Carlos Ghosn, speaking earlier today

Carlos Ghosn, speaking earlier today

Renault has reported a tripling of net income in its 2014 full-year results in spite of deeper losses incurred in Russia.

"We met all the objectives announced for 2014. This milestone positions us on track to achieve our strategic plan, 'Renault Drive the Change'. 2015 should allow us to take a new step forward, thanks to an unprecedented product offensive in the history of Renault," said Carlos Ghosn, Chairman and Chief Executive Officer of Renault.

The company said that group net income rose to EUR1.89bn in 2014, up from EUR586m in 2013. The group's 2014 operating profit reached EUR1,609m, compared to EUR1,242m in 2013 (3.9% of revenues vs 3.0% in 2013). Cost reduction contributed an EUR844m improvement to operating profit in 2014 versus 2013 and Renault said that Alliance synergies are continuing to grow.

In 2014, Renault Group revenues came to EUR41,055m, an increase of 0.3% compared to 2013. At constant exchange rates, revenues grew by 3.1%. Renault Group vehicle registrations were up 3.2% globally in 2014.

At an analysts' presentation, Ghosn drew attention to a product offensive that included stronger sales from low-cost Dacia brand as well as the success of compact Renault models such as the Captur SUV and new Clio.

He also said that Renault was well placed in emerging markets for the medium-term and showing 'resilience' in them, despite current adverse developments in a number of emerging markets.

However, the crisis in Russia hit Renault's bottom line in 2014 as losses at AvtoVAZ incurred in Renault's accounts widened to EUR182m in 2014 versus EUR34m in 2013. An analyst report this week said that the losses in Russia could be much deeper in 2015 and it has announced suspended production at its Avtoframos plant.

In spite of the uncertainties surrounding numerous economies, Renault said that global car demand should continue to grow this year (+2 %). The European market should also show a slight positive growth (+2 %) but Renault expects to see "high volatility" in its main emerging markets.

In 2015, Renault expects to further increase its registrations and revenues (at constant exchange rates), continue to improve operating margin and generate positive automotive operational free cash flow.

See also: 

RUSSIA: Renault faces 'major headache' on Russia exposure - analyst

RUSSIA: Renault to shut Moscow plant for three weeks as market stutters

Show the press release

FOR IMMEDIATE RELEASE                                                  730 WORDS

12TH FEBRUARY 2015

 

2014 FINANCIAL RESULTS:

RENAULT MEETS ITS FULL-YEAR GUIDANCE

 

  • New registrations up 3.2% to 2.7 million units
  • Group revenues: €41,055 million (+0.3%). Excluding foreign exchange rate effect, +3.1%
  • Group operating profit: €1,609 million, or 3.9% of revenues, compared to €1,242 million and 3.0% in 2013
  • Automotive operating profit: €858 million, compared to €495 million in 2013 (2.2% vs 1.3%)
  • Group operating income: €1,105 million versus minus €34 million
  • Net income: €1,998 million versus €695 million in 2013
  • Positive Automotive operational free cash flow: €1,083 million

 

“We met all the objectives announced for 2014. This milestone positions us on track to achieve our strategic plan, "Renault Drive the Change". 2015 should allow us to take a new step forward, thanks to an unprecedented product offensive in the history of Renault”, said Carlos Ghosn, Chairman and Chief Executive Officer of Renault.

 

In 2014, Group revenues came to €41,055 million, an increase of 0.3% compared to 2013. At constant exchange rates, revenues grew by 3.1%.

 

The contribution of the Automotive division to revenues amounted to €38,874 million, up 0.3% vs 2013. The Group offset negative currency variations by increasing prices outside Europe and by the strong growth of sales to partners.

 

The Group's operating profit reached €1,609 million, compared to €1,242 million in 2013 (3.9% of revenues vs 3.0% in 2013).

 

The Automotive operating profit rose by €363 million to €858 million, representing 2.2% of revenues. This performance results from cost reductions and from growth in sales while unfavorable foreign exchange rates and the enrichment of some end-of-life models impacted negatively.

 

Sales Financing contributed to €751 million to Group operating profit compared to €747 million in 2013. The drop in net banking income was offset by an increase in average loans outstanding and by growth in services. The cost of risk remained stable at 0.43%.

 

Other operating income and expense items were negative by €504 million, mostly due to restructuring costs of €305 million and the impairment of assets for €153 million.

 

Group operating income came to €1,105 million compared to -€34 million in 2013. This improvement results from the increase in operating profit and the reduction in other operating expenses of €772 million.

 

The contribution of associated companies, mainly Nissan, was €1,362 million, compared to €1,444 million in 2013, including the negative contribution of AVTOVAZ for -€182 million.

 

Net income came to €1,998 million and net income, Group share, to €1,890 million (€6.92 per share compared to €2.15 per share in 2013).

 

Automotive operational free cash flow was positive at €1,083 million, due to the increase in profitability, as well as a positive change of €596 million in the working capital requirement over the period.

 

A dividend of €1.90 per share, vs €1.72 last year, will be submitted for approval at the next Shareholders’ Annual General Meeting.

 

2015 OUTLOOK

 

In spite of the uncertainties surrounding numerous economies, global car demand should continue to grow this year (+2 %). The European market should also show a slight positive growth (+2 %) while we continue to expect high volatility in our main emerging markets:

In this context, 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 positive Automotive operational free cash flow.

Renault consolidated Results

€ million 

2014

2013

Change

Group revenues

41,055

40,932

+0.3 %

Operating profit

% of revenues

1,609

3.9 %

1,242

3.0 %

+367

+0.9pts

Other operating income and expenses items

-504

-1,276

+772

Operating income

1,105

-34

+1,139

Net financial income

-333

-282

-51

 

 

 

 

Contribution from associated companies

1,362

1,444

-82

o/w : NISSAN

1,559

1,498

+61

 AVTOVAZ

-182

-34

-148

 

 

 

 

Current and deferred taxes 

-136

-433

+297

Net income

1,998

695

+1,303

Net income, Group share

1,890

586

 +1,304

Automotive operational free cash flow

1,083

827

+256

 

ADDITIONAL INFORMATION

The consolidated financial statements of the Renault group at December 31, 2014 were approved by the Board of Directors on February 11, 2015. The Group’s statutory auditors have conducted a limited review of these financial statements and their report will be issued shortly. The earnings report, with a complete analysis of the financial results in 2014, is available at www.renault.com in the Finance section.

Original source: Renault