Renault expects to boost returns this year on the back of a record order book and new models as it navigates high inflation and lingering supply-chain problems.
The manufacturer forecast a group operating margin at or above 6 per cent in 2023, compared with 5.6 per cent last year, it said on Thursday. Renault will also reinstate paying a dividend for the first time in four years after getting traction on its turnaround plan.
“Renault Group’s fundamentals have been thoroughly cleaned up and there will be no turning back,” said chief executive Luca de Meo. The “2023 financial outlook and the return of a dividend illustrate this”.
Free cash flow is expected at or above €2 billion, Renault said, compared with a record €2.1 billion last year. The shares rose as much as 1.8 per cent in early Paris trading, taking gains in the first few weeks of the year to 40 per cent.
Planning regulator Niall Cussen: We can overcome the housing crisis, ‘if we put our minds to it’
On his return to Web Summit, the often outspoken chief executive Paddy Cosgrave is now an epitome of caution
Surviving a shake-up: is restructuring ever good for staff?
The Irish Times Business Person of the Month: Dalton Philips, Greencore
The carmaker is emerging from a tumultuous 12 months marked by a costly withdrawal from Russia and a landmark deal to reshape its troubled alliance with Nissan. While crippling chip shortages are easing, Renault still faces logistics troubles paired with a weakening outlook in Europe, its mainstay market.
In November, Renault outlined new mid-term targets for an operating margin of more than 8 per cent in 2025 and above 10 per cent by 2030. The French carmaker has been revamping its model line-up including higher-returning trims. Orders for new models such as the all-electric Megane e-tech, Arkana and Dacia Jogger and high prices helped boost automotive revenue last year, Renault said.
Irish jewellery designer Chupi: 'The divorce ring is a whole new category'
Group revenue during 2022 rose 11 per cent to €41.7 billion with operating income more than doubling to €2.2 billion. Orders at the end of last year for Europe were equivalent to 3½ months of sales, the company said.
Mr de Meo is moving ahead with a split of the business into five units as he seeks outside investors to help fund a costly shift to electrification. This month’s agreement with Nissan will also allow the company to proceed with plans to work with new partners, such as China’s Zhejiang Geely.
Renault is planning an initial public offering of its carved-out electric-vehicle business in Paris as soon as the second half of this year, depending on market conditions. The stock is the top performer in Europe’s Stoxx 600 Automobiles & Parts Index, giving Renault a market value of €13 billion. — Bloomberg
