Groupe Renault - 2019 Universal Registration Document

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RISK FACTORS GROUPE RENAULT

RISK FACTORS 1.6 The Group comprises three operating divisions: Groupe Renault Automotive excluding AVTOVAZ (hereafter known as “Automotive”), the AVTOVAZ group and Sales Financing (RCI Banque group). Each of them has its own risk management system, which is used to keep the risks related to its activities under control. For Automotive, the global risk management system is based on collaboration between the Risk Management department at head office, operational risk managers in operating entities, global functions and projects, and expert risk managers within certain business functions. This network of different levels strengthens the risk management system and provides it with the means to be proactive in controlling risks. The methodological corporate activities framework implemented is described in sections 1.5.1 and 1.5.2. For the AVTOVAZ group, the risk management system is unique, based on methodologies that are the subject of discussions with Groupe Renault with a view to gradual harmonization and increasing maturity. A summary of the main risk factors identified by the AVTOVAZ group is presented in section 1.6.2. Risk factors for Automotive 1.6.1 As indicated in 1.5.2, major risks are notably assessed through impact and probability of occurrence, the product of these two terms defining criticality. In this section, presented risk factors are those whose criticality is rated at high level on the Group’s risk scale, unless otherwise indicated. They are listed according to the three categories of the current analysis typology: Risks related to strategy and governance; P Risks related to operations; P Risks related to cross-group functions. P For each of these categories, the risk factor deemed preeminent is described, below, at the beginning of the relevant paragraph.

For the Sales Financing segment (RCI Banque group activities), the comprehensive risk management system is organized in accordance with banking regulations (see section 1.5.3). A detailed description of this system is available in the RCI Banque group’s annual report. In this document, the risk factors and management procedures and principles are briefly outlined. It should be noted that the Group’s major risk mapping is updated every year, in close collaboration with the preparatory work and implementation of the medium-term strategic plan, so that the plan integrates the appropriate action plans designed to respond to the operational or strategic risks identified. In this context, this chapter describes the main risk factors currently identified by the Group’s operating segments, as well as the key elements of the associated control systems. Although the risk factors described below are identified by the Group as significant factors that could, at the horizon of its medium-term strategic plan, have a negative impact on its image, its assets, the conduct of its activities and the achievement of its objectives, it cannot be ruled out that other risk factors currently considered insignificant or not identified could in the future adversely affect the Group.

Risks related to strategy and governance Risk of performance failure of the Alliance 1.6.1.1

The Group’s membership of the Renault-Nissan-Mitsubishi alliance brings an essential contribution to the success of the Group and its strategic plan. It is accompanied by governance and specific requirements for which changes and implementation difficulties could lead to disturbances that unfavorably impact the conduct of the Group’s strategy and its performance. In 2019, an Alliance Operating Board was put in place, aiming in particular to improve the effectiveness of the Alliance, guided by a deep common understanding of the future work of the Alliance. The members of this Board are in agreement on the programs aiming to significantly improve and accelerate the operating effectiveness of the Alliance in the interest of the three companies, in particular by action plans whose objective is to maximize the contribution of the Alliance in order to support the strategic plan and the operating results of each company. At the end of 2019, a General Secretary of the Alliance was appointed in order to coordinate and support several large projects within this framework.

98 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019

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