2005 ANNUAL REPORT - Renault

Financial performance
and outlook for 2006
Revenues up 1.9% (1)
Faced with difficult
business conditions
in Europe, but strong
growth on other
international markets,
Renault reported
an operating margin
equal to 3.2% of revenues
while net income reached
a record 73.4 billion.
Group revenues increased 1.9% to total 541.3 billion
in 2005.
• Revenues reported by the Automobile Division were
up 2% at 539.5 billion on the back of increased
sales worldwide:
- on fiercely competitive markets in Europe,
a decline in unit sales was compounded by a less
favorable product mix and lower prices as the Group’s
product range entered a less positive phase;
- in the rest of the world, a rise in unit sales
combined with higher prices and an improved
product mix led to increased revenues, with new
Renault Samsung models SM5 and SM7 leading
the way, and Logan increasing its market share.
• The contribution from the Sales Financing Division,
down 0.2% to 51.9 billion, was nearly unchanged
as a lower average interest rate on loans to customers
was offset by a 4.6% rise in total average loans
outstanding.
Revenues by Division
e million
40,565 41,338
40,000
30,000
20,000
10,000
0
1,884 1,880 (0.2)%
2004 2005 2005/2004
2005 scope change
Automobile
Sales Financing
38,681 39,458
1.9%
+ 2.0%
Operating margin reaches 3.2%
of revenues
Group operating margin came to 51.3 billion in 2005,
or 3.2% of revenues, compared with 5.2% in 2004:
• The Automobile Division reported operating margin
of 50.86 billion, compared with 51.65 billion in 2004.
Strong performances outside Europe were offset
by a marked decline in the contribution of European
sales, in turn due to:
- a less favorable product mix and geographical mix;
- lower sales price of vehicles;
- a rise in both raw material costs and costs
associated with the introduction of Euro IV
emission standards.
Furthermore, R&D costs increased due to international
expansion and the extension of the product lineup.
A drive to reduce purchasing costs failed to offset these
factors.
• The Sales Financing Division once again made
a healthy contribution to revenues, totaling 50.47
billion.
Operating margin by Division
e million
2,500
2,000
1,500
1,000
500
2,115
Automobile
Sales Financing
1,654
(*) 2004 data presented under IFRS.
1,323
858
0 461
465
2004 ( *) 2005
% of revenues 5.2 3.2
(1) On a consistent accounting basis.
82
2005 Renault Annual Report