Plastic Omnium - 2020 Universal Registration Document

PRESENTATION OF PLASTIC OMNIUM AND ITS BUSINESSES Significant events PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2020 53 # $ & $# 1.4 Changes in the governance of Compagnie Plastic Omnium SE At the proposal of Mr. Laurent Burelle, in order to continue the Group’s long-term growth by seizing the opportunities associated with the transformation of the automotive market, the Board of Directors of Compagnie Plastic Omnium SE decided to put in place a new management team and change the governance structure. Mr. Laurent Burelle, Chairman and Chief Executive Officer since July 2001, became Chairman of the Board of Directors of Compagnie Plastic Omnium SE effect from January 1, 2020. Mr. Laurent Favre was appointed Chief Executive Officer and director. At the proposal of Mr. Laurent Favre, Ms. Félicie Burelle was appointed Managing Director. Changes within the Compagnie Plastic Omnium SE Executive Committee As of January 1, 2020, Messrs. Stéphane Noël and Christian Kopp were appointed President and CEO of Intelligent Exterior Systems and President and CEO of Clean Energy Systems, respectively. On January 1, 2021, Mr. David Meneses joined the Executive Committee of Compagnie Plastic Omnium SE as Executive Vice President Sustainability. Plastic Omnium: fully mobilized to face Covid-19 Faced with the Covid-19 pandemic, Plastic Omnium has implemented all measures to protect all of the Group’s employees, ensure its business continuity in close collaboration with its customers and preserve the strength of its financial structure. The Group’s first priority is the health of its employees. At all of its sites worldwide, Plastic Omnium has implemented systematic measures to avoid contact between employees and reduce the risk of contamination. Strictly complying with the measures taken by the authorities in each country where the Company operates and in response to carmakers’ production line shutdowns, Plastic Omnium has been forced to close production facilities: these closures began by affecting all the Chinese plants from the end of ● January 2020; in mid-March, the Group’s European plants were gradually shut down; ● North and South American plant closures started in late March. ● The Group’s plants then gradually re-opened with reduced utilization rates. On June 24, 2020, all 131 plants had resumed activity. Developments in the situation have been and continue to be managed daily, on a site-by-site basis. Agile and efficient, the Plastic Omnium Group has taken the necessary actions to adapt with maximum flexibility: partial unemployment measures were implemented in the plants that ● have been shut down; they were also applied in the Group’s R&D and administrative centers; ● the 305 Group’s executives, as well as all members of the Group’s ● Board of Directors, mobilized more than ever before to manage the situation, have contributed to the collective effort. The compensation of senior managers was reduced by 15% during the business shutdown (-20% for members of the Executive Committee and -25% for executive directors) and the annual compensation of directors was reduced, at their initiative, by 15%. Expecting an already significant drop in automotive production even before the Covid-19 pandemic, the Group set up an extremely efficient organization to reduce its costs, control its investments, optimize its working capital requirement and preserve its cash generation. This organization currently makes it possible to act very quickly to strengthen all of these measures: all non-essential expense commitments were eliminated and the ● implementation of this measure strictly controlled; cost reduction plans are reported daily; ● cash is also monitored daily, thanks to the global cash-pooling in place ● across the Group; in this way, Plastic Omnium acts responsibly to scrupulously respect all ● of its commitments to suppliers. The teams are fully committed. The measures put in place are rapid and efficient. The Group’s financial structure is very solid. Implementation of a cost reduction program and a transformation plan called Omega With ongoing market volatility, Plastic Omnium continues to find ways to gain flexibility in its cost structure. Along with these flexible cost measures, the Group is adapting its industrial footprint to accommodate the assumption that worldwide automotive production will not regain pre-crisis levels (92 million vehicles) for several years. The Group is thus continuing its actions to rationalize its industrial footprint and accelerate the reduction of its indirect production costs and overheads: closure of the composites business in Arevalo in Spain (Intelligent ● Exterior Systems); the closure of the Argentinian plant in Malvinas in early 2022 ● (Intelligent Exterior Systems); shutdown of certain paint lines; ● reorganization in Germany of the production businesses and R&D ● system of Intelligent Exterior Systems; closure at the end of 2020 of the regional headquarters of HBPO Asia ● in Seoul, to be combined with those in Shanghai. The plan is to save €40 million per year by the end of 2022. Additionally, the Omega transformation plan will improve the Group’s agility, organizational operation and industrial efficiency by simplifying processes, accelerating digitization and facilitating a more cross-functional approach. Omega’s first two phases are currently in progress, focusing on indirect purchases and on project design and development. Savings of €200 million per year are forecast by the end of 2022. The total objective of this plan is to achieve €240 million in annual savings by the end of 2022.