Groupe Renault - 2019 Universal Registration Document

RENAULT: A RESPONSIBLE COMPANY

ANNUAL GENERAL MEETING OF RENAULT ON APRIL 24, 2020

GROUPE RENAULT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

RENAULT AND ITS SHAREHOLDERS

ADDITIONAL INFORMATION

RISK FACTORS

Legal risks Groupe Renault is exposed to four main types of legal risks, for which the evaluation and potential impacts are set out below: Disputes, governmental or legal proceedings, arbitration Renault is involved in various governmental, legal and arbitration proceedings as part of its activities in France and internationally. To the best of Renault’s knowledge, over the last 12 months there has been no dispute or governmental or legal proceeding other than those described below or arbitration process underway or likely to occur and that could have a significant impact on its financial position, activities or results. Each event was reviewed regularly in particular during approval of the financial statements. After seeking the opinion of the appropriate advisers, the Group sets aside any provisions deemed necessary to cover the estimated risks (see note 20 A “Provisions” to the consolidated financial statements). It should be noted, however, that, concurrently with the works of the independent technical commission (“Royal” commission in 2016), the Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF) conducted investigations concerning the automotive industry. These investigations concerned the practices relating to the Nitrogen Oxide emissions (NO x ) of a dozen car manufacturers selling diesel vehicles in France, including Renault. The DGCCRF decided to communicate its conclusions relating to Renault on this matter to the public prosecutor who, on January 12, 2017, opened judicial investigations against Renault on the grounds of “deceit in respect of the material qualities and on the checks carried out, these facts having led to the products being harmful to human and animal health”. Renault contests the existence of any infringement and intends to prove its compliance with French and European regulations in the legal investigation. Moreover, Renault, which at this stage is not a party to the proceeding, is therefore not in a position to assess the possible impact of this ongoing proceeding on the Group. Intellectual property Renault uses various patents, trademarks, designs and models. Each year, Renault files several hundred patents, trademarks, designs and models (see section 1.4), some of which are the subject of fee-paying licenses granted to third parties. The Group may also be confronted with patents held by third parties, which could bring about a risk in the use of technical solutions developed, a risk in part mitigated by paying licenses negotiated with these third parties. Risks may also exist with respect to third parties holding trademarks or models similar to those filed by Renault. Groupe Renault’s performance depends in particular on the robustness of the legal framework protecting its patents and other intellectual property rights. For example, Renault cannot guarantee that its intellectual property rights will not be misused or contested by third parties. Such infringements or challenges, as well as attacks counterfeiting patents, trademarks, drawings or models by third parties could have an adverse impact on the business activity, earnings, and image of the Group.

Identified risks arising from non-compliance with contractual commitments Identified risks arising from non-compliance with contractual commitments are, where applicable, described in the section on disputes, governmental or legal proceedings and arbitration. Renault is not aware of any other identified risks arising from non-compliance with contractual commitments that could have a significant impact on its financial position or profitability; Legal and regulatory changes The risk of non-compliance with laws and regulations is described in 1.6.1.1. Finally, the control of legal risks is also based on an internal control system organized around three guiding principles: management of the Group’s legal function, which is organized P around a central function and employees in the Group’s main countries. These employees report on a hierarchical and/or functional basis; employees of the legal function are proactive in anticipating legal P risks upstream and adapting the corresponding procedures (advisory consultations, information from the central legal function, etc.); regulatory monitoring by Groupe Renault in collaboration with the P different countries concerned. Financial risks The Group is exposed to four main types of financial risks, for which evaluation, potential impacts and principles of control are specified below: The Group’s Automotive operating segment needs sufficient P financial resources to finance its day-to-day business and the investments necessary for growth. For this, Automotive borrows regularly from banks and on capital markets to refinance its gross debt and ensure its liquidity. This creates a liquidity risk if markets are frozen during a long period or credit is hard to access; It is also exposed to foreign exchange risk with respect to its P manufacturing and commercial activities, with potential adverse impacts on the following financial aggregates: operating margin, working capital requirement, financial income, share in the net income of associated companies, shareholder’s equity and net cash position; Debt, financial investments and their repayment conditions result P in interest rate risk affecting the Group’s financial position; Lastly, the Group enters into transactions on the financial and P banking markets for the placement of its surplus cash and the management of currency risk, interest rate risk and payment flows, which may give rise to counterparty risk.

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GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019