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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Renault SA | EU:RNO | Euronext | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.41 | 0.86% | 48.28 | 48.10 | 48.82 | 48.99 | 47.60 | 47.88 | 597,819 | 02:02:06 |
Press ReleaseFebruary 14, 2024 |
20240214_Renault Group_Press Release_2023 results
Historical 2023 resultsStrong improvement of all financials
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 |
“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
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%.
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.
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:
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:
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:
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 | Philippine de Schonen+33 6 13 45 68 39philippine.de-schonen@renault.com | |||
RENAULT GROUP PRESS RELATIONS | Rie Yamane+33 6 03 16 35 20rie.yamane@renault.com |
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.
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