Valeo Se · EURONEXT:FR
Valeo — Investor Day (March 2017)
100 slides from Valeo's investor day presentation, Mar 1, 2017
Slide 1: Valeo Investor Day London 2017
VALEO INVESTOR DAY London 2017
Slide 2: The Acceleration of Our Journey
THE ACCELERATION OF OUR JOURNEY JACQUES ASCHENBROICH CHAIRMAN & CHIEF EXECUTIVE OFFICER =a isis WE Al
Slide 3: Agenda
AGENDA THE ACCELERATION OF OUR JOURNEY: 09:30- 10:10 THE ACCELERATION OF our JounN! JACQUES ASCHENBROICH 10:10- 10:30 {We ACCELERATION OF OUR JOURNEY CHRISTOPHE PERILLAT 10:30- 10:50 FINANCIAL OUTLOOK ROBERT CHARVIER 10:50-11:30 Q&A VALEO TEAM 11:30- 12:30 PRODUCT EXHIBITION VALEO TEAM 12:30- 13:30
Slide 4: Agenda
AGENDA XAVIER DUPONT 13:30 - 14:00 POWERTRAIN SYSTEMS’ ACCELERATION MICHEL FORISSIER ERMAL SYSTEMS’ ACCELERATION FRANCISCO MORENO 14:00 - 14:30 " FRANCOIS BORDES COMFORT & DRIVING MARC VRECKO 14:30- 15:00 ASSISTANCE SYSTEMS’ ACCELERATION JOACHIM MATHES MAURIZIO MARTINELLI 15:00- 15:30 VISIBILITY SYS
Slide 5: Our Team
OUR TEAM JACQUES ASCHENBROICH CHAIRMAN AND CHIEF EXECUTIVE OFFICER ROBERT CHARVIER CHIEF FINANCIAL OFFICER CHRISTOPHE PERILLAT CHIEF OPERATING OFFICER
Slide 6: Our Team
OUR TEAM XAVIER DUPONT FRANCISCO MORENO THERMAL SYSTEMS BUSINESS GROUP PRESIDENT POWERTRAIN SYSTEMS BUSINESS GROUP PRESIDENT MICHEL FRANCOIS FORISSIER POWERTRAIN SYSTEMS R&D & PRODUCT MARKETING DIRECTOR THERMAL SYSTEMS R&D AND PRODUCT MARKETING DIRECTOR GEOFFREY BouQquoT CORPORATE STRATEGY AND EXTER
Slide 7: We Are Delivering Results While Investing for the Future
WE ARE DELIVERING RESULTS WHILE INVESTING FOR THE FUTURE: COMPELLING GROWTH OPPORTUNITIES FOCUSED ON INNOVATION & ORGANIC GROWTH INTEGRATING STRATEGIC BOLT-ON ACQUISITIONS CONTROLLING OUR GROWTH STRONG DISCIPLINE IN OUR CASH ALLOCATION TRACK RECORD OF FINANCIAL PERFORMANCE IMPROVEMENT
Slide 8: A New Valeo
A NEW VALEO MORE TECHNOLOGICAL =—~ WELL POSITIONED FOR THE CHALLENGES INNOVATIVE OF THE AUTOMOTIVE DYNAMIC INDUSTRY PROFITABLE
Slide 9: We Confirm Our Strategic Ambition and Accelerate Our Growth
WE CONFIRM OUR STRATEGIC AMBITION AND WE ACCELERATE OUR GROWTH THANKS TO NEW OPPORTUNITIES
Slide 10: The Beginning of a Story
THE BEGINNING OF A STORY: KEY TAKE AWAY FROM OUR INVESTOR DAY IN MARCH 2015 THE ACCELERATION OF OUR JOURNEY: OUR NEW AMBITIONS 2016-2021 A NEW VALEO: WE ARE AHEAD OF THE PLAN ANNOUNCED IN MARCH 2015 10
Slide 11: The Beginning of a Story
THE BEGINNING OF A STORY: KEY TAKE AWAY FROM OUR INVESTOR DAY IN MARCH 2015
Slide 12: Key Takeaways from Investor Day March 2015
THE BEGINNING OF A STORY: KEY TAKE AWAY FROM OUR INVESTOR DAY IN MARCH 2015 The beginning of a story ——— OUTPERFORM : } y Be ao AUTOMOTIVE > MARGIN PRODUCTION 31% IN 2014 12% \ we ab a eee ¢ [8%-9%] _ 2020 2020
Slide 13: The Beginning of a Story
The beginning of a story How we will do it have achieved
Slide 14: Our Commitment in 2011 / What We Have Achieved
Our commitment in 2011 What we have achieved OUTPERFORM ca PRODUCTION AUTOMOTIVE os PRODUCTION oF +3 POINTS 2010 2011 2012 2013 es - Light vehicle productiot
Slide 15: Sales by Destination
In 2007 Americas @ Europe @ Asia exc. China @ shina @ North America @ South America What we have achieved Americas 23% @ Europe @ Asia ex. China @ china @ North America @ South America OEM sales by destination, including joint ventures consolidated proportionaly Europe, including Africa. Asia includ
Slide 16: Operating Margin
Our commitment in 2011 OPERATING MARGIN What we have achieved Valeo Operating margin 7.2% 0, 2010 2011 2012 2013 2014 2014: Operating margin incluc ng )V & Asx tes in accordance with new IFRS Standard: 16
Slide 17: Return on Capital Employed
Our commitment in 2011 What we have achieved 31% AVERAGE 2010-2014 IN 2014 12% AVERAGE 2005-2009
Slide 18: Cash Generation
Our commitment in 2011 What we have achieved 20% 200 AVERAGE 2010-2014 IN 2014 8% AVERAGE 2005-2009
Slide 19: Valeo Back to CAC 40
v ALEeroR \ What we have achieved WYP? 01> \ OUTPERFORMED ALL INDICES HISTORICAL HIGH VALEO BACK TO CAC 40 — DJ EURO Stoxx Auto — DJ US AUTOPARTS — Dj Industrials — CAC 40 2008 2009 2010 2011 2012 2013 2014 MARCH 2015 19 =
Slide 20: 20
20
Slide 21: Obsession for Growth
OBSESSION FOR GROWTH SALES GROWTH +8 % /YR
Slide 22: Obsession for Profit
OBSESSION FOR PROFIT OPERATING MARGING 7.2% [8%-9%]
Slide 23: Obsession for Return on Capital Employed
WP} 015 DN OBSESSION FOR RETURN ON CAPITAL EMPLOYED ROCE 31%
Slide 24: Obsession for Growth, Profit and Cash Generation
OBSESSION FOR GROWTH, PROFIT... .-& CASH GENERATION FREE CASH FLOW/ EBITDA 24
Slide 25: The Beginning of a Story
THE BEGINNING OF A STORY: KEY TAKE AWAY FROM OUR INVESTOR DAY IN MARCH 2015 THE ACCELERATION OF OUR JOURNEY: OUR NEW AMBITIONS 2016-2021 A NEW VALEO: WE ARE AHEAD OF THE PLAN ANNOUNCED IN MARCH 2015 25
Slide 26: A New Valeo: Ahead of the Plan
ZU16: A NEW VALEO: WE ARE AHEAD OF THE PLAN ANNOUNCED IN MARCH 2015
Slide 27: Focus on Organic Growth
FOCUS ON ORGANIC GROWTH FUELED BY ORDER INTAKE & INNOVATION >40% INNOVATION® | | | o_ | | 2009 2014 2015 2016 Products and technologies in series production for less than three years
Slide 28: Active Management of Our Product Portfolio
GROWTH AND PROFITABILITY ARE ACCELERATED BY AN ACTIVE MANAGEMENT OF OUR =r) PRODUCT PORTFOLIO o = TAKEOVER @ coors 'CHIKOH LAUNCHED povcin FTEY Bape Valeo : aa @ SYSTEMS ACQUISITION La SIEMENS ACQUISITION, > Valeo 3 peiker BECOMES #1 WORLDWIDE ON TORQUE CONVERTER (MARKET #1 WORLDWIDE IN HYDRAUUC AUT
Slide 29: Sales Higher Than Announced
SALES HIGHER THAN ANNOUNCED VALEO TOTAL SALES a (€BN) +8% AVERAGE ANNOUNCED IN MARCH 2015 2014 2015 2016 (°) As reported including Peiker and Spheros 29
Slide 30: Operating Margin Higher Than Announced
OPERATING MARGIN HIGHER THAN ANNOUNCED a VALEO one OPERATING MARGIN 8.2%," IN PERCENTAGE OF SALES H2 2016 2016 2010 2014 2015 H1
Slide 31: Cash Conversion Rate Higher Than Announced
CASH CONVERSION RATE HIGHER THAN ANNOUNCED FREE CASH FLOW / EBITDA
Slide 32: ROCE Higher Than Announced
ROCE HIGHER THAN ANNOUNCED
Slide 33: A Transformation Acknowledged by the Financial Markets
A TRANSFORMATION ACKNOWLEDGED BY THE FINANCIAL MARKETS Base 100 Investor day 2015 VALEO CAC 40 SBF 120 DJ STOXX AUTO American Peers European Peers Japanese Peers Performance since our last investor day +28.1% -2.3% 1.6% 16.5% +12.2% 11.7% -10.6% Historical high: 60,32€ 13/03/2015 3 15/02/2017
Slide 34: A Transformation Acknowledged by the Sustainability Indexes
A TRANSFORMATION ACKNOWLEDGED BY THE SUSTAINABILITY INDEXES ROBECOSAM’S ® ON DOW JONES SUSTAINABILITY INDEXES® WORLD & EUROPE (2016) & INDUSTRY MOVER SUSTAINABILITY AWARDS (2017) ROBECOSAM r ( Sustainability Award Gold Class 2017 a ROBECOSAM Sustainability Award Industry Mover 2017 IN EURONEXT LOW C
Slide 35: We Are Ahead of the Plan
WE ARE AHEAD OF THE PLAN ANNOUNCED IN MARCH 2015
Slide 36: The Beginning of a Story
THE BEGINNING OF A STORY: KEY TAKE AWAY FROM OUR INVESTOR DAY IN MARCH 2015 THE ACCELERATION OF OUR JOURNEY: OUR NEW AMBITIONS 2016-2021 A NEW VALEO: WE ARE AHEAD OF THE PLAN ANNOUNCED IN MARCH 2015 36
Slide 37: The Acceleration of Our Journey: Our New Ambitions 2016-2021
THE ACCELERATION OF OUR JOURNEY: OUR NEW AMBITIONS 2016-2021
Slide 38: Our New Ambitions 2016-21
THE ACCELERATION OF OUR JOURNEY: OUR NEW AMBITIONS 2016 - 2021 >€27 2021 BILLION SALES ~9.0% OPERATING MARGIN IN PERCENTAGE OF SALES ~€3.7bn FREE CASH FLOW GENERATION OVER THE PERIOD (2017-2021) 2016
Slide 39: Our Vision 2016-2021
THE ACCELERATION OF OUR JOURNEY: OUR NEW AMBITIONS 2016 - 2021 WE ARE READY TO DELIVER ALL OUR BUSINESS GROUPS ARE ACCELERATING THE ACCELERATION OF OUR JOURNEY: OUR VISION 2016 - 2021 WE ARE ACCELERATING OUR INNOVATION MARKET OFFERS NEW GROWTH OPPORTUNITIES 39 AWELL BALANCED GEOGRAPHICAL PORTFOLIO®
Slide 40: Restating Our Passion for Growth & Profit
RESTATING OUR PASSION FOR GROWTH & PROFIT THROUGH: INNOVATION % CO, ION Pp... DRIVING EXPANSION IN HIGH-GROWTH POTENTIAL COUNTRIES (ESPECIALLY IN ASIA AND EMERGING COUNTRIES)
Slide 41: Market Offers New Growth Opportunities
MARKET OFFERS OPPORTUNITIES
Slide 42: Positive Trends in Volume for the Automotive Market
WE STILL SEE POSITIVE TRENDS IN VOLUME FOR THE AUTOMOTIVE MARKET
Slide 43: Million Vehicles
MILLION VEHICLES 100 80 CAGR 60 2016/2021 +2.3% 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 SOURCE: LMC & VALEO ESTIMATES 3
Slide 44: 65% of the Growth Is Driven by Asia
65% OF THE GROWTH IS DRIVEN BY ASIA 35% 104M 0 | wom. | 46% mks MILLION VEHICLES
Slide 45: Our Vision 2030
OUR VISION 2030 SOURCE: BIPE & VALEO 45
Slide 46: New Mobility Solutions Expected to Have Limited Impact on Sales
NEW MOBILITY SOLUTIONS ARE EXPECTED TO HAVE A LIMITED IMPACT ON SALES UP TO 2021 A NEW PARADIGM FOR MOBILITY
Slide 47: Technological Contents Are Fueling the Transformation
TECHNOLOGICAL CONTENTS ARE FUELING THE TRANSFORMATION OF THE AUTOMOTIVE MARKET
Slide 48: Mega Trends
MEGA TRENDS GLOBAL MEGA TRENDS AGING 4 ECONOMY POPULATION , 4 & PoLiTics POWER OF TECHNOLOGY DIGITAC WORLD & CONSUMER TRENDS ei ureanAriOn AUTOMOTIVE TRENDS TRAFFIC MOBILITY DENSITY ENERGY < EFFICIENCY CONNECTED'CAR CONSUMER BEHAVIOR CAR SEGMENTS EMOTIONS A NEW THN PARADIGMS 48
Slide 49: Mega Trends
MEGA TRENDS NEW ANGE DIGITAL WoRLO & CONSUMER PARADIGMS TRENDS
Slide 50: Startups Are Exploring New Trends & Technologies
STARTUPS ARE EXPLORING NEW TRENDS & NEW TECHNOLOGIES v2v / V2X COMMUNICATION we HME ED ARR suronaric VERA Me eam dash 9 airsiquity , pg Ovi ®Sovori Tifech 4, Qnetnomile AutoBot — ‘ til VEHICULE CYBERSECURITY TRUVOLO °° Pion CohdaWireless ADAS/CAR AUTOMATION Dorwtonomy §)Q nauto drive.ai_ AdasWorks E
Slide 51: New Players
SUZUKI .] ‘ ) TATA man) Oo JAGUAR WE FSO SUBARU GEELY CHERY A> Great Wall rey aD HYUNDAI <> FAW | wD RENAULT NISSAN bile dt @seannn par NEW PLAYERS 51
Slide 52: Mega Trends: Consumer Behavior
MEGA TRENDS CONSUMER BEHAVIOR
Slide 53: New Needs
NEW NEEDS MAKE MY LIFE EASIER REMEMBERME PN TTT TSS KO ~~ 4 er A® BE REACTIVE EG; * 24X7 we HELP ME REDUCE MY COSTS
Slide 54: Car Ownership to Car as a Service
CAR CAR ASA OWNERSHIP SERVICE
Slide 55: A New Paradigm for Mobility
A NEW PARADIGM FOR MOBILITY TOWARDS THE C) e-AUTONOMOUS SHARED CARS
Slide 56: Mega Trends
MEGA TRENDS ar Sg TRAFFIC SCARCITY =o . DENSITY OF RESOURCES : ie a ele ff ee Pe WRBANIZATION CITIES RECMAAE IMEI TIEMITIAL
Slide 57: Air Quality Pollution Is a Worldwide Issue
AIR QUALITY POLLUTION IS A WORLDWIDE ISSUE Source: aqicn.org - world air quality
Slide 58: Cities Become Influential Stakeholders
CITIES BECOME INFLUENTIAL STAKEHOLDERS IN THE FUTURE OF MOBILITY ©OGo0G REDUCE REDUCE IMPROVE REDUCE IMPROVE POLLUTION CONGESTION SAFETY NOISE ACCESSIBILITY
Slide 59: Cities Become Influential Regulators
CITIES BECOME INFLUENTIAL REGULATORS IN THE FUTURE OF MOBILITY BEIJING SINGAPORE BANS HIGHLY POLLUTING CARS POLLUTION PEAK DIESEL BAN EARLY TURNOVER SCHEME TO RIVERBANK TRAFFIC BAN DURING SMOG ALERTS BAN ON PRIVATE CARS BY 2019 REPLACE CAR ALTERNATE TRAFFIC (8% OF CAR PARK) PETROL & DIESEL BAN IN WH
Slide 60: The Revolutions of the Automotive Industry
THE 3 REVOLUTIONS OF THE AUTOMOTIVE INDUSTRY MOBILITY & DIGITAL 0-9 ELECTRIFICATION & SMART ENGINE AUTONOMOUS & CONNECTED CAR
Slide 61: Valeo Growth Is Fueled by Successive Innovation Waves
VALEO GROWTH IS FUELED BY SUCCESSIVE INNOVATION WAVES @ MOBILITY & DIGITAL AUTONOMOUS & CONNECTED CAR ELECTRIFICATION & SMART ENGINES 2016 2019 2022 2025
Slide 62: Our Vision 2016-2021
THE ACCELERATION OF OUR JOURNEY: OUR NEW AMBITIONS 2016 - 2021 WE ARE READY TO DELIVER ALL OUR BUSINESS GROUPS ARE ACCELERATING THE ACCELERATION OF OUR JOURNEY: OUR VISION 2016 - 2021 WE ARE ACCELERATING OUR INNOVATION MARKET OFFERS NEW GROWTH OPPORTUNITIES 62 AWELL BALANCED GEOGRAPHICAL PORTFOLIO®
Slide 63: We Are Accelerating Our Innovation
WE ARE ACCELERATING OUR
Slide 64: Overperforming the Market with Our Innovations
OVERPERFORMING THE MARKET WITH OUR INNOVATIONS VALEO +26% PER YEAR GROWTH ENGINES” | cer: ean VALEO +4% PER YEAR TRADITIONAL PRODUCTS nner 2015 2021 Source: Valeo * Strategic products and services that are positioned on growth markets or generate a significant increase in Group sales 64
Slide 65: A Solid Innovation Planning Process
A SOLID INNOVATION PLANNING PROCESS End consumers Exchange sence TECHNOLOGY DEVELOPMENT STRATEGIC SCENARIO PLANNING PLANNINGS PLANNING we. yRS ® YRS ‘
Slide 66: We Accelerate in R&D
WE ACCELERATE IN R&D... R&D HEADCOUNT 13 700 e_ 2010 2016 R&D headcount more than doubled over the period DEVELOPMENT EFFORT IN % OF OEM SALES 10.1% 11.1% 2010 2016 ~8b€ invested in R&D over the period PATENTS 1840 2“ 2010 2016 7100 new patents filed over the period 66
Slide 67: Investing in New Competencies
ooo IN NEW COMPETENCIES CWBER SECURITY
Slide 68: We Are Building Our Startup Ecosystem Worldwide
WE ARE BUILDING OUR STARTUP ECOSYSTEM WORLDWIDE... ~~ © = = ~@ ° © w —)
Slide 69: With New Partners
coe WITH NEW PARTNERS RuTOMATES SEPTEMBER 2016: WORLD’S FIRST AUTONOMOUS E-SHUTTLE LAUNCHED IN LYON, FRANCE BY KEOLIS & NAVYA PASSENGERS 69
Slide 70: We Create New Digital Solutions & Services
WE CREATE NEW DIGITAL SOLUTIONS & SERVICES STATISTICS (RESERVATIONS, VEHICLES...) management, remote Clean4u, Updat : is, Remote temperature Valet parking, car sharing Rosati, => keyless ignition, Ss Remote temperature management, EI temote ignition Pees 70
Slide 71: Our Vision 2016-2021
THE ACCELERATION OF OUR JOURNEY: OUR NEW AMBITIONS 2016 - 2021 WE ARE READY TO DELIVER ALL OUR BUSINESS GROUPS ARE ACCELERATING THE ACCELERATION OF OUR JOURNEY: OUR VISION 2016 - 2021 WE ARE ACCELERATING OUR INNOVATION MARKET OFFERS NEW GROWTH OPPORTUNITIES 71 AWELL BALANCED GEOGRAPHICAL PORTFOLIO®
Slide 72: The Acceleration of Our Journey: 2016-2021
THE ACCELERATION OF OUR JOURNEY: 2016 - 2021
Slide 73: A Solid Business Model
A SOLID BUSINESS MODEL NET R&D: ~6%0 oF satts Ol RATIO: >1.5 INNOVATION IN OI: >40% CAGR 2017/2021: >10% EBITDA INCREASE: ~ 2ptsFROM 2016 To 2021 OPERATING MARGIN: ~ 9% oF sates in 2021 CAPEX: ~ 6% or sates CASH GENERATION: ~€3. Zon serween 2017 & 2021 ROCE ~30% in 2021 ROA >20% iw 2021
Slide 74: A Well Balanced Geographical Portfolio
A WELL BALANCED GEOGRAPHICAL PORTFOLIO* @ Europe @ North America @ South America @ China @ Asia w/o China * OEM sales by destination 74 WE ARE ACCELERATING IN SALES
Slide 75: A Well Balanced Customer Portfolio
A WELL BALANCED CUSTOMER PORTFOLIO @ GERMAN @ AMERICAN @ FRENCH @ ASIAN @ OTHERS 75
Slide 76: We Are Accelerating
WE ARE ACCELERATING... 2021 2227 BILLION SALES ~15% EBITDA €16 BILLION SALES 13.0% EBITDA 2016
Slide 77: We Are Accelerating in Sales
M sales by destination WE ARE ACCELERATING IN SALES SALES IN €bn
Slide 78: CAGR 2016-2021
+64% > 1 O% CAGR 2016 -2021
Slide 79: We Are Accelerating in Profitability
WE ARE ACCELERATING IN PROFITABILITY OPERATING MARGIN IN PERCENTAGE OF SALES
Slide 80: Keeping Our Return on Capital Among the Best in the Industry
KEEPING OUR RETURN ON CAPITAL AMONG THE BEST IN THE INDUSTRY RETURN ON CAPITAL EMPLOYED 34%
Slide 81: 81
81
Slide 82: 82
82
Slide 83: 83
83
Slide 84: 84
84
Slide 85: 85
85
Slide 86: 86
86
Slide 87: 87
87
Slide 88: 88
88
Slide 89: 89
89
Slide 90: 90
90
Slide 91: 91
91
Slide 92: 92
92
Slide 93: 93
93
Slide 94: 94
94
Slide 95: 95
95
Slide 96: 96
96
Slide 97: 97
97
Slide 98: 98
98
Slide 99: 99
99
Slide 100: Slide 100