Slide 1: H1 2013 Results
H1 2013 Results Jacques ASCHENBROICH – CEO July 30, 2013
Slide 2: Highlights
Highlights H1 results demonstrate the strength of Valeo’s growth model In Q2, sales growth accelerated 10.4% like-for-like Balanced performance between OEM (+11.7% like-for-like) and aftermarket (+8.4% like-for- like) sales Balanced growth and overperformance for OEM sales across the regions Growth
Slide 3: Highlights
Highlights H1 results demonstrate the strength of Valeo’s growth model Operating margin of 384 M€, up 4% to 6.2% of sales (2) Negative 0.3pts impact of exchange rates Increase in net R&D expenditure offset by a decrease in SG&A expenses (as a % of sales) Net income excl. non-recurring items, up 10%
Slide 4: 2013 outlook
2013 outlook Based on the following key assumptions for FY 2013: Automotive production: Europe: -2% to -3% World: +2% Valeo has set the following objectives for 2013: Performance higher than the market in the main production regions Assuming stabilized market conditions in Europe, a slight increase
Slide 5: Order intake of 7.3 bn€
Order intake of 7.3 bn€ confirming growth & profitability potential July 30, 2013 I 5 H1 2013 results
Slide 6: Innovation fueling future organic growth
Innovation fueling future organic growth High-quality order intake(1) at 7.3 bn€ (excl. Access Mechanisms business) % of order intake In bn€ Innovation 35%* 15.1 14.0 11.9 10.0 10.1 7.4* 9.7 6.6* 9.2 7.7 5.6* *Products or technologies sold by less than 3 years 4.9 5.0 5.1 3.4 6.1 7.4* 7.7* 7.3* 6.3*
Slide 7: Balanced order intake fueling future organic growth
Balanced order intake fueling future organic growth Acceleration in Asia (39% of OI, 24% of OEM sales), with China (29% of OI, 11% of OEM sales) % of order intake SA 4% NA Other 24% Asian countries 26% Asia 39% China 74% Europe 33% World: 7.3 bn€* Asia: 2.9 bn€* *Excluding Access Mechanisms business
Slide 8: In Q2, sales growth accelerated 10.4%
In Q2, sales growth accelerated 10.4% (like-for-like) July 30, 2013 I 8 H1 2013 results
Slide 9: In H1, sales of 6.2 bn€, up 5.8% despite European climate
In H1, sales of 6.2 bn€, up 5.8% like-for-like despite European climate Balanced performance between OEM & aftermarket sales Balanced performance for OEM sales across the different regions July 30, 2013 I 9 H1 2013 results
Slide 10: H1 sales of 6.2 bn€, up 5.8% like-for-like
H1 sales of 6.2 bn€, up 5.8% like-for-like Sales growth accelerated in Q2 Total sales In M€ *Like-for-like +5.8%* +1.3%* +10.4%* 6,166 3,039 3,127 H1 13 Q1 13 Q2 13 Year-on-year +2.8% Year-on-year +0.2% Year-on-year +5.4% Exchange rates -1.7% Perimeter -1.3% July 30, 2013 I 10 H1 2013 results
Slide 11: Sales growth accelerated in Q2
Sales growth accelerated in Q2 Balanced performance between OEM and aftermarket sales Above-market OEM sales growth of 5pts Aftermarket In M€ +6.3%* +4.3%* +8.4%* OEM sales In M€ X,XXX 765 2,516 *Like-for-like +5.7%* 0.1%* +11.7%* 382 383 H1 13 Q1 13 Q2 13 Year-on-year +4.5% Year-on-year +3.5% Year-
Slide 12: Strong & balanced growth across the main regions
Strong & balanced growth across the main regions Supported by above-market OEM sales growth and improving market conditions in Europe and NA in Q2 Geographic contribution to sales growth In M€ 35 142 61 (48) 102 (10) (42) (73) 6,166 5,999 H1 12 Europe Asia North South H1 13 America America Perimeter
Slide 13: OEM sales growth accelerated in Q2
OEM sales growth accelerated in Q2 Up 11.7% like-for-like, 8pts higher than market Above-market growth in the main regions, improvement in SA Outperf. Outperf. +8pts* Outperf. +10pts* World +12pts* OEM sales*** +12% North America Europe** Production**** +4% OEM sales*** +11% OEM sales*** +18% Produc
Slide 14: H1 OEM sales, up 5.7% like-for-like, 5pts higher than market
H1 OEM sales, up 5.7% like-for-like, 5pts higher than market Strong and balanced growth across the different regions Outperf. +5pts* Outperf. World Outperf. +7pts* +10pts* OEM sales*** +6% North America Europe** Production**** +1% OEM sales*** +3% OEM sales*** +14% Production**** -4% Production****
Slide 15: H1 Asian OEM sales, 2pts higher than market
H1 Asian OEM sales, 2pts higher than market Above-market growth in China, Korea & India Outperf. +2pts* Asia** OEM sales*** +4% Production**** +2% Underperf. -5pts* 24% of Valeo sales Japan OEM sales*** -14% Outperf. Production**** -9% +4pts* 22% of Asian sales Korea Outperf. OEM sales*** 0% +9pts*
Slide 16: Geographic repositioning
Geographic repositioning Asia & emerging countries up 1pt to 54%, Western Europe down 1pt to 38% OEM sales by production region Eastern Eastern Europe & Europe & Africa Africa 14% 15% Western Western Western Western Europe Europe Europe Europe 40% 39% 38% 38% 53% in Asia 54% in Asia Asia Asia & emer
Slide 17: Balanced customer portfolio
Balanced customer portfolio % of OEM sales Other Other 6% 6% American American German 18% 20% German 28% 30% French* French* 19% 18% Asian** Asian** Asian** Asian** 29% 29% 26% 26% H1 12 H1 13 * Excluding Nissan ** Including Nissan July 30, 2013 I 17 H1 2013 results
Slide 18: Above-market growth in all Business Groups
Above-market growth in all Business Groups Strong growth for the Visibility Systems BG % of YTD total sales OEM growth like-for-like CDA 19% +3% Powertrain 27% +2% Thermal 28% +3% Visibility 26% +18% July 30, 2013 I 18 H1 2013 results
Slide 19: Operating margin up 4%, to 384 M€ or 6.2% of sales
Operating margin up 4%, (2) to 384 M€ or 6.2% of sales July 30, 2013 I 19 H1 2013 results
Slide 20: Gross margin of 1,037 M€ or 16.8% of sales
Gross margin of 1,037 M€ or 16.8% of sales Mainly impacted by exchange rates & startup costs at new plants 1,037 M€ 1,006 M€ +3% +0.4pts -0.3pts +0.1pt -0.2pts 16.8% 16.8% H1 12 Volume Exchange Startup Others H1 13 inflation rates costs at new (yen+ plants real) July 30, 2013 I 20 H1 2013 results
Slide 21: Operating margin up 4% to 384 M€ (6.2% of sales)
Operating margin up 4% to 384 M€ (6.2% of sales) (2) Sound management of administrative expenses offset the increase in net R&D expenditure 384 M€ +4% 370 M€ +0.6pt +0.0pt +0.2pts -0.2pts 6.2% 6.2% H1 12 Gross Net R&D SG&A H1 13 margin July 30, 2013 I 21 H1 2013 results
Slide 22: Net R&D expenditure at 5.4% of sales, up 0.2pts
Net R&D expenditure at 5.4% of sales, up 0.2pts Focused R&D to support profitable growth Order intake In bn€ 15,1 14,0 In M€ 11,9 & % of sales 9,7 10,0 10,1 6.6* 7.4* 9,2 7,7 5.6* 4,9 5,0 5,1 3,4 6,1 +6% 7.4* 7.7* 7.3* 6.3* 332 4,3 4,8 5,0 5,0 3,1 313 2005 2006 2007 2008 2009 2010 2011 2012 2013 *Ex
Slide 23: Sound management of administrative expenses
Sound management of administrative expenses Down to 3.6% of sales In M€ -1% 323 321 Selling Selling expenses expenses 98 99 % of sales Admin. Admin. expenses expenses 225 222 H1 12 H1 13 -0.2pts 5.4% 5.2% 1.6% 1.6% 3.8% 3.6% H1 12 H1 13 July 30, 2013 I 23 H1 2013 results
Slide 24: Excluding non-recurring items, net income up 10% to 230 M€
Excluding non-recurring items , net income up 10% to 230 M€ (3) Operating margin, up 4% to 384 M€ or 6.2% of sales H1 12* H1 13 Change Total sales (M€) 5,999 6,166 +3% Operating margin (2) (M€) 370 384 +4% % of sales 6.2% 6.2% 0pt Of which 20 M€ impact from the disposal of the Other income & expense
Slide 25: ROCE at 28%
ROCE(4) at 28% Higher level of capital employed to support order intake(1) H1 12 H1 13 Total sales 5.9 bn€ 6.2 bn€ Operating margin (2) 6.2% 6.2% Capital turnover 5.0 4.5* ROCE (4) 31% 28%* ROA (5) 19% 19%* *Proforma excluding Access Mechanisms business July 30, 2013 I 25 H1 2013 results
Slide 26: Free cash flow of 113 M€, net debt of 457 M€
Free cash flow of 113 M€ (7) Net debt of 457 M€ down 306 M€ versus end -2012 July 30, 2013 I 26 H1 2013 results
Slide 27: EBITDA of 669 M€ or 10.8% of sales
EBITDA of 669 M€ or 10.8% of sales (6) In line with 2012 H1 2013 Powertrain % of sales 10.3 % In M€ & % of sales Thermal % of sales 11.2% Visibility as % of sales 8.8% Comfort & Driving Assistance 12,1% % of sales 12.5 % 11,8% 11,3% 11,0% 10,9% 10,8% TOTAL 10.8 % 10,5% 655 669 602 610 605 586 564 13
Slide 28: Focused investments totaling 455 M€
Focused investments totaling 455 M€ Supporting future profitable organic growth Capex* (% of sales) In M€ 5,2% 5,0% +7% 455 426 H1 12 H1 13 Capex* 310 310 Capitalized R&D (% of sales) 2.4% 116 Capitalized R&D 145 1.9% H1 12 H1 13 H1 12 H1 13 * excluding capitalized R&D July 30, 2013 I 28 H1 2013 res
Slide 29: Free cash flow totaling 113 M€
Free cash flow totaling 113 M€(7) Investment flows of 444 M€ H1 12 H1 13 EBITDA (6) (M€) 655 669 Operating working capital (M€) 59 (17) Restructuring & employee-related costs (M€) (22) (14) Other operating items (inc. taxes) (M€) (120) (81) Of which : Taxes (93) (70) Pensions (13) (10) Cash from ope
Slide 30: Free cash flow totaling 113 M€
Free cash flow totaling 113 M€ (7) Investment flows of 444 M€ Of which Capex of Of which 171 M€ in Of which pensions Before payment of (299)M€ & capitalized proceeds from the of (10)M€ & taxes of dividend (115)M€ R&D of (145)M€ disposal of Access (70)M€ which occurs in H2 Mechanism In M€ (17) (81) (
Slide 31: Strong balance sheet
Strong balance sheet July 30, 2013 I 31 H1 2013 results
Slide 32: Strong balance sheet
Strong balance sheet Leverage & gearing ratios at 0.4x and 21% respectively Net debt(9) over EBITDA (6) Net debt over shareholders’ equity Net debt (M€) Shareholders’ equity (M€) excluding non-controlling interests Net debt (M€) EBITDA (6)12 months rolling (M€) 2,133 2,052 1,954 1,265 1,260 1,274 76
Slide 33: Strong liquidity position
Strong liquidity position To cope with challenging environment Liquidity : Debt: Cash & cash equivalent: 1.2 bn€ Maturity Amount Coupon Undrawn bank credit lines: 1.1 bn€ Euribor 3M Syndicated Loan June 2016 250M€ + 1.3% Average Maturity : 3 years Aug 2016 (redeemable in 4 equal Euribor BEI financin
Slide 34: 2013 outlook
2013 outlook July 30, 2013 I 34 H1 2013 results
Slide 35: 2013 outlook
2013 outlook Based on the following key assumptions for FY 2013: Automotive production: Europe: -2% to -3% World: +2% Valeo has set the following objectives for 2013: Performance higher than the market in the main production regions Assuming stabilized market conditions in Europe, a slight increase
Slide 36: Investor Relations
Contact Investor Relations Thierry Lacorre 43, rue Bayen F-75848 Paris Cedex 17 France Tel.: +33 (0) 1.40.55.37.93 Fax: +33 (0) 1.40.55.20.40 E-mail: thierry.lacorre@valeo.com Web site: www.valeo.com July 30, 2013 I 36 H1 2013 results
Slide 37: Share Information
Share Information Share Data Bloomberg Ticker FR FP Reuters Ticker VLOF.PA ISIN Number FR 000130338 Shares outstanding as of June 28, 2013 79,462,540 ADR Data Ticker/trading symbol VLEEY CUSIP Number 919134304 Exchange OTC Ratio (ADR: ord) 1:2 Depositary Bank J.P. Morgan Contact at J.P. Morgan – ADR
Slide 38: Glossary
Glossary (1) Order intake corresponds to contracts awarded by automakers (less any cancellations) during the period, based on Valeo's best and reasonable estimates in terms of volumes, sale prices and project lifespans. Order intake for the Access Mechanisms business was not included in order intake
Slide 39: Back-up
Back-up July 30, 2013 I 39 H1 2013 results
Slide 40: Key figures
Key figures H1 12** H1 13 Change Total sales (M€) 5,999 6,166 +2.8% +5.8%* OEM Sales (M€) 5,118 5,250 +2.6% +5.7%* R&D expenditure, net (M€) 313 332 +6% % of sales 5.2% 5.4% +0.2pts Operating margin (M€) 370 384 +4% % of sales 6.2% 6.2% 0pt Net attributable income (M€) 193 190 -2% % of sales 3.2% 3.
Slide 41: Half year P&L
Half year P&L 2009 2010 2011 2012* 2013 In M€ H1 H2 H1 H2 H1 H2 H1* H2 H1 Total sales 3,472 4,027 4,787 4,845 5,334 5,534 5,999 5,760 6,166 Gross margin 453 685 856 879 916 927 1,006 942 1,037 as % of sales 13.0% 17.0% 17.9% 18.1% 17.2% 16.8% 16.8% 16.4% 16.8% R&D expenditure, net (234) (239) (267)
Slide 42: Segment information
Segment information Comfort and First-half 2012 Driving Assistance Powertrain Thermal Visibility In M€ Systems Systems Systems Systems Others TOTAL Net sales • segment (excluding Group) 1,278 1,667 1,704 1,337 13 5,999 • intersegment (Group) 13 14 15 20 (62) - EBITDA 156 156 207 127 9 655 Research &
Slide 43: Quarterly information
Quarterly information In M€ Sales by segment Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1 13 Q2 13 Comfort & Driving Assistance 408 440 418 438 481 489 567 620 657 634 615 604 629 570 Powertrain Systems 636 708 625 714 767 782 743 834 855 826 784 802 833 877 Thermal Sys
Slide 44: Safe Harbor Statement
Safe Harbor Statement Statements contained in this report, which are not historical fact, constitute “Forward-Looking Statements”. Even though Valeo’s management feels that the Forward-Looking Statements are reasonable, investors are put on notice that actual results may differ materially due to num
Slide 45: Automotive technology, naturally
Automotive technology, naturally