Renault Turns To FY21 Profit, Sees Margin Growth; Names New CFO; Stock Up

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Shares of Renault SA were gaining around 3 percent in the morning trading in Paris after the French automaker reported a profit in its fiscal 2021, compared to last year's hefty loss, with strong revenue growth. Despite the impact of semiconductor shortages and rising raw material prices, operating margin exceeded Renaulution objective, reaching two years ahead of schedule. For fiscal 2022, the company projects higher margin.

Separately, Renault announced the appointment of Thierry Piéton as Chief Financial Officer with effect from March 1.

For fiscal 2022, the company targets a Group operating margin superior or equal to 4 percent, and an Automotive operational free cash flow superior or equal to 1 billion euros.

In an environment still impacted by the semiconductor crisis, particularly in the 1st half of 2022, and by the increase of raw materials prices, total loss is estimated at 300,000 vehicles on 2022 production.

Renault's Renaulution objective is for an operating margin above 3 percent in 2023. The company plans to organize a Capital Market Day in the fall of 2022, ahead of its mid-term Renaulution objectives. The company will present an update on its strategy then.

Further, the company said its Board will propose to the Assembly General Meeting, scheduled for May 25, to not pay a dividend for 2021.

In 2022, Renault plans to make an early repayment of 1 billion euros of the loan from a banking pool guaranteed by the French State as well as 1 billion euros relating to the mandatory annual reimbursement. The loan will be fully reimbursed by the end of 2023 at the latest.

Renault further confirmed its ambition in EV with the objective for the Renault brand to be 100 percent EV in Europe by 2030. Renault also aims to achieve carbon neutrality in Europe by 2040 and worldwide by 2050 by reducing its carbon emissions over the entire life cycle of the vehicle.

Regarding the new CFO appointment, Renault noted that Piéton, currently Deputy Chief Financial Officer and Controller, will become a member of the Board of Management and will report to Luca de Meo, CEO.

Clotilde Delbos will mainly focus on her role as CEO of the Mobilize brand, around RCI Banque SA of which she is the Chairman of the Board of Directors. Delbos will work to accelerate its development in the context of the company's transformation and the next stages of the Renaulution plan.

Piéton, 51, became Deputy Chief Financial Officer and SVP, Controller in February 2020, and in January 2021, he was appointed Renault Brand Finance and a member of Renault Group Corporate Management Committee.

He started his career as an auditor with PricewaterhouseCoopers, and later joined General Electric in 1998. In 2014, he joined Nissan Europe, and since 2016, Piéton has been Senior Vice President, Controller of Groupe Renault.

For fiscal 2021, Renault's net income Group share was 888 million euros, compared to a loss of 8.01 billion euros last year. Profit per share was 3.26 euros compared to a loss of 29.51 euros.

Operating income was 1.40 billion euros, compared to loss of 2 billion euros a year ago. Operating margin was 1.66 billion euros or 3.6 percent of revenue, while last year's margin was negative 337 million euros or 0.8 percent of revenues.

Group revenue was 46.21 billion euros, up 6.3 percent from prior year's 43.47 billion euros. At constant scope and exchange rates, revenue increased 8 percent. From the pre-pandemic 2019, revenues declined 16.8 percent.

In 2021, automotive revenue excluding AVTOVAZ was 40.40 billion euros, up 7.1 percent. Automotive operational free cash flow was positive at 1.27 billion euros.

AVTOVAZ's revenue increased 10.4 percent to 2.85 billion euros, mainly due to strong price increases and a product mix effect

In Paris, Renault shares were trading at 37.42 euros, up 2.99 percent.

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