Renault Said To Be Almost “German, But Not German Enough”
Renault managed to stay in the black in 2011 and some investors were impressed with the way the company has organised its finances to weather coming economic storms.
One investment bank said Renault’s performance was so good it was almost “German”.
In 2011 Renault earnings before interest and taxes (EBIT) and one time items fell just under one per cent to €1.09 billion.
“Second half results show a company that seems to have many “Germanic” traits. Disciplined working capital management, ongoing emerging market expansion, strong cash generation, an almost fully de-leveraged balance sheet and a very cautious approach to distributing earnings back to shareholders,” said Credit Suisse analyst Erich Hauser.
Renault might be showing some German tendencies, but it wasn’t German enough for Hauser.
“We stick to our conviction that longer term the “real” German manufacturers such as BMW and VW offer a better risk-reward profile during 2012. While Renault is clearly outperforming its immediate peers, we do not believe that investors are likely to be switching out of BMW and VW into Renault when production has yet to bottom and we have to understand how bad the situation in Europe can become,” Hauser said.
Neil Winton – March 1, 2012
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