Slide 1: ESG Investor Presentation Oddo BHF Breakfast
ESG Investor Presentation Oddo BHF Breakfast June 2024
Slide 2: Safe harbour statement
Safe harbour statement Statements contained in this document which, when they 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
Slide 3: Executive summary
Executive summary 01 02 03 04 05 Sustainable Environmental Human Societal Responsible Positioning Strategy Capital Ecosystem Governance A summary of our sustainable Our climate strategy and Attracting talent, in particular Our social policies A dual governance: an positioning: purpose, targets valid
Slide 4: Sustainable Positioning
01 SUSTAINABLE POSITIONING ESG INVESTOR PRESENTATION | JUNE 2024 4
Slide 5: Our Corporate Purpose
01 Our Corporate Purpose Valeo’s ambition, as a tech company, is to play a major role in tomorrow’s mobility. At the heart of today’s environmental and social issues, future mobility must be greener, safer and more diverse. It must also contribute to the well-being and safety of citizens and consume
Slide 6: Valeo in a nutshell
01 Valeo in a nutshell €22.0bn 3 Divisions * Total Sales 2023 Total Sales in €bn 85% 10% 5% OEM Sales Aftermarket Miscellaneous VALEO POWER €11.6bn (former Powertrain + Thermal) VALEO BRAIN €4.9bn 112,740 175 66 (former Control and Driving Assistance) employees plants R&D Centers VALEO LIGHT €5.5bn
Slide 7: Valeo is a powerful motor of this revolution – Move Up
01 Valeo is a powerful motor of this revolution M OVE UP Strategic plan We are taking concrete and rapid actions to anticipate tomorrow REGULATIONS INNOVATION Decarbonising mobility Decarbonising and optimising energy mobility management Developing safer, more immersive Optimum visibility for safety
Slide 8: Automotive industry transformation: focus on strong market trends
01 Automotive industry transformation: focus on 2 strong market trends M OVE UP Strategic plan 01 02 Valeo order intake Advanced Driving Assistance Systems Electrification (as of Dec. 31st, 2023) Software Defined Vehicle Systems market Interior experience Group €34.9bn €150bn €100bn > 50% Order intake
Slide 9: Aftermarket and remanufacturing
01 Aftermarket and remanufacturing A dynamic activity and a product diversification Developing a remanufacturing sustainable and strategy, thanks to solid market trends: profitable business • Growth and aging of the global vehicle fleet • VALEO 4R circular economy framework • Expansion into new product
Slide 10: A well balanced footprint
01 A well balanced footprint * 48% * 20% 16% * 16% * North America Europe Asia excl. China China 28 plants 75 plants 72 plants 31 plants 8 R&D sites 34 R&D sites 24 R&D sites 11 R&D sites 19,331 employees 55,230 employees 38,179 employees 18,297 employees ESG INVESTOR PRESENTATION | JUNE 2024 * % of
Slide 11: Sustainability is at the heart of Valeo’s strategy
01 Sustainability is at the heart of Valeo’s strategy Green portfolio Sustainable ecosystems Talent transformation A portfolio contributing Beyond operations, improving In the course to the decarbonisation sustainability in the value chain of the transition of road mobility & in ecosystems ● 21% of
Slide 12: Our technological solutions are sustainable
01 Our technological solutions are sustainable By innovating to support more sustainable mobility and the climate transition With 60% of 2023 OEM Sales, Valeo is assertively facilitating the transition to cleaner, and safer mobility. Alternative Performance indicators* Mobility cleaner 45% Reducing
Slide 13: Exposure to European Taxonomy
01 Exposure to European Taxonomy 2023 Figures Taxonomy categories & contribution to objectives ● Valeo's activities covered by the Taxonomy include the Turnover CapEx OpEx manufacture of automotive systems and components for electric mobility (categories 3.18) and other low-carbon manufacturing tech
Slide 14: Materiality Matrix Double materiality matrix (CSRD)
01 Materiality Matrix Double materiality matrix (CSRD) ● Being finalized in the course of CSRD ● 5 main topics are identified both in terms of impact & financial: - climate change - circular economy - employees - consumer end users - business conduct Please refer to URD 2023, page 196, for more detaile
Slide 15: Our sustainable pillars, contributing to the SDGs
01 Our 3 sustainable pillars, contributing to the 7 SDGs ENVIRONMENTAL SOCIAL SOCIETAL Decarbonisation of Commitments Sustainability across mobility towards employees the value chain Health & Safety Resource preservation Engagement with & circular economy Diversity, Equity & Inclusion education ecos
Slide 16: 2023 ESG performance, on track to achieve our 2025 objectives
01 2023 ESG performance, on track to achieve our 2025 objectives Environmental Gender diversity Business practices towards footprint & Safety end to end integrity CO2 emissions* (scopes 1, 2, 3) Women in managers & engineers New, 2 revised Codes -9% in absolute value 25.5% (+1.4pts vs. 2022) code of
Slide 17: Sustainable KPIs & targets 2025 and/or 2030
01 20 Sustainable KPIs & targets 2025 and/or 2030 2019 2023 2025 2030 9 environmental Challenges Environmental indicators Baseline Results Targets Targets indicators Emissions from operating activities 1.1 0.65 0.65 0.28 Scopes 1 & 2 (MtCO2ep.) -41% -41% -75% Carbon Emissions from purchased goods an
Slide 18: Our levers for 2030 emissions reduction targets
01 Our levers for 2030 emissions reduction targets Scopes 1 & 2, Scope 3 upstream & downstream Scopes 1 & 2 Scope 3 Upstream Scope 3 Downstream 2019 2030 2019 2030 2019 2030 Levers Levers Levers Data Target Data Target Data Target Share (%) of Share of products Number of ISO 50001 production purchas
Slide 19: 2023-2019 Results: on track to achieve our 2030 targets
01 2023-2019 Results: on track to achieve our 2030 targets WATER WASTE CONSUMPTION PRODUCTION -9% -6% 91% BETWEEN 2019 AND 2023 BETWEEN 2019 AND 2023 WASTE RECOVERED OR RECYCLED IN ABSOLUTE VALUE IN ABSOLUTE VALUE IN 2023 -20% -25% -23% BETWEEN 2019 AND 2023 BETWEEN 2019 AND 2023 BETWEEN 2019 AND 20
Slide 20: Decarbonation Mobility: 2023 highlights
01 Decarbonation Mobility: 2023 highlights CHINA ASIA NORTH AMERICA EUROPE Shenyang Penang Seymour Fischbach Solar panels Solar panels Elec Power units Biomass heating SCOPE 1&2 -3,444t -1,250t -1,750t -364t eq. CO₂ per year* eq. CO₂ per year* eq. CO₂ per year* eq. CO₂ per year* SCOPE Full halogen t
Slide 21: Sustainable KPIs & targets: employee-related indicators
01 20 Sustainable KPIs & targets 2019 2023 2025 2030 8 employee- Challenges Employee-related indicators Baseline Results Targets Targets related indicators Accident frequency rate (FR1) 1.9 0.8 <1 - Gender equity index 82 pts 88.9 pts 90 pts - Percentage of women on the Group's 16% 23.6% 24% 32% man
Slide 22: Sustainable KPIs & targets: social indicators
01 20 Sustainable KPIs & targets 2019 2023 2025 2030 3 social Challenges Employee-related indicators Baseline Results Targets Targets indicators Share of production purchases for Purchasing and which the suppliers' sustainable Sustainable 80% 85% 82% development practices were assessed Development d
Slide 23: Best practices in Corporate Governance
01 Best practices in Corporate Governance 1 2 3 Dual Independence & Specialized Committees & governance Diversity of the Board CSR incentive ● Separation of Chairman & ● 15 members(1) ● 4 Committees under the CEO roles* supervision of the Board ● 92% of independent - Governance, Appointments & CSR ●
Slide 24: Preparing actively the new CSRD Disclosure
01 Preparing actively the new CSRD Disclosure 2023 2024 2025 Phase 1 Maturity Evaluation Phase 2 Operational Alignement Phase 1 - dual impact analysis matrix: Phase 3 Dry run sustainability impact and financial impact with 4 levels of criticality Phase 2 - gap analysis with the support from a - opera
Slide 25: Leader in ESG ratings, extra-financial agencies
01 ESG Investor Leader in ESG ratings*, extra-financial agencies Staying ahead of market practices 68/100 #1 10.1 #2 B- #1 • Decarbonisation plan (CAP 50 Plan) low-risk Prime • Climate strategy S&P Global Sustainalytics ISS ESG • Circularity program • European Taxonomy - #1 #1 A AAA 63 Top3 • Transpa
Slide 26: To conclude
01 To conclude Valeo is Valeo gets A unique positioning towards a more greener A virtuous circle between and safer mobility Finance and Sustainability Fully committed to the Ready for the sustainability transition challenges of tomorrow ESG INVESTOR PRESENTATION | JUNE 2024 26
Slide 27: Environmental Strategy
02 ENVIRONMENTAL STRATEGY ESG INVESTOR PRESENTATION | MAY 2024 27
Slide 28: Taking action against climate change
02 Taking action against climate change The automotive sector has a key role to play in Our industry turned the corner on the fight against climate change decarbonisation: e-mobility 18% 25%* of global CO2 of the car park will be emissions* electrified** today in 2030 6 Gt 5% per year in 2023 *Source:
Slide 29: Cap Plan: Our carbon reduction plan
02 Cap 50 Plan: Our carbon reduction plan SBTi Valeo’s GHG emissions reduction targets on Scopes 1, 2 and 3 2030 Targets (vs 2019) Absolute data Base year -9% -18% -17% -59% -90%* Scopes 1&2 -75% 49.6 2.5 Scope 3 -15% Upstream Scope 3 -15% Downstream 45.2 NET ZERO** Intensity data 2.0 41.4 Scopes 1&
Slide 30: Emissions avoided by third parties, thanks to Valeo Technologies
02 Emissions avoided by third parties, Positive impact of avoided emissions by thanks to Valeo Technologies third parties Valeo’s technologies are expected to enable third parties to As a developer of electrification technologies that are key avoid 13.6 MtCO2eq. of GHG emissions, or 27% of 2019 for t
Slide 31: CO2 emissions figures
02 CO2 emissions figures A continuous KtCO2eq. 2019 2020 2021 2022 2023 achievement of annual Scope 1 196 171 193 191 186 greenhouse gas Scope 2 (including renewable emissions energy purchases) 966 460 582 517 464 targets, Scope 3 Upstream each year since the (purchased goods and services, and 9,479
Slide 32: Circular economy: Valeo 4R program
02 Circular economy: Valeo 4R program ROBUST DESIGN REPAIR The program addresses the full range of circularity issues. In particular, the approach focuses on: • preventing, managing and recycling Maximize product Give second chance lifespan to dysfunctional process waste VALEO 4R products • collecti
Slide 33: A commitment spanning the entire value chain
02 A commitment spanning the entire value chain Valeo has 7 major initiatives to significantly reduce its carbon emissions across its entire value chain 1 2 3 4 5 6 7 reducing the prioritizing reducing technologies transforming the carbon footprint carbon-free involving emissions in its eco-designing
Slide 34: Green and sustainability-linked financing framework overview
02 Green and sustainability-linked financing framework overview (October 2023) Green Financing Framework Sustainability-Linked Financing Framework • KPI 1: Valeo’s total adjusted carbon footprint Use of Proceeds Project evaluation and • (Scopes 1, 2 & 3 GHG emissions) Selection of selection • KPI 2:
Slide 35: Human Capital
03 HUMAN CAPITAL ESG INVESTOR PRESENTATION | JUNE 2024 35
Slide 36: Human capital mission
03 Human capital mission Chief Human Resources Officer, a member of the Executive Committee, is in charge of the HR policy TOP 4 priorities of the 5 dedicated targets on: human resources policy: ▪ accident frequency ▪ safety and working conditions ▪ women representation & ▪ attracting and retaining
Slide 37: Human capital in a nutshell
03 Human capital in a nutshell 112,740 employees, 141 nationalities 19,376 engineers, of which +9,000 software engineers Training & Accident Rate Turnover & Engagement Quality of life at Work 93% employees trained 7.2% voluntary turnover rate of Managers & 54.8% working From Home Managers & Professi
Slide 38: Our geographical footprint
03 Our geographical footprint North America South America Europe* Asia** Worldwide 15% 2% 49% 34% % of headcount Employees 112,740 17,199 2,132 55,230 38,179 Plants 175 23 5 75 72 ESG INVESTOR PRESENTATION | JUNE 2024 * Including Africa **including China All figures are at end of Dec. 2023 38
Slide 39: Research & Development
03 Research & 47 19,376 19 Development Engineers Research Development centers centers €2.6bn +9,000 Software Engineers EUROPE dedicated to R&D effort (including Africa) 16 Research centers 18 Development centers NORTH AMERICA 6 Development centers ASIA (including, China, the Middle East & Oceania) 3
Slide 40: Women representation
03 Women representation Tackling the sectoral legacy of women's under-representation 23.6% 2021 2022 2023 in 2023 Women in headcount (%) 32.4 31.8 33.1 Percentage of women on Key Women in new hires (%) 36.0 35.5 37.1 the Group’s various Indicators management Gender equality index (pts) 86.3 87.9 88.
Slide 41: Societal Ecosystem
04 SOCIETAL ECOSYSTEM ESG INVESTOR PRESENTATION | MAY 2024 41
Slide 42: Supporting suppliers in sustainable development best practices
04 Supporting suppliers in sustainable development best practices Supplier self-assessments questionnaire: 2023 Results of assessments of suppliers 52 questions divided into 6 equally categories Coverage of 85% of the Group’s production purchases Environment & Example below of supplier carbon assess
Slide 43: A proactive commitment to local communities
04 A proactive commitment to local communities Action at sites level Action at country level Valeo has a policy of encouraging its sites to take responsibility Valeo, a partner in academic research in social and to support local initiatives around the world. fields, in addition to research for the de
Slide 44: A proactive commitment to research & innovation ecosystems
04 A proactive commitment to research & innovation ecosystems Collaboration with academic & research institutes, fostering ecosystems and accelerating innovation, for mobility and way beyond the automotive industry. Software & Electronics Connected, cooperative & automated mobility Valeo is in the P
Slide 45: Responsible Governance
05 RESPONSIBLE GOVERNANCE ESG INVESTOR PRESENTATION | MAY 2024 45
Slide 46: Board of Directors
05 Board of Directors The Board of Directors has set up 4 Committees to make Mission of the Board recommendations on key matters, improve its operating procedures The Board of Directors determines Valeo’s business strategies and ensures that they are implemented effectively Audit & Risks Compensatio
Slide 47: Risk management
05 Risk management Risk categories Risk factors Risks are mapped using a global, iterative approach Risk related to automotive involving several stages: equipment industry Strategy risks • identification: their causes and consequences Risk related to attracting and are analyzed using various methods,
Slide 48: Business Ethics & Compliance
05 Business Ethics & Compliance A comprehensive ethical and compliance process with: of new hires ~ 100% have acknowledged reception The engaged commitment of executive management: of the code of business ethics • a Code of Business Ethics • precise, explicit compliance programs • multilingual tools
Slide 49: Executive committee
05 Executive committee (as of April 2024) A tight team of twelve experienced leaders From left to right: Catherine Delhaye, Chief Ethics, Compliance and Data Protection Officer Marc Guédon, Chief Purchasing Officer Detlef Juerss, Chief Sales & Business Development Officer Xavier Dupont, CEO of Valeo Po
Slide 50: Compensation structure
05 Compensation structure Annual variable compensation - Criteria Criteria weight (max. 120% of fixed compensation) (up to 100%) Annual 2024 compensation Ebit 18% Target structure of the Chief Executive Officer Free Cash Flow 18% Quantifiable Net Income 16% 58% The Chief Executive Officer’s 2024 Net deb
Slide 51: Valeo’s Sustainable Development governance
05 Valeo’s Sustainable Development governance Governance, Appointments & Corporate Social CAP 50 Plan Governance Responsibility Committee • Role of Sustainable Development and External Affairs Department: A CAP 50 governance system has been set up to ensure effective plan piloting and coordinating f
Slide 52: ESG Investor Presentation
Valeo ESG Investor Presentation SMART TECHNOLOGY FOR SMARTER MOBILITY