Renault: The stock market rather optimistic about Renault’s renewed profitability

(BFM Bourse) – After a dark year in 2020, the overall sales volume of the diamond manufacturer did not rebound in 2021, still against the backdrop of a global shortage of semiconductors. The share of sales to individuals and those of the electrical segment, on the other hand, have increased significantly, which should have a positive effect on the group’s profitability.

From nearly 3.9 million vehicles sold in 2018, Renault saw its sales volume contract to 2.69 million in 2021, according to its activity report published on Monday morning. The manufacturer reports a third annual decline in its sales in volume (-3.4% in 2019, -21.3% in 2020 and therefore -4.5% in 2021). “We can reasonably think that by having full capacity in terms of production (…) we would have returned to an increase compared to 2020”, nevertheless specified the commercial director of the Renault brand Fabrice Cambolive during a teleconference. press, stating that the shortage of electronic components deprived the group of the production of 500,000 vehicles last year, including around 400,000 for the diamond brand.

Note that the 4.5% decline announced by Renault was calculated on the basis of 2.82 million vehicles sold in 2020, while Renault’s sales volume was 2.95 million vehicles according to the latest results. annual manufacturer. The difference comes from not taking into account, since this year, sales of the Shineray brand (belonging to Jinbei), with which Renault created a joint venture (“Renault-Brilliance-Jinbei Automotive Company”) in 2017.

The volume of sales certainly fell under the effect of the worldwide shortage of semiconductor materials, but also because of the continuation, by Renault, of “its commercial policy initiated in the 3rd quarter of 2020 (under the impetus of the new boss Luca de Meo) which leads to an increase in the share of sales on the most profitable channels” explains the group in its press release. Of the five main European countries (France, Germany, Spain, Italy, United Kingdom), the share of sales to individuals now represents 58%, up by nearly 6 points compared to 2019, underlines Renault. On all of the group’s markets, on the other hand, sales to individuals fell by 7.1% over the year to 2.26 million, while sales of commercial vehicles rose by 12.1% to more than 438,000 vehicles.

More profitable electric and hybrid cars

The group, which will publish its 2021 financial results on February 18, is also betting on the mid-size car segment, which is more profitable than that of small cars, where the year 2022 will be marked in particular by the arrival of the electric Mégane and the Austral SUV, in addition to the brand new Arkana crossover – which has enabled the brand to return to the C segment (vehicles whose size is between 4.20 and 4.50 meters). Renault sold more than 62,000 Arkana in 2021, 56% of which in the “E-TECH” version, he says. Sales of electric and hybrid vehicles, essential for achieving CO2 targets and which also contribute to the increase in average revenue per model, accounted for 30% of Renault brand passenger car sales last year in Europe, compared to 17 % in 2020.

The very profitable low-cost brand Dacia, for its part, recorded a 3.9% rebound in sales over one year, to 537,000 vehicles (passenger and commercial), a figure which nevertheless remains well below its 2019 level. (737,000). The “revival” of the Alpine brand continues with 2,659 vehicles sold in 2021 (+74% over one year).

Finally, Renault reports a doubling of its order portfolio in Europe, “to more than 3 months of sales, supported by the attractiveness of the Renault E-TECH offer, utility vehicles, Dacia Sandero and Dacia Spring 100 % electric”. At the same time, inventories were down around 30% year-on-year, while stocks recorded an estimated decline of around 30% from 2020.

On the stock market, these announcements are relatively well received by investors, in that it suggests an improvement in the group’s operating margin, the title rising by 1.3% to 33.97 euros around 11:15 a.m. This brings the valuation of the automaker slightly above 10 billion euros.

Quentin Soubranne – ©2022 BFM Bourse

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