Groupe Renault - 2020 Universal Registration Document

368 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020 Find out more at group.renault.com 04 CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS In 2020, these costs include -€115 million for a work exemption plan in France which eligible employees could join between April 1, 2020 and January 1, 2021. On May 29, 2020 the Group announced a proposed plan to reduce fixed costs by more than €2 billion over three years, including a workforce reduction of 4,600 employees in France and 10,000 employees worldwide. The proposal was confirmed by the signature in France of an agreement with Renault’s social partners on November 20, 2020 to transform technical and service skills in preparation for future developments in the automotive world. This agreement lays down the conditions for a new outplacement policy, and includes a new voluntary work-exemption plan in 2021, which eligible personnel can join between February 1 and December 1, 2021, and a Collective Contractual Separation plan for a maximum 1,900 employee departures. Restructuring provisions were recorded at December 31, 2020 of -€70 million for the new voluntary work-exemption plan, and -€197 million for the Collective Contractual Separation plan. Restructuring costs and provisions for the rest of the world at December 31, 2020 include restructuring costs of -€218 million. The principal countries concerned are Argentina (restructuring costs of -€37 million), Spain (restructuring costs of -€26 million), Romania (restructuring costs of -€21 million), AVTOVAZ (restructuring costs of -€21 million), Morocco (restructuring costs of -€17 million), and Brazil (restructuring costs of -€15 million). A restructuring plan was announced in South Korea on January 20, 2021. This plan will be recognized in the 2021 financial statements, in accordance with the IAS 37 rules for restructuring provisions. In 2019, restructuring costs mainly included -€89 million of complementary expenses following revision of the assumptions to reflect the higher than anticipated numbers signing up to the French career-end work exemption plan set out in the initial agreement named “Renault France CAP 2020 – Contrat d’Activité pour une Performance durable ” (activity contract for sustainable performance), signed on January 13, 2017 and amended on April 16, 2018. Gains and losses on disposal of businesses 6 - B - or operating entities In 2020, costs associated with the sale of Renault’s share in the joint venture DRAC and the takeover of the after-sales activity were recognized in the total amount of -€172 million. Impairment of fixed assets and goodwill 6 - C - (excluding goodwill of associates and joint ventures) Impairment net of reversals amounts to -€762 million at December 31, 2020 (-€229 million in 2019). The new impairment was principally recorded as a result of impairment tests on petrol and diesel engine vehicles given the lower sales volumes in 2020, the downward revision of business prospects in view of the COVID-19 pandemic, and the assumptions used in the medium-term plan for the period 2021-2025 presented in January 2021. No reversal of impairment was recorded in 2020 (€10 million of reversals were recognized in 2019). In 2020, impairment concerns intangible assets (net increase of -€565 million, compared to -€201 million in 2019) and property, plant and equipment (net increase of -€197 million, compared to -€28 million in 2019 (notes 10 and 11)). Other unusual items 6 - D - Impairment tests on certain vehicles led to the recognition of unusual expenses corresponding to advance and future payments to partners and suppliers in connection with those vehicles, amounting to -€75 million in 2020 and -€78 million in 2019. Business activity in Algeria was halted in early 2020 following government decisions, notably concerning authorizations to import parts necessary for production, and it is not possible to determine when this activity might resume. Certain assets (receivables, inventories, etc .) associated with the business have consequently been fully written off for a total amount of €99 million in 2020. Moreover, production in Algeria is carried out by Renault Algérie Production, an entity accounted for by the equity method (see note 13-C). FINANCIAL INCOME (EXPENSES) NOTE 7 (€ million) 2020 2019 Cost of gross financial indebtedness (355) (386) Income on cash and financial assets 18 75 COST OF NET FINANCIAL INDEBTEDNESS (337) (311) Dividends received from companies that are neither controlled nor under significant influence 16 59 Foreign exchange gains and losses on financial operations 41 30 Gain/Loss on exposure to hyperinflation (40) (34) Net interest expenses on the defined-benefit liabilities and assets corresponding to pension and other long-term employee benefit obligations (16) (28) Other* (146) (158) OTHER FINANCIAL INCOME AND EXPENSES (145) (131) FINANCIAL INCOME (EXPENSE) (482) (442) Other items mainly comprise expenses on assignment of receivables, changes in fair value (the investments in FAA and Partech Growth), bank commissions, discounts and * late payment interest. At December 31, 2020, other items also include the effects of adjustment to amortized cost of the State-guaranteed credit facility (-€69 million) and redeemable shares (+€41 million) (note 23 C). The net cash position (or net financial indebtedness) of the Automotive segments is presented in the information by operating segment (see section 4.2.6.1 – A4).