Renault sells shares in Russian subsidiary and AvtoVAZ-May 16, 2022 08:36

(AOF)-The Renault Group’s board of directors has signed an agreement to sell 100% of the Renault Groupe’s shares in Renault Russia to Moscow and 67.69% of Aftwaz’s shares to NAMI (Central Research and Development Institute). Approved by agreement. (For cars and engines). Completion of these transactions is not subject to any conditions and all necessary permits have been obtained. The agreement provides options for the Renault Group to repurchase AvtoVAZ shares and can be exercised at specific times over the next six years.

“Today we have made difficult but necessary decisions. We make responsible choices for our 45,000 employees in Russia and maintain the group’s performance and ability to return home in the future. We are confident in our ability to further accelerate the transformation of the Renault Group and exceed our medium-term goals, “said Lucademeo, CEO of the Renault Group.

As announced on March 23, non-cash adjustment costs corresponding to the value of the Group’s consolidated intangible assets, property, plant and equipment and goodwill in Russia should be recorded in the first half of 2022 results.

As of December 31, 2021, this value reached € 2.195 billion. Russia’s activities will be deconsolidated in the Groupe Renault Group’s semi-annual financial statements as of June 30, 2022 and will be treated as a discontinued operation in accordance with IFRS 5.

The Renault Group has confirmed the financial outlook announced on March 23, 2022.

Prior to the medium-term revitalization target, the Renault Group will release the latest financial outlook and strategy information on Capital Markets Day, Fall 2022, positioning it as a competitive, technological and sustainable benchmark.

AOF-Details

Key Point

Established in 1898, the world’s fourth-largest automobile manufacturer with five brands-Renault, Dacia, Lada, Alpine and Mobilize.

-Position of global industry. With more than 50% of sales outside Europe, it has a strong position in nine countries: France, Russia, Italy, Turkey, Spain, Belgium-Luxemburg, Romania, Morocco and Poland.

-Sales generated by automobiles were 93%. This includes 6% of Russian manufacturer Avtovaz and 1% of sales capital.

-A new economic model that relocates the group to the quality offered by medium and electric or hybrid vehicles.

-Capital is 15% in France, 15% in Nissan subsidiary, 3.1% in Dimler, 3.48% in employees, and the 16-member board of directors is chaired by Jean-Dominique Senard and Luca de Meo. I am the Managing Director.

The 2021 debt rating downgrade has a post-credit car liquidity reserve of 173, guaranteed by France, despite a € 1.3 billion free operating cash flow contributing to a € 2 billion debt reduction. Reached 100 million euros (completely repaid in 2023 at the latest).

Task

-Three-step “regeneration” strategy. Its purpose needs to be revised upwards in the fall. Revival by 2023: Brand Autonomy, Platform 6 to 3 Rationalization, “Midrange” Offers 15%, Operating Margin Over 3%, Free Self-Funding of € 3 Billion, Revenue 8 ~ 9% investment and research / refurbishment from 2023 to 2025 with renewal of scope / increase in hydrogen used in professional vehicles with market share targets 30% in 2030 Revolution from 2025;

-Innovation strategy focusing on connectivity and electric vehicles based on 5.5% research and development and a portfolio of about 80 projects: E-TECH hybrid technology / lab innovation network deployment and electrification in California, France and Israel Specializing in ReKnow University Launch Data Cyber ​​Security etc / R & D, as well as Renault Venture Kapital Investment Fund, and Alliance Ventures for Venture Capital and Start-up Support. Partnerships / partnerships with CEA and Moveo, Sysematic, and ID4Car competitive clusters.

-Environmental strategy to be carbon-neutral in 2040 in Europe and 2050 in the world: Electric vehicle supply, batteries, materials and material use, second life, recycling, circular economy classification: € 23 billion investment over the next 5 years, Recycling, innovation and research structure of the target parts and equipment of a series of fully electrified private cars in Europe by 2030.

-Rapid progress in 2021: + 2 billion euro reduction in fixed costs, 40% break-even point reduction, ability to raise selling prices (+ 5.7%).

-The dynamism of E-TECH vehicles in Europe and the launch of seven vehicles in 2022.

-Electric vehicle profitability growth is expected to be comparable to traditional vehicles by 2025.

Task

Another strong impact at -1

er

Semester of semiconductor shortage (total loss of 300,000 vehicles in 2022) and raw material inflation.

-Continue to significantly reduce new car inventories.

-Exposure to Russia through AvtoVAZ;

-Expected decisions regarding the relocation of electrical activity and technology, engine and transmission technology in France.

-Target for 2022: Investment self-financing of at least € 1 billion, and operating profit of at least 4%.

-No dividends for 2021.

New giant of used car

The € 400 billion market in Europe is under concentration. UK group Constellation has taken over the retail platform CarNext. The aim is to form a European leader in this sector and compete with other leaders such as Germany’s AutoHero, England’s Kazoo and France’s AramisAuto. Financing is accelerating. Kazu of the United Kingdom has announced that it will be listed on the New York Stock Exchange through Spac (special purpose acquisition company) and will raise $ 1.6 billion. Germany’s Out Eins Group has raised € 1.8 billion on the Frankfurt Stock Exchange, and Stellantis’ subsidiary France’s Aramis Group has entered the Paris Stock Exchange.

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