Thierry Piéton, Chief Financial Officer of Renault Group: “Renault Group is off to a solid start in the year with a 30% increase in the first quarter revenue, supported by strong pricing and product mix effects. The Group pursues its commercial policy focused on value – by optimizing its pricing policy and commercial discounts, and focusing on the most profitable channels. It also benefits from the first successes of its renewed line-up with Arkana, Megane E-TECH Electric and Austral for the Renault brand and Dacia Jogger. The strong orderbook at the end of March and all forthcoming launches will keep supporting the Group’s commercial activity.”
COMMERCIAL RESULTS: FIRST QUARTER HIGHLIGHTS
Renault Group recorded 535,000 sales in 2023 Q1, up 14.1% compared to 2022 Q1. In Europe, Group sales increased by 27.3% in a market up 16.2%.
Renault Group benefited from the successes of the renewal of its range with, for the Renault brand, Arkana, Megane E-TECH Electric and Austral, and for the Dacia brand, Jogger. The Group continued to concentrate on the most profitable channels: retail sales accounted for 68% in the five main European countries4.
In Europe, Renault brand sales amounted to nearly 230,000 vehicles, up nearly 20% in 2023 Q1.
The brand continues to successfully develop its sales in value-creating segments:
- It maintains its leading position in the electrified5 market with a 24% increase in sales.
- In the C-segment, Renault recorded growth of more than 51% thanks to the success of its new models: Arkana, Megane E-TECH Electric and Austral.
- More than one out of two sales in our five main countries in Europe3 in the retail channel.
Dacia recorded sales up 41% to nearly 150,000 units in Europe thanks to the product momentum and new brand identity:
- In 2023 Q1, in Europe, Dacia Sandero ranked first in retail sales and Dacia Duster remains on the podium of SUVs sold to retail customers.
- Dacia Spring continued its momentum and recorded 14,500 units sold this quarter. It was again on the podium of retail electric vehicles in Europe.
- The brand continues to expand its electrified product offering with Jogger Hybrid 140, the first hybrid in the range and the most affordable hybrid family car on the market.
FIRST QUARTER REVENU
Reminder relative to the impacts of the disposal of Russian automotive activities on financial statements: as a result of the 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) announced on May 16th, 2022, the Russian activities were deconsolidated in Renault Group’s financial statements and treated as discontinued operations under IFRS 5 with retroactive effect from January 1st, 2022.
The revenue for 2023 Q1 therefore no longer includes the Russian industrial activities. Group revenue for 2022 Q1 has been adjusted in line with this new scope of activity (impacts: AVTOVAZ -€527 million and Renault Russia -€367 million).
Group revenue for 2023 Q1 amounted to €11.5 billion, up 29.9% compared to 2022 Q1.
At constant scope and exchange rates6, Group revenue was up 33.5%.
Automotive revenue reached €10.5 billion, up 29.7% compared to 2022 Q1. This strong improvement is mainly explained by the following:
- A strong volume effect of +18.6 points, essentially due to the increase in production compared to 2022 Q1, thanks to the commercial success of new vehicles coupled with an improved availability of EC components. This volume effect is higher than the growth in registrations due to a lower destocking of the independent dealer network in 2023 Q1 compared to 2022 Q1, when EC crisis was at peak.
- A robust price effect of +9.4 points, reflecting the continuation of the commercial policy focused on value, price increases to offset cost and currency inflation, and an optimization of commercial discounts.
- An increasing product mix effect of +5.2 points mainly resulting from Megane E-TECH Electric and Austral which average revenue per unit is largely higher than Renault Group’s average.
- A geographic mix of +2.7 points benefiting from the strong performance of European sales.
- A positive impact of sales to partners of +0.9 points, mainly supported by a dynamic LCV market driving sales to Nissan, Renault Trucks and Mercedes-Benz as well as from the start of production of the ASX for Mitsubishi Motors.
These positive effects more than offset:
- A forex impact of -2.6 points, mainly related to the Argentinian Peso.
- An “Other” effect of -4.5 points, related to a decrease in the contribution of sales from the Renault Retail Group network following the disposals of branches, partially offset by the performance in the aftersales activity.
Mobility Services contributed €9 million to 2023 Q1 revenue compared to €8 million in 2022 Q1.
Mobilize Financial Services (formerly RCI Bank and Services) posted revenue of €974 million in 2023 Q1, up 32.2% compared to 2022 Q1 due to higher interest rates and to the increase of new contracts coupled with higher average amount financed.
Average performing assets (€49.4 billion) increased by 13% compared to 2022 Q1. This is supported by vehicle restocking in the dealerships and by a 17.4% increase in new financing for the retail business.
At March 31, 2023, total inventories (including the independent network) represented 580,000 vehicles:
- The Group is still facing logistics issues explaining the growth of Group inventories at 273,000 vehicles.
- The independent dealer inventories stood at 307,000 units in line with the orderbook which remains at record levels in absolute value.
2023 FY FINANCIAL OUTLOOK
Renault Group confirms its 2023 FY financial outlook with:
- Group operating margin superior or equal to 6%
- Automotive operational free cash flow superior or equal to €2 billion.
4 France, Italy, Germany, Spain and the United Kingdom.
5 Includes EV, Hybrid (HEV) and Plug-In Hybrid (PHEV), excludes Mld-Hybrid (MHEV).
6 In order to analyze the change in consolidated revenue at constant scope and exchange rates, Renault Group recalculates revenue for the current financial year by (applying the average exchange rates of the previous period and excluding significant changes in scope during the period.
RENAULT GROUP’S CONSOLIDATED REVENUE
1 2022 Q1 revenue adjusted to reflect the exit from Russia (excluding AVTOVAZ and Renault Russia, whose disposals were announced on May 16th, 2022).
RENAULT GROUP’S TOP 15 MARKETS AT THE END OF MARCH 2023
1 Sales excluding Twizy.
TOTAL RENAULT GROUP PC + LCV SALES BY BRAND
1 2022 volumes excluding Renault Russia and AVTOVAZ.
2 Mobilize, Eveasy, Jinbei & Huasong.