Renault SA (RNO) Earnings Call Transcript & Summary

[Foreign Language] Two years in advance and above our 2023 guidance. So we also suggested that Renault Group transformation was moving forward with substantial improvements on all fundamentals that made us confident in our ability to overcome future headwinds. That's what we said. And we had a lot of course, of headwinds in this last month. So this is the outcome. In H1, our profitability reached 4.7% up 2.6 points from H1 last year. We generated around EUR 1 billion of free cash flow. This is up EUR 1.5 billion. And since the end of last year, our net debt was reduced by EUR 1.2 billion, and this includes EUR 0.5 billion from the deconsolidation of our Russian automotive operation. So by June 30, our net debt amounted to only EUR 426 million. So these results place us at a 10-year high in terms of cash generation for the first semester. We also achieved our best margin on variable cost in Europe per unit in 10 years. We did that, as you know, in probably the worst environment in 15 years, electronic component crisis, supply disruptions and cost inflation with almost EUR 800 million of impact on raw materials. And of course, the conflict in Ukraine resulted in a very challenging situation for the group. We had to sell Renault Russia and out of us. It was a difficult but necessary decision, and it didn't penalize as you can see the performance of the group. Today's results confirm that we -- with a much lighter and nimble organization that we have shaped in the last 2 years, we are now able to absorb even the most severe shocks, manage a volatile environment and still accelerate the metamorphosis of the company. I think I can state today without blowing it up that Renaulution is a success. We are delivering 3 years in advance our commitments, and we are not here to rest on laurels as we know that there is still room to catch up with our best competitors. So 3 levels of transformation allow us to get there. First one is our commercial policy focused on value. The second is the start of a product offensive enabling commercial successes. And third, the restoration of our competitiveness. So let's start with our go-to-market approach placing value over volume. It's working, and it will continue to work because we enter into a favorable product cycle. And because in the meantime, we went on optimizing our operations. We improved our product mix within the existing product offer. In Europe, for example, our electric and hybrid mix went through the roof. It moved from 4.5% in 2019 to 36% in H1, and it's still on the rise, winning 10 points in 1 year. What happened is clear, in 18 months, we have made it to replace diesel with hybrid cars, which was a big question mark for all European carmakers only a few years ago. In addition, C segment and above products now represent 40% of our passenger car sales worldwide, this is consistent with the ambition to align our mix with our competitors. So for the Renault brand, also in Europe, C segment and above segments, sales rose by 10 points in 2 years, reaching 36%. So as promised, we improved our channel mix. In H1, retail accounted for more than half of Renault Brands total sales in the big 5 countries and up 13 points from a year ago. Dacia confirms its #3 position in Europe on the PC passenger car retail segment. And in G5, so the big 5 markets, 1 individual customer out of 6 is choosing a car model of the Renault Group. All our new models show that customer and their launches show that the customer are willing to upgrade their selection with high-end versions making over 70% of the mix. So the bottom line, ladies and gentlemen, is a net price improved by 7.4 points versus H1 2021. Compared with H1 2020, the improvement is around 18 points. The second level is product offer. We are starting to benefit of new important product introductions, and it will accelerate massively in the next months and years. Remember that when the crisis came, we were on a low point of our product life cycle. So all new car launches that we have organized in the last 2 years were above our project expectation. Mégane E-TECH ranked #2 at the Car of the Year contest. We already received over 25,000 orders, while it is just starting to appear in dealerships in Europe. It's roughly 20% above our expectation and over 80% of our customers go for the richest versions with large batteries. Arkana success is steady. We received this year 40,000 orders. In total, we see more than 100,000 orders since its launch. And the same is true for Dacia. The Dacia Spring we received 33,000 orders this year. This is more than 5,000 orders per month and all of this despite the shortages. For Dacia Jogger in 6 months, we received more than 50,000 orders. That is 30% above our initial estimations. The next big thing will be the Austral this C-SUV is on one of the most strategic segments with high volume and double margins, a segment where we were not existing basically in the previous generation. So the product has the most efficient hybrid engine in the world with 44% of energy efficiency, 200-horsepower and down to 103, 104-gram of CO2 per kilometer. This is 15 or 20 grams lower than the best of competition. And most importantly, Austral will provide an outstanding profitability. We expect this transaction price to be 25% above previous generation Dacia. So let's finish with Alpine the brand is, I would say, sky rocketing, Its registration rose by more than 70% after an already record year in 2021. The -- I think the engagement in Formula One is proving to have an effect on awareness and desirability of the brand. We are touching a completely different customer profile of automotive enthusiasts. Just as an example, for the 100 anniversary of Alpine's legendary founder, Jean Redel, we presented online, a limited edition of 100 pieces, obviously, at the price of around EUR 90,000. The 100 were booked with down payment in 34 seconds. Our group backlog now amounts to over 4 months of sales, which means that H2 is basically secured just with today order book. So now let's see the other side of the equation, cost, productivity and competitiveness. So what happened here in terms of cost structure in the last 18 months is unprecedented at Renault. We lowered down our breakeven point by over 40%, and we will continue despite the headwinds. Let me take an example by addressing upfront potential question in the Q&A. How are you guys are going to manage energy prices increase and shortage? Of course, we are closely monitoring the situation. But in the European Union, 95% of our production takes place in 3 countries where the dependence of Russian gas is significantly lower than the average, 20% in France, 18% in Romania and 8% in Spain against 45% for the EU and on average. We achieved in our plants on top, a 10% operational performance by unit compared to 2021. That's quite a lot when we talk about energy, approximately the annual consumption of 2 plants, thanks to 4.0 industry. We will increase leverage data monitoring tools to further optimize industrial processes such as overheating or to better detect leaks. In September, we will unveil a plan to drastically improve our energy performance with best-in-class initiatives in the field of renewable energies. We consider the ESG requirements linked to the carbonization as a lever to improve competitiveness. In the last 2 years, we also decided to get rid of all unnecessary bricks and mortars in the company to create a real estate light organization. We already reduced our footprint by 1 million square meters, Russia excluded or 1.3 million if you include it. This is equivalent to 93 football fields or a decrease of 8% everywhere in the company from the plants to own dealers to administrative buildings. By the end of the year, we will add another 165,000 square meters. When it comes to average stock and therefore, the working capital needed to run the business, we are already on another planet and not because of the shortage of components. Since 2020, for example, we reduced average vehicle stocks for us and for our dealers by 35%. On cash fixed cost, we are also much lighter, already in October 2021, we had fulfilled our end of 2022 commitment. We are continuing to push on all our drivers. And this semester, we did an additional 100 million of reduction and this number excludes Russia. This is almost a 30% cut from 2019 putting us on a reasonable percentage level even in times where turnover is limited by market demand and supply shortages. We are ready for the moment when the business will come back. But if you allow me, beyond the numbers, the most important thing that we manage with a change of mindsets of the people at Renault from the focus on the business and on the customer generated by a brand-driven organization to the discipline of engineering, the flexibility of our production people, the resilience of our buyers, the focus on value of our sales and marketing people, the thoroughness of our finance and the obsession of our quality specialists. We promoted 250 people in new top management position. 50 of them from the outside are bringing new competencies and enrich our perspectives, 50% of these new recruits are women. We are very -- every day more of the, I would say, the spirit of the winning teams. We have the courage of and the vitality of the survivors. As a leader of this organization, it is very pleasant to see. After 2 years of sacrifices and the hard diet. We are now ready for the next chapter at Renault. A chapter where words like innovation, ambition and continuous improvement and metamorphosis will be at the center of our conversation. But I will tell you more about it in a few minutes. So before that, I leave it to Thierry Pieton, who will present to you the financial results.

Well, thanks very much, Luca, and good morning, everyone. Before starting on the results, I'd like to give you a clear view of the impact of our exit from Russia and provide you with some adjusted figures. The Russian automotive activities were deconsolidated in Renault Group's 2022 H1 results and treated as discontinued operations with retroactive effect on the first of January. The results of the discontinued operations are a loss of EUR 2.3 billion in H1, most of it coming from the impairment of goodwill and intangible assets in AVTOVAZ and Renault Russia. The financial aggregates of continuing operations for H1, therefore, no longer include the Russian automotive activities. As you can see, 2021 has been restated accordingly. To give you a few figures, the impact on '21 revenue is minus EUR 2.3 billion for H1 and minus EUR 4.5 billion for the full year. The impact on '21 operating margin amounted to minus EUR 222 million for H1 or 0.7 points and EUR 510 million on the full year or 0.8 points. Last, which Luca already mentioned, the net debt as of December 31, 2021, improved thanks to the deconsolidation by EUR 522 million and thus amounted to minus EUR 1.1 billion. Moving to volume. As a consequence of the exit from Russia here as in the rest of the presentation, the 2021 figures have been adjusted from Lada and Renault Russia sales. In H1, overall, the market remained pretty tough mainly due to the electronic component situation. In this environment, the group adjusted 1 million units, an 11.9% decrease in H1 -- versus H1 of '21. Renault brand sold 692,000 vehicles down 16.8%, mostly driven by the electronic component situation. However, we continue to focus on the most profitable channels. And as an example, in the top 5 European countries, Renault brand significantly outperformed the retail market, with a market share increasing by 0.8 points. Dacia, which is less exposed to the most affected suppliers and benefiting from its value for money positioning, continued its growth and was up 5.9% at 278,000 units. Alpine's activity, as mentioned by Luca, supported by the launch of the new range around the successful A110 and the expansion of its network rose by 71%. As you will see in the following slides, the group's operational performance already mentioned by Luca translated into financial figures that more than offset the overall volume decrease. On Slide #12, we show the revenue contribution by activity. Group revenue, despite the decrease of 11.9% in volume, was up 0.3% compared to H1 of '21 at EUR 21.1 billion. At constant exchange rates, it increased by 1.1%. Automotive revenue increased by 0.3% to EUR 19.6 billion. Mobility services contribution amounted to EUR 17 million. Our captive finance company, which, by the way, has been renamed Mobilized Financial Services recorded revenues of EUR 1.5 billion in the semester, up 0.5%. I'll now review the breakdown of revenue for the automotive industry segments. As just shown, the impact of discontinued operations on H1 revenue is EUR 2.1 billion. Starting on H1 adjusted, Foreign exchange was a negative 0.9 points mainly related to the devaluation of the Turkish lira. We had a negative volume impact of 5.2 points of total revenue, as was just mentioned. The product mix effect yielded a positive impact of 3.3 points, thanks to the success of our C crossover Arkana, which was launched in the second quarter of '21, the launch of Jogger in the first quarter of '22 and Mégane Electric in Q2. As you can see, the group is back in the C segment, and it's starting to pay off. The benefit of the value over volume commercial policy is reflected in the 7.4 points of price effect. After a first quarter at 5.6 points, we posted an 8.4 point improvement in the second quarter. This continues to show how serious we are about improving the pricing of our cars and optimizing our commercial discounts. This semester, we reached the lowest level of commercial discounts in 10 years. The impact of sales to partners was negative 1.8 points. It's mainly due to the lower production of diesel engines and the end of the contract with Opel in Fiat at the end of last year. The last bucket, others represented a minus 2.1 point effect explained by the decline of the contribution of our own dealership network Renault Retail Group, mainly due to branches being sold. You will see further in the presentation that, however, the results of RRG were very strong. This effect was partially offset by strong pricing improvement in RRG and by the strong performance of our aftersales business. I'll now comment on the group operating margin by sector. We more than doubled the group's operating profit, delivering almost EUR 1 billion in H1 which represents 4.7% of revenue, up 2.6 points versus the first semester of '21. The Automotive segment was positive EUR 420 million or 2.1% of auto revenue up EUR 565 million, which is 2.8 points versus first half of '21, despite a reduction in volume of 136,000 units. Our financing activity, Mobilized Financial Services delivered EUR 582 million contribution to the group margin, stable versus last year. The next slide, Slide #15, provides a sequential view of the group auto and the group and auto operating margins by semester. I think the chart speaks by itself and it's a further evidence of the group's ongoing transformation. Of course, as Luca mentioned, 4.7% is not the end game, and it's still below the performance of some of our competitors. However, it's close to the Renaulution target that we had set for ourselves of 5% that was scheduled in 2025. So it's a significant step towards our new ambitions, which we will present, by the way, at the Capital Market Day that we will have in the fall. Let's see how -- more in detail how we achieved this EUR 0.6 billion improvement year-over-year despite an impact of lower volume of EUR 270 million. The biggest gain in the semester came from the high level of price, mix and enrichment, which contributed EUR 1.5 billion. This is the largest effect in 1 semester in mass over the last 10 years, and it shows the strong benefit of our commercial policy. This impact includes price increases to cover inflation, but more importantly, it reflects our strategy to bridge the gap versus the competition to optimize the discount scheme of our dealer network and crucially the success of our lineup renewal on the C segment in particular. We now show alongside this box the impact of costs in total, including raw material and input cost inflation to highlight the group's ability to more than offset cost headwinds, thanks to pricing, mix and productivity. You can see clearly the balance between the 2 boxes this semester. We achieved the best margin and variable cost in euros per unit in the last 10 years. The impact of cost, however, was a large headwind. And it represented EUR 647 million. The largest driver was higher raw material prices at minus EUR 797 million, particularly steel. Purchasing performance continued to be strong at EUR 167 million. Manufacturing costs increased by EUR 72 million, reflecting the impact of wages, energy and logistics roughly EUR 150 million together, partially offset by strong productivity and lower amortization. Warranty was a positive EUR 55 million in the semester, which is more importantly an indication of the quality improvements that the company is delivering. R&D contribution was positive at EUR 56 million. Our gross spending was almost flat year-over-year. So the positive effect stems mainly from lower amortization and higher capitalization ratio at plus 4.7 points, it remains quite a low capitalization ratio compared to historical averages. SG&A impact was negative EUR 82 million and is mainly explained by the nonreconduction in 2022 of partial unemployment subsidies that we received last year during COVID. I'll comment on Mobilize Financial Services performance in a minute in the presentation. To finish the analysis, the last bucket, named Other, contributed negatively for EUR 75 million. A good performance in RRG, thanks to the implementation of the new commercial policy and our work to optimize network as well as an aftersales contribution that's back to its 2018 level was more than offset by the effect of nonrecurring items in the first half of '21 and in '22 and the effect of the retreatment of buyback commitments. Mobilized Financial Services generated EUR 8.9 billion of new financing in the semester, up to 2.3%. In particular, thanks to the 14.8% increase in the average financed amount. So the pricing policy effects that we're getting on the new vehicle sales is also impacting favorably our financing franchise and it also stems from a strong commercial performance with a penetration rate that's up 2.2 points at 46.5%. Average performing assets at EUR 43.7 billion were down 3.9%. This decrease is purely linked with the wholesale activity, so our dealer stock financing for which the average performing assets was down 28.3% and due to the reduction of dealer inventories resulting from the group's strategy and from the shortage of electronic components. Net banking income was positively impacted this semester by swaps valuation effect of EUR 58 million due to current interest rates. It should be noted that this effect will tend towards 0 when the maturity of the swaps occurs. Cost of risk increased to 0.49%, but remains very low. Overall, Mobilized Financial Services posted an operating profit at EUR 0.6 billion, stable versus 2021 level. A noncash adjustment of EUR 100 million on exposure to Russia impacted the pretax income and has been booked by Mobilized Financial Services in H1 2022, this impact is recorded in associated companies, and we'll cover that later in the presentation. I'll continue down the P&L with the other operating income and expenses items on Slide 18, which amounted this semester to EUR 49 million. There's not much going on in this area in the semester, slightly lower restructuring cost provisions stood at minus EUR 134 million. This expense was partially offset by the disposals of distribution network, real estate assets, which led to a capital gain of EUR 56 million. Continuing down the P&L. The next item is financial income and expenses on Slide 19. The net charge stood at EUR 236 million this semester, which is an increase of EUR 98 million mainly due to the accounting impact of hyperinflation in Argentina. The cost of debt actually remained flat. The next slide shows the impact of associated companies in Renault's P&L. Nissan's H1 contribution stood at EUR 325 million, an improvement of EUR 225 million versus last year. Contribution from other associates was a negative at minus EUR 111 million compared to plus EUR 60 million last year. It mainly includes the depreciation of the assets of Renault Nissan Bank, which I mentioned previously. I'll turn back to the P&L on Slide 21. The net tax charge came to minus EUR 260 million in the semester versus minus EUR 185 million last year in line with the improvement of the pretax income, in particular in our foreign subsidiaries. Net income from continuing operations was therefore up EUR 657 million up was recorded -- sorry, reached EUR 657 million, up EUR 458 million versus last year. Net income from discontinued operations amounted to EUR 2.3 billion, as mentioned, due to the situation in Russia. Bottom line and total net profit came in at minus EUR 1.666 million. Now that the P&L announce is complete, I'll turn to Slide 22 on the evolution of the net financial position. Cash flow from operations amounted to EUR 2.6 billion, versus EUR 1.7 billion a year ago, reflecting the improvement in the operational performance and an EUR 800 million Mobilized Financial Services dividend payment. Net tangible and intangible investments came to EUR 1.1 billion, down almost EUR 320 million versus last year, mostly driven by CapEx and by leased vehicles. Group net CapEx and R&D rate as a percentage of turnover amounted to 8% in H1 versus 9.1% last year. This is in line with our target and also the best ratio since the second half of 2017. Assets disposal amounted to EUR 101 million. As you can see, the net investments were way more than covered by the automotive free cash flow regardless of the Mobilized Financial Services dividend despite low volume of sales in the semester. This is the key proof of the work that we've done with the team to lower the breakeven point. Change in the working capital requirement had a negative impact of EUR 0.3 billion, we recorded restructuring cash out in the semester for EUR 0.3 billion. As a result, operational free cash flow reached almost EUR 1 billion in the semester. Net financial investments and dividends consists mainly in dividends received, including EUR 64 million from Nissan and paid as well as investments in EV and mobility start-ups. EUR 161 million of cash were booked in discontinued operations. Finally, ForEx, IFRS and others had a negative impact of EUR 68 million. In total, our automotive net financial position improved by EUR 674 million compared to the end of last year and stood at minus EUR 426 million. Taking into consideration the exit from our Russian operations, it represents an improvement of EUR 1.2 billion. We're on the right track to become net cash positive. On Slide 23, it shows the inventory situation of Renault's balance sheet and for the independent dealer network. The figures prior to June 22 have not been adjusted for Russian stock they represented roughly 15,000 units on average over the period. As you can see, inventories are still very low, reflecting stricter inventory management, but also the chip shortage. In terms of backward coverage, this leads to about 60 days. The liquidity of the Automotive division was very comfortable at EUR 15.8 billion at the end of June 2022. In 2022, the group made an early repayment of EUR 1 billion of the loan from a banking pool guaranteed by the French state in H1, and we'll make an additional repayment of EUR 1 billion in H2 according to schedule. The remaining EUR 1 billion will be fully reimbursed by the end of 2023. As a side note, Renault SA launched a bond issue on the Japanese market in June for a total amount of JPY 80.7 billion or roughly EUR 561 million at a rate of 3.5% and a maturity of 3 years. The bond was cash on July 1 and is therefore not included in the financial liabilities at June 30, 2022. And with that, Luca, I'll give you -- Luca will give you the outlook for the rest of the year.

Thank you, Thierry. So In H2, I'm going to talk about H2. We think that market condition will continue to be challenging. So cost inflation, especially on raw materials will continue to wait strongly. We will probably have to face also the rising energy prices. Although for this year, we substantially hedge them. We expect also consumer sentiment to continue to be low, which means the demand under intention, but our order book is full, as I said before, for 2022. On the other hand, we have several wining cards in our hands. On the electronic component side, the situation is improving even if we still lack a full transparency. Of course, we will continue to reduce costs, as Thierry said, but I hope we have proved you that we know how to do it. And for sure, we will increasingly benefit from our lineup overall, Jogger, Arkana and on top from now on the brand-new Mégane E-TECH and especially the Austral. So Renault Group has not been very famous for in the past for upgrading financial guidance. I told you we were changing. So today, we are significantly increasing our financial outlook for the year from around 3% to above 5% of operating margin. And our automotive operational free cash flow will be above EUR 1.5 billion compared to a positive free cash flow guidance we gave previously. So the Renaulution plan that we launched 18 months ago at 3 parts, so restoration, renovation and evolution, if you remember. So with this new guidance, we are now 3 years or more ahead of the targets and the commitments. And I think we can say that the restoration phase, meaning the emergency phase, it's over at Renault. So let's look ahead at the years ahead. The renovation phase of the Renaulution in fact, is already well underway. We are developing what we believe is our best product lineup in decades. So between 2023 and 2025, we will launch 25 new vehicles. Among them, some will support our geographical offensive on important markets like, I don't know, LATAM, South Korea or India, Others will bring us back where we deserve in our home market, Europe. Of course, this lineup will embody the Renaulution spirit. So more than half of the passenger cars will be in the C segment or above. Almost 1 out of 2 will be pure electric. And overall, during these 4 years, more than 80% of the group launches worldwide would be electrified. In addition, we will launch electric version for our SUV and PC Kangoo. Our intention is to be leader in electromobility that's why we worked very hard to extend our coverage of the EV value chain. You can see it on this chart. In H1, we continue to secure strategic raw materials thanks to an agreement, for example, with Manage for low-carbon cobalt. Of course, this direct cooperation ensures traceability. And there is more Managem is recognized for its expertise in energy efficiency and decarbonized energy use. This is key for allowing us to build a compliant battery supply chain. We already secured almost 80% of our lithium and 2/3 of our nickel and cobalt. We also created a joint venture with Minth and in-sourced battery casing for EVs, thus, I would say, strengthening our electricity ecosystem in the northern part of France. On the e-motor side, we struck an important deal with Valeo. And by 2027, we will be the first OEM mass-producing a 200-kilowatt in motor without rare hertz. That means that our France industrial operation will be totally pivoting from ICEs to EVs. We will produce this e-model for Renault, but also potentially for other clients. Our strategic partnership with Vitesco complements the agreement we signed with STMicroelectronics last year. It will allow us to develop and produce a unique power electronic cars at One Box, we call it, that will allow for a 45% volume reduction of the parts of our hybrid and electric powertrains. All this work was meant to secure that Renault would be in the position to be a leader in the transition to electromobility. Starting from 10% 3 years ago, we already managed to cover 30% of the EV value chain. And thanks to partnerships agreed in last month, we will be at 80% in a few years' time. Specialists consider that Renault is already on the global podium when it comes to EV value chain integration. We are also obsessed with the idea of making Renault one of the most competitive and progressive companies in the world. We are working hard to ensure the long term. And let me mention some examples that are for me, pretty symbolic. We decided to completely digitalize the product development process to reduce time and cost. That's why we partner with Dassault Systèmes using the 3DEXPERIENCE platform. We are the first OEM to go so far. You can ask to my friend, Bernard Charlès. 20,000 of our employees are already plugged into this virtual twin experience. This is a game changer for our supplier, for our engineers, for our purchasing people and for our finance people. We are also ahead of the game on Industry 4.0. We developed an industrial digital twin, leveraging the best solutions on the market, including the Google Cloud platform. It is so well done that other players are interested in using it. So we partner with Atos to put it on the market. In the new mobility space, you have certainly heard about Mobilize. A lot of things are happening at the same time in that organization. For example, we decided to boost our insurance business to offer paper use packages to our customers. We target a 70% growth in insurance and financial services by 2030. And to embrace the software value chain, we pursue an ecosystemic approach together with Atos, Dassault Systemes, Orange, STMicroelectronics and Thales, we launched the Software République. This is a kind of a tech ecosystem to generate innovation in the new mobility space. Recently, we created it's incubator, and we have already incubated 5 start-ups. The software-defined vehicle is the next automotive revolution. And Renault wants to be a front-runner. It is already happening actually. If you look at the Mégane E-TECH and the Austral, these are concrete demonstration of our know-how. We registered 300 patents on those cars, and our engineers develop the Android-based infotainment system. Everybody says that this is today benchmark in the market. So there's, I would say, Spider Web that we started to weave a couple of years ago with tech companies working. It gives us speed in execution and agility in financial commitments in a very evolutionary tech world. This horizontal model of cooperation will be one of the characteristics of Renault business model looking forward. And this relationship will become deeper. Let me also come back to product because this is what our customers expect from us first. There is no product that better represents our ambition than the Scenic concept we recently presented in Paris. It is a successor of legendary Renault [ 8 ], completely reinvented as a C segment SUV with a hybrid hydrogen engine. I ask the team to embody our ESG strategy into a physical product. That is the only way for people to understand that ESG is not a PowerPoint exercise, an ESG strategy in Renault that we built on 3 pillars: inclusion, safety and environment. And the result is a new generation Scenic with a reinvented interior where each passenger not only the driver is the hero, a car that is 75% less polluting from cradle to grave than a comparable BEV. It also reduces by up to 70% the risk of accidents, thanks to the onboarded ADAS technology. This shows you how far we are pushing the envelope on future products. And the best news is that a very close model will be in the markets in maximum 18 months. Let me finish with a comment on the Alliance as I'm sure that some questions will arise. We are working to open a new chapter in the alliance based on the mutual trust, focused on concrete projects and with a win-win mindset. Renault offers its platform to Mitsubishi to enable them to stay in Europe. Nissan decides to build the successor of Micra in our plant in France. These are just first examples of new dynamics that we are building together. And you will see more in the next months and years. We are all convinced that we need to stick together to face the competitive challenges expecting us in the next decade. So I want to take the opportunity to express my deepest gratitude to Jean-Dominique Senard, Chairman of the Alliance for the tremendous work he is doing to facilitate this very strategic discussion. I also want to thank Uchida-san, Kato-san and Ashwani Gupta, for their trust and their cooperative mindset and all the key members of Nissan, Mitsubishi and Renault management are working -- that are working very hard to open this new chapter. The last 24 months were amongst the hardest and more intense of my now, unfortunately, long career. It's true also for the Renault team. I would like to honor them and thank them for their unbelievable work, but I'd like to think that the most exciting part starts now. For all of us, the opportunity to qualify very much in front of the starting grid for the next Grand Prix. It is a very, very motivating challenge. We are very determined to accelerate and engage into the revolution. Our idea is very simple. Our automotive is not a single discipline anymore. It's like Olympic Games, making EVs, making ICE vehicles, addressing new opportunities in the world of mobility, for example, have turned in to very different sports with different rules of the games, and this is true in terms of innovation management, customer expectation, competitive environment, workforce and capital intensity. And the success factors are also different. So we will focus dedicated teams with full accountability to win medals on the different competition fields. In this phase, it is not any more a matter of being big. It is a matter of being good. The studies that we announced in February are progressing very well, and I can tell you that there is a very strong motivation in the team and in the company. And we have already received several partnerships request. So we believe that we are at a turning point in the history of the group and this time, hopefully, for the good. So we will be more specific during the Capital Market Day in the fall. So thank you very much for your attention. And obviously, we are now open to your questions.

Thank you, Luca. So we can start the Q&A session with a question from Charles Coldicott from Redburn.

I've got two, please. Firstly, pricing. So even the overall pricing environment has been accommodating, it seems like you've been able to extract more pricing gains than your competitors. So my question would be, if that environment becomes harder and industry pricing starts to normalize, do you expect that you outperform on pricing on the way down just as it seems you have done on the way up? Or should we think about you moving more in line with the industry? And my second question, conversely, the cost savings from purchasing as well as manufacturing and logistics were perhaps a little lighter than I'd expected in H1. Do you think you can reaccelerate that again? Or should we expect margin expansion to continue to come mainly from price mix?

I'll answer the first one on pricing. I think the answer is pretty simple. We have significantly adjusted our production capacity. Based on our forecast, we will be next year already way above the 100% capacity utilization at Renault. So that means we will not fall into the trap of pushing a car that the customer doesn't want. You can see it also very clearly in the mix -- in the channel mix that we have built during this month. The other thing is Renault will finally get the advantage of a favorable product life cycle. So I think we will be able to defend the pricing because we're not going to push, okay, on deals that are not profitable. That's the mantra. That's our religion. And the other one is that we will mechanically improve our pricing because we're going to get cars that are new, that will more likely be attractive to retail customer, and they will actually be in segments where the transaction price is higher. I'll leave it to you.

Yes. On the cost side, I wanted to comment a little bit on some of the figures that were indicated. So first of all, the purchasing performance at EUR 167 million is slightly lower than in previous years. We have to take into consideration that, that number includes almost EUR 100 million of inflation coming from electronic components due to the current situation. The second element is, and I think I mentioned it in the presentation. In the manufacturing number, there's almost EUR 150 million coming from higher logistics costs coming from wage inflation and coming from the rise of the cost of energy. So if you exclude that, the productivity that was delivered by the manufacturing team is actually pretty strong. Luca mentioned 10% savings in energy on fixed cost, they delivered more than 8% productivity. So if you look at the sort of ex-monozukuribucket here, it's roughly EUR 150 million, but that includes EUR 250 million of external headwinds from the current situation. So adjusted for that, it's about EUR 400 million for the first semester, which is at least as good as if not better compared to the performance we had in the past. I would say as these costs tend to -- the inflation tends to stabilize, you should see an improvement in the improvement in those buckets. The other thing more importantly is we're at the cusp of our big product incentive revolution. And as the new products come online, a lot of them will come with much better cost positioning. So we've done a lot of work in terms of reduction of diversity. We've reduced by 40%, the number of parts that enter in the production of the cars. We've reduced commercial diversity as well by having standard ranges across Europe, et cetera. So as opposed to seeing sort of brute force manufacturing and logistics savings in the future, also see a cost benefit coming from cars that have a DNA that's more competitive, okay? It will start with the new cars that we're launching right now but the full effect will come as we launch the vehicles according to the schedule that Luca presented earlier.

Thank you, Thierry. We now have a question from Thomas Besson from Kepler Cheuvreux.

I have three questions, please. I'd like to stay on the likely deterioration of the macro environment. You mentioned the 4 months plus order book Luca more or less kind of secure H2 in terms of volumes and probably earnings. Can you say a few words on what you have been seeing over the last 2, 3 months when we've effectively seen a deterioration of consumer confidence and the first impact of inflation on consumer purchasing power? That's the first question. Then I have one for Thierry on Financial Services. Can you say a few more words on it? The cost of risk started rising. And you had again a solid contribution to earnings. But for once, it was lately done your equity in this business is still at a very high level. I think you still have EUR 6.7 billion of Mobilized Financial Services equity. How much can you still pay in terms of recurring dividend in '23, '24? Should we more expect something in the EUR 400 million, EUR 500 million range? Or can you continue to pay a kind of super dividend for a third year? And then third question would be a bit more difficult because I think you really want to keep that for September, but I wanted to know if there's any kind of update you can give us on your plans for the spin of the s*** bit of Renault and the potential participation of Nissan to that?

Look, the -- let's say, the customer order market is very -- it's actually pretty untransparent. We don't have the data in all the markets, right? So they are not public as you know. And you also have in the database when things that maybe they are not the kind of hiding the reality like, for example, if you do self-registration, it counts as an order, but it's actually not. So it's very difficult to say. We are very, very clean in the channel, very, very clean. So -- and we feel like from the indication that we're probably above competition in terms of order intake. But it might be around minus 20% kind of -- in terms of incoming orders from the customer in average in the market. And I think what is also interesting to see for the Renault internal cases that we are selling cars that are pretty rich. So the mix is very high. Even on a brand like Dacia, the Sunday was probably 70% of mix of step way, which is the highest thing. So we are really managing to get the orders that come to get them on cars that are reaching equipment and therefore, more profitable. That's what I can say. It's very difficult to give you an answer on that because the other market is pretty untransparent.

And on Mobilized Financial Services, first of all, Mobilized Financial Services a couple of things that explain the fact that it's flat. So first of all, as I mentioned, volume decreased a little bit, and that's primarily due to wholesale financing. So the -- we finance the stock of the dealers, as you know, and dealers stock is down massively, one, because we wanted it because we didn't want to continue to load the dealers. Secondly, realistically, there's a shortage situation. On the customer side, the average performing assets continue to increase. We're actually up 1.3 points, but you've got this balance between wholesale and retail. The second element that explains the fact that the profit is flat versus last year is our cost of risk. And I think in reality, it's really back to normal. We've been hovering between 0.4% and 0.5% of average performing assets historically. Last year was abnormally low because the year before that was abnormally high. So we built up the risk profile in '20 during COVID, released it during '21 and then now it's kind of the normal effect. So on the ability to distribute dividend, I think, clearly, our view is that the level of this year is an exceptionally high level. I think we should be looking at something that's relatively close to EUR 0.5 billion in the future, in particular, because we should see a return to growth once the electronic components crisis gets solved and therefore, we'll need liquidity in RCI in Mobilized Financial Services, sorry.

So I'll take the question on the plan. Of course, as you suggest, it's not probably the moment to reveal what we are doing. So we leave it for after summer. What I can say is this, is we -- there is a pretty good move, let's say, mood in the company that is supporting all the ideas that we have. I think -- I guess probably 300, 400 people that are working on it every day. So it means that we had doing a very serious work on that. And as you mentioned on Nissan, the cooperation is getting stronger and stronger, week after week, and relationship are getting, again, very, very close. We've been a couple of times Japan in the last 2 months, the management of Nissan came here. So we've been very, very transparent with our colleagues from Nissan and Mitsubishi about our intention. This is important. And because -- and we believe that Renault has to do it and we'll do it. But we have also always opened the door to Mitsubishi and to Nissan to engage on all the projects that we are doing together. So of course, it's up to them to decide what they want to do but we believe that we have a lot of opportunity to do -- release structural things together. And that's the aim of this reinvention of the alliances to come from the bottom and from very concrete industrial project. So maybe in the fall, we will tell you more about it.

We now have a question from Horst Schneider, Bank of America.

Okay. I wanted to say congrats was a great result, I have got a specific one on volumes. I mean we've got a quite different guidance from other companies. When we look at the American OEMs account for something like 15%, 20% sequential growth. Foton was very bullish, which is 40% sequential growth, but that's also driven by China, as I said. So it would be good to have some better guidance by you, what we could expect for Renault? I mean you should have by now nearly full visibility if your order book is 4 months' time. Then the second one also a little bit read across to peers. I mean I know you don't disclose profitability by region. But we saw yesterday, for example, that Stellantis really great profitability in Middle East and especially Turkey. So since you're a market leader in Turkey, maybe you can provide a little bit color what has been profitability by region, there have been -- where we have seen the biggest swings? And the last one, it's a more strategic question. I mean, as much as I like your results, now the concern, of course, that I have, and that's a little bit of head on also what Thomas asked, is that your customers are typically at low end of market, right? And I know you want to improve that by the new model launches that you have. But can you provide a little bit color when we talk about models like the Mégane now and also like the Austral. To what extent you can conquer basically new customers, which have got a higher income level? So to what extent you concur from Volkswagen and from the other brands where the customers have got a little bit of better affordability?

Look, maybe I'll take the question on the volume side. We don't really give volume guidance. However, for us, as you pointed out, we've got 4.1 months of order book. So it's a supply discussion, not a demand discussion very clearly. We're forecasting an improvement in the component situation in the second half. So volume for the second half should be quite a bit stronger than it was in the first half. All right? On the profitability, it's typically always like this. It's a little bit more marked this year because we've got a normalization of the component situation. On the profitability by region, what I can tell you is we've seen improvement across all the regions. So the commercial policy that we've put in place is paying off in all the geographies, all the key geographies that we operate in. We've had a great work that was done by the team in Latin America to focus on the right channels. We discussed the improvements that were made in retail, in particular, in the Renault brands in Europe. Dacia has been also very strong in Europe. So we really see a widespread profitability improvement across the geographies. On the -- do you want to take the questions on the high-end models?

I think is, let's say, science are a first signs are pretty motivating because -- as I said before, Mégane is working and people are actually buying cars that are worth more than EUR 40,000 so we have a very high mix. So I'm sure that we don't have still the number on conquest versus loyalty. But I guess this is a typical conquest tool car that will bring completely new customer profile to Renault. I'm not sure that I totally agree that we only have customer in the low end of the society. Honestly, I think we are a pop brand. So we sell cars to everybody. And that's what we are since like 120 years. We'll continue to do this, and we'll try to upgrade, of course, let's say, the mix and the kind of profile. I believe that the new product will enable to do this because they are -- we were selling 70% of the small cars. And a few years' time, will be 50% of typical family cars. So it's just a different usage of the product and -- but with the same people. So our target is very, very large. And one thing that maybe is not -- maybe it's not very clear what happened here is I remember as you were talking about Volkswagen or Stellantis, a couple of years ago, when we started to build the Renaulution plan, we wanted to use PSA as a benchmark on many criteria, okay? Including on pricing and all the things. And what we did is in 2 years is basically to catch up what PSA was in 2019, okay? Look at the numbers, and you will see that we are there. And this is a very positive sign because you know the rest of the story. And even on pricing, one of my, let's say, ambitions was to catch up with the PSA with -- especially with Peugeot and for the Renault brand and Dutch with the Citroen brand in pricing. And you can look at the numbers, these are public numbers, we are basically there. And that's the most important thing for me. And we will also upgrade you, and I will send you a cup from Alpine because I like your cap.

I'll send you my private address Luca. It just -- it's a quick amendment. I mean I don't take it personally because say, you have got low-end customers. I have driven myself a Renault, Renault Kadjar. I don't have a Renault Kadjar anymore right now because at least just for 1 year and it got too expensive. That's positive. And I'm sure you can do with the Austral a lot, lot better. And then I maybe drive Renault again.

And look, by the way, we also like some of the what you call low-end customers. We love the Dacia brand these days and in an environment where the prices are increasing, et cetera, the Dacia franchise is incredibly well positioned, as you can see in the growth figures in the first semester. Dacia was up 5.9%. It's one of the only brands that actually gained ground so having this sort of double positioning, actually, the high range of Renault is doing well. I mean the first signs on Mégane are very good. And the Trim level is super high, 70% high Trim, 82% big battery but at the same time, Dacia is performing very well. So I'd tell you it's positive news.

As your German, Dacia is the brand of the site guys, I would say.

For people which do not need a status symbol. I agree. Yes. Good luck.

We now have a question of Gabriel Adler from Citi.

My first is on your market outlook. I'd like if you could just explain maybe your thinking behind raising your market outlook to 2022, you've obviously maintained the 300,000 units impact from semi. So it's not necessarily a change on your view of the supply chain there. So you have some color there on what's behind our more positive view on the European market outlook in particularly interesting given all the pressures we're seeing on the consumer at the core suspension there as well. My second question is on the breakeven point. Clearly, good progress being made in lowering the breakeven point. We're well ahead of plan as we know. Maybe you could help us understand a bit better, though, where you see further opportunities to reduce fixed costs or whether really from here on out, it's more about volume growth as the next driver of improvements in profitability rather than more cost cutting? And then my final question is on the EBITDA. The deliveries of EBITDA are now beginning to accelerate. Maybe you could comment a little bit on how you're -- how you expect that to impact product mix in the second half? And any comments around the profitability of the E Mégane relative to your ICE lineup would be really helpful.

Okay. So I'll start, and then I'll let Luca comment afterwards. On the market outlook, I think it's just a question of what we see from our components of our situation perspective. Visibility in the first half was still very, very poor. We did see a significant improvement in the months of May and June and particular in June. It's clear that the situation is not entirely solved and visibility remains problematic with a few selected suppliers. However, we do see an improvement, and that should drive some of the ability for us and for the other OEMs to execute more volume. On the fixed cost side, look, we're -- it's not going to be only a volume game. It's very much going to continue to be a cost game. And both variable cost and fixed cost. I commented previously on variable cost. It's probably the biggest lever at this point for us. And again, it's a question of putting the new models on the road because they come, as I said, with inherently more competitive sort of DNA, and we'll continue to see that benefit as the models come out. On the fixed cost side, we're going to continue to work it, absolutely. In fact, our total fixed cost continued to be down in the first half. Obviously, it's not the same magnitude as what we had in the first 2 years of the initiative. We're not going to take another EUR 2 billion out in the coming 2 years. I'd like to highlight that if you include the de deconsolidation of AVTOVAZ, our fixed costs compared to 2 years ago is actually down 30%. But we're going to continue to work it. And I think the next step is really around sort of wing-to-wing process improvement. Luca commented on some of the digitization initiatives that we're putting in place partnership with Dassault, et cetera. So for us, it's a question of becoming leaner and more efficient, thanks to process improvement and digitization. So we'll absolutely keep working it. Obviously, not with the same magnitude of savings as what we've had in the last 2 years. On your question on E Mégane, there's 3.3 points of product mix effect in the first semester that you saw in the walk across on the turnover side, roughly 1/4 of that comes from Mégane E despite the fact that it's only been for sale for a few weeks. So we look forward to having the full effect of that car. As to the profitability of the car, I can tell you, our rule is that the electric vehicles need to be relative to the margin of the group. And Mégane is off to a good start.

Thank you, [ Jay ]. And Gabriel, just one additional comment regarding your first question. We didn't make any upgrade on the outlook for the market. The -- what you saw on the slide is for H2 and not for the full year. So we now have a question from Tom Narayan, RBC. The floor is yours. Okay. We will take the next question, Philippe Houchois from Jefferies.

I hope you can hear me now. I just have two questions, please. The first one, maybe for Luca. On one of your slides, you show 12 product launches in 2024, which is as much as you're going to do from the following 3 years. And I was just -- I asked you that question before, I'm trying to understand, are those models going to be expansion to the range? Or are you thinking more about -- we had 4 this week talk about thinking of the future with fewer body styles and more differentiation from software. And I'm just trying to understand whether you're looking at range expansion or trying to find better volume of a more limited, more focus product range. And the second question I have is on the inventory. 60 days of sales. It's not a bad level of inventory, I think from what I understand from the rest of the industry. Is that really a limiting factor to your commercial performance? And I'm kind of wondering, are they need to products in there that are hard to get rid of? Or when you think about the future of distribution, is that 60 days a good representation of what you would like to keep the levels on?

Look, I think that -- thanks God, we will have in the thing because that was the problem for us for a few years. So I can't complain that we are adding let's say, new models to the range. Some of them are replacement of, let's say, of cars that we already have improved, take the example of the Austral versus Kadjar, others, they are just like adding up because we are also developing the EV range. And as you know, at Renault, we made a choice of having a completely different strategy and dedicated strategy from a technological point of view on EVs. So we have specific platform, which we believe is the right way of doing it, okay? So cars like Renault 5 or Renault 4, et cetera, et cetera, will be simply addition to the range, which is good, I think. But you have to go back to what Thierry said, we have completely changed the way we have engineered together with [indiscernible], et cetera. the way we develop the cars. So we have leveraged alliance platform many of the investments were behind us, okay? And we try to do a range with much less diversity okay? So commercially, it's probably 40%, 50% down, technically also 40%, 50% down. So the result is that we are now able, in terms of CapEx and R&D and development cost on the car to do 2 cars for the price of 1 we used to do before. And that shows, let's say, this is, I would say, the reason why we can afford to limit the CapEx as we did pretty substantially, but at the same time, offer more products. You might ask myself, why did you do it before? Probably sometimes it's a question of people of orientation, et cetera, but we did it. So we will have a very efficient lineup, we will have in the segments that are on growth where there is margin. And I tell you we -- let's say, this morning, we say that for us, resurrection is over after 2 good semester of results. But I can tell you that when you look at the numbers on the 25 projects that we have, they are very, very solid. The projects are based on volumes that are reasonable. We have a reasonable price assumption control the cost. We are very close to the targets that we gave ourselves a couple of years ago. So I'm pretty confident that this range of product would be probably one of the best we have ever had in 3 decades at least since I observe Renault as an employee or as a competitor. So I am very confident about it. I think in inventory, yes, I think -- my philosophy is like 2 months plus of order bank and 2 months minus in stock. And you need to find that kind of, let's say, of balance to be able to satisfy customer demand, reduce delays in deliveries. Right now, we are not a normal situation. People are waiting 6 months, 7 months for a car. Of course, it has an impact because I'm sure that we lose the sales, but there's nothing we can do. We're trying to find components left and right. It's already a hard thing. The good thing is that we are light. So in case you have a downturn of the market, we are light in stock. We haven't increased the stock compared to last year. So we will enter potentially if -- I hope not because we already had a lot of miseries in the last 2 years, but you mentioned that the thing doesn't work, at least we're light in stock.

You asked a question on aged stock. I can tell you it's at historically low level. To give you an idea on the Renault brand, it's down 87% versus last year. So we're running very efficient stuff.

Yes. So Fabrice is here in the room. Fabrice who runs this. And it was one of our target, right? We were double digit with the old stock and now we have a very really low single digit on that. And so everything that we have in the dealers, we actually invoice, that's the story. So as soon as the car comes, then it goes. And yes, so -- but you have you need to have a minimum of things. But right now, we are invoicing everything that is physically available.

So now we have a question of José Asumendi from JPMorgan.

Congrats on the progress done on, I think, particularly the debt reduction. I think that was one of the highlights said today. A couple of questions, please. Can you comment a little bit around -- can you comment on restructuring cash outflow first half and second half, please expectations? Second, can you comment on price dynamics -- price/mix dynamics into the second half if possible, also '23 and also working capital opportunity as production hopefully rebound slowly back in the second half and '23? And then, Luca, can you comment a little bit around 2 topics. I think one, the Austral launch. So how important this is for you? How many orders did you get so far? What's the sort of cadence into the second half of the year on this vehicle, which is nothing underestimated by the market how important it's going to be. And then second, can you come back again to the alliance? You show the alliance slide and you made the comments to Jean Dominique. I fully agree. I think this is one of the -- I mean I have not seen so much progress on the alliance and proper progress, i.e., building cars on your -- on the Renault -- is alliance architecture. I haven't seen so much progress in a very long time. And actually, we're seeing the fruits of that, we you're seeing how vehicles are going to be built out by Mitsubishi. So can you comment a little bit more around what this means for the alliance? And also in terms of maybe the economics, I mean this is going to be a substantial booster also for the economies of scale of any plants in Europe.

Okay. So I start it Jose. I start with the two questions to me and then I'll leave it to Thierry for the other one on the cash flow and the working capital. So I mean we -- you know that we -- I don't like to make focus on volumes, right? But -- but Austral is a car that goes into one of the most important segments in Europe. So it's not a car for tens of thousands. It's a car for [ 100 thousands ], okay, potentially. We have a product that is very competitive in cost, producing a very efficient plant in Spain, in your country with very, very good quality, with a great package with probably the best, let's say, I would say, engine lineup you have in the segment right in the core of the market with the hybrid. This engine is the best in terms of efficiency. I mean who would have imagined that you could bring to the market a C-SUV with 200-horsepower and 100 grams of CO2. This is a miracle, right? This thing is better than the diesel, right? So -- and we have the infotainment system that we also, let's say, having the Mégane, which is considered by far, the best right now. So we are confident. We don't want to blow it up. So we don't want to think that this thing. But we have a very, very serious argument to be on par with the kings of this segment. And in this segment, you have at least twice the margin okay? In twice the margin you have on the segment, we would normally sell cars, at least I say, okay? So you can imagine that this thing will have a huge effect on our turnovers, on our profitability. But let's work on it. And let's try not to replicate the mistakes that we did at the beginning with the Kadjar, where we were pushing volumes. We will not do this. And then we destroyed the residual value. We're not going to do that. We're going to do properly, okay, because the car deserves it. And for the alliance, yes, I mean, I don't know what to say. I think we're working a lot with our colleagues from Nissan and Mitsubishi. I'm taking the problem from, let's say, what I'm supposed to -- from the point of what I'm supposing my role to do, which is taking the thing from the operation from the bottom, so trying to find projects that are win-win for both companies. And very important is we have -- I always try to do what is best for Renault first, assuming that if we do something that is great in absolute terms, then our Japanese colleagues will take it, okay? And that's what we've done. Take the example of the Micra. I mean, 10 years ago, when the Micra, the current Micra was decided and it was decided that it would be produced in plant. That was an imposed decision from the management. So the Nissan voice, they actually always frustrated, but this thing never worked economically in the market, et cetera. In this case, we didn't force anything, we just show them the numbers, show them the product. And they said, "Okay, guys, we're going to do it in your plant on your platform because there is no better solution for us." And that's the right relationship that we have to build amongst partners. So I have to do -- I have to make Renault a competitive company first, right? And I have to do things that are so great that they cannot ignore it, okay? And it seems -- it looks like it's working that way. And you will see more things coming from now by the end of the year, very big things that will happen.

On the numbers questions, Jose. On restructuring, the cash out for the second half should be slightly higher than the cash out for the first half as people are taking the plan and we start paying out. From a price and mix, mix will continue to improve as Austral and Mégane E-TECH come fully online. Price, I mentioned in the presentation that it was 5.6 points in the first quarter, 8.4 points in the second quarter. The trend is going to continue in the second half as we'll have the full effect of the price increases that we did in the first half. And then from a working capital perspective, volume is very constrained today. And as you know, we have a negative working capital. So when volume picks up, yes, we will have working capital lift. In the guidance that we gave, we're not counting on a massive working capital upside should be some improvement in the second half, but nothing massive. However, if we get back, hopefully, at 1 point of the volumes we were precrisis, yes, that would be a significant working capital upside.

So we have now time for maybe a last question from Richard Carlson, Credit Suisse.

Congrats on the performance. It's very impressive. I don't think anybody is working as hard as you guys. On gas, though, you mentioned that you're in a good spot with your own production but to what extent are you worried about your supply chain? I'm sure you have a few suppliers out there who are you may be sole sourcing in Germany might have an issue? Are you able to start digging through the supply chain and figuring out where you might have a bottleneck should the gas situation get really bad in Germany?

We have made this analysis and obviously, most of the suppliers are around the plants. So I mentioned to you we made also analysis on which country are more or less dependent from Russian gas. So we might be in this case for once a little bit lucky with this thing for once, right? So -- but you never know because you can't control completely some of the supply chains are very deep, right? So that's why we say there will be uncertainty on the thing. But relatively, we feel that relative to the market will be in a better shape. And we have done a very, very thorough analysis on this. So there is a group of people that is actually focusing the old day and night to actually observe and provide parts and understand the potential risk. In some cases, we are also thinking about having some strategic stocks, et cetera. So getting into a different kind of poly without having a huge impact on the working capital. But we're trying to be smart. And that we -- the 2 years of experience with this component crisis specialized group of people in handling such kind of disruption. So we have a war room and people are working 24/7 into the thing. They are very, very good, and we have proved that because we have been able to manage the last couple of years in an honorable way, and you can see the results. Now, you can conclude, Philippe, the floor is yours, Philippe. No, I just want to say to wish a good summer to everybody, and thank you for the time you spent with us. I hope that we were able to prove you that we -- as you said, Richard, we are working very, very hard. But for us, it's just the beginning. Hopefully, the most exciting part of the story comes now with Renault. Thank you very much.