Financial report - 2024 H1

Financial report – First half 2024

1.                 In brief           3

 Key figures           3  Overview           3

                   2024 financial outlook                                                                                                                                                                  5

                          Main risks and uncertainties for the remaining six months of the fiscal year                                                             5

 Transactions with related third parties           5  Highlights          6

2.                 Sales performance 8

                 Overview                                                                                                                                                                                           8

2.1  Automotive    9

2.1.1           Group sales worldwide by region, by brand & by type     9

2.1.2           Sales and production statistics            11             

2.1.3           Geographical organization of the Renault Group by region – countries in each region                12

2.2  Sales financing               13

3.                 Financial results      14

                  Summary                                                                                                                                                                                        14

3.1  Comments on the financial results            14   3.1.1 Consolidated income statement         14

3.1.2Free cash flow    15

3.1.3Capex and Research & Development              16

3.1.4Automotive net financial position at June 30, 2024      17

3.2  Condensed consolidated statements        18

4.                 Statutory auditors’ review report on the condensed

                         half-yearly consolidated financial statements                                                             49

5.                 Person responsible for the document   50

1 In brief

Key figures

(1) Free cash flow: cash flows after interest and tax (excluding dividends received from publicly listed companies) minus tangible and intangible investments net of disposals +/- change in the working capital requirement

Overview

2024 FIRST HALF RESULTS: RENAULT GROUP BREAKS NEW RECORDS AND CONTINUES TO IMPROVE ITS PERFORMANCE

•       New record profitability in 2024 H1:

•       Group revenue: €27.0bn, +0.4% and +3.7% vs. 2023 H1at constant exchange rates¹  • Automotive revenue: €24.4bn, -1.9% and +1.2% vs. 2023 H1at constant exchange rates¹ 

•       Record profitability: 

-          Group operating margin: 8.1% of revenue (+0.5 points vs. 2023 H1), up €0.1bn vs. 2023 H1

-          Automotive operating margin: 6.6% of revenue (+0.4 points vs. 2023 H1)

•       Net income: €1.4bn (including €440m of capital loss on the disposal of Nissan shares)

•       Solid free cash flow: €1.3bn driven by a strong operational performance. It included €600m of Mobilize Financial Services dividend and a negative variation of working capital requirement of €209m

•       Record automotive net cash financial position: €4.9bn at June 30, 2024 (+€1.1bn vs. December 31, 2023) 

•       Complementary and growing automotive brands:

•       Renault brand #3in Europe, #1 in France and leader in LCVs²  

•       Dacia in the top 10 best-selling brands in Europe, with Sandero best-selling car across all channels

•       Alpine strong double-digit growth before new launches  

•       Strong orderbook in Europe at 2.6 months of forward sales, reflecting the strong order intake

•       Very healthy level of total inventories at 500ku at June 30, 2024 (down 69ku yoy)

•       Renault Group confirms its 2024 financial outlook: 

•       A Group operating margin ≥7.5%

•       A free cash flow ≥€2.5bn 

Group revenue reached €26,958 million, up 0.4% compared to 2023 H1. At constant exchange rates¹, it increased by 3.7%.

Automotive revenue stood at €24,372 million, down 1.9% compared to 2023 H1. It included 3.1 points of negative exchange rates effect (€779 million) mainly related to the devaluation of the Argentinean peso and to a lesser extent of the Turkish lira. At constant exchange rates¹, it increased by +1.2%. This evolution was mainly explained by the following:

•       A price effect of +1.8 points, mostly to offset currency devaluations mainly in Argentina and Turkey. As already announced, Renault Group has entered a phase of price stabilization combined with price repositioning of targeted products enabled by cost reduction. 

•       A positive product mix effect of +1.0 point, which reflected a gradual improvement in line with the Group’s recent launches (Scenic, Rafale and Espace). It has more than offset the negative effect from the end of life of Zoe and the continuing success of Sandero. This positive effect will continue to improve in the coming quarters. 

•       A positive geographic mix of +1.1 points, driven by the Group’s activity in Europe.

•       A negative volume effect of -4.7 points. The 1.9% increase in registrations was more than offset by a destocking within the dealership network in 2024 H1 compared to an important restocking in 2023 H1.

As of June 30, 2024, total inventories of new vehicles stood at a very healthy level and represented 500,000 vehicles (down 69k units yoy), of which 369,000 at independent dealers and 131,000 at Group level. 

•       A stable effect of sales to partners of +0.2 points, due to the decrease of new vehicles sales to partners in a transition year before the launch of new products as anticipated, offset by R&D billings in line with the ramp-up of Group’s partnerships. 

•       A positive "Other" effect of +1.8 points, thanks to the robust performance of parts and accessories as well as dynamic used cars sales.

The Group posted a record operating margin at 8.1% of revenue versus 7.6% in 2023 H1, up 0.5 points. 

Automotive operating margin stood at €1,600 million versus €1,541 million in 2023 H1. It represented 6.6% of Automotive revenue, an improvement of +0.4 points versus 2023 H1. This evolution was mainly explained by the following:

•       A positive impact of foreign exchange of €93 million, mostly attributable to the impact of the Turkish lira devaluation on production costs. 

•       A negative volume effect of €329 million, mostly driven by the destocking previously mentioned. 

•       In 2024 H1, price/mix/enrichment effect was a positive of €51 million and costs decreased by €262 million thanks to a strong purchasing performance and to a lesser extent to a raw materials tailwind. Together, it represented a positive impact of  €313 million. 

Renault Group continues to reduce its costs and to pass part of those gains to its customers which allows the Group to boost its competitiveness by offering attractive vehicles in terms of price and content while offsetting regulatory requirements, especially on new models and facelifts. Renault Group’s strategy is to work on the combination of these two effects, with the sole objective to improve margins. 

•       A positive effect of R&D of €153 million: the increase in gross R&D spendings and the lower capitalization rate (-6.2 pts versus 2023 H1) were more than offset by R&D billings, in line with the ramp-up of the Group’s partnerships, and lower amortization of capitalized R&D expenses. 

•       A negative impact of SG&A, which increased by €109 million, mainly driven by an increase of marketing costs related to the brands’ offensives and to the current performance of motorsport activities.

•       Prior to deconsolidation, Horse was under the IFRS 5 assets held for sale accounting treatment and therefore, amortization of its assets had been suspended. Since Horse was deconsolidated on May 31^st, 2024, invoices paid to Horse by Renault Group include the cost of amortization again as well as Horse's mark up. The cumulated effect of these 2 elements represented  €55 million for the month of June.

The contribution of Mobilize Financial Services (Sales Financing) to the Group's operating margin reached €593 million, up €75 million vs. 2023 H1, mainly thanks to the continuous strong growth of the customer financing activity as well as -€37 million of non-recurring negative impact of swaps valuation in 2023 H1. 

Other operating income and expenses were negative at -€277 million (versus +€56 million in 2023 H1) and included notably +€286 million of capital gain on Horse deconsolidation, -€440 million of capital loss on Nissan shares disposal made in March 2024 and restructuring expenses for -€123 million. 

After considering other operating income and expenses, the Group’s operating income stood at €1,898 million compared to  €2,096 million in 2023 H1.

Net financial income and expenses amounted to -€385 million compared to -€260 million in 2023 H1. This variation is mostly explained by the impact of hyperinflation in Argentina.

The contribution of associated companies amounted to €195 million compared to €566 million in 2023 H1.  

Current and deferred taxes represented a charge of -€328 million compared to a charge of -€278 million in 2023 H1. The effective tax rate amounted to 17% at the end of June 2024, up +2 pts versus 2023 H1, due to the first year of implementation of Pillar 2 directive and other deferred tax impacts.

Thus, net income stood at €1,380 million, including the capital loss on Nissan shares disposal. Net income, Group share, was €1,293 million (or €4.74 per share).  

The cash flow of the Automotive business reached €2,972 million in 2024 H1 and included €600 million of Mobilize Financial Services dividend. 

Excluding the impact of asset disposals, the Group’s net CAPEX and R&D stood at €2,143 million i.e. 7.9% of revenue compared to 6.9% of revenue in 2023 H1. Assets disposals amounted to €28 million, compared to €197 million in 2023 H1. Group's net CAPEX and R&D amounted to 7.8% of revenue including asset disposals.

Free cash flow^[2] stood at €1,257 million and included a negative change in working capital requirement of -€209 million. 

The Automotive net cash financial position stood at the record level of €4,860 million on June 30, 2024, compared to €3,724 million on December 31, 2023, an improvement of €1,136 million. This increase was driven by the strong free cash flow, a positive impact of Horse deconsolidation (+€420 million), cash received from the disposal of Nissan shares (+€358 million), dividends received from Nissan  (+€142 million). It was partly offset by dividends paid to shareholders for -€628 million and financial investments for -€355 million, of which -€215 million in Flexis SAS.

Liquidity reserve at the end of June 2024 stood at a high level at €17.6 billion.

2024 financial outlook 

•     Renault Group confirms its 2024 financial outlook: 

•     A Group operating margin ≥7.5%

•     A free cash flow ≥€2.5bn 

Main risks and uncertainties for the remaining six months of the fiscal year

Renault Group operates in design, manufacture, marketing of vehicles and sales financing (through its subsidiary Mobilize Financial Services) in an environment that remains in strong evolution, particularly in terms of technology, consumption patterns and the geopolitical, economic, and regulatory context of the markets.

Renault Group does not identify, for the next 6 months of 2024, risk factors other than those described in Chapter 4.2 of the Universal Registration Document published on 14 March 2024.

Transactions with related third parties

There are no significant transactions between related parties other than those described in Note 27-D of the Appendix to the Annual Consolidated Financial Statements of the same Universal Registration Document and in Note 20 of the Appendix to the Half-Year Consolidated Financial Statements summarized in this report.

Highlights

•   January 17, 2024: Renault Group announces a strong increase its worldwide sales: +9% compared to 2022, with a total of 2,235,345 vehicles over the year. The Group demonstrated a successful dynamic with three of its core brands growing significantly.

•   January 29, 2024: Considering both current equity market conditions and stronger cash generation, Renault Group has decided to cancel the Ampere IPO process. Renault Group will continue to fund the development of Ampere until Ampere reaches breakeven in 2025. All the targets announced during Ampere Capital Markets Day are confirmed. Furthermore, this decision has no impact on the financial guidance of Renault Group and its capital allocation strategy.

•   February 8, 2024: Nissan contributes €797 million to Renault Group’s Full Year 2023 earnings. 

•   February 15, 2024: Renault Group publishes its 2023 results with strong improvement of all financials with record levels. Group revenue reached €52,376 million, up 13.1% compared to 2022. At constant exchange rates, it increased by 17.9%. The Group posted a record operating margin at 7.9% of revenue versus 5.5% in 2022, up 2.4 points and a record free cash flow: at €3.0bn, up €0.9bn vs 2022. The Automotive net financial position stood at €3,724 million on December 31, 2023, compared to €549 million on December 31, 2022, an improvement of €3,175 million. Renault Group is aiming to achieve in 2024 a Group operating margin ≥7.5% and a free cash flow ≥€2.5bn. The proposed dividend for the financial year 2023 is €1.85 per share, up €1.60 per share versus last year. The payout ratio is 17.5% of Group consolidated net income – parent share. 

•   March 15, 2024: JCDecaux strengthens the Software République ecosystem as a new member alongside Dassault Systèmes, Eviden, Orange, Renault Group, STMicroelectronics and Thales.

With its seven members and multiple partners, Software République can count on new collaborations in supporting territories and public services to meet their challenges of tomorrow.

•   March 20, 2024: The Future Is NEUTRAL launches a new remanufacturing activity of three parts adapted to the electric powertrain. This is a European first in the automotive sector. Customers with electric vehicles can now choose between new original parts or a range of quality reconditioned products, that are more accessible (up to 30% cheaper) and help to limit the impact on resources and CO² emissions.

•   March 20, 2024: Renault group launches “Les voitures de future fonction” by caremakers, a solidarity initiative to help people return to work in mobility deserts. The vehicles that will be part of the initiative are Dacia Sandero (new car) and a selection of used car offered by renew.

•   March 22, 2024: Following the joint venture binding agreements signed on October 6^th, 2023, Renault Group and Volvo Group complete creation of Flexis SAS, joint venture for the next generation of fully electric vans based on a Software Defined Vehicle (SDV) platform and its dedicated services. Renault Group and Volvo Group plan to invest respectively €300 million over the course of the next three years. CMA CGM Group has confirmed its interest for a strategic investment up to €120 million in Flexis. 

•   March 25, 2024: Ampere announces the laying of the foundation stone of the Innovation Battery Cell Laboratory at the Lardy Technical Centre. Operational in 2025, this centre of excellence and innovation will enable prototyping and evaluation of battery cells and help anticipate technological breakthroughs.

•   March 26, 2024: Renault Group and the CEA continue to innovate for the car of tomorrow with the creation of a novel material architecture that combines groundbreaking digital design with additive manufacturing (3D printing). This innovation could make it possible to design components with exceptional properties and adaptable, customizable behavior. The potential applications for the automotive industry are promising, with onboard comfort for example.

•   March 27, 2024: After a first sale of Nissan shares on December 13, 2023, Renault Group announces its intention to sell to Nissan up to 100,242,900 Nissan shares, representing approximately 2.5% of Nissan capital. This sale results from the exercise by Nissan of its right of first offer to acquire 100,242,900 Nissan shares following a notice from Renault Group expressing its intention to sell 280,690,000 Nissan shares (representing up to 7% of Nissan capital). Pursuant to the New Alliance Agreement,

Renault Group has the option to sell the remainder of the 180,447,100 Nissan shares that have not been bought back by Nissan, during a 180-day period to Nissan or to third-parties. Nissan has announced its decision to cancel all the acquired shares which will be accretive for Nissan’s shareholders.

•   March 28, 2024: Renault Group completes a second transaction by selling to Nissan 99,132,100 Nissan shares, representing approximately 2.5% of Nissan’s capital. It results in a cash inflow of €358 million, which improves the Automotive net cash financial position and allows faster deleveraging of the Group. It also supports the Group’s target to return to an investment grade rating.

•   March 29, 2024: The Sandouville plant is to place its expertise at the service of Flexis SAS, a new joint venture set up on 22 March 2024. From 2026, the site will build a new generation of allelectric vans based on a connected electronic platform.

•   April 3, 2024: CMA CGM Group joins Renault Group and Volvo Group as founding member of Flexis SAS, a joint venture for a revolutionary generation of electric vans. In addition to bringing its client input, CMA CGM Group has acquired a 10% stake within Flexis SAS and will invest up to EUR 120 million by 2026. Renault Group and Volvo Group will hold respectively 45% equity stakes and are planning to invest EUR 300 million each over the course of the next three years.

•   April 23, 2024: Renault Group publishes Q1 revenue at €11.7 billion,

+5.9% at constant exchange rate. Automotive revenue stood at €10,446 million, -0.7% and +3.6% at constant exchange rate versus 2023 Q1. Renault Group confirms its 2024 financial group operating margin ≥7.5% and free cash flow

. 

•   May 2, 2024: Renault Group launches The Remakers, a new European leader in the refurbishment of automotive parts, with a target of 50% growth in this business by 2030. Based at the Flins Refactory, The Remakers is joining The Future Is NEUTRAL as a new company.

•   May 9, 2024: Nissan contributes €225 million to Renault Group’s first quarter 2024 earnings.

•   May 15, 2024: Renault Group announce the coming launch of an ambitious level 4 autonomous vehicle offer for public transportation. The Group is developing an electric, robotised, and pre-equipped miniBus platform that will host various automation solutions from specialist partners.

Experimentations have been underway for several years, and others are about to be announced, in particular with WeRide, the world expert in autonomous vehicles. 

•   May 31, 2024: Renault Group and Geely announce the creation of leading Powertrain Technology Company, “HORSE Powertrain Limited”, with each group holding 50% stake in the new company. The new company will lead the market for hybrid and combustion powertrain components and systems. HORSE Powertrain Limited expects to reach c. €15 billion in annual revenues and a production of c. 5 million powertrain units per year and will have as of day 1 a complete portfolio of state-ofthe-art powertrain technologies for global partners including hybrid systems, internal combustion engines, transmissions, and battery solutions.

•   June 7, 2024: Renault Group chooses Exotec to automate the site of the Villeroy Parts and Accessories Logistics Department. The integration of this next-generation solution is a world first for a car manufacturer and is a further step in Renault Group's technological transformation.

•   June 12, 2024: HYVIA, a joint-venture between Renault Group and Plug dedicated to hydrogen mobility, and HYPE, an independent pure player in zero-emission mobility and a pioneer in hydrogen taxis, have announced a partnership to accelerate decarbonized hydrogen mobility. This partnership covers the entire ecosystem of H2 mobility: the supply of decarbonized hydrogen, H2 refueling stations and hydrogen vehicles.

•   June 28, 2024: Aramco has signed definitive agreements to acquire a 10% equity interest in HORSE Powertrain Limited (“HORSE”) valuing the target at €7.4 billion enterprise value. Renault Group and Geely each retain 45% equity stakes.

•   July 1, 2024: Ampere announces groundbreaking battery strategy for Renault Group with LFP technology and Cell-toPack solutions, a proof of its commitment to aggressively reduce vehicle costs and democratize electric mobility in Europe. 

Ampere integrates LFP (Lithium Iron Phosphate) technology to complement NCM batteries (Nickel Cobalt Manganese) and creates a European value chain, ensuring efficiency and price competitiveness. 

With its partner LG Energy Solution, Ampere launches Cell-toPack technology (CTP), a world premiere for pouch-type batteries.

With these technologies, Ampere will reduce by around 20% the cost of batteries in its vehicles from beginning of 2026. This plan is in line with Ampere roadmap to reduce costs and improve margins. It confirms its ability to lead major transformations in record time.

2 Sales performance

Overview

RENAULT GROUP CONTINUES TO GROW THANKS TO ITS COMPLEMENTARY BRANDS

(1) Preliminary figures                                                                                                                                                                                                      

2.1 Automotive

2.1.1 Group sales worldwide by region, by brand & by type

(1) Twizy is a quadricycle and therefore not included in Group automotive sales except in Bermuda, Chile, Colombia, South

Korea, Guatemala, Ireland, Lebanon, Malaysia, and Mexico where Twizy is registered as a passenger car (2) Preliminary figures

(3)   ACEA European Scope. French overseas territories and departments are not accounted in the Europe region but

comprised in the Global figure

(4)   Other: Mobilize and EVEASY which is JMEV's brand                                                

RENAULT BRAND 

The world’s best-selling French car brand 

•  The Renault brand reported a 2.0% increase in sales (787,223 vehicles) in first half of 2024 compared with the same period in 2023, thanks to its success in Europe, where sales rose by 8.2% (535,238 vehicles). Outperforming a market that grew by 5.5%, the brand consolidated its position as Europe's third-ranking PC+LCV brand, primarily on the back of results in Spain (+12.7%), Italy (+18.4%) and the United Kingdom (+32.7%). 

•  In its home market of France, Renault consolidated its leading position with 214,881 vehicles sold, an increase of 8% on the overall PC+LCV market. Nearly one in every five vehicles sold in France is a Renault.

•  Outside Europe, the brand is also making progress in Turkey (10.8%), Brazil (5.3%) and Morocco (1.5%). The first few months of the year saw the roll-out of the “International Game Plan 2027”. Renault is relaunching the brand in South Korea with Grand Koleos, while Kardian is off to a good start in Brazil with more than 5,200 registrations. This vehicle has also been very well received in Mexico and will be launched in Morocco in the second half of the year. In Turkey, the brand recently presented Renault Duster, which will be launched in the second half of the year for international markets.

A value-oriented sales policy: one in every two sales to retail customers in Europe, combined with an acceleration on C segment and above 

•  In its five main European countries, the Renault brand makes one in every two sales to retail customers, a high valuecreating market. Clio and Captur are among the top 10 in the retail sales rankings.

•  Renault is also stepping up efforts in Europe to reconquer the C segment and above especially C-SUV and D SUV (+10%), with Austral, Espace E-Tech full hybrid and Rafale, particularly the high-trim versions, which account for the bulk of sales. 55% of Austral sales and 72% of Espace E-Tech full hybrid sales concern the Iconic or Esprit Alpine versions. Europe's No. 1 LCV brand

•  The brand is consolidating its leadership in the LCV market with 171,202 vehicles sold, an increase of 19.2% on H1 2023, in a market that grew by 12.9%. This momentum is driven by the success of flagship vehicles, Kangoo and Express (+30.7% vs H1 2023), as well as Master (+16.0% vs H1 2023), all leaders in their segments. At the same time, Trafic (+22.5% vs Y-1), is now the third best-selling vehicle in its segment.

Relevant technological choices and a two-pronged electrification strategy

•  Nearly one in every two vehicles sold by Renault is electrified. The brand is continuing its electrification offensive with a twopronged strategy balancing a complete electric vehicle range with a full hybrid range. 

•  Renault is Europe’s number two brand for hybrids, accounting for more than one in three sales, with an impressive sales increase (almost +45% compared with H1 2023). Clio, Austral and Captur rank among the top 10 best-selling hybrids. 

•  All-electric vehicles account for almost 12% of Renault brand sales and will continue to grow with Scenic E-Tech electric and Renault 5 E-Tech electric. Megane E-Tech electric, launched in mid-2022, ranks among the top 3 in its class in Europe.  2024: Numerous market launches for the Renault brand

•  With seven new vehicles planned, 2024 is a year rich in commercial launches for Renault. The brand is having a promising first half of the year while waiting for the commercial launches of Symbioz, Master and Renault 5 E Tech electric in Europe. Internationally, the brand will continue to implement its “International Game Plan” with the market launches of Renault Duster and Grand Koleos, while Kardian will be launched on new markets.  

DACIA BRAND

Continued progress 

•  Dacia sales rose by 3.8% in the first half of the year, with 358,497 registrations. In Europe, Dacia sold 309,816 vehicles, an increase of 4.0% PC+LCV. The brand is still ranked ninth in the PC market and remains in the European top 10 for PC+LCV sales. 

Results driven by a strong new brand identity

•  Driven by a strong new brand identity, Dacia is consolidating its position on the European retail sales podium, the brand’s core customer base, with four pillar models and conquest and loyalty rates at the highest level on the market.

•  Global sales of Dacia Sandero totalled 164,789 units, up 18.5% on first-half 2023. Best-selling retail vehicle since 2017, Sandero is also the best-selling model in Europe across all customer channels in first-half 2024.

•  With 113,783 units sold worldwide, Dacia Duster (including the second generation and recently launched third generation) sales grew by 1.7% compared with first-half 2023. It maintains its position on the podium of SUV retail sales in Europe. 

•  Dacia Jogger recorded 50,841 units sold worldwide, up 0.7% on first-half 2023. It is Europe’s best-selling non-SUV C-segment vehicle for retail sales. 

•  Sales of Dacia Spring are falling as a result of changes in government support and the vehicle's product cycle. Nevertheless, in first-half 2024, Spring ranked fifth in retail sales of small electric vehicles (A and B segments) in Europe. Renewal of the range

•  New Dacia Duster, available to order since mid-March 2024, has been in showrooms since June 2024. It was very well received and has already been awarded numerous times in various markets. 

•  All-electric New Spring is opened to orders since April 2024 for mainland Europe and since June 2024 for the UK. It will arrive in the showrooms in autumn 2024.

•  In second-half 2024, the brand will present Bigster, its future Csegment SUV, scheduled to arrive in the dealerships in firsthalf 2025.

ALPINE BRAND

Brand performance 

•  Alpine reported 2,720 registrations, a new record, and an increase of 47.2% on first-half 2023, driven in particular by France (+58.9%), Germany (+45.9%), the UK (+27.2%) and Belgium (+29.5%).

Start of the electric offensive:

•  In June, Alpine began its electric offensive with the presentation of A290, the brand's sporty electric 5-seater hot hatch, at the Le Mans 24 Hour event. Orders are scheduled to open this summer. 

A faster pace of international deployment:

• Internationally, first-half 2024 saw the roll-out of Alpine in Turkey and the opening in Barcelona of the first Atelier Alpine, an experiential concept store soon to open in London and Paris. By the end of 2024, the brand plans to open new Alpine stores in the Netherlands, Hungary and Sweden, as well as in France (including in Guadeloupe).

2.1.2 Sales and production statistics

2.1.2.1       Group sales worldwide

Consolidated global sales by brand and geographic areas as well https://www.renaultgroup.com/en/finance-2/financialas by model are available in the regulated information of the information/key-figures/monthly-sales/Finance section on Renault Group website.

2.1.2.2       Group worldwide production

(1) Production data concern the number of vehicles leaving the production line

(2) Preliminary figures

(3) Chinese subsidiaries: eGT (25%) in the production of partners for Renault Group         

2.1.3 Geographical organization of the Renault Group by region – countries in each region

As at June 30, 2024

2.2 Sales financing

Number of financing contracts

Including used vehicles contracts

New financing

Average performing assets  

PENETRATION RATE BY BRAND                                                                                                                                                                                      

PENETRATION RATE BY REGION                                                                                                                                                                                 

Mobilize Financial Services sold 1.9 million insurance and service contracts in the first half of 2024, down 4.2% compared to the same period of 2023.

 MOBILIZE FINANCIAL SERVICES FINANCING PERFORMANCE                                                                                                                                         

Number of services contracts Penetration rate on services

3 Financial results

Summary

(1) Free cash flow: cash flows after interest and tax (excluding dividends received from publicly listed companies) minus tangible and intangible investments net of disposals +/- change in the working capital requirement

3.1 Comments on the financial results

3.1.1 Consolidated income statement

OPERATING SEGMENT CONTRIBUTION TO GROUP REVENUES

Group revenue reached €26,958 million, up 0.4% compared to 2023 H1. At constant exchange rates¹, it increased by 3.7%.

Automotive revenue stood at €24,372 million, down 1.9% compared to 2023 H1. It included 3.1 points of negative exchange rates effect (-€779 million) mainly related to the devaluation of the Argentinean peso and to a lesser extent of the Turkish lira. At constant exchange rates¹, it increased by +1.2%. This evolution was mainly explained by the following:

•       A price effect of +1.8 points, mostly to offset currency devaluations mainly in Argentina and Turkey. As already announced, Renault Group has entered a phase of price stabilization combined with price repositioning of targeted products enabled by cost reduction. 

•       A positive product mix effect of +1.0 point, which reflected a gradual improvement in line with the Group’s recent launches (Scenic, Rafale and Espace). It has more than offset the negative effect from the end of life of Zoe and the continuing success of Sandero. This positive effect will continue to improve in the coming quarters. 

•       A positive geographic mix of +1.1 points, driven by the Group’s activity in Europe.

•       A negative volume effect of -4.7 points. The 1.9% increase in registrations was more than offset by a destocking within the dealership network in 2024 H1 compared to an important restocking in 2023 H1.

As of June 30, 2024, total inventories of new vehicles stood at a very healthy level and represented 500,000 vehicles (down 69k units yoy), of which 369,000 at independent dealers and 131,000 at Group level. 

•       A stable effect of sales to partners of +0.2 points, due to the decrease of new vehicles sales to partners in a transition year before the launch of new products as anticipated, offset by R&D billings in line with the ramp-up of Group’s partnerships. 

•       A positive "Other" effect of +1.8 points, thanks to the robust performance of parts and accessories as well as dynamic used cars sales.         

The Group posted a record operating margin at 8.1% of revenue versus 7.6% in 2023 H1, up 0.5 points. 

Automotive operating margin stood at €1,600 million versus  €1,541 million in 2023 H1. It represented 6.6% of Automotive revenue, an improvement of +0.4 points versus 2023 H1. This evolution was mainly explained by the following:

•       A positive impact of foreign exchange of €93 million, mostly attributable to the impact of the Turkish lira devaluation on production costs. 

•       A negative volume effect of €329 million, mostly driven by the destocking previously mentioned. 

•       In 2024 H1, price/mix/enrichment effect was a positive of  €51 million and costs decreased by €262 million thanks to a strong purchasing performance and to a lesser extent to a raw materials tailwind. Together, it represented a positive impact of €313 million. 

•       Renault Group continues to reduce its costs and to pass part of those gains to its customers which allows the Group to boost its competitiveness by offering attractive vehicles in terms of price and content while offsetting regulatory requirements, especially on new models and facelifts. Renault Group’s strategy is to work on the combination of these two effects, with the sole objective to improve margins. 

3.1.2 Free cash flow

•       A positive effect of R&D of €153 million: the increase in gross R&D spendings and the lower capitalization rate (-6.2 pts versus 2023 H1) were more than offset by R&D billings, in line with the ramp-up of the Group’s partnerships, and lower amortization of capitalized R&D expenses. 

•       A negative impact of SG&A, which increased by €109 million, mainly driven by an increase of marketing costs related to the brands’ offensives and to the current performance of motorsport activities.

•       Prior to deconsolidation, Horse was under the IFRS 5 assets held for sale accounting treatment and therefore, amortization of its assets had been suspended. Since Horse was deconsolidated on May 31^st, 2024, invoices paid to Horse by Renault Group include the cost of amortization again as well as Horse's mark up. The cumulated effect of these 2 elements represented €55 million for the month of June.

The contribution of Mobilize Financial Services (Sales Financing) to the Group's operating margin reached €593 million, up  €75 million vs. 2023 H1, mainly thanks to the continuous strong growth of the customer financing activity as well as -€37 million of non-recurring negative impact of swaps valuation in 2023 H1. 

In 2024 H1, the free cash flow is positive at +€1,257 million, resulting from the following elements:

•       Cash flow (excluding dividends received from publicly listed companies) of +€2,372 million, including €167 million restructuring costs (vs €219 million in 2023 H1),

•       Dividends received from Mobilize Financial Services for €600 million in 2024 H1 (same level as in 2023 H1), 

•       A negative change in the working capital requirement of  -€209 million,

•       Property, plant and equipment and intangible investments  net of disposals of -€1,535 million (5.7% of Group revenue, 

-1.4 points below 2023 H1), including asset sales for an amount of €28 million (vs €197 million in 2023 H1),

•       Net investments related to vehicles and batteries with buy-back commitments for +€29 million (vs. -€15 million in 2023 H1).

Total gross investment in 2024 H1 increased compared to 2023 H1, with Europe accounting for 66% and the rest of the world for 34%.

•       In Europe, capital expenditure was mainly earmarked for the development of the C segment range (Rafale and Symbioz), the renewal of LCV range (new Master ICE & EV) and the deployment of the EV range (Scenic E-Tech, Renault 5 E-Tech and Renault 4 E-Tech).

•       Internationally, investments are mainly about renewing the range in Romania (new Duster ICE and HEV and Bigster) and in Brazil (Renault Kardian), and for the D segment range in South Korea (Grand Koleos).

RESEARCH AND DEVELOPMENT EXPENSES RECORDED IN THE INCOME STATEMENT

Analysis of research and development costs recorded in the income statement:

(1) Research and development expenses are reported net of research tax credits for the vehicle development activity (gross R&D expenses: R&D

NET CAPEX AND R&D EXPENSES IN % OF REVENUES

Net Capital expenditures and R&D expenses amounted to 7.8% Excluding the disposal of assets for €28 million, this rate of Group revenues, up 1.7 point compared to 2023 H1. amounted to 7.9%.

3.1.4 Automotive net financial position at June 30, 2024

CHANGE IN AUTOMOTIVE NET FINANCIAL POSITION 

(€ million)                                                                                                                                                                                                                                

Beyond the Automotive segment reported positive operational _• A positive impact of Horse deconsolidation for  free cash flow of +€1,257 million, Renault Group received  +€420 million, 

€142     million     of      dividends      from      Nissan.       Dividends      paid

shareholders amounted to -€628 million in 2024 H1.                                                     •        Financial       investments      for     -€355     million,    of                                                                                                                                      which 

-€215 million in Flexis SAS,

The €365 million remaining change in automotive net financial

position versus December 31, 2023, is due to:  • Other impacts on automotive net financial position, including notably the purchase and disposal of treasury

•       The disposal of Nissan shares for +€358 million,           shares, currency variations and IFRS 16 impacts for a total amount of -€58 million.

AUTOMOTIVE NET FINANCIAL POSITION

The        Automotive      segment’s       liquidity      reserves      stood      at

€17.6 billion as at June 30, 2024. These reserves consisted of:

•       €14.36 billion in cash and cash equivalents;

•       €3.26 billion in undrawn confirmed credit lines.

At June 30, 2024, Mobilize Financial Services (ex RCI Banque) had available liquidity of €13.4 billion, consisting of: • €4.4 billion in undrawn confirmed credit lines;

•       €4.0 billion in central-bank eligible collateral;

•       €4.9 billion in high quality liquid assets (HQLA);

•       €0.2 billion in available cash.

Condensed consolidated half-year financial statements 2024

1.  Consolidated income statement .................................................................................................................... 19

2.  Consolidated comprehensive income.......................................................................................................... 20

3.  Consolidated financial position ..................................................................................................................... 21

4.  Changes in consolidated shareholders’ equity ........................................................................................... 22

5.  Consolidated cash flows ................................................................................................................................ 23

6.  Notes to the condensed consolidated financial statements ..................................................................... 24

6.1.                   Information on operating segments .................................................................................................................................. 24 A. Consolidated income statement by operating segment ................................................................................................. 24

B.  Consolidated financial position by operating segment .................................................................................................... 26

C.   Consolidated cash flows by operating segment ................................................................................................................... 28

D.  Other information for the Automotive segment: net cash position (net financial indebtedness),

operational free cash flow and ROCE .................................................................................................................................................. 31

6.2.                   Accounting policies and scope of consolidation ........................................................................................................... 32

Note 1 - Approval of the financial statements ................................................................................................................................ 32

Note 2 - Accounting policies ...................................................................................................................................................................... 32

Note 3 - Changes in the scope of consolidation, and assets and liabilities held for sale .................................... 34

6.3.                   Consolidated income statement ........................................................................................................................................ 35

Note 4 - Revenues ............................................................................................................................................................................................. 35

Note 5 - Research and development expenses ............................................................................................................................ 35

Note 6 - Other operating income and expenses ........................................................................................................................... 36

Note 7 - Financial income (expenses) .................................................................................................................................................. 36

Note 8 - Current and deferred taxes .................................................................................................................................................... 37

Note 9 - Basic and diluted earnings per share ............................................................................................................................... 37

6.4.                   Operating assets and liabilities, shareholders’ equity................................................................................................. 37 Note 10 - Intangible assets and property, plant and equipment ........................................................................................ 37

Note 11 - Investment in Nissan ................................................................................................................................................................... 38

Note 12 - Investments in other associates and joint ventures ..............................................................................................40

Note 13 - Sales Financing receivables .................................................................................................................................................40

Note 14 - Inventories ......................................................................................................................................................................................... 41

Note 15 - Financial assets – cash and cash equivalents............................................................................................................ 41

Note 16 - Shareholders’ equity ................................................................................................................................................................... 41

Note 17 - Provisions .......................................................................................................................................................................................... 42

Note 18 - Financial liabilities and Sales Financing debts ......................................................................................................... 43

6.5.                   Cash flows and other information ...................................................................................................................................... 44

Note 19 - Cash flows ........................................................................................................................................................................................ 44

Note 20 - Related parties ............................................................................................................................................................................. 45

Note 21 - Off-balance sheet commitments and contingent assets and liabilities .................................................. 45

Note 22 - Subsequent events .................................................................................................................................................................... 48

1. Consolidated income statement

(1) Net income - parent company shareholders’ share divided by the number of shares stated.  

2. Consolidated comprehensive income

(1)       In 2024, translation adjustments on foreign operations include the reclassification to profit and loss of HORSE Powertrain Solutions S.L.U. and its subsidiaries translation adjustments following the sale of shares held by Renault (Note 3-A).

(2)       In 2023 and 2024, translation adjustments on foreign operations and the partial hedge of the investment in Nissan include the reclassification to profit and loss of Nissan translation adjustments following the partial sale of shares held by Renault (Note 3-A).

3. Consolidated financial position

SHAREHOLDERS’ EQUITY AND LIABILITIES (€ million)                                                                                                                                                                                                          Notes December 31, 2023

Shareholders’ equity        Share capital                       1,127

Share premium                  3,785 Treasury shares       (212)

Revaluation of financial instruments                                                                                                                                                                                                                                                                                   (111)

Translation adjustment                                                                                                                                                                                                                                                                                                         (3,140)

Reserves                                                                                                                                                                                                                                                                                                                                    26,105

Net income – parent company shareholders’ share  2,198 Shareholders’ equity – parent company shareholders’ share  29,752 Shareholders’ equity – non-controlling interests’ share  882

TOTAL SHAREHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                  16 30,634

Non-current liabilities      Deferred tax liabilities     917

Provisions for pension and other long-term employee benefit obligations – long-term                                                                                                                                                                            17-A 1,071

Other provisions – long-term               17-B 1,224 Non-current financial liabilities                18 8,956

Provisions for uncertain tax liabilities – long-term                                                                                                                                                                                                                                                              236

Other non-current liabilities                  942 TOTAL NON-CURRENT LIABILITIES                        13,346

Current liabilities                                                                                                                                                                                                                                         

Provisions for pension and other long-term employee benefit obligations – short-term                                                                                                                                                                             17-A 137

Other provisions – short-term              17-B 1,130 Current financial liabilities                         18 3,448 Sales Financing debts              18 54,095

Trade payables                                                                                                                                                                                                                                                                                                                           7,965

Current tax liabilities                                                                                                                                                                                                                                                                                                                    359

Provisions for uncertain tax liabilities – short-term                                                                                                                                                                                                                                                               20

Other current liabilities                                                                                                                                                                                                                                                                                                           9,704

Liabilities related to assets held for sale                                                                                                                                                                                                                                                                         3 1,075

TOTAL CURRENT LIABILITIES                                                                                                                                                                                                                                                                                               77,933

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES                                                                                                                                                                                                                                                      121,913

4. Changes in consolidated shareholders’ equity

(1)       Changes in reserves correspond to actuarial gains and losses on defined-benefit pension plans recognized during the period.

(2)       In 2024, translation adjustments on foreign operations include the reclassification to profit and loss of HORSE Powertrain Solutions S.L.U. and its subsidiaries translation adjustments following the sale of shares held by Renault (Note 3-A).

(3)       In 2023 and 2024, translation adjustments on foreign operations and the partial hedge of the investment in Nissan include the reclassification to profit and loss of Nissan translation adjustments following the partial sale of shares held by Renault (Note 3-A). Details of changes in consolidated shareholders’ equity in 2024 are given in Note 16.

5. Consolidated cash flows

(€ million)                                                                                                                                                                                                 Notes

Net income                                                                                                                                                                                                            

Cancellation of income and expenses with no impact on cash                                                                                                               

          Depreciation, amortization and impairment                                                                                                                                 

            Share in net (income) loss of associates and joint ventures                                                                                                   

             Other income and expenses with no impact on cash before interest and tax                                                           19

Dividends received from unlisted associates and joint ventures                                                                                                            

Cash flow before interest and tax _⁽¹_⁾  Dividends received from listed companies _⁽²_⁾           Net change in financing for final customers               Net change in renewable dealer financing                        Decrease (increase) in Sales Financing receivables                         Bond issuance by the Sales Financing segment         Bond redemption by the Sales Financing segment                         Net change in other debts of the Sales Financing segment           

Net change in other securities and loans of the Sales Financing segment                                                                                           

Net change in financial assets and debts of the Sales Financing segment                                                                                         

Change in capitalized leased assets    Change in working capital before tax                         19

Cash flows from operating activities before interest and tax                                                                                                                 

Interest received               Interest paid                        

Current taxes (paid) / received              CASH FLOWS FROM OPERATING ACTIVITIES             

Property, plant and equipment and intangible investments        19 Disposals of property, plant and equipment and intangible assets                Acquisitions of investments involving gain of control, net of cash acquired                 

Acquisitions of other investments                                                                                                                                                                   

Disposals of investments involving loss of control, net of cash transferred                                                                                         

Disposals of other investments _⁽³_⁾                                                                                                                                                                    

Net decrease (increase) in other securities and loans of the Automotive segment                                                                          

CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                                                                 

Dividends paid to parent company shareholders   16 Transactions with non-controlling interests          Dividends paid to non-controlling interests               (Acquisitions) sales of treasury shares           

Cash flows with shareholders                                                                                                                                                                          

Bond issuance by the Automotive segment              Bond redemption by the Automotive segment         

Net increase (decrease) in other financial liabilities of the Automotive segment                  Net change in financial liabilities of the Automotive segment  

CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                                                                

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                                                      

(1)       The cash flow before interest and tax is presented net of dividends received from listed companies.

(2)       Dividends received from Nissan.

(3)       Principally comprising proceeds of the sale of Nissan shares (€358 million in the first half-year of 2024 and €764 million in the second half-year of 2023).

(€ million) H1 2023                                                                                                                                                                                                                                                                                                         Year 2023

Cash and cash equivalents: opening balance 21,774 21,774 Increase (decrease) in cash and cash equivalents (2,890) (756)

Effects of change of scope (7) 5 Effect of changes in exchange rate and other changes  50 (255) Cash generated by assets held for sale 17 (91)

Cash and cash equivalents: closing balance _⁽¹_⁾ 18,944                                                                                                                                                                                                                                                20,677

(1) Cash subject to restrictions on use is described in Note 15-B.

6. Notes to the condensed consolidated financial statements

6.1. Information on operating segments

A. Consolidated income statement by operating segment

(1)       Details of depreciation, amortization and impairment are provided in the statement of consolidated cash flows by operating segment.

(2)       Dividends paid by the Sales Financing segment to the Automotive segment are included in the Automotive segment’s financial income and eliminated in the intersegment transactions. They amounted to €600 million in the first half-year of 2024.

(1)       Details of depreciation, amortization and impairment are provided in the statement of consolidated cash flows by operating segment.

(2)       Dividends paid by the Sales Financing segment to the Automotive segment are included in the Automotive segment’s financial income and eliminated in the intersegment transactions. A dividend of €600 million was paid in 2023.

B. Consolidated financial position by operating segment

(1) Current tax assets and other current assets include assets held for sale.

(1) Current tax assets and other current assets, and current tax liabilities and other current liabilities, respectively include assets held for sale and liabilities related to those assets.

C. Consolidated cash flows by operating segment

(1)       Dividends paid by the Sales Financing segment to the Automotive segment are included in the net income of the Automotive segment. They amounted to €600 million in the first half-year of 2024.

(2)       The cash flow before interest and tax is presented net of dividends received from listed companies.

(3)       Dividends received from Nissan (€142 million).

(4)       Principally comprising proceeds of the sale of Nissan shares (€358 million in the first half-year of 2024).