Slide 1: H1-2012 Results
H1-2012 Results Jacques ASCHENBROICH – CEO July 26, 2012
Slide 2: Highlights
Highlights H1-2012 results demonstrate the strength of Valeo’s growth model High quality order intake at a record 8 bn€ Sales at 6 bn€, up 12.5% (+4% organic growth), in challenging markets in Europe and in South America OE Sales, up 13.5% (+5% organic growth) Overperformance in Europe and Asia (exc
Slide 3: Highlights
Highlights H1-2012 results demonstrate the strength of Valeo’s growth model Free cash flow up 10%, at 148 M€ After CAPEX increase of 117 M€ to sustain order intake (1) FY-2012 operating margin* level (in M€) in the same magnitude of FY-2011 * Adjusted EBIT July 26, 2012 I 3 H1 2012 results
Slide 4: Key figures
Key figures H1-2011 H1-2012 ▲ Total sales (M€) 5,334 5,999 +12.5% +4%* OE Sales (M€) 4,510 5,118 +13.5% +5%* Gross margin (M€) 916 1,006 +10% % of sales 17.2% 16.8% -0.4pt Operating margin(2) (Adj. EBIT) (M€) 345 370 +7% % of sales 6.5% 6.2% -0.3pt Operating income (EBIT)(3) (M€) 344 348 +1% % of sa
Slide 5: Outlook 2012
Outlook 2012 Based on the following market scenario for FY 2012: Automotive production: World: +5 to 6% Europe: -6 to -7% Raw materials prices at current levels Guidance FY-2012 operating margin* level (in M€) in the same magnitude of FY-2011 * Adjusted EBIT July 26, 2012 I 5 H1 2012 results
Slide 6: Sales at 6 bn€, up 12.5%, +4% organic growth
Sales at 6 bn€, up 12.5% +4% organic growth OE sales growth higher than the market in Asia & Europe July 26, 2012 I 6 H1 2012 results
Slide 7: Record order intake at 8.0 bn€
Record order intake at 8.0 bn€ (1) out of which 2.9 bn€ in Asia % of order intake In bn€ Innovation 30% CAGR 14.9 +11.6% 12.5 10.0 7.2 10.1 9.7 9.2 6.0 7.7 4.9 5.0 5.1 3.4 6.1 7.7 8.0 6.5 4.3 4.8 5.0 5.0 3.1 2005 2006 2007 2008 2009 2010 2011 2012 H2 H1 July 26, 2012 I7 H1 2012 results
Slide 8: 36% of order intake in Asia
36% of order intake in Asia 19% of total order intake in China North America 16% Asia Other 36% Asian China countries 53% 47% Europe 40% South America 8% World: 8 bn€ Asia: 2.9 bn€ July 26, 2012 I8 H1 2012 results
Slide 9: Sales of 6 bn€, up 12.5% (+4% like-for-like)
Sales of 6 bn€, up 12.5% (+4% like-for-like) OE sales up 13.5% (+5% like-for-like) OE sales In M€ 5,118 +13.5% 275 In M€ 4,846 4,510 5,999 Perimeter +6.0% +12.5% 316 Currencies +2.8% Like-for-like +4,7% H1-11 H1-12 Aftermarket In M€ 732 +1.8% 34 5,334 5,683 Perimeter +5.9% 719 698 Currencies +2.6% S
Slide 10: Performance higher than the market in Asia and Europe
Performance higher than the market in Asia and Europe World performance higher than the market excluding Japanese OEMs Underperf. -4pts* World Outperf. OE sales +5% Underperf. +4pts* Production +9% -4pts* North America Europe World (w/o Japanese) Valeo OE sales** -1% OE sales +2% Valeo OE sales** +1
Slide 11: Performance higher than production in Asia
Performance higher than production in Asia Above-market growth in China, India & Korea, more than offsetting below market growth in Japan Outperf. +5pts* Asia Valeo OE sales** +20% Production +15% Underperf. -28pts* Japan 24% of Valeo sales OE sales** +26% Outperf. Production +54% +12pts* 31% of Asi
Slide 12: OE sales performance impacted by strong Japanese recovery
OE sales performance impacted by strong Japanese recovery A temporary consequence of 2011 earthquake Japanese +13 OEMs downturn +7 +7 +10 +8 +2 +1 +5 0 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 0 -2 -3 -3 -4 -4 -4 Japanese -10 OEMs -1
Slide 13: Strong development in Asia
Strong development in Asia through organic & external growth Geographical contribution to sales evolution (in €M) Perimeter +4 +144 Perimeter +56 -35 +100 Perimeter +227 5,999 +190 Perimeter +20 -41 5,334 H1-11 Europe Asia NA SA Currencies H1-12 Perimeter Organic July 26, 2012 I 13 H1 2012 results
Slide 14: Positioning in Asia & emerging countries at 53% of OE sales
Positioning in Asia & emerging countries at 53% of OE sales Strong improvement in Asia OE sales by production region Asia 18% Asia 26% Western Mexico Europe 7% Western 53% in Asia 39% 47% in Asia Europe & emerging & emerging 47% countries Eastern countries Mexico Europe 8% & Africa Eastern 15% Europ
Slide 15: Asian & German customers at 29% & 28% respectively
Asian & German customers at 29% & 28% respectively vs 21% & 29% in H1-2011 (in % of OE sales) Others Others 6% 9% German American American 18% German 18% 29% 28% French* French* 19% Asian** 23% Asian** 21% 29% H1-2011 H1-2012 * Excluding Nissan ** Including Nissan July 26, 2012 I 15 H1 2012 results
Slide 16: Operating margin (adj. EBIT) up 7.2%, at 370 M€
Operating margin (2) (adj. EBIT) up 7.2%, at 370 M€ or 6.2% of sales July 26, 2012 I 16 H1 2012 results
Slide 17: Gross margin at 1,006 M€ or 16.8% of sales
Gross margin at 1,006 M€ or 16.8% of sales mainly impacted by aftermarket, exchange rates & new production sites startup costs +0,4pt -0,3pt -0.2pt -0,1pt -0,2pt 17.2% 16.8% H1-2011 Volume OEM/ Currencies Startup of Others H1-2012 Aftermarket (Real+Rupee) new production mix sites July 26, 2012 I 17
Slide 18: Stable raw material prices
Stable raw material prices Rare earth action plan on track 2900 Aluminum Copper €/T 11000 €/T 2700 10000 2500 9000 2300 8000 2100 7000 1900 6000 1700 5000 1500 4000 H1-2011 H1-2012 H1-2011 H1-2012 Impact H1-2012 ▲% % of consumption H1-2012 / H1-2011 39% LME* -6% 35% Steel +3% 23% Plastic +6% 3% Rare
Slide 19: EBITDA by Business Group
EBITDA by Business Group Powertrain action plan on track, Visibility impacted by aftermarket 14% H1-2012 Powertrain 12% as % of sales 9.2 % Thermal 10% as % of sales 12.0% Visibility as % of sales 9.3% 8% Comfort & Driving Assistance as % of sales 11.9 % 6% 4% TOTAL 10.9 % H1-08 H2-08 H1-09 H2-09 H1
Slide 20: Operating margin (Adj. EBIT) up 7.2%
Operating margin (Adj. EBIT ) up 7.2% at 370M€ or 6.2% of sales +0.1pt 0.0pt -0.4pt +0.6pt 6.5% 6.2% H1-11 Gross margin R&D SG&A H1-12 July 26, 2012 I 20 H1 2012 results
Slide 21: Net R&D at 313 M€, up 10%
Net R&D at 313 M€, up 10% Order intake In bn€ 14.9 to sustain order intake growth 12.5 7.2 9.2 6.0 6.1 In M€ 7.7 8.0 & % of sales 6.5 3.1 +10% 313 2009 2010 2011 2012 285 S1 S2 5.3% 5.2% H1-11 H1-12 July 26, 2012 I 21 H1 2012 results
Slide 22: SG&A under strict control
SG&A under strict control In M€ Stable at 5.4% of sales +13% 323 286 Selling Expenses Selling 98 Expenses 88 Admin. Admin. Expenses Expenses 225 198 % of sales H1-11 H1-12 5.4% 5.4% 1.7% 1.6% 3.7% 3.8% H1-11 H1-12 July 26, 2012 I 22 H1 2012 results
Slide 23: Higher break even point due to investment in Asia
Higher break even point due to investment in Asia Break even point % sales 95% 91% 88% 79% 78% 76% 75% 2007 2008 2009 2010 2011 H1-2012 2015 In line with strategic plan Flexibility assured thanks to high level of temporary contracts July 26th, 2012 I 23 H1 2012 results
Slide 24: Net income of 198 M€, mainly impacted by cost of debt
Net income of 198 M€, mainly impacted by cost of debt H1-11 H1-12 ▲ Total sales (M€) 5,334 5,999 +12.5% Operating margin (adj. EBIT) (M€) 345 370 +7% % of sales 6.5% 6.2% -0.3pt Other income & expenses (M€) (1) (22) na % of sales 0.0% 0.4% +0.4pt Operating income (EBIT) (M€) 344 348 +1% % of sales 6
Slide 25: Free cash flow up 10%, at 148 M€ after CAPEX increase
Free cash flow up 10%, at 148 M€ after CAPEX increase of 117 M€ July 26, 2012 I 25 H1 2012 results
Slide 26: Capex increase to sustain order intake
Capex increase to sustain order intake Capex excl. capitalized R&D (% of sales) 5.2% 4.2% +39% M€ 426 307 H1-11 H1-12 310 Capex excl. 224 capitalized R&D Increase of capitalized R&D driven by higher profitability of order intake 83 Capitalized R&D 116 Capitalized R&D H1-11 H1-12 (% of sales) 1.9% 1.
Slide 27: Free cash flow up 10%, at 148 M€
Free cash flow up 10%, at 148 M€ Due to strong EBITDA and favourable working capital H1-11 H1-12 EBITDA (M€) 602 655 Operating working capital (M€) (11) 59 Taxes: Restructuring & social costs (M€) (27) (22) (93) m€ Other operational items (inc. taxes) (M€) (123) (120) Pensions: (13) m€ Capex (inc. c
Slide 28: Strong financial structure
Strong financial structure July 26, 2012 I 28 H1 2012 results
Slide 29: Strong financial structure
Strong financial structure Keeping our “investment grade” status as a high priority Net financial debt over EBITDA Shareholders’ equity and net debt Net debt (M€) Shareholders’ equity (M€) excluding minority interests Net debt (M€) EBITDA 12 months rolling according to bank definition(M€) 1,936 1,95
Slide 30: Strong cash position to cope with challenging environment
Strong cash position to cope with challenging environment Debt profile as of June 30, 2012 Liquidity secured by Long – term debt management New bond issue Repurchase EMTN 2013: 89 M€ Cash and cash equivalents: 1,4 Bn€ 500 M€ - January 2017 Reimbursement syndicated loan: 225M€ Undrawn credit lines: 1
Slide 31: Valeo Access Mechanisms planned disposal
Valeo Access Mechanisms planned disposal July 26, 2012 I 31 H1 2012 results
Slide 32: Valeo Access Mechanisms
Valeo Access Mechanisms Planned disposal Key figures Part of Comfort & Driving Assistance Business Group Sales: 620 m€ in 2011 90% of sales in Europe and South America Main exposure to European customers Operating margin (Adj. EBIT) slightly lower than the Group Employees: 4,400 (end of June 2012) I
Slide 33: Valeo Access Mechanisms
Valeo Access Mechanisms Planned disposal Rationale In line with Valeo strategy focused on CO2 emission reduction, Asia & emerging countries Expected to be accretive to earnings EBITDA multiple in line with the average of multiples observed in similar transactions in the industry in 2011 Status Submi
Slide 34: U-Shin + Valeo Access Mechanisms
U-Shin + Valeo Access Mechanisms a leader with diversified geography and customer base Customer fit Valeo Access Mechanisms: strong position with European customers U-Shin: strong position with Asian customers Geographical fit 90% of Valeo Access Mechanisms sales in Europe and South America 90% of U
Slide 35: 2012 outlook
2012 outlook July 26, 2012 I 35 H1 2012 results
Slide 36: Outlook 2012
Outlook 2012 Based on the following market scenario for FY 2012: Automotive production: World: +5 to 6% Europe: -6 to -7% Raw materials prices at current levels Guidance FY-2012 operating margin* level (in M€) in the same magnitude of FY-2011 * Adjusted EBIT July 26, 2012 I 36 H1 2012 results
Slide 37: 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 26, 2012 I 37 H1 2012 results
Slide 38: Share Information
Share Information Share Data Bloomberg Ticker FR FP Reuters Ticker VLOF.PA ISIN Number FR 000130338 Shares outstanding as per 30.06.2012 79,311,067 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 J
Slide 39: Glossary
Glossary (1) Order intake: Order intake corresponds to business 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. (2) Operating margin (adj. EBIT) corresponds to operating income (E
Slide 40: Back-up
Back-up July 26, 2012 I 40 H1 2012 results
Slide 41: Quarterly information
Quarterly information in M€ Sales by segments Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Comfort & Driving 408 440 418 438 481 489 567 620 657 634 Assistance Powertrain Systems 636 708 625 714 767 782 743 834 855 826 Thermal Systems 693 754 735 751 783 776 777 804 864 855 Visibility
Slide 42: Half year P&L
Half year P&L 2009 2010 2011 2012 (in € million) H1 H2 H1 H2 H1 H2 H1 Total sales 3,472 4,027 4,787 4,845 5,334 5,534 5,999 Gross margin 453 685 856 879 916 927 1,006 as % of sales 13.0% 17.0% 17.9% 18.1% 17.2% 16.8% 16.8% R&D expenditures (234) (239) (267) (270) (285) (276) (313) Selling & administ
Slide 43: Half year segment information
Half year segment information H1-11 and H1-12 First-half 2011 Comfort and Driving (in €m) Assistance Powertrain Thermal Visibility Others TOTAL Systems Systems Systems Systems Net sales • segment (excluding Group) 956 1 537 1 545 1 284 12 5 334 • intersegment (Group) 14 12 14 20 (60) - EBITDA 107 16
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 n
Slide 45: H1 2012 results
Automotive technology, naturally