February 10, 2017 / 6:32 AM / 5 months ago

Renault sets new mid-term goals after record earnings

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PARIS, Feb 10 (Reuters) - French carmaker Renault posted record full-year sales and profit on Friday and set itself ambitious new mid-term goals for both, after earnings were boosted by a comprehensive model revamp.

Operating profit surged 38 percent to 3.282 billion euros in 2016 on a 51.2 billion euros in revenue, up 13.1 percent, Renault said. That lifted its operating margin to 6.4 percent 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 increased its market share in all regions last year, according to sales data published last month, thanks to an onslaught of product launches and the success of low-cost models such as the Duster and Kwid SUVs.

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 research and development spending could imperil the goal.

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. (Reporting by Laurence Frost; Editing by Bate Felix)

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