Slide 1: Half-Year 2023 Results
Half-Year 2023 RESULTS July 27, 2023 Christophe Périllat Robert Charvier Chief Executive Officer Chief Financial Officer VALEO RESERVED | 1
Slide 2: Half-Year Results Summary
Half-Year Results Summary 01 02 03 04 FY guidance & Financial H2 key business Highlights performance focus Backup slides H1 2022 figures have been adjusted as though the high-voltage electric powertrain business had been consolidated in the Group's financial statements as of January 1, 2022, see gloss
Slide 3: Highlights
01 Highlights HALF YEAR 2023 RESULTS | JULY 27TH 2023 3
Slide 4: H1 in line with expectations: sales and order intake
01 H1 in line with expectations Sales Order intake* €11.2bn €18.8bn, up 18% OEM sales at a significantly higher H1: +19%* Q2: +26%* like-for-like level of profitability Outperformance H1: +8pts* Q2: +10pts* More than half of new orders in ADAS, driven by high demand in Software Defined Vehicle * To cal
Slide 5: H1 in line with expectations: operating margin and free cash flow
01 H1 in line with expectations Operating margin Most inflation negotiations complete 3.2% vs 1.2% adjusted* in 2022 of which ~€260m recorded end of June to be cashed in Q3 Another step forward Leading to a Free Cash Flow of in our strategic plan to improve margins €(156)m at the end of June** * H1 2
Slide 6: Further improvement of financial performance in H2; FY guidance reaffirmed
01 Further improvement of financial performance in H2, in line with expectations FY guidance reaffirmed H1 2022 H1 2022 2023 H1 2023 reported adjusted* guidance** Sales €9.4bn €9.8bn €11.2bn €22bn - €23bn EBITDA (as % of sales) 11.8% 10.6% 11.6% 11.5% - 12.3% Operating margin (as % of sales) 2.7% 1.2%
Slide 7: Profitable order intake driven by technology
01 Profitable order intake Further improvement driven by technology in embedded margins €18.8bn* Leading to continued improvement in our margins beyond 2025 +18% €16bn* ADAS Electrification acceleration acceleration More than half €5bn in new orders H1 2022 H1 2022 H1 H1 2023 2023 of H1 group’s in hig
Slide 8: Strong momentum in Software Defined Vehicle
01 Strong momentum in Software Defined Vehicle 5 orders in high-performance computing unit incl. 2 strategic awards in 2023 SOFTWARE DEFINED VEHICLE VALEO’S FULL STACK OFFER Offering new business opportunities Applications software, middleware & integration services PREVIOUS NOW SOFTWARE HARDWARE Coo
Slide 9: Financial performance
02 Financial performance HALF YEAR 2023 RESULTS | JULY 27TH 2023 9
Slide 10: Summarized P&L
02 Summarized P&L H1 2023 results showing strong improvement on an adjusted basis* Sales €m H1 2022 H1 2023 ▲ +17% lfl adjusted* adjusted* +17% Total Sales 9,789 11,212 lfl growth EBITDA margin +100 bps EBITDA 1,033 1,302 +26% As a % of sales 10.6% 11.6% +100bps Operating margin excl. JV & associates
Slide 11: Total sales amounting to €11.2bn, up 19%
02 Total sales amounting to €11.2bn, up 19% H1 sales by type Total sales OEM Aftermarket Miscellaneous €11,212m €9,544m €1,167m €501m incl. high-voltage powertrain* +€847m +17% +19% +5% +8% lfl adjusted growth* lfl adjusted growth* lfl adjusted growth* lfl adjusted growth* Reported growth: +19% Reported
Slide 12: OEM sales performance by region
02 OEM sales Better outperformance** in Q2 in all regions Performance* by region Continuing repositioning of our customer base in China World Europe North Asia South (including Africa) America (excluding China) China America +8pts +9pts** -2pts** +12pts** In line** In line** adjusted** perf. H1 +3pt
Slide 13: Outperformance in all business groups in Q2
02 Outperformance in all business groups in Q2 Comfort & Driving Assistance Systems (CDA) Powertrain Systems (PTS) H1: +9 pt performance | Q2: +8 pts H1: +18 pt adjusted performance* | Q2: +26 pts* ADAS Interior experience OEM Sales OEM Sales High-voltage powertrain +108% lfl growth OEM Sales +15 pts
Slide 14: H1 operating margin at 3.2% of sales
02 H1 operating margin* at 3.2% of sales Efficiency, inflation recovery +200 basis points on adjusted basis & activity Efficiency plan on track As a % of sales Most of the negotiations complete +1.1pts -0.2pts +1.1pts 3.2% R&D expenses Higher capitalization Higher order intake at a significant higher le
Slide 15: Net income
02 Net income H1 2022 (€m) H1 2023 ▲ Adjusted* Cost of net debt Operating margin excl. JV & associates 117 363 +208% Refinancing in a context of significant +200 bps increase in interest rates As a % of sales 1.2% 3.2% JV & associates 2 4 na €(108)m Operating margin incl. JV & associates 119 367 +208%
Slide 16: Comfort & Driving Assistance Systems (CDA)
02 Comfort & Driving Assistance Systems (CDA) Very strong business momentum in ADAS in H1 EBITDA ADAS CDA +26% OEM sales lfl growth CDA Sales €2,331m -0.6pts Interior experience +20% OEM sales lfl growth +10% OEM sales lfl growth €300m €343m 15.3% 14.7% ADAS business highlights H1 2022 H1 2023 • Total
Slide 17: Powertrain Systems (PTS)
02 Powertrain Systems (PTS) H1 performance ahead of plan EBITDA PTS High-voltage electric Sales €3,571m Sales €847m PTS +29% OEM sales lfl growth adj.* +108% OEM sales lfl growth +4.4pts Business highlights • €5bn order intake in high-voltage €209m* €411m All technologies concerned, incl. 800V SiC / A
Slide 18: Visibility Systems (VIS)
02 Visibility Systems (VIS) Solid performance in H1 EBITDA VIS Acceleration driven by new Sales €2,816m VIS production launches +11% OEM sales lfl growth +0.8pt Business highlights €328m €372m • Acceleration started in Q2 12.4% 13.2% • Around 60% of new orders in BEV • Strong momentum in Aftermarket
Slide 19: Thermal Systems (THS)
02 Thermal Systems (THS) H1 seen as a turning point EBITDA THS Growth driven by ramp-up in Sales €2,384m THS high-voltage EV +14% OEM sales lfl growth -0.9pts Business highlights €162m €158m • Some inflation compensation negotiations still ongoing 7.5% 6.6% • Multiple starts of production in H1 in fro
Slide 20: H1 Free Cash Flow of €(156)m
02 H1 Free Cash Flow of €(156)m, given that 260m will be cashed in Q3 m€ H1 2022 adjusted* H1 2023 CAPEX (PP&E) EBITDA 1 033 1 302 Strict control over CAPEX Tangible CAPEX (property, plant & equipment) (345) (456) Intangible CAPEX (355) (480) of which capitalized R&D (298) (461) Most inflation negoti
Slide 21: H1 net debt evolution
02 H1 net debt evolution Cash & Cash Most of net debt increase reversed in H2, thanks to cash generation equivalents Net debt €1.7bn €4.5bn €4.5bn €4.5bn €4.0bn €4.0bn ~€4.2bn ~€4.2bn June 30, 2023 June 30, 2023 Dec. June Dec. 2022 2023 2023 estimate Credit ratings LT Outlook ST Leverage ratio Geari
Slide 22: €500m in divestment of non-strategic assets
02 €500m in divestment of non-strategic assets Target: 100% of transactions signed before year-end Signed or closed Advanced discussion Ongoing Agreement for a total amount of Advanced discussions for around Projects now launched for €80m €120m around €300m ~ €80m ~ €120m ~ €300m 0 100 200 300 400 5
Slide 23: FY guidance & H2 key business focus
03 FY guidance & H2 key business focus HALF YEAR 2023 RESULTS | JULY 27TH 2023 23
Slide 24: Further improvement in H2; FY guidance reaffirmed
03 Further improvement of financial performance in H2, in line with expectations FY guidance reaffirmed 2022 reported 2022 adjusted* 2023 guidance ** Move Up 2025 Sales €20.0bn €20.4bn €22bn - €23bn ~ €27.5bn EBITDA (as % of sales) 12.0% 11.4% 11.5% - 12.3% ~ 14.5% Operating margin (as % of sales) 3.2
Slide 25: H2 key business focus
03 H2 key business focus Finalize last inflation negotiations Reduce Achieve further inventory new phase of synergies leading to a positive working and efficiency programs capital contribution to FCF Deliver Sign all €500m First step of divestment transactions THS recovery Before year end HALF YEAR 20
Slide 26: Thank you, Q&A session
THANK YOU Q&A SESSION HALF YEAR 2023 RESULTS | JULY 27TH 2023 26
Slide 27: Backup slides
04 Backup slides HALF YEAR 2023 RESULTS | JULY 27TH 2023 27
Slide 28: Q2 Total sales
04 Q2 Total sales Sales by type Total Sales OEM Aftermarket Miscellaneous €5,730m €4,907m €552m €271m incl. high-voltage powertrain* +485m +23% +26% +4% +22% lfl adjusted growth* lfl adjusted growth* lfl adjusted growth* lfl adjusted growth* Reported growth: +23% Reported growth: +26% Reported growth: -
Slide 29: H1 geographic & customer positioning
04 H1 geographic & customer positioning OEM sales by production region (% of OEM sales) H1 2023 H1 2022 ▲ Western Europe 31% 31% Stable US Asia & emerging countries 7% 62% 8% 61% -1pp +1pp 62% Of which Asia excluding China 15% 16% -1pp of OEM sales Of which China 16% 16% Stable Exposure to Asian Of
Slide 30: Summarized P&L (reported basis)
04 Summarized P&L Reported basis H1 2022 €m H1 2023 ▲ Reported Total Sales 9,419 11,212 +19% EBITDA 1,111 1,302 +17% As a % of sales 11.8% 11.6% -20bps Operating margin excl. JV & associates 258 363 +41% As a % of sales 2.7% 3.2% +50 bps Net Income (Net attributable income) (48) 119 na As a % of sal
Slide 31: Research & Development (reported basis)
04 Research & Development Reported basis (€m) H1 2022 H1 2023 ▲ Gross Research and Development expenditure (959) (1 245) +30% As a % of sales (10.2%) (11.1%) (90 bps) Capitalized development expenditure 295 461 +56% As a % of sales 3.1% 4.1% +100 bps Amortization and impairment of capitalized develo
Slide 32: Research & Development (adjusted basis)
04 Research & Development Adjusted basis H1 2022 (€m) H1 2023 ▲ adjusted Gross Research and Development expenditure (1 042) (1 245) +19% As a % of sales (10.6%) (11.1%) (50 bps) Capitalized development expenditure 299 461 +54% As a % of sales 3.1% 4.1% +100 bps Amortization and impairment of capital
Slide 33: Net income (reported basis)
04 Net income Reported basis H1 2022 (€m) H1 2023 ▲ reported Operating margin excl. JV & associates 258 363 +41% As a % of sales 2.7% 3.2% +50 bps JV & associates -76 4 na Operating margin incl. JV & associates 182 367 +102% As a % of sales 1.9% 3.3% +140 bps Other income & expenses (71) (18) -75% C
Slide 34: H1 Segment information
04 H1 Segment information H1 2023 CDA* PTS THS VIS Other Total (€m) Sales: Segment (Excluding Group) 2 315 3 528 2 354 2 813 202 11 212 Intersegment (Group) 16 43 30 3 (92) - EBITDA 343 411 158 372 18 1 302 Research & Development expenditure, net (361) (284) (160) (193) (2) (1 000) Investments in pr
Slide 35: Debt profile
04 Debt profile Average maturity: 3 years Undrawn credit €1.7BN facilities As of June 30, 2022 Undrawn Bridge to bond Senior bond (EMTN) Schuldschein €650M Extension Maturity Amount Coupon Maturity Amount Coupon Nominal options January 2024 €700M 3.250% April 2025 €90M 1.291% June 2025 €600M 1.500% A
Slide 36: 2019-2025 ESG performance
04 2019-2025 ESG performance 2019 2022 2025e base year (change vs. 2019) (change vs. 2019) Emissions reduction (Scope 1, 2 & 3) - validated by SBTi in Mt CO2 eq. 49.6 45.2 (-9%) 45.3 (-9%) Scope 1 & 2 & 3 emissions including gains from Valeo in Mt CO2 eq. 49.6 41.5 (-16%) 37.9 (-23%) E Energy consum
Slide 37: Share information
04 Share information Share Data ADR Data Ticker/trading symbol VLEEY Bloomberg Ticker FR FP CUSIP Number 919134304 Reuters Ticker VLOF.PA Exchange OTC ISIN Number FR0013176526 Ratio (ADR: ord) 1:2 Shares outstanding as of June 30, 2023 243,501,944 Depositary Bank J.P. Morgan Contact at J.P. Morgan –
Slide 38: Glossary
04 Glossary Order intake corresponds to business awarded by automakers during the period to Free cash flow corresponds to net cash from operating activities (excluding changes in Valeo, and to joint ventures and associates based on Valeo’s share in net equity, (except non-recurring sales of receivabl
Slide 39: Safe harbour statement
04 Safe harbour statement Statements contained in this document, which are not historical fact, constitute “forward-looking statements”. These statements include projections and estimates and their underlying assumptions, statements regarding projects, objectives, intentions and expectations with re
Slide 40: Smart technology for smarter mobility
SMART TECHNOLOGY FOR SMARTER MOBILITY