Renault Group continued profitability in the first half of 2015

“Thanks to a stronger than forecasted recovery in a European market, and despite a more adverse environment in our main emerging markets, Groupe Renault half-year results marked a further step towards “Drive the change” plan targets.

The successful line-up renewal and expansion, European momentum and disciplined execution put the Group in a favourable position to reach its revenue growth and operating margin targets”, said Carlos Ghosn, Chairman and Chief Executive Officer of Renault.

In H1 2015, Group revenues came to €22,197 million (RM93,164 million), up 12.0% from H1 2014.

Automotive revenues amounted to €21,065 million, up 12.4% due to increased Group’s brands volumes and sales to partners. The euro’s drop against a basket of currencies (Korean won, British pound, etc.) had a positive impact. The price effect was also positive, primarily due to higher prices decided in late 2014 in emerging markets in order to offset currency depreciations (particularly in Russia and Brazil).

The Group’s operating profit amounted to €1,069 million (RM4,487 million) (+47%), compared to €729 million (RM3,059 million) in H1 2014, representing 4.8% of revenues (3.7% in H1 2014).

The Automotive operating profit was up €308 million (RM1,293 million) (+89%) to €656 million (RM2,753 million), or 3.1% of revenues. This performance can be explained by increased activity and reduced costs. The currency impact was positive in the first half; on the other hand, the mix/price/enhancement effect was negative.

The contribution of Sales Financing to the Group’s operating profit was €413 million (RM1,733 million), compared to €381 million (RM1,599 million) in H1 2014. This increase was due in particular to the rising contribution of services. The cost of risk improved to 0.31% of the average performing loans outstanding compared to 0.47% in H1 2014.

Other Operating Income and Expenses Items were negative at €116 million (RM487 million), primarily related to restructuring costs related to the on-going implementation of the competitiveness agreement in France (-€265 million [-RM1,112 million] in H1 2014).

The Group’s operating income came to €953 million (RM3,999 million)  (+105%), compared to €464 million (RM1,947 million) in H1 2014. This improvement is due to the increase in the operating profit and the €149 million (RM625 million) reduction in other expenses.

The contribution of associated companies, mainly Nissan, came to €912 million (RM3,828 million), compared to €725 million (RM3,043 million) in H1 2014, including a €70 million (RM294 million) negative contribution by AVTOVAZ.

Net income came to €1,469 million (RM6,166 million) (+83%), and Group share totalled €1,396 million (RM5,859 million) (€5.12 [RM21.49] per share compared to €2.75 [RM11.54] per share in H1 2014, up 86%).

Automotive operational free cash flow was near breakeven at -€95 million (-RM399 million), despite a negative €369 million (RM1,549 million) change in the working capital requirement.

At June 30, 2015, total inventory (including the independent dealer network) represented 64 days of sales compared to 62 days at end-June 2014.

OUTLOOK 2015

Global car demand should continue to grow about one percent in 2015 despite a significant slowdown in emerging markets. On the other hand, the European market should grow by at least five percent.

Within this context, the Renault group aims to:

• increase further its registrations and revenues (at constant exchange rates),
• continue to improve the Group’s operating margin and that of the Automotive division
• generate a positive Automotive operational free cash flow

RENAULT HALF-YEAR CONSOLIDATED RESULTS