H117 RENAULT PRESENTATION · 2020. 6. 23. · INVESTOR RELATIONS –2020 PRESENTATION PROPERTY OF...

PROPERTY OF GROUPE RENAULT 1INVESTOR RELATIONS – 2020 PRESENTATION

GROUPE RENAULT

June 23, 2020

European Automotive Conference

JP Morgan


Disclaimer

Information contained within this document may contain forward looking statements. Although the Company considers that such

information and statements are based on reasonable assumptions taken on the date of this report, due to their nature, they can

be risky and uncertain (as described in the Renault Registration Document filed with the French Autorité des Marchés Financiers).

Actual results may differ materially from those projected or implied in these forward looking statements.

These forward looking statements are made as of the date of this presentation. Renault does not undertake to provide updates or

revisions, should any new statements and information be available, should any new specific events occur or for any other reason.

Renault makes no representation, declaration or warranty as regards the accuracy, exhaustiveness, adequacy, effectiveness and

genuineness of any statements and information contained in this report.

This information does not constitute an invitation to invest in shares or constitute or form a part of any offer for the sale or

subscription of, or any offer to buy or subscribe for, any securities or other financial instruments.

Further information on Renault can be found on Renault’s web site (www.group.renault.com), in the section Finance/Regulated

Information.”


▪ The plan is our ticket to be back in the game

− Focus on cash generation from the operations

− More realistic and helpful Alliance approach

− Honest diagnostic on our situation and rightful answers

▪ Cost reductions will continue way beyond 2022

− Main industrial French footprint adjustment will happen after 2022

− The fruits of the Alliance new organization will kick in from 2022 onwards

− Platforms consolidation will be achieved by 2026

▪ Execution is the key

− “No-pain” social measures

− We have the financial means to execute it

EXECUTIVE SUMMARY


2o22 - COST REDUCTION PROJECT

01


Building a resilient performance 2o22 fixed cost reduction project01.1

Alliance as a performance enhancer of Groupe Renault Zoom on new projects and associated benefits01.2


01.2


Alliance as a performance enhancer of Groupe Renault Zoom on new projects and associated benefits


A CHANGE OF PRIORITIES: TOWARDS BETTER PERFORMANCE

OUTCOME

STRATEGIC FOCUS

Inability to generate

cashOver-sized structure

Size Innovation

Restore

competitiveness Profitability

over volume

Increase

efficiencyTrim down diversity

Optimize

organizationLeaner structure

Customer focused – leverage of Alliance – rigorous approach

REDUCED FIXED COSTS> €2bn by 2022 vs 2019

Performance

2020+

OUTCOME

2020-

2017

MINDSET

BUSINESSFOCUS

ACTIONPLANS

Fixed costs too high


NEW LEADERSHIP

NEW MINDSET

FACT BASED

SELF-HELP

RESILIENCE

A NEW MINDSET FOR A BETTER RESILIENCE


PARADIGM SHIFT AT RENAULT: PROFITABILITY OVER VOLUMEFIRST PRIORITY: REDUCE FIXED COSTS

LOWER DEPENDENCY

ON VOLUMES

&

IMPROVED

COMPETITIVENESS ENHANCED

PROFITABILITY

FIXED COSTS

2o22 PLAN FOCUS

ON GOING EFFORT

VARIABLE COSTS

PRICING

DISCIPLINE

-20%2019 - 2022


2o22 PROJECT: OVER €2bn CASH COST REDUCTION VERSUS 2019

1. Execution of the € 2bn reduction plan does not rely on new Alliance projects or external factors like market growth

2. Includes production labor cost savings

~€700m

~€800m

~€650m

>€2bnin 2022 vs 2019

w/o CAPEX


ENGINEERING: IMPROVED EFFICIENCY

~€800mCOST REDUCTION

in 2022 vs 2019

LINE-UP

▪ Optimization

▪ Reduced parts diversity

▪ Increased commonalization

ORGANIZATION

▪ Subcontractor base rationalization

▪ Increase in RTX1 utilization

▪ Rationalized structure

▪ Digitalization of validation

1. Regional Technical Centers


DIVERSITY REDUCTION: VERSIONS, PARTS, POWERTRAINS

PRODUCT DEFINITION

Less part references1

per vehicle in plant

Powertrain

commonalization

within the Alliance

1. Part reference = part number.

-25%by 2022vs 2019

85%by 2022

+10 pts vs 2019

EN

GIN

EE

RIN

GLIN

E-U

P

OR

GA

NIZ

AT

IO

N


FEWER PC1 PLATFORMS TO DEVELOP IN 2022 & MORE VEHICLES PER PLATFORM BY 2026

DEVELOPMENT COSTS DOWN VEHICLES PER PLATFORM UP

Active PF (requiring development)

Mature PF(already developed)

13 13

# platforms

> 600k units / year13 3 ALL

4

9

4

2019 20222019-2022

Platform transition

2022-2026

Platform evolution

5

4 4

2026

4

1. Passenger cars, platforms including partners’ volumes

EN

GIN

EE

RIN

GLIN

E-U

P

OR

GA

NIZ

AT

IO

N


C/D

A/B

LCV

EV

2019 2020 2021 2022

K-ZE

Arkana

New Clio

Triber

New Captur

XM3

ZoeLCV

SIMPLIFICATION BUT NOT AT THE EXPENSE OF THE PRODUCT CADENCEE

NG

INE

ER

ING

LIN

E-U

P

OR

GA

NIZ

AT

IO

N


WORK ORGANIZATION: LEVERAGE REGIONAL FOOTPRINT

ENGINEERING EFFICIENCY

Increased RTx1 use

40%RTx2019

60%RTx2022

Skills and resources

Focus France Core technologies

High added-valueTop 9

subcontractors2019

Top 4subcontractors

2022

Subcontractor base

rationalization

80%of business with

1. Regional Technical Centers

EN

GIN

EE

RIN

GL

INE

-UP

OR

GA

NIZ

AT

IO

N


PRODUCTION: CAPACITY RIGHTSIZING, ENHANCED EFFICIENCY


in 2022 vs 2019

PERFORMANCE

& CAPACITY RIGHTSIZING

▪ Industry 4.0

▪ Lines/plants rightsizing

▪ Supply chain efficiency

▪ Labor savings

PROCESS ENGINEERING

▪ Performance “best in class”

▪ Subcontractors rationalization

▪ Digitalization of prototype process

▪ Maximization of 3D Printing


INNOVATION: BOOSTING INDUSTRIAL PERFORMANCE

PERFORMANCE GAINS

2019

Competitiveness

& Industry 4.0

80Veh/employee

2022

91Veh/employee

+14%

Digitalization

prototype process

Maximization of 3D Printing

PR

OD

UC

TIO

NP

ER

FO

RM

AN

CE

FO

OT

PR

INT


3,3

3,8

4,3

4,8

5,3

5,8

CAPACITY RIGHTSIZING

20222019 2024

Capacity3 shifts x 5 days

CapacityHarbour standard

Group Production 2019

1. including AVTOVAZ & JVs, w/o Renault Nissan Automotive India Private Limited

Groupe Renault capacity evolutionVehicle production and max capacity (in Million veh)1

3.8

3.6

4.0

3.3

5.5

6.0

4.9

~ -18% 2024 vs 2019

~ -10% 2022 vs 2019

PR

OD

UC

TIO

NP

ER

FO

RM

AN

CE

FO

OT

PR

INT


GLOBAL RIGHTSIZING PROJECTCapacity rightsizing 2019-2024

Potentially impacted locations

PR

OD

UC

TIO

NP

ER

FO

RM

AN

CE

FO

OT

PR

INT


ADAPTING OVERALL STRUCTURE TO RESTORE COMPETITIVENESS


in 2022 vs 2019

FIXED MARKETING EXPENSES

▪ Digitalization and media efficiency

▪ Media cost optimization

▪ Scope adjustments

G&A

▪ Cross function approach

▪ Optimization

▪ Downsizing

▪ Shared service centers expansion

SG

&A


TIMELINE OF CASH IMPACTS

30%75%

100%

30%50%

20%

2020 2021 2022

% of the >€2bn fixed cost gains achieved versus 2019

€1,2bn cash restructuring costs timing

Ramp-up of Group cash savings

& implementation costs


SCOPE ADJUSTMENTS: CAPITAL ALLOCATION OPTIMIZATION

>€500m

RRG GROUP

▪ Assets reduction (real estate

and working capital)

▪ Variable costs vs fixed costs

NEW FOCUS IN CHINA

▪ Transfer of DRAC shares

to Dongfeng

▪ Re-focusing on EVs and LCVs

Capital allocated tolow-return business

in 2022 vs 2019


PEAK PASSED FOR INVESTMENT BUT NOT FOR DEPRECIATION

2021201920182015 2016 2017 2020 2022

Capex & R&D cash spending Amortization and depreciation in COP

Capex + R&D

in % of Group

Revenues

10.7% ~8%

6.0bn

4.7bn

2.9bn

3.7bn

-2.5 ptsRD&CAPEX

in 2022 vs 2019

+€0.8bnDEPRECIATION

7.9%


WRAP-UP: FIXED COST REDUCTION BY NATURE BY 2022

Labor costs~ 15 000 positions

worldwidepotentially impacted

Outsourcing optimization

Marketing & Others



Alliance as a performance enhancer of Groupe RenaultZoom on new projects and associated benefits01.2


ALLIANCE NEW COLLABORATION SCOPE BEYOND OUR FIXED COST REDUCTION PLAN

REGIONS(REFERENCE PLAYER BY

REGION)

NEW

CURRENT ALLIANCE SCOPE NEW ALLIANCE COLLABORATION SCOPE

BEYOND 2o22 PLANWITHIN 2o22 PLAN

PLATFORMS & POWERTRAINS

TECHNOLOGY

PURCHASING

SCOPE EXTENSION TO FULL VEHICLE

LE

AD

ER

/ F

OL

LO

WE

R

PLATFORMS & POWERTRAINS

SCOPE EXTENSION

LE

AD

ER

/ F

OL

LO

WE

RTECHNOLOGY

INCREASED STANDARDIZATION

NE

WP

AR

TN

ER

SH

IPS

PURCHASING


SIGNIFICANT BENEFITS FROM NEW COLLABORATION SCOPE

Up to -40% Model investment1

LEADER FOLLOWEREXAMPLE EXAMPLE OF BENEFITS

New opportunities

for Fixed costs gains

Under

100$/kWh

VEHICLE

PURCHASING

REGIONS

B-SUVNext Generation

Renault reference playerEurope, Russia, Latam

EV BatteryStandardization: Geometry &

chemistry, design, carry-across

1. Model investment = R&D + Tooling

2. Core system of electric-electronic

Nissan

Development

TECHNOLOGY

Autonomous driving

Renault

Developmente-Body architecture2


Q1 2020 Results

02


KEY TAKEAWAYS FROM Q1

▪ Strong acceleration of market decline in March due to COVID-19

▪ Automotive liquidity reserves at €10.3 bn at the end of March

▪ Product cadence confirmed so far

▪ Restarting production as we speak where feasible

▪ RCI: comfortable liquidity reserve at €11.5 bn at the end of March

▪ Not yet possible to assess the pandemic impact for the FY

▪ No guidance possible at this stage


TIV EVOLUTION Q1 2020 VS Q1 2019

(1)

Brazil -8%

Colombia -9%

Argentina -36%

India -23%

(1) The evolution of the global automotive market for all brands also called Total Industry Volume (TIV) indicates the annual variation in sales* volumes of passenger cars and light commercial vehicles** in the main countries including USA & Canada,

provided by official authorities or statistical agencies in each country, and consolidated by Groupe Renault to constitute this world market (TIV).

*Sales: registrations or deliveries or invoices according to the data available in each consolidated country.

**Light commercial vehicles of less than 5.1 tons.

Morocco -21%

Algeria -88%

Turkey +41%

Russia +2%

China -46%

March Q1

World (1)

TIV -40% -25%

EuropeTIV -52% -26%

EurasiaTIV +3% +7%

Africa-ME-India-PacificTIV -24% -14%

AmericasTIV -29% -13%

ChinaTIV -49% -45%

South Korea -7%

Germany -20%

UK -31%

Spain -31%

France -33%

Italy -35%


908

503

158106 98

43

673

322

168

85 7721

2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020

GROUPE RENAULT’S SALES Q1 2020 VS Q1 2019

Thousand units

(PC+LCV)

World Market Share: 4.1% (unchanged)

International -13.4%

Global Europe Eurasia Africa-ME-India-Pacific Americas China

TIV* -24.6% -26.2% +7.0% -14.4% -13.4% -45.0%

GROUP -25.9% -36.0% +6.1% -19.8% -21.7% -50.5%

* PC+LCV including USA & Canada


PERFORMANCE OF NEW MODEL LAUNCHES IN Q1

CLIO ZOE CAPTUR

ARKANA TRIBER XM3

63 kuSales

-0.3 pt M/S

21 kuSales

34 kuSales

-0.2 pt M/S

5 kuSales

+1.2 pt M/S

10 kuSales

+1.2 pt M/S

6 kuSales

+1.5 pt M/S

+12%Pricing

+14%Pricing

+0.4 pt M/S

+81%Sales


Q1 2020 GROUP REVENUES

In million euros Q1 2019 Q1 2020 Change

Global unit sales (units) 908,402 672,962 -25.9%

Group Revenues 12,527 10,125 -19.2%

o/w Automotive excl. AVTOVAZ 10,916 8,591 -21.3%

o/w AVTOVAZ (1) 767 701 -8.6%

o/w Mobility Services (2) - 6 ++

o/w Sales Financing 844 827 -2.0%

(1) AVTOVAZ net of eliminations

(2) New segment as of 01/01/2020


Change Automotive revenues excluding AVTOVAZ

Q1 2020 vs Q1 2019: -€2,325m

10,916 8,591

10,12512,527

REVENUES VARIANCE ANALYSIS

(million euros)

-14.1 pts -0.7 pts -0.3 pts +2.8 pts -6.1 pts -1.4 pts -1.5 pts

-21.3%

Q1 2019 VolumeGeographic

Mix

Product

MixPrice

Sales to

PartnersCurrency Others Q1 2020

Q1 2019 Automotive AVTOVAZMobility

ServicesRCI Q1 2020


(In thousand units)

NEW VEHICLE DISTRIBUTION STOCK EXCLUDING AVTOVAZ

Group

Independentdealers

Total

76 61 69 70 76 65 75 68 109Number of days

of sales (backward)

697660

588622

656 630603 599

660

340

236285

182

300

218

290

157

270

357424

303

440

356412

313

442391

MAR'18 JUN'18 SEP'18 DEC'18 MAR'19 JUN'19 SEP'19 DEC'19 MAR'20


RCI BANK AND SERVICES PERFORMANCE

Q1 2019 Q1 2020 Change

Average performing assets (€m) 46,462 49,318 +6.1%

New contracts (units) 436,509 391,056 -10.4%

New Financings (€m) 5,128 4,622 -9.9%


2020 OUTLOOK

In the context of the coronavirus (COVID-19) pandemic: No FY guidance

▪ To date, the impact that this pandemic will have on the Group's

results is still impossible to assess. Groupe Renault will

communicate a new guidance as soon as it considers that it is in

a position to do so.

▪ The Group undertakes to restart commercial and production

activities in countries where safety and regulatory conditions

permit and will implement all necessary measures to respond

effectively to commercial demand.


FY 2019 Results

03


SOLID ASSETS: INTERNATIONAL PRESENCE

BrazilEurope Russia India

ARKANA KWID

SANDERO

All-new CLIO TRIBER


EVSales +25%


LCVRecord sales


DaciaRecord sales


SOLID ASSETS: RCI ROBUSTNESS

Service contracts

Penetration rate


Solid assets: Alliance – CMF-B


Solid assets: Alliance – CROSS MANUFACTURING

Maubeuge


3,884

1,921

748562 437

217

3,754

1,946

751453 425

180

Groupe Renault’s sales 2019 vs 2018

Thousand units

(PC+LCV)

World Market Share: 4.25% (+0.1 pts)

International

TIV*

GROUP

-7.9%

-2.9% w/o Iran

Global Europe Eurasia Africa-ME-India-Pacific Americas China

-4.8%-3.8% w/o Iran

+1.2% -4.4% -8.5%-3.8% w/o Iran

-5.6% -8.2%

-3.4%-0.8% w/o Iran

+1.3% +0.4% -19.3%-1.6% w/o Iran

-2.9% -17.2%

2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019

* PC+LCV including USA & Canada


2019 Group revenues

In million euros 2018 2019 Change

Global unit sales (units) 3,884,273 3,753,723 -3.4%

Group revenues 57,419 55,537 -3.3%

o/w Automotive excl. AVTOVAZ 51,171 49,002 -4.2%

o/w AVTOVAZ(2) 3,040 3,130 +3.0%

o/w Sales Financing 3,208 3,405 +6.1%

H1 H2

-7.7% -0.4%

(1)

(1) Including Jinbei & Huasong(2) AVTOVAZ net of eliminations


Currency

VolumeGeographic

mix

Sales topartners

Others

-4.2%

-1.4 pts -0.2 pts 0 pt +1.7 pts -0.7 pts -0.2 pts

Price

-3.4 pts

Change Automotive excluding Avtovaz revenues

2019 vs 2018: -€2,169m

2018 2019

Productmix

51,171

-738-1,747

+853

+10-91

-88

49,002

-368

Automotive Excluding Avtovaz

Groupe Renault2018 2019

Automotive

RCI Avtovaz

-2,169

+90 +197 55,537

57,419

Revenues variance analysis

(million euros)



Group operating profit % of Group revenues

3,6126.3%

2,6624.8%

-950-1.5 pts

o/w Automotive excl. AVTOVAZ% of segment revenues

2,2044.3%

1,2842.6%

-920-1.7 pts

o/w AVTOVAZ(1) 204 155 -49

o/w Sales Financing 1,204 1,223 +19

2019 Operating profit by activity

H1 H2

4.0% 1.3%



Currency

Volume & partners

Mix / Net Enrichment

G&A

RCI Banque& others

Monozukuri

Raw materials

AVTOVAZ(1)

+547

-587

-74 -493,612

2,662

+121

-2

-324-329

Change 2019 vs 2018: -€950m

-582

2018 2019

Group operating profit variance analysis


(million euros)


+458

+53

+106 -70+121

G&AManufacturing

& Logistics

R&DWarrantyPurchasing

Monozukuri

Cost reduction analysis excluding Avtovaz

Change 2019 vs 2018: +€668m

+458

+53

+106+121

-70

(million euros)


In million euros 2018 2019

Net restructuring costs -306 -236

Impairment of assets -276 -229

Capital gain/loss on disposal of fixed assets +68 -15

Others -111 -77

Total other operating income & expenses -625 -557

Other operating income & expenses


2019 Financial results


Group Revenues 57,419 55,537 -3.3%

Operating profit 3,612 2,662 -950

% of Group revenues 6.3% 4.8% -1.5 pts

Other operating income & expenses -625 -557 +68

EBIT 2,987 2,105 -882

Net financial income & expenses -353 -442 -89

Associated companies 1,540 -190 -1,730

Current & deferred taxes -723 -1,454 -731

Net income 3,451 19 -3,432



NISSAN 1,509 242 -1,267

Others 31 -432 -463

Total associated companies 1,540 -190 -1,730

Associated companies

H1 H2

-21 +263


Net tangible& intangibleinvestments

-5,848

Capitalized

R&D

-1,925

Net capex

-2,921

Operationalfree

cash flow

Cash flow

Changein WCR

+1,829

Dividendspaid Net Change

Incl.AVTOVAZ

Dividendsreceived

fromlisted co. Financial

investments& others

(million euros)

-484

Currency& IFRS 16 impact

AVTOVAZFCF

Automotive Net Financial Position

Excl. AVTOVAZ

+1,027

4,144

+28

+153 +625 -1,120

-912

-293 -1,335-700

December 31, 2018 : €3,702m

January 1st, 2019 : €3,069m*

December 31, 2019 : €1,734m

+802Leased

Vehicles

-1,002

* IFRS 16 impact at transition date -€633m

LeasedVehicles


678

896

243

950 947

1,750

750

500

2020 2021 2022 2023 2024 2025 2026 2027

Auto Division liquidity reserves (Dec. 2019): €15.8 billionCash & cash equivalents: €12.3 billion

Available back-up lines: €3.5 billion

Liquidity

Redemption schedule – Renault SA Bonds, Banks & assimilated, excluding CP & redeemable shares (in million euros)


(In thousand units)

New vehicle distribution stock excluding Avtovaz

Group

Independentdealers

Total

Number of daysof sales (backward)

613

697660

588622

656 630603 599

190

340

236285

182

300

218

290

157

423

357

424

303

440

356412

313

442

DEC'17 MAR'18 JUN'18 SEP'18 DEC'18 MAR'19 JUN'19 SEP'19 DEC'19

57 76 61 69 70 76 65 75 68


RCI Banque

2018 2019

New financings (€bn) 20.9 21.4

Average performing assets (€bn) 44.4 47.4

Net banking income 4.34% 4.31%

Cost of risk(1) (customer & dealer) -0.33% -0.42%

Operating expenses -1.27% -1.26%

Pretax income 2.74% 2.80%

Operating profit (€m) 1,204 1,223

All percentages are calculated on average performing assets(1) As of 2018, Cost of risk reflects the application of IFRS 9 Standards


2020Challenges

▪ CAFE

▪ Enrichment and regulation costs

▪ Capex + R&D spendings

▪ China

▪ CAFE

▪ Enrichment and regulation costs

▪ Capex + R&D spendings

▪ China

2020Challenges

2020Levers

▪ Electrification

▪ Pricing policy

▪ Cost management

▪ Alliance’s new paradigm

▪ Renewed leadership


2020 PERFORMANCE LEVER: ELECTRIFICATION OF OUR RANGE

All-new ZOE


BEV

HEV

PHEV


2019 2020 2021-2022

New vehicle New version

All-New CAPTURE-TECH plug-in

MEGANEE-TECH plug-in

All-New CLIOE-TECH

1st CMF-EV

TWINGO Z.E.All-New ZOE

Ren

au

ltE

-TE

CH

10

0%

ele

ctr

ic

Dacia Urban City car



0 g

120 g

Other ICE

HEV + DIESEL

BEV + PHEV

LPG

2019 2020

EV

PHEV

HEV

DIESEL

LPG

PETROL

10% BEV + PHEV

~30% HEV + DIESEL

~10% LPG

Passenger Cars Europe Mix

CO2 level*

* Average CO2 emission per km per vehicle (NEDC-BT)


GROUPE RENAULT ROADMAP TO 2020 CAFE TARGET

2018NEDC

NEDC-BT Mix ICEimprovement

& EV

2019 NEDC-BT

Electrification ICE & Mix management

Supercredit& Phase-in

2020NEDC-BT

112 g

118 g

93 g


2020 performance lever: pricing policy improvement

All-new CLIO All-new CAPTUR All-new ZOE

All-new CAPTUR

E-TECH plug-in

All-new CLIO

E-TECH


2020 performance lever: cost management

Optimization of

industrial footprint

and sub-contractors

Review of

Make-or-Buy

strategy

Review of

non-core assets

Implementation of

Leader-Follower

strategy


Renault Investors Relation Contact

Thierry Huon

Investor Relations Director

+33 1 76 84 53 09

[email protected]

Christophe Rochelle

Investor Relations

+33 1 76 83 05 13

[email protected]

Investor relations internet site: http://group.renault.com/finance

Clémentine de Quatrebarbes

Investor Relations

+33 1 76 84 60 89

[email protected]

mailto:[email protected]:[email protected]:[email protected]

H117 RENAULT PRESENTATION · 2020. 6. 23. · INVESTOR RELATIONS –2020 PRESENTATION PROPERTY OF...

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