Groupe Renault - 2020 Universal Registration Document

22 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020 Find out more at group.renault.com 01 OVERVIEW OF RENAULT AND THE GROUP GROUPE RENAULT The Group has set new financial objectives: by 2023, the Group to reach more than 3%, around €3 billion in P cumulative Automotive operational free cash flow (1) (2021-2023) and investments (R&D and capex) reduced to approximately 8% of revenues; by 2025, the Group aims for at least 5% group operating margin, P about €6 billion in cumulative automotive operational free cash flow (1) (2021-2025), and an improvement in ROCE (2) of at least 15 points compared to 2019. The Renaulution plan will ensure the Group’s sustainable profitability while keeping on track with its Zero CO 2 footprint commitment in Europe by 2050. The Renaulution plan includes the following main elements: Acceleration of the efficiency of functions, which will be 1. accountable for competitiveness, costs, development time and time-to-market. Engineering and manufacturing efficiency, speed and P performance, boosted by the Alliance: rationalization of platforms from six to three (with 80% of P Group volumes based on three Alliance platforms) and powertrains (from eight to four families), all models to be launched on existing platforms will be in the P market in less than tree years, rightsizing manufacturing footprint from 4 million units in P 2019 to 3.1 million units in 2025 (Harbour standard), reinvented efficiency with suppliers; P steering of the Group’s international footprint towards high P margin business: notably in Latin America, India and Korea while leveraging our competitiveness in Spain, Morocco, Romania, Turkey and creating more synergies with Russia; strict cost discipline: P fixed cost reduction: the "2o22 plan" achieved earlier and P pushed further by 2023 to reach €2.5 billion, and target €3 billion by 2025 (including fixed cost variability), variable costs: €600 improvement per vehicle (3) by 2023, P decreasing investment (R&D and Capex) from around 10% of P revenues to below 8% by 2025. All these efforts will strengthen the Group’s resilience and lower its break-even point by 30% by 2023. portfolio with 24 launches by 2025 - half of them in the C/D segments – and at least 10 full EVs. Four Business Units with strong identity and positioning. This 2. new model will create a rebalanced and more profitable product This new value-driven organization and product offensive will drive a better pricing and product mix. Renault, la Nouvelle vague The brand will embody modernity and innovation within and beyond the automotive industry in energy, tech and mobility services, for example. As part of its strategy, the brand will lift up its segment mix with a C-segment offensive and will strengthen its positions in Europe, while focusing on profitable segments and channels in key markets such as Latin America and Russia. The brand will lean on our powerful assets: leader in electrification by 2025 with an “Electro pole”, potentially P in the north of France, the Group’s largest EV manufacturing capacity worldwide: hydrogen joint-venture from fuel-cell stack to vehicle, P “greenest” mix in Europe, P half of launches in Europe being full EVs, with higher margin P contribution than ICE (in €), challenger in hybrid market with 35% hybrid mix; P high-tech Ecosystem assembler: becoming a player in key P technologies from big data to cybersecurity, with the “Software République”; leader in circular economy with EV & energy-dedicated services P through Re-Factory in Flins (France). Dacia-Lada, Tout. Simplement Dacia, will stay Dacia with a touch of coolness, and Lada, still rough and tough, will continue to offer affordable products, based on proven technologies targeting smart buyers, while breaking the C-segment glass ceiling. Super-efficient business models: P design-to-cost, P improved efficiency: from four platforms to one,18 body-types P to 11, increasing average production from 0.3 million units/ platform to 1.1 million units/platform; revamped competitive line-up breaking into the C-segment: P seven models launched by 2025, two in the C-segment, P revival of iconic models, P CO 2 efficiency: leverage Group tech assets (LPG for both brands, P E-TECH for Dacia). Automotive operational free cash flow: cash flows after interest and tax (excluding dividends received from publicly-listed companies) (1) minus tangible and intangible investments net of disposals +/- change in the working capital requirement. ROCE= Auto Operating Profit (incl. AVTOVAZ) x (1- average tax rate)/(PP&E + intangible assets + financial assets - investments in (2) RCI/Nissan/Daimler + WCR) Mix unchanged. (3)