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Unknown Executive: Hello, everyone. Welcome to Renault Group's 2025 Financial Results Conference Call. I remind you that this call is recorded and will be made available in replay on our website after the call. During today's call, we will outline the 2025 strong performance from our group, and we'll discuss the 2026 and medium-term outlook. This presentation will be made by Francois Provost, CEO of Renault Group; and Duncan Minto, CFO of Renault Group. Francois, the floor is yours.
Francois Provost: Thank you, Florent. Hello, everyone. Thank you for joining the call. It's a pleasure to be here with you for this important moment, not only to present, as mentioned by Florent, our 2025 full year results, but also to share our '26 outlook and medium-term financial ambitions. But first, I would like to start with our strong momentum since July 2025. One month after my nomination, I could release our new leadership team. And with this team, we already took several important decisions to simplify, streamline our organization. Fabrice Cambolive as a Chief Growth Officer, enhance complementarity between Renault and Dacia, and this start to deliver results. Our CTO, Philippe Brunet set one unified engineering organization, and the team was capable to reorganize this within 4 months. We released our Ampere 2.0 project in order to extend the mindset of Ampere to all our Renault Group operation. I decided to stop Mobilize Beyond Automotive, focusing more on customer experience for our EV customers. On India side, we appointed a CEO in charge of the full-fledged operation in India in order to prepare our next midterm plan in India. And last but not least, we reshuffled our light commercial vehicle operation in order to put this important operation back on track. On the partnership side, we also grant important milestone with the closing of our agreement with Geely in Brazil. So today, Renault do Brazil or I should say Renault Geely do Brazil is selling Geely cars and the localization of the Geely platform, both for Geely and Renault products is on a good track. And we also, as you well know, released our partnership with Ford in Europe. Let's move now to our financial results. We got the job done. July guidance has been delivered with operating margin 6.3%, which means EUR 3.6 billion; free cash flow, EUR 1.5 billion; and record high automotive net cash position at EUR 7.4 billion. All our brands delivered strong performance in 2025. We recorded 2.3 million units overall in total with third consecutive years of growth for Renault Group. Renault brand, first, also third consecutive year of growth, plus 10% growth in passenger cars, second brand in Europe for PC and LCV, first French brand worldwide. Dacia also delivered good results with plus 3.1% growth. We have more than 10 million vehicles sold with Dacia brand since 2004. Dacia is second brand in retail passenger cars in Europe, and Sandero is the best model sold in passenger cars in Europe. But also Alpine, because with Alpine, we have triple-digit growth. First time ever, we achieved 10,000 sales in a year for Alpine. A290 now is gaining a good momentum, and we launched -- just launched A390 in the European markets. Our so-called 2-leg strategy is working well. We continue to push on EV and software, plus 72% sales growth for Renault brand EVs in Europe, plus 77% for the group in Europe. The mix of full EV for Renault brand is 20%, 14% for Renault Group. But we have also very good results on hybrid. Our hybrid E-Tech full hybrid is second best in Europe. We grew plus 35% sales growth in hybrid in Europe. And the mix of hybrid for the Renault brand is 38%, but also overall 30% mix of full hybrid for Renault Group in Europe. All of this is due to the successful launches of our new product. I start with Europe, and I start, of course, by Renault 5 with over 100,000 units sold in 2025, and leader in EV B-segment in Europe. Symbioz, successful launch as well with 89,000 units sold since the launch. It's Renault's best-selling full hybrid model, and it is a C-segment growth for Renault brand in Europe. On Dacia side, Bigster was a big hit in terms of launching last year. We already sold 67,600 cells. It is the best-selling C-SUV to retail customers in Europe in H2 2025. Outside Europe -- our push outside Europe started. As you know, we launched Grand Koleos in South Korea, about 44,000 units sold in 2025. It is a top 3 D-SUV HEV in South Korea. Kardian is also a success with about 50,000 cells sold in 2025, both in South America, but also very successful launch in Morocco. And the Duster, over 27,000 cells sold outside Europe in new markets like Colombia, Australia and Saudi Arabia. All of this is based on strong fundamentals supporting the performance. We keep healthy inventories, 539,000 total inventories. As you know, we have high utilization rates, over 85% for our manufacturing footprint. We have solid order intake fueling order book, plus 3%. We continue to value -- to focus on value over volume, plus 17 points above market average on retail channel mix for our brands. All of this leading to increase of the residual value from 5 to 12 points above peers in Europe. We have, also on cost side, a very strong performance with over EUR 400 COGS reduction per vehicle in average worldwide in 2025. Duncan, please detail the results.
Duncan Minto: Thank you, Francois. Good morning, everyone. Thanks for joining the call with us this morning. Without ado, let's go straight into the zoom on the financial results. Starting with group revenue, Renault Group enjoyed a 3% revenue growth at EUR 57.9 billion in 2025. As you've just seen, the result has been achieved while staying true to our value over volume credo. At constant exchange rates, revenue was up 4.5%. Automotive revenue stood at EUR 51.4 billion, up 1.8%. The Mobility Services contribution amounted to EUR 91 million, up EUR 22 million versus last year. And last but not least, Mobilize Financial Services revenue increased 13.2% to EUR 6.4 billion, mainly driven by higher interest rates of the portfolio and the increase in average performing assets. Drilling into Automotive revenue, it included in the first bucket, negative 1.6 points of exchange rate, mainly related to the devaluation of the Turkish lira and Argentinian peso. Constant exchange rates, revenues increased 3.4%. The volume effect was positive at 0.7 points, driven by an increase in registrations, which was partly offset by a lower restocking within the dealership network in 2025 compared to 2024. As mentioned by Francois, group registrations rose by 3.2% this year, totaling 2.3 million units, marking the third consecutive year of growth, driven by 3 distinct brands. Each brand surpassed market performance, aided by the deployment of the international game plan and the expansion of our electrified lineup. The 3.2% increase in registrations was partially offset by a lower restocking within the network in 2025 compared to 2024. As you can see on the graph, the stock rose 5,000 units in the year compared to 62,000 in the previous period. As of December 31, total inventories of new vehicles stood at a healthy level to operate and represented 539,000 units, of which 442,000 at independent dealers and 97,000 at group level. This level of inventories is supported by a 3% growth of the order intake, resulting in an order book of 1.5 months of forward sales at year-end 2025. Order trend continued to be positive also at the beginning of the year with a double-digit increase over the year in both PC and LCV. The sales to partners, which was the next bucket effect was slightly negative, mainly due to the positive R&D billing one-off in the first half of 2024 and the deconsolidation of Horse Powertrain revenues from the end of May. These were partly offset by gains from partner programs, particularly Nissan Micra and several models for Mitsubishi. Additionally, our Indian activities, RNAIPL, inclusion in the consolidation perimeter has happened since 1st of August, which contributed positively. Let's review price, product mix and geographical mix effects. The price effect was slightly negative at 0.2 points, mainly due to the ongoing commercial pressure, especially in Europe. Price increases helped partially offset negative currency impacts. The group continues to prioritize residual values as part of its value over volume strategy, as mentioned earlier. Product mix had a positive effect of plus 3.2 points, driven by the recent launches, notably Dacia Bigster, Renault Symbioz, Renault 5, the A290 from Alpine, the Renault 4 and the Renault Koleos. This trend will continue to support results in 2026. Geographical mix was negative at minus 0.5 points attributed to increased sales outside of Europe. The international mix rose to 30.4% in 2025, up from 28.6% in 2024. Finally, the other impact resulted in a 0.3 point increase, primarily due to the performance of parts and accessories and distribution activities. So let's turn now to analyze the operating margin. This year, we posted an operating profit at EUR 3.63 billion, representing 6.3% of revenue. The Automotive segment operating margin stood at EUR 2.18 billion or 4.2% of auto revenue. Mobilize Financial Services operating profit reached EUR 1.47 billion. So looking at the evolution of the group operating margin. On the first point, currencies had a negative impact of EUR 282 million, mainly due to the Argentinian peso. The Turkish lira positive impact on production costs was offset by the increase of the group sales in Turkey. Volume effects contributed a positive EUR 186 million, thanks to the increase of our invoicing and increased sales to partners in H2. Price, mix and enrichment and cost factors together had a negative impact of EUR 341 million, that's the sum of the 733 and the 391, reflecting strong commercial pressure, especially in Europe, a higher EV mix, higher international sales and fewer high-margin LCV sales. Efficient cost management helped partially offset these impacts. When it comes to costs, we achieved our target of reducing the cost of goods sold by EUR 400 per vehicle in 2025, mainly due to our strong purchasing performance and the initial benefits we're seeing from the powertrain synergies delivered by Horse. That said, even with these positive results on COGS, our overall costs were affected by higher warranty expenses in the second half of the year, largely due to a recall campaign on powertrain. Also, despite a strong performance, industrial and logistics costs were impacted by higher amortization related to recent launches. R&D posted a negative impact of EUR 87 million, primarily due to an unfavorable comparison base with nonrecurring R&D billings to partners in the first half of the previous year. SG&A improved by EUR 59 million, thanks to strict control of expenses and others effect was negative by EUR 59 million. Mobilize Financial Services posted a record operating profit. I'll just comment that in a minute. But the last bucket highlights the impact of Horse deconsolidation. It represented a negative impact of EUR 279 million in 2025 compared to 2024, explaining a significant part of our operating margin decrease. From now on, there will be no more impact of Horse deconsolidation on the bridge. Competitiveness from Horse will be tracked in the cost bucket. As I said, Mobilize Financial Services generated a record result, recording EUR 22.3 billion of new financing, up 3.3%, thanks to growth in both registrations and in the average financed amount. Average performing assets hit EUR 59.3 billion, up EUR 3.3 billion versus 2024, driven mainly by strong commercial activity on the customer financing business over the last years, following the end of the electronic component shortage. Net banking income as a percentage of average performing assets improved by 19 basis points, highlighting a robust margin policy. Cost of risk at 0.36% remained in line with our historical levels. Operating costs in absolute value improved by 4 basis points as a percentage of average performing assets and remained stable in absolute value, excluding positive one-offs in 2024. Overall, Mobilize Financial Services posted a record operating profit of EUR 1.468 billion, up EUR 173 million year-on-year. Moving to key items from our group P&L below the operating margin line, other operating income and expenses were negative at EUR 11.5 billion, mainly included the noncash loss linked to the change of the accounting treatment of Renault Group's stake in Nissan for EUR 9.3 billion that was recorded in the first half of the year. It also included impairments for EUR 0.9 billion, restructuring costs for EUR 0.4 billion. These restructuring costs notably embedded an early retirement scheme. Other items included here the FCA penalty provision at MFS. Indeed, we took, this year, an additional provision of EUR 222 million to address potential risks related to the U.K. Motor Commission matter. Other items are also included with the EU CAFE LCV provision for a total of around EUR 100 million at the end of 2025. Moving down to net financial income and expenses. This amounted to EUR 208 million compared to EUR 517 million in 2024. Hyperinflation in Argentina had a lower negative impact in '25 compared to the previous year. The contribution of associated companies amounted to negative EUR 2.2 billion compared to a negative EUR 521 million in 2024, included Nissan's contribution for negative EUR 2.3 billion in the first half, while the contribution of Horse Powertrain amounted to a positive EUR 245 million this year. I remind you, Nissan no longer impacts the net result since the change of accounting method end of June. Current and deferred taxes represented a charge of EUR 522 million, including EUR 24 million related to the French exceptional surtax. All in all, and excluding Nissan's impacts, net income group share reached EUR 715 million. Let's now move to free cash flow generation, starting from the top line. The cash flow reached EUR 4.7 billion in 2025 compared to EUR 5.2 billion last year. The year-on-year decrease was meaningfully lower than the decrease we experienced in our operating profit, highlighting the resilience of our performance. Worth highlighting as well is that 2025 cash flow included EUR 300 million dividend from MFS versus a EUR 600 million dividend in 2024. The EUR 300 million was EUR 150 million of dividend for the year 2024 paid in the first half of '25 and EUR 150 million anticipated for the year 2025 paid in H2 2025. Tangible and intangible investments cash outflow included asset sales -- including asset sales, amounted to EUR 2.8 billion, rather stable compared to 2024. Including the part of R&D expenses accounted for in the P&L and excluding the impact of asset disposals, the total amount of group's net CapEx and R&D stood at EUR 4 billion, relating to 6.9% of revenue compared to 7.2% of revenue in 2024. The change in working capital requirement was a headwind of EUR 190 million. This underscores the group's willingness to have a healthy and sustainable working capital requirement management. In this context, the group aims to unwind, in '25 and '26, the significantly positive EUR 844 million change in working capital recorded in 2024. Finally, restructuring charges had a EUR 300 million cash impact. All in all, Renault Group generated EUR 1.5 billion of Automotive free cash flow in 2025, demonstrating a resilient profile. The Automotive net cash financial position stood at EUR 7.4 billion on December 31, 2025, compared to EUR 7.1 billion a year before. This evolution was mainly driven by the strong free cash flow generated, dividends paid to shareholders for EUR 697 million and the impact of foreign exchange, IFRS 16 and others, which resulted in a negative EUR 392 million, partly due to the employee share plan. Liquidity reserves stood at a comfortable level of EUR 17.7 billion. I'll end this presentation of our '25 results with the dividend that we will submit for the approval of the general assembly on April 30, 2026. The proposed dividend for the financial year 2025 is EUR 2.20 per share. This dividend, I think, is a clear signal of confidence in the future of our company and confirms our intention to remain attractive in terms of return. I'll now hand back over to Francois for the '26 and midterm financial outlook.
Francois Provost: Thank you. Thank you, Duncan. Before we look at the midterm perspective, let me start with 2026 full year financial outlook. As you can see, we aim to deliver, again, a strong and resilient results in complex environment with operating margin circa 5.5% and free cash flow circa EUR 1 billion. Our key assumption is same pace in terms of global markets, stable Europe, South Korea growth, India, South America and also a high level of market in Turkey and Morocco. As you can see, we have a slight decrease in operating margin ratio. This is due to expansion of our business, especially in India, South America, South Korea, strong increase in terms of sales to partner and of course, also keeping a strong momentum in terms of battery EV in Europe. I remind you that in 2026, we have consolidation of RNAIPL, our plant in India. In this outlook, we embedded to keep a very strong cost reduction activities as well as a negative change in working capital. We also expect EUR 350 million dividend from Mobilize Financial Services. In 2026, we will keep intensive product offensive, both in Europe and outside Europe. Let me start with Europe. On passenger cars, we will have the full impact of our new Renault Clio and the start is super strong. The new Twingo E-Tech Electric will be launched in H1. For Dacia, we'll have a new A-segment EV, a new C-segment ICE and full hybrid version. On LCV side, we will launch this year our new Trafic van E-Tech at the end of the year. But in parallel, we'll have the full benefit of the full set of version of Master now available. We will have also the benefit of the Alpine A390 in Europe. Outside Europe, we will push strongly our growth, notably with Renault Boreal in South America and in Turkey, the launch of the Renault Duster in India, Renault Filante just released also in South Korea. And I would like also to mention the launch of our new pickup in South America in H2 2026. This is for 2026 overall financial outlook. Next March 10, we will release our new strategy, our new strategic road map for Renault Group. This will be based on 4 convictions. The first one is that we have and we will continue to give top priority to our product to deliver a second successful lineup in a row in Europe and to be a contender in high potential markets outside Europe like India and South America. We will also release a strong ambition in terms of customer experience. We will release detailed technology road maps for all key technologies, especially regarding EV and software. Third, we will deliver top operational excellence because in this tough competitive market with a lot of uncertainties, we need for each function to target the best-in-class performance. And last but not least, our conviction is clear. We will not win alone. We will build sustainable, trusted, transparent relationship with our key stakeholders, of course, our employees, but also our suppliers, our dealers and our partners. Our next midterm plan as Renault Group is a stand-alone midterm plan, and we will use our partnership to boost our competitiveness and strengthen our position, especially in key international markets. In terms of midterm financial outlook with this strategy, with this midterm plan, we are happy to share with you today our midterm financial outlook, which is about robustness, regular and resilient financial results. In a very challenging environment, we will create value with consistency, predictability, discipline and realistic approach. As you can see, we aim to deliver regular 5% to 7% operating margin as well as over EUR 1.5 billion per year on average free cash flow. We will do this, and I will now detail a bit more those items. In terms of operating margin, as you can see, our industry is very cyclical. Over the past 20 years, our average COP was 3.9%. And what we disclose today is that we aim, in the next year, to deliver between 5% to 7% with a steady mid-single-digit revenue growth over the midterm, supported both by the Automotive business and MFS. This will be also delivered through a steady improvement in variable costs as well as a fixed cost discipline with a strong focus on productivity. If we move now to cost reduction, we will deliver every year EUR 400 cost reduction in average per vehicle. We will continue to improve our efficiency in terms of development of new products. We will deliver in the coming years up to minus 40% reduction in new projects entry ticket, means R&D CapEx and supplier entry ticket. Our SG&A expenses will remain stable over the midterm. With all of this, we will keep a cautious breakeven point, and we'll keep stable our cash fixed cost base over the midterm. Let me move now to free cash flow. With all of this and enhanced performance, revenues, focus on costs will enhance our profitability. As a consequence, we will improve and deliver strong free cash flow, R&D CapEx and supplier entry ticket below 8% of group revenues. MFS dividends will come back to historical high level, circa EUR 500 million a year on average. But also, I would like to mention that in the next years, we will start to have high level of dividends from Horse Powertrain to start from 2027 onwards. In terms of capital allocation, we will have a very strict discipline and balanced capital allocation. Of course, the top priority will be to invest into our products, as I mentioned, with R&D CapEx and supplier entry ticket below 8%. In terms of financial investment, we'll have very high ROCE request. We will, with all of this, preserve a strong balance sheet to maintain strong liquidity reserve to protect our investment-grade profile. We will also return value to our stakeholders, to our employees with profit share mechanism. But today, I also confirm our long-term objective to have 10% of our share capital owned by employees. And of course, to shareholders, we will have a progressive increase in dividend per value (sic) [ share ] in absolute value. It is what I will present now in the next page regarding dividends. For this as well, you see that over the past 20 years, we had EUR 1.65 per share dividend, but circa EUR 0.4 per share if we exclude Nissan dividends pass-through. And now we aim to deliver EUR 2.2 per share this year, next year, explained by Duncan, but also progressive increase in dividend per share in absolute value. As you can see, and this is my conclusion, in a cyclical industry, now Renault after 5 years of Renaulution, clearly a success story. We are capable and we will deliver a success system. And it means in terms of financial outlook, sticky, robust, resilient financial performance. Thank you.
Unknown Executive: Thank you, Francois. Thank you, Duncan. With this, we will now open the Q&A session. And the first question will come from Thomas Besson, Kepler Cheuvreux.
Thomas Besson: First question, I'd like to talk about your recent momentum. I mean, November, December, January in Europe have seen clearly a sharp deceleration of your commercial dynamic. Can you talk about this, explain if there's something unusual or if it's partly driven by the sharp increase in Chinese automakers' share or your geographic mix or the momentum in LCVs? That's the first question. Second, could you say a few words if you can already or eventually postpone that to March 10 about capital allocation? Talk about the Nissan stake, whether you still plan to reduce that over time, what you plan to do with FlexEVan or whether there are eventually some other investments that might require some capital or whether we could hope to see eventually higher capital returns in the future, given the strong net cash position you've reported? And finally, a question on the financial services operation that reported very strong results again in '25. Could you explain why the dividend is not rising faster in '26? I think we thought it would be a bit more. I've seen you raised the equity of the business in '25. Could you detail the evolution of the cost of risk and remind us what was your residual value exposure at the end of 2025 directly carried by the financial services operations?
Francois Provost: Thank you, Thomas. A lot of questions, so I will try to organize this. In terms of commercial performance in Europe, we delivered a good performance in 2025, and we'll continue to do so next year. And maybe, Fabrice, you can give the overall overview of your strategy in Europe in 2026.
Fabrice Cambolive: Yes. I don't know, we'll check with you what you mean with deceleration in November, December. But our results in Europe are not only robust, but I would say, consistent in the time. Our growth is based on growth on PC retail market in Europe in 2025, and it was the case for Renault and for Dacia, 3 years in a row. And I would say this year in 2026, we will benefit from many positive factors. First of all, a good recovery on LCV. You know that we had this phase-in, phase-out of Master with the launch of the new Master and now we have the full diversity and this should -- and this will already help us to increase our volumes on the LCV side, which is a very good point. The second point is that we are -- we will have a robust and we will consolidate our strong position on the A and B segment with the renewal of Clio on one side, but the arrival also and the extension of our market coverage on the A segment with the new Twingo and a new A electrified -- segment A electrified model for Dacia. Next point, we have a stable position on the C-segment, and we will add on this segment a new car from Dacia side. And of course, we'll count on our 2-leg strategy between hybrid and EV to fulfill the consumer needs market by market. On top of that, as you saw also last year, we have an increase of our international volumes, double-digit increase last year, which should continue through the number of model launches you saw and presented before by Francois. It means, for me, no alert from the commercial side, a good position in terms of CO2 in Europe, which allow us to play between volumes, pricing, profitability and CO2. And this always structured value-oriented commercial policy, I think we are working far above pure pricing power. We are working in value. What does it mean? A good channel mix, good residual value, good capacity to increase our model mix. It means on this side, we are working on the safe -- on a very safe dynamic.
Francois Provost: Thank you, Fabrice. Regarding Nissan, I think the priority for Nissan is the success of the Re:Nissan plan. And I share very often with Ivan, and I'm confident Ivan and Nissan team are capable to deliver this plan. I think they just released encouraging results a few days ago. My personal opinion is that once Nissan will be somehow stabilized, we will see more opportunities than today between Renault and Nissan because both groups, we have to concentrate on priority in terms of resources. It means that each time one partner can help each other to share resources and our geographical footprint is very complementary. I personally think that you will see in coming years even more opportunities between Renault and Nissan that what we are successfully doing today, especially in Europe and in India. And for Nissan shares, as you know, everything is open, and we will consider any decision with the unique interest of our shareholders. Regarding FlexEVan, Flexis, I'm happy to share that, with our partners, Volvo Group, Volvo Trucks, CMA CGM, we are about to reshuffle the business model, which is unfortunately needed because the pace of electrification for light commercial vehicle is much below what we expected. But the product is good. The product is really good. The product is now almost fully invested. It means, Thomas, that our SDV now is invested and everything will be launched, I mean, Trafic E-Tech included SDV this year, and this is -- and this will be a strong asset already invested for the next midterm plan. And regarding the 2 last questions, MFS and dividends, maybe Duncan.
Duncan Minto: Yes. Thank you. Thomas, so yes, so we did do a Tier 1 equity or Tier 1 raise last year. But I mean, the capital situation at MFS is really strengthened. It was building for the future. Cost of risk, you asked, I think I called it out in the slide, so 0.36%, we're pretty much in line with historical levels, things are under control. In terms of total exposure for residual values compared to average performing assets of close to EUR 60 billion, we have a EUR 4.9 billion exposure to residual values, around EUR 700 million of that is EV alone. And in terms of dividend, yes, so it probably wasn't well known, but we received EUR 150 million in the first half, which we published in June. We got a pre-dividend of EUR 150 million in the second half. The outlook is therefore EUR 350 million for 2026. And obviously, as we move on through the midterm, back up to EUR 500 million per year.
Unknown Executive: And the next question will come from Jos Asumendi.
Jose Asumendi: A few questions, please. Duncan, can you help us a bit with the expectations for 2026 on the bucket of raw materials, purchasing, warranty and industrial costs? And if you could comment there also on the cost savings that we're expecting from Horse to be booked in 2026. That will be question one. There's probably 3 questions there. But question one -- but that will be the first one. And then two, Francois, can you comment on -- and I'm happy to leave it also for the CMD, but you're mentioning some very big numbers like 40% reduction in entry tickets. Does this mean that some of the vehicles that you're planning to develop going forward will be coming from Shanghai? Is there an additional opportunity to work with Chinese suppliers or with Shanghai R&D development center to continue to develop some vehicles from that region, which could allow you to reduce further entry ticket by that proportion, which is very large? And then also happy to leave it for the CMD, but I was wondering if you could just comment briefly on your market share assumptions in Europe for '26 and '27 in the light of the competition that we have, obviously, Chinese OEMs entering the European market?
Duncan Minto: Thanks for the questions. I'll start in terms of the 2026 outlook bucket by bucket. So for FX, the impact on the operating margin will be more negative in '26 than '25. We're still seeing Argentinian peso, Turkish lira, it's the same kind of exposure that we have this year, but it will be a stronger impact. Obviously, as you call out, and maybe Francois or Fabrice will come on to the market share questions afterwards, but not just a market share in Europe, but growth in volumes, obviously, in line with our mid-single-digit sales growth assumption, both from internal plus also partner businesses. We do continue to see commercial pressure remains strong, and so therefore, weighing negatively on the price mix element for the activity. Enrichment will be a big part of that due to the regulatory costs. We had the Euro 6e base, which is impacting powertrains, which came into force on Jan 26 is impacting a lot of our B segment, B+ segment [indiscernible] negative. But I mean in terms of dilutive, we have growth in EV, we have growth in international, but that's been well called out. As you say, we do have a strong dynamic on the cost reduction. That remains very key in terms of priority. So that will be positive. Variable costs, the fact that we're doing EUR 400 per vehicle will impact us very positively. And also, we won't have the warranty recall provision that we had in the second half of the year. And as fixed costs will be managed stable, the only thing that's coming through is slightly higher amortization. Fixed cost and cash are stable. And I think MFS will be able to produce as well, if not slightly better than this year in terms of outlook. So that's bucket by bucket. You asked for the 3 of the main ones, but that's the full walk down.
Francois Provost: Okay. Jos , regarding your 2 next questions, yes, we think we are capable up to minus 40% entry ticket reduction for the new model project development compared with previous generation. And yes, this is especially because we could assess in detail the way Chinese ecosystem is doing, thanks to our ACDC development center in Shanghai. I remind you that our proof of concept was Twingo. And as a matter of fact, we are launching Twingo within 21 months, showing that we are capable to do. In the next midterm plan, our challenge is to put this as a standard and to demonstrate that Renault is European OEM capable in techno center with our supplier to develop within 2 years our new model as a standard, and this is a strong part of the next midterm plan. And this is indeed for this main reason that we are capable to release such a performance for entry ticket. And regarding market share in Europe, as you know, we do not disclose market share. What I can repeat is that, together with Fabrice, Katrin, Philippe, [ Krief ], we will continue to give priority to value versus volume. And thanks to this, we deliver steady growth, we improve the value for our customer, we improve the residual value, we improve the loyalty of our customer. You mentioned Chinese competition. If I take the example of Spain, which is probably where the Chinese growth is the strongest one, you can see that our brands, both brands are growing and gaining market share. So it's why I do not underestimate the strong Chinese push because I know very well the strength of Chinese industry. But I think that, with our strategy, with our recipe, which is about clear brand positioning, strong product, value versus volume, we will be capable to sustain the growth in Europe in the next years.
Unknown Executive: And the next question will come from Horst.
Horst Schneider: I hope you can hear me.
Unknown Executive: Loud and clear.
Horst Schneider: That's great. My first question is just a quick one. When you talk about midterm guidance, could you specify you talk about which year? Is that now a 2028 guidance? Then the second one is, again, I want to come back on the 2026 guidance. I missed, Duncan, your comments on raw materials. So what is baked now into the guidance? And maybe you can split that up, what's the impact also then from the rising chip prices? Then I want to follow up also on the question that was raised by Thomas on the late development. I mean we have seen in January that the Chinese OEMs, they increased their sales in Europe by something like 100%. So there seems to be a renewed push by Chinese OEMs into Europe. At the same time, I think Stellantis also said that they want to do more volume over value. So they also put the prices down. And at the same time, we see that [ Dutch ] share was very weak in January, which I think you say was due to logistical issues. But my impression is that the overall competitive environment worsened again in January. So therefore, my question is, to what extent is already baked into your guidance? You talk about around 5.5% margin guidance for '26. Should we work now with a range of kind of 5.3% to 5.7%? And since the market got worse, we should rather go than for something like 5.3% for '26. And the last one is a brief one on dividends. So you say dividends increase in absolute terms. My takeaway from that is, it's not that important what the earnings going to do. If it's now 5.3% or 5.7% margin, doesn't matter that much. It's more really that you want to increase the dividend step by step, and we do not have a kind of payout ratio that we need to keep in mind. Thank you.
Duncan Minto: Horst, thanks for the questions. So midterm is for the years to come. We're not talking about something for 2035, so it's shorter than that. But with the volatility of our industry, we want to give you the corridor that we're working in for the years to come. In terms of the second question on raw materials, yes, we had a tailwind of raw materials in 2025. That would be the opposite and probably more like double the amount opposite. So we've got that on our radar and built into the guidance. In terms of chips, I guess you're talking about memory. So we've been, like all sourcing topics, we're covering them -- covering this, and we have working groups making sure that we're fully on top of it. So we are seeing pressure across the sector in that area, but no disturbance at this point in time to call out. In terms of the guidance range, so 5.5% -- circa 5.5%, mathematically, that's between 5.3% and 5.7%. I mean, we're announcing today the guidance for 2026, Horst. So I don't think I'd say I've got anything particular to say whether it's the lower or the upper end of that. It's circa 5.5%. And the last point in terms of dividend stable, yes, so we had in the past talked about payout, and we want to move away from that sort of cyclicality and we want to be able to produce a steady and robust result. So the idea is to de-link the percentage payout for free cash flow. And so we are proposing a EUR 2.20 dividend and a policy which should progressively grow over time. I think there was a third question in the middle of those five, which was on Chinese competition, Stellantis. Do you want to take?
Francois Provost: No, I will not add much.
Horst Schneider: [indiscernible] January as well. Why that was so weak in January?
Francois Provost: You should not pinpoint 1 month. I think we have to see the trend. And I repeat, last year, several competitors pushed a lot in terms of price. This is short term. This is short-term strategy. It is not our strategy. And despite this, we showed in 2025 that thanks to clear brand positioning, strong product lineup and value versus volume, we can do better. So we will not be short term in 2026 and following years, and it is because of this that steadily we are growing our performance. And I remind you that residual value is key in the European market because we sell most of the car with financial and leasing products, for which the residual value is absolutely key. So it's why our sustainable value versus volume policy for our brands, our focus on retail for our brands, those are the good solution to have a steady growth in Europe and this is what we will continue to do. We know what Chinese competition is and we are ready to fight and to grow in Europe.
Horst Schneider: But your impression is not that it got worse lately, right?
Unknown Executive: No, Horst, I think I made the comment to you guys asking the question in Jan. In Jan, we had some specifics, indeed, as you referred to, regarding logistics, notably for the Dacia brand, but this will be caught up during Feb and March. So this is something that is not depicting a trend or whatever. And as mentioned by Fabrice as well, the order trend is good in Jan. And the order book, as reinforced, it was at 1.7 months at the end of Jan. So again, on these, the perspectives that we have are good. Thank you, Horst. We now give the floor to Philippe Houchois, he is on the phone. Philippe, can you unmute your microphone, please?
Philippe Houchois: I've got 2 questions, please. The first one is on the investment ratio, the 6.9% is very, very low. Want to keep it below 8%, average industry, probably 10%. I guess the market will have an issue with the sustainability of that investment ratio. And so it would be helpful if you could maybe comment on what kind of benchmarking you've made. I know you're breaking new ground working with the Chinese, on development, but also maybe to make that ratio look more sustainable, how much of that is the fact that you are probably more disintegrated vertically than most of your peers, having deconsolidated the horse. So in the context of that sub-8% investment ratio, how much do you think is an edge from your vertical disintegration? That's my first question. And my second question, maybe for you, Francois, is more on the -- we hear noise about EU local content rules coming through, hopefully next week. What we heard is 70% ex battery seems to be like music to your ears, I think, in terms of what you were kind of looking at. And I'm just wondering if you can kind of tell us your latest thoughts on would that be kind of a positive for you? What's happening on the LCV CO2 rules to make them workable? And then any thoughts on what does the EU have in mind when they allow the price undertaking offers for the Chinese OEMs?
Francois Provost: Regarding the first question, indeed, what we target is best performance for entry ticket and supplier entry ticket. We know how to do. This does not mean that we reduce the pace and the ambition in terms of new products, but also in terms of technology roadmap. And you will see during our Strategy Day, March 10, and our CTO will explain this in detail, that we set very detailed tech roadmap to catch up Chinese trend on all what is important in terms of future of automotive. And it is true as well that -- and we will show this also March 10, that we will streamline our platform. We set in our engineering organization, a cross-car line organization, in order to streamline diversity and develop top-notch level of module and technology, very much standardized, and then the three brands can use it. So this is also a strong lever in order to be better than competitors. So yes, we aim to be better than competitors in terms of R&D CapEx ratio, but not reducing the pace of investment. Regarding EU, I have been very talkative. It's true, last year, in order to raise the urgency to do some changes, I think EU and governments now understand the urgency, but so far, we have no concrete project. I nevertheless remain confident that we will get the necessary realism and flexibility as far as CAFE 2035, technology neutrality, and also tsunami of regulation are concerned. Regarding Chinese competition, you know Renault opinion? We do not think that to close boundaries is good. It's not good for Europe, it's not good for China. What we recommend, and I will repeat this now, is to apply in Europe what China successfully applied 20 years ago. Means that Chinese OEM are welcome in Europe, but they should partner with us. They should produce, develop, use our suppliers, invest in Europe. And this is, we call it -- we can call it local content, but for me, this is the most important. So now, I will wait for the decision. But what I can share with you is, again, as Renault today, we have the agility to move quicker than our competitor in order to adjust ourselves to what EU will decide sooner or later.
Unknown Executive: Thank you, Philippe. The next question will come from Michael Foundoukidis from ODDO BHF. Michael, the floor is yours.
Michael Foundoukidis: 3 questions on my side. First, on the order book, order was 1.5 at the end of last year. I think you said 1.7 at the end of January, so it's definitely improving a bit. There's probably some seasonality here as well, but what's your take on how it should develop throughout 2026? That's the first question. Second question, a follow-up. Duncan, I think you said earlier that -- or maybe it was Francois, that LCV sales should improve in 2026, meaning should grow. Is that versus, I would say, H1, which was very tough last year or overall we should expect absolute LCV sales to increase in 2026 versus 2025? And maybe third question and follow-up from others on shareholder returns and free cash flow. So you're guiding for free cash flow above EUR 1.5 billion per year. Dividend is, even if it increased, it's probably a payout, which is something like, EUR 1 billion max, I would say, so there are still some available free cash flow. And your financial situation has been highlighted as already significantly improved and is very strong. So could you help us navigate into that? Meaning that what should we expect as a target for net cash position and how should we see shareholder returns in the context of free cash flow? Is it possible that all free cash flow should be returned to shareholders at some point or there's other ideas in mind?
Francois Provost: Thank you, Michael. Fabrice will start with the 2 first question and then Duncan.
Fabrice Cambolive: Yes, Florent said that order book increased at the end of January by 0.2 months, which is reflecting what we said before. It means a good dynamic in terms of orders. We are monitoring that carefully, and frankly speaking, the trajectory until now is good. We don't see any reason why we shouldn't confirm that in the next months, due to the success of our 2-day lineup and the next launches, which will increase our market coverage. We are entering once again in A segment, in C segment with Dacia. It means we should increase naturally our market coverage and our orders due to this news in terms of product. Of course, we're putting, as Francois said, value first. We want to increase on the right channels, at the right residual value at the right pace, and we will monitor that carefully. Regarding LCV, the comeback is already demonstrated in the numbers you see since the beginning of the year. I think that if you check LCV sales in January, they are increasing. The level of orders is also increasing. It means, yes, we should have a global increase on LCV volumes this year in Europe.
Duncan Minto: Michael, on the capital allocation, so yes, free cash flow guidance is for over EUR 1.5 billion on average per year. Currently, we pay a little bit less than EUR 700 million when we look at a dividend per share of EUR 2.20. So in terms of capital allocation, I repeat again, what Francois said. So first priority is product and investments in the company. Yes, mathematically, if you take 1.5, minus the dividend, there's more left over. We will continue to strengthen the balance sheet, but we will also make investments in product and extended businesses. So if we were to change the scope of Flexis, for example, that would be an impact on utilization of cash, because we believe in the product, and we have some excellent opportunities in those types of areas. So first of all, product, and then steady growth over time. We want to move away from the cyclicality. I'll manage to say the word of the sector, and prove to you that we have a robust financial outlook in this corridor of 5% to 7% group operating margin, and a very significant improvement compared to historical trends, both on margin and on cash.
Unknown Executive: Thank you, Michael. The next question will come from Pushkar Tendolkar. Pushkar, the floor is yours.
Pushkar Tendolkar: My first question is, again, I want to come back to the Dacia commercial performance in Europe. Second half of last year versus first half, it's still gone down in terms of absolute volumes, despite having the Bigster ramp up. Also within the last few months of the year, it was down month-over-month. So is there any specific reason for that? And just to give us more comfort from a '26 point of view, if you can break up the sort of the mid-single-digit into Renault, Dacia and LCVs in terms of the volume growth. The second one on cost versus price mix enrichment. Historically, the objective has always been to make -- to keep this sort of neutral or positive. Unlikely that it happens for '26. If you can share what the negative magnitude could be, ballpark, but also, when could this bucket then again go back to neutral in terms of your medium-term planning?
Francois Provost: Okay. So for the first question, regarding Dacia track record, I will ask Katrin to answer, please.
Katrin Adt: So we are very satisfied with '25. We had a solid increase and volume increase. We are a brand which is not chasing volume, but value, and we did that also last year. We had the entrance in the C segment, as Francois said, and it was very successful. We managed to be the #1 on the C segment SUV for retail customers in the second half. We had record sales also when it comes to our electric car, the Spring. So we are very confident also to move into that or to continue that trajectory also in 2026. At the end of last year, we had a change of model years and also engines, so we might have a slight slowdown, which is more due to logistics and changes in production than we see it in orders. And we are very confident also that we started the year well off and that we will continue to do so.
Duncan Minto: Yes. Pushkar, on the cost, the mix price enrichment and cost, we had said in the past that those buckets should be able to compensate each other in previous periods as well due to you know, electronic component crisis and the ability for the industry to have more demand than supply was possible. That was a positive in the previous years. Certainly, as we came through this year and we saw in the second half, and we'd called out, the sum of the 2 can no longer compensate at this point in time. We've not taken an assumption in '26 that they can compensate either. I'd like to remind you, as we are growing, obviously, Katrin just talked about the changeovers of engines at Dacia, so we have additional headwinds in those sectors. So Euro 6e-BIS is calling us to put additional equipment and cost into the car that, frankly, the customer is not willing to pay for. So this is a negative overall. And in terms of growth, we had 10% growth internationally for the group in 2025. As you know, Pushkar, the margins outside Europe aren't necessarily the same as inside Europe, so that growth is slightly dilutive. We called out in the guidance that EV is shifting very positively for the group as well. 14% mix for the group in 2025, and obviously, that's going to continue to grow. And partner business, so even if I was to come back and link to one of the questions earlier from Philippe Houchois, we're seeing growth in revenues, where we have no fixed cost from these partners coming in. So that also impacts our ratio of CapEx to group revenues. But your question was, do we have an assumption in 2026 that the 2 are positive? No. I came, I think it was, I don't know if it was Horst or Jose earlier that asked about raw materials, but that's a headwind as well in 2026. And the second part of your question was, at what point can it come back in time? Obviously, our international expansion, the idea is as we grow, that we also improve profitability. Pushkar, we'll be delighted to see you on March 10 to look at our Strategy Day and see what we have in terms of excellence, in terms of efficiency and performance across functions, the products that we're bringing out, the technology that we're bringing out, and how we plan to improve profitability internationally over time, improve EV over time as well. So I won't call out a specific year in which we would say that that would be fully balanced, but that's, I guess, the low point for us in 2026.
Pushkar Tendolkar: Just if I can ask one follow-up or a housekeeping rather question. In terms of 2026, are you looking at more provisions related to the LCV on the CO2 side?
Duncan Minto: On the LCV, the European CAFE for LCV, it was just over EUR 100 million provisioned in '25 in the other operating income and expenses line. All things being equal, at that same mix with no change in regulations further than today, that would be a further headwind in '26, yes.
Unknown Executive: Thank you, Pushkar. The next question will come from Renato Gargiulo. Renato, the floor is yours.
Renato Gargiulo: Thank you for taking my questions. Most of them have been already answered, but 2 quick ones. The first one, if you can give us an update on the synergies on powertrains with Horse. The second one, if you have any further comment on the recently announced partnership with Ford in European market, and if we can expect any potential expansion of the partnership, going forward.
Francois Provost: Yes. Regarding the Horse Powertrain, I'm very, very confident with this project. In 2026, this will deliver more cost reductions than what was planned already, and much more to come. I start to see also a lot of synergies created inside the company, which will go on top of the cost reduction roadmap for the European cluster, let's say. So yes, indeed, Horse Powertrain is strong lever to sustain our cost performance in the midterm. And on top of this, Horse Powertrain will be also contributor in terms of dividends in the next midterm. So indeed, a strong lever for our next years to come. And regarding Ford, progressing very smoothly. I have nothing new to disclose today, but I can confirm that the first projects, namely, 2 Ford cars based on human technologies, production in France, are proceeding smoothly and operationally very smoothly between the 2 teams.
Unknown Executive: Thank you, Renato. The next question will come from Stephen Reitman.
Stephen Reitman: I have 2 questions as well. First of all, could you talk about your BEV mix in vans in 2025? And what was it -- and what is the average you require over '25 to '27 in order to be compliant? And can you quantify the potential fine if your BEV share stayed at the 2025 level? My second question is about international. Clearly, you already indicated that the growth you expect in international is dilutive to your margin, and that's obviously included in your guidance. To what extent is international required to reach European levels of profitability for you to be up -- to be at the up end of your guidance range over in the medium term? And maybe give some idea of what the lag is at the moment. And also, can you comment on some of your BEVs, the Renault 5 volume potential in 2026, especially with the availability of LFP, in terms of what that you can do with positioning on price-wise on that vehicle?
Francois Provost: Regarding the first question, if I understood well, it's a battery EV van situation. Unfortunately, the trend in Europe is much lower what EU expected. It is why we have the problem with CAFE. But I consider Renault Group is better than the average of the competitors, slightly better. Regarding penalty...
Duncan Minto: The theoretical penalty if no mix was to change. So I mean, it's a very theoretical question. I mean, based on the mix we had in 2025, that the provision for the fine is EUR 105 million relating to our 2025 volumes. I mean, it was heavier in the first half and lower in the second half because our mix actually improved in the second half in terms of the CAFE, LCV. So if all things being equal and we do the same volume over the three years, you can multiply that trend by 3. But obviously, we have a product portfolio plus Flexis, the full availability of Master, which you called out earlier in terms of EV as well. So once again, it depends. We have the product offer, it's how the demand follows.
Francois Provost: Yes. Regarding the last question, you spoke about LFP and R5. I would like to highlight that as planned, we are capable to introduce, within less than 18 months, a second battery technology in our existing cars. LFP, including the cell to pack, no more modules. So this is I think the proof that Renault is capable to catch up the speed, the innovation of our Chinese OEM competitors. The way we use this opportunity of double battery, I leave it to Fabrice.
Fabrice Cambolive: I mean, we saw that regarding the -- because your question was also the volumes of R5 and the commercial results. Last year, we sold almost 90,000 R5 all over the world. We are not pushing the car. It means the car is very good on retail market. By the way, in the top 3 on BEV retail in Europe. We expect this year another growth due to the potential of the car, our order bank, which is good, and also the increase of the EV mix market in Europe. t means no change until now for R5 and additional levers to grow in the coming months.
Unknown Executive: Stephen, just to give you some order of magnitude in terms of cost performance, we intend, as mentioned by both Duncan and Francois, to continue to reduce our variable costs, notably in 2026. Through the implementation of LFP and cell to pack on the existing cars, that enables to reduce the battery cost by about 20%. This is the type of improvement, technological improvement that will support the cost, hence the competitiveness of our vehicles on the market against European players, but also against Chinese competitors.
Stephen Reitman: On international.
Duncan Minto: On the international I did confirm that it was dilutive, as we said, compared to the average profitability of the group. I won't go into calling out the percentage lag nor at what point it catches up to Europe. But certainly, you can assume that it contributes positively to moving us upward in the corridor from 5% to 7%. That's all I'll say.
Unknown Executive: Thank you, Stephen. We'll take the next question from Christian Frenes. Christian, the floor is yours. Please open your mic.
Christian Frenes: Most of my questions have been asked, but maybe 2 more from me. First of all, regarding your 2026 outlook, could you add some qualitative commentary regarding European pricing, what you're assuming within the 2026 outlook and also the contributions perhaps from Turkey and also from Brazil to that number? And then my second question is just on free cash flow. It's going from EUR 1.5 billion to a guide of EUR 1 billion next year. Could you just give us the walk -- the bridge for that?
Duncan Minto: So thanks, Christian. We got those clear. So I'll maybe answer the second one first, on the free cash flow walk. So you have obviously, in terms of the cash flow generation, you'll be able to make your estimations from our mid-single growth, plus the operating margin guidance, but there's not a huge move there. CapEx and R&D, we will have a slight increase, but the main one I'd like to call out, is the working capital assumption. So it was EUR 190 million negative in 2025, coming off the EUR 844 million positive impact in 2024. And so, we've built into our assumption for 2026 that we will further unwind, working capital. So you can consider that amount will be somewhere between the 2025 number and the total gap we had to catch up to 2024. So that was on the free cash flow. On the Turkey?
Francois Provost: Yes. For Turkey, so you are lucky because I was with Fabrice in Turkey early this week, so I can give you up-to-date information. I'm very confident, very confident what I shared with the team in Turkey. I don't think we had such lineup for Turkey for a very, very long time. Clio 6, the new Clio, its start is super good, and we met with Fabrice dealer, salesman. The Boreal, I tested the Boreal. It will be a great, great car for Turkey. And also for Dacia, the C segment car we launch in Europe and produce in Turkey will be a fantastic car for Dacia in Turkey. So I'm very confident about Turkey, not only, as you understood for 2026. Very, very confident. I think that what we put in 2026, in our midterm plan. This is really a baseline, and we decided with the team locally to set extra miles, extra targets. So I'm very confident. And for Brazil, Fabrice, you were in Brazil a few days or weeks ago, so maybe you can share the situation and your views.
Fabrice Cambolive: Now, Brazil is benefiting for the first effects of our joint venture with a common sharing of our industrial assets and our lineup now, which is on 2 legs with Renault on one end, Geely on the other end. What we can see is that the models which have been launched from both brands are doing their job. Kardian and Boreal for Brazil, for Renault and we expect to catch the growth of the market in an environment where the exchange rate remains until now at a good level for us.
Christian Frenes: That's very helpful. And on European pricing?
Fabrice Cambolive: Okay. But European pricing, you saw the evolution in the last years. You see also the different announcements which are made by our competitors. I would say that, if you look at our pricing policy in the last years, frankly speaking, we've been always very stable. No erratic movements, but a consistency in our pricing strategy. Focused once again on a reduction of distribution cost, because this is very important for us. Narrowing tariff price with transaction price to give even more transparency, and for that, Dacia is a benchmark. It means for us, what we aim is a stability on that to avoid any erratic movements in terms of residual value, all stock and so on, and we are sticking to that. That's the priority. And of course, our way to respond or to answer to the pressure of the context is the product once again. Don't forget that the products we are launching now, if I take the example of a Twingo, less than EUR 20,000, is at the same time value and a good answer to the need of affordability in the market. It means our answer is pricing stable. We stick to our strategy, we give transparency, we are not erratic, we preserve our residual value, but we cover even better the market with the complementarity of both brands and the entry on the A segment, which is coming very soon with the launch of Twingo and then the launch of the Dacia.
Christian Frenes: Okay. So just to reiterate and make sure I understood this correctly. Given your refreshed product range, your '26 assumptions assume a sort of stable environment regarding your pricing, given the value proposition your products have. And then, but they also -- the guide also assumes positive contributions from Turkey and Brazil. That's how I understood you.
Duncan Minto: Christian, so we gave positive dynamic in Turkey and Brazil. In terms of pricing, I mean, I think you, you asked specifically about the pricing environment in Europe, and Fabrice gave a comprehensive answer to the approach, the stability, the longer term view, the focus on value. Just that, in your model, I know when you look at the price bucket, you look at the price mix and enrichment together. And so, don't forget that, we've factored in a negative factor for the total, because, once again, regulations mean that we have to put content in the vehicles that we can't necessarily price off.
Christian Frenes: Yes, that's clear.
Duncan Minto: Outside Europe, also, keep in mind that we will still have a strong negative Forex impact on international sales and revenue and this will not be entirely offset by price increases. So this is a key for you to put into your model.
Unknown Executive: The next question will come from Henning Cosman from Barclays. Henning, the floor is yours.
Henning Cosman: Francois, Duncan and team, perhaps I can, if you allow me, just ask a little bit higher level about your midterm guidance, right? At the floor, 5% obviously implying downside to your 5.5%, around 5.5% for 2026. So if we could just talk a little bit high level, if there's anything specific that you're expecting that would make things perhaps a bit worse before it gets better in terms of phasing? You're looking at a sort of a back-end loaded improvement or is it really that you're looking for progress in terms of profitability, but in the context of the volatile environment, you just have to give yourself that range of margin of safety? That's the first question. If you could just, talk us through your thinking there a little bit again. Second question, to come back to Horse. Francois, I appreciate your very constructive wording around Horse. Can I just ask if that EUR 2 billion net saving figure over 5 years that your predecessors had shared previously, is that still a relevant number? And how does that reflect into the obviously now cost bucket rather than a specific Horse reporting line itself? And also on the dividend you're referencing from Horse, could you share an order of magnitude, and to what extent that is reflecting into the average of the EUR 1.5 billion midterm free cash flow guidance? And then finally, third question on this defense project, the drone project from the French government. Is this more of a one-off in your mind, or is that something that you would allow the market to get a little bit excited about, that there's potential for you to expand into this area proactively, look for more projects in this defense direction? How do you want us to think about this?
Duncan Minto: Henning, thanks for the questions, and good we managed to get you in, especially to finish on some high-level questions. So yes, I think we should employ you. I think the way you worded the answer to the question on midterm guidance was perfect. I don't see anything that we're looking to say when we say circa 5.5 in 26% and the range 5% to 7%. It is that we're targeting to steadily grow up in that range. We're not looking at a hockey stick plan, but as you say, we just don't want to lock ourselves in for a couple of basis points difference. So just wanted to be nice and prudent in that corridor. On Horse, I know you and I have just talked about this in the past in terms of the dynamic is the same, as called out in the initial plan, so very strong. You need to look at Horse, both sides of the business as well, both in terms of European and on the Chinese side, which gives us the internal benchmark to challenge on that. We've got back to the point where we're now costs Renault Group less than it to buy engines and powertrain units from Horse than it was in the past. And so we're seeing that dynamic, and that's part of the EUR 400 per unit variable cost reduction coming through. We've already seen some of that and that's key for us going forward. Remind you of the EUR 245 million positive impact on equity associated earnings for our 45% holding at Horse. From that, I'll let you estimate your dividend assumptions, but we're not talking EUR 10 million a year, so it's obviously a good upside for us, but not as of '26. That could start from 2027 onwards. Maybe, Francois, I think the defense...
Francois Provost: Regarding defense, no change. We do not intend to become a major player or part of the defense industry in Europe. At the same time, we accepted the request of French Minister of Defense to help to cope with all the disruptions they are facing. We will do this with defense industry players in partnership, and we bring our specific value in terms of technologies, adaptability, both product, process development, and of course, scale. We got a big first contract together with [indiscernible] and the project is ongoing. There is several other opportunities. But for me, it's an opportunity and not core for our next midterm plan. And of course, just for the sake of clarity, we do not reduce the necessary allocation of capital to our core business due to defenses. So this is opportunity.
Unknown Executive: Thank you, Henning. And the last questions will come from Stuart Pearson from Oxcap Analytics. Stuart, the floor is yours.
Stuart Pearson: Just feel free to finish quickly. On the midterm guidance of 5% to 7%, obviously, that's group. Normally, that would mean a 3% to 5% auto margin. Is that still the right equation going forward? I just wonder, given the finance company seems to have particularly strong momentum. And given the work you've done on residual values over the last few years, what kind of expectations do you have for that finance business and the mix of that profit, I guess, between auto and I think going forward? And then on that 5% to 7% guide, I guess that's a standalone, almost organic business plan that you have today. Presumably, the Ford BEV agreement is in there, but just to confirm, nothing on the OCV side yet, as that's not set in stone just yet. And I also think another part of the IA we're expecting next week is possibly a requirement for foreign players of certain countries to invest via JVs in Europe. Is that -- obviously, you do that with Horse on the engine side, would you consider an assembly JV with a Chinese partner just on that? And then finally, Duncan, on the working capital, thanks for the clarity on '26. Very clear on that. But you seem to be suggesting you want it to kind of neutralize the volatility in the free cash flow. That's something that Stellantis has been trying to do over the past by bringing that working capital position down. You've still got a few billion negative working capital overall, though. So over the next five years, is that going to be a constant drain on the cash flow? Obviously, you're putting that into your EUR 1.5 billion guide, but is that after a constant drain of working capital as you try and reduce that volatility?
Duncan Minto: Yes, midterm guidance, 5% to 7% corridor would, I agree with you in terms of the estimation of the auto alone, that's 3% to 5%, because of the MFS profitability. We do see growth. I mean, you're seeing a stellar performance of MFS today, and we will look to expand the coverage of the different types of offers internally in-house through organic growth with MFS as well. So that's also you can underline -- you can read the underlying performance as well as we're saying EUR 350 million of dividends in 2026, expected rising to the normalized EUR 500 million going forward. So good news on that. Yes, the plan is an organic plan and includes the Ford 2 vehicle opportunity that Francois discussed earlier, but nothing else on top of that. So it's an organic plan, and anything -- I think the comment you said, Francois, was it boosts, other opportunities may boost that going forward. I'll maybe finish on the working capital to let you comment on Europe, assembly, JV, Chinese. Just on the working capital, yes, we will unwind in 2026. And we have assumed a slight negative in the years going forward as well, even if naturally, in the auto sector with the structure of our working capital growth would actually generate cash from working capital. But it's not something that we want to focus on, and we want to have a more robust profile and avoid the volatility. So we've built in a negative each year going forward within the over EUR 1.5 billion free cash flow generation per year.
Francois Provost: Regarding the last question, if I understood well, your question was Horse Powertrain doing some JVs locally with Chinese OEM in Europe or some third-party sales. Is it correct or...
Stuart Pearson: Not quite. It's kind of the -- Geely doesn't have any -- If I'm getting to the point, doesn't have any local assembly capacity of its own in Europe. But obviously, the IA might make that, increase its motivation to have that, and obviously, you're one of their key partners. Obviously, you have an engine joint venture, but if they wanted to do something in assembly or any Chinese partner, it...
Francois Provost: Yes. Okay, sorry, I did not catch your question. We have no such project for time being. In Europe, we have -- we develop and we'll continue to develop our own technologies in order to prove that in Europe, European OEM is capable to develop, to produce, at the same performance as the best Chinese OEMs in terms of cost, innovation, speed. This is the ambition for the next midterm plan. So our ecosystem is open to partners. We receive a lot of requests, and we cannot say yes to all requests. But for time being, we have no such project with Chinese OEM.
Unknown Executive: Good. Thank you, Stuart. Thank you all for your attendance to this call. So we remind you to get to the team to register for March 10 Strategy Day, which is fast approaching. Have a good day and speak soon. Thank you.
Francois Provost: Thank you. Bye-bye.