The former VW executive has led the French automaker back into the black.
(Photo: dpa)
Boulogne Billancourt The restructuring course at Renault is showing its first successes: on Friday, the French carmaker presented a profit of 888 million euros last year. In the previous year, the group had made a record loss of eight billion euros and had to be rescued with an emergency loan from the government in Paris.
“The Renault Group has significantly exceeded its financial targets for 2021, despite the shortage of semiconductors and rising raw material prices,” said Renault boss Luca de Meo. The turnover of the group, which also includes the brands Dacia, Lada and Alpine, increased by 6.3 percent compared to the previous year to 46.2 billion euros.
De Meo took over the management of Renault in the summer of 2020 at the height of the company’s severe crisis. A year ago, he unveiled a future program called “Renaulution,” which combines hard-hitting cost-cutting with a focus on a higher-priced product range and electric cars.
>> Read about this: Luca de Meo wants to reposition Renault with its future program
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The company in Boulogne-Billancourt near Paris announced that the savings targets are ahead of schedule. The targeted cost reduction of two billion euros was achieved a year earlier than planned.
According to the information, the operating margin was 3.6 percent last year – actually, de Meo had only promised profitability of more than three percent again for 2023. Renault expects profits to account for at least four percent of sales this year.
Renault is now aiming for a quick repayment of the state aid. This year, one billion euros would be repaid early in addition to the installment due, it said. By the end of 2023, the state-guaranteed loan of a good four billion euros should be fully repaid.
The shareholders, on the other hand, get nothing and have to forego a dividend for 2021. Nevertheless, investors took the carmaker’s results positively: Renault’s share price on the stock exchange rose by more than four percent shortly after the announcement.
“Something magical happened at Renault”
“Renault is back,” said de Meo. When presenting the results, he chose enthusiastic words: “Compared to where we were a year ago, you can say that something magical is happening at Renault.” In addition, the alliance with the Japanese car manufacturers Nissan and Mitsubishi was successfully revived.
In January, Renault, Nissan and Mitsubishi announced joint investments in electric cars. By 2030, 35 new battery-powered vehicles are to be developed. Renault aims to make its core brand in Europe 100 percent electric by 2030.
>> Read about this: Renault, Nissan and Mitsubishi are pursuing these electric plans
The Renault Group sold 2.7 million vehicles worldwide in 2021, a drop of 4.5 percent compared to the previous year. CEO de Meo blames the lack of chips in car production, among other things, for the falling sales. After around 500,000 cars could not be built as planned in 2021 due to delivery problems with electronic components, the group expects around 300,000 vehicles to fail in the current year.
The sales figures are also an expression of the new strategy “value instead of quantity” with a focus on more profitable segments, said CFO Clotilde Delbos. Under the former boss Carlos Ghosn, Renault had still pursued the goal of increasing the number of vehicles sold and, together with Nissan, becoming the world’s largest car manufacturer.
More: Renault, Nissan and Mitsubishi are merging their electric car plans