On July 24, French automaker Renault Group announced that due to reasonable car pricing and a new product offensive, its operating profit for the first half of the year exceeded expectations, and it would maintain its full-year operating profit margin forecast.
Renault Group reported that in the first half of this year, thanks to the strong performance of its hybrid models in the key European market, group sales increased by 1.9% year-on-year. Revenue reached €26.958 billion (approximately $29.247 billion), a slight increase of 0.4% from the same period last year, slightly higher than the market forecast of €26.9 billion.
Operating profit was €2.175 billion, an increase of €135 million from last year, with a growth rate of 6.6%. The operating profit margin rose by 0.5 percentage points year-on-year to 8.1%, also higher than analysts' expectations of 7.9%. However, net profit was lower, at €1.38 billion, compared to €2.124 billion a year ago. This decrease was primarily due to a capital loss of €440 million from the sale of shares in alliance partner Nissan and restructuring costs of $123 million.
Renault Group stated that its current order volume is sufficient, equivalent to 2.6 months of sales.
Given the strong performance in the first half, Renault Group reaffirmed its financial forecast for 2024, expecting a full-year operating profit margin of at least 7.5% and free cash flow of at least €2.5 billion.
Renault Group has set a goal of achieving a double-digit operating profit margin by 2030. When asked in a conference call with reporters whether the group could achieve this double-digit profit margin before 2030, the company's CFO Thierry Pieton declined to comment, only stating, "Renault Group remains ahead of the plan we set for ourselves."
After four consecutive years of declining sales, Renault Group's sales resumed growth last year, and it hopes that the 10 new models launched this year will continue this growth momentum. The company had aimed to be a leader in the transition of traditional automakers to electrification and plans to fully electrify the Renault brand by 2030.
This week, Renault Group CEO Luca de Meo heavily promoted the group's electrification efforts. However, given the sharp slowdown in demand for electric vehicles in Europe, with trade group data released last week showing that European electric vehicle sales grew by only 1.3% in the first half of the year, Renault is calling on the EU to be "a bit flexible" about the ban on new fuel cars by 2035.
In contrast, automakers have seen strong consumer demand for more affordable and convenient hybrid cars and are launching more models to meet this demand. Renault Group has introduced new hybrid models, and group executives stated last week that they would continue to launch such models.
