Losses at Renault: 8 billion and a difficult 2021 due to the coronavirus and semiconductors
Renault reduced its turnover by 21.7% in 2020, to stand at 43,474 million euros, compared to 55,537 million euros in 2019.
The Renault automobile group recorded net losses of 8,046 million euros in 2020 , compared to the 19 million it earned in the previous year , according to data presented this Friday by the French company.
Thus, Renault has explained that 2020 was “strongly impacted” by the coronavirus pandemic, although it acknowledges that after the first half of last year the consortium was improving its productivity “significantly” from July to December.
“This result is the result of everyone’s efforts, the successful acceleration of the fixed cost reduction plan and an improvement in our pricing policy. Profitability and cash generation are prioritized, as announced in our strategic plan Renaulution “, declared the CEO of the Renault group, Luca de Meo.
All this after Renault reduced its turnover by 21.7%, to stand at 43,474 million euros , compared to the 55,537 million euros it entered a year earlier. Excluding the impact of currencies, this drop would have been 18.2%.
In this way, the net attributable profit of the automobile consortium was also negative, losing 8,008 million euros, compared to the 141 million it also lost in 2019.
Renault’s operating losses reached 1,999 million euros, well below the operating profit of 2,105 million euros it posted a year earlier.
Improvement in 2023
Looking ahead to this year’s forecasts, Renault expects a “difficult” 2021, as the health crisis will be joined by the shortage of certain components such as semiconductors.
On this, the company expects that the peak of this situation should be reached in the second quarter, so production will recover in the last six months of the year, although it estimates a risk of the order of 100,000 fewer vehicles.
“2021 will be difficult, with uncertainties related to the health crises and the supply of electronic components. We will face these challenges collectively, in the recovery dynamics undertaken since last summer,” added De Meo.
However, Renault has confirmed its objectives for 2023, when it will have an operating margin of more than 3%, an accumulated free cash flow of around 3,000 million euros and its investments and expenses in research and development will be around 8% of its figure of deal.
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