I bring you more exciting insights from Renault's analyst conference ($RNO (-1,99%) ) with you:
CEO Luca de Meo opened the presentation with a consistently positive assessment of the company's performance and emphasized that Renault achieved record results for the third year in a row. The operating margin reached a new all-time high of 7.6 percent, equivalent to 4.3 billion euros. Free cash flow amounted to almost 3 billion euros, increasing the net cash position in the automotive sector to over 7 billion euros. Renault is thus one of the few manufacturers to have fully achieved its original forecasts.
De Meo presented the Renault Group's realigned brand strategy. Renault itself is focusing on innovation and electrification with a strong price-performance ratio. Alpine is evolving into a premium brand for affluent car enthusiasts, combining electric platforms with racing technology. Alpine's brand value has increased six-fold in recent years and sales have tripled. Mobilize focuses on financial services, energy and new forms of mobility, while Dacia as the third strongest retail brand in Europe continues to grow.
A total of 22 new models have been launched in the past three years, ten of which in 2024 alone. The Renault 5 and the Alpine 290 model were named Car of the Year, while Dacia also took a top spot.
De Meo spoke at length about the Renault Group's strategy. The Renault Twingo is to be launched on the market as an affordable electric car for less than 20,000 euros, supported by a strong Chinese supplier network. With Ampere and ACDC, Dacia is planning another small electric car for less than 18,000 euros, which will be developed in just 16 months. Renault is now the second largest manufacturer of hybrid vehicles in Europe with a market share of 20 percent.
The development of alternative combustion technologies with synthetic fuels, hydrogen and biofuels is being driven forward. The cooperation with Geely and Aramco is intended to reduce fixed costs and ensure the further development of combustion technology.
CFO Thierry Pieton then presented the financial results. Group turnover increased by 7.4 percent to 56.2 billion euros. In the automotive sector, growth amounted to 4.9 percent, while Mobilize Financial Services achieved particularly strong growth with a 35 percent increase in turnover to 5.6 billion euros. New registrations worldwide climbed to 2.3 million units, and Renault maintained its position as the best-selling French car brand. The share of electrified vehicles in total sales in Europe reached 33 percent, while hybrid vehicles increased by 47 percent.
Operating profit reached a new record of 4.3 billion euros, which corresponds to a margin of 7.6 percent. In the automotive segment, the operating margin was 5.9 percent, while Mobilize Financial Services remained particularly profitable with a return of almost 30 percent. The net cash position in the automotive segment reached a historic high of 7.1 billion euros. Renault plans to increase the dividend to 2.20 euros per share in 2025.
Luca de Meo spoke about the regulatory challenges, particularly in connection with the CAFE requirements from 2025. Renault plans to maximize the penetration of electric and hybrid vehicles while strategically adapting its internal combustion engine portfolio. The company anticipates a negative CAFE effect of around one percentage point on the operating margin, but is still aiming for a margin of over seven percent for the year as a whole. Free cash flow is again expected to exceed 2 billion euros.
The subsequent Q&A session focused on several topics.
Thomas Besson from Kepler wanted to know how Renault intends to master the CO₂ regulations without resorting to pooling with other manufacturers. Luca de Meo explained that the company is focusing on increased electrification and will develop small electric vehicles for the mass market more quickly. Thierry Pieton added that the new Koleos plays an important role in South Korea due to its low development costs and high profitability.
Pushkar Tendolkar from HSBC inquired about the impact of CAFE regulations, inventory levels and development times in China. Pieton confirmed that the one percentage point CAFE effect is to be compensated for by increased incentives for electric vehicles and a reduction in combustion engine volumes. The increase in inventories was mainly due to new product launches. De Meo explained that the shortened development times reduce costs by 30 percent and make Renault more flexible in the face of market changes.
Jose Asumendi from JPMorgan asked about potential savings and the effects of the partnership with Geely. Thierry Pieton emphasized that Renault benefits greatly from cooperations with suppliers and can achieve considerable savings through economies of scale. De Meo confirmed that Nissan and Mitsubishi continue to work closely with Renault, particularly on production in Spain.
Stuart Pearson from BNP asked about the competitiveness of the European car industry in the face of increasing investment from Chinese manufacturers. De Meo referred to the European Action Plan, which is based on three pillars: Boosting demand, strengthening European competitiveness and adapting the regulatory framework. Pieton predicted that profitability would remain stable over the course of the year.
In summary, Renault Group's management was optimistic for 2025, focusing on accelerating the introduction of affordable electric vehicles, a flexible combustion strategy and further optimization of cost structures. With new models, efficiency improvements and strategic partnerships, the company believes it is well positioned to continue its growth and hold its own against increasing competition from Asia.
I hope you enjoyed the summary!
