In the wake of 2022, most companies in France's CAC 40 stock market index again posted excellent results in the first half of 2023, defying analysts' cautious forecasts from the start of the year in the face of macroeconomic uncertainties. Their size, solid financial structures and global presence give French multinationals considerable advantages.
In all, they generated net income of between €85 and €89 billion on sales of over €900 billion. The top four were Stellantis (Peugeot, Citroën, Fiat, Chrysler) with €10.9 billion, TotalEnergies (€8.9 billion), LVMH (€8.5 billion) and BNPParibas (€7.2 billion).
Net income rose by an average of 12.7% compared with the same period in 2022. Companies have moved upmarket, cut costs and drawn on provisions in 2022 to absorb the additional costs of certain raw materials.
The companies in the Paris Bourse's benchmark index (excluding Pernod-Ricard and Alstom, whose financial years have been postponed) enjoyed buoyant business, with a cumulative rise in sales of 7.4% – Bouygues (+ 41%), which acquired technical services specialist Equans from Engie, engine maker Safran (+ 28%), buoyed by a recovery in air traffic that also benefited Airbus, Hermès (+ 22.3%), which confirmed its excellent health, STMicroelectronics, boosted by chip demand; Renault (27.3%), whose CEO, Luca de Meo, welcomes "one of the fastest turnarounds in the recent history of the automotive industry" after two difficult years marked by the precipitous departure from Russia, due to the invasion of Ukraine.
The automotive market is recovering. Stellantis is benefiting from the uncompromising policy (of top-of-the-range models at high prices, drastic reductions in fixed costs) pursued for years by its CEO. With an operating margin of 14.4%, higher than Tesla's 10.5% according to Carlos Tavares, his group is the most profitable of the major automakers. This buoyant environment benefits Michelin and its premium tires, which posted a profit of €1.2 billion (+ 44.7%).
Inflation did not hurt margins, which came as a surprise to many observers. In 2022, major corporations had been accused – including by European Central Bank economists – of "greedflation" or "profitflation," for passing on extra costs (energy, raw materials) beyond what was necessary, and feeding inflation more than wage increases.
"For more than half of all companies, operating income [+8% on average] is growing faster than sales, i.e., the margin is increasing," noted Bénédicte Hautefort, co-founder of Scalens, a fintech dedicated to listed companies. But Hautefort doesn't believe that the best-performing groups have increased their prices beyond the rise in their costs.
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