(News Bulletin 247) – The automaker has raised its forecast for operating margin as well as cash generation for the current financial year. Its financial director, Thierry Piéton has also indicated that the moment to launch the IPO of Ampere would probably take place more in the first half of 2024 than at the end of this year.

Renault has, in the past, sometimes issued warnings about its results, especially in the fall of 2019. This “profit warning” was then resounding.

On Thursday, the car manufacturer on the contrary reserved a good surprise for the market by raising its objectives for the 2023 financial year, due to half-year results ahead of its forecasts.

Renault will unveil its full half-year accounts on July 27. But the manufacturer already indicates that its operating margin for the first six months of the year will be more than 7% while the operating cash flow (cash-flow) of the automotive industry will be around 1.5 billion euros. euros, an amount which includes 600 million euros in dividends paid by its captive (i.e. its financing division which has a banking licence) Mobilize Financial Services.

By way of comparison, in the first half of 2022, Renault had generated an operating margin of 4.7% and an automotive operating cash flow of 956 million euros.

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Successful launches

In view of these better than expected performances, Renault is therefore revising its ambitions upwards, expecting an operating margin for 2023 of between 7% and 8%, against a rate expected at least 6% previously. Automotive operating cash flow is now expected to be at least 2.5 billion euros versus at least 2 billion euros previously.

“This revision is mainly explained by the quality of the mix of its sales in connection with the success of the new launches and the continuation of the commercial policy focused on value”, explained the group.

This year, Renault is reaping the full impact of new models marketed last year, in particular the Megane E-TECH, the group’s technological showcase, which is supposed to embody its know-how in electrical and software, as well as the Renault Austral, a SUV. A new Renault Espace went on sale in June and a new Clio will arrive in the third quarter.

“Renault is in the process of making a massive move upmarket, causing a price cycle that will lead to a significant improvement in profits,” explained Bernstein, in a note published on June 20.

“These results are the result of a value-oriented strategy and the unfailing commitment of the teams over the past three years to Renaulution, which is transforming the group in depth. Thus, Renault Group is revising upwards the financial outlook for the year, thanks to continuous efforts to reduce costs and an unprecedented product offensive in the history of the group”, underlines Luca de Meo, the general manager of Renault, quoted in a press release.

“This product offensive, across all of our brands, is just beginning and will further enhance the group’s performance, while driving a unique transformation to become the next-generation automotive company,” he added.

Ampere’s IPO more likely in the first half of 2024

Bernstein also pointed out in his note that investors feared a delay or even a failure of the IPO of Ampere, the future electric subsidiary of Renault, which posed a barrier to investment in the action.

This Thursday, Thierry Piéton, Renault’s financial director, told financial analysts that the group was waiting for “the right window of opportunity” to carry out this operation, which should “probably” occur in the first half of next year. The diamond group previously mentioned a launch of this IPO no earlier than the end of 2023.