Renault predicts strong outlook as order books boom
Orders for new models such as the all-electric Megane e-tech helped boost automotive revenue last year, Renault said.
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 French manufacturer forecast a group operating margin at or above 6% in 2023, compared with 5.6% last year, it said. Renault will also reinstate paying a dividend for the first time in four years with a payout of 25 euro cents a share after getting traction on its turnaround plan.
“Renault Group’s fundamentals have been thoroughly cleaned up and there will be no turning back,” said CEO Luca de Meo.
Free cash flow is expected at or above €2bn, Renault said, compared with a record €2.1bn last year. The shares rose as much as 1.8% in early Paris trading, taking gains in the first few weeks of the year to 40%.
The automaker is emerging from a tumultuous twelve 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% in 2025 and above 10% by 2030. 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.
Group revenue during 2022 rose 11% to €41.7bn with operating income more than doubling to €2.2bn. Orders at the end of last year for Europe were equivalent to three-and-a-half months of sales, the company said.
