. And second question maybe regarding Europe profitability. It was strong, of course, much stronger than what we expect. This was partly thanks to mix and price, but also efficiency gains. Could you maybe help us understand how we should look at these efficiency gains, maybe between Opel, which is probably still bringing some new synergies, FCA portfolio cleanup and maybe the cost measures you took at FCA level and maybe also the old PCD scope, if possible?

Two great questions. Thank you. First of all, on the synergies, I would like, as always, that we keep it very transparent with ourselves and with our investors. It is fair to say that €3.2 billion is a very nice number for the first year. At the same time, I think it's important that we highlight the fact that those were the low-hanging fruits. And therefore by definition, the low-hanging fruits can be captured fast and strong. I expect the pace of progress to slow down for a very simple reason is that the execution of the synergies is the cement of Stellantis. We want the synergies to be a bottom-up dynamic that translates the fact that our teams understand the sense of what we are doing with this merger. And for me, the most important thing is to make sure that the foundation of Stellantis is sound and it's built bottom up. And that's the reason why not only I can congratulate our teams for the excellent number for 2021, but I want them to continue to run the show, and I want them to continue to demonstrate that there is a bottom-up dynamic that demonstrates their complete support of this merger. So I can expect that it's going to be good. I think it is fair for all of us to consider that the pace may slow down so that we keep it bottom up, and we make sure that we have a very strong foundation for our company. I think it is in your best interest and my best interest cities and our best interest that the foundation of Stellantis is as sound as possible. And for this foundation to be sound, it has to be driven bottom up as much as possible, not only, of course, but it needs to be significantly bottom-up driven. So do we have more potential? Yes. I will tell you more next week on this matter. I just want to be very clear on the fact that in this year, we were blessed by the low-hanging fruits that we could capture in a very strong and dynamic way. It is also somewhere the consequence of the excellent collaboration that happened prior to the merger and prior to the closing within the teams. The human relationships could be built. Again, as I said during the presentation, enjoying the diversity as a way to have an even more exciting and rewarding and enriching activity in the company by working with very different people. That's what we are seeing. And I think that's great for the company, and that's great for you. So I expect it to continue even though the pace may slow down a little bit so that we continue to build on a strong foundation for the company. On the second topic, it is clear that in Europe, there is more potential. There is more potential in Europe in terms of overall efficiency and effectiveness, most probably in the area of the G&A. We see that on the pricing power, most of the brands have done their homework. You can see that most of the brands are at, if not above the benchmark in pricing power, which means that they are the new benchmark of the market. But inside of the organization, as we have been historically piling up many different layers of different companies, different brands, it is quite clear when you look at the numbers and when you discuss with the top executives that there is more potential for simplification for diversity complexity reduction, for increasing the speed at which we go to market, focus more energy on quality and marketing and a little bit less in bureaucratic work. So there is potential in terms of G&A for Europe. There is potential to reduce diversity complexity and there is potential to increase speed. So all of this has been identified. We are going to execute our plans over the next couple of years. Hopefully, we'll see the results. For me, it's premature to tell you what are the magnitudes we are shooting for. But certainly, this is the direction in which we are currently working on this matter. Hopefully, this gives you some light on these 2 matters.

The next question comes from the line of George Galliers from Goldman Sachs.

The first question was really just on 2021. It obviously was an extraordinary performance. And I think people would have struggled to imagine 5 years ago, a scenario where you reached 16% margin in North America and 9% in Europe, particularly when we consider some of the assets in that base in addition to PSA. However, some investors do feel that 2021 from an industry perspective was as good as they get due to the price mix evolution from the shortage of vehicles despite the very low industry volume. Out of interest, would you classify 2021 as the year which was as good as it gets from an end market development perspective? And then the second question I had was just on your end-market prognosis for 2022. Obviously, you're seeing most of your main markets growing at a rate of around 3%. That seems a little conservative. Perhaps you could give some insight into why only 3% and what you think presents stronger growth? And as the company, do you expect to do a little better than 3% on your wholesale from an internal planning perspective?

Well, those are great questions. Let me try to answer. On the first one, on North America, I just would like to tell you that we are not shy of things we would like to improve, being cost, being marketing, being quality, we have identified with the North American management team, a lot of things we can improve. And it's a rewarding experience, a refreshing experience to see that there are things that we could do better and why? Because we have such a very large open book for internal benchmarking in Stellantis that there is always somebody in the company that is doing a better result than you are in any given part of your P&L. So that is giving us a huge internal benchmarking lever that our top executives are aggressively embracing to improve things in their own region or in their own brand. This has been working very well because, fortunately, we have been able to keep an open-minded attitude inside of the top leadership team, which is only focused at improving the company and not being defensive on any kind of topic where we could find in the company a better performance. So we are not shy on the list of things we can do better in North America. At the same time, I think it is fair, and I think you hinted that to consider that the current conditions in North America are very positive for the margins because we have this significant imbalance between the offer and the demand, which then creates what we call a pool market instead of a push market. And we both know that those are very good conditions to improve the profitability margins in a given market. This is a situation in which we are now. But we are not the only ones. Our competitors are in the same -- enjoying the same position, and then you can compare you, the investor, who is doing the better job just looking at the margins. From the metrics that I have access to, the winner is obviously Stellantis in North America by far. That's good for them, and it's warm congratulations to our North American team. And of course, our strength is to be able, at the same time, where we congratulate them to be putting our energy, our time and our focus on the things that we can do better, thanks to the internal benchmarking. So that's what I would tell to you on the North American current situation. What was the other question, I forgot?

Growth of 3%...

The 3%, yes, the forecast. Well, I think we have to be very humble on the outlooks. We are not very good at making outlooks. Historically, we see that we are often wrong. Anyway, as you know well, right now, the size of the markets will be mostly managed by the supply of semiconductors. So the size of the market is going to be somewhere the consequence of that supply. So that expresses the fact that we believe that the situation is going to move in the right direction. But we also believe that it's going to be very [indiscernible] is, yes, hopefully, things will get a little bit better. But we believe it's going to be very slow. It will take time. And 2022 is not going to be from that perspective, the year where we can say we are back to normal. We don't think that, that will happen. On top of the pure semiconductor problem, we have, of course, the raw material cost inflation, which is going to create additional hurdles to be overcome. And of course, it's normal that we mentioned geopolitics of the world, which have not been very helpful in the last years and they don't seem to be coming better this year. So we are not at all pessimistic because we have enough on our plate to improve the efficiency of the company. The way we have been working intensively on the long-term strategic plan, it's very helpful to see where are the areas in the pockets of things that we could and should be doing better. So we have tons of things that we can improve. At the same time, we are facing the headwinds that you know. And if you seem to consider that we are quite cautious on the outlook, from our side, we would answer that is, probably, it's because we see an improvement on the semiconductor supply front, but still a very small and very low pace improvement. I think that's the best answer that we can give you on this matter.

The next question comes from Thomas Besson from Kepler Cheuvreux.

It's Thomas Besson from Kepler Cheuvreux. I have 2 questions, please. The first one is about cash returns. I mean you've generated a much stronger amount of cash than initially anticipated in '21. We are proposing to return €3.3 billion via dividend, a bit less than 25% of your earnings. Is it reasonable to think that a buyback may eventually complement dividend in the coming months if your share price remains depressed in terms of valuation? Or is it something you prefer to discuss next week? Second, you achieved extraordinary results for 2021. But still, you've decided to change your distribution agreements in Europe and try to get as well new agreements with suppliers at least in North America. Can you update us on this and explain us why you're still pushing so much for margin improvement, while you are way above competition. I know the times of performance is always there for you. But maybe you could explain us already what allowed Stellantis to improve in all regions in H2, while most of your direct competitors in North America or with Chinese exposure, in particular, had a deterioration of their operating performance. What do you see maybe coming that the others may not see as well as you do?

Well, thank you, Thomas. Great questions indeed. A couple of comments. I will give the free cash flow question to Richard. He will give you more details as it relates to dividend policy. We will talk to you about this next week in more details. It is a sensitive matter that needs some explanations. I just want to tell you that we consider that the cash of the company is owned by the shareholders. So either we have a very strong projects to propose, and we have, as you will see next week. And if there is availability and a strong liquidity position, which is our case, there is no reason why we will not give the cash back to our shareholders, which I think is fair. They are the owners of the company. So that's how we think about things. And certainly next week, we are going to be talking about that. But for the free cash flow question, I will hand over to Richard. On your second question, which is about why do we keep pushing as much as we are. I think the fair answer is that I have learned from my 40 years of automotive life that as soon as you stop pushing, you go backwards because as you know well, Thomas, this is a competitive game. It is all about being better than the other guys at the end of the day. And if you stop pushing, then you go backwards because the other guys are pushing. They may not be pushing as much as you are, you never know, but they are pushing anyway. So if you stop pushing then you go backwards. For us, the big gorilla in the room is the cost of electrification. That's the big, big gorilla in the room. We can expect electrification to represent an additional total production cost of around 40% to 50% against the conventional vehicle. There is no way we can transfer 40% to 50% additional total production cost to the customer because if we do so, we will lose the middle classes and our customer bases will shrink. So we cannot do that. At the same time, we cannot keep the same pricing with that cost because, of course, we will go in the red, and we have to restructure the company. So the only way to move forward is to absorb those 50% of additional cost. If we say that we do it from now up to 2026 because we told you at the Capital Day that from 2026, we would be ready to commit on a double-digit AOI margin. If we have to do it over the next few years, then that means around 10% productivity per year for the next 5 years in an industry that is used to deliver, as you know, Thomas, between 2% to 3%. So how do you go from 2% to 3% per year to 10% per year. There are not many, many different ways to go there. One of the ways is to reduce your distribution cost, improve the quality to the final customer, improve the fact that you can connect with the final customer. And at the same time, while you are improving the quality of the customer journey, you reduce the cost of distribution. It's a strong contributor for the absorption of the electrification cost. It's not the only lever. We have others that we can comment next week. But this is to say that one of the reasons why we didn't stop discussing with our partners about how can we improve the quality of the customer journey while reducing the cost of distribution, we didn't stop, and we are now progressing very well in Europe. And I believe that we will reach an agreement that we'll be supportive of achieving a double-digit AOI margin in a fully electrified world, while making sure that we do not lose the middle classes, which represent a significant part of our customer base. So that's what we are trying to do, and that's why we don't stop pushing. But you know our DNA, we are competitors, and we are here for the race. Thank you, Thomas. Richard, on the free cash flow, please.

Thank you, Carlos. Well, I think you basically answered the question. I think on capital allocation, we'll be talking about it on March 1. I think on the payout of the dividend, I think we're very satisfied with being able to propose to the Board and the Board agreed. So therefore, obviously, subject to the shareholder approval. We're pleased with the €3.3 billion payout. We'll look at the rounding to see if it's a precise 25.0%, Thomas, but I think it's basically not far off. So I think we're at 25% as a first payout for Stellantis, which I think is very respectable. And hopefully, we'll be seen so by shareholders and investors, and then we'll move forward. But we'll give you more visibility on overall thoughts on capital allocation on March 1.

The next question comes from the line of Philippe Houchois from Jefferies.

I've got two questions, please. One, maybe for Richard is. I'm looking at the size of your adjustments was €1.7 billion last year or 2020; €2.7 billion in 2021. What's the direction there because some of those adjustments, it's hard to know how much they're nonrecurring, how much they are things like the valuation warranties. So I think it'd be interesting to get your views on where we're going in terms of the size of adjustments and future visibility on this. And the second one, thank you very much, Carlos. So I know you've been vocal about affordability. And -- but I'm still looking at the cost electrification is definitely one. But then this year and next, possibly, raw materials going up, so logically, nominal prices of cars have to go up if you want to maintain your margin. Interest rates going up real values aren't going to improve much. So they may be stable, but they may also come down. So that makes affordability with lots of multiple headwinds. So I'm just wondering what's your -- you talked about distribution, but that's going to be, I know it's going to take several years. And I'm curious about what you're doing with some of your suppliers where you seem to be very, very strict about requiring that it gives back to you any productivity gains. Are there any levers? Or are you taking the risk that you're going a bit far with your suppliers?

I think your understanding is absolutely perfect on the second topic, I will answer the second question, then leave the first one to Richard. On the second one, we have to come back to some basics that, of course, you know as good as I do, which is the fact that on the total production cost of an automobile today, just before you put the car on the trailer to ship it to the dealer, 85% of the total production car of automobile mobile is made out of both our parts. This is the situation that has been created over the last 30 years in the automotive industry. And of course, our suppliers could enjoy this activity for the last 30 years. It happens that in such a cost structure, if you have 85% of the total production cost, which is made out of both our parts, there is no surprise that when you have to absorb 50% of additional costs coming out of electrification, your suppliers need to be a significant contributor for this additional productivity because they have been doing a significant business over the last 30 years with this kind of cost structure. So yes, they have to contribute. And some of them are doing. Some of them are contributing in a very efficient and partnership-oriented way. What does it mean? It means that in this transformation of the industry, it's not only about the OEMs, it's also about the supplier base. And as you know, there is a significant competition in the supplier base, and that is going to be also a very nice Darwinian transition period for our suppliers as much as it is for the OEMs. It means that we are in the same boat, we are in the same transformation. The speed is imposed on us by the regulations. And of course, it means that we are going to keep what I believe is a strong differentiator of Stellantis. And it has been formally for the 2 families that created Stellantis, which is keeping a very low breakeven point. Because if at any point in time, we cannot generate enough productivity to absorb the additional cost of electrification and we cannot pass everything to the consumer, but we can pass something to the consumer, perhaps that the total markets will go slightly down. And the guys who are going to be able to manage these are the guys who will have the lowest breakeven point. And we are those guys. We will keep a very low breakeven point because we have 30% more efficiency than our peers when we spend R&D and CapEx. So we are more efficient. We are sharper on costs, sharper on fixed cost. We try to enjoy a strong pricing power at benchmark level. So we keep the breakeven point very low because in this process of absorbing 50% of additional cost, we can contribute and we will contribute significantly as the OEM. We need our suppliers to contribute. And at the end of the day, what is left is some part of it will be transferred to their customer, it may have an impact on the size of the market and the guys who are going to be able to digest that are the guys who have the lowest breakeven point. And from that perspective, 2021 is very good concrete example because we did 6 million cars. Our potential, as you know well, is above 8%, and we delivered 11.8% AOI margin, north of €6 billion of positive free cash flow with 6 million cars in a car company that could do more than 8 million, which demonstrates to which extent our low breakeven point is protecting the company and protecting our investors. And that's why some of your teammates were talking about all-weather company. Yes, to a certain extent, Stellantis is all weather company. And one of the things that is, I think, a differentiator is that -- of course, we need to push. It's not always spontaneous. But to a certain extent, this company likes change. This company likes to put itself in a dynamic of change because we don't get board when things are changing, and it gives us more opportunities to grasp a different business and be even more competitive vis-a-vis RPS. So your point is valid. This is going to be mostly a cost reduction race over the next 5 years to protect affordability in terms of protecting the size of the market so that we can keep the middle classes on board on new car sales. I think it's very important, not only for the car companies, but also for the social stability of the Western societies in which we operate. I think that's very important that we protect freedom of mobility for the middle classes. This is what I can comment to your fair question, and I will give the floor to Richard for the other one.

Thanks, Carlos. Hi, Philippe. So well, so I think we're looking at 2 relatively unusual years, let's hope. So 2020, obviously, the charges we had on unusual were largely related to impairments due to COVID and issues related to some of the product that we looked at going forward in largely in FCA, frankly, in 2020. In 2021, obviously, if I look at the €2.7 billion, about €1.5 billion are noncash items related to PPA, €0.5 billion of inventory; warranty, policy alignment, €0.7 billion, which, again, is a noncash item. We have 2 companies that had different practices, and from an accounting estimate point of view, we need to move forward in a consistent manner. And then €0.3 billion of some impairments on some old vehicle lines frankly, mainly from the ex-opal side of the house as that product line up basically comes towards an end. So €1.5 billion is noncash charges, largely related to the merger. And then we have a remainder of about €800 million, €900 million, which is restructuring in a more traditional sense of the word and also related to these transactions that have occurred in the past for both ex-PSA and ex-FCA. So I would imagine that going forward, we are likely to continue to have some level of restructuring going through the restructuring line of €0.5 billion to €1 billion depending on the year in the short term, coming down over time. But I would not expect to have the same level of noncash charges that we had in 2020 for some of the events there in 2021 related to the merger.

Thank you, Richard. Let's take one more question as the time is flying, please?

The next question comes from Horst Schneider from Bank of America.

The most important one that I have that relates to your market cap, I checked again this morning. So in 2021, you probably generated an adjusted EBIT similar to the one of the Volkswagen Group. Your market cap is just 40% of the Volkswagen Group. So we see at the moment that Volkswagen Group has embarked on -- or is likely to embark on financial engineering and going to dispose assets. I just want to understand how you think about valuation of Stellantis and would you also consider financial engineering measures, maybe to increase the valuation of the company. And the last question that I have or a second question that I said relates more again to the one from George Galliers on volumes, what would you do if transaction prices get worse in the U.S. if incentive is going to increase in the U.S., would you rather than cut back on volumes? Or would you say, no, it's still a great margin, volumes are more important, we need to keep market share. What is good for your preference?

Well, thank you. Those are really great questions. I would be pleased to answer them much more next week than this week, of course. But I would just comment that you are possibly right that right now, Stellantis is cheap. It is a good opportunity for the investors because I am absolutely convinced that what we have ahead of us is very exciting, and you will see it through our plan next week. So yes, Stellantis is quite cheap. Why is that? Possibly because we have not been good enough and I have not been good enough at communicating to you the exciting plans that we have for the company. We have tried to correct that with the electrification Capital Day with the software Capital Day. We will present to you the plan in an extensive manner next week. Hopefully, you will be convinced, but surely, Stellantis deserves a much better market cap. That's for clear. It's a very obvious opportunity for investors. We have demonstrated that we are in our DNA, an all-weather company. We have demonstrated that we like change. And therefore, we are not afraid of steering the company towards a tech mobility company in any way. We have demonstrated that we are not afraid of new technologies. We have demonstrated that we are able to make partnerships with tech companies at a high pace. So all of this has been done for you, the investors to enjoy opportunities. Now the decision is in your hands, not in mine. My job is to ensure that we are creating value and that we are ensuring the sustainability of our company through the different challenges that we have ahead. And I'm absolutely convinced that we have everything we need. I'm absolutely convinced that we have a fantastic team, and I'm absolutely convinced that with a very clear and rigorous governance that we have in our company, we can ensure the proper stability for the management to execute the plans. You were asking if we had some specific financial operations that we could do. I don't expect that to happen in the first years of the plan, but it's still a possibility that we cannot disregard and that we should not disregard based on the great things that we are now building. And those great things in a few years may represent big opportunities to unleash additional value for our shareholders, and we should not, and I do not exclude that. But so far, it's not the core of our plan. The core of our plan is to explain to you how we are steering the company towards a tech automotive company, how we are positioning ourselves to grasp more profitable opportunities. And I think we have, as you will see next week, tons of things that we can do. And hopefully, you will be convinced not only by the numbers but also by the clarity of what we want to do. So with this, I would like to thank you all for the very thoughtful questions that you are raising always. I would like to tell you that as the CEO of this company, I'm very confident. I don't generally speak without being grounded on realities that I can see inside of the company. So I think that Stellantis was a great move. It's a winning move. Stellantis has a great potential. And I think it is fair to our people to say that we cannot do everything in one single year. And it is fair to tell them that what they have already achieved on the first year, through the accumulation of the 3 layers that I have described, is already quite immense. So I would like to thank you, the investors, for your trust, for your thoughtful questions, and I would like to convey to my people, my warm thanks and sincere congratulations for what they have achieved on the first year of Stellantis. Thank you very much and see you, hopefully, next week. Bye-bye.

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