Renault mulls possible IPO to spin off its EV, Auto News, ET Auto business
By Gilles Guillaume and Nick Carey
PARIS: French automaker Renault said Friday that “all options are on the table” to spin off its electric vehicle (EV) business, including a possible IPO in the second half of 2023.
Thierry Pieton, Renault’s chief financial officer, said any plan was subject to approval by its alliance partner Nissan, but said the Japanese automaker “is aware” as it weighs its options.
Renault has pushed ahead with plans to split its electric vehicle and combustion engine businesses as it seeks to catch up with rivals such as Tesla and Volkswagen.
Ford said last month it would run its electric vehicle business separately from its former combustion engine business.
The news came as Renault reported better-than-expected first-quarter revenues, with higher prices and higher sales of electric vehicles more than offsetting the impact of war in Ukraine and a continued global shortage of semiconductors. .
Renault shares rose about 1% in early trading after the announcement of its results.
The group, which also produces vehicles of the Dacia and Lada brands, said on Friday that its turnover had fallen by 2.7% compared to the previous year to stand at 9.748 billion euros (10, $6 billion). Analysts had expected revenue of around 9.61 billion euros, according to Refinitiv estimates.
Excluding the activities of Avtovaz and Renault Russia, sales were down 1.1% to €8.9 billion.
Last month, Renault announced it would suspend operations at its Moscow plant while it weighs options on its majority stake in Avtovaz, Russia’s top automaker.
On Friday, the French automaker said discussions over the future of Russian operations were “ongoing and progressing”.
The fall in first-quarter revenue follows a 17% drop in Renault vehicle sales to 552,000 vehicles, the lowest quarterly sales since the height of the global financial crisis in 2009.
The company said its sales of all-electric and hybrid vehicles rose 13% and accounted for 36% of sales. Renault said its prices rose 5.6% from the first quarter of 2021 as the automaker continued sales of more profitable cars.
In a client note, JP Morgan analysts described this quarter as “a solid quarter” for Renault.
“Renault continues to apply its price and model rationalization policy and today’s result is another step in the right direction,” they wrote.
Renault confirmed its financial outlook presented in March of an operating margin of around 3% for the full year 2022 and said it would give a more detailed update on its objectives and strategy later this year.
The global shortage of semiconductors, used in everything from brake sensors to entertainment systems, will reduce Renault’s planned car production by 300,000 vehicles in 2022, mostly in the first half, the company said.
Renault’s order book at the end of March had reached a 15-year high of 3.9 months of sales.
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