Profitability sharply increasing, operating margin at 7.9%. De Meo on the merger hypothesis: «As far as I’m concerned, I try to give a new meaning to Renault»
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Turnaround well underway although, in an increasingly competitive market, much remains to be done. Having reached the end of his mandate, but according to rumors ready for confirmation, the CEO of Group Renault, Luca de Meo, can boast a historic result: from the red of 8 billion euros in 2020 to the net profit of 2.3 billion in 2023, 3 above the result of 2022 even if less than the estimates of market (3.5 billion). Revenues in fiscal 2023 reached 52.4 billion, +13.1% and +17.9% at constant exchange rates compared to the previous year. Operating margin exceeded expectations: 4.1 billion or 7.9% of revenues (versus 5.5% in 2022), up 1.5 billion euros compared to 2022. It was initially expected above 6% and had been revised upwards mid-year, between 7 and 8 percent. Free cash flow also went beyond forecasts: 3 billion, 0.9 more than a year earlier and half a billion above the guidance already revised upwards in June. The transalpine group aims to achieve an operating margin of more than 7.5% in 2024 as well as a free cash flow equal to or greater than 2.5 billion euros.
And again: a dividend of 1.85 euros will be proposed to the vote of the Annual General Meeting on 16 May 2024 compared to 0.25 euros per share for the 2022 financial year (+1.60 euros per share). “The dividend proposal is proof of our confidence in the ability to continue growing,” commented financial director Thierry Pieton. The challenge remains to relaunch the capitalisation, today at 11 billion. Much less than its European rivals. The one-year p/ea is 2.9, bringing up the rear.
Meanwhile, in 2023, in Europe, the Renault Group can boast two out of the three best-selling vehicles. The Renault brand climbed three positions, from fifth to second place. In 2024 the product offensive will continue with 10 launches and with the acceleration of cost reduction which, according to the Boulogne-Billancourt company’s expectations, should lead to strong cash generation.
The Group’s global sales increased by 9% compared to 2022 (after nine consecutive years of decline), reaching 2.23 million units. In Europe, sales grew by 18.6% in a market that grew by 13.9%. Renault is the best-selling French brand in the world, in second place in the European passenger car and light commercial vehicle market. Clio has become the best-selling car in France in 2023, across all sales channels combined and is in third place in Europe.
Dacia ranked eleventh in the European passenger car and light commercial vehicle market, gaining four positions. In the European passenger vehicle market, Dacia enters the top 10 and remains second in the European retail vehicle market, its main one. Alpine sales increased 22.1% compared to 2022.
On the electric car front, the Renault brand took third place in Europe for electrified cars, with sales increasing by 19.7% compared to 2022. Sales of electrified cars represent 39.7% of passenger vehicle sales in the brands in Europe (11.3% full electric vehicles). This trend was supported by a 62% increase in hybrid vehicle (HEV) sales. Austral, Clio and Captur are among the 10 best-selling hybrid vehicles in Europe.
Pieton did not say he was worried about the slowdown in demand, because the road to electrification in Europe was marked by political choices that set a stop to combustion engines for 2035. In the meantime, Renault has already taken its path, which is to give more weight to value (i.e. profitable models) than to volumes. As a corollary of the industrial choices also those ofevolution of the alliance with Nissan and, for example, the sale of land in the Boulogne-Billancourt headquarters, several commercial subsidiaries of the Group and subsidiaries of Groupe Renault Retail.
«Today – commented CEO Luca de Meo – the Renault Group records record results. These results are the result of enormous team work and reflect the success of our Renaulution strategy. Our fundamentals have never been stronger and we won’t stop there. In 2024, we will benefit from an unprecedented number of vehicle launches, which will showcase the renewal of Groupe Renault, continuing to optimize our cost structure.” In an interview with Le Figaro de Meo also cooled, for the moment, the rumors about a possible merger/partnership with Stellantis. «In the car industry, the size (of a manufacturer, ed.) is a condition that remains necessary, but I’m not sure that today it is sufficient» to be successful. In certain circumstances, continued the top manager at the helm of the French group, it is better to remain “very agile” and “oriented towards innovation”.
Translated: «On paper, Tesla could buy Volkswagen or Stellantis: it has the means to do so. Why doesn’t he do it? Surely because it’s not that simple and maybe it’s not even that interesting. A merger only succeeds when there is the will of both parties. As for me, I try to give a new meaning to Renault. The starting point was very complicated. But in 2023 we achieved historic performances never achieved in the company. We will continue to make nice cars for customers, equipped with good technologies. When you start from this, you are never wrong. We will also continue to reduce our costs to reduce prices.”
This is why 2024 “for us will be the year of breakthrough – reiterated Pieton – thanks to the new models” and the implementation of the strategy based on greater profitability and cost reduction”. The Group will launch 10 new vehicles, seven from Renault, two of which are fully electric: Scenic e-Tech electric, more than 600 km of WLTP autonomy, and Renault 5 E-Tech electric, the return of the icon in a totally redesigned version. Plus two hybrid vehicles in Europe, including Rafale e-Tech and a commercial one, the new Renault Master (both thermal and battery-powered). Finally, two models for non-European markets. The launches of the new Dacia Duster and Spring are also important.
As for the reduction of production costs per vehicle, the objective is 30% for thermal vehicles and 50% for electric vehicles between now and 2027. The reduction in production costs will also fuel the objective of the Ampere electric unit of reduce variable costs between first and second generation C-segment electric vehicles by 40% by 2027
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Alberto Annicchiarico
vicecaposervizio
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2024-02-14 20:54:11
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