Renault Group last year reported losses of 700 million euros globally, mainly due to the disposal of the Russian business, while the company’s net profit, excluding the Russian business, reached 1.6 billion euros, with 1, 1 billion above the level of 2021. The group’s turnover is 46.4 billion euros, up 11.4% compared to 2021, writes News.ro.
The company remained profitable
“The group’s turnover reaches 46.4 billion euros: +11.4% compared to 2021. The Group’s operating margin amounts to 2.6 billion euros (5.6% of the turnover): increasing by 1.4 billion euros compared to 2021 (+2.8 percentage points). The margin amounted to 6.4% in the second semester of 2022 (+2.9 percentage points compared to the second semester of 2021)”, the group says in a statement.
Renault Group is present in over 130 countries and has over 111,000 employees. The group sold 2.1 million vehicles in 2022. The operating margin of the Automobile perimeter amounted to 1.4 billion euros (3.3% of turnover), up by 1.4 billion euros compared to 2021 (+3.3 percentage points). It rises to 4.2% in the second semester of 2022 (+3.5 percentage points compared to the level reached in the second semester of 2021).
“The turnover of the Group reaches 46.391 billion euros, up by 11.4% compared to 2021. At constant exchange rates, the turnover is up by 12.4% (negative effect of -1 point of exchange rates). The turnover of the Automobile perimeter amounts to 43.121 million euros, up by 11.4% compared to 2021. At constant exchange rates, the turnover is up by 12.6% (negative effect of -1 .2 points of the exchange rates, mainly related to the devaluation of the Turkish Lira and the Argentine Peso)”, the group says.
The financial result stands at -486 million euros, compared to -295 million euros in 2021. This degradation is mainly explained by the accounting impact of hyperinflation in Argentina, despite the decrease in interest rates applied to net debt.
The contribution of the associated companies amounts to 423 million euros, compared to 515 million euros in 2021. It includes 526 million euros related to the contribution of Nissan, which fully compensates the negative contribution of the other associated companies (-103 million euros) related in mainly by the depreciation of Renault Nissan Bank shares in Russia.
The group records a positive operating margin of 2.595 billion euros (5.6% of turnover) against 1.153 billion euros (2.8% of turnover) in 2021 (+1.442 billion euros and +2.8 points). It increased to 6.4% in the second semester of 2022 compared to 4.7% in the first semester.
The operating margin of the Automobile perimeter amounted to 1.402 billion euros (3.3% of the turnover of the Automobile perimeter) compared to -3 million euros in 2021, an increase of +3.3 percentage points.
“The net result of continuing activities amounts to 1.620 billion euros, an increase of 1.071 billion euros compared to 2021. The net result of continuing activities, part of the group, is 1.650 billion euros (equivalent to 6.07 euros per share ). The net result of abandoned activities amounts to -2.32 billion euros as a result of the adjustment charge related to the disposal of industrial activities in Russia. Thus, the net result amounts to -700 million euros and the net result, part of the group, to -338 million euros (equivalent to -1.24 euros per share)”, reveals the group’s report.
Also, the group’s order book in Europe reached record levels of 3.5 months of sales at the end of the year.
Renault Arkana recorded 86,000 units sold in more than 50 countries in 2022. In Europe, 65% of sales correspond to the E-TECH version, 74% are the top of the range version and 56% are sold to individuals.
Launched at the end of the second quarter of 2022, the Renault Megane E-TECH Electric has already been sold in over 33,000 units. In the second half of last year, it was the best-selling electric model in France. Renault Megane E-TECH Electric registers more than 49,000 orders since its launch, of which more than 70% for top-of-the-range versions and more than 80% for the most powerful engines.
Dacia Sandero remains, since 2017, the best-selling model to individuals in Europe, with 229,500 units sold last year.
Launched in mid-2021, Dacia Spring recorded a 75% increase in sales compared to 2021, with 48,900 units sold. Dacia Spring ranks third in the ranking of the most sold electric vehicles to private customers in Europe.
Dacia Jogger registers over 57,000 units sold. The family model of the Dacia brand ranks second in sales of C-segment vehicles (excluding SUV models) to individuals in the European market.
Alpine shows a record level of sales, increasing by 33% compared to 2021.
In a context that remains difficult, the group aims to increase its performance in 2023 with an operating margin of the superior group or equal to 6% and an operational free cash-flow of the Automobile perimeter superior to or equal to 2 billion euros.
The impact of the divestiture of the automotive activities in Russia on the financial situation
In May 2022, the Renault Group’s Board of Directors unanimously approved the signing of the agreements regarding the transfer of 100% of the shares held by Renault Group in the Renault Russia subsidiary to the Moscow City Hall and the transfer of its 67.69% participation in AVTOVAZ to NAMI ( Central Institute for Research and Development of Automobiles and Engines). The agreement provides for an option for Renault Group to buy back its participation in AVTOVAZ, which can be exercised at certain times during the next 6 years.
As a result of these agreements, the activities in Russia were no longer consolidated in the 2022 annual accounts of the Renault Group and were treated as discontinued activities in the application of IFRS 5, with retroactive effect on January 1, 2022. The financial aggregates of the continued activities in 2022 do not they also include the industrial activities in Russia and the situation of 2021 was restated in coherence with this new scope of activity. The result of abandoned activities represents a loss of 2.3 billion euros in 2022, mainly corresponding to the depreciation of tangible, intangible and goodwill assets of AVTOVAZ and Renault Russia as well as specific assets owned by other entities of the Group, and the result of the assignment on entities Russian surrendered. The net debt of the Automobile perimeter was restated by 0.5 billion euros, thus going from -1.6 billion euros to -1.1 billion euros on December 31, 2021.
As of December 31, 2022, total new vehicle inventories (including the independent dealer network) were 480,000 vehicles, compared to 336,000 at the end of December 2021. This increase is explained by higher independent dealer inventories, mainly due to logistical strains of at the end of the year. This stock level must be correlated with the record level of registered orders.
In 2022, Renault Group made an early repayment of 1 billion euros and returned 1 billion euros for the mandatory annual repayment of the loan to a banking pool benefiting from the guarantee of the French state (PGE). As announced, the entire loan will be repaid by the end of 2023 at the latest.
The liquidity reserve at the end of 2022 was at a high level of 17.7 billion euros, up by 1 billion euros compared to December 31, 2021.
As announced during Capital Market Day, on November 8, 2022, Renault Group is willing to collaborate in the effort to create value with stakeholders through a shareholding plan dedicated to employees and by reintroducing dividends.
Renault Group has started taking measures to increase the share of employees in its capital, with the objective of reaching 10% by 2030.
More than 95,000 employees benefited from 6 free shares each. Of these, over 40,000 subscribed to other shares at a preferential price of 22.02 euros per share.
In total, with almost 2.7 million additional shares held by employees, the Renaulution Shareplan operation represents 0.9% of Renault Group’s capital, and employees hold approximately 4.7% of the capital after this operation.
The proposed dividends for the 2022 financial year are 0.25 euros per share. These would be paid in full in cash and will be subject to approval during the Annual General Meeting on May 11, 2023. The ex-dividend date is scheduled for May 17, 2023, and the payment date for May 19, 2023.
As announced during the Capital Market Day, the level of distribution will increase in the medium term, progressively, up to 35% of the net result – part of the Group. To do this, the Group will need to achieve its first priority, which is to return to an investment grade financial rating.
