Fitch relève la note long-terme de Renault à BBB-
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Fitch relève la note long-terme de Renault à BBB-

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Description

The upgrade reflects the resilience of Renault's profitability and underlying cash generation in a difficult and adverse environment, notably for volume manufacturers. Group operating margins increased to more than 3% in 2013 and we expect further improvement in the medium term, including a further strengthening of core automotive operations. We believe that Renault's bold restructuring measures have streamlined its cost structure, lowered its breakeven point and made it more resistant to a possible sharp downturn in one or several of its markets. Automotive operating margins and free cash flow (FCF) have remained positive since 2008, including between 2011 and 2013 when revenue and profitability declined.
The ratings also reflect Renault's significantly improved liquidity and balance sheet. Adjusted net leverage has declined continuously since end-2009, to less than 0.5x at end-June 2014 and we expect a further improvement towards 0x in the next couple of years. The group's sound liquidity and healthy financial structure provide it with more flexibility to go through the next cyclical downturn or to face potential financial challenges without significantly impairing its key credit ratios.
KEY RATING DRIVERS
Stronger Credit Metrics
Net financial debt has fallen substantially since 2009 as a result of positive FCF and asset sales, while earnings and funds from operations (FFO) rebounded in the same period. Adjusted net leverage has declined continuously since end-2009, from 5.6x, to less than 0.5x at end-June 2014 and this provides the group with more flexibility to go through the sector's next cyclical downturn.
Weak but Improving Mix
Renault's sales retain a bias towards Europe, in particular to weaker Southern markets such as Spain, Italy and France, where the eurozone debt crisis has had the most impact on new car sales. However, ongoing and successful diversification has led to a growing share of sales outside Europe. Renault also derives the majority of its revenue from the less profitable small- and medium-sized car segments, where competition is fiercest and price pressure is strongest.
Entry-Level Models Success
The success of the growing entry range is pivotal in compensating for the sales declines of the core Renault models, and also favours geographical diversification. In addition, the profitability of the entry range is higher than the automotive average and therefore bolsters group operating profit.

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Publié le 10 novembre 2014
Nombre de lectures 7
Langue Français