In the first half of 2016, Group revenues came to €25,185 million, up 13.5% compared with the first half of 2015.
Automotive revenues amounted to €24,078 million, up 14.3% thanks to an increase in the Group’s brand volumes (+10.6 points) and sales to partners (+3 points). The price effect was positive (+3.8 points), primarily due to price increases in some emerging markets to offset currency devaluation (-4.9 points). The mix effect is positive at 1.8 points.
The Group’s operating profit amounted to €1,541 million (+40.6%), compared with €1,096 million1 in the first half of 2015, and represents 6.1% of revenues (4.9%1 in the first half of 2015).
The Automotive operating profit was up €441 million (+64.9%) to €1,121 million and reached 4.7% of revenues, compared with 3.2%1 in the first half of 2015. This performance can be explained mainly by strong business growth (€614 million positive impact), higher prices and an improved mix. The currency impact is unfavorable (-€432 million), mainly due to the depreciation of the Argentinian peso, the Russian rouble and the British pound. However, raw materials had a positive effect of €164 million. The positive mix/price/enrichment effect of €135 million was a marked improvement compared with the first half of 2015, thanks in particular to the success of our new models. Cost reductions were affected by the increase in R&D expenses to prepare the future, the decrease in their capitalization rate, and higher than usual start-up costs due to the large number of launches.
Sales Financing contributed €420 million to the Group’s operating margin, compared with €416 million1 in the first half of 2015. This stable profit is related to the sharp increase in loans outstanding, but negatively impacted by adverse currency evolution and the decrease in Americas’ business. However, the cost of risk stabilized at a very good level of 0.30% of the average performing assets (0.31% in the first half of 2015).
Other operating income and expenses improved notably thanks to the drop in expenses related to the competitiveness plan in France. They remained negative at -€65 million versus -€116 million in the first half of 2015.
The Group’s operating income came to €1,476 million compared with €980 million1 in the first half of 2015 (+50.6%). This improvement is due to the increase in the operating profit and the reduction in other operating expenses.
The contribution of associated companies, mainly Nissan, came to €678 million, compared with €895 million2 in the first half of 2015. Nissan’s contribution was impacted by a one-off charge booked in Q1. AVTOVAZ contribution is negative at -€75 million versus -€87 million2 in the first half 2015, despite a deterioration of the operating result.
Regarding AVTOVAZ, the group confirms its intention to take part in a recapitalization operation before the end of the year, which should result in the consolidation of AVTOVAZ as of December 31, 2016.
Net income came to €1,567 million (+7.9%), and Group share totaled €1,501 million (€5.51 per share compared with €5.061 per share in the first half of 2015).
Automotive operational free cash flow was positive at €381 million after taking into account a negative change of €129 million in the working capital requirement.
At June 30, 2016, total inventories (including the independent network) represented 60 days of sales, compared with 66 days at end-June 2015.
In 2016, the global market is expected to record growth around 1.7% compared to 2015. The European market, as well as the French one, are now expected to increase by at least 5%.
Outside Europe, the Brazilian and Russian markets are expected to decline: -15% to -20% for Brazil and -12% for Russia. On the contrary, China (+4% to +5%) and India (+7% to +9%) should pursue their positive momentum.
Within this context, the Renault Group (at constant scope of consolidation) confirms its full-year 2016 guidance: