The Board of Directors of Renault Group announced that, from March 23, Renault Group activities in its manufacturing plant in Moscow are suspended.
Regarding its stake in AvtoVAZ, the subsidiary of Renault in Russia in which the French company holds a controlling 67.61% stake, the corporate group assesses the available options taking into account the current environment, while acting responsibly towards its 45,000 employees in the eurasian country, according to a press release.
The company reminds that it already implements the necessary measures to comply with international sanctions.
Economic consequences
As a result of the suspension of activities in Moscow, Renault announced it has to revise its 2022 financial outlook, with a Group operating margin of around 3% (vs ≥ 4% previously) and a positive automotive operating free cash flow (vs ≥ €1Bn previously).
A non-cash adjustment charge amounting to the accounting value of the consolidated intangible assets, property, plant and equipment and goodwill should be recorded at the time of the 2022 first half results. As of December 31, 2021, this value amounted to 2,195 million euros.
Renaulution is still on
Renault Group remains focused on implementing its Renaulution strategic plan, the press note stated. Renaulution is an ambitious transformative program that aims to move away from volumes to added value, through a plan structured in 3 phases launched in parallel.
The Group will pursue its commercial policy focused on value, strengthen its competitiveness, and accelerate its cost reduction program.
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