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Annual General Meeting 30/04/2010 - Speech Carlos Ghosn, Chairman & CEO Ladies and Gentlemen, Dear Shareholders, I am pleased to welcome you today to Renault’s Annual General Meeting. I would like to thank you for your presence and I hope that this General Meeting meets your expectations, especially those that you informed us about in the consultation organized from late February to mid-March. During this General Meeting, Patrick Pélata will present the Group’s results for 2009. I will then talk
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1 Annual General Meeting 30/04/2010 - Speech Carlos Ghosn, Chairman & CEO Ladies and Gentlemen, Dear Shareholders, I am pleased to welcome you today to Renault\u2019s Annual General Meeting. I would like to thank you for your presence and I hope that this General Meeting meets your expectations, especially those that you informed us about in the consultation organized from late February to mid-March. During this General Meeting, Patrick P\u00e9lata will present the Group\u2019s results for 2009. I will then talk about our strategic outlook. Naturally we will take the time needed to answer all of your questions. We aim to bring the Meeting to a close at around 6.15 pm. I would also like to inform you that this General Meeting will be broadcast live on the internet and rebroadcast through the end of July. Vote counting shall be performed by the two members of the meeting who are present and accept such duties, who represent, either on their own behalf or as proxies, the greatest number of votes. Mr Alexis Kohler, representing the government, and Ms Elisa Vergine, representing Amundi, have taken up their place as scrutineers alongside Mr Christian Husson, Senior Vice President, Legal Department and Public Affairs, who I propose to designate as secretary of the General Meeting. The Renault Management Committee is also present in the hall.2 We are now going to look at the results in 2009, before reviewing the outlook for 2010. The automotive industry went through the worst crisis in its history in 2009. We foresaw the arrival of an economic recession. Indeed, Renault was the first automotive manufacturer, as early as July 2008, to take crisis measures. But the crisis triggered in September 2008 surprised the entire economic and political world by its intensity and suddenness. It began as a purely financial crisis. Our industry needs a lot of liquidity. In late 2008 and early 2009 our entire industry found itself in a situation where it was practically impossible to borrow outside of already confirmed credit lines, even at prohibitive rates. Our customers, two-thirds of whom buy their cars on credit, also experienced great difficulties in financing their purchases. The financial crisis thus intensified the economic recession that was on the horizon. Governments played an essential role in enabling carmakers to remain on an even keel. The French government\u2019s three billion euro loan to French carmakers \u2013 at an interest rate of 6%, which at the time was impossible from banks \u2013 allowed Renault to get through the crisis while preserving its investments for the post-crisis period. The financial markets have since then returned to their pre-crisis level and we recently borrowed five million euros over seven years at a rate of 6.52%. The key for Renault during the crisis was to protect our cash, in other words to not go into debt to finance our activity. This is why our unique objective was to achieve positive free cash flow for the year. I am now handing over to Patrick P\u00e9lata, Chief Operating Officer, who will present the 2009 results. I will be talking with you later on about our strategic outlook.3 Patrick P\u00e9lata, Chief Operating Officer Thank you. Ladies and Gentlemen, Dear Shareholders, As Carlos Ghosn just shared with you, the company focused in 2009 on a single objective, that of achieving positive free cash flow. The Acad\u00e9mie Fran\u00e7aise has not approved a translation of \u201cfree cash flow\u201d, but the term refers to the variation in our cash level, excluding borrowing and payments on borrowing. Our action plan was divided into three parts: Success of the crisis plan - Maximize our revenues, notably through an increase in our market shares. - Reduce our stocks and our debts. - Reduce our fixed costs. Thanks to the hard work of all Renault employees, we were able, in a particularly difficult context, to do better than planned, with positive free cash flow of 2.1 billion euros. I would like to talk about how we achieved these results. Let\u2019s start with the maximization of our revenues, in other words our sales performance. TIV trend in 2009 The global automotive market contracted 4.5% in 2009 compared with 2008. The downturn was lower than our initial projections, thanks to the rapid and effective implementation in most of the major automotive markets of government aid, such as scrappage bonuses. The impact of these measures was particularly noticeable in second-half 2009. In Europe, after a 13.3% fall in the first half of the year, the market increased 7.6% year- on-year in the second half. For the full year, Europe limited the decrease to 4.3%. The automotive market in Russia was halved and the fall in Euromed was nearly 13%. The recovery was strong in the second half-year in Asia, Latin America and Africa. In this context, Renault\u2019s world market share increased slightly, by 0.1 points, especially in the second half and in Europe, where we grew our market share by 1.4 points. Renault sales performance The increase in our market share was clearly visible in our 15 biggest markets, which account for 85% of our sales. For the year as a whole, we improved our share in 11 of our 15 main markets, a trend that was even more pronounced in the second half, with growth in 13 out of the 15 markets. In a sign of our international development, 9 of these 15 markets were outside Europe.4 Success of product launches: Scénic, Mégane, SM3, Sandero These sales results resulted in particular from the success of our most recent models. Starting with the Mégane family. New Scénic, produced at Douai, returned to the number-one spot in the minivan category in Europe after launch in mid-2009, with a near 20% share of the segment. Mégane station wagon also has a 20% share of its segment in Europe. Sales of Mégane hatchback, renewed in late 2008, doubled in 2009. Our product offensive was also led outside Europe. We launched SM3 in South Korea in June. It took a 25% share of its segment, with orders considerably outstripping production capacity. Fluence, the Renault vehicle launched on the same base in late 2009, also got off to a good start. We are currently reviewing the possibility of increasing production at our Bursa plant. Lastly, the success of Sandero continued, helping Dacia sales to double in France in 2009. I would like us to watch a video, in which we asked customers from five different countries what Renault represented for them. Customers are always right. Our customers, in all countries, see Renault as a reliable brand. All the surveys confirm the spectacular progress made by Renault in this area over the last few years. For example, in the rankings by L’Automobile Magazine, most of our range is now top-three in France on quality and reliability. They appreciate the safety of our models and the comfort of our cars. We are an innovative brand, but we seek to make this innovation affordable, as with the Carminat TomTom built-in navigation system, available on our best-selling models for less than 500 euros. Nearly one Scénic in three is currently sold with this equipment. Customers are always right, and we pay attention to what they say. Renault seeks to bring its customers a complete offering from entry-level to high-end models. We are still present in the high-end segment with Laguna, Espace and Koleos. And we are currently working on renewing and broadening this offering. In terms of car design, you know that we have a new design chief, Laurens Van den Acker. So I simply want to say: see you at the Paris Motor Show in the autumn! Finally, concerning after-sales in South Africa, our South African customer is right. Two years ago we were more expensive than the South African market, but we have realigned the prices of our parts, in some cases quite spectacularly (by up to 30%). More globally, our price policy in after-sales is to be in line with market prices. And for customers with older vehicles, we propose an alternative to srcinal parts with our Motrio brand that is around 20% cheaper. Success of the crisis plan: Inventory
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