Carlos Ghosn has defended Renault’s corporate governance after the group decided to reinstate the 13-year chief executive for another term, sparking an issue that risked overshadowing the carmaker’s record annual financial results.
Speaking on Friday morning, Mr Ghosn said the idea that the carmaker where he is both chairman and chief executive had a corporate governance problem was “absolutely not based in fact”.
Questions over the issue took the shine off the company’s results, in which operating profit rose 17 per cent to €3.85bn, ahead of estimates of €3.65bn, with revenues climbing 14.7 per cent to €58.7bn, slightly behind what the market had expected.
Renault’s operating margin was 6.6 per cent, up from 6.4 per cent, taking it towards the 2022 target of 7 per cent, while it expects the global market to grow 2.5 per cent in 2018, despite falling sales in the US and UK.
It expects its European heartland to grow 1 per cent, although the second half of the year will be tough because of price rises likely to be caused by a new vehicle-testing regime that comes into force in September.
Renault on Thursday evening appointed Mr Ghosn for another four-year term, after a search for a successor that saw it consider both internal and external candidates.
The group also promoted chief competitive officer Thierry Bolloré to become chief operating officer with responsibility for day-to-day management of the business, a position that looks increasingly like a chief executive role as the company’s finance and HR functions will report to him.
As part of the deal, Mr Ghosn agreed to take a 30 per cent pay cut in the new role because much of the responsibility has passed to Mr Bolloré.
On Friday, Mr Ghosn sought to quash concerns that the moves had led to several recent senior departures.
Stefan Mueller, who was a strong contender against Mr Bolloré, resigned this week citing personal health reasons, while Renault non-executive director Thierry Desmarest cut his term short to leave the board.
Mr Ghosn said the idea that either event was triggered by his reappointment was “a romance”.
Mr Ghosn said his newly renewed role was to make sure the global alliance with Nissan and Mitsubishi was “irreversible”, and to move the businesses closer to becoming a single entity.
The Alliance, which is the world’s second-largest carmaker behind Volkswagen Group, already has ambitious targets to achieve €10bn of savings a year by 2022, compared with €5bn last year, as well as launching 12 new electric vehicles and an autonomous ride-sharing service.
But several shareholders across the Renault-Nissan-Mitsubishi Alliance, as well as the French state, had raised concerns that the global partnership would “fizzle” if Mr Ghosn left, he said.
However, moving the group to become a single corporate entity would be impossible while both the French and Japanese governments have a voice within the business.
“The market can’t get to grips with the current byzantine arrangements,” said Max Warburton, an analyst at Bernstein, who said its value would rise significantly if eventually unified.
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