Renault SA (RNO) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to Renault Group's H1 2026 Conference Call. This call is broadcast live and will be made available on our website. We are today with Renault Group's leadership team, Francois Provost, Group CEO; Duncan Minto, Group CFO; Fabrice Cambolive, Chief Growth Officer and Renault Brand CEO; Katrin Adt, Dacia CEO; and Philippe Krief, Alpine CEO. The presentation will be followed by a Q&A session. Francois, the floor is yours.

Thank you, Florent. Hello, everyone. I am very pleased to be with you today because it is exactly 1 year after my appointment as CEO of Renault Group. I am also proud today, not only about the results we'll present to you in detail, but moreover because I feel that Renault Group is transforming, gaining speed and our futuREady midterm plan is already delivering concrete results, and it is what I will present to you now. As a reminder, futuREady, as you know, we have 4 pillars. The first one is growth, futuREady is a growth plan. In H1 2026, our revenue growth is plus 10%, which paves the way towards growth in the year to come. Tech-REady in order to deliver competitive technology for all what matters in modern cars, Excellence-REady to be among the best for all what we can control in a more and more complex environment. And also last but not least, and this is very important to me, Trust-REady, it is the Renault way. It is our engagement to all our stakeholders, starting with our employees, but also our suppliers, our dealers, our partners. Let's start with Growth-REady. In H1, we delivered a strong new product momentum. Our Twingo start of sales is booming, very encouraging. New Clio is also doing super well with outstanding design and the strength of our full hybrid technologies. I am also very satisfied by the start of our 4x4 hybrid solution on Dacia, Duster and Bigster, which is doing also very well. And in H1, we launched A390. But futuREady growth is also outside Europe. We launched successfully our Renault Duster in India, our Renault Boreal both in Turkey and Brazil and also our Renault Filante in South Korea. As a consequence of this, we delivered plus 10% revenue growth. And this is for me, a big highlight of H1 performance. Renault brand plus 3% sales worldwide, second brand in Europe, plus 61% sales increase in India compared with 2025. Dacia sales minus 8%, but orders up in Europe, plus 4%. Dacia remains very strong in its core business, top 3 retail in Europe. And Dacia now is also moving forward towards electrification, already top 4 in hybrid in Europe. And for Alpine, again, a record of sales, plus 69%, 8,000 vehicles sold in H1. As you know, for Renault Group, EV is at the core of our strategy, and this is a core axis of futuREady, and this is delivering results. Renault brand is second retail EV brand in Europe. Renault 5 is top 1 in its segment. And moreover, I would like to mention that beyond EV, we are also progressing strongly in full hybrid. In total, electrified vehicle represent 2/3 of Renault brand sales in Europe, but also 31% of Dacia sales in Europe. This is up 7 points versus H1 2025. LCV is back. In February, when we presented to you our results, I told you that I was confident about the effect of the complete reshuffle of LCV business units that we have been proceeding. And now we start to see concrete outputs with sales plus 12%. We are top 2 in Europe. I am very proud that our new Master is leading the large van segment. And what I would like to mention to you is that I feel it is now the tipping point for electrification of LCV in Europe. LCV EV sales for Renault were up 48% H1 2026 compared with 2025. And this is important for Renault because we have the best EV LCV lineup. Our Master EV is top. We have also Kangoo EV. And I do confirm that we launch by the end of the year, our Trafic E-Tech, which will be the first EV native LCV in Europe. I consider Trafic Van E-Tech can do for electric vans what Renault 5 is already doing for passenger cars. Mobilize Financial Services. We always underestimate the importance of MFS for Renault Group business model. MFS operates in 35 countries. MFS is key to enhance our sales and loyalty. One car out of 2 retail sales in Europe is financed by MFS. At the end of an MFS contract, 77% of the customer rebuy the Renault Group cars. As a consequence of this, MFS is also a very strong contributor to our results. For instance, EUR 753 million, which represents 50% of Renault Group operating margin. FutuREady second pillar is Tech-REady. And for this as well in H1, we delivered significant results. In terms of EV value chain, as planned, we launched our new chemistry LFP on Twingo and we do also on Megane in the new Megane we launched in H2.

We need to make a stop. Apparently, there is a technical issue, and we cannot hear you properly in the Teams. So sorry, we'll make a stop just a few moment because we have an issue on the sound in the Teams. So can you please hang on for a second, and can the IT team join us to sort this out? Thank you. Good morning, everyone. Apologies for this technical issue. So we will have a restart. That was the formation lap, we would say. So welcome to this Renault Group H1 2026 Conference Call. This call is broadcast live and will be available in replay on the group's website. We are today with Renault Group's leadership team, Francois Provost, Group CEO; Duncan Minto, Group CFO; Fabrice Cambolive, Chief Growth Officer and Renault Brand CEO; Katrin Adt, Dacia's CEO; and Philippe Krief, Alpine CEO. The presentation will be followed by a Q&A session. Please send me your question either by e-mail, either through the Teams, and I will read it to the management. Thank you. Francois, the floor is yours.

Thank you, Florent. Hello, everyone, or hello again. I am very pleased to be with you today. It is exactly 1 year after my appointment as CEO of Renault Group. I am also very proud because -- not only because we will present to you good results today, but moreover because I feel that Renault Group is transforming, it's accelerating. Our futuREady new midterm plan is already giving and delivering results. It is what I will present to you now. As you know, futuREady is 4 pillars: Growth-REady. This plan is a growth plan. And in H1, we delivered plus 10% revenue growth compared with last year. Tech-REady to be at the best level for all technologies that matters in modern automotive industry. Excellence-REady to be among the best for all what we can control in a more and more complex environment. And last but not least, Trust-REady, and this is typical Renault culture, our engagement towards our stakeholders, our employees, of course, but also our dealers, our suppliers, our partners. Let me start with Growth-REady. In H1, we delivered a strong new product momentum. Twingo start up sales is booming. New Clio is also doing super well with outstanding design, but also, again, the success of our cutting-edge full hybrid technology E-Tech. I am also very pleased by the start of the new Smart 4x4 upgradation of Dacia on the Duster and Bigster. And in H1, we also start the sales of Alpine A390. FutuREady is also about growth outside Europe. We launched successfully our new Duster in India, our new Boreal in Turkey and Brazil and our new Renault Filante in South Korea. As a result of all of this, we delivered plus 10% revenue growth compared with H1 2025. This is one of the main highlights of today's results presentation. For Renault brand plus 3% sales, Renault brand second brand in Europe, plus 61% sales in India. Dacia sales down minus 8%, but plus 4% orders compared with last year. Dacia remains very strong in its business model, top 3 retail in Europe. And Dacia is also now moving towards electrification, already top 4 passenger car hybrid in Europe. For Alpine, Alpine delivers a new record of sales with more than 8,000 vehicles sold in H1. EV is a core of Renault Group's strategy and futuREady. Again, we delivered strong results in EV. Renault brand is now the #2 EV retail brand in Europe. Renault 5 leads its segment. And as I said before, Twingo is off to an outstanding start. Beyond full EV, I would like also again to mention the success of our full hybrid solution. Together, EV, full hybrid E-Tech, electrified vehicles represent 2/3 of Renault brand sales in Europe and also 31% of Dacia sales, up 7 points versus H1 2025. LCV is back. When I presented our results in Feb, I told you that the complete reshuffle of LCV business unit was done and that I was optimistic about the output. We see at the end of H1 2026, the concrete first output with sales up 12%. We are second in Europe for LCV. I am very proud to have the new Master leading large van segment. But what I would like to mention to you today is I feel we reached a tipping point for electrification in LCV. Our sales for LCV EV were up 48% compared with H1 2025. And we have, as Renault Group, the best EV lineup for LCV, Master EV outstanding performance. We have also our Kangoo EV. And I do confirm that by the end of the year, we will launch our new Trafic E-Tech, the first native EV LCV in Europe with SDV, and we are very confident with this car. I am convinced Trafic Van E-Tech can do for electric vans what Renault 5 is already doing for passenger cars. Mobilize Financial Services, MFS. We always underestimate the importance of MFS in our business model, and it is why I want to insist on this morning. MFS operates in 35 countries. In Europe, 1 car out of 2 sold to retail customer is financed through MFS. And moreover, at the end of financing contract by MFS, 77% of the customer renew with Renault Group cars. This is a huge tool to sell car and to enhance royalty. And with all of this, MFS delivered also a very strong and stable financial performance with for H1 alone, EUR 753 million in profitability, representing 50% of group operating margin. FutuREady second pillar is Tech-REady. And in H1, we passed again significant milestone. In terms of EV value chain, as planned, we launched our second chemistry, LFP, on Twingo, and it will be the case also on new Megane, we will launch in H2. We are among the first worldwide OEM to have wireless battery management system. We launched our new e-machine 6-in-1 on Twingo as planned. And moreover, in terms of battery, as you know, we don't want to be battery makers. We rely on our suppliers, but we want to dig into technology and our lab on battery is now fully operational at the end of H1 2026. In terms of SDV, I do confirm that we will launch in Europe the first European SDV in Trafic Van E-Tech by the end of the year. And for intelligent car, we introduced Gemini in our openR link vehicles. A lot of people doubt that European industry will not match China pace in automotive technology at Renault Group with futuREady, we are proving that we can. Third pillar is about excellence in operations. Development time, 100% of the new project now in Renault will be developed under the 2-year development time scheme. And this is what we structured in H1. In terms of cost target, I do confirm we are on track with EUR 400 target a year, which is outstanding performance by procurement and all upstream functions when you consider headwinds, especially in terms of raw materials. In terms of resilience as well, we granted significant milestone in H1. For instance, thanks to our digital twin for manufacturing and supply chain, we could mitigate within 48 hours the supply chain issues raised by Middle East conflict. And with AI, we are capable to get a lot of quick proposals and scenarios to mitigate this. But I am also very pleased to see the speed on which the speed is moving for dual sourcing. Dual sourcing is completely new in Renault, completely new in automotive, I would say. It is one of the pillar of futuREady to have dual sourcing on targeted parts and technologies. This is already fully implemented in each new project we start now as from H1 2026. And for manufacturing, as you know, introducing humanoid robots is a key action of futuREady. This is already operational in Douai in H1 2026. Let's move to Trust-REady. This is very important to me. And after the release of futuREady, I took specific attention to the cascading and endorsement by all the teams, especially the 9,000 managers. So we did a V-shaped process. This is cascading first, and this is team contribution later on. And to check the good engagement of our teams, we did a survey with our 9,000 managers, and we got good results with above 80% of our managers fully comfortable with the plan, aligned with strategy, capable to cascade, capable to define the contribution of its team to the futuREady and confident towards futuREady. We also continue to speed up organization transformation. I remind you 4 months to define the new organization of engineering end of last year, 6 months to structure the transformation plan of engineering. This engineering transformation is an ambition to show that a European OEM can develop in Europe with European suppliers at the best level in the world in terms of speed, technology, cost competitiveness. This transformation is now ready for implementation, and I would like to thank especially our unions because they were very demanding, but supporting, and we got 75% favorable opinion of union reps towards our R&D transformation. In H1, we also grant significant social agreements in order to secure the competitiveness of very important sourcing worldwide. I remind you that we intend to decrease manufacturing costs by 20% in future already. We grant social agreements in Spain, Morocco, Slovenia and South America. And last but not least, I want to continue to simplify this company. We decided -- I decided significant changes with General Secretary appointment, and I decided also to manage directly product organization. Trust-REady is also about partnership. We delivered significant growth, plus 164% growth compared with H1 2025, plus 50%, excluding scope effect. I would like to mention the very successful start of our project with Geely in Brazil with a very encouraging start of Geely brand in Brazil, for instance, plus 35% total sales of Renault do Brasil with both brands Renault and Geely. I would like also to remind you that we launched 2 new defense partnerships with Thales in the course of H1. With all of this, we delivered good results in H1, consistent with our guidance, 5.2% operating margin. Automotive free cash flow over EUR 600 million. But beyond numbers, I would like today to thank all the teams, all our employees. I would like to thank also our suppliers, our dealers, our partners because this is a result of the efforts of all the team. And as you can understand, this give us a lot of confidence about the robustness of futuREady moving forward. And I would like now to hand over to Duncan to present in detail our H1 financial results. Duncan?

Thank you, Francois. Hello, everyone, and thank you very much for joining the call this morning. So as you said, let's go through a bit more of the detail on the financial results. And maybe I'll just take the zapper, if I could, possibly. Thanks. Perfect. So let's start with group revenue. Renault Group enjoyed a 9.5% revenue growth to EUR 30 billion in the first half of 2026. At constant exchange rates, that's an increase of 10.3% and I'll highlight it was driven both by Automotive and MFS. Automotive revenue was up 9.3% to EUR 26.8 billion. Since the beginning of the year, we've included the mobility service contribution into this. In terms of Financial Services, MFS increased by 11% to EUR 3.4 billion, mainly driven by the increased activity level. So drilling into the Automotive revenue, it included in the first part on the left-hand side, 0.9 points of negative exchange rate, mainly related to devaluation of the Turkish lira, Argentinian peso and the pound sterling. At constant exchange rates, it increased by 10.2%. The volume effect was slightly positive at 0.2 points. The minus 0.4% decrease in registrations was offset by a lower destocking within the dealership network in H1 '26 compared to H1 '25. So group registrations, as I said, slightly declined by 0.4% this half, totaling 1,165,000 units. Renault brand delivered a solid growth in H1 '26 with sales up 2.6%, supported by continued electrification momentum stronger LCV performance, as Francois just said, and renewed growth outside Europe. Dacia showed commercial resilience in H1 '26, maintaining strong retail fundamentals, best value positioning despite lower volumes while accelerating its shift towards hybrid powertrains. All in all, H2 Dacia sales are expected flat versus H2 '25, with Q3 down and Q4 up. Alpine achieved a record first half with sales up 69%, driven by the success of A290, continued momentum of A110 and the first deliveries of the A390. Renault Group is pursuing a strategy focused on value and quality of sales. We favor retail sales to protect residual values. Our retail channel mix continued to grow and represented 60% of our PC sales in the 5 main European markets, up 3.8 points versus H1 last year. This is 17.7 points above the market average. Meanwhile, we reduced by 1.2 points our short-term rental mix with sales down 12% in a market that was up 12%. Looking at competition, it's worth highlighting that Chinese peers are almost doubling their sales in the short-term rental market, and one of our main competitors grew 24% to reach more than 1/4 of market share in this channel. With this approach of quality of sales and focus on value, we meaningfully outperformed the market in terms of residual values from 4 to 13 points above our peers' average in Europe, depending on brands. Dacia is best-in-class in residual value management with its best value for money strategy, its focus on retail by adding more technology and perceived quality, underpinning a strict design to cost execution. Focusing on EV, Renault outperformed Chinese competitors by 7 points on average. This advantage has been stable over time. As a reminder, maintaining high residual value is part of the full life cycle management. It's embedded in our vehicles as soon as the development phase. It allows competitive and attractive leasing offers by lowering depreciation to be financed and enabling more competitive monthly rates without sacrificing margin. Before coming back to the revenue bridge, just to highlight on stock. The slight decrease in registration was offset by a lower destocking within the dealer network in first half '26 compared to the previous period. As of June 30, total inventories of new vehicles stood at 546,000 vehicles. This level of inventories is supported by a 6% growth of the order intake, resulting in an order book of 2.1 months of forward sales at the end of June 2026. It will enable the group to smoothly operate during H2, a semester traditionally stronger in terms of registrations. In terms of outlook, we expect the total inventories at the end of the year will remain in the bracket of 525,000 to 550,000 corridor, which is a healthy level of inventories to operate. The sales to partner effect was a strong positive in the first half, mainly driven by the performance of partner programs. You should also keep in mind 2 changes of scope, the integration of RNAIPL onto the consolidation perimeter since August 1, 2025, for a EUR 380 million and the ramp-up of distribution of Geely vehicles in Brazil. Local production through our JV is set to begin this summer. Now let's review price, product mix and geographical mix effects. The price effect was positive at 0.9 points, helping to compensate FX, partly offset by price pressure in Europe. This price pressure is expected to continue throughout the year. Product mix was also a solid positive at 3.2 points, driven by the success of EVs, the transition phase of Clio 5 to Clio 6 and to some extent, Master. Product should remain a strong contributor in H2. Geographical mix was negative at minus 0.7 points, mainly attributed to increased sales outside Europe, notably in India and Turkey. Next, let's turn to the operating margin. In this half, we posted an operating margin of EUR 1.567 billion, representing 5.2% of revenue. The Automotive segment operating margin stood at EUR 814 million or 3% of revenue. Mobilize Financial Services operating profit reached EUR 753 million. So a little deep dive into the group's operating margin evolution, starting with currencies, which had a negative impact of EUR 117 million as on the revenue due to the Turkish lira, U.K. pound and the Argentinian peso. The Turkish lira positive impact on production costs was offset by the increase of the exposure to group sales in Turkey. Volume effects contributed to EUR 95 million, notably thanks to the increase to sales to partners. Volume effect should be slightly positive for the full year 2026. Price, mix and enrichment effect stood at minus EUR 425 million, reflecting the increase of regulatory costs, commercial pressure in Europe, a higher mix of EV sales and increased international sales, notably in India. Costs were reduced by EUR 184 million, thanks to an efficient cost management program, strong purchasing performance and lower warranty costs compared to last year, which more than offset the raw material inflation. COGS reduction efforts are paying off and are in line with futuREady strategy. As a reminder, the group aims to reduce variable costs per vehicle by around EUR 400 per year on average over the medium term. As previously commented, we expect higher headwinds on raw materials in H2. That's why cost reduction will remain a key priority for the remainder of the year to compensate this effect. R&D effect was positive at EUR 87 million, mainly due to the impact of capitalizing SDV expenses from March 1 this year. SG&A impacted by minus EUR 39 million and the others was a plus EUR 44 million, thanks to the strong performance of the aftersales business. So let's have a look at Mobilize Financial Services, which generated EUR 11.6 billion of new financing, up 4.6%, thanks to the growth in number of financing contracts and the average financed amount. Average performing assets amounted to EUR 61.8 billion, up EUR 2.9 billion versus H1 '25, driven mainly by a strong commercial activity on the customer financing business since the end of the electronic component shortage in '23. Net banking income as a percentage of average performing assets improved by 0.2 points, highlighting the robust margin policy of the bank. Cost of risk at 0.47% slightly increased against last year due to a macroeconomic environment becoming more challenging in some countries. Operating costs in percentage of average performing assets were almost stable. And overall, Mobilize Financial Services posted an operating profit of EUR 753 million, up EUR 85 million year-on-year. Moving to key items from our group P&L below the operating margin line. You'll see other operating income and expenses were negative at minus EUR 441 million, including EUR 313 million of restructuring costs. As a reminder, the first half 2025 so other operating income and expenses amounted to minus EUR 10.1 billion and included minus EUR 9.3 billion of noncash loss linked to the change of accounting treatment of Renault Group's stake in Nissan as of June 30, 2025. After considering other operating income and expenses, the group's operating income stood at EUR 1.126 billion for the first half. Net financial income and expenses amounted to EUR 126 million compared to minus EUR 93 million in the first half of the previous period. This variation is mostly explained by the negative impact of hyperinflation in Argentina and noncash items. The contribution of associated companies was neutral compared to the minus EUR 2.3 billion in the first half of '25, almost solely explained by at that time by Nissan's negative contribution. As a reminder, since June 30, 2025, any changes in the fair value of the stake at Nissan's based on Nissan's stock price are directly recognized in equity with no impact on Renault Group's net income. Lastly, current and deferred taxes represented a charge of EUR 279 million compared to a charge of EUR 324 million in the first half of '25. The effective tax rate in this half stood at 28%. Bottom line, net income stood at EUR 721 million, and net income group share was EUR 705 million or EUR 2.39 per share. So turning to free cash flow generation. The cash flow of EUR 2.2 billion included EUR 250 million of dividend from MFS versus EUR 150 million dividend in the first half of 2025. Net CapEx amounted for EUR 648 million. Disposals are in line compared to the first half at EUR 40 million. Capitalized R&D increased by around EUR 90 million, mainly explained, as I said, by the capitalization of SDV from March 1. Restructuring expenses stood at EUR 200 million, and the change in working capital requirement was a headwind of EUR 226 million. Within those EUR 226 million, it included a positive EUR 300 million of down payments from partners for future vehicle programs. All in all, Renault Group generated EUR 653 million of free cash flow in the first half of 2026. The automotive net cash financial position stood at EUR 6.6 billion on June 30, '26 compared to EUR 7.3 billion at the end of December '25. This evolution was mostly driven by the strong free cash flow, dividends paid to shareholders for EUR 655 million and net financial investments of EUR 605 million, mainly related to the full consolidation impact of Flexis through the acquisition of both shares and loans. Francois, I'll now pass back to you to comment on the conclusion and outlook.

Thank you. Thank you, Duncan. Let me now turn to the outlook of the upcoming months. First of all, our H1 results provide clear confirmation that our strategic model is working. Even in a complex environment, we remain firmly on track to deliver our full year 2026 guidance at circa 5.5% operating margin with automotive free cash flow, circa EUR 1 billion. Again, in H2, the main enabler will be about product. And we launched again a new product in H2. It is what I would like to mention as a conclusion of our presentation. For Renault brand, we have the new Megane E-Tech Electric, fully upgraded, higher autonomy over 600 kilometer, richer in terms of digital experience and very nice new design. I mentioned before the potential I see -- I foresee for the Trafic Van E-Tech with 800 volt with amazing SDV capabilities for specific use case to B2B customers. But also, again, it's not only about Europe, it's about international growth with our half-ton pickup Niagara that we launch in Latin America. For Dacia, very, very big events in H2. And I would like first to mention the new hybrid Sandero, which for me will be a strong, strong enabler for Dacia sales. It means as well that now Dacia has a full hybrid in all models, and this is very important for Dacia. We launched a new spring, new EV show again that Dacia is moving firmly towards electrification. And also the new Striker. The presentation, the reveal was very promising. So we are very confident with the potential of Striker. And with all of this, again, I confirm that we are very confident not only for 2026, but also for our futuREady midterm plan moving forward. And I would like again to thank all the teams, all the efforts of our teams, our partners, which allow us to show you today those results. Florent, Q&A?

Yes, Francois. So let's start the Q&A. Again, apologies for the technical issue. We will -- so I will read the questions that I received from numerous analysts through e-mail. The first question will come from Thomas Besson from Kepler Cheuvreux. Could you please comment on the positive adjusted EBIT drivers in H2 that should help you more than offsetting higher raw material, energy, supplier compensation costs? And likely sustained negative pricing environment in Europe? And should we assume continued tailwinds from R&D and warranty? So this is the first question. And the second question is about MFS. Congratulations on the further progress and contribution to earnings. Could you please discuss the evolution of the cost of risk and of residual values in H1 and give us indication on the prospects of its dividends to autos potentially in H2, but also in 2027, taking into account its capital requirements as it continues to grow as an activity.

Okay. Thank you, Thomas. In terms of H2 walk down, so it was all about cost elements, wasn't it?

Yes it was.

So yes, cost will continue to be a strong driver in H2. If you remember, we had some warranty provisions last year. So year-on-year, we will see lower warranty cost in H2. But we will also continue to keep the pressure on maintaining our fixed costs flat. And obviously, the strong dynamic of variable costs is continuing and even accelerating because we have that impact of raw materials, which will be stronger in H2 as we called out. I think you also asked about -- there was a statement about the negative pricing environment. I mean, I think we called that out in the speech, so we said that, that would continue to be a factor of a headwind in H2. In terms of MFS, so cost of risk, we had a slight increase in some Southern American countries, which is -- but I mean, it's not really moving the needle massively. And in terms of capacity to pay out dividends in the full year guidance we've given at the beginning of the year, we said that MFS would pay EUR 350 million of dividends this year, which EUR 250 million was in the first half. And I'm fully comfortable with MFS' capital structure to be able to pay the remaining in the second half.

Maybe to complement. Regarding residual value, I do confirm that we continue to have a very strict discipline priority is value versus volume. We are very keen to monitor carefully our residual value in all our markets. And I really think and confirm that this is a very strong enabler for robustness of our performance, especially in Europe. When we see the difference between our residual value, it is true for Renault brand. It is true also for Dacia. Duncan showed this before. Our residual value are much better than our competitors. Our mix into retail is much higher and safer. And please understand that this is not one day. This is the case for quite a long time. We continue on this basis. This is at the core of futuREady, and this is a very strong enabler for our business model in Europe.

On the dividend from MFS, I also remind that we gave a guidance towards around EUR 500 million per year on average through the midterm plan in dividend paid out to Auto. So we stick to that guidance. The next question comes from Jose Asumendi from JPMorgan. So Jose is interested to know about the pricing power trends by region in H2 as well as the product mix driven by the product pipeline to expect in the second half. Pricing trends in Europe and other regions in H2?

As Francois said, I think we are not chasing volume at the expense of pricing discipline. For me, what I think is that our product attractiveness and the disciplined, very good channel mix management will enable us to maintain pricing stability and strong residual values in a very volatile market environment. I would like to give you 2 examples. For instance, we anticipate a high level of volumes of short-term rental in the market. In this context, we are decreasing our short-term rental volumes by 20%, 10,000 units when the market will grow by 15%. We are protecting like that our residual value. And at the same moment, we are pushing our product attractiveness. And if I take, for instance, the example of Twingo, I think Twingo is rolling out of the garage at the same pace of Renault 5. It means we are focusing our product and our volumes on our product strategy. Look, I think with that, we have the means to do what we did in the last years, but what we are doing now for the future to maintain a very stable pricing policy and very high residual value. That's our strategy.

Thank you, Fabrice. And so the next -- the questions from Jose also tied to CapEx, what CapEx in H2 against H1? And what is our working capital assumption on a full year basis. He's also asking about cost saving or efficiency initiatives in full year '26 and what are the biggest action to reduce our costs?

Okay. And I think we didn't answer on the product mix in H2 as well, which I think we called out in the speech that said would actually continue to be a positive boost certainly on the revenue. And obviously, the mix is slightly negative. But the order book is very strong as well with 2.1 months of forward-looking sales. So on CapEx for H2, H1 CapEx and capitalized R&D was very similar to last year's level and H2 is due to the basic dynamic of our product launches. H2 was higher last year. So we had like EUR 1.6 billion in H2 last year compared to EUR 1.2 billion in the first half of the year. On top of that, we've also consolidated Flexis now, and we're in the final phases of rolling out Flexis. So Flexis will have an increase. So we expect H2 CapEx and capitalized R&D to be slightly higher than previous year level. Working capital should remain negative full year. And I think I've already commented on the cost savings. Obviously, the biggest contribution to that is purchasing, as you called out, in terms of performance. But that doesn't mean that we are not working across the board in all functions to help compensate the increase in raw materials in H2.

Yes. Maybe on cost reduction beyond the daily activity of discussion with our suppliers, I would like to mention that we start to see in H1, and we see in H2 as well, the output and the results on the way we manage our partnership with suppliers in terms of working more closely upstream in order to deliver breakthrough both in variable costs, but also in terms of entry ticket development costs with suppliers. And this is not an intention. This is already delivering results. This is implemented in all our projects. We reached, for instance, over minus 40% decrease of entry tickets with our suppliers in each and any new project or life cycle in our product compared with the past. So all of this start to deliver concrete results. And this is also why we were and we are capable to mitigate that much the strong increase of raw materials that we see in the market this year. So again, this is about futuREady, not only to do the traditional peeling work with suppliers, but to see and to break through the way to engage with our suppliers. And this is not a dream. This already deliver concrete results.

Thank you, Francois. And the next questions will come from Michael Foundoukidis from ODDO BHF. So the first one from Michael is to have the key drivers in the margin bridge in H2 versus H1. What are the tailwinds and headwinds? We spoke partially about some. And that's the first one, and I will follow up with the next upcoming ones.

Let's go once again through the H2 walk down. So as we called that, the volume should remain positive throughout the year. We said that mix price enrichment costs, obviously, a part of this was the enrichment cost coming from Euro 6e-bis, which started on Jan 1. So it's rolling throughout the year. And we said that we expect pricing pressure to remain even as Fabrice said, "We're not necessarily the leaders in that field, but obviously, we're impacted in some way. So that will continue to be a negative part in the second half of the year." R&D around neutral full year because we are actually increasing the expenditure in the second half, as I already called out on the cash front. SG&A and others, I don't think will be a particular mover. And I think MFS will continue to provide a solid performance. So it's really the cost factors, which are key. And obviously, we'll keep our dynamic on the growth of the business. We had a sorry, 10% revenue increase in the first half. We'll have a strong Q3 ahead of us. And I'd just remind you that we have the comparison base on the partner business of RNAIPL, which we consolidated from 1st of August last year. So that will make Q4 a little tougher on a comparison basis, but still post futuREady, we called out mid-single digits over the cycle. So we're comfortably within that.

Thank you. And maybe related to H2, Duncan, can you elaborate on the EUR 300 million partners down payments that we received in H1? And how is that expected to unwind in H2?

Yes. So EUR 653 million of positive free cash flow in H1. So if you take out the EUR 300 million, that means we would have done sort of EUR 353 million as a first base for the first half of the year. And so we will do a slight improvement on that, obviously, to be able to be within our guidance range of EUR 1 billion full year. But the payments received in H1 will be expensed in H2.

Thank you. And maybe the last question from Michael is that could we share our view on the nonauto opportunities, speaking about defense, humanoid, we touched a bit on the matter in the presentation.

We consider 0 in futuREady. So this is a pure opportunity. We do not rely on this to mitigate overcapacities, fixed costs and so no, no. Everything is done stand-alone with our core business. So we see opportunities in defense. We released 2 new projects with Thales. One is mixing the know-how of Thales in management system and the car. And as Renault, we integrate all Thales system inside the car to allow the efficiency of command towards the troops. So this is something which is for military purpose, but also for instance, for firemen purpose. And the second project with Thales is a small drone for which we develop together with Thales, we produce and Thales will be in charge of selling this because, again, we are not becoming expert in defense industry, we contribute with our values. So I'm confident it will grow. But again, for you, the most important to know is that we do not rely on this to deliver our results. We do not need this to fill our plants because we have no idle capacity. We have no overcapacity. We have no fixed cost issue. We continue to optimize and work with a strict discipline.

Thank you, Francois. Maybe, Duncan, can you also elaborate on the raw mat impact that we expect into moving into H2. I remind that we said around EUR 600 million negative of raw mats and inflation for the full year. So what have we seen in H1? And what should we expect moving into H2 on that front?

You've helped me answer the question. So yes, guidance was EUR 600 million full year raw mats and inflation altogether. And if you look across the bridge, we had about EUR 200 million in the first half. So it's about twice the impact in the second half of the year.

Yes. What I can complement, when we have a spike in raw materials, we can find some ways with suppliers to mitigate. But what we see today is that the increase of raw materials is not just a spike. This is a trend. So we have also to be fair with our suppliers and to take this into account. So it's why in H2, we have more impact because we have also to be fair with the suppliers. Of course, we do not accept everything. We work together to mitigate. And again, our procurement team with all upstream functions are able to find other ways with the suppliers to mitigate this, but the impact in H2 is higher, as mentioned by Duncan. My view is, compared with what we organized for 2027, raw mat is the main offender. For all the rest, because you ask us every time, there is more competitors, there is pricing pressure and so on. But all of this, we knew. So there is no surprise. For raw mat, it's true that in terms of trend, there is -- it seems a stable increase of raw mat in our industry for the months moving forward.

Thank you. And the next questions will come from Christian Frenes from Goldman Sachs. So how are the Chinese OEMs affecting Renault's pricing power and segment share in Europe, Brazil and Turkey? And how competitive is Renault's cost base in markets where it competes with Chinese OEMs, including Brazil through the Geely joint venture? What have we learned? And what implications does the JV with Geely in Brazil have for operations in Europe?

My main answer is that there is no surprise. Each time you ask, there is new competitors, there is pricing pressure and so on. But what we see in the market today is not a surprise. This is exactly what futuREady is about, and we are ready for this. And it's why I insist so much about being as competitive as those new competitors in Europe, not only in terms of cost, in terms of technology and engineering. And on the other side, I think we have our advantage. We are better in terms of brand management, design, product, manufacturing. So this is exactly what futuREady is about. Regarding your second question, we do not learn much from the Brazil case because we know exactly what are the strong points of our Chinese competitors. But for sure, this cooperation with Geely in Brazil is very successful because Geely is a strategic partner. We have now a strong intimacy. We know how to work. And what we expected from this collaboration is to have a new brand, which is a good brand, good products and all the strength of the ecosystem of Renault do Brazil. And this is unique in Brazil, and it is why it's working very well. The car of Geely we sell in Brazil are already in the top 3 of each segment. And this is because of Renault ecosystem in Brazil. And we start on time the local production in Curitiba of Geely EX5 as from this summer. So this is, yes, very encouraging in order to mitigate for Renault the strong push of Chinese industry in Brazil and to make it as a strong opportunity to increase our presence. And as I mentioned before, Renault do Brasil volume increase in H1 is plus 35% compared with last year.