Renault Confidential C
2O22COST REDUCTION PROJECT
MAY 29, 2020
Renault Confidential C2
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.
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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.”
Renault Confidential C3
AGENDA
Building a resilient performance 2o22 fixed cost reduction project01Alliance as a performance enhancer of Groupe Renault Zoom on new projects and associated benefits02
Renault Confidential C4
AGENDA
Building a resilient performance 2o22 fixed cost reduction project01Alliance as a performance enhancer of Groupe Renault Zoom on new projects and associated benefits02
Renault Confidential C5
A CHANGE OF PRIORITIES: TOWARDS BETTER PERFORMANCE
OUTCOME
STRATEGIC FOCUS
Inability to generate cash Over-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
Renault Confidential C6
NEW LEADERSHIP
NEW MINDSET
FACT BASED
SELF-HELP
RESILIENCE
A NEW MINDSET FOR A BETTER RESILIENCE
Renault Confidential C7
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
Renault Confidential C8
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
Renault Confidential C9
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
Renault Confidential C10
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
GL
INE
-UP
OR
GA
NIZ
AT
ION
Renault Confidential C11
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 20222019-2022
Platform transition
2022-2026
Platform evolution
5
4 4
2026
4
1. Passenger cars, platforms including partners’ volumes
EN
GIN
EE
RIN
GL
INE
-UP
OR
GA
NIZ
AT
ION
Renault Confidential C12
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
PO
RG
AN
IZA
TIO
N
Renault Confidential C13
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
ION
Renault Confidential C14
PRODUCTION: CAPACITY RIGHTSIZING, ENHANCED EFFICIENCY
~€650mCOST 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 C15
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
Renault Confidential C16
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
Renault Confidential C17
GLOBAL RIGHTSIZING PROJECT
Capacity rightsizing 2019-2024
Potentially impacted locations
PR
OD
UC
TIO
NP
ER
FO
RM
AN
CE
FO
OT
PR
INT
Renault Confidential C18
ADAPTING OVERALL STRUCTURE TO RESTORE COMPETITIVENESS
~€700mCOST 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 C19
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 C20
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
Renault Confidential C21
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 pts
RD&CAPEX
in 2022 vs 2019
+€0.8bn
DEPRECIATION
7.9%
Renault Confidential C22
WRAP-UP: FIXED COST REDUCTION BY NATURE BY 2022
Labor costs~ 15 000 positions
worldwidepotentially impacted
Outsourcing optimization
Marketing & Others
Renault Confidential C23
Building a resilient performance 2o22 fixed cost reduction project01Alliance as a performance enhancer of Groupe RenaultZoom on new projects and associated benefits02
Renault Confidential C24
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
Renault Confidential C25
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
Renault Confidential C
2O22COST REDUCTION PROJECT
MAY 29, 2020