PARIS -- Renault set itself ambitious new midterm goals after setting records for vehicle sales and profit margin last year thanks to a comprehensive model revamp.
Operating profit surged 38 percent to 3.28 billion euros in 2016 on record revenue of 51.2 billion euros, up 13.1 percent, Renault said. That lifted its operating margin to 6.4 percent, also a record, from 5.2 percent, meeting existing targets a year early.
The results were achieved "in spite of the fact that some of our important markets are still significantly lower," Chief Financial Officer Clotilde Delbos said. "That means there is plenty of potential for Renault to continue to grow."
Renault had record sales of 3.18 million vehicles, which helped it increase its market share in all regions last year, according to data published last month. The rise came thanks to an onslaught of product launches and the success of SUVs such as the Captur, Duster and Kwid.
The group set new five-year goals including a 7 percent operating margin and 70 billion euros in revenue -- a further 37 percent increase on last year's figures -- to be measured in 2022. It raised its proposed dividend to 3.15 euros per share from the 2.40 paid out last year.
The full-year results largely beat market expectations of 3.07 billion euros in operating profit on revenue of 50.84 billion, based on the median estimates in an Inquiry Financial poll of nine analysts for Reuters.
However, full-year savings in variable production costs amounted to 184 million euros, short of a 350 million target.
The group had warned in July that higher r&d spending could imperil the goal.
The effect of pricing and mix -- reflecting customers' choice of vehicles and options -- turned negative in the second half, paring 20 million euros from profits after a 135 million positive first-half contribution.
These setbacks "will likely temper the upper end of consensus upgrades," Exane BNP analyst Dominic O'Brien said in a note. "The key here though will be the mid-term plan, (which) will likely re-ignite interest in the stock."
The embattled Brazilian and Russian auto markets should bottom out at "stable" levels this year, Renault said, while China expands a further 5 percent and India grows 8 percent.
For 2017, the group said it was targeting further growth in revenue and operating profit underpinned by positive automotive free cash flow.