2O22 COST REDUCTION PROJECT - MAY 29, 2020 - Renault Group
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2O22
COST REDUCTION PROJECT
MAY 29, 2020
Renault Confidential CDISCLAIMER
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 CAGENDA
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 CAGENDA
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 CA CHANGE OF PRIORITIES: TOWARDS BETTER PERFORMANCE
REDUCED FIXED COSTS
OUTCOME > €2bn by 2022 vs 2019
ACTION Restore
Increase Optimize
PLANS competitiveness
efficiency organization
2020+ Profitability
Trim down diversity Leaner structure
over volume
MINDSET Customer focused – leverage of Alliance – rigorous approach
BUSINESS
FOCUS Performance
OUTCOME Fixed costs too high Inability to generate cash Over-sized structure
2020
- STRATEGIC
2017 FOCUS Size Innovation
5 Renault Confidential CA NEW MINDSET FOR A BETTER RESILIENCE
NEW LEADERSHIP
SELF-HELP
NEW MINDSET
RESILIENCE
FACT BASED
6 Renault Confidential CPARADIGM SHIFT AT RENAULT: PROFITABILITY OVER VOLUME
FIRST PRIORITY: REDUCE FIXED COSTS
2o22 PLAN FOCUS
-20%
2019 - 2022 LOWER DEPENDENCY
ON VOLUMES
FIXED COSTS &
IMPROVED
COMPETITIVENESS ENHANCED
PROFITABILITY
PRICING
DISCIPLINE
VARIABLE COSTS
ON GOING EFFORT
7 Renault Confidential C2o22 PROJECT: OVER €2bn CASH COST REDUCTION VERSUS 2019
~€800m
>€2bn
in 2022 vs 2019
~€700m w/o CAPEX
~€650m
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 CENGINEERING: IMPROVED EFFICIENCY
LINE-UP
▪ Optimization
▪ Reduced parts diversity
▪ Increased commonalization
~€800m ORGANIZATION
COST REDUCTION
in 2022 vs 2019 ▪ Subcontractor base rationalization
▪ Increase in RTX1 utilization
▪ Rationalized structure
▪ Digitalization of validation
1. Regional Technical Centers
9 Renault Confidential CDIVERSITY REDUCTION: VERSIONS, PARTS, POWERTRAINS
PRODUCT DEFINITION
ENGINEERING
Less part references1 Powertrain
LINE-UP
per vehicle in plant commonalization
within the Alliance
ORGANIZATION
-25% 85%
by 2022 by 2022
vs 2019 +10 pts vs 2019
1. Part reference = part number.
10 Renault Confidential CFEWER PC1 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 / year1
13 13
LINE-UP
4
Active PF 9
(requiring development)
5
4
ORGANIZATION
Mature PF 4 4
(already developed)
4
2019 2019-2022 2022 2022-2026 2026
Platform transition Platform evolution
1. Passenger cars, platforms including partners’ volumes
11 Renault Confidential CSIMPLIFICATION BUT NOT AT THE EXPENSE OF THE PRODUCT CADENCE
2019 2020 2021 2022
ENGINEERING
EV Zoe
LCV
C/D
Arkana XM3
LINE-UP
New Captur K-ZE
A/B New Clio
ORGANIZATION
Triber
LCV
12 Renault Confidential CWORK ORGANIZATION: LEVERAGE REGIONAL FOOTPRINT
ENGINEERING EFFICIENCY
ENGINEERING
Skills and resources Increased RTx1 use Subcontractor base
LINE-UP
rationalization
ORGANIZATION
Focus France 40% 60% 80%
Core technologies
RTx RTx of business with
High added-value
2019 2022
Top 9 Top 4
subcontractors subcontractors
2019 2022
1. Regional Technical Centers
13 Renault Confidential CPRODUCTION: CAPACITY RIGHTSIZING, ENHANCED EFFICIENCY
PERFORMANCE
& CAPACITY RIGHTSIZING
▪ Industry 4.0
▪ Lines/plants rightsizing
▪ Supply chain efficiency
~€650m
▪ 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 CINNOVATION: BOOSTING INDUSTRIAL PERFORMANCE
PERFORMANCE GAINS
PRODUCTION
PERFORMANCE
Competitiveness Digitalization
& Industry 4.0 prototype process
Maximization of 3D Printing
FOOTPRINT
2019 2022
80 +14% 91
Veh/employee Veh/employee
15 Renault Confidential CCAPACITY RIGHTSIZING
Groupe Renault capacity evolution
PRODUCTION
Vehicle production and max capacity (in Million veh)1
Capacity 6.0
3 shifts x 5 days
PERFORMANCE
5.8
5.5
5.3
4.9
4.8
~ -10%
2022 vs 2019
4.3 ~ -18%
FOOTPRINT
Capacity 4.0 2024 vs 2019
Harbour standard
3.8 3.8
Group Production
3.6 3.3 2019
3.3
2019 2022 2024
1. including AVTOVAZ & JVs, w/o Renault Nissan Automotive India Private Limited
16 Renault Confidential CGLOBAL RIGHTSIZING PROJECT
Capacity rightsizing 2019-2024
PRODUCTION
PERFORMANCE
FOOTPRINT
Potentially impacted locations
17 Renault Confidential CADAPTING OVERALL STRUCTURE TO RESTORE COMPETITIVENESS
FIXED MARKETING EXPENSES
▪ Digitalization and media efficiency
▪ Media cost optimization
▪ Scope adjustments
~€700m
SG&A
COST REDUCTION G&A
in 2022 vs 2019
▪ Cross function approach
▪ Optimization
▪ Downsizing
▪ Shared service centers expansion
18 Renault Confidential CTIMELINE OF CASH IMPACTS
Ramp-up of Group cash savings
& implementation costs
100% % of the >€2bn fixed cost
75% gains achieved versus
2019
30%
30% 20% €1,2bn cash restructuring
50% costs timing
2020 2021 2022
19 Renault Confidential CSCOPE ADJUSTMENTS: CAPITAL ALLOCATION OPTIMIZATION
RRG GROUP
▪ Assets reduction (real estate
and working capital)
▪ Variable costs vs fixed costs
>€500m
Capital allocated to
low-return business NEW FOCUS IN CHINA
in 2022 vs 2019
▪ Transfer of DRAC shares
to Dongfeng
▪ Re-focusing on EVs and LCVs
20 Renault Confidential CPEAK PASSED FOR INVESTMENT BUT NOT FOR DEPRECIATION
6.0bn
4.7bn
RD&CAPEX 3.7bn
-2.5 pts 2.9bn
DEPRECIATION
+€0.8bn
in 2022 vs 2019
2015 2016 2017 2018 2019 2020 2021 2022
Capex + R&D
in % of Group 7.9% 10.7% ~8%
Revenues
Capex & R&D cash spending Amortization and depreciation in COP
21 Renault Confidential CWRAP-UP: FIXED COST REDUCTION BY NATURE BY 2022
Outsourcing
optimization
Labor costs
~ 15 000 positions
worldwide
potentially impacted
Marketing
& Others
22 Renault Confidential C01 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 CALLIANCE 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 &
POWERTRAINS TECHNOLOGY
TECHNOLOGY
NEW
INCREASED STANDARDIZATION
PARTNERSHIPS
REGIONS
NEW
(REFERENCE PLAYER BY
PURCHASING PURCHASING REGION)
24 Renault Confidential CSIGNIFICANT BENEFITS FROM NEW COLLABORATION SCOPE
EXAMPLE LEADER FOLLOWER EXAMPLE OF BENEFITS
VEHICLE B-SUV Up to -40%
Next Generation Model investment1
Nissan
Autonomous driving
Development
TECHNOLOGY
Renault
e-Body architecture2
Development
EV Battery Under
PURCHASING Standardization: Geometry & 100$/kWh
chemistry, design, carry-across
Renault reference player New opportunities
REGIONS Europe, Russia, Latam for Fixed costs gains
1. Model investment = R&D + Tooling
2. Core system of electric-electronic
25 Renault Confidential C2O22
COST REDUCTION PROJECT
MAY 29, 2020
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