Although the French automaker sold more than two million vehicles last year and posted record profits for the first half of 2023, investors effectively are valuing the company’s core business at less than zero. — Reuters
PARIS: Renault hopes it can lift the curse of its negative value next year thanks to the creation of two specialised businesses, Ampere and Horse, and its revamped alliance with Nissan and Mitsubishi, several top executives say.
Although the French automaker sold more than two million vehicles last year and posted record profits for the first half of 2023, investors effectively are valuing the company’s core business at less than zero.
The group’s market capitalisation is currently around �10.6bil (US$11.43bil), much lower than European rivals. Stellantis is worth about �64bil and Volkswagen �57bil, based on LSEG data.
Renault’s 12-month forward price-earnings ratio – a key metric for valuing shares – is 2.8, the lowest among European carmakers.
Excluding the value of Nissan shares held by Renault (�6.6bil), the net cash position of its automotive business (�2.2bil as of June 30) and financial services of its Mobilize unit (�6.1bil on June 30), the remaining “core” value stands at minus �4.3bil for Renault’s automotive assets, based on Reuters’ calculations and Renault data.
“It is not up to me decide what is the core value of the company,” chief executive officer Luca de Meo said at a press conference on Wednesday with Nissan and Mitsubishi on their new alliance.
“My job is to actually make sure we do the right things so that the investors and the market understand there is a lot of substance in Renault.”
De Meo hopes the listing of Ampere, a “pure player” in electric vehicles and software earmarked for a listing next spring if market conditions permit, will help give that substance.
In September, de Meo mentioned a possible valuation of up to �10bil although some analysts valued Ampere at �4bil. — Reuters
