2 O 22 COST REDUCTION PROJECT MAY 29, 2020 Renault Confidential C
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. ” 2 Renault Confidential C
AGENDA 01 Building a resilient performance 2o22 fixed cost reduction project 02 Alliance as a performance enhancer of Groupe Renault Zoom on new projects and associated benefits 3 Renault Confidential C
AGENDA 01 Building a resilient performance 2o22 fixed cost reduction project 02 Alliance as a performance enhancer of Groupe Renault Zoom on new projects and associated benefits 4 Renault Confidential C
A CHANGE OF PRIORITIES: TOWARDS BETTER PERFORMANCE REDUCED FIXED COSTS OUTCOME > €2bn by 2022 vs 2019 Restore ACTION Increase Optimize competitiveness PLANS efficiency organization Profitability 2020+ Trim down diversity Leaner structure over volume Customer focused – leverage of Alliance – rigorous approach MINDSET BUSINESS Performance FOCUS Fixed costs too high OUTCOME Inability to generate cash Over-sized structure 2020 - STRATEGIC Size Innovation 2017 FOCUS 5 Renault Confidential C
A NEW MINDSET FOR A BETTER RESILIENCE NEW LEADERSHIP SELF-HELP NEW MINDSET RESILIENCE FACT BASED 6 Renault Confidential C
PARADIGM SHIFT AT RENAULT: PROFITABILITY OVER VOLUME FIRST PRIORITY: REDUCE FIXED COSTS 2o22 PLAN FOCUS - 20 % LOWER DEPENDENCY 2019 - 2022 ON VOLUMES & FIXED COSTS IMPROVED COMPETITIVENESS ENHANCED PROFITABILITY PRICING DISCIPLINE VARIABLE COSTS ON GOING EFFORT 7 Renault Confidential C
2o22 PROJECT: OVER €2 bn CASH COST REDUCTION VERSUS 2019 ~ € 800 m > € 2 bn in 2022 vs 2019 ~ €700 m ~ € 650 m w/o CAPEX 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 8 Renault Confidential C
ENGINEERING: IMPROVED EFFICIENCY LINE-UP ▪ Optimization ▪ Reduced parts diversity ▪ Increased commonalization ~ € 800 m ORGANIZATION COST REDUCTION ▪ Subcontractor base rationalization in 2022 vs 2019 ▪ Increase in RTX 1 utilization ▪ Rationalized structure ▪ Digitalization of validation 1. Regional Technical Centers 9 Renault Confidential C
DIVERSITY REDUCTION: VERSIONS, PARTS, POWERTRAINS PRODUCT DEFINITION ENGINEERING Powertrain Less part references 1 LINE-UP commonalization per vehicle in plant within the Alliance ORGANIZATION - 25 % 85 % by 2022 by 2022 vs 2019 +10 pts vs 2019 1. Part reference = part number. 10 Renault Confidential C
FEWER PC 1 PLATFORMS TO DEVELOP IN 2022 & MORE VEHICLES PER PLATFORM BY 2026 ENGINEERING DEVELOPMENT COSTS DOWN VEHICLES PER PLATFORM UP # platforms 3 3 ALL > 600k units / year 1 13 13 LINE-UP 4 Active PF 9 (requiring development) 5 4 ORGANIZATION Mature PF 4 4 4 (already developed) 2019 2022 2026 2019-2022 2022-2026 Platform transition Platform evolution Passenger cars, platforms including partners’ volumes 1. 11 Renault Confidential C
SIMPLIFICATION BUT NOT AT THE EXPENSE OF THE PRODUCT CADENCE 2019 2020 2021 2022 ENGINEERING EV LCV Zoe C/D Arkana XM3 LINE-UP New Captur K-ZE A/B New Clio ORGANIZATION Triber LCV 12 Renault Confidential C
WORK ORGANIZATION: LEVERAGE REGIONAL FOOTPRINT ENGINEERING EFFICIENCY ENGINEERING Increased RTx 1 use Subcontractor base Skills and resources LINE-UP rationalization ORGANIZATION Focus France 40 % 60 % 80 % Core technologies of business with RTx RTx High added-value 2019 2022 Top 9 Top 4 subcontractors subcontractors 2019 2022 1. Regional Technical Centers 13 Renault Confidential C
PRODUCTION: CAPACITY RIGHTSIZING, ENHANCED EFFICIENCY PERFORMANCE & CAPACITY RIGHTSIZING ▪ Industry 4.0 ▪ Lines/plants rightsizing ▪ Supply chain efficiency ~ € 650 m ▪ Labor savings COST REDUCTION in 2022 vs 2019 PROCESS ENGINEERING ▪ Performance “best in class” ▪ Subcontractors rationalization ▪ Digitalization of prototype process ▪ Maximization of 3D Printing 14 Renault Confidential C
INNOVATION: BOOSTING INDUSTRIAL PERFORMANCE PERFORMANCE GAINS PRODUCTION PERFORMANCE Competitiveness Digitalization & Industry 4.0 prototype process Maximization of 3D Printing FOOTPRINT 2019 2022 80 91 +14% Veh/employee Veh/employee 15 Renault Confidential C
CAPACITY RIGHTSIZING Groupe Renault capacity evolution PRODUCTION Vehicle production and max capacity (in Million veh) 1 6.0 Capacity 3 shifts x 5 days PERFORMANCE 5.8 5.5 5.3 4.9 4.8 ~ -10 % 2022 vs 2019 ~ -18 % 4.3 FOOTPRINT Capacity 4.0 2024 vs 2019 Harbour standard 3.8 3.8 Group Production 3.3 3.6 2019 3.3 2022 2024 2019 1. including AVTOVAZ & JVs, w/o Renault Nissan Automotive India Private Limited 16 Renault Confidential C
GLOBAL RIGHTSIZING PROJECT Capacity rightsizing 2019-2024 PRODUCTION PERFORMANCE FOOTPRINT Potentially impacted locations 17 Renault Confidential C
ADAPTING OVERALL STRUCTURE TO RESTORE COMPETITIVENESS FIXED MARKETING EXPENSES ▪ Digitalization and media efficiency ▪ Media cost optimization ▪ Scope adjustments ~ € 700 m SG&A G&A COST REDUCTION in 2022 vs 2019 ▪ Cross function approach ▪ Optimization ▪ Downsizing ▪ Shared service centers expansion 18 Renault Confidential C
TIMELINE OF CASH IMPACTS Ramp-up of Group cash savings & implementation costs % of the >€2bn fixed cost 100% gains achieved versus 75% 2019 30% 20% €1,2bn cash restructuring 30% 50% costs timing 2020 2021 2022 19 Renault Confidential C
SCOPE ADJUSTMENTS: CAPITAL ALLOCATION OPTIMIZATION RRG GROUP ▪ Assets reduction (real estate and working capital) ▪ Variable costs vs fixed costs > € 500 m Capital allocated to NEW FOCUS IN CHINA low-return business in 2022 vs 2019 ▪ Transfer of DRAC shares to Dongfeng ▪ Re-focusing on EVs and LCVs 20 Renault Confidential C
PEAK PASSED FOR INVESTMENT BUT NOT FOR DEPRECIATION 6.0 bn 4.7 bn RD&CAPEX 3.7 bn -2.5 pts 2.9 bn DEPRECIATION +€0.8 bn in 2022 vs 2019 2015 2016 2017 2018 2019 2020 2021 2022 Capex + R&D 7.9% ~8% 10.7% in % of Group Revenues Capex & R&D cash spending Amortization and depreciation in COP 21 Renault Confidential C
WRAP-UP: FIXED COST REDUCTION BY NATURE BY 2022 Outsourcing optimization Labor costs ~ 15 000 positions worldwide potentially impacted Marketing & Others 22 Renault Confidential C
01 Building a resilient performance 2o22 fixed cost reduction project 02 Alliance as a performance enhancer of Groupe Renault Zoom on new projects and associated benefits 23 Renault Confidential C
ALLIANCE NEW COLLABORATION SCOPE BEYOND OUR FIXED COST REDUCTION PLAN CURRENT ALLIANCE SCOPE NEW ALLIANCE COLLABORATION SCOPE WITHIN 2o22 PLAN BEYOND 2o22 PLAN SCOPE EXTENSION TO FULL VEHICLE SCOPE EXTENSION / FOLLOWER / FOLLOWER PLATFORMS & LEADER LEADER POWERTRAINS PLATFORMS & TECHNOLOGY POWERTRAINS TECHNOLOGY NEW INCREASED STANDARDIZATION PARTNERSHIPS REGIONS NEW (REFERENCE PLAYER BY PURCHASING PURCHASING REGION) 24 Renault Confidential C
SIGNIFICANT BENEFITS FROM NEW COLLABORATION SCOPE EXAMPLE LEADER FOLLOWER EXAMPLE OF BENEFITS B-SUV Up to -40% VEHICLE Model investment 1 Next Generation Nissan Autonomous driving Development TECHNOLOGY Renault e-Body architecture 2 Development EV Battery Under PURCHASING Standardization: Geometry & 100$/kWh chemistry, design, carry-across New opportunities Renault reference player REGIONS for Fixed costs gains Europe, Russia, Latam 1. Model investment = R&D + Tooling 2. Core system of electric-electronic 25 Renault Confidential C
2 O 22 COST REDUCTION PROJECT MAY 29, 2020 Renault Confidential C
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