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Mixed General
Meeting
Mixed General
Meeting
April 30, 2004
Louis SchweitzerChairman and Chief Executive Officer
Thierry MoulonguetExecutive Vice President – Chief Financial Officer
1
Success of new models
Confirmed increase in operating margin in second half
Sharp rise in net income
Continued reinforcement of financial structure
2003 highlights
In a In a sluggishsluggish environment environment
2
Sales Financing Division
Automobile Division
* On a consistent basis
34.334.334.3
1.91.91.9 2,02,02,0
EEEEEEEE billionbillion
36.236.2 37,537,5
+ 3.8% (o/w – 2.1% from exchange rate impact)
35.535.535.5
Rise in revenues in 2003
+ 5.1 %
+ 3.7 %
20032002*
3
EEEEEEEE millionmillion
As a % of revenuesAs a % of revenues
Recovery ofoperating marginin 2nd half of 2003
20032003
2nd half
912912
588588
4.8 %
3.2 %
1st half
571571
3.3 %
2nd half
814814
4.3 %
1,4831,483 1,4021,402
4.1% 3.7%
1st half
2002
Sales FinancingDivision
AutomobileDivision
4
2002 2003
EEEEEEEE millionmillion
1,3351,335
1,7051,705
Major contribution from ourstrategic shareholdings
7171
175175
Nissan AB Volvo
2002 200320022003
5
A record net income
E��E��E��E��E��E��E��E��millionmillion
1,9561,956
2,4802,480
534534
1,0801,080 1,0511,051
20032000 2001 20021999
EarningsEarnings per per
shareshare (€)(€) 2.232.23 4.504.50 4.384.38 7.537.53 9,329,32
+ 26.8 %
6
1999 2000 2001 2002 2003
A return on equity much higherthan projected
Net Net incomeincome / / ShareholdersShareholders’ ’ equity equity ((beforebefore appropriation of net appropriation of net incomeincome for for thethe yearyear))
19.819.8
11.711.712.612.6
22.322.3
As a %As a %
20032000 2001 20021999
11%7.07.0
7
A strong financial structure
On 31.12.02 On 31.12.03
11,82811,82813,59113,591
2,4952,495 1,7481,748
21.1% 12.9%
Indebtedness of the Automobile Division
Shareholders’ equityEEEEEEEE millionmillionAs a % of As a % of shareholdersshareholders’ ’ equityequity
8
Cash tender offer for all the outstanding shares at the priceof €450 per share (cum coupon) or:
+19.1% compared to the closing price on March 11, 2004
+29.5 % compared to the six-month average*
Cash Tender Offer for Redeemable Shares
60% of 60% of thethe 2 million 2 million sharesshares werewere tendered tendered
* Based on volume-weighted average up to March 10, 2004
9
Change Q1 2004/Q1 2003 (in %)Change Q1 2004/Q1 2003 (in %)
A rise of sales in Western Europe in 1st quarter 2004
Registrations in Registrations in unitsunits (Cars +(Cars + LCVsLCVs))1er quarter 2003
1er quarter 2004
Western FranceEurope
-- 1.6 %1.6 %
+ 3.3 %+ 3.3 %
+ 2.6 %+ 2.6 %
Renault
WesternEurope
Market
10
Mégane family -Best-seller in Europe
Market share as % (Cars)
55
44
33
2000 2001 2002 2003 3 months 2004
MEGANE Rival models
MEGANE4.7 %
11
A strong rise in sales outsideWestern Europe
In Q1 200In Q1 20044 Group worldwide sales: Group worldwide sales: + 6+ 6..88 %%
Total Groupoutside
Western Europe
Resteof the world
Turkey
+21.4 %+21.4 %
+19.6 %+19.6 %
+362 %+362 % +44.5 %+44.5 % --36.5 %36.5 %
1st quarter 2003
1st quarter 2004
Renault : + 40.6 % SamsungDacia
100100
7575
5050
2525
Thousands Thousands of unitsof units
125125
150150
12
Revenues in 1st quarter 2004reflecting the increase of volumes
EEEEEEEE billionbillion
Sales Financing Division
Automobile Division
* On a consistent basis
Q1 2003* Q1 2004
8.498.498.49
0.470.470.470.490.490.498.968.969.959.95
+ 11.1 %
9.469.469.46
+ 5.3 %
+ 11.4 %
Mixed General
Meeting
Mixed General
Meeting
April 30, 2004
Louis SchweitzerChairman and Chief Executive Officer
14
The markets in 2004
Very slight growth in markets in Western Europe, close to 1%
Growth outside Europe
15
Outlook for 2004
The Group has set itself the objective of achieving an operating margin of around 4.5% of revenues
And also expects a further increase in net income(excluding exceptional items)
16
Mégane II Family
Grand Scénic
17
Expansion of the range -Modus .
18
Principles of the Alliance:vision - destination
Trust and mutual respect
A transparent organization with clear decision-making processes
DevelopDevelop synergiessynergiesExchange best practicesExchange best practices
A unique group, A unique group, unitedunited for performance, for performance, basedbased on on thethe followingfollowing principlesprinciples: :
19
The pillars of the Alliance
Shareholders satisfied with attractive returns fromboth companies
Best working conditions for men and women to develop their skills
A shared ambition: sustainable development
20
The objectives of vision - destination
For the quality and value of its products and services, in each region and market segment,
In key technologies,
In terms of operating profit thanks to its strategy of profitable growth.
To To rankrank amongamong thethe top top threethreeautomotiveautomotive groups in groups in thethe world: world:
21
Build recognition for our brand identity
Be the most competitive manufacturer on our markets in terms of quality, costs and delivery times
Extend our international reach
Develop Renault’s core values
Translate success into financial performance
Renault’s profitable growth strategy
BasedBased on on fivefive goals:goals:
22
Solid fundamentals
! safety! efficient engines
A strong and innovative range
! Value-added innovations
! Daring design
Goal n°1 - Build recognition for our brand identity
1.9dCi 120 ch 300Nm BVM
23
Be the most competitive on our markets
Goal n°2 -Profitable growth strategy
Quality
Costs
Delivery times
24
EEEEEEEE 1.41.4
EEEEEEEE2.32.3
EEEEEEEE3.13.1
EEEEEEEE4.24.2
EEEEEEEE5.25.2
EEEEEEEE66
1998 1999 Cum.end 2000
2001 2002 Cum. end 2003
Cost-reduction plans -1998-2000 / 2001-2003
EEEEEEEE billion billion -- CumulatedCumulated
25
* Renault Nissan Purchasing Organization (RNPO)
Reduction in purchasing costs -Renault-Nissan Alliance
IIn 2004, RNPOn 2004, RNPO** handledhandled 70% 70% of Alliance of Alliance purchasespurchases
or EEEE21.5 billion
or EEEE33 billion
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Phase I
Phase II
Phase III
43 %
30 %
70 %
or €21,5 billion
or €33 billion
26
Application of best practices
Renault Valladolid Renault Valladolid plant (Spain) plant (Spain) --
Nissan Sunderland plant Nissan Sunderland plant ((UnitedUnited KingdomKingdom) )
27
Shorter development times
57 monthsSAFRANE
43 monthsVEL SATIS
53 monthsMEGANE I
28 monthsMEGANE II
55 monthsLAGUNA I
42 monthsLAGUNA II
Choice of design Start of production
28
Goal n°3 – Extend ourinternational reach
4 million 4 million vehiclesvehicles
20032003 Objective 2010Objective 2010
2.4 million2.4 millionvehiclesvehicles
Under Under thethe 3 Renault group brands:3 Renault group brands:
29
Internationalization -Renault brand
Mercosur
Turkey
Asia
Central and Eastern Europe
Mexico
30
1st wave of deployment1st wave of deployment
Other potential regionsOther potential regions2nd wave of deployment2nd wave of deployment
Internationalization –Dacia: L90 markets
31
Internationalization -Renault Samsung
Successful modelsDevelopment of new productsProduction of future Renault 4X4
SM3
SM5
120,000 120,000 300,000300,000vehiclesvehicles in 2003in 2003 vehiclesvehicles in 2010in 2010
32
Formula 1 – Promote recognitionof the Renault brand worldwide
Objective for 2004Objective for 2004: : rankrank amongamong thethe top top threethree constructorsconstructors
33
Goal n°4 –Develop Renault’s core values
95% of employees are proud tobelong to the Renault group
Provide training to employeesto maximize their skill levels
• Make ongoing contribution to sustainable development
Respect for people Respect for people andand thethe environmentenvironment
Kangoo : recycled and recyclable parts
34
Goal n°5 – Translate success intofinancial performance
Operating margin representing 4% of revenues on averageover a business cycle
Return on equity of no less than 11%
Zero indebtedness at the peak of the cycle
Key Key indicatorsindicators
35
Renault is building a lasting relationship with its shareholders
36
Ownership of Renault equity
On On DecemberDecember 31, 200331, 2003
Treasury stock 4,0%
Individual shareholders 6 %*French government 15.7%
Nissan 15.0%
Employees 4,1%
French institutional investors19%*
Foreign institutional investors 36%*
* Estimate
Public : 61,2 %
37
A lasting relationship with shareholdersbased on 3 principles
Strict application of the principles of corporate governance
An open policy of information and communication
An attractive dividend
38
Good corporate governance
Application of Application of thethe FinancialFinancial SecuritySecurity ActAct –– Art. 117Art. 117
The Chairman of the Board must draw up a report on:
• The conditions for preparing and organizing the Board’s work;
• Internal control procedures.
39
Board of Directors -other resolutions
Grant full and final release to Messrs. Bézard, Hanawa andMs Seyvet;
Change to articles of association with a view to increasing the number of directors appointed by the AGM*
from 13 to 14
Objective: Objective: GraduallyGradually increaseincrease thethe numbernumber ofofindependentindependent directorsdirectors
* Excluding employee representatives
40
SinceSince 1996, recommandations on1996, recommandations oncorporatecorporate governancegovernance have been have been takentaken intointo account account
((VienotVienot andand Bouton reports)Bouton reports)
Change to internal regulations, adoption of a director’scharter
Annual appraisal of the operation of the Board to identifyscope for improvement
Board of Directors -Operation
41
Specialized committees
The Accounts and Audit Committee: met 3 times in 2003 5 members, 3 of them independent; Chaired by Mr. Studer
The Appointments and Remuneration Committee: met 3 times in 2003; 3 members, 2 of them independent; Chaired by Mr. Riboud
The International Strategy Committee: met twice in 2003 6 members, 2 of them independent; Chaired by Mr. Martre
42
Transparent and open communications policy
Improvement in quality of information thanks to theShareholders’ Consultative Committee – Latest work:
• Preparation of AGM
• Upgrading of financial section of website www.renault.com
• Creation of a shareholder guide
Increased number of meetings with our shareholders:
• Approximately 10 shareholder meetings a year in Paris and other regions
• Shareholder club: 15 plant visits in 2004, discovery of automotive
industry, products…
43
An attractive dividend
Net dividend per share in €Net dividend per share in €
+20 %+20 %
0.920.92
1.151.15
20032001
1.401.40
2002
+52 %+52 %
44
Movements in Renault share priceand CAC 40 and DJ Euro Stoxx Auto indices
Movements in Renault share priceand CAC 40 and DJ Euro Stoxx Auto indices
((indexedindexed on Renault on Renault shareshare priceprice on 31/12/96, on 31/12/96, €€17)17) Share price on 29/04/04: €63.05
10101997 1998 1999 2001 4/20042000 2002 2003
2020
3030
4040
5050
6060
7070+51.8% +48.3% +25.1% +16.0% -28.6% +13.1% +22.2%
RenaultRenault
CAC 40CAC 40
DJ Euro Stoxx AutoDJ Euro Stoxx Auto
+16.1%
+22.9%
+15.3%+15.3%
+3.7%+3.7%
+4.4%+4.4%
Mixed General
Meeting
Mixed General
Meeting
April 30, 2004
Louis SchweitzerChairman and Chief Executive Officer