The French manufacturer will propose the payment of a dividend to its shareholders for the first time since 2019. OceanProd / stock.adobe.com
The automotive group arrived above its forecasts thanks in particular to price increases on its cars.
The Renault automotive group regained a foothold in 2022, offsetting sharply declining sales and its costly withdrawal from Russia with price increases, and thanks to the profitable Dacia. The French manufacturer’s turnover jumped by 11.4%, to 46.4 billion euros, and its operating margin doubled, to 2.6 billion euros and 5.6% of turnover , the manufacturer announced on Thursday.
«I think of early 2021, when we had lost 8 billion euros and not many people saw us rebound. I can say today that we succeeded“Launched the general manager of the group, Luca de Meo, during the presentation of these results slightly exceeding the forecasts, at the Renault headquarters in Boulogne-Billancourt. Renault has straightened its margins by selling its cars more expensive, limiting discounts, and clearly repositioning itself on the top of the range with its latest models, like the Arkana SUV or the electric Mégane, sold for 46,000 euros. The group’s sales have however been almost halved in four years.
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Rising prices
In a depressed auto market, Renault sales saw a fourth consecutive year of decline in 2022, plunging 5.9% last year, excluding Russia. The group has sold just over two million vehicles, a quarter of which under the Dacia brand. The factories have been resized and no longer have overcapacity, in particular via a global departure plan launched in 2021.
But after two years in the red, the manufacturer is approaching equilibrium: it recorded a net loss (group share) of 338 million euros in 2022, notably caused by its sale of the Russian manufacturer of Ladas, Avtovaz , decided after the outbreak of the war in Ukraine and which cost him 2.2 billion euros in accounting charges. “We are already on another planet“, continued Luca De Meo. “We have cut our break-even point in half».
Hybrid and electric sales, which are more profitable, now represent 39% of group registrations in Europe, compared to 4.5% in 2019. The group now intends to continue this momentum with the launch of 18 new models by 2025, including the Kangoo, the R5 or the electric Scénic. It also intends to repay by the end of 2023 the last billion of its state-guaranteed loan, granted in 2020 to get through the pandemic.
A “new energy”
For the first time since 2019, Renault management will propose the payment of a symbolic dividend, up to 0.25 euros per share. The idea is to return to a distribution rate of 35% of the net result “medium term“. But this will require that Renault, which is still far from the performance of other manufacturers, regain the favor of the rating agencies, specifies the group.
«The fundamentals of the group have been cleaned up in depth and we will not go back. The 2023 financial outlook and the return of a dividend are proof of this.said Luca de Meo. Production improved in the second half of 2022, affected however by shortages of electronic chips and heavy transport problems for new vehicles. The group’s order book in Europe thus remains at a “recordof 3.5 months of sales, as of December 31, 2022.
Counting on a stabilization of the price of raw materials, and still complicated logistics, Renault aims for 2023 an operating margin greater than or equal to 6% of turnover. The group has launched a hunt for partnerships (20 new ones since 2020) to emerge with its head held high (and without investing too much) from an electrifying but risky transition for the automobile industry: it will launch its electric cars on the stock market, cooperate with the Chinese Geely for its traditional engines, but also to accelerate with its premium brand Alpine.
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Internationally, the French group reviewed its relationship with its partner Nissan in early February. After 24 years of marriage and rumors of divorce, they announced a new alliance based on shareholdings “rebalanced» and new industrial projects, in electricity and in new countries. “2022 was a turning point, people at Renault have new energy now», concludes Luca De Meo.
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