Groupe Renault - 2020 Universal Registration Document
GROUPE RENAULT: A COMPANY THAT ACTS RESPONSIBLY
ANNUAL GENERAL MEETING OF RENAULT ON APRIL 23, 2021
GROUPE RENAULT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
RENAULT AND ITS SHAREHOLDERS
ADDITIONAL INFORMATION
INTERNAL CONTROL AND RISK MANAGEMENT
For the Sales Financing segment, liquidity risk management is based on several indicators or analyses, updated monthly on the basis of the latest estimates of outstanding loans and actual refinancing transactions. Laws relating to the outflow of deposits are subject to conservative assumptions. The Group has limits governing its liquidity risk. RCI Banque must always have sufficient financial resources to ensure the long-term future of its business and development. As of December 31, 2020, RCI Banque’s liquidity reserve (European scope) stood at €16.6 billion, enabling it to ensure the continuity of its commercial activity for more than 12 months without access to external liquidity (centralized refinancing scope). It comprises €4.5 billion in undrawn confirmed bank lines, €4.5 billion in collateral eligible for the ECB’s monetary policy operations, €7.4 billion in high-quality liquid assets (HQLAs), and €0.3 billion in short-term financial assets. As of December 31, 2020, RCI Banque’s liquidity reserve (European scope) stood at €16.6 billion, an increase of €7.1 billion compared to end 2019. For more details on the liquidity risk management system, see note 25-B1 to the consolidated financial statements. Foreign exchange risk - medium risk The international expansion of its activities leaves the Group exposed to foreign exchange risk. This risk is related to the fluctuation of the various currencies against the euro, and mainly impacts the Group’s Automotive activity. The operating margin and working capital requirement constitute the Automotive segment’s main exposure to foreign exchange risk, with the policy being not to hedge future operating cash flows in foreign currencies. Based on the structure of its results and operating cash flows for 2020, an increase of 1% in the euro against all currencies would have a negative impact of €24 million on the Automotive division’s annual operating margin after hedging (detailed impact by currency in note 25-B2 of the notes to the consolidated financial statements). Net financial income, the share in the result of associated companies, shareholders’ equity and the net cash position may also be impacted by exchange rate fluctuations against the euro. In particular, the Group has a stake of 43.7% in Nissan, and therefore holds a net asset in yen whose fluctuations impact the value of the securities in assets and the Group’s translation reserves in liabilities. For the 2020 financial year, the impact of a 1% increase in the euro against the yen would represent a €137.5 million reduction in Nissan’s contribution to shareholders’ equity and a €49 million reduction in the Group’s income from associated companies (see notes 12-C ad 12-D to the consolidated financial statements). The Group partially hedges the foreign exchange risk related to its investment in Nissan by issuing loans in Japanese yen, which impacts its net cash position. Thus, a 1% rise in the euro against the yen would increase the net cash position by €1.4 million. The Sales Financing segment is exposed to a more limited extent to the risk of exchange rate fluctuations, which may nevertheless have a negative impact on its financial position.
RENAULT SA – REDEMPTION SCHEDULE OF BONDS, BANK AND EQUIVALENT DEBT (INCLUDING DRAWDOWNS OF FRENCH STATE- GUARANTEED LOAN, EXCLUDING REDEEMABLE SHARES & NEU CP) AS OF DECEMBER 31, 2020 (1)
01
2,315 2,307
1,750 1,750
1,563
1600
1200
884
800
500
400
0
2021 2022 2023 2024 2025
2027
2026
Nominal amounts excluding interest and IFRS impacts (in € millions, (1) exchange rates at December 31, 2020).
A detailed redemption schedule of the financial liabilities related to the Automotive and sales financing segments is presented in note 23-D to the consolidated financial statements. For more details on liquidity risk, see Note 25-B1 to the consolidated financial statements. Risk management Liquidity risk management in the Automotive sector is conducted by the Financing and Treasury department. This management is based on an internal model that defines the level of the liquidity reserve that the Automotive segment must maintain to finance its activity and its growth. The liquidity reserve level of the Automotive division is subject to close monthly monitoring, through a periodic review and reporting validated internally by the Chief Financial Officer. Oversight and management of the liquidity reserve level were strengthened in the context of the COVID-19 pandemic. To finance the liquidity requirements stemming from the COVID-19 pandemic, Renault SA entered into a €5 billion bank credit agreement in June 2020, backed by a French State guarantee. This credit facility, which may be used in whole or in part and in one or more installments only until December 31, 2020, was drawn three times in a total amount of €4 billion (see note 23-C to the consolidated financial statements). In 2020, Renault SA also maintained its access to the capital markets by issuing a new Eurobond under its EMTN program (€1 billion, maturity five and a half years) on November 25 and its access to short-term financing thanks to its NEU CP program. The contractual documentation for this funding, including bank loans and credit lines, does not contain any clause that might adversely affect credit availability or continuation as a result of a change in Renault’s credit rating or its compliance with financial ratios. As of December 31, 2020, the Automotive segment’s liquidity reserve (including AVTOVAZ) stood at €16.4 billion, enabling it to meet its commitments in the coming 12 months. It breaks down as €12.95 billion in cash and cash equivalents and €3.43 billion in committed bank credit lines, which remained unused at December 31, 2020.
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GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020
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