Friday, February 10, 2017

Strong one-year “record”, Renault displays its ambitions for 2022 –

Renault seeks 70 billion euros of revenue at the horizon 2022.-AFP/LOIC VENANCERenault seeks 70 billion euros of revenue at the horizon 2022.-AFP/LOIC VENANCE

with a Strong record of activity and a profit record in 2016 on the back of strong volume growth and profitability, Renault announced on Friday that aim for 70 billion euros of revenue at the horizon 2022.

The French car manufacturer has posted a net income increase of 19.7% 3.54 billion euros, on sales of 51.2 billion (+13.1% compared to 2015).

This strong growth is due in particular to vehicles of the group (Renault, Dacia and Renault Samsung Motors), which jumped 13.3% compared to 2015 and reached 3.18 million units thanks to the Europe, India, and Iran, among others.

Renault has pleased a little to PSA the place of first French company of the sector in terms of volumes.

These results also reflect an increase of sales to partners – Renault factory including utilities, Fiat, Opel and Mercedes in its factories – and increasing the operational efficiency: 6.4% of revenue compared to 5.2% in 2015.

“2016 was a very good year for the Renault group. We have achieved record growth and profitability record,” fruit “of years of effort and discipline,” and looked forward to its CEO Carlos Ghosn during a press conference at the company’s headquarters in Boulogne-Billancourt, france (southwest of Paris).

The group has exceeded the “one year ahead” the two objectives of its strategic plan: operational profitability of more than 5% and a turnover of more than € 50 billion. “The outcome is clear and without appeal in spite of an environment that is not a carrier,” assured Mr. Ghosn.

With its geographical diversification, “the company is sitting on a base incomparably more solid today, with a potential of strong growth allowing him to address 2017 and beyond with confidence,” he promised, while mentioning the risks: a rise in the price of raw materials, the “Brexit” and possible changes to international trade agreements.

- Capacity used to 100% -

Carlos Ghosn during the press conference at the company's headquarters in Boulogne-Billancourt on April 10, 2017-AFP/ERIC PIERMONTCarlos Ghosn during the press conference at the company’s headquarters in Boulogne-Billancourt on April 10, 2017-AFP/ERIC PIERMONT

Renault, that comes to sign in France a new social agreement three-year with three majority unions asking for more flexibility to employees in exchange for a guarantee of a certain level of activity in the factories, prides itself on a level of utilization of its capacity by 100% in 2016, “a performance without precedent for the group”, according to Mr Ghosn.

The CGT, the second union at Renault, said that these results, achieved in part thanks to “productivity gains taxed to the employees”, “must be used for increases in salaries, hiring, improvement of working conditions”.

The company emphasized to have suffered by 2016 a strong negative effect of foreign exchange (-702 million euros), due to the depreciation of the pound sterling and the argentine peso, and have had to consent to an increase in research and development expenses.

in Addition to the 70 billion euros of activity (at constant exchange rates) with a maturity of five years, the new strategic plan for Renault to be presented in detail in October, aims to reach an operating margin of 7%, while displaying a cash flow positive each year.”

In the immediate future, the group plans by 2017 to increase its turnover beyond the effect of Avtovaz (at constant exchange rates)”.

Avtovaz, a Russian manufacturer in trouble and bailed out in 2016 by Renault, will be consolidated for the first time in the accounts in 2017, and Mr. Ghosn has forecast a return to profit by 2018 in favor of a recovery plan.

In 2015, Nissan, of which Renault owns 43.4 per cent, had contributed to two-thirds of the net income of the French group. Last year, the contribution of the japanese manufacturer has accounted for half of the profits: 1.74 billion euros. Avtovaz has had a negative impact of 89 million euros in the accounts, after -620 million in 2015.

Finally, Renault announced that it had no past history of provisions to deal with the possible financial consequences of a case of emissions from diesel engines is to be referred by a judicial investigation in France for “deception”.

Repeating Friday that”there is no cheating at Renault,” Mr. Ghosn remarked that his company did not have access to the court file, but the”we know what we have in our engines. And when you look at what there is in our engines, we don’t need to spend any of the provisions”.


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