(Bloomberg) -- Renault SA rose after forecasting resilient returns this year as the French manufacturer overhauls its lineup to counter muted demand for electric vehicles.

The company sees an operating margin of at least 7.5% in 2024, compared with 7.9% last year, it said late Wednesday. Renault, which plans to introduce ten new models this year including the key all-electric R5, also proposed its highest dividend since the one paid out in 2019.

The guidance is “encouraging” and the proposed dividend is “strong on the back of strong free cash flow,” Bernstein analyst Daniel Roeska said in a note.

Renault climbed as much as 5.1% in Paris. The stock has declined around 10% in the past year.

Chief Executive Officer Luca de Meo, who has been leading Renault through a recovery since assuming the post in July 2020, is focused on reducing the cost of new EVs via partnerships after scrapping a plan to sell shares in its EV and software business Ampere. The IPO project faced headwinds including Tesla Inc.’s frequent price cuts and increased competition from Chinese manufacturers.

Demand for cars with a plug has cooled recently. A number of manufacturers are pushing back rollouts of new models and car-rental firms are paring purchases for their fleets. Larger peer Stellantis NV on Thursday warned of a difficult year ahead, with higher global vehicle output weighing on prices and an unpredictable broader backdrop. 

Read More: Stellantis Sees Turbulence as Carmakers Cut Prices to Compete

Renault is not expecting growth in the automotive markets in Europe or Latin America this year and is projecting free cash flow of at least €2.5 billion ($2.7 billion) in 2024, compared with €3 billion last year.

“We remain cautious on the volumes front,” Chief Financial Officer Thierry Pieton told reporters on a call. “We will be replacing vehicles with a certain margin level with other new ones that are much more profitable.”

Group revenue rose 13% to €52.4 billion last year — still slightly below analyst estimates — amid robust growth in the company’s main market Europe and success selling more expensive vehicles like the Megane E-Tech. 

The company proposed a dividend of €1.85 per share, a 17.5% payout ratio, Pieton said, confirming that Renault still aims for a 35% payout ratio in the longer term.

Renault, which loosened ties with long-time Japanese partner Nissan Motor Co. last year, has been holding talks with rivals including Volkswagen AG about possibly sharing the cost of developing a platform for more affordable EVs.

The automaker also is pooling its combustion-engine assets with China’s Zhejiang Geely Holding Co. Closing of the powertrain joint venture is likely “in coming months” as the companies wait for regulatory approvals, notably in China, Pieton said.

(Updates with shares in fourth paragraph.)

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