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Investing.com -- Renault (EPA:RENA) Group has released preliminary financial figures for the first half of 2025, showing revenue growth of 2.5% to €27.6 billion, but the company has cut its full-year outlook due to deteriorating market conditions.
The French automaker reported an operating margin of 6.0% of group revenue and free cash-flow of €47 million for H1 2025. The cash-flow figure includes a significantly negative change in working capital requirement estimated at approximately €900 million, excluding tax effects.
Renault cited lower-than-expected performance in June, with slightly lower volumes and increasing commercial pressure due to a continuing decline in the retail market. The company also experienced an underperformance in its Light Commercial Vehicle (LCV) business amid a sharply declining European market.
The negative change in working capital was attributed to lower production levels at the end of June 2025 compared to the end of 2024, and higher OEM inventory levels compared to December 2024. Total (EPA:TTEF) inventories stood at 530,000 vehicles at the end of June, down from 560,000 vehicles in March 2025.
In response to these challenges, Renault Group has revised its full-year 2025 targets. The company now aims to achieve an operating margin of around 6.5%, down from its previous target of 7% or higher. Free cash-flow expectations have been lowered to between €1.0 and €1.5 billion, compared to the previous target of €2 billion or more.
The automaker said it is pursuing a strict commercial policy that prioritizes value creation over volume and is strengthening its short-term cost reduction plan. This plan focuses on SG&A cost reduction, manufacturing and R&D savings.
Despite these challenges, Renault highlighted its strong fundamentals, including a flexible business model, an attractive product lineup with 7 launches and 2 facelifts planned for 2025, and a focus on profitable retail sales channels in Europe.
The company will publish its complete H1 2025 results on July 31, 2025.
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