CORPORATES
ISSUER PROFILE Renault S.A. 22 July 2020 Key Facts and Statistics - FYE December 2019
Company overview Renault S.A. (Renault) is a French automotive company that manufactures, sells and TABLE OF CONTENTS distributes passenger cars, light commercial vehicles and associated components under the Company overview 1 Renault brand (global), the Dacia brand (Europe and North Africa), the Renault Samsung Business description 2 Motors brand (South Korea), Alpine and Lada brands (Russia). It also funds dealers and Management strategy 4 Financial highlights 5 customers through its wholly owned finance company RCI Banque. Capital structure and debt maturity 7 As of 31 December 2019, the company sold vehicles in over 134 countries. In the financial Company management 9 year ended 31 December 2019 (2019), it sold approximately 3.8 million vehicles worldwide, Ownership structure 9 and reported revenue of €55.5 billion. Subsidiaries 10 Peer group 10 Renault originated in 1898 with the formation of Société Renault Frères. Since the company’s Related websites and information privatisation in 1994, its common stock has been listed on Euronext Paris (Ticker: RNO). sources 10 Moody’s related publications 11 As of 31 December 2019, Renault’s largest shareholders were the French government and Nissan Motor Co., Ltd. (Nissan), which owned 15.01% and 15.00% of its total share capital, respectively. Contacts Sources: Company report (registration document Dec 2019), Company data, Moody’s Investors Service research and Moody’s Financial Falk Frey +49.69.70730.712 Metrics Senior Vice President [email protected] Timo Fittig +49.69.70730.812 Associate Analyst [email protected]
CLIENT SERVICES Americas 1-212-553-1653 Asia Pacific 852-3551-3077 Japan 81-3-5408-4100 EMEA 44-20-7772-5454
This report was republished on 23 July 2020 with some minor corrections in the Business Segments section. MOODY'S INVESTORS SERVICE CORPORATES
Business description Renault designs, manufactures, sells, repairs, maintains and leases motor vehicles (including commercial, light commercial and passenger vehicles). It also designs and produces parts and equipment used in the manufacture and operation of vehicles.
Company history The company was founded in 1898 as Société Renault Frères to manufacture motor vehicles. In 1914, it secured contacts from the French War Ministry to produce ambulances, aircraft engines and shells. In 1922, the company became a limited company and established production facilities in France and abroad. However, in 1945, the company was nationalised and renamed Régie Nationale des Usines Renault. In 1972, the company began selling the Renault 5 passenger car, which became one of its best-selling models ever. In 1990, Renault once again became a limited company. In 1994, the French government authorised the company to access external private funding (including capital). Subsequently, in July 1996, the company was privatised.
In 1999, Renault signed a cooperation agreement with Nissan, under which the company bought a 36.8%1 stake in Nissan. This resulted in the creation of the Renault-Nissan Alliance (the Alliance). In 2002, Renault increased its interest in Nissan to 44.3%, while Nissan acquired a 15% stake in Renault.
In 1999, Renault acquired a 51% stake in the Romanian car maker Dacia. In 2000, it increased its interest to 80.1%2. In 2000, Renault acquired a 70.1% stake in Samsung Motors, which was renamed Renault Samsung Motors (RSM)3.
In 2008, Renault acquired a 25% stake in AVTOVAZ, a Russian car maker and the owner of the Lada brand. In 2012, the Alliance formed a joint venture (JV) with Russian Technologies (a Russian state holding company) named Alliance Rostec Auto BV (Alliance Rostec). At the end of December 2016, AVTOVAZ carried out a cash capital increase of RUB26.14 billion, of which RUB14.85 billion (€231 million) were subscribed by Alliance Rostec. Renault alone participated in a cash capital increase of Alliance Rostec increasing its investment in the capital of the JV from 50% minus one share to 73.30%. Subsequently, on 28 December 2016, AVTOVAZ became fully consolidated within Renault's accounting scope by global integration.
In 2017, Renault acquired shares in Alliance Rostec Auto b.v. which were previously held by Nissan. Consequently, As of 31 December 2017, Renault indirectly owned 53.26% of the share capital of AVTOVAZ through Alliance Rostec's 64.60% stake in AVTOVAZ. During 2018, Alliance Rostec increased its shareholding in AVTOVAZ to over 75% through an infusion of RUB61.4 billion. Subsequently, a mandatory tender offer for minority interests was initiated in early July 2018 and closed in September 2018. Following the tender offer, Alliance Rostec Auto b.v. increased its shareholding to 96.64% in AVTOVAZ, ensuing which a mandatory squeeze-out was launched at the price of RUB12.40 per ordinary share and RUB12.20 per preference share. As of 31 December 2018, the squeeze-out operation had ended, pursuant to which Alliance Rostec Auto b.v. now owns 100% of AVTOVAZ. AVTOVAZ has been delisted from the Moscow Stock Exchange in Q2 2019.
In 2010, the Alliance and Daimler signed a long-term strategic cooperation agreement on future Smart Forfour and Twingo models, pooling of powertrains, and collaboration to develop and manufacture light commercial and electric vehicles. Under the terms of the agreement, Daimler acquired 3.1% stakes in both Renault and Nissan, while Renault and Nissan each bought a 1.55% stake in Daimler.
In 2013, Renault formed Dongfeng Renault Automotive Company, a 50:50 JV with Chinese car maker Dongfeng Motor Co., Ltd. In February 2016, the company opened its first plant in China, with the production of two SUVs, including its latest model Kadjar.
In January 2018, Renault-Nissan-Mitsubishi launched Alliance Ventures BV, an Amsterdam based venture capital fund, with an aim to invest almost $1 billion to develop open innovation and new mobilities over the next five years. The new venture fund will be jointly owned by Renault (40%), Nissan (40%) and Mitsubishi (20%), with an initial investment of $200 million.
In December 2018, Renault announced its intention to establish a joint venture and acquire a significant stake in JMEV, a subsidiary of JMCG, a Chinese automobile manufacturer. The proposed acquisition will help Renault expand its offering in the Chinese EV market. The transaction was finalised in July 2019.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
2 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
In June 2019, Renault s.a.s., in collaboration with Nissan group, established two joint-ventures - Alliance Mobility Company France and - Alliance Mobility Company Japan, focused towards development of driverless mobility services.
In December 2019, PAO AVTOVAZ gained complete ownership of ZAO GM-AVTOVAZ, by acquiring GM's remaining 50% interest in the joint-venture, in addition to its initial 50% shareholding. During the same month, the group established a new entity - Renault MAI (Mobility As an Industry) - to accelerate development in new types of mobility and form strategic partnerships in the same field.
As of 31 December 2019, Renault’s vehicles were sold in over 134 countries in Europe, the Americas, Asia Pacific, Africa, the Middle East, India and Eurasia. The company’s largest market is Europe, which accounted for 65.7% of its revenue in 2019. It manufactures vehicles and components at 38 production plants.
Business segments The company operates through the following three business segments: Automotive (excluding AVTOVAZ), Sales Financing and AVTOVAZ. The company formed the third operating segment AVTOVAZ following its acquisition of control on 28 December 2016. This segment consists of the Russian automotive subgroup and its parent-company, Alliance Rostec.
Automotive (excluding AVTOVAZ): Accounting for 88.2%4 of the company’s revenue in 2019, this segment includes its production, sales and distribution subsidiaries for passenger and light commercial vehicles, its automobile service subsidiaries and the subsidiaries in charge of the segment’s cash management operations. Renault designs, manufactures and sells vehicles under the following three categories: passenger cars (key models: Clio, Sandero, Duster, Logan, Captur, Megane, Scenic, Twingo, Espace, Kadjar, Kwid, Talisman, Triber, Koleos); light commercial vehicles (Trafic, Kangoo, Dokker, Alaskan, Oroch and Master); and electric vehicles (Zoe, Twizy, SM3, K-Ze, Master and Kangoo). The company’s vehicles are marketed under five umbrella brands: Renault (2019 sales: 2,357,093 vehicles); Dacia (736,570); RSM (79,081); and Alpine (4,835). This segment also sells used vehicles and spare parts.
AVTOVAZ: Accounting for 5.7% of the company’s revenue in 2019, and indirectly controlled by Renault (holds 67.6% of shares of parent), the AVTOVAZ business sells passenger cars and light commercial vehicles (LCV) under the Lada brand (regional sales, 2019: 412,889 vehicles) and manufactures cars for Renault and Nissan.
Sales Financing: Accounting for 6.1% of the company’s revenue in 2019, this segment operates through RCI Banque and its subsidiaries. It provides finance for sales of Renault’s brands (Renault, Dacia, Alpine, RSM, Lada) across the world and of Nissan group brands (Nissan, Infiniti, Datsun) mainly in Europe, South America, South Korea, and in form of joint ventures in Russia and India as well as Mitsubishi in the Netherlands. As of 31 December 2019, RCI Banque maintained operations in 36 countries.
Sources: Company reports (registration document Dec 2019, Dec 2018, Dec 2017, Dec 2016, Dec 2015, Dec 2014 and Dec 2013), Company data and Moody’s Investors Service research
Exhibit 1 Exhibit 2 Revenue by segment Revenue by geography (in € Million) (in € Million)
2017 2018 2019 2018 2019 60,000 40,000
35,000 50,000 30,000
40,000 25,000
20,000 30,000 15,000 20,000 10,000
10,000 5,000
0 0 Europe Americas China Africa-Middle Eurasia Automobile (Excluding AVTOVAZ Sales Financing East-India- AVTOVAZ) Asia-Pacific Excluding inter-segment transactions Source: Company report (registration document Dec 2019) Source: Company reports (registration document Dec 2019 and Dec 2018)
3 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Exhibit 3 Operating income by segment (in € Million)
2017 2018 2019 3,000
2,500
2,000
1,500
1,000
500
0 Automobile (Excluding AVTOVAZ Sales Financing AVTOVAZ) Excluding inter-segment transactions Source: Company reports (registration document Dec 2019 and Dec 2018)
Management strategy In October 2019, Renault announced that it would put its “Drive the Future” strategic plan on hold and reassess its mid-term plan targets. Coinciding with the arrival of the new group CEO Luca de Meo, management is currently developing a new strategic plan.
In May 2020, Renault has launched its new “2022 Cost Reduction Project”. As part of the new programme, the company targets an overall fixed cost reduction of at least €2 billion compared to 2019 levels, to be achieved by 2022. Part of the programme are measures to rightsize its capacities and reduce cost in the areas manufacturing, engineering and general & administrative functions.
Sources: Company reports (registration document Dec 2019, Dec 2018 and Dec 2017, cost reduction project presentation May 2020, group factsheet Mar 2018) and Company data
4 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Financial highlights Overview Company Type: Public Exchange Listing: Euronext Paris: RNO Fiscal Year End: December Financial Filings: Autorité des Marchés Financiers (AMF) Auditor: KPMG Audit and Ernst & Young Audit
Note: The financials presented below have been adjusted for Moody’s analytic purposes. To see how adjustments have been made, please see Moody’s Financial Metrics , a fundamental financial data and analytics platform that offers insight into the drivers of Moody’s Corporate ratings.
Exhibit 4 Selected adjusted financial data Renault S.A. – Automotive Segment
(in € Million) 31-Dec-19 31-Dec-18 31-Dec-17 INCOME STATEMENT Revenue/Sales 52,237 54,307 55,878 Gross Profit 9,972 11,304 11,505 EBITDA 2,835 5,183 7,313 EBIT 283 2,890 4,998 Interest Expense 446 482 533 Net Income (921) 2,259 4,115 BALANCE SHEET Cash & Cash Equivalents 13,472 13,186 12,988 Current Assets 23,561 23,359 24,274 Net Property, Plant & Equipment (PP&E) 23,441 20,554 19,190 Total Assets 71,067 68,745 67,523 Current Liabilities 28,750 26,948 28,380 Total Debt 13,157 11,333 11,875 Total Liabilities 39,366 35,704 36,513 Shareholders' Equity 31,701 33,041 31,010 CASH FLOW Funds from Operations (FFO) 1,927 3,337 3,636 Cash Flow from Operations (CFO) 3,773 4,166 4,160 Capital Expenditures (CAPEX) (3,120) (2,864) (2,607) Cash from Investing Activities (3,277) (3,057) (2,734) Dividends (1,131) (1,121) (1,049) Retained Cash Flow (RCF) 796 2,216 2,587 Share Repurchases (36) (41) (226) Cash from Financing Activities 61 (1,062) (1,518)
Source: Moody’s Financial Metrics
5 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Exhibit 5 EBITA margin and EBITA/Interest expense (Adjusted)
EBITA Margin % EBITA / Interest Expense 10% 10.0x
8% 8.0x
6% 6.0x
4% 4.0x
2% 2.0x
0% 0.0x 2017 2018 2019 As of 31 December 2019. Source: Moody’s Financial Metrics
Exhibit 6 Debt/EBITDA and RCF/Debt (Adjusted)
Debt / EBITDA RCF / Debt % 5.0x 25%
20% 4.0x
15%
3.0x
10%
2.0x 5%
1.0x 0% 2017 2018 2019 As of 31 December 2019. Source: Moody’s Financial Metrics
6 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Capital structure and debt maturity Note: The financials presented below have been adjusted for Moody’s analytic purposes. To see how adjustments have been made, please see Moody’s Financial Metrics , a fundamental financial data and analytics platform that offers insight into the drivers of Moody’s Corporate ratings.
Exhibit 7 Capital structure Renault S.A. – Automotive segment
(in € Million) 31-Dec-19 31-Dec-18 31-Dec-17 SHORT- TERM DEBT Short-Term Debt 3,875 3,343 4,761 Current Portion of Long-Term Debt - - - Total Short-Term Debt 3,875 3,343 4,761 LONG-TERM DEBT Equipment Trust - - - Secured Debt - - - Senior Debt 7,885 6,115 5,023 Subordinated Debt - - - Mandatorily Redeemable Pref. Secur. - - - Capitalized Leases 42 81 84 Gross Long-Term Debt 7,927 6,196 5,107 Less Current Maturities - - - Net Long-Term Debt 7,927 6,196 5,107 Total Debt 11,802 9,539 9,868 Total Adjusted Debt 13,157 11,333 11,875 SHAREHOLDERS' EQUITY Preferred Stock - - - Common Stock & Paid-In Capital 35,294 36,053 33,447 Retained Earnings - - - Accumulated Other Comprehensive Income - - - Total Equity 35,294 36,053 33,447 Total Adjusted Equity 31,701 33,041 31,010
Adjusted Book Capitalization 44,906 43,791 42,689 Adjusted Market Capitalization 25,678 26,881 36,497
Adjusted Debt/Adjusted Book Capital (%) 29.30 25.88 27.82 Holding Company Debt/Total Debt (%) - - - Secured Debt/Total Debt (%) - - -
Source: Moody’s Financial Metrics
7 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Of Renault’s total adjusted debt in 2019, the largest components were those related to pension and lease adjustments.
Exhibit 8 Components of debt - Automotive segment
16,000
1,623 14,000 13,157
11,802 (268) 12,000
10,000
8,000 € Million 6,000
4,000
2,000
0 Unadj. Debt Pensions Analyst Adj. Debt As of 31 December 2019. Source: Moody's Financial Metrics
Exhibit 9 Upcoming financial liabilities maturities – automotive segment
3,500 3,011 3,000
2,500
2,000
€ Million 1,500
1,004 979 963 1,000
500 318
0 2020 2021 2022 2023 2024 Post 2024
As of 31 December 2019. Source: Moody’s Financial Metrics
8 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Company management
Exhibit 10 Renault SA Company Management Age Current Title Clotilde Delbos 52 Interim Chief Executive Officer, Executive Vice President, Chief Financial Officer and Chairman, RCI Banque Luca de Meo* N/A Chief Executive Officer
As of 21 May 2020. *To assume office starting 1 July 2020. Sources: Company report (registration document Dec 2019) and company data
Exhibit 11 Renault SA Board of Directors Age Affiliation Jean-Dominique Senard 67 Chairman of the Board of Directors Catherine Barba 47 Independent Director Frédéric Barrat 47 Director (employee representative) Miriem Bensalah Chaqroun 57 Independent Director Thomas Courbe 47 Director (appointed by the French State) Marie-Annick Darmaillac 65 Independent Director Thierry Derez 63 Independent Director Pierre Fleuriot 66 Lead Independent Director Richard Gentil 52 Director (employee representative) Benoît Ostertag 54 Director (elected on proposal of the employee shareholders) Eric Personne 57 Director (employee representative) Olivia Ronghong Qiu 53 Independent Director Yu Serizawa 61 Director (appointed upon proposal of Nissan) Pascale Sourisse 58 Independent Director Joji Tagawa 59 Director (appointed upon proposal of Nissan) Patrick Thomas 72 Independent Director Martin Vial 66 Director (appointed by the French State) Annette Winkler 60 Independent Director
As of 21 May 2020. Sources: Company reports (registration document Dec 2019 and Notice to AGM Mar 2020) and company data
Ownership structure As of 31 December 2019, Renault’s ownership structure was as follows:
Exhibit 12 Renault SA Shareholders Number of Shares % Capital French State 44,387,915 15.01 Nissan Finance Co. Ltd 44,358,343 15.00 Daimler Group 9,167,391 3.10 Employees* 8,605,324 2.91 Treasury Stock 4,548,736 1.54 Public 184,654,575 62.44 Total 295,722,284 100.00
*Shares owned by past and present employees are held in the FCPE mutual fund. Source: Company report (registration document Dec 2019)
9 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Subsidiaries As of 31 December 2019, Renault’s major subsidiaries were as follows:
Exhibit 13 Renault SA Subsidiary Country % Held Renault s.a.s. France 100 RCI Banque SA France 100 Renault Retail Group (France) France 100 Renault Espana SA Spain 99.78 Renault España Comercial SA Spain 100 Renault Deutschland AG Germany 100 Renault Italia Italy 100 Revoz Slovenia 100 Renault Finance SA Switzerland 100 Renault U.K. UK 100 Renault Belgique Luxembourg Belgium 100 Renault do Brasil Brazil 99.92 Renault Argentina Argentina 100 Renault Samsung Motors South Korea 80.04 Renault Algérie SpA Algeria 100 Renault Commerce Maroc Morocco 80 Renault Tanger Exploitation Morocco 100 Oyak-Renault Otomobil Fabrikalari Turkey 51 SC Automobile Dacia SA Romania 99.43 CJSC Renault Russia Russia 100 Renault India Private Limited India 100 PAO AVTOVAZ* Russia 67.61
This list does not include all the company’s subsidiaries. Source: Company report (registration document Dec 2019)
Peer group » Peugeot S.A.
» Nissan Motor Co., Ltd
» Volvo Car AB
» Fiat Chrysler Automobiles N.V.
Related websites and information sources For additional information, please see:
The company’s website
» http://group.renault.com
MOODY’S has provided links or references to third party World Wide Websites or URLs (“Links or References”) solely for your convenience in locating related information and services. The websites reached through these Links or References have not necessarily been reviewed by MOODY’S, and are maintained by a third party over which MOODY’S exercises no control. Accordingly, MOODY’S expressly disclaims any responsibility or liability for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on any third party web site accessed via a Link or Reference. Moreover, a Link or Reference does not imply an endorsement of any third party, any website, or the products or services provided by any third party.
10 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Moody’s related publications Issuer page on Moodys.com:
» Renault SA
Credit opinion:
» Renault S.A.: Update following downgrade of ratings to Ba2 with negative outlook, June 2020 (1220172)
Industry outlook:
» Automotive Manufacturing – Global: Outlook update: Cutting sales forecast as coronavirus economic impact worsens, May 2020 (1228329)
» Automotive Manufacturing and Parts Suppliers – Global: Outlook update: Decline in auto sales to accelerate on expanding coronavirus impact, March 2020 (1219788)
Sector in-depth:
» Automotive Parts Suppliers – Europe: Amid coronavirus pressures, credit quality remains stronger than 2008 pre-crisis levels, April 2020 (1224431)
To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this report and that more recent reports may be available on the issuer’s page. All research may not be available to all clients.
11 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
Endnotes 1 As of 31 December 2019, Renault owned 43.4% of Nissan’s total share capital. 2 As of 31 December 2019, Renault owned 99.43% of Dacia’s total share capital. 3 As of 31 December 2019, Renault owned 80.04% of RSM’s total share capital. 4 Throughout this segment, such percentages have been calculated excluding intersegment transactions
12 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
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REPORT NUMBER 1229849
13 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019 MOODY'S INVESTORS SERVICE CORPORATES
CLIENT SERVICES
Americas 1-212-553-1653 Asia Pacific 852-3551-3077 Japan 81-3-5408-4100 EMEA 44-20-7772-5454
14 22 July 2020 Renault S.A.: Key Facts and Statistics - FYE December 2019