2007 Interactive Registration Document - Renault

02 EARNINGS
MANAGEMENT REPORT
REPORT
2.1.2.1. CONSOLIDATED INCOME STATEMENT
Group revenues came to €40,682 million, up 1.8% on 2006, on a consistent basis.
Divisional contribution to Group revenues ✦
2007 REPORTED
2006 RESTATED FOR 2007 SCOPE
AND METHODS (1) % CHANGE 2007/2006
2006
REPORTED
(€ million) H1 H2 YEAR H1 H2 YEAR H1 H2 YEAR YEAR
Automobile 19,567 19,112 38,679 19,871 18,187 38,058 -1.5% 5.1% 1.6% 39,605
Sales Financing 995 1,008 2,003 985 926 1,911 1.0% 8.9% 4.8% 1,923
TOTAL 20,562 20,120 40,682 20,856 19,113 39,969 -1.4% 5.3% 1.8% 41,528
(1) The changes in accounting methods chiefly concern operations related to contracts with subcontractors and sales of parts under warranty to customers, previously recorded as revenue.
The contribution from Sales Financing (RCI Banque) to revenues was
€2,003 million, up 4.8% on 2006, on the higher average interest rate on the
customer loan portfolio.
The contribution from Automobile was €38,679 million, up 1.6% on a
consistent basis.
Several trends were at work:
n the revenue contribution from the France and Europe Regions fell 2.6% in
a fi ercely competitive market. Sales growth was positive in the second half,
quickening in the fi nal quarter with the launch of new products;
Divisional contribution to Group operating margin
all the other Regions made a positive contribution to revenues in 2007 on
strong sales growth, especially in the Americas and Euromed Regions, where
the product mix improved. The total contribution of Euromed, Americas and
Asia-Africa improved 3.1% on 2006.
The increase in revenues can also be attributed to higher sales of powertrains
and vehicles to partners, which made a positive contribution of 1.2 point.
(€ million) H1 2007 H2 2007 YEAR 2007 YEAR 2006 CHANGE
Automobile 455 427 882 571 311
% of revenues 2.3% 2.2% 2.3% 1.5%
Sales financing 267 205 472 492 -20
% of revenues 26.8% 20.3% 23.6% 25.7%
TOTAL 722 632 1,354 1,063 291
% of revenues 3.5% 3.1% 3.3% 2.6%
Group operating margin in 2007 totaled €1,354 million in 2007, or 3.3% of
revenues, compared with €1,063 million and 2.6% in 2006.
Sales Financing contributed €472 million to Group operating margin, or 23.6%
of its revenues, versus €492 million and 25.7% in 2006. This slight contraction
can be explained by a decline in sales fi nancing business, due to the decrease
in commercial activity in Automobile in 2006 and fi rst-half 2007.
Amid adverse economic conditions in 2007, with a negative currency impact
of €154 million and raw materials costs up by €270 million, Automobile’s
contribution to operating margin increased 54.5% to €882 million, or 2.3% of
revenues, owing chiefl y to:
n growth in international sales, with the three non-European regions generating
positive operating margin;
56 Registration Document Renault 2007
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the steady performance of the commercial vehicle line-up in Europe;
continued cost-cutting efforts:
. purchasing costs fell by €660 million, excluding the impact of raw
materials,
. manufacturing and logistics costs improved by €137 million,
. G&A declined 2%, by €44 million,
. special product-recall and warranty extension operations were carried out
with a view to preserving the Group’s brand image; these resulted in a
€152 million increase in warranty-related costs.
The product development cycle was the reason for a €196 million increase in
capitalized R&D expenses in 2007.
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