Renault Group: Historical 2023 results - Strong improvement of all
financials
Press ReleaseFebruary 14, 2024 |
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20240214_Renault Group_Press Release_2023 results
Historical 2023
resultsStrong improvement of all
financials
- Exceeding
2023 FY financial guidance (already upgraded in June
2023):
|
2022 1 |
2023
Initialguidance |
2023 Upgradedguidance |
2023 |
Change vs 2022 |
Group operating margin |
5.5% |
≥6% |
7% to 8% |
7.9% |
+2.4 pts |
Free cash flow |
€2.1bn |
≥€2.0bn |
≥€2.5bn |
€3.0bn |
+€0.9bn |
-
Strong improvement of all financials with record
levels:
- Group
revenue: €52.4bn, +13.1% and +17.9% at
constant exchange rates vs 2022
- Record
Group operating margin: €4.1bn or 7.9% of
revenue (+2.4 pts vs 2022), up €1.5bn vs 2022
- Record Auto
operating margin: €3.1bn or 6.3% of
revenue (+3.0 pts vs 2022), up €1.6bn vs 2022
- Net income:
€2.3bn, up €3.0bn vs 2022
- Record free
cash flow: €3.0bn, up €0.9bn vs 2022
- Automotive
net cash financial position at highest levels:
€3.7bn at December 31, 2023 (up €3.2bn vs December
31, 2022)
- More than
doubled ROCE: 28.5% in 2023 vs 12.6% in
2022
- Strong
orderbook in Europe at 2.5 months of forward sales
- Renault
Group back in the spotlight for its customers thanks to the
successful renewal of the line-up. In 2023 and in
Europe, Renault Group has 2 vehicles in the Top 3 of the
best-selling cars and Renault brand has risen from
5th place to
2nd
- In 2024,
the product offensive with 10 launches2
and the acceleration of cost reductions will be the drivers
for operational performance and strong cash generation. Renault
Group is aiming to achieve in 2024:
- A Group
operating margin ≥7.5%
- A free
cash flow ≥€2.5bn
- A
significantly higher dividend of €1.85 will be proposed to
the vote of the Annual General Meeting on May 16, 2024 versus €0.25
per share in respect of 2022 financial year (+€1.60 per share)
“Today, Renault Group is posting record
results. These results are the outcome of a tremendous teamwork and
reflects the success of our Renaulution strategy. Our fundamentals
have never been stronger, and we will not stop there. In 2024, we
will benefit from an unprecedented number of vehicles launches,
showcasing Renault Group's renewal while continuing to optimize our
cost structure. At the same time, we are leading at an incredible
speed the in-depth transformation of the Group with important steps
achieved for our major projects and an acceleration of our EV and
software strategy. Our organization brings flexibility and boosts
performance. This is a strength in a challenging environment! I
would like to thank the teams for these achievements. All together,
we are giving birth to a new Renault Group much more efficient and
performant which is creating value for all stakeholders.”
said Luca de Meo, CEO of Renault
Group
Boulogne-Billancourt, February 14,
2024
Commercial results
- 3
complementary and growing brands:
- Worldwide
Group’s sales up 9% versus 2022 to reach 2, 235,000 units.
In Europe3, sales were up 18.6% in a market up 13.9%.
-
Renault is the best-selling French brand in the
world, 2nd place in the European PC+LCV4 market, leader in the
European LCV5 market, leading position in France in PC and LCV.
Clio became the best-selling car in France in 2023, all sales
channels combined and is #3 in Europe.
-
Dacia ranked 11th on the European PC + LCV market
(+ 4 places). In the European PC market, Dacia joins the top 10.
The brand confirms its 2nd place on the retail vehicle market in
Europe6, its core market.
-
Alpine sales were up 22.1% versus 2022. The Alpine
A110 maintains its position as the leading two-seater sports coupé
sold in Europe in 2023.
- A
commercial policy focused on value and already benefitting from the
beginning of the unprecedented product offensive:
- Renault brand sales
in C-segment and above in Europe improved by 26%
compared to 2022, thanks to the success of Arkana, Austral, Espace
E-TECH Hybrid and Megane E-TECH Electric. C & above segments
represented 42% (+ 3 points vs 2022) of Renault brand sales mix in
Europe in 2023.
- 65% of Group sales
were on the retail channel in the Group’s five
main countries in Europe7. Renault brand generated more than half
of its sales in the retail channel.
- A
successful electrification offensive:
- Renault brand took
the 3rd place in Europe for electrified8 passenger car with sales
up 19.7% versus 2022. They accounted for 39.7% of the brand’s PC
sales in Europe (of which 11.3% EV). This trend was supported by a
62% increase in hybrid vehicle (HEV) sales. Austral, Clio and
Captur are among the top 10 best-selling hybrid vehicles in
Europe.
- Dacia already
started its smooth electrification strategy: Dacia Jogger Hybrid
140, on sale since January 2023, represents more than 25% of Jogger
orders and Dacia Spring, 100% electric, held on to its place in the
top-three European4 retail electric vehicles sales.
- In 2023, Renault
Group confirms it achieved its CAFE9 targets (passenger cars and
light commercial vehicles) in Europe.
Financial results
The consolidated financial statements of Renault
Group and the company accounts of- Renault SA at December 31,
2023 were approved by the Board of Directors on February 14, 2024
under the chairmanship of Jean-Dominique Senard.
Group revenue reached €52,376
million, up 13.1% compared to 2022. At constant exchange rates10,
it increased by 17.9%.
Automotive revenue stood at
€48,150 million, up 11.7% compared to 2022. It includes 4.8 points
of negative exchange rates effect (€2,068 million) mainly related
to the Argentinean peso and to a lesser extent to the Turkish lira
devaluation. At constant exchange rates1, it increased by
16.5%.
- Volume effect stood
at +4.0 points thanks to the commercial success of
vehicles. The 9% increase in registrations translates into 4
points of volume effect due to the lower restocking within the
dealership network compared to the end of 2022. This improvement on
total inventories is better than our objective of being below
500,000 units at the end of the year.
- The price effect,
positive by +7.4 points, continued to be very strong and reflects
the Group’s commercial policy focused on value over volume,
vehicles enrichment as well as price increases to offset currency
effect.
- The geographic mix
impacted positively by +1.7 points thanks to the strong sales
performance in Europe.
- The product mix
effect stood at +1.0 point mainly thanks to the success of Austral,
Espace E-TECH Hybrid and LCVs. The success of Clio had a negative
impact on this item as its average selling price is below the
Group’s average selling price.
- Sales to partners
had a positive effect of 2.1 points, supported by the production of
the ASX (since the beginning of the year 2023) and Colt (since
October 2023) for Mitsubishi Motors as well as a dynamic LCV
business with Nissan, Renault Trucks and Mercedes-Benz.
The Group posted a
record operating margin at 7.9% of revenue versus
5.5% in 2022, up 2.4 points. It continued to improve sequentially
from 6.3% in 2022 H2 to 7.6% in 2023 H1 and 8.1% in 2023 H2. It
stood at €4,117 million, up €1,547 million versus 2022.
Group operating margin includes, since the
beginning of November 2022 and until the deconsolidation of Horse,
a positive non-cash effect of the cessation of amortization for
these assets held for sale. It accounted for €482 million in 2023
(€275 million in 2023 H1 and €207 million in 2023 H2).
Year-on-year, it represented a positive effect of €398 million.
Adjusted from this positive impact, the Group
operating margin would have been 6.9% in 2023 with 6.6% in 2023 H1
and 7.3% in 2023 H2.
Automotive operating margin
also reached a record level at 6.3% of Automotive
revenue in 2023, up 3.0 points versus 2022. It stood at a record
€3,051 million in 2023 versus €1,402 million in 2022.
- Automotive
operating margin was strongly impacted by a negative forex of -€595
million mainly due to the Argentinean peso.
- The positive volume
effect at +€621 million and the positive mix/price/enrichment
effect of +€2,908 million illustrated the success of vehicles and
of the commercial policy focused on value. The positive
mix/price/enrichment effect more than compensated the increase in
costs. This increase amounted to -€1,630 million and is mainly
explained by the impact of the carry-over of raw materials and
energy price increases, logistics and labor costs.
- SG&A increased
by €389 million, mainly driven by marketing costs due the ongoing
product offensive and salary increases.
- The price
reevaluations in Argentina, computed in the Renault Group’s
subscription plan in the country, explained most of the +€376
million effect in the “others” item.
The contribution of Mobilize Financial
Services (Sales Financing) to the Group's operating margin
reached €1,101 million versus €1,198 million in 202211 due to
non-recurring impacts of the swaps valuation linked to the interest
rate increase in Europe since beginning 2022. Excluding this
one-off, Mobilize Financial Services would have posted an operating
margin up 8% compared to 2022. This evolution was mainly driven by
the increase in new financings and lower cost of risk.
Other operating income and
expenses were negative at -€1,632 million (versus -€379
million in 2022). This amount was mainly driven by -€0.9 billion of
capital loss on the disposal of Nissan shares made in December
2023, -€0.5 billion of impairment on vehicles developments and
specific production assets and by restructuring costs. Capital gain
on asset disposals amounted to +€0.3 billion, related to the sale
of land in Boulogne-Billancourt, of several commercial subsidiaries
of the Group and of branches of Renault Retail
Group.
After taking into account other operating income
and expenses, the Group’s operating income stood
at €2,485 million versus € 2,191 million in 2022 (+€294 million
versus 2022).
Net financial income and
expenses amounted to -€527 million compared to -€486
million in 2022. The increase is explained by the impact of
hyperinflation in Argentina partially offset by the positive impact
of the rise in interest rates on the net cash position.
The contribution of associated
companies amounted to €880 million compared to €423
million in 2022. This included €797 million related to Nissan's
contribution.
Current and deferred taxes
represented a charge of -€523 million, stable compared to
2022 (-€524 million in 2022). The increase in the pre-tax
income, related to the improvement in performance, was offset by
the evolution of deferred taxes.
Thus, net income stood at
€2,315 million, up €3,031 million compared to 2022 and net
income, Group share, was €2,198 million (or €8.11 per
share). As a reminder, in 2022, net income from discontinued
operations amounted to -€2,320 million due to the non-cash
adjustment related to the disposals of the Russian industrial
activities.
The cash flow of the
Automotive business was at record level
in 2023 and reached €5,485 million, up €667 million versus
2022. It includes €600 million of Mobilize Financial Services
dividend versus €800 million in 2022. This cash flow significantly
more than covered the tangible and intangible investments before
asset disposals which amounted to €2.9 billion (€2.6 billion net of
disposals) and the restructuring expenses (€0.5
billion).
Excluding the impact of asset disposals, the
Group's net CAPEX and R&D stood at €3,817 million in 2023,
representing 7.3% of revenue compared to 7.4% of revenue in 2022.
It amounted to 6.7% including asset disposals.
Free cash
flow12 reached a record
level at €3,024 million. Excluding Mobilize Financial
Services dividend, it stood at €2,424 million versus €1,319 million
in 2022, up €1,105 million. The change in working capital
requirement was positive at €637 million and is mainly related to
the decrease in inventories.
As of December 31, 2023, total
inventories of new vehicles (including the independent
dealer network) represented 484,000 vehicles, better than our
objective, and compared to 569,000 vehicles at the end of June 2023
and 480,000 vehicles at the end of December 2022.
The Automotive net financial
position stood at €3,724 million on December 31, 2023
compared to €549 million on December 31, 2022, an improvement
of €3,175 million. In 2023, it included the following
operations:
- €764 million
corresponding to the sale of 211,000,000 Nissan shares held in a
French trust, implemented as per new Alliance Agreement;
- €200 million
representing a 24% equity stake investment in Alpine Racing Ltd
(United Kingdom) by Otro Capital, RedBird Capital Partners and
Maximum Effort Investments.
The loan of a banking pool benefiting from the
guarantee of the French State (PGE) is now fully reimbursed (one
year in advance).
Liquidity reserve at the end of
December 2023 stood at a high level at €17.8 billion, up €0.1
billion compared to December 31, 2022.
Capital allocation
Renault Group intends to share value creation
with its stakeholders through an employee shareholding plan and
through its dividend.
Renaulution employee shareplan
Since 2022, Renault Group is taking steps to
increase the share of employees in its capital to reach 10% by
2030.
In 2023, more than 95,000 employees benefitted
from 8 free shares. Among them, nearly 38,000 also subscribed to
shares at a preferential price of 26.28 euros per share. In total,
with nearly 2.1 million additional shares held by employees, this
second Renaulution Shareplan operation represented 0.7% of Renault
Group's capital.
Employees hold 5.07% of the capital at December
31, 2023.
Dividend
The proposed dividend for the financial year
2023 is €1.85 per share, up €1.60 per share versus
last year. The payout ratio is 17.5% of Group consolidated net
income – parent share13. It would be paid fully in cash and will be
submitted for approval at the Annual General Meeting on May 16,
2024. The ex-dividend date is scheduled on May 22, 2024 and
the payment date on May 24, 2024.
As announced during its Capital Market Day, the
dividend policy will gradually grow, in a disciplined manner, up to
35% payout ratio of Group consolidated net income – parent share,
in the mid-term. To do so, the Group must achieve its first
priority: return to an “investment grade” rating.
2024 Outlook
2024 product offensive and the acceleration of
cost reduction will be the drivers of operational performance and
strong cash generation:
- Product
launches: 2024 will be a historic year with 10 new vehicles
launches14
- Renault
brand: 7 new vehicles launches15:
- 2 new all-electric vehicles with Scenic E-TECH electric,
offering more than 600 km of WLTP range, and Renault 5 E-TECH
electric – all-electric pop icon
- 2 new hybrid vehicles in Europe, including Rafale E-TECH
- New Renault Master (ICE and all-electric versions)
- 2 new vehicles in markets outside Europe: Kardian and a Renault
Korea Motors vehicle
- In 2024, the Renault brand will continue to roll out the
"International Game Plan 2027". After Brazil and Turkey in 2023,
this year will be highlighted by the deployment of the plan in
Morocco and South Korea
- Dacia:
- New Dacia Duster on sale starting March 2024
- The new 100%
electric Dacia Spring, with an all-new design, both exterior and
interior, on sale in summer 2024
- The brand will also
reveal Bigster, a C-segment vehicle, at the end of 2024
-
Alpine:
- Alpine will
continue its international deployment with its arrival in Turkey in
H1 2024
- 2024 will mark
Alpine's shift into electric. The brand will present its electric
hot hatch, the Alpine A290, its first all-electric vehicle
- Faster cost
reductions and time-to-market:
- Reduction of
production costs per vehicle by 30% for thermal vehicles and 50%
for electric vehicles between now and 2027, thanks to the
Industrial Metaverse.
- This production
cost reduction will also fuel Ampere target to reduce variable
costs between the 1st and the 2nd generation of C-segment electric
vehicles by 40% by 2027+, following a continuous trajectory.
In 2024, European and Latin America automotive
markets are expected to be stable, and Eurasia is expected to
decline by 11%.
In this context, Renault
Group is aiming to achieve in 2024:
- A Group
operating margin ≥7.5%
- A free cash
flow ≥€2.5bn
Renault Group's consolidated results
In € million |
2022 1 |
2023 |
Change |
Group revenue |
46,328 |
52,376 |
+13.1% |
Operating margin |
2,570 |
4,117 |
+1,547 |
% of revenue |
5.5% |
7.9% |
+2.4 pts |
Other operating income and expenses |
-379 |
-1,632 |
-1,253 |
Operating income |
2,191 |
2,485 |
+294 |
Net financial income and expenses |
-486 |
-527 |
-41 |
Contribution from associated companies |
423 |
880 |
+457 |
of which Nissan |
526 |
797 |
+271 |
Current and deferred taxes |
-524 |
-523 |
+1 |
Net income |
-716 |
2,315 |
+3,031 |
of which continuing operations |
1,604 |
2,315 |
+711 |
of which discontinued operations |
-2,320 |
- |
+2,320 |
Net income, Group share |
-354 |
2,198 |
+2,552 |
Free cash flow |
2,119 |
3,024 |
+905 |
Automotive Net Financial Position |
+549at
2022-12-31 |
+3,724at 2023-12-31 |
+3,175 |
1- The 2022 figures include restatements following the first
application of IFRS 17 "Insurance contracts" in 2023.
Horse accounting impacts
In € million |
2022 1 |
2023 |
Operating margin |
2,570 |
4,117 |
% of revenue |
5.5% |
7.9% |
Horse cessation of amortization impact (IFRS
5) |
87 |
482 |
Operating margin excluding IFRS 5 Horse
impact |
2,483 |
3,635 |
% of revenue |
5.4% |
6.9% |
1- The 2022 figures include restatements following the first
application of IFRS 17 "Insurance contracts" in 2023.
No impact from Horse on free cash flow for 2022 and 2023.
Additional information
The consolidated financial statements of Renault
Group and the company accounts of Renault SA at December 31,
2023 were approved by the Board of Directors on February 14,
2024.
The Group’s statutory auditors have conducted an
audit of these financial statements and their report will be issued
shortly.
The earnings report, with a complete analysis of
2023 financial results including condensed financial accounts, is
available at www.renaultgroup.com in the "Finance" section.
2023 Financial Results Conference
Link to follow the conference at 8am CET on February 15th, and
available in replay: events.renaultgroup.com/en/
About Renault Group
Renault Group is at the forefront of a mobility
that is reinventing itself. Strengthened by its alliance with
Nissan and Mitsubishi Motors, and its unique expertise in
electrification, Renault Group comprises 4 complementary brands -
Renault, Dacia, Alpine and Mobilize - offering sustainable and
innovative mobility solutions to its customers. Established in more
than 130 countries, the Group has sold more than 2,235 million
vehicles in 2023. It employs nearly 106,000 people who embody its
Purpose every day, so that mobility brings people closer.
Ready to pursue challenges both on the road and
in competition, Renault Group is committed to an ambitious
transformation that will generate value. This is centred on the
development of new technologies and services, and a new range of
even more competitive, balanced, and electrified vehicles. In line
with environmental challenges, the Group’s ambition is to achieve
carbon neutrality in Europe by 2040.
https://www.renaultgroup.com/en/
RENAULT
GROUP INVESTORRELATIONS |
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Philippine de
Schonen+33 6 13 45 68
39philippine.de-schonen@renault.com |
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RENAULT
GROUP PRESS RELATIONS
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Rie Yamane+33 6 03
16 35 20rie.yamane@renault.com |
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1 The 2022 figures include restatements
following the first application of IFRS 17 "Insurance contracts" in
2023.2 10 new vehicles launches in 2024 without Renault Duster
(outside Europe) and Captur facelift.
3 ACEA European Scope. 4 PC+LCV: passenger car +
light commercial vehicle.5 Excluding pickup trucks. 6
Austria, Belgium, Croatia, Czech Republic, Denmark, Finland,
France, Germany, Hungary, Italy, Luxembourg, Netherlands, Norway,
Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden,
Switzerland, United Kingdom.7 France, Germany, Spain, Italy, United
Kingdom.8 Includes EV, Hybrid (HEV) and Plug-In Hybrid (PHEV),
excludes Mild-Hybrid (MHEV).
9 The official results will be released by the European
Commission in the coming months. CAFE = Corporate Average Fuel
Economy.
10 In order to analyze the variation in
consolidated revenue at constant exchange rates, Renault Group
recalculates the revenue for the current period by applying average
exchange rates of the previous period.11 The 2022 figures include
restatements following the first application of IFRS 17 "Insurance
contracts" in 2023.12 Free cash flow: cash flow after interest and
taxes (excluding dividends received from listed companies) less
tangible and intangible investments net of disposals +/- change in
working capital requirement.13 Excluding €880m of capital loss on
Nissan shares disposal.
14 10 new vehicles launches in 2024 without Renault Duster
(outside Europe) and Captur facelift. 15 7 new vehicles launches
for Renault Brand in 2024 without Renault Duster (outside Europe)
and Captur facelift.
- 20240214_Renault Group_Press Release_2023 results
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