2022 first half outcomes – Renault Group upgrades its 2022 monetary outlook and accelerates its transformation

“Renault Group is resolutely pursuing its in-depth transformation and turnaround of its actions. These first half outcomes are a proof of this: regardless of all of the headwinds associated to the cease of the exercise in Russia, the semiconductor disaster and value inflation, the Group continues to enhance its working efficiency and is starting to profit from the success of latest launches.

Having greater than compensated for the lack of its Russian actions and persevering with its high-speed transformation, Renault Group is upgrading its 2022 full-year monetary outlook. Within the fall, new mid-term monetary outlook and the accelerated roll-out of Renaulution might be introduced throughout its Capital Market Day. All our energies are mobilized to rework Renault Group right into a aggressive, tech and sustainable participant.”  stated Luca de Meo, CEO of Renault Group

• • 2022 H1¹ outcomes, a brand new step within the Group’s turnaround: vital enchancment in profitability, robust free money move era and strengthening of the monetary construction
    • Group income at €21.1 billion, steady in comparison with 2021 H1, regardless of 11.9% decline within the Group’s world gross sales over the interval, in a nonetheless disrupted market
    • Group working margin at €988 million (4.7% of income): up €556 million and +2.6 factors in comparison with 2021 H1
    • Automotive working margin at €420 million (2.1% of Automotive income): +€565 million (+2.8 factors) regardless of a lower of 136,000 autos in comparison with 2021 H1
    • Web revenue from persevering with operations at €657 million, up €458 million in comparison with 2021 H1
    • Web revenue from discontinued operations at -€2.3 billion because of the non-cash adjustment associated to the disposal of the Russian industrial actions introduced on Could 16, 2022
    • Automotive operational free money move at +€956 million (together with a €800 million dividend from Mobilize Monetary Companies) up €1,470 million in comparison with 2021 H1
    • Automotive internet debt lowered by €1.2 billion versus December 31, 2021, of which €522 million associated to the sale of actions in Russia: -€426 million

• Success of latest autos and acceleration of the technique targeted on worth
  • Group order e book in Europe at 4.1 months of gross sales, supported by the success of latest launches:
    • Renault Arkana recorded greater than 100,000 orders since its launch, 60% of that are in E-TECH model and 60% on the retail channel
    • Renault Megane E-TECH Electrical is experiencing a promising launch with already greater than 25,000 orders, 75% of that are on the best variations and 80% on essentially the most highly effective engines. The primary autos arrived in French dealerships mid-Could; its launch in European international locations is underway and can proceed till September
    • Dacia Sandero stays the best-selling car to retail clients in Europe
    • With greater than 30,000 orders recorded in 2022 H1, Dacia Spring 100% electrical is
      no 1 electrical car bought to retail clients in France
    • Dacia Jogger guarantees to be a brand new success with greater than 50,000 orders in 6 months and a mixture of greater than 60% on high-end variations in Europe
    • Alpine doubled its orders versus 2021 H1 because of the success of its new A110 vary
  • Product combine impact of +3.3 factors on the Automotive income versus 2021 H1 because of new launches (Arkana, Jogger and Megane E-TECH Electrical)
  • Efficiency of E-TECH gross sales² that proceed to develop, representing 36% of the registrations of Renault model passenger automobiles in Europe (vs. 26% in 2021 H1)
  • Acceleration of the pricing impact, which reached +7.4 factors of the Automotive income versus 2021 H1. This impact will proceed in H2 because of the Renaulution business coverage
  • Influence of uncooked supplies value will increase and value inflation greater than offset by the advantages of this new business coverage coupled with the Group’s productiveness
• 2022 FY monetary outlook upgraded

Renault Group is upgrading its 2022 FY monetary outlook with:

• a Group working margin superior to five% versus round 3% beforehand
• an Automotive operational free money move superior to €1.5 billion versus constructive beforehand

The Group confirms an influence of the semiconductor disaster estimated at 300,000 autos in 2022.

• Throughout its Capital Market Day within the fall, the Group will current an replace of its Renaulution
  mid-term monetary outlook and its technique positioning itself as a aggressive, tech and sustainable reference participant

Boulogne-Billancourt, July 29, 2022 –

On Could 16, 2022, the Board of Administrators of Renault Group unanimously permitted the signing of agreements to promote 100% of Renault Group’s shares in Renault Russia to the Metropolis of Moscow and its 67.69% stake in AVTOVAZ to NAMI (the Central Institute for Analysis and Improvement of Cars and Engines). As well as, the settlement supplies for a name choice for Renault Group to purchase again its stake in AVTOVAZ, exercisable at sure durations over the subsequent 6 years.

On account of these agreements:

• The Russian actions have been deconsolidated in Renault Group’s 2022 H1 monetary statements and handled as discontinued operations beneath IFRS 5 with retroactive impact from January 1^st, 2022.
• The monetary aggregates of continuous operations for 2022 H1 subsequently not embrace the Russian industrial actions and the yr 2021 has been adjusted according to this new scope of exercise.
• The results of discontinued operations represents a lack of -€2.3 billion in 2022 H1, primarily because of the impairment of the property, plant and gear, intangible belongings and goodwill of AVTOVAZ and Renault Russia in addition to the impairment of particular belongings held by the opposite entities of the Group and the results of disposals on the Russian entities bought.
• The Automotive internet debt was lowered by €0.5 billion from -€1.6 billion to -€1.1 billion at December 31, 2021.

Group income reached €21,121 million, up 0.3% in comparison with 2021 H1. At fixed alternate charges³, it elevated by 1.1% (adverse alternate price impact primarily associated to the Turkish lira devaluation).

Automotive income stood at €19,574 million, up 0.3% in comparison with 2021 H1.

The value impact, constructive by +7.4 factors, mirrored the continuation of our business coverage, launched in 2020 Q3, targeted on worth over quantity in addition to value will increase to offset price inflation, and an optimization of business reductions.  It amounted to +8.4 factors in 2022 Q2 after +5.6 factors in Q1.

The success of Arkana, launched in 2021 Q2, in addition to these of Jogger and Megane E-TECH Electrical in H1, emphasised the renewal of Renault model within the C section and contributed to generate a constructive product combine impact of +3.3 factors.

These two results make it doable to compensate for the lack of quantity of -5.2 factors, which is principally defined by the decline of the European automotive market in reference to the scarcity of semiconductors.

The influence of gross sales to companions, adverse by -1.8 factors, is principally because of the lower in manufacturing of diesel engines and autos for our companions (finish of contracts of Grasp for Opel and Site visitors for Fiat on the finish of 2021).

The “Different” impact, of -2.1 factors, is because of a lower within the contribution of gross sales from the Renault Retail Group (RRG) community following the disposals of branches and partially offset by the aftersales efficiency.

The Group recorded a constructive working margin of €988 million (4.7% of income) versus €432 million in 2021 H1(+2.6 factors).

Automotive operating margin improved by €565 million to €420 million (2.1% of Automotive income, or +2.8 factors versus 2021 H1).

The constructive combine/value/enrichment impact of +€1,548 million illustrates the success of the business coverage targeted on worth over quantity. This coverage greater than offset the adverse quantity impact of
-€270 million and the rise in prices (uncooked supplies, buying, guarantee and manufacturing & logistics prices) which amounted to -€647 million. The latter is principally defined by the sharp enhance in uncooked supplies costs (-€797 million), partially offset by the efficiency of buying (+€167 million).

The contribution of Gross sales Financing of Mobilize Monetary Companies (previously RCI Financial institution and Companies) to the Group’s working margin reached €582 million, down €11 million in comparison with 2021 H1, primarily because of the normalization of the extent of danger and a median performing belongings (€43.7 billion) lowering according to the Group’s technique to optimize car shares within the community.

The retail enterprise recorded a 2.3% enhance in new financings. The 14.8% enhance within the common quantity financed for brand new contracts offset the ten.9% lower of the variety of new financing contracts because of the decline of the Group’s registrations.

In 2022 H1, Mobilize Monetary Companies efficiently accomplished its first inexperienced bond situation for an quantity of €500 million with a 5-year maturity. The proceeds of this situation might be used to finance electrical autos and charging infrastructure. This situation was cashed in early July and is subsequently not included within the monetary liabilities as at June 30, 2022.

Different working revenue and bills have been adverse at -€49 million (versus -€70 million in 2021 H1) and have been notably defined by restructuring provisions of -€134 million and asset disposals (+€56 million) primarily associated to the sale of a number of business subsidiaries of the Group and branches of RRG.

After taking into consideration different working revenue and bills, the Group’s working revenue stood at €939 million versus €362 million in 2021 H1.

Web monetary revenue and bills amounted to -€236 million in comparison with -€138 million in 2021 H1. This deterioration may be defined by the influence of hyperinflation in Argentina, the price of debt remaining steady.

The contribution of related corporations amounted to €214 million, up by €54 million in contrast with the primary half of 2021. This contains €325 million associated to Nissan’s contribution, which greater than offset €111 million adverse contribution from different associates, notably in reference to the impairment of Renault Nissan Financial institution shares in Russia.

Present and deferred taxes represented a cost of -€260 million in comparison with a cost of -€185 million in 2021 H1 in relation with the development in revenue.

Web revenue from persevering with operations was €657 million, up by €458 million in comparison with 2021 H1.

Web revenue from discontinued operations amounted to -€2.3 billion because of the non-cash adjustment associated to the disposals of the Russian industrial actions.

Thus, internet revenue was -€1,666 million and internet revenue, Group share, was -€1,357 million (or -€4.98 per share).

The money move of the Automotive enterprise, excluding restructuring bills, included €800 million of Mobilize Monetary Companies dividend and reached €2.6 billion, up €0.9 billion in comparison with 2021 H1. This money move largely lined the tangible and intangible investments earlier than asset disposals which amounted to €1.2 billion (€1.1 billion internet of disposals).

Excluding the influence of asset disposals, the Group’s internet CAPEX and R&D price was 8.0% of income in comparison with 9.1% in 2021 H1. It amounted to 7.5% together with asset disposals.

Automotive operational free money move⁴ was constructive at +€956 million taking into consideration -€278 million of restructuring bills and a adverse change in working capital requirement of -€275 million.

Automotive internet debt amounted to -€426 million at June 30, 2022 in comparison with -€1.6 billion at December 31, 2021 (-€1.1 billion adjusted from the operations of AVTOVAZ and Renault Russia), or a lower of €1.2 billion.

In 2022 H1, Renault Group made an early reimbursement of €1 billion of the mortgage of a banking pool benefiting from the assure of the French State (PGE) and can reimbursed, in H2, €1 billion for the necessary annual reimbursement.  As introduced, your complete mortgage might be reimbursed by the tip of 2023 on the newest.

As a part of its Shelf Registration program, Renault SA launched on June 24, 2022 a bond situation on the Japanese marketplace for a complete quantity of 80.7 billion yen (or €561 million) with a price of three.5% and a
3-year maturity. This situation was cashed in on July 1^st , 2022 and is subsequently not included within the monetary liabilities as at June 30, 2022.

As of June 30, 2022, whole inventories of latest autos (together with the impartial seller community) represented 348,000 autos in comparison with 427,000 (together with c. 12,000 autos in Russia) on the finish of June 2021, or 60 days of gross sales.

Outlook & Technique

Renault Group is upgrading its 2022 FY monetary outlook with:

• a Group working margin superior to five%, versus round 3% beforehand
• an Automotive operational free money move superior to €1.5 billion, versus constructive beforehand

The Group confirms an influence of the semiconductor disaster estimated at 300,000 autos in 2022.

Throughout its Capital Market Day within the fall, Renault Group will current an replace of its Renaulution
mid-term monetary outlook and its technique positioning itself as a aggressive, tech and sustainable reference participant.

Renault Group’s consolidated outcomes

Changes of AVTOVAZ and Renault Russia actions in 2021

Further data

The condensed half-year consolidated monetary statements of Renault Group at June 30, 2022 have been reviewed by the Board of Administrators on July 28, 2022.

The Group’s statutory auditors have performed a restricted assessment of those monetary statements and their half-year report might be issued shortly.

The monetary report, with a whole evaluation of the monetary leads to the primary half of 2022, is out there at www.renaultgroup.com within the “Finance” part.

SOURCE: Renault Group