Amidst the turmoil caused by the war in Ukraine, the ongoing tensions in the Middle East, the shock of inflation, and the energy crisis, the financial performance of French companies, as revealed by their February results, was eagerly anticipated. Investors were keen to gauge how these corporations were coping in such trying times, particularly given the release of the 2023 results.
Impressively, the combined net profits of the largest French companies listed on the CAC 40 index have already surpassed 120 billion euros (specifically, 123.9 billion euros) in 2023. This is despite only 25 out of the 40 groups having released their annual results. Remarkably, this performance is roughly on par with the previous year’s. In 2022, the same 25 companies had collectively generated nearly 125 billion euros, out of the total 143 billion euros in profits made by the entire CAC. Those companies that have yet to publish their annual results had collectively made approximately 18.4 billion euros in profits in 2022.
Currently, the revenue for the past year for these 25 groups is already nearing 1,185 billion euros. In 2022, the total revenue for all CAC companies was 1,721 billion euros. Therefore, we must wait a bit longer to gain a clear understanding of the companies’ performance.
Numerous sectors in the positive
This marks the third consecutive year where the collective profits of CAC 40 companies have exceeded 100 billion euros. The luxury sector continued to thrive, even in the face of a market slowdown. Hermès, Kering, L’Oréal, and LVMH together made nearly 29 billion euros in profits, a 7% increase, despite a 17% drop at Kering. In the banking sector, profits rose by 14%, reaching almost 20 billion euros for BNP Paribas, Crédit Agricole, and Société Générale.
The transport sector also bolstered the balance sheet. Renault made a profit of 2.2 billion euros, a significant turnaround from a loss of 350 million in 2022. Stellantis posted a record profit of 18.6 billion euros, the second largest result on the index. Even with a strike in North America, the French automobile group still performed exceptionally well. TotalEnergies claimed the top spot. Its profit increased slightly in dollars, to 21.4 billion, but remained almost stable in euros: 19.8 billion euros compared to 19.5 billion in 2022.
Schneider Electric reported a 15% increase in net profit in 2023, reaching 4 billion euros. This was driven by products and services related to the energy transition. The company’s revenue for electrical equipment and industrial automation rose by more than 35.9 billion, a 5.1% increase. Schneider Electric noted a “gradual recovery in demand” for products in consumer-related segments and in the manufacturing market during the second half of the year.
Airbus’ robust performance
Even though Airbus’ net profit declined by 11% in 2023, to 3.8 billion euros, due to expenses incurred in its space activity, the European aircraft manufacturer still achieved the third highest profit in its history. This followed the 4.2 billion euros generated in 2022. “In 2023, all our activities recorded significant order intake, and we kept our commitments. This is a remarkable result, given the complexity of the operational context,” said Airbus Executive Chairman Guillaume Faury.
After missing its aircraft delivery target in 2022, Airbus managed to deliver 735 aircraft to its customers in 2023, despite ongoing challenges in its supply chain. The company plans to deliver “around 800” aircraft in 2024, the same number as in 2018, before the Covid pandemic. Airbus also received 2,094 net orders last year, shattering its previous record set in 2013. The aircraft manufacturer rode on the success of its A320 family single-aisle aircraft and its A350 long-haul aircraft.
The major European stock exchanges are expected to rise at the opening this Thursday. Trading will be driven by a flurry of results and indicators. The CAC 40 is expected to open above the 7,700 points threshold, surpassing the previous record of 7702.95 points set on January 31. Overall, the outlook is positive. The only uncertainty lies in whether companies can capitalize on the ongoing decrease in interest rates and stimulate a swift rise in consumer spending.
