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Valeo — Non-Deal Roadshow (June 2002)
24 slides from Valeo's roadshow presentation, June 2002
Slide 1: Bruno-Roland Bernard, Investor Relations Director, June 2002
Bruno-Roland BERNARD Investor Relations Director June 2002
Slide 2: Content
Content • Challenges of 2001 • Agenda for 2002 • Vision for leadership Property of Valeo - Duplication prohibited June 2002 2
Slide 3: 2001 Challenges
2001 Challenges
Slide 4: 2001 results: need for action
2001 results: need for action (million euros) 2001 2000 1999 • Sales 10,234 9,120 7,717 • Gross Margin 1,675 1,708 1,512 % sales 16.4% 18.7% 19.6% • Operating income 388 573 487 % sales 3.8% 6.3% 6.3% • Net income (591) 368 563 % sales (5.8%) 4.0% 7.3% Property of Valeo - Duplication prohibited June
Slide 5: 2001 agenda
2001 agenda • New management team appointed in April 2001 • Immediate actions taken: – Refocusing management • clear operational targets assigned: restoration of short term profitability – In-depth restructuring • enhancing efficiency of existing industrial tool • adapting capacities to market downt
Slide 6: Management discipline
Management discipline • Management reinforced – 1,800 engineers + 80 senior hirings • Purchasing – number of production suppliers reduced by over 900 – 50 “Valeo Integrated Suppliers’ appointed – Asian Purchasing Office – bidding on line (335 Meuros in 2001 - est. 9% saving) – on-line catalogues (11
Slide 7: Industrial restructuring
Industrial restructuring • Selective disposals: 4 deals completed to date (17 sites) – equivalent to approx. 300 million euros of sales • 12 closures, 2 new sites • Down from 170 to 143 plants in 1 year – Headcount down from 77,000 (March 01) to 70,000 (Dec. 01) Property of Valeo - Duplication prohi
Slide 8: Restoring profitability
Restoring profitability (million euros) Q1-2002 Q1-2001 Sales 2,550 2,695 Gross margin 422 404 % of sales 16.5% 15.0% Operating income 98 54 % of sales 3.8% 2.0% Net income 20 (179) % of sales 0.8% (6.6%) unaudited quarterly data Property of Valeo - Duplication prohibited June 2002 8
Slide 9: Agenda for 2002
Agenda for 2002
Slide 10: 2002: restoring profitability further
2002: restoring profitability further • 2002: tough environment – Production down • North America • Europe • Intensive actions pursued – provisions at year end 2001: 740 M€ Property of Valeo - Duplication prohibited June 2002 10
Slide 11: Further actions in 2002
Further actions in 2002 • Purchasing – reduction in number of suppliers: -600 over 12 months • Industrial restructuring – reduction in number of production sites • 5 closures announced + gradual disengagement from wiring manufacturing in France – disposals (3 PCB units + 2 plastic injection units) •
Slide 12: VESI (Rochester)
VESI (Rochester) • 2001 operating loss 70 M€ • 14th December 2001: filing for Chapter 11 – impairment of goodwill & assets 224 M€ – restructuring provisions 302 M€ • 5th May 2002: agreement with Union accepted by staff – allowing for Rochester ’s turnaround Property of Valeo - Duplication prohibited
Slide 13: Our vision for leadership
Our vision for leadership
Slide 14: Our vision for Leadership
Our vision for Leadership • Strengths – Focused on core business segments – Independent (multi-client, large free-float) – Global – Financially strong • Technological innovation to feed growth – Domains as growth drivers Property of Valeo - Duplication prohibited June 2002 14
Slide 15: Focused: Sales 2001: 10.2 bn Euros
Focused Sales 2001: 10.2 bn Euros Aftermarket 19% Electrical & Transmissions Electronics 5% lTransmissions lLighting Systems 51% lFriction Materials lWiper Systems lMotors & Actuators lSecurity Systems 25% lElectronics Thermal systems lElectrical Systems lEngine Cooling lConnective Systems lClimate
Slide 16: Independent
Independent 2001 OE Sales 20% 10% Other Other suppliers manufacturers Property of Valeo - Duplication prohibited June 2002 16
Slide 17: Global
Global North America Europe % of total sales: 24% % of total sales: 67% 20 production sites 87 production sites (+ 9 Maghreb) % of total sales: 3% % of total sales: 6% 13 production sites + JVs = 25% of enlarged perimeter 14 production sites South America Asia Property of Valeo - Duplication prohibi
Slide 18: Strong balance sheet
Strong balance sheet • 2001 cash position: balanced despite testing market conditions – Cash flow from operations +720 – Industrial investments -741 Gearing = 29% stable in Q1-2002 Property of Valeo - Duplication prohibited June 2002 18
Slide 19: Technology as growth driver
Technology as growth driver • Ambitious R&D approach – >6% of sales – increasing efficiency: • growing number of projects / reduced time to market • Focusing on key growth domains – Fostering creativity through cross-branch cooperation – Partnerships to bring new technologies to cars Property of Val
Slide 20: Key growth domains
Key growth domains • 5 transversal domains identified – Electric Energy Management – Seeing and Being Seen – Thermal Systems – Driveline Systems – Vehicle Access and Security Property of Valeo - Duplication prohibited June 2002 20
Slide 21: Electrical Energy Management
Electrical Energy Management • Transition to 42V ð combining Alternator and Starter Belt Driven Alternator/Starter Alternator Starter + Integrated Flywheel Alternator / Starter • New functions: engine booster, stop and go... Property of Valeo - Duplication prohibited June 2002 21
Slide 22: Electrical Energy Management
Electrical Energy Management • Transition to 42V ð More energy available allowing for new functions – Transmission field Clutch/Transmission Actuators – Engine cooling area Electric Cooling System Engine Cooling Water Pump Control Fan Motor Property of Valeo - Duplication prohibited June 2002 22
Slide 23: Valeo in the years to come
Valeo in the years to come • Leveraging strengths to achieve superior organic growth – technology as growth driver • Profitability restored – 2002: quarterly improvement – returning to historic levels Property of Valeo - Duplication prohibited June 2002 23
Slide 24: Slide 24