Groupe Renault

Press release strategic plan "Renaulution"

PRESS RELEASE

GROUPE RENAULT “RENAULUTION” STRATEGIC PLAN

Boulogne-Billancourt, January 14, 2021 – Following approval by the Board of Directors, Luca de Meo, CEO Groupe Renault, presents today “Renaulution”, a new strategic plan, which aims to shift Groupe Renault’s strategy from volume to value.

This strategic plan is structured in 3 phases that are launched in parallel:

• “Resurrection”, running up to 2023, will focus on margin and cash generation recovery,
• “Renovation”, spanning up to 2025, will see renewed and enriched line-ups, feeding brand’s profitability,
• “Revolution” from 2025 and onwards, will pivot the business model to tech, energy and mobility; making Groupe Renault a frontrunner in the value chain of new mobility.

                   
The Renaulution plan will restore Groupe Renault’s competitiveness by:

• taking the 2o22 plan¹ one step further, driving efficiency through engineering and manufacturing, to reduce fixed costs and to improve variable costs worldwide,
• leveraging on current Group’s industrial assets and electric leadership in Europe,
• building on the Alliance to boost our reach in products, business and technology coverage,
• accelerating on mobility, energy-dedicated and data-related services,
• driving profitability through 4 differentiated business units based on empowered brands, customers and markets oriented.

A new organization will roll-out this plan: the functions, with engineering at the forefront, are accountable for the competitiveness, costs and time-to-market of the products of the brands. The fully-fledged, clear and differentiated brands manage their profitability.

In accordance with this value-driven organization, the company will no longer measure its performance on market shares and sales but on profitability, cash generation and investment effectiveness.

The Group sets new financial objectives:

• By 2023, the Group targets to reach more than 3% group operating margin, about €3bn of cumulative automotive operational free cash flow² (2021-23) and lower investments (R&D and capex) to about 8% of revenues,
• By 2025, the Group aims for at least 5% group operating margin, about €6bn of cumulative automotive operational free cash flow² (2021-25), and a ROCE³ improvement by at least 15 points compared to 2019.

The Renaulution plan will ensure the Group’s sustainable profitability while keeping on track with its Zero CO2 footprint commitment in Europe by 2050.