Renault's revenue and market capitalization

  •   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 2021, the company's business experienced a recovery in profits after the Covid-19 pandemic. Here are the key takeaways from the figures recorded in FY2021.

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Renault's revenue and market capitalization
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Business impacted by the health crisis and component shortage

Several events marked the Renault group's 2021 financial year. Business picked up timidly after a difficult year in 2020. 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 2020.

The Renault group has not been spared this reality. Indeed, the Covid-19 pandemic strongly disrupted the company's activity 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. This is the reason for the upturn in 2021.

 

Balance sheet for the 2021 financial year over the two half-years

After a significant loss of €8 billion in 2020, Renault was able to recover from the start of 2021. With its strategic plan, the Renault group was able to generate a net profit (in 2021) of 967 million euros. Automotive1 free operating cash flow after changes in working capital was €1.3 billion. This contributes to the €2 billion reduction in net debt recorded by Automotive in 2020.

This is the result of the many efforts made by the company to turn things around. Indeed, after recording mixed results in the first half of 2020, the Renault group was able to significantly improve its performance in the second half of the year. These actions have continued through to 2021. This stems from the successful acceleration of the plan implemented by the group 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 addition, the Automotive division's free cash flow from operations was positive. These good performances show the first signs of the company's recovery from the strong impact of the pandemic in 2020. Year I of the "Renaulution" strategic plan is therefore productive for the group.

 

Renault's revenues and operating margin in 2021

Over the full twelve months of the 2021 financial year, the Renault group generated revenues of €46.2 billion, compared with €43,474 million in 2020. This is an increase of 6.3% year-on-year.

In 2021, Automobile excluding AVTOVAZ saw its revenues increase by €1.7 billion in the first half. The volume effect was positive at +8.7 points. This is mainly due to the implementation of the "Renaulution" strategic plan. For the 2021 financial year, Renault recorded an operating margin of 3.6% (vs. an operating margin forecast of the same order as in the first half of 2021, i.e. 2.8%). This achieves, two years ahead of schedule, the Renaulution target of an operating margin above 3% in 2023.

The Automotive operating margin excluding AVTOVAZ increased by 2.8% compared with -6.5% in the first half of 2020. The Group's order book in Europe (at more than 3 months of sales) is supported by the attractiveness of the Renault E-TECH offer, commercial vehicles, Dacia Spring 100% electric and also Dacia Sandero.

The Group's operating margin was €1.7 billion. This is equivalent to 3.6% of turnover. This value is an improvement of 2 billion euros compared to 2020. It amounts to 4.4% in H2 2021.

The Automotive1 operating margin was EUR 507 million. This represents 1.2% of the segment's turnover. This is an improvement of 1.8 billion euros compared to 2020. The volume effect is therefore positive by +4.4 points.

 

Performance of other financial indicators in 2021

368 million for 2021, compared with an operating loss of This performance is the result of the implementation of the "Renaulution" strategic plan. There was also a decrease in average debt. This resulted in a significant increase in the group's financial result.

The car manufacturer recorded a net result of 368 million euros in 2020. 368 million for the year as a whole.

For this year, the company will post an Automotive operating free cash flow (including AVTOVAZ) before changes in working capital of €1.6 billion, compared with €4,551 million in 2020. After changes in working capital, cash flow is €1.3 billion.

 

Renault's dividend and market capitalisation in 2021

The Renault group presents an interesting discount for the shareholder. This can be seen by looking at the market capitalisation in 2021. It is 10.4 billion euros compared to an equity value of the group of 25.34 billion euros in 2020. It should be noted that the Renault group has abolished its dividend in 2020.

The Renault share is listed on the Paris Stock Exchange on Euronext. At the end of 2021, the company will be included in the CAC 40 stock market index. Its equity value is EUR 24.34 billion. This corresponds to a potential increase in value of at least +143%.

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