Renault SA Annual Shareholders Meeting

RNO.PA - Renault SA
Renault SA Annual Shareholders Meeting
Jun 15, 2017 / 01:15PM GMT 

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Corporate Participants
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   *  Anne-Sophie Le Lay
   *  Carlos Ghosn
      Renault SA - Chairman, CEO & President
   *  Clotilde Delbos
      Renault SA - CFO and EVP
   *  Mouna Sepehri
      Renault SA - Executive Vice-Président of Office of the CEO - Renault Group

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Conference Call Participants
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   *  Aymeric de La Morandière

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Presentation
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 Carlos Ghosn,  Renault SA - Chairman, CEO & President   [1]
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 Ladies and gentlemen and shareholders, welcome to the AGM of the Renault Group. This is a very important moment in the life of the company, and this is an event that is extremely important to all of us. It's an opportunity for us to meet and to share our -- and share with you our strategy and our vision and to dialogue -- hold the dialogue with you.

 All the leaders and -- of the company are here with us today. We have Mouna Sepehri, who is in charge of the -- of governance; Mrs. Marie-Françoise Damesin; and Thierry Bolloré, who is Competitive -- Chief Competitiveness Officer; and Clotilde Delbos, who is our CFO.

 And the first -- front row, we have Thierry Koskas; Bruno Ancelin, who is in charge of product and programs; Jean-Christophe Kugler, who is Director of Operations in the Europe region; Jose-Vicente De Los Mozos, who is Director of Manufacturing and Logistics; Christian Vandenhende, who is Director of Quality and Customer Satisfaction; Gaspar Gascon, who is Director of Engineering.

 As well as members of the Management Committee: Mr. Patrick Thomas, who is independent director of Renault and Chairman of the Compensation Committee, is present on the stage. And to his -- we have Anne-Sophie Le Lay, the Legal Director of the group, whom I suggest that we should use as the Secretary of the AGM. We also have Mr. [Jacques Azoulai], who is the Director of the Industry Participation of the agency for safe participation; and Mr. Cedric Laverie, who is the representative of the -- Amundi, the company who -- that is in charge of [group shares].

 So I suggest now that we should tackle our program. Mrs. Delbos will talk to you about the sales and financial results of the group and the -- for 2016 as well as the turnover for the first quarter of 2017. And Aymeric de La Morandière, who is one of our auditors, will represent -- will present the accounts -- accountants -- the accounts of the company. And I will come back to you and talk to you about what we did in 2016 and our priorities for 2017. Then Mrs. Sepehri will look at the activity of the board and will give us a status report on our actions on -- for CSR. Mr. Thomas, who is the Chairman of the Committee of Nominations, will end this. And then we will vote on the resolutions. After the vote, at about 6:00 p.m., we will have the greatest pleasure in inviting you to a cocktail.

 I give the floor now to Mrs. Le Lay so that we can have the provisional quorum.

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 Anne-Sophie Le Lay,    [2]
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 Thank you, Mr. Chairman. Good afternoon, ladies and gentlemen.

 In order to be able to have a valid decision for this assembly, which has been -- has met after the first invitation, needs to have for its ordinary part and equal -- a quorum that is equal to the 1/5 of the shares that have voting rights, that is 59,144,457 shares. And for its extraordinary part, we need 1/4 of the shares that have voting rights, 73,930,551 shares. Let me remind you that all of the shares making up the capital of the company and that have voting rights stand at 295,722,224 shares.

 The attendance sheet gives us a provisional situation in accordance with which the present or represented shareholders as well as the shareholders who have voted by correspondence represent 152,973,293 shares. That is more than 1/2 the shares that have voting rights. I can therefore declare that we have achieved quorum, and the Annual General Meeting can therefore hold discussions both in -- for ordinary and extraordinary affairs.

 All of these documents are deposited on this office, and the attendance sheet in its final version is being checked right now and will be handed to me before the votes.

 In keeping with the legal and regulatory provisions, the documents that concern the points that have been put at -- on the program of this AGM have been placed at your disposal in your invitation letter as well as in the headquarters of the company and on the group.renault.com website. It is about -- it's actually the explanation and the text of the resolutions, the informations concerning the directors whose appointment or renewal is proposed. It is also -- there's also the report of the board to the general assembly, to the AGM, the report of the CEO and internal control, the -- all of the reports of the accountants and also -- the auditors, sorry, and the details of the program for the buyback of shares and that -- and the spreadsheet that represents -- that gives you all the results of the company over the last 5 years.

 And this assembly is going to deliberate on 19 ordinary resolutions and 2 extraordinary ones.

 Let's start with the ordinary ones: resolutions #1 and #2 concern the approval of the annual accounts and consolidated accounts for 2016; #3 is the allocation of the results of the financial year 2016, fixing of the dividend and the date of its payment; resolution #4, approval of the report of our auditors on the regulated conventions that are covered by Article L. 225-38 and the following of our commercial law; then resolution #5, report of the auditors concerning the elements that serve to determine the compensation of redeemable shares; resolution #6, an opinion on the elements of the compensation due or attributed for 2016 to Mr. Carlos Ghosn, CEO; resolution #7, a vote on the compensation policy of the CEO for financial year 2017; resolution #8, the authorization given to the Board of Directors in order to operate on the shares of the company.

 Now let us take a look at 2 extraordinary resolutions: resolution #9, it is the authorization given to the board in order to reduce the capital of this -- of the company by the cancellation of treasury shares; resolution #10, modification of Article #11 of the statutes of the company in order to mention the provisions of the order of 20th August 2014, relative of -- to governance and operations of the capital of companies that have public participation.

 The resolutions that are going to follow now actually are covered by the mandate of the ordinary AGM: resolution #11, the ratification of the cooptation of Mr. Yamauchi as the board of direct -- as a Director of the Board appointed on the proposal of Nissan; resolution #12, ratification of the renewal of the mandate of Mrs. Serizawa as Director appointed on the proposal of Nissan; resolution #13, the appointment of Mr. Faure as a board -- as a Director and appointed on the proposal of the Board -- of the state, sorry; resolution #14, appointment of a new director, Mrs. Bensalah Chaqroun; resolution #5 (sic) [#15], appointment of a new member of the Board of Directors also, Mrs. Darmaillac; resolution #16, the appointment of a new director to replace a director who has resigned, Mrs. Barba; resolution #17, renewal on the conditions of the mandate of Mr. Ostertag as a member of the Board of Directors representing employee shareholding or shareholding employees; resolution #18, the appointment under conditions of Mr. Thollot as a director representing shareholding employees; and resolution #19, the authority to accomplish formalities.

 These legal modalities have been laid out. We can now continue with the organization of this AGM. After the presentations, Mr. Carlos Ghosn and the members of the Executive Committee will answer any questions that you might have during the Q&A session.

 For the written questions that were asked before the assembly and posted on the -- on Renault's website, we have answered those questions in compliance with the law.

 Concerning voting operations, let me tell you that the vote boxes will no longer be handed out to shareholders after 4:00 p.m. I suggest that you should keep your electronic voting box close to you. And during the votes, we will have a video that will show you how to use the box. And of course, at the end of the session, please do not forget to give them back to us.

 I'd like to give the floor now back to Mr. Ghosn in order to continue the assembly -- the AGM.

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 Carlos Ghosn,  Renault SA - Chairman, CEO & President   [3]
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 Thank you. I'd like to give the floor now to Mrs. Delbos, who is going to present herself to the group.

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 Clotilde Delbos,  Renault SA - CFO and EVP   [4]
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 Good afternoon, ladies and gentlemen. It is, therefore, for me to introduce the sales and financial performance in 2016 and a few words about business in Q1 2017.

 So the performance in 2016, as our CEO will tell you in a minute, Renault was able to take advantage of The Drive the Change plan, whose objectives were met. Sales grew remarkably since we've past the EUR 50 billion mark that we had set. Current operating profit improved in 2016, above 5%. And operational -- operating free cash flow for the Automotive branch is above EUR 1 billion for the third year running. With its new launches, Renault continued its growth in a very, very volatile context, especially in emerging countries.

 Let's take a look at this in detail. What were the trends from the global automotive industries? Sales were up, by and large, 89 -- 91.3 million cars sold around the world, up 4.6% compared with last year, with the previous year. Growth was mostly driven in Europe and Asia Pacific, the other parts of the world being -- falling back somewhat. But Renault Group sold 3.183 million cars, up 13.3% compared to -- in 2015, up therefore 374,000 units for the fourth year running. Renault, Dacia and Renault Samsung Motors registrations are up, the Renault brand itself is up 14.2%, becoming #2 in Europe, with the best growth on private cars sales. Dacia, the success of the past 10 years, confirmed in 2016 with the new 6% growth, with as many as 584,000 new registrations, and thanks to a renewed lineup. Renault Samsung Motors renewed its growth with 31,000 additional registrations, now getting up 38.8%.

 On the regional basis. Sales in Europe were up 11.8% in a market that was up 7%, and that was thanks to the Renault brand and the renewal of the Mégane family and this continued success of Clio and Captur. You should also point out the electric cars, whose sales grew 11% compared to 2015. Renault is the leader on this market segment with a market share of 25%. Outside Europe, we have had growth around the world. Africa, Middle East is up 36.7 -- 36.4%, whereas the market is down 1.7%. This is because of record sales in India, especially with Kwid, but also our solid growth in Iran and our leadership position in North Africa. Eurasia was up 2.3%, and that market is down 6.3%. And this -- our success was thanks to Kaptur in Russia and a record performance in Turkey. As to the Americas, this is more circumscribed, only 0.1%, but that market is down 4.1%. We were able to take advantage of record market shares in Colombia and Brazil, and the successful launch of Duster OROCH, which is a segment leader not just in Argentina but also in Colombia. And the Asia Pacific enjoyed significant growth, 34.5%, thanks to Kadjar and Koleos launched in China but also QM6 and SM6 in Korea and China. Revenue were up 50%. Sales were up 50% in 2016. And in Korea, Renault Samsung Motors became #4, with a 6.2% market share.

 Let's take a closer look at our sales performance, how this reflects into our accounts, and let's take, therefore, a closer look at our financial performance. So here, you have the income statement on this page. You have 3 items to be pointed out: significant growth in revenues, significant improvement in current operating profit; and a significant also improvement of net profit.

 As we've pointed out, Renault in 2016's revenues stood at EUR 51.2 billion, including EUR 48.995 billion for the Automotive branch alone, up 13.7% over the year. As to RCI Banque, our sales bank, its revenue was 2 point -- and their banking income was EUR 2.248 billion, up 1.3% compared to 2015.

 Growth revenue -- revenue growth in 2016 was in line with, of course, growth in registrations but also a renewal of our product mix and new models being launched and ramped up. We also have additional sales to partners, thanks to the Nissan Rogue model, which is built in our Korean plant in Busan. Now there were positive effects there but negative FX due to ForEx, especially depreciation of the Argentinian peso and pound sterling.

 In 2016, the operating profit was up EUR 907 million to EUR 3.282 billion or 6.4% of revenue compared with 5.2% in 2015. Once again, we have overshot the 5% target with a new record. This performance is based on a sound improvement in Automotive COP, up 54%, but also RCI Banque's contribution to the tune of EUR 896 million. Our contribution to the performance of the related companies -- associated companies stood at EUR 1.683 billion in 2016, up EUR 267 million compared to last year. This is mostly due to Nissan's contributions, which brought in EUR 1.741 billion to our 2016 profits. AVTOVAZ's contribution was negative to the tune of EUR 89 million compared with the EUR 620 million loss in 2015.

 On others, you have, therefore, other expenses and income. Interest and taxes is negative EUR 1.377 billion. So this is a higher charge line because of higher taxes, because of the higher profit, but also some really deferred tax credits, or adjustments for -- to the point. So this good performance have brought about a net profit after tax 3 point -- EUR 5.3 billion, almost EUR 600 million more than last year, about 6.9% of revenue.

 Once again, Automotive free cash flow was positive at more than EUR 1 billion because, of course, of operating profits but also a stringent management of our working capital requirements, but also because we kept our capital expenditure under control, thanks to Alliance -- the Alliance with Nissan and other partners. And so our balance sheet is even stronger at end 2016, with a net cash position at EUR 2.720 billion, slightly higher than in 2015, even though we had to consolidate AVTOVAZ. If we were not to include AVTOVAZ's integration, the net cash position would have been -- would have stood at EUR 3.9 billion, up EUR 1.2 billion compared to the previous year. This is also due because we received cash as part of the Nissan share buyback program.

 As you can see on this chart, the sound and sustainable position of Renault is one we're able to increase the dividends in line with our dividends policy, what is being suggested to your vote today is a payout of EUR 3.15 per share for the year 2016. This is up EUR 0.75 per share, up 31% compared to 2015.

 Let's take a closer look at the performance for the first 3 months of 2017. We sold 874,000 cars all over -- for all Renault brands, that is the Groupe Renault brands, up 15.8% compared to the same period in 2016. Our market -- global market share is up 3.8 -- stands, rather, at 3.8%, up 0.4 percentage points compared to 2016. Sales outside Europe are up 8 points -- percentage points, which, of course, is to do partly with the consolidation of Lada but also the positive development of growth of cars sold by Renault in Russia, Iran and India. Our market share in Europe is up 0.2 percentage points at 10.1%. Renault, therefore, was able to carry the fruit of its new product line. Good performance with the new ZOE with -- which has a 400-kilometer range. And we are consolidating our leadership position for electric cars outside Europe.

 All regions are up in volumes and market shares. Renault has strengthened its position with its entire [range]: Kwid in India; QM6 and SM6 in Korea; Kaptur in Russia; Koleos in China; Mégane sedan in Turkey; and Duster OROCH in South America. This first quarter is highly dynamic from a sales point of view and has generated a revenue up 25.2% compared with the first quarter in 2016 at EUR 13.129 billion. On a like-for-like basis, the growth would be -- is 19.7%.

 Now let's take a look at the video of the Shareholders' Day on 30 May 20 -- at Technocentre, where our CEO were able to meet with our shareholders.

 (presentation)

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 Clotilde Delbos,  Renault SA - CFO and EVP   [5]
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 This gentleman is saying I'd like to meet other shareholders to learn more about the company, its strategy. Of course, I'm not just a shareholder but a customer.

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 Carlos Ghosn,  Renault SA - Chairman, CEO & President   [6]
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 Good afternoon, ladies and gentlemen. It's always a pleasure to welcome you, and I'd like to thank you for the trust that you have deposited in us by buying shares in our company.

 2016 was a beautiful year for Renault. We are therefore facing 2017 with a lot of confidence. We have 3 fantastic advantages: first of all, a range that's been renewed, that is strong, enriched; the second thing is more internationalization, and that is a promising; third advantage is the stronger competitiveness that we owe to a lot of financial discipline and a lot of synergies generated within the Alliance. In 6 years, the Renault Group has changed considerably. From a European carmaker, we have become a global carmaker.

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 Clotilde Delbos,  Renault SA - CFO and EVP   [7]
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 So everything that we were told today in terms of the company is performance and its success, I think the company has a great future. We have visibility for the performance of the car, which is very clear for -- of the company for the next 4 or 5 years, that's very clear. We are facing the changes in the company. We are working for the future vehicles, which will be connected, autonomous and electric.

 It's quite a special moment for somebody who loves Renault and who loves cars to be able to meet the CEO in a way -- in a framework that's actually different from the AGM. It's less formal.

 I was rather pleasantly surprised by the range of vehicles that was presented. We've seen cars that we are not used to seeing. I was interested in the electric vehicles. I'm very optimistic for Renault's future. Yes, I wouldn't be a shareholder if I wasn't -- if I didn't trust enough the company's future. I'm going to buy even more shares of Renault. I believe in their future.

 Thank you very much for your attention.

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 Carlos Ghosn,  Renault SA - Chairman, CEO & President   [8]
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 And now Mr. de La Morandière, the auditor, will give us his report.

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 Aymeric de La Morandière,    [9]
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 Thank you, sir. Good afternoon, ladies and gentlemen. On behalf of the auditors, we will now introduce our report. There are, in fact, 6 reports. They were made available to you, so rather than reading them out, I will just give you a general summary.

 Let's look at the corporate accounts. We have certified Renault SA's corporate accounts for the year 2016 without reservations, likewise, the consolidated accounts for the year 2016. To arrive at this conclusion, we took into account the specificities of the organization and its specific risks. We assessed the -- we -- rather we considered the assessment of the recoverable value of tangible assets, the amount of R&D that is been capitalized and deferred tax assets under French tax law. We considered the operations that led to the consolidation of AVTOVAZ with its overall integration for accounting purposes to the year ending 2016. Finally, we look at the equity method for Nissan and looked at all the elements that justified this method. And based on all our assessment, we arrived at that conclusion on the accounts.

 So additionally, we also published 3 reports. Number one, as provided by resolution #4, is on related party agreements. And so this report refers to conventions and agreements between your company and the corporate offices or companies with directors in common. There were no such conventions in 2016 that required the approval of the AGM. The existing conventions and agreements were described in the report whether they were continued or not. The second report, as covered by resolution #5, is on redeemable shares. After our assessment, we find no observation on the computation of the variable part of the interest and compensation of these shares, no incompatibility with the issuance contract and the elements of the consolidated accounts. And finally, we -- in the extraordinary part, we have a report on capital reduction with the cancellation of treasury shares, for which the Board of Directors has authorization. There's no special comment for that. Now again, for the (technical difficulty) capital reduction can be done in several parts, but since it is for the Board of Directors to do this, we have no comments.

 Thank you for your attention.

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 Carlos Ghosn,  Renault SA - Chairman, CEO & President   [10]
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 Thank you, Mr. de La Morandière. Now if I may, I would like to consider the outlook for 2016 -- rather, the performance in 2016, the outlook for 2017 and beyond.

 Ladies and gentlemen, in 2016, for the fourth consecutive year, the results of the Renault Group are up. We have achieved record growth, strongest in the Automotive industry in 2016, and we have achieved record profitability for the -- for Renault. And lastly, record position -- net position of cash.

 Now with 3.18 million vehicles sold worldwide, the sales of the group have increased in every single one of its regions. We are the biggest French automotive company and the biggest French brand worldwide. We are present on 5 continents, and we have 5 brands, Renault, Dacia, Renault Samsung Motors, Alpine and Lada. And the group today is very much a global player. Our results are up and we have achieved that in advance. The objectives of the strategic Drive the Change plan announced in 2011 was supposed to be achieved by the end of 2017. In 2015, we already had a COP that was higher than our target of 5%. This -- we have kept this step ahead in 2016, and we had a EUR 50 billion of turnover plus over 6% of operating margin while, at the same time, generating positive free cash flow. After 6 years of efforts, with objectives that have consistently been outstripped, the Renault Group has changed considerably. I will tell you about our new lines of strength now that we are halfway through 2017.

 We have a much more diverse offer, we have a mix -- a regional mix that is much better balanced, and we have more competitiveness, so 2016's achievements are undeniable.

 The first achievement which 2016 really brings to a swelling crescendo is a range that has been completely renewed, which has been extended, made more innovative and adapted to every single market. In 6 years, we have a 38 vehicle offer. We have launched 32 new models and we have enriched and extended our offer as well by entering into new segments, like crossovers and pickup trucks. After Duster OROCH launched in 2015, we launched the Renault Alaskan in 2016. We modernized our more popular models by completely renewing our C and D segment offers with the new Mégane, new Scénic, new Espace and Talisman.

 We are confirming our leadership on the EV markets, our range on -- of electric vehicles. It's the most competitive one in the market today. And in terms of price as well as diversity of offer because it goes from the Twizy to Kangoo Z.E. and the Master EV. Our sales of electric vehicles are up by 45% compared to the first quarter of 2016. And ZOE ZE 40 is the biggest EV seller in Europe. With the Alliance, we are leaders in EVs worldwide, with more than 460,000 vehicles sold up to today, which is twice as much as our immediate and most media-driven competitor, Tesla.

 Now thanks to this diversity, we have increased our presence internationally. From a European carmaker, whose profitability was based on just a single segment, the C segment, a single product, the Scénic, and a single country, which was France, we have today become a global worldwide multiproduct player. And we are profitable on each segment and in each region. We are -- and we have adapted our work to the expectations and specificities of local regions. We have tried to be as close as possible to our markets and our needs. And we have set up 6 technical centers in the regions and 6 design centers, which contributed to our local successes, like Kwid in India and the Duster OROCH in South America. And in the same way, since 2011, we have built plants in Tangier in Morocco, in Oran in Nigeria, in Wuhan in China and in Chennai in India, which is our very first joint plant belonging to the Alliance. This has made it possible for us to optimize our costs, with local sourcing that is very competitive, and the rate of that was pushed up to 97% in the case of Kwid in India.

 The successful consolidation of AVTOVAZ at the end of 2016 is also part of this expansion movement. If we take a total of all of the brands of Renault and of the Alliance, we have more than 1/3 of the Russian automotive market.

 The second achievement of our plan is very strong competitiveness, and that is based on several pillars. The first of these pillars is our sales to our partners. In 6 years, we have contributed 40% to the growth of our turnover. They are the brand, they have the stamp of the excellence of the competitiveness of the group in the manufacturing of engines, of chassis, of vans and mobilizing all of the French industrial sites. For certain sites like Batilly, the production of -- for Nissan, for General Motors and Renault Trucks, represents more than 1/3 of their total production.

 The second pillar is the economies of scale because we have developed this within the Alliance. Our approach of modular design -- for modular design, sorry, makes it possible to integrate the same components within different vehicles. In 2016, we should have a new record of synergies and generate 15% more savings than in 2015.

 Now the third pillar is our financial discipline. We have maintained that throughout the plan. We've worked throughout the value chain of our vehicles. And we -- from the definition of the product right up to engineering, manufacturing, purchasing and logistics. And over the last 6 years, we were able to save EUR 3 billion, thanks to these efforts.

 The fourth pillar is the agreement of -- with our industrial partners and especially those that were signed with trade unions in France, where we have really started being competitive again. In 2013, when we signed our first agreement, this was a new approach, and the climate was rather tense. And we were worried about the durability of our industrial sites. Thanks to the commitment of the trade unions who signed the agreement and the mobilization of all of our employees in 3 years, our production in France has increased by 50%. We have recruited 3x more people than was initially planned, that is 3,000 people. The French plants of the Renault Group are today used 100% to their capacity. 1/4 of the worldwide production of Renault is today achieved in France or made in France. The 14 industrial sites on -- in France supplies 70% of the chassis and 25% of the power trains of the group, without counting sales to partners. And just for 2016, more than EUR 450 million were invested. We know that in order to be stronger worldwide, we have, first, to be stronger in France.

 Now buoyed by the virtuous dynamics that was triggered by the Drive the Change plan, the 2017 -- this year, 2017, has started very well. And the primary results that we have, they confirm our basic tendency, which is growth and performance. For the very first time, we have had results that consolidated those of AVTOVAZ, and we have improved our performance compared to first quarter of 2016. Over the first 3 months of the year, our sales increased by 16% everywhere. In every region, we've done better than the market. And this shows how our internationalization is working because the sales outside of Europe represent 41% of our worldwide sales outside of Lada. That is a 4% increase compared to last year.

 For AVTOVAZ, the effects of the recovery plan that was started in 2016 is going well, and the return to operational profitability, which was supposed -- is supposed to be for 2018, because the Russian market is recovering.

 Now our return to Formula One is based on this international strategy. Single seaters will carry the colors of Renault on all racetracks from South America to Asia, through Europe. And they are -- these, of course, are regularly followed by 0.5 billion people. In 2017, we have 13 launches. Among these launches, we will -- we've just launched the Captur in Brazil and in Mexico. And it will be launched in India by the end of the year, whereas as Kwid is going to have a specific version for South America. In the B segment, Clio was introduced in Korea. And new Captur is going to be sold from June 2017, first, in Europe and then in Asia. The total renewal of our C and D segment offer was started in 2015 and continued -- is continuing internationally, with new Koleos launched in South America and the new Espace in China. And of course, Europe has not been left behind with the launch of the new Duster for Dacia.

 In 2017, we've also reinforced our sports range with the renewal of Alpine, which, of course, is something that motor sports enthusiasts are very happy about. The presales of the first edition of Alpine, which were available in 2,000 copies, were all booked up in 1 week. And the first models will be delivered by the end of 2017.

 So 2016 was as -- were the first results of 2017 actually, the achievement of 6 years of efforts that we had been made within our Drive to Change plan. And we have taken -- we are actually running ahead of schedule, and we plan to keep this step ahead. And it's on this very solid basis that we are envisaging 2017 and the future beyond 2017 within the Renault Group. 2017 is a year for the preparation of our next strategic plan. We should increase our turnover beyond the impact of AVTOVAZ.

 The future of Renault is now being played out in Europe as well as internationally. The first figures we have for 2017 show that very clearly. If -- although our growth is still fed by Europe, we still have a growing part from non-European countries, and these markets are hugely -- are a huge potential. Russia, Brazil, Iran, China, et cetera, where we have local crises, we are seeing recoveries, and so we are ready. In Russia, of course, we have potential -- the potential we've acquired with AVTOVAZ is very big, thanks to the complementarity of the brands; and to the production site in Togliatti, which is producing cars for Renault, Nissan and Datsun. The same is true for Brazil. In India, we have the biggest served European brand. In Iran, our sales grew by 150% by end April 2017 compared to the same period last year. And in China, where, at the beginning of 2017, we've -- we were able to double the volumes that we had sold in the same period in 2016.

 Now for our worldwide group, the future can -- has to also be prepared inside, internally, by mobilizing and training the proper -- the right men and women. And of course, social dialogue, industrial dialogue is important for us. We have signed agreements in Spain, in Brazil, in Argentina, in Korea, Portugal and France. In France, a new agreement signed with the CFE-CGC and the CFDT and the FO have -- is something we have undertaken for the next 3 years to come. 2,600 people will have been recruited, 1,800 in 2017 and as well as 6,000 youth contracts. Almost 50% of our recruitment is going to reinforce our teams in engineering and will bring new competencies, especially in electronics. EUR 500 million will be invested to improve working conditions and industrial performance in France and EUR 220 million will be devoted to training.

 The Alliance, of course, is something that is important for our future. The alliance reinforces our competitiveness. With the integration now of Mitsubishi Motors, of course, economies of scale is going to get even better. We should achieve our objective of EUR 5.5 billion of synergies generated by 2018. By 2020, we plan to have 70% of our vehicles built on a common platform, which could -- would drive down the cost linked to purchasing by 30% and engineering costs by 40%.

 We are making our differences into a strength, and that is why we have an all-new LCV unit that was set up last -- in April last year. The Renault Group has been a leader for more than 15 years in the manufacture -- manufacturing of vans, especially for the European and South American market. And Nissan is well known for its very popular pickups and its LCV, SUVs that are popular in North America and China and in Japan. With Mitsubishi Motors, we now have a range of 17 models under 4 brands, which means we can cover 77% of the market. Together, we can join our expertise together. And with our investment, we can respect the market and the identity of each brand while, at the same time, selling more.

 Our -- on the sector that is very highly regulated, the future, of course, has to be prepared by being proactive, especially in terms of the [end market] environment. We are ready for that. In the period from 2015 to 2020, within the Alliance, we have decided to set up an investment plan for EUR 1.2 billion for developing less polluting, more efficient and more responsible technologies. And with the arrival of Mitsubishi Motors, we have added plug-in hybrids to our offer. Thanks to this diversity, we are quite confident that we have the capacity to adopt -- adapt, sorry, to the new changes that are being announced, whether they are relative to regulations or to the expectations of our customers on these markets.

 Then the Alliance, of course, will make it possible also for us to endow ourselves with the right technologies to have the -- to face up to the evolutions in our sector. This, of course, will not surprise anyone. The vehicle of the future is going to be an electric, connected, autonomous car. By 2025, 100% of vehicles will be connected.

 Now according to Bloomberg, McKinsey study, by 2030, in the mega boards that are very densely populated in the developed countries, 2 out of every 3 vehicles will be electric. These technologies will, of course, necessitate a lot of investments. And thanks to this -- the economies of scale and to joint engineering and research and development, the Alliance makes it -- will make it possible for us to be present everywhere. And we will not have to make choices. We'll be able to be present in all technologies.

 And now for the electric vehicle, we are today the worldwide leader, but we are working to accelerate the quickness of the charge time. Today, in Geneva, we presented the ZOE e-sport concept, which can accelerate from 0 to 100 KPH more -- quicker than a single-seater Formula One car. And the success that we have had in the Formula E have also shown the proof of our leadership. We've won 5 races out of 6. And we develop -- we are also developing personalized services that facilitate the usage of our cars and life onboard electric vehicles.

 Now in terms of connectivity, we will be launching in 2018 a vehicle -- connected vehicle alliance platform that will propose a huge range of personalizable services in partnership with Microsoft. We are also working to propose a vision for the connected vehicle of the future by betting on French innovation, the acquisition of 2 specialized departments for connectivity and onboard software for Intel. Last month, we'll reinforce our teams with more than 400 experts, researchers and engineers who are working in Toulouse and Sophia Antipolis. Together, we are working on the vehicle of the future connected to infrastructures, homes and objects.

 In terms of autonomous vehicle, of course, our clear -- our vision is very clear. We want to develop technological solutions that are safe, reliable and that give leisure time back to drivers. In September 2016, we set up a project platform that was dedicated to autonomous vehicles in Saclay, within the Atomic Energy Centre, with which we are working on robotics and artificial intelligence. Its mission is to put into traffic an experimental fleet of several dozen vehicles by -- autonomous vehicles by 2020.

 We are also working with Transdev. We've signed a partnership with Transdev, which is a world leader in public transport and mobility services. Together, we're going to develop a solution of shared mobility tested on fleets of vehicles without drivers that are made up of ZOEs by proposing transport -- individual transports on request.

 Through this video, I suggest that you have -- we give you look at the work of innovation that's being implemented inside the Alliance.

 (presentation)

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 Carlos Ghosn,  Renault SA - Chairman, CEO & President   [11]
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 A concept car is a unique object, in which we put the best of innovation in terms of engineering and design. If you look at autonomous driving, this is a huge innovation that is going to completely change the cabins of our cars. We have to imagine what those cabins could look like and propose the best to our customers.

 In order to integrate and develop these innovations, Renault has 6 design centers worldwide. It uses the best talents with their ideas, their different cultures, their diversity. These centers compete on each project in order to bring up the best concept. And it is joint thinking between engineering and design that led to our 2 latest concept cars, TREZOR. TREZOR, that has the -- which is electric, connected and autonomous. And the R.S. 2027 Vision, which is the future single-seater racing car that has autonomous mode that can be automatically activated in case of an accident.

 In the race for innovation, the Alliance, which now has Mitsubishi Motors in it as well, is a lever for high performance. And all the technologies studied with [Nilands] are potential opportunities for Renault. Innovations integrated to concept cars are the first experiments for the car of the tomorrow.

 So when are we going to have autonomous driving in mass-produced cars? We are looking at that. The first one will be a valet who can come and pick you up. And then we'll have the next 2, which is an auto-connected autonomous prototype.

 Today, Renault is working on the base of the Renault Espace, which has already gone through several thousands of kilometers of tests. It means that our customers can have the freedom to be -- to have autonomous driving on motorways. This technology will make it possible to cut down on the number of accidents. And this is something that the company has been working on for very many years now. But what is new with autonomous driving is to go even further and to ensure that drivers have the time to do something else when it's no fun to drive.

 It's okay to develop technology, but we also have to make it affordable to the [lowest] number. And it is by looking at its customers that Renault is building the mobility of the future, sustainable mobility that makes life better and more agreeable and mobility that rhymes with liberty.

 Ladies and gentlemen, you know that the car industry is evolving very fast, and so we, from 2016, the Renault Group has achieved and gone beyond its objectives of 2017. As I said, we are one step ahead, and we today have growth that is robust and sustainable, that generates healthy profitability, that itself leads to growth. Every day, we are moving up in terms of leadership, in terms of sales volumes. Since January, the Alliance is among the -- is in the head -- is among the first 3 worldwide carmakers. We today plan -- we are probably going to be first by the midyear. This was never an object, but of course, it's something we are very happy about. Our priority is the durability of our performance in terms of growth and profit, and these are major objectives in our next plan which will go up to 2022. We plan to achieve EUR 70 billion of turnover with a minimum margin of 7% at the end of the plan, while at the same time keeping positive free cash flow every year. The details of this new strategic plan will be announced in October 2017.

 I thank you for your attention, and I suggest that we should now welcome Mouna Sepehri, who is the Director for the President's Office, for the presentation of the road map of the Board of Directors. Thank you.

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 Mouna Sepehri,  Renault SA - Executive Vice-Président of Office of the CEO - Renault Group   [12]
------------------------------
 Good afternoon, ladies and gentlemen. It is my pleasure to introduce the members and program of the Board of Directors.

 In 2017, we're making a significant step because we are achieving a better balance between experience, skills, independence and ethics. We are making great strides towards gender parity and, of course, taking on board the growing international dimension of this company.

 With the CEO, we have 19 members, as follows: 10 independent directors; 2 directors appointed or at least elected upon proposal by Nissan; 2 appointed by the French government; 4 representing employees and shareholding employees.

 Regarding independent directors, we had -- we have several candidates put forward by the board. We have Mrs. Miriem Bensalah Chaqroun. She is a Moroccan entrepreneur, and her election would be in line with the board's wishes to open up to a more industrial profile. And of course, her experience in sustainable development will be a major plus, a major asset for the board. We now have Mrs. Marie-Annick Darmaillac. She's a judge, a French judge, and her presence on the board will provide expertise on legal, ethical and sustainable development expertise. Of course, this is at the heart of the group's concerns. Mrs. Catherine Barba, she is a French expert on trade and the digital transition and, of course, this will be very much in line with the board's wishes to open up to new technologies in the digital age.

 Regarding directors representing Nissan, at the December board meeting, Mrs. Serizawa was coopted as director, upon proposal by Nissan, to replace Mrs. Koike. Mrs. Koike stepped down from her position after she was elected governor of the City of Tokyo. Mrs. Serizawa is Managing Director of International Affairs for Science and Technology within -- at Society Forum. This is a nonprofit organization based in Japan. But she's also adviser to the CEO of Mori Building Corporation. On that same board meeting, Mrs. Saikawa (sic) [Mr. Saikawa] asked to step down precisely in order to fulfill all his obligations as a new CEO of Nissan, and so he was replaced in February of this year by Mr. Yamauchi, who is in charge of competitiveness at Nissan.

 Regarding directors appointed by the French government, the Board of Directors has decided to implement the 20 -- August 2014 ordinance of the French governance regarding the governance of companies with state shareholdership. And so it will be for the government to appoint one state representative on the board. And so Mr. Martin Vial was appointed by the French government. And it is now for you to confirm the election of Mr. Pascal Faure as the second representative of the French government.

 Finally, regarding employee directors, in 26 -- November 2016, after the elections to appoint employee representatives, Mr. Frédéric Barrat was appointed in his capacity as Director to replace Mrs. Mariette Rih. And Mr. Richard Gentil and Éric Personne's terms were renewed.

 Regarding administrators representing shareholding employees, you have 2 candidates that can be voted in with more than 5% of favorable votes: Mr. Julien

 Thollot and Mr. Benoît Ostertag.

 In 2017, the Board of Directors decided to continue with its gradual renewal, with 2 main objectives in mind: international diversification and gender parity. Well, we're almost at parity, and that should be highlighted because at -- after this AGM, the percentage of women directors will be 43.7%, above the percentage required by law. Regarding international diversity, well, we have as many as 6 nationalities -- we will have, rather, 6 nationalities represented on the board.

 As to the program of the board, we have included 2 -- well, a number of following of fundamental issues for Renault's development: our CO2 road map for platforms, vehicles and engines; our China strategy, as China being a key country in terms of growth and development; and our partnership with AVTOVAZ in Russia, the integration of AVTOVAZ in the group at the end of 2016. We decided to take a particular look at the objectives in part 2 of our strategic plan, Renault Drive the Change, that is for the part 2014 to 2016. The board noted its successful implementation by all operative teams of the group. The next strategic plan will be discussed at a board meeting in the second half of the year.

 All in all, 2017 will mark the ramping up of a more modern and more responsible company, with its board reinforced in terms of diversity, expertise, more agile and better equipped to meet the societal challenges of the company.

 Thank you. By the way, this Annual General Meeting is our opportunity to show what we've done in terms of social and environmental responsibility.

 2016, in this field, marks the continuous efforts that we have been undertaking now for 20 years, and this year, our approach was concentrated around 2 main fields. The first field is basically linked -- directly linked to our activities as a carmaker, and that's -- that concerns the environmental impact of our vehicles as well as safety. So reducing the impact of our activities is our very first responsibility. The second field concerns diversity, inclusion and access to education. We are quite convinced that beyond its activities, the Renault Group has to also contribute to the development of society.

 In each of these fields, Renault has maintained its ambition by taking commitments that are clear, that have figures and that are concrete. So you will find them in all the documents that have been given to you. In terms of the environment, in 2010, we had undertaken to reduce the carbon print -- footprint of our products and our activities worldwide by 3% on an average per year by 2017. By end 2016, given what our auditors have checked, we achieved and went beyond the target, with the reduction of our carbon footprint by 3.3% per year on an average over the last 6 years.

 In pragmatic terms -- in a very pragmatic matter, we have invested in the only solution that really represents 0 emissions when you use it, and that is an electric car. To date, the Renault Group is the European leader on the market of electric vehicles, and we are worldwide leaders with the Renault-Nissan Alliance. One electric vehicle out of every 4 in Europe is a Renault vehicle. And with the Alliance, we have sold more than 460,000 electric vehicles worldwide since 2009. This performance and the efforts of the Renault Group to become a leader in the low carbon transition of the automotive industry was recognized by the international -- nonprofit international organization that is called the Carbon Disclosure Project, and that awarded a prize to Renault in October 2016.

 Our group also ensures that we do proper management of raw materials. In Europe, our vehicles are made up of 30% of recycled materials. Our commitment is also very important in terms of recycling or the reusing of vehicles that have reached the end of their life cycle. At the end of the chain, we can actually recycle 95% of the mass of our vehicles.

 Renault's action in the field of circular economy is a pioneering one and is recognized as being pioneering. The partnership with the Ellen MacArthur Foundation that we have just renewed improves our capacity to set up short circuits for the production of vehicles.

 Another challenge that is linked to our activity is, of course, road safety. More than 1 million people are victims of fatal accidents on the roads in countries all over the world. Over the last 17 years, Renault has been building awareness through its program Safety and Mobility for Everyone. Today -- up to today, more than 15 million young people have been trained in 10 countries.

 We have also decided to go beyond our activity as an automotive -- as a carmaker in order to work for diversity, inclusion and access to education. In Renault, diversity is much more than an indicator. It is really one of the basis -- basics of our cultural identity. It is also one of the drivers of our competitiveness. The diversity of Renault employees actually reflects the diversity of our customers. And gender parity is something that Renault has been following up very -- in a very determined manner. Today, 19% of Renault's employees are women. They are present in equal proportion at all levels, white collar, blue collar, and they occupy more than 25% of key positions within the group.

 We are also working for mobility that is affordable to everyone in many regions worldwide. Mobility is an essential condition, it's a vital condition for social and economic insertion or integration. In France, the Mobiliz program proposes cost price repairs to people who are in economic difficulties. Over the last 2 years, we have decided to go further, and therefore, for precarious workers, for people who are looking for a job and, recently, with micro entrepreneurs, we have also created an offer to rent out new vehicles with an option to buy that is based on a microcredit. In March, Renault signed an agreement with the unemployment office in France for that. And the Renault network in France today has more than 340 garages that are in solidarity with the people who don't have much money. And they have helped more than 1,000 people to have access to mobility.

 And also, through its foundation, the Renault Group also acts for education. In 15 years, 950 young people in 35 countries in Europe, North Africa, Middle East, South America and Asia were given scholarships in order to train -- to get professional training so that they could find a job.

 In terms of social and environmental responsibility, 2016 illustrated our -- the constancy and coherence of our policy and our capacity to take on new challenges. In 2017, we will continue to take the initiative to accelerate things, to remain a pioneer for responsible mobility and inclusive growth.

 After these few words, I would like to show you some pictures. I'm going to -- I hope you will enjoy the film that illustrates some of our actions before we give the floor to Mr. Patrick Thomas. Thank you.

 (presentation)

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 Unidentified Participant,    [13]
------------------------------
 I had a problem with my vehicle, and I was looking -- I just started my company, found it very difficult to find customers. You have to walk a long way to go to school. And we used to hitchhike. Of course, that's dangerous, but we have no choice. The association was created to organize the community and to set up systems to help people overcome the crisis. This was a very, very negative period for me, and Renault helped me to set up a loan to get another car, and that meant that I could go back to work. So today, we have school transport that Renault has provided, and this has meant that we can go to school. Now I can use my new car, go and visit my customers. And the project for the sewing company, tailoring company has really helped everyone with supplies. They give us the raw material. We recycle it, and then the stitching association can sell its products. These are the products we sell today. This made it possible for me to go right up to the baccalaureate, and I hope if I get good results, I wanted to -- I want to do a diploma in architecture. So thanks to Renault, I was able to continue to my job and my work.

 And I think we shared our dream with Renault, and they made it possible. They made it come true.




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