By Dominique Patton PARIS (Reuters) -Renault named its finance chief Duncan Minto as interim CEO on Tuesday, and said it will step up cost cutting measures after cutting its forecast for full year
Renault Appoints Duncan Minto as Interim CEO Amidst Margin Cuts
By Dominique Patton
PARIS (Reuters) -Renault named finance chief Duncan Minto as interim CEO on Tuesday, and said it will step up cost cutting measures after lowering its forecast for full year operating margins.
The French carmaker said its first half free cash flow would amount to just 47 million euros ($54.49 million), hit by a negative working capital requirement of around 900 million euros, due to delayed billings and a decline in both the passenger car and van market in Europe.
It said it now aims to achieve a full year operating margin of 6.5% compared with at least 7% previously announced. And it aims for free cash-flow of 1-1.5 billion euros, versus over 2 billion euros previously.
Renault, whose popular models include the low-cost Dacia Sandero as well as the electric Renault 5, has fared better than many of its bigger peers like Stellantis and Volkswagen over the last year, with new launches boosting sales and profits, and a focus on Europe insulating it from trade turmoil caused by U.S. President Donald Trump's tariffs.
However, it remains under pressure, with weak demand in its key European markets and growing competition from China, especially in electric and hybrid vehicles.
"Obviously, the retail market's been slow across Europe, and we haven't seen any positive dynamic at all in, you know, competitive positioning and pricing. We've seen actually things get softer slightly," Minto told an analysts' call.
The company said June volumes were slightly lower than expected, while it was also impacted by billing timing that affected its receivables.
Minto, who has been at the Renault group since 1997, has taken over running the company as of Tuesday as it searches for a permanent replacement for Luca de Meo who resigned suddenly last month to join luxury group Kering.
Minto, 50, was appointed CFO in March. He will ensure the day-to-day management of the company alongside chairman Jean-Dominique Senard, Renault said in a statement.
Renault, which reports first half results on July 31, said on Tuesday that the selection process for the new CEO was "well underway."
Cost-cutting actions and plans to ensure the group's cost competitiveness, as well as the working capital reversal, will be in focus during the July 31 earnings call, said analysts at JPMorgan.
"Additionally, in our view, it is crucial for Renault to provide more details on the CEO succession, with an announcement expected by year-end," they added.
Denis Le Vot, currently head of Renault's Dacia brand, is seen by analysts as a frontrunner to take over as CEO, as is Maxime Picat, who was chief global purchasing and supply chain officer at Stellantis until his departure this month, weeks after the company overlooked him for the top job and picked Antonio Filosa as CEO.
($1 = 0.8625 euros)
(Additional reporting by Gilles Guillaume; Writing by Dominique Patton and Ingrid Melander;Editing by Elaine Hardcastle and Susan Fenton)
