Renault's market cap, dividends, sales and earnings in 2020

  •   DEHOUI Lionel

The Renault group is the European leader in the electric car market. It is the third largest car manufacturer in the world. The company has formed an alliance with Nissan and Mitsubishi Motors. It is present in more than 130 countries and has more than 180,000 employees worldwide. In 2020, the company's business suffered a huge drop due to the Covid-19 pandemic. Here are the key takeaways from the figures recorded in FY2020.

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Renault's market cap, dividends, sales and earnings in 2020
Image copyright: Ivan Radic - Flickr

Business impacted by the health crisis and component shortage

Several events marked the Renault group's 2020 financial year. The Covid-19 health crisis was one of the key events that disrupted business in several countries around the world. It had a heavy impact on the financial performance of many companies during the year.

The Renault group has not been spared this reality. The Covid-19 pandemic severely disrupted the company's business in 2020. The company was also penalised by the global shortage of electronic components that affected the entire automotive industry during the year.

However, the car manufacturer has made the necessary efforts to limit the effects of this shortage on production as much as possible.

 

Balance sheet for the 2020 financial year over the two half-years

The first half of 2020 is the part of the year that was significantly affected by the Covid-19 health crisis. After recording mixed results during this period, the Renault group was able to significantly improve its performance in the second half of the year under review.

This is the result of the many efforts made by the company to turn things around. The improvement in H2-2020 is also the result of the successful acceleration of the group's plan to reduce fixed costs and improve its pricing policy.

Indeed, in its strategic plan called "Renaulution", the French group has given priority to cash generation and profitability. In addition, the actions undertaken to resist the health crisis have shown initial positive impacts in the second half of 2020. They are illustrated in particular by a remarkable improvement in operating profitability over this period.

In H2 2020, the Renault group recorded an operating margin of 3.5% of revenues. In addition, the Automotive division's free cash flow from operations was positive. These strong performances show the first signs of the company's recovery after the strong impact of the pandemic in the first half of 2020.

 

Renault's revenues and operating margin in 2020

For the full twelve months of the 2020 financial year, the Renault group generated revenues of €43,474 million, compared with €55,537 million in 2019. This is down 21.7% year-on-year. Excluding the impact of currencies, the company's turnover would show a decline of 18.2%.

In 2020, Automotive excluding AVTOVAZ saw its sales fall by 23.0% year-on-year to 37,736 million euros. The volume effect was negative at -19.2 points. This is mainly due to the health crisis and the change in commercial policy. Sales to partners decreased by -5.1 percentage points.

They were also affected by the Covid-19 pandemic and the suspension of Rogue production for Nissan. 2,662 million (at 4.8% of revenues) in the previous year.

The operating margin for the Automotive division excluding AVTOVAZ fell by EUR -2,734 million to EUR -1,450 million in 2020. -1,450 million in 2020, representing -3.8% of sales, compared with 2.6% a year earlier. 198 million (or 0.9% of sales).

In 2020, AVTOVAZ contributed €145 million to the operating margin, compared with €155 million the year before. This was also the case for Sales Financing, which contributed €1,007 million, compared to €1,223 million in the previous year.

This decline is due in particular to the drop in activity marked by a 17% decrease in new financing. It is also caused by the rise in the cost of risk. The latter represents 0.75% of average outstandings in 2020, compared to 0.42% in 2019.

In addition, mobility services also contributed to the company's operating margin in 2020. Their contribution is estimated at EUR -35 million.

 

Performance of other financial indicators in 2020

For the 2020 financial year, Renault recorded an operating profit of -1,999 million euros, compared with 2,105 million euros the previous year. For the year as a whole, other operating income and expenses amounted to €1662 million, compared with €557 million in 2019.

This underperformance is the result of significantly higher restructuring costs and asset impairments. For the full year 2020, the group's financial result amounted to -€482 million, compared to -€442 million in the previous year. This is due to an increase in average debt.

The carmaker recorded a net result of -8,046 million euros in 2020. 8,046 million for the year as a whole. This corresponds to -29.51 euros per share, compared to -0.52 euros per share the year before.

In 2020, current and deferred taxes amounted to EUR -420 million, compared to EUR -1,454 million a year earlier. For the year, the company posted a negative Automotive operating free cash flow (including AVTOVAZ) of -€4,551 million, compared with €153 million in 2019.

 

Renault's dividend and market capitalisation in 2020

Due to the deteriorated results recorded in 2020, Renault's Board of Directors has decided not to pay a dividend to its shareholders for this year. Furthermore, the company is one of the companies present on the equity markets.

The Renault share is listed on the Paris Stock Exchange on Euronext. At the end of 2020, the company was included in the CAC 40 stock market index with a market capitalisation of EUR 9.11 billion.

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