PARIS -- Renault reported its first loss in a decade and cut its 2020 margin target, as it attempts to draw a line under the Carlos Ghosn affair and reboot its Nissan alliance.
Renault posted an annual loss of 141 million euros ($153 million), compared with a profit of 3.3 billion euros in 2018, the automaker said in a news release on Friday. Operating income dropped 30 percent to 2.11 billion euros.
"It has been a tough year for Groupe Renault and the alliance," acting CEO Clotilde Delbos told a conference call, adding that the broader autos downturn had hit the company "right when we were facing internal difficulties."
The loss triggered a "no-taboos" commitment to cut structural costs by 2 billion euros ($2.2 billion) over the next three years. Renault did not exclude job cuts in a promised review of its performance across all factories.
Former Volkswagen Group executive Luca de Meo will start as Renault CEO in July. He and Chairman Jean-Dominique Senard will be charged with turning the page on a troubled era and shoring up Renault’s alliance with Nissan.
On Friday, Renault executives repeated assurances that the Nissan alliance was on track. Delbos acknowledged that investors were still skeptical, but said that the automakers would provide meatier joint goals by May.
Renault doesn’t have the "luxury" to wait until de Meo arrives in July, Delbos said.
Delbos stepped into the CEO role on an interim basis after Thierry Bollore, a long-standing Ghosn ally, was ousted in October. She will remain finance chief after de Meo becomes CEO.
Delbos said Renault's automotive operational free cash flow, under scrutiny from analysts, would be positive in 2020 after stripping out restructuring costs. "We are very confident that there is no topic on cash availability within the group," Delbos said.
Last year Nissan's contribution to Renault's income plunged to 242 million euros last year from 1.51 billion euros the year before. Renault has a 43 percent stake in Nissan, which earlier this week posted its first quarterly loss in nearly a decade and cut its profit forecast.
Renault was penalized by charges linked to some of its Chinese joint ventures. The company also booked a 753 million-euro charge related to the discontinuation of the recognition of deferred tax assets on tax losses in France.
Sales to partners were down 3.4 percentage points due to lower vehicle production for Nissan and Daimler, as well as the decline in demand for diesel engines in Europe. A sharp drop in CKD business in China and the end of CKD production in Iran also hit earnings.
Renault's group sales fell 3.3 percent to 55.53 billion euros in 2019.
For 2020, the automaker sees annual revenues in line with last year, leaving aside currency swings, and a group operating margin of between 3 percent and 4 percent, down from 4.8 percent in 2019.
Renault’s 2019 dividend will fall by more than two-thirds to 1.10 euros a share, it said.
Renault forecasts that the global auto market will fall in 2020, with sales in Europe and Russia down around 3 percent.
Renault has stumbled in several countries, including Argentina, and said it needed to fix its operations in China, where it has a partnership with Dongfeng on passenger cars vehicles and with Brilliance China Automotive Holdings on light commercial vehicles.
The automaker has a factory with Dongfeng in Wuhan, the epicenter of the coronavirus epidemic, which has been in lockdown to contain the spread of the virus. It has also suspended operations for at least four days at its South Korean subsidiary in Busan due to supply chain hiccups.
Bloomberg contributed to this report
