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Renault doubled its profitability last year and resumed dividend. Dacia Sandero remained the best-selling vehicle to retail customers in Europe since 2017

Autor: Financial Market
3 min

Renault Group reported better-than-expected financial results for 2022 and exceeded FY financial outlook (upgraded in July 2022). The company showed significant improvement in profitability (5.6% operating margin vs a guidance above 5%) and up €1.4bn vs 20211 (+2.8 pts).

In May 2022, the Board of Directors of Renault Group unanimously approved the signing of agreements to sell 100% of Renault Group’s shares in Renault Russia to the City of Moscow and its 67.69% stake in AVTOVAZ to NAMI (the Central Institute for Research and Development of Automobiles and Engines).

In addition, the agreement provides for a call option for Renault Group to buy back its stake in AVTOVAZ, exercisable at certain periods over the next 6 years.

Financial highlights for FY 2022

• Group revenue at €46.4bn: +11.4% vs 2021
• Group operating margin at €2.6bn (5.6% of revenue): up €1.4bn vs 2021 (+2.8 pts), reaching 6.4% in 2022 H2 (+2.9 pts vs 2021 H2)
• Automotive operating margin at €1.4bn (3.3% of revenue): up €1.4bn vs 2021 (+3.3 pts), reaching 4.2% in 2022 H2 (+3.5 pts vs 2021 H2)
• Record Automotive operating margin per vehicle
• Net income from continuing operations at €1.6bn, up €1.1bn compared to 2021
• Net income from discontinued operations at -€2.3bn due to the non-cash adjustment related to the disposal of the Russian industrial activities announced on May 16, 2022
• Record Automotive operational free cash flow at €2.1bn (including a €800m dividend from Mobilize Financial Services): up €1.2bn vs 2021
• Automotive net cash: back to positive at +€549m at December 31, 2022 compared to -€1.1bnat December 31, 2021, ie an improvement of €1.6bn

Orderbook at record levels and success of new vehicles
• Group orderbook in Europe at record levels: 3.5 months of sales at the end of the year
• Sales mix to retail customers in the 5 main European countries (France, Germany, Spain, Italy, UK): 67% (+9 pts vs 2021, +15 pts vs 2019)
• Growing performance of E-TECH3 sales, representing 39% of Renault brand passenger cars sales in Europe (+9 pts vs 2021). Renault is the 3rd brand on pure EV market and 2nd brand on full-hybrid market in Europe
• Success of models: – Renault Arkana recorded 86,000 sales in more than 50 countries in 2022. In Europe, 65% of sales are in E-TECH version, 74% on the highest versions and 56% on the retail channel; – Renault Megane E-TECH Electric reached over 33,000 sales in 2022, since its launch at the end of 2022 Q2. It was number 1 EV in France in 2022 H2.

As of today, 49,000 orders have been recorded since its launch with more than 70% of these on the highest versions and more than 80% on the most powerful engines; – Dacia Sandero, with 229,500 sales, remained the best-selling vehicle to retail customers in Europe since 2017
– Launched mid-2021, Dacia Spring 100% electric recorded 48,900 sales, up 75% vs 2021 and was number 3 EV sold to retail customers in Europe
– Dacia Jogger recorded almost 57,000 sales and was number 2 of C-segment (ex. SUV) sold to retail customers in Europe
– Alpine reached a record level of sales, up 33% versus 2021

Net income from continuing operations was €1,620 million, up €1,071 million compared to 2021. Net income from continuing operations, Group share, was €1,650 million (or €6.07 per share). 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.

Thus, net income was -€700 million and net income, Group share, was -€338 million (or -€1.24 per share).

2023 FY financial outlook
In a still challenging environment, the Group is aiming to improve its performance in 2023 with:
• a Group operating margin superior or equal to 6%
• an Automotive operationalfree cash flow superior or equal to €2bn

The proposed dividend for the financial year 2022 is €0.25 per share. It would be paid fully in cash and will be submitted for approval at the Annual General Meeting on May 11, 2023. The ex-dividend date is scheduled on May 17, 2023 and the payment date on May 19, 2023.

As announced during its Capital Market Day, the dividend policy will gradually grow, 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.