EARNINGS REPORT 2020 EARNINGS REPORT 2020 IN BRIEF 1 1. SALES PERFORMANCE 3 OVERVIEW 3 1.1 AUTOMOTIVE 4 1.1.1 Group sales worldwide by Region, by brand & by type 4 1.1.2 Sales and production statistics 6 1.2 SALES FINANCING 8 1.2.1 New financing and services 8 1.2.2 International development and new activities 9 2. FINANCIAL RESULTS 10 SUMMARY 10 2.1 COMMENTS ON THE FINANCIAL RESULTS 10 2.1.1 Consolidated income statement 10 2.1.2 Automotive operational free cash flow 11 2.1.3 CAPEX and Research & Development 12 2.1.4 Automotive net financial position at December 31, 2020 13 2.2 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 15 2.2.1 Consolidated income statement 15 2.2.2 Consolidated comprehensive income 16 2.2.3 Consolidated financial position 17 2.2.4 Changes in consolidated shareholders’ equity 18 2.2.5 Consolidated cash flows 19 2.2.6 Notes to the consolidated financial statements 20 2.2.6.1 Information on operating segments and Regions 20 A. Information by operating segment 21 B. Information par Region 27 b Earnings Report 2020 IN BRIEF IN BRIEF KEY FIGURES 2020 2019 Change Worldwide Group registrations (1) Million vehicles 2.95 3.75 - 21.3% Group revenues € million 43,474 55,537 - 12,063 Group operating profit € million - 337 2,662 - 2,999 % revenues - 0.8% 4.8% - 5.6 pts Group operating income € million - 1,999 2,105 - 4,104 Contribution from associated companies € million -5,145 - 190 - 4,955 Of which Nissan € million -4,970 242 - 5,212 Net income € million -8,046 19 - 8,065 Net income, Group share € million -8,008 - 141 - 7,867 Earnings per share € -29.51 - 0.52 - 28,99 Automotive operational free cash flow (2) € million - 4,551 153 - 4,704 Automotive net financial position € million - 3,579 + 1,734 - 5,313 at Dec. 31, 2020 at Dec. 31, 2019 Sales Financing, average performing assets € billion 46.9 47.4 -1.1 % (1) Group registrations include Jinbei, Huasong & Shineray registrations. (2) Automotive operational free cash flow: cash flows after interest and tax (excluding dividends received from publicly listed companies) minus tangible and intangible investments net of disposals + /- change in the working capital requirement. OVERVIEW The Group’s operating margin amounted to - €337 million and represented - 0.8% of revenues (4.8% in 2019) thanks to a marked In a context of the Covid-19 pandemic, the 2020 Groupe Renault improvement in H2 (3.5% of revenues). worldwide sales totaled 2,951,971 vehicles, down 21.3%. After a first half of 2020 in which the Group’s main markets were severely Automotive excluding AVTOVAZ operating margin was down impacted by the pandemic and the associated containment - €2,734 million to - €1,450 million, which represented - 3.8% of measures, the second half of the year shows greater resilience: revenues compared to + 2.6% in 2019. In the second half, it was Group sales in Europe remained in line with the markets. positive at €198 million (0.9% of revenues). On the European electric market, the Renault brand doubled its The change can be explained by the following: sales and confirmed its leadership with 116,196 electric vehicles sold. ZOE is the best-selling electric car with 114% growth at • Volume effect had a negative impact of - €2,556 million, 100,815 units. including sales to partners. Groupe Renault achieved its CAFE targets1 (passenger cars and • Mix/price/enrichment effect was positive + €172 million despite light commercial vehicles) in Europe. the enrichment of new products and the regulatory content. Group revenues reached €43,474 million (-21.7%). At constant • The Monozukuri effect was positive by + €36 million after exchange rates, the decrease would have been -18.2%. taking into account a negative impact of - €479 million due to the increase in depreciation and amortization and a lower R&D Automotive excluding AVTOVAZ revenues stood at capitalization rate. €37,736 million, down - 23.0%. • Raw materials weighed for - €131 million largely on higher The volume effect was - 19.2 points. It stemmed primarily from prices for precious metals. the health crisis and, to a lesser extent, from our commercial • The improvement of + €172 million of G&A spending stemmed policy favoring profit over volume. from the impact of lower activity in H1 but also from the Sales to partners declined by - 5.1 points, also impacted by the company’s effort to limit its costs under the “2o22“ plan. health crisis and the Nissan Rogue production discontinuation. Forex impact was negative - 2.8 points, and related to the • Currencies impacted by - €428 million reflecting the devaluation devaluation of the Argentinean peso, Brazilian real and Turkish of our main currencies despite the positive impact of the lira and to a lesser extent to the Russian rubble. Turkish lira on production costs. Price effect, up 3.9 points, came from a more ambitious price The AVTOVAZ operating margin contribution amounted to policy and measures to mitigate devaluations. €141 million, compared to €155 million in 2019 highlighting the Product mix impacted for 1.1 points thanks to ZOE sales increase. resilience of AVTOVAZ in the Covid-19 context. Effect “others“ weighed for -1 point notably because of lower Sales Financing contributed €1,007 million to the Group’s contribution from spare parts activity, largely impacted by the operating margin, compared to €1,223 million in 2019. This confinement measures in H1. decrease was due to a lower activity, with new financings down 1 CAFE: Corporate Average Fuel Economy. These results should be consolidated and formalized by the European Commission in the coming months. Earnings Report 2020 1 IN BRIEF - 17% and a cost of risk representing 0.75% of average performing Automotive operational free cash flow, including AVTOVAZ, assets compared to 0.42% last year. was negative at - €4,551 million. It takes into account the fall in operating margin, the change in working capital requirements The contribution of Mobility Services to the Group’s operating and the absence of dividend received from RCI following margin amounted to - €35 million in 2020. European Central Bank’s decisions. On the sole second half, the Other operating income and expenses amounted to free cash flow was positive at + €1,824 million due to investment - €1,662 million (compared to - €557 million in 2019) coming from management and a reverse of the change in working capital significantly higher restructuring charges and impairments. requirement, without, however, offsetting the change in the first half of the year. Group operating income came to - €1,999 million compared with €2,105 million in 2019 after taking into account a strong increase The Automotive net cash position was negative at - €3,579 million of charges related to competitiveness improvement. at December 31, 2020 compared with a positive position of €1,734 million at December 31, 2019. Net financial income and expenses amounted to - €482 million, compared with - €442 million in 2019, due to higher average The Automotive activity at December 31, 2020 held + €16.4 billion indebtedness. of liquidity reserves. The contribution of associated companies came to At December 31, 2020, total inventories (including independent - €5,145 million, compared with - €190 million in 2019. Nissan’s dealers) represented 486,000 vehicles, down more than contribution was negative at - €4,970 million and the one of other 100,000 units (- 19%). It represented 61 days of sales, compared companies amounted to - €175 million. to 68 days at end December 2019. Current and deferred taxes represented a charge of - €420 million The Board of directors will propose at the Shareholders’ Annual compared to a charge of - €1,454 million in 2019. General Meeting, scheduled for April 23, 2021, not to pay a dividend in respect of 2020. Net income stood at - €8,046 million and net income, Group share totaled - €8,008 million (- €29.51 per share compared with €0.52 per share in 2019). OUTLOOK The electronic chips shortage impacting the whole auto industry In accordance with the “Renaulution” plan, the Group will does not spare the Group. It is entirely dedicated to limit as continue the implementation of the actions aiming at its recovery much as possible the impact on production. The peak of the and confirms the 2023 objectives communicated during the plan shortage should be reached in Q2. The most recent estimate, presentation: assuming a production catch-up in H2, gives a net risk of about • Group operating margin above 3% by 2023, 100,000 vehicles for the year 2021. • Cumulative automotive operational free cash flow 2 (2021-23) about €3bn, • Investments (R&D and capex) at about 8% of revenues by 2023. 2 Automotive operational free cash flow: cash flows after interest and tax (excluding dividends received from publicly listed companies) minus tangible and intangible investments net of disposals +/- change in the working capital requirement 2 Earnings Report 2020 1. SALES PERFORMANCE 1. xxx SALES PERFORMANCE OVERVIEW 1 OVERVIEW • In a context of the Covid-19 pandemic, the 2020 Groupe Renault • The order portfolio in Europe at the end of December 2020 was up by worldwide sales totaled 2,951,971 vehicles, down 21.3% in a global 14% compared to 2019, due partly to the attractiveness of the new automobile market that declined by 14.4% 3. E-TECH hybrid and plug-in hybrid offerings, while inventories were • Groupe Renault confirms that it has achieved its CAFE 4 (passenger down by around 20% from 2019. cars and light commercial vehicles) targets by the end of 2020 5. • In 2020, the Groupe Renault is making progress in the most profitable • After a first half of 2020 in which the Group’s main markets were sales channels, with the Renault brand increasing its share in the severely impacted by the pandemic and the associated containment retail market in Europe by almost one point.