PARIS (Reuters) – Renault shares jumped more than 7% on Thursday after it raised its 2023 financial outlook thanks to the success of new models, in particular the Austral SUV and a Dacia Jogger hybrid.
After several years of restructuring and strategic repositioning to restore margins, the French carmaker said it is now aiming for an operating margin of 7% to 8% by full-year 2023, from a previous target of more than 6%.
Renault Chief Executive Luca de Meo said in a statement that the upgrades were due to cost cuts and an “unprecedented product offensive”.
The automaker now also expects an automotive operational free cash flow superior or equal to 2.5 billion euros ($2.72 billion), compared to 2 billion euros previously.
Renault was committed to catching up with its best-performing rivals, Thierry Pieton, its chief financial officer, said during a conference call.
Stellantis, which owns local rival PSA, confirmed last month it was forecasting a double-digit margin for this year.
Renault should boast a record operating margin of more than 7% when it publishes its first-half results at the end of next month, Pieton added.
The French carmaker is set to launch more new models to spur growth. It has just rolled out an SUV version of its Espace minivan and plans to restyle its best-seller Clio city car this year. Another 12 new models will follow in 2024.
At 0835 GMT, Renault shares were up 7.5% at 39.18 euros, outpacing France’s blue-chip index CAC 40 and the Stoxx Europe 600 Auto Index.
($1 = 0.9189 euros)
(Reporting by Gilles Guillaume and Benoit Van Overstraeten in Paris, Michal Aleksandrowicz in Gdansk; Editing by Muralikumar Anantharaman, Christopher Cushing and Emma Rumney)
