9:26 am, October 25, 2024
Renault has reported a surprise growth in revenue despite declining car sales across Europe, seeing its share price jump by 7.6% to €42.06 (£35.05).
The company reported revenues of €10.7bn (£8.93bn) in Q3 against a forecast of €10.35bn (£8.64bn) and is the only major European manufacturer to not revise its volume forecast downward with trading analyst Jefferies saying it showed ‘resilience versus peers’.
Its shares were up 7.6% around 0830 GMT, on course for their best day in 28 months, with Jefferies analysts pointing to ‘resilience versus peers’.
Electrified vehicles – both hybrid and fully electric – accounted for 47% of Renault brand sales, up from less than 40% a year ago.
‘Our Q3 revenue is starting to benefit from our unprecedented product offensive, with 10 new launches this year, representing 18% of our invoices over the quarter,’ Renault said.
The higher transaction price of EVs is bringing up average revenues, which will continue to rise into 2025, the company added. Renault shares have risen about 18% in total this year, outperforming European peers.
In the same period, Volkswagen’s share price has fallen by 18% and Stellantis by 42%.
Renault’s CFO, Thierry Pieton, said that the company wasn’t facing the supplier problems or inventory management issues hitting some competitors, and that it had an order book of two months of forward sales.
‘In terms of potential difficulties at the end of the year, the order book is pretty good, we have a big quarter ahead of us, at this stage it is simply execution,’ he said.
Fully electric cars accounted for 11.6% of Renault brand sales in the third quarter, the same as in the first half, but this will need to improve if the company is to hit its ZEV targets and strict EU rules on CO2 emissions in 2025.
But with the launch of the new Renault 5 in September and a slew of new retro-styled models to follow off the same architecture, the company is already showing an uplift in EV volumes that will be visible in its year-end results, Pieton added.
According to industry body the ACEA, car sales in Europe slumped 18% in August and declined again in September – the first consecutive monthly decline in two years, forcing most carmakers to revise their forecasts downwards.
‘Given the underperformance of the sector and warning from almost all other OEMs, Renault has clearly executed exceptionally well and has beaten low expectations,’ said analysts at Citi Research in a note, in which it also cited the brand’s well-managed inventory of 528,000 units and forward order book.
