Renault Sa Unsp/Adr

Ladies and gentlemen, good morning and good afternoon. Welcome to Renault Group's Q3 2025 revenue presentation. This conference call is broadcast live and recorded. It will be made available in replay on our website. I will now hand over to Duncan Minto, Renault Group CFO, to begin the presentation, which will be followed by a Q&A session. Duncan, the floor is yours.

Thanks, Florent. Good morning, good afternoon, everyone. Thanks for joining us today. I'm pleased to be with you here to present our Q3 revenue and the sales performance. So in Q3 2025, Renault group revenue amounted to 11.4 billion euros, up 6.8%. At constant exchange rates, it was up 8.5%. Automotive revenue stood at €9.8 billion, up 5% or 6.8% at constant exchange rates. Mobility services amounted to €23 million, up €9 million compared to the same period last year. And mobilised financial services continued strong growth, with revenue up 18.4% to €1.6 billion. so as usual let's drill down into the automotive revenue evolution automotive revenue stood at 9.8 billion euros in q3 that was up 6.8 percent as i said at constant exchange rates with a negative forex impact of 1.8 points this impact was driven mainly by the devaluation of the argentinian piso the turkish lira the Brazilian RIE and the Korean Won. The second part, the volume effect, was a strong positive by 3.2 points in the quarter, as the 9.8% growth in group registrations was partly offset by a higher destocking of the independent dealer network over the quarter in Q3 2025 against Q3 2024, but we'll come back to this in a second. Looking first at the registrations, the 9.8% growth worldwide in Q3 translated to more than 529,000 registrations. I think the point to note is international sales were up 14.9% and European sales up 7.5%. In Europe, passenger car sales grew by 10.9%, outperforming a market up 7.5%. LCV sales have shown a meaningful improvement sequentially for us, but yet remain 7.1% below the Q3 2024. Overall, all brands were up, which is quite remarkable. Renault, Dacia and Alpine. Certainly a highlight in the current auto industry context. Renault Group continued its acceleration on electrification. Renault Group's electrified vehicle mix in Q3 grew by 10.8 points to reach 44% of its sales. The Renault Group EV sales more than doubled, reaching 13.5% of sales, and HEV sales grew by a strong 25%. Looking at the Renault brand, electrified vehicles accounted for 60% of the brand sales, up nearly 10 points compared to last year. Renault's EV sales surged by 85% thanks to Renault 5, the B-segment EV leader in Europe, and Scenic, the C-segment EV leader in France. The EV mix reached more than 20% of Q3 sales, up 8.7 points. Hybrid sales rose off a strong base by 4.4% thanks to Sambios, the best-selling Renault hybrid, to reach 37.9% of brand sales in total. Renault was the second brand for hybrid sales in Europe. Dacia's hybrid sales more than doubled, now accounting for nearly 21% of its Q3 sales, up 9.1 points compared to Q3 2024, thanks to Duster and Bigster. As regards our commercial policy, we kept our focus on value over volume. In Q3, retail sales accounted for 63.8% of group sales in the five main European countries. This is 20 points above the market average. Sandero, Duster and Clear were in the top 10 retail sales in Europe. and residual values remain globally stable for both Renault and Dacia brands at the end of September 25 compared to last year. I remind you there's a 5 to 11 point positive gap above our main competitors in the five main European markets for passenger cars. Quick zoom on the Renault brand. Continued progression in Q3 25. Global sales were up 6.6% at just over 361,000 units. In Europe, the brand grew by 1.8% thanks to a 5.5% PC growth and an LCV performance, as I said, showing signs of recovery, but still down. Growth was especially high in Germany and in Spain. And Clio is the second best selling car across all channels in Europe. In international markets, Renault grew in its strategic regions, posting a 14.2% increase overall. In Latin America, the brand rose by 6.8%, thanks to Cardian. Further momentum is expected from the upcoming launch of Boreal in Brazil in November. In South Korea, Grand Collier supported the brand's growth by 54.7% year-on-year. And in Morocco, Renault achieved 42.6% growth with 9,258 vehicles sold, again supported by Cadian's success. Turning to Dacia, worldwide sales were up 16.2% with 165,000 vehicles sold. The brand posted solid growth in most European markets with outstanding performance in Germany, Spain, Belgium, Luxembourg. Bigster is the second best-selling C SUV in Europe on the retail market, with 22,353 units sold during Q3 and more than 55,000 orders taken since launch. Sandero remains the best-selling vehicle in Europe, all distribution channels combined, with 66,233 units sold in Q3 and over 218,000 sold since January. Year to date, in terms of standing in the European market, Dacia gained one place and ranked second on the European podium for retail sales. Turning to Alpine, we recorded more than 2,300 registrations in Q3, with now both A290 and the A110. A290 is now available in most of the brand's countries, with 1,845,000 registrations over the period. Since its launch in the UK this summer, the UK registered a strong start of sales for A290. A110 maintained a solid momentum with 500 registrations. The orders of the current generation of A110 will close in the coming months before of the next generation, which will be 100% electric. Lastly, Alpine will soon open orders for the A390, its new electric sports fastback, which will be out at the end of the year. So that's the zoom on the brands. I'd like to move to the inventories on the next slide. Total inventories, this is the sum of group and independent dealers, at the end of September stood at 538,000 units, up just 8,000 units versus June. The inventory increase at group level is partly offset by a destocking at independent dealers in line with the regular seasonal patterns. Looking at the impact on our volume bucket in the revenue, this quarter destocking at independent dealers was minus 98,000 units, you can see on the slide, stronger than the destocking effect experienced in the same quarter last year, which was only 72,000 units. Therefore, this impacted negatively our volume effect in the walk-down of revenue. We continue to implement a strict discipline in the management of our total inventories. We did slightly adjust our production output in Q3, as we do traditionally, and we'll continue to do so in Q4 if needed. This will be done while maintaining a high utilization rate of our industrial facilities. Looking forward to Q4, the group expects a restocking of independent dealers, but one well below that registered in Q4 2024. Let's move on to our sales to partners. This is the next part of the walk-down. This has a positive effect of 1.6 points on revenue in Q3 2025, driven by programmes with our partners and the impact of the integration of ARIN IPL in the consolidation perimeter. This was the facility we bought in India. As a reminder, on August, we completed the acquisition of this facility we now have 100% of the Chennai plant previously held at 51% by Nissan. Now let's have a look at the next box, which is price, product mix and geo-mix effects. As expected, the price effect was slightly negative in Q3. This is mainly due to a highly challenging environment with continuing and strong commercial pressure, especially noted in Europe. On international sales, the negative currency impacts were partly offset by price increases. But as part of our value over volume policy, we maintain, in our pricing approach, a strong focus on residual values, which is a key competitive factor for the Group's longer-term performance. The product mix effect was positive at plus 0.9, driven by the performance of both Renault and Dacia models, mostly Bigster and Renault 5. I'd like to note they delivered on our expectations in terms of mix impact. The lower product mix effect compared to the previous quarters is mostly explained by the annualization impact of the phasing of product launches. When we look back after one year we have Sambios, Scenic and Duster which entered in the comparison base this time last year which naturally reduces the year-on-year impact. Product mix in Q4 should be higher benefiting from a stronger contribution of Bigster and Renault 5 and the ramp-up of Renault 4. Geographical mix stood at plus one point notably explained by lower sales in Brazil in Q3 2025 This was due to a focus on the most profitable channels, combined with a high comparison base in the quarter of the previous year. Now let's turn quickly to mobilised financial services. I mentioned the strong growth. The contracts production slightly increased on Q3 2024, but it's the average performing assets that improved by 5.3% at €59.5 billion, mostly thanks to the increase in average selling prices over the last years. All in all, mobilised financial services revenue were up 18.4% to 1.6 billion euros, mainly driven by both interest rates and the average ticket price I just described. So review of the revenue done, let's turn to the outlook for the full year. In 2025, the auto industry as a whole is challenging, but we have built strong fundamentals on which we can leverage. We have a very disciplined inventory management, allowing flexibility in our production base while maintaining the high utilization rates of our plants. Our order intake was a high single digit growth in Q3, that's year on year, with a positive momentum both on passenger cars and on light commercial vehicles. We continue to focus on value over volume. It's a core fundamental. embodied by our exposure to the retail channel mix and I say once again we are 20 points above the market average. This is an advantage obviously as regards the group's margin profile. Finally, in terms of residual value, the strong competitive edge remains. We stand 5 to 11 points above our main competitors in the European markets. Can't forget product. This year was intense in terms of launches and facelifts. We've already seen the first benefits of Bigster, available in both ICE and hybrid. The vehicle was launched in Q2 and is demonstrating day after day commercial success. Renault 4 arrived at the end of Q2, with a real launch happening in September, and we have also launched the facelifts of both Espace and Austral. This will not stop here. We continue in Q4. We have three new vehicles for Renault. Renault Quid E-Tech, Renault Boreal for International, and the new Renault Clio 6 for European markets, which we will see the first deliveries in Q1 2026. And last but not least, the Alpine A390, which will arrive right at the end of the year. These launches will further support the commercial dynamic of the group, which is very positive, as you saw in the Q3 registrations. So, looking at the outlook, we confirm our guidance today for 2025 with a group operating margin at around 6.5% and a free cash flow between 1 billion and 1.5 billion euros. We remain very focused on reducing our costs and continue to work on what we can control. Our top priority is to deliver on our updated full-year guidance. And in parallel, as you know, we are working on the next strategic plan, which will be announced in Q1 2026. So this concludes my presentation. Florent, thanks everyone to your attention, first of all. And then with Florent and the team, we're ready to take your questions.

Thank you, Duncan. And so the first question will come from Jose Asumendi from J.P. Morgan. Can you please open your mic?