Renault announced a major overhaul that will see it separate its activities in five businesses, deepen ties with China's Geely and spin off its electric vehicles unit through a stock market listing next year.
The automaker set an 8 percent operating margin goal for 2025, which would increase to more than 10 percent in 2030, from 5 percent expected this year. It also aims for an operating cash flow of more than 2 billion euros a year between 2023-25 from more than 1.5 billion this year, rising to more than 3 billion euros in the following five years.
Dividend payments will resume next year after a three-year hiatus as turnaround efforts take hold, Renault said on Tuesday during an investor day.
CEO Luca de Meo, who took over a struggling Renault in 2020, has embarked on a radical overhaul of operations as the automaker seeks to navigate the difficult and costly transition to electrification.
The main plank of the automaker's strategy is separating its combustion engine business -- which will be housed in a 50-50 joint venture with Geely -- from its electric vehicle unit, to be listed in the second half of next year. The move is expected to help Renault raise funds for EV development and technology and narrow the gap with bigger companies such as Stellantis.
Renault is reorganizing into five different units spanning electric cars, combustion- and hybrid-engine assets, the Alpine sports-car brand, financial services and new mobility and recycling businesses.
"We are creating independent businesses, focused on structurally more profitable activities, open to external investments, each of built around an indigenous set of technologies," De Meo said.
Using a sports metaphor, he compared the "old" Renault to a pentathlon athlete who would struggle to win gold medals in all five sport specialties.
By partnering in each of its new 5 businesses with the best available partners, "Renault hopes to win medals in those different sports instead of remaining at an average level in all 5," he said.