Renault sees further surges in sales and earnings in 2014

Article by Christian A., on February 17, 2015

Renault is aiming to further hike its sales and earnings this year after posting higher sales, revenues, operating profit, net profit and operating margin in 2014. The carmaker saw strong demand for its low-cost Dacia cars and small SUVs in 2014, helping hike revenue by 0.3 percent to EUR41.06 billion. The French carmaker posted nearly 30-percent jump in operating profit to EUR1.61 billion, with its operating margin leaping to 3.9 percent from 3 percent.

Chief executive Carlosn Ghosn attributed the carmaker’s full-year performance to an "unprecedented product offensive," which he says positions the French group on track to achieve its strategic plan. The carmaker’s automotive operating profit jumped EUR363 million to EUR858 million, which represents 2.2 percent of revenues.

Renault said cost cuts and sales growth helped offset unfavorable foreign exchange rates. Renault’s auto division generated EUR38.87 billion in revenues. The French carmaker said it was able to offset negative currency variations by hiking prices outside Europe and by the strong growth of sales to partners.

The surge in profitability as well as a change of EUR596 million in the working capital requirement has paved way to an automotive operational free cash flow of EUR1.08 billion.

Renault expects global auto output to jump 2 percent this year and has vowed to hike deliveries and revenue before currency effects while increasing profitability at the group and auto-division levels.

Evercore ISI analyst Arndt Ellinghorst remarked that Ghosn's forecast for the full-year 2014 should relieve fears of Renault’s exposure to Russia. Citi analyst Philip Watkins noted that the carmaker’s results mean a strong set of earnings “considerably above expectations” despite weakness in key emerging markets.

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