Capgemini SE

Renault Group said H1 2026 revenue rose 10% year over year. Group operating margin was 5.2%, and automotive free cash flow was over EUR 600 million; management also said H1 free cash flow was EUR 653 million. Renault brand sales were up 3% worldwide, Dacia sales were down 8% but orders were up 4% in Europe, Alpine sales were up 69% with more than 8,000 vehicles sold, and LCV sales were up 12%. Renault also said MFS generated EUR 753 million of profitability in H1, equal to 50% of group operating margin. For full-year 2026, management reiterated guidance for circa 5.5% operating margin and automotive free cash flow of circa EUR 1 billion. On cash flow, the company expects H2 to absorb EUR 300 million of partner down payments received in H1, and it reiterated MFS dividend guidance of EUR 350 million for 2026, with EUR 250 million paid in H1 and the remainder expected in H2.

Francois Provost framed the quarter as evidence that Renault is transforming and accelerating under the futuREady midterm plan. He emphasized growth through new products, electrification, and international expansion, citing Twingo, new Clio, Dacia’s hybrid models, and launches in India, Turkey, Brazil and South Korea. His tone was confident and defensive on competitiveness, repeatedly stressing that Renault is prepared for pricing pressure, Chinese competition, and regulatory uncertainty through tighter cost control, supplier partnership, and a focus on value over volume.

Duncan Minto highlighted that H1 results were in line with guidance and that the business remains on track for circa 5.5% operating margin and circa EUR 1 billion of automotive free cash flow for 2026. He said raw materials and inflation are a EUR 600 million headwind for the full year, with about EUR 200 million in H1 and roughly twice that impact in H2, while warranty costs should be lower in H2 than last year and fixed costs should stay flat. He also said H2 CapEx and capitalized R&D should be slightly higher than prior-year levels, working capital should remain negative for the full year, and the EUR 300 million of partner down payments received in H1 will unwind in H2. On MFS, he said the cost of risk rose slightly in some South American countries but not materially, and he was comfortable with MFS paying the remaining dividend in H2.

Analysts focused on the H2 margin bridge, pricing pressure, raw-material inflation, and MFS dividend capacity. Management said H2 will still face pricing pressure, raw materials will be a bigger headwind than in H1, and cost savings will mainly come from purchasing and broader supplier collaboration, including more than a 40% reduction in entry tickets on new projects versus the past. On MFS, management said the full-year EUR 350 million dividend plan remains intact and that the balance can be paid in H2. They also addressed Chinese competition, saying it is not a surprise and that Renault’s response is to match competitors on cost and technology while relying on its own strengths in brand, design, product and manufacturing; on capacity, Renault said it has no need to reduce capacity further because utilization is above 80%.