Renault maintains guidance after third quarter growth

24th Oct 2024 10:34

(Sharecast News) - Renault Group reported a 1.8% rise in third-quarter revenue on Thursday, to €10.7bn, surpassing analyst forecasts, driven by strong demand for new models like the Symbioz and Dacia Duster hybrid SUV.

At constant exchange rates, revenue increased 5%, despite a challenging automotive market marked by rising costs and weakening demand across Europe.

While total automotive sales fell by 5.6% globally, Renault's European sales, down 5.3%, still outperformed a number of its competitors.

Automotive revenue dropped slightly by 0.5% to €9.3bn, but rose 2.6% when adjusted for currency effects, mainly impacted by currency depreciation in Argentina, Brazil, and Turkey.

Renault's higher-value product mix, with models such as the Scenic E-Tech and Dacia Duster, contributed to a 3.8-point improvement in product performance.

Electrified vehicles, including hybrids and fully-electric models, accounted for 47% of Renault brand sales, up from 40% a year ago.

That shift aligned with the company's strategy to counter rising competition from Chinese electric vehicle manufacturers.

Fully electric vehicles made up 11.6% of Renault's sales during the quarter, holding steady from earlier in the year, but the company said it expected an uptick following the recent launch of the electric Renault 5.

Renault maintained its 2024 financial outlook, targeting an operating margin of at least 7.5% and free cash flow exceeding €2.5bn.

The company said it had a solid two-month order book heading into the final quarter, reflecting stable demand and a pipeline of new vehicle launches.

"Our third quarter revenue is starting to benefit from our unprecedented product offensive, with 10 new launches this year, representing 18% of our invoices over the quarter," said chief financial officer Thierry Piéton.

"This trend will continue over the next quarters in line with the gradual introduction of vehicles on their respective markets and will accelerate further with the seven new launches planned for 2025.

"This appealing and competitive line-up, with both electric and ICE and hybrid vehicles, demonstrates our flexibility to adapt whatever the pace of EV transition and remains a key support for the group's performance together with cost reduction.

"In this challenging environment, we are accelerating our in-depth transformation with committed teams, to improve our agility and build our next chapter."

At 1122 CEST (1022 BST), shares in Renault SA were up 6.46% in Paris at €42.87.

Reporting by Josh White for Sharecast.com.