Groupe Renault - 2019 Universal Registration Document

01

RISK FACTORS GROUPE RENAULT

The table below presents the breakdown by maturity (less than and more than one year) and type of rate (fixed, floating) of the financial assets and liabilities of the Automotive division excluding AVTOVAZ.

FINANCIAL ASSETS AND LIABILITIES OF THE AUTOMOTIVE DIVISION (EXCLUDING AVTOVAZ) BY MATURITY AND TYPE OF RATE AS OF DECEMBER 31, 2019 (EXCLUDING RENAULT REDEEMABLE SHARES AND DERIVATIVES)

Less than 1 year More than 1 year

Total

(€ million)

Fixed rate

183

15

198

Floating rate

13,012 13,195

13,012 13,210

FINANCIAL ASSETS BEFORE HEDGING

-

15

Fixed/floating rate Floating/fixed rate

0 0 0

HEDGING OF FINANCIAL ASSETS

0

0

Fixed rate

183

15

198

Floating rate

13,012 13,195

13,012 13,210

FINANCIAL ASSETS AFTER HEDGING

15

Fixed rate

1,022 2,476 3,498

6,733

7,755 2,586

Floating rate

110

FINANCIAL LIABILITIES BEFORE HEDGING

6,843

10,341

Fixed/floating rate Floating/fixed rate

308

118

426

95

0

95

HEDGING OF FINANCIAL LIABILITIES

403 809

118

521

Fixed rate

6,615

7,424 2,917

Floating rate

2,689 3,498

228

FINANCIAL LIABILITIES AFTER HEDGING

6,843

10,341

The impact on net income and shareholders’ equity (before taxes) of a 100 base point rise in interest rates applied to financial instruments exposed to interest rate risks would be positive €102.1 million and €0.2 million at December 31, 2019. Renault Finance also trades for its own account in interest rate instruments within strictly defined risk limits. The resulting positions are monitored and marked to market in real time. This activity carries very little risk and has no material impact on the Group’s results. Counterparty risk Due to the internationalization of its business activities, including in emerging countries, the Group pays special attention to the choice of its counterparties in each banking system. Management of counterparty risk incurred by Group entities is fully coordinated and uses an internal rating system based mainly on counterparties’ long-term credit ratings and equity. This system is used by all Groupe Renault companies exposed to counterparty risk. Some Group companies have significant exposure to counterparty risk owing to the nature of their business. These companies are monitored daily to ensure that they comply with authorized limits by counterparties, in accordance with specific procedures. The Group produces a consolidated monthly report covering all its bank counterparties, organized by credit rating. This report provides a detailed analysis of compliance with limits in terms of amount, maturity and type, as well as a list of the main exposures.

In addition, most deposits are made with large network banks and generally have terms shorter than 90 days, as this allows a good spread of the risk and lowers the systemic risk. In 2019, the Group suffered no financial loss as a result of the failure of a banking counterparty. operational risks Within Groupe Renault, financial protection against operational risk has two facets: high-impact, low-probability risks are transferred to the insurance P and reinsurance markets; common risks that are statistically known and whose financial P impact can be predicted are provisioned by the Group, unless there is a legal requirement to insure them, via a policy of retention on the part of its subsidiary Motor Reinsurance Company (MRC) and deductibles. The Insurance department conducts negotiations and directly entrusts financially solvent insurers with worldwide programs, in cooperation with its Alliance partners for certain risks. The nature and scope of cover is determined via a preliminary risk analysis of operating entities. This approach is used for the following types of risk: “transportation and storage of vehicles in depots”: the Alliance P (Renault and Nissan) buys a capacity of €295 million per claim with a deductible of €100,000 per claim for damage caused to vehicles in depots and €45,000 per claim for land transportation; Insurance programs covering 1.6.1.4

108 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019

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