Renault Confidential C
2O22
COST REDUCTION PROJECT
MAY 29, 2020
2 O 22 COST REDUCTION PROJECT MAY 29, 2020 Renault Confidential C - - PowerPoint PPT Presentation
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
Renault Confidential C
MAY 29, 2020
Renault Confidential C 2
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
Further information on Renault can be found on Renault’s web site (www.group.renault.com), in the section Finance/Regulated Information.”
Renault Confidential C 3
AGENDA
2o22 fixed cost reduction project
Zoom on new projects and associated benefits
Renault Confidential C 4
AGENDA
2o22 fixed cost reduction project
Zoom on new projects and associated benefits
Renault Confidential C 5
A CHANGE OF PRIORITIES: TOWARDS BETTER PERFORMANCE
OUTCOME STRATEGIC FOCUS Inability to generate cash Over-sized structure Size Innovation
Restore competitiveness
Profitability
Increase efficiency
Trim down diversity
Optimize
Leaner structure
Customer focused – leverage of Alliance – rigorous approach REDUCED FIXED COSTS
> €2bn by 2022 vs 2019
Performance 2020+ OUTCOME 2020
MINDSET BUSINESS FOCUS ACTION PLANS Fixed costs too high
Renault Confidential C 6
A NEW MINDSET FOR A BETTER RESILIENCE
Renault Confidential C 7
PARADIGM SHIFT AT RENAULT: PROFITABILITY OVER VOLUME FIRST PRIORITY: REDUCE FIXED COSTS
LOWER DEPENDENCY ON VOLUMES & IMPROVED COMPETITIVENESS ENHANCED PROFITABILITY
FIXED COSTS
2o22 PLAN FOCUS ON GOING EFFORT
VARIABLE COSTS
PRICING DISCIPLINE
2019 - 2022
Renault Confidential C 8
2o22 PROJECT: OVER €2bn CASH COST REDUCTION VERSUS 2019
in 2022 vs 2019 w/o CAPEX
Renault Confidential C 9
ENGINEERING: IMPROVED EFFICIENCY
COST 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
Renault Confidential C 10
DIVERSITY REDUCTION: VERSIONS, PARTS, POWERTRAINS PRODUCT DEFINITION Less part references1 per vehicle in plant Powertrain commonalization within the Alliance
by 2022
vs 2019
by 2022
+10 pts vs 2019
ENGINEERING LINE-UP ORGANIZATION
Renault Confidential C 11
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 / year1 3 3 ALL
4 9 4 2019 2022
2019-2022 Platform transition 2022-2026 Platform evolution
5 4 4 2026
4
1. Passenger cars, platforms including partners’ volumes
ENGINEERING LINE-UP ORGANIZATION
Renault Confidential C 12
C/D A/B LCV EV
2019 2020 2021 2022
K-ZEArkana New Clio Triber New Captur XM3 Zoe LCV
SIMPLIFICATION BUT NOT AT THE EXPENSE OF THE PRODUCT CADENCE
ENGINEERING LINE-UP ORGANIZATION
Renault Confidential C 13
WORK ORGANIZATION: LEVERAGE REGIONAL FOOTPRINT ENGINEERING EFFICIENCY Increased RTx1 use
RTx
2019
RTx
2022
Skills and resources
Core technologies High added-value
Top 9
subcontractors
2019
Top 4
subcontractors
2022
Subcontractor base rationalization
ENGINEERING LINE-UP ORGANIZATION
Renault Confidential C 14
PRODUCTION: CAPACITY RIGHTSIZING, ENHANCED EFFICIENCY
COST REDUCTION 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
Renault Confidential C 15
INNOVATION: BOOSTING INDUSTRIAL PERFORMANCE PERFORMANCE GAINS
2019
Competitiveness & Industry 4.0
Veh/employee
2022
Veh/employee
Digitalization prototype process Maximization of 3D Printing
PRODUCTION PERFORMANCE FOOTPRINT
Renault Confidential C 16
3.3 3.8 4.3 4.8 5.3 5.8
CAPACITY RIGHTSIZING
2022 2019 2024
Capacity
3 shifts x 5 days
Capacity
Harbour standard Group Production
2019
Groupe Renault capacity evolution
Vehicle 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
PRODUCTION PERFORMANCE FOOTPRINT
Renault Confidential C 17
GLOBAL RIGHTSIZING PROJECT
Capacity rightsizing 2019-2024
Potentially impacted locations
PRODUCTION PERFORMANCE FOOTPRINT
Renault Confidential C 18
ADAPTING OVERALL STRUCTURE TO RESTORE COMPETITIVENESS
COST REDUCTION 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
Renault Confidential C 19
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
Renault Confidential C 20
SCOPE ADJUSTMENTS: CAPITAL ALLOCATION OPTIMIZATION
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 to low-return business in 2022 vs 2019
Renault Confidential C 21
PEAK PASSED FOR INVESTMENT BUT NOT FOR DEPRECIATION
2021 2019 2018 2015 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
RD&CAPEX
in 2022 vs 2019
DEPRECIATION
7.9%
Renault Confidential C 22
WRAP-UP: FIXED COST REDUCTION BY NATURE BY 2022
~ 15 000 positions worldwide potentially impacted
Renault Confidential C 23
2o22 fixed cost reduction project
Zoom on new projects and associated benefits
Renault Confidential C 24
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 PLAN WITHIN 2o22 PLAN
PLATFORMS & POWERTRAINS TECHNOLOGY PURCHASING
SCOPE EXTENSION TO FULL VEHICLE
LEADER / FOLLOWER
PLATFORMS & POWERTRAINS
SCOPE EXTENSION
LEADER / FOLLOWER
TECHNOLOGY
INCREASED STANDARDIZATION
NEW PARTNERSHIPS
PURCHASING
Renault Confidential C 25
SIGNIFICANT BENEFITS FROM NEW COLLABORATION SCOPE
Up to -40%
Model investment1
LEADER FOLLOWER EXAMPLE EXAMPLE OF BENEFITS New opportunities for Fixed costs gains
Under
100$/kWh
VEHICLE PURCHASING REGIONS
B-SUV
Next Generation
Renault reference player
Europe, Russia, Latam
EV Battery
Standardization: Geometry & chemistry, design, carry-across
1. Model investment = R&D + Tooling 2. Core system of electric-electronic
Nissan Development
TECHNOLOGY
Autonomous driving Renault Development e-Body architecture2
Renault Confidential C
MAY 29, 2020