Groupe Renault with sales at 2.95 million units, down -21.3%, had a net loss of -€8.5 Billion ($9.7 billion) during 2020 compared to a profit of €19 million in 2019 as Covid ravaged its results. Japanese partner Nissan – it holds a 43% share – contributed €4.9 billion of the loss. Group revenues were down -21.7% at €43.5 billion or -18.2% at constant exchange rates. Group revenues, however, were down -8.9% in total during Q3 and Q4, which if Covid ever abates provides a glimmer of a possible recovery. Another indicator – Group operating margin of -€337 million (-0.8% of revenues) was positive at €866 million (3.5% of revenues) in H2.
The disastrous results take into account an increase of charges related to restructuring costs and impairments of almost a €1 billion. Net income of -€8,046 million (-€660 million in H2) compared to €19 million in 2019. However, a negative Automotive operational free cash flow of -€4,551 million is distressing even with a positive contribution of €1,824 million in H2.
“The results for the second half of 2020 (Group operating margin at 3.5% and positive Automotive operational free cash flow) mark the first step in the Group’s recovery. The achievement of 60% of the €2 billion savings plan objectives right from the first year (compared with 30% announced), together with the implementation of the new commercial policy of the “Renaulution” strategic plan largely contributed to these results.,” said Renault.
Renault added “in accordance with the “*Renaulution” plan, the Group will continue the implementation of the actions aiming at its recovery and confirms the 2023 objectives communicated during the plan presentation.”
This recovery plan has 3 phases that are launched in parallel:
- “Resurrection”, running up to 2023, will focus on margin and cash generation recovery,
- “Renovation”, spanning up to 2025, will see renewed and enriched line-ups, feeding brand’s profitability,
- “Revolution” from 2025 and onward, will pivot the business model to tech, energy and mobility; making Groupe Renault a front-runner in the value chain of new mobility.