(Finance) – The group Renault has unveiled its ambitious plans for the future on today’s Market Dayclaiming to aim to become aNext Gen automotive company built on 5 focused businesses addressing all the new value chains: Ampere (the unit of electric vehicles); Alpine (a zero-emission, high-end global brand with a racing pedigree); Mobilize (leading financial services company to enter the market for new mobility, energy and data services); The Future Is NEUTRAL (a 360 ° circular economy company in the automotive sector); Power (the traditional core business of the group which will continue to develop low-emission internal combustion and hybrid vehicles under the Renault, Dacia and Renault LCV brands, each with its own dedicated organization and governance).
“After executing one of the most rapid and unexpected recovery plans, after preparing the company for growth by ensuring the development of the best product line of the last decades, we intend position ourselves faster and stronger than the competition on the new automotive value chains: EV, software, new mobility and circular economy “, explained the CEO Luca de Meo.
Ampere’s listing
The French carmaker has unveiled that it plans to list its electric vehicle unit, Ampere, on Euronext Paris already in the second half of 2023 (subject to market conditions) with Renault maintaining a strong majority and the support of potential strategic investors (including Qualcomm Technologies).
The partnership with Geely
Renault also announced that it has signed a non-binding framework agreement with Geely to create a new global leader in the development, production and supply of the best hybrid and internal combustion powertrains. Basically, the Renault group and Geely they will join their ICE business (ie internal combustion vehicles) into a 50-50 entity that will be formed with a project called “Horse”.
The entity will have a turnover of over 15 billion euros and a volume of 5 million units per year, already serving 8 customers who will benefit from greater synergies and productivity. This entity will all be global with: 17 factories supplying 130 countries; 5 research and development centers in Europe (Spain, Romania and Sweden), China and South America for a total of 3,000 engineers; a total of 19,000 employees, on 3 continents.
The financial perspectives 2025-2030
Renault plans a operating margin above 8% in 2025 and above 10% by 2030. Il Free cash flow will be over € 2 billion per year on average in the period 2023-2025 and over € 3 billion per year on average in the period 2026-2030
As for the dividend policy, the French group plans to restore dividend payments from 2023 (for the year 2022 – awaiting the approval of the General Shareholders’ Meeting). This dividend policy will grow “gradually and in a disciplined manner”, up to 35% payout ratio of consolidated net profit – parent company share, in the medium term. Renault also has an ambition to increase employee participation to 10% by 2030.
“We are taking our non-marketable fundamentals – value versus capital volume, competitiveness and efficiency – to the next level – said the CFO Thierry Piéton – This new business architecture will allow us to improve our financial performanceaiming at the profitability of the benchmark, the generation of free cash flows and the return on capital employed “.