Slide 1: H1 2015 Results
H1 2015 Results Jacques Aschenbroich – CEO July 27, 2015 July 27, 2015 I 1
Slide 2: H1 highlights
H1 highlights Fueled by +18% as reported Order intake(1 ) of €10.7bn innovation +13% like-for-like (2) +15% as reported Sales of €7.3bn +6% like-for-like (2) +16% as reported OEM sales of €6.3bn +7% like-for-like (2) Growth* Outperformance** Outperformance in all production World OEM sales +7% +6pts
Slide 3: H1 highlights
H1 highlights Operating margin* of €538m 7.4% of sales up 23% Strong improvement in Net income of €344m 4.7% of sales up 34% Profitability EPS of €4.41 up 34% EBITDA(1) of €913m 12.5% of sales up 24% Free cash flow(1) of €306m Double H1 14 Significant Cash conversion rate (FCF/EBITDA) 33% cash gener
Slide 4: Latest market trends
Chinese trend Growth rate slowing down Latest market Many customers extending summer holidays trends Full-year growth production forecast: between 4% and 5% YTD organic growth of 10% Numerous starts of production ongoing thanks to very high historical level of order intake Strong growth with Chinese
Slide 5: 2015 outlook
2015 outlook Based on the following key assumptions for full-year 2015: Automotive production growth consistent with LMC estimates: World: between 2% and 3% Europe (excl. Russia): between 4% and 5% China: between 4% and 5% Raw material prices and currencies in line with current levels Valeo raises i
Slide 6: Strategic plan 2015-2020
Strategic plan 2015-2020 Valeo ahead of the plan Sales growth [2015-2020] CAGR 8% H1 15 order intake growth like-for-like +13% Balanced, profitable Cash organic growth conversion rate Outperformance 2020 >30% [2015-2020] +5pts H1 14 21% H1 15 +6pts H1 15 33% Growth Profit Cash Operating margin ROCE*
Slide 7: Half year order intake of €10.7bn up 18%
Half year order intake of €10.7bn up 18% (up 13% like-for-like) confirming high growth potential July 27, 2015 I 7
Slide 8: Acceleration in order intake up 18% (up 13% like-for-like)
Acceleration in order intake up 18% (up 13% like-for-like)… … leading to an acceleration in Valeo’s future organic growth Innovation fueling future organic growth as a % of order intake* Order intake* €bn Innovation 30% (1) 8.4 (1) Products and technologies sold by less than 3 years 7.4 7.5 6.6 FY o
Slide 9: Acceleration in order intake fueling future organic growth
Acceleration in order intake fueling future organic growth China: local OEMs representing ~20% of OEM sales and 44% of order intake % of H1 2015 OEM sales* % of H1 2015 order intake* SA Asia 21% Asia 29% excl. China €0.4bn 22% SA Asia Asia NA 2% excl. €2.2bn China 28% China NA €1.4bn €0.8bn 25% Chin
Slide 10: Sales of €7.3bn, up 15% as reported
Sales of €7.3bn, up 15% as reported up 6% like-for-like OEM sales, up 16% as reported up 7% a 6-point outperformance like-for like, Aftermarket sales, up 8% as reported up 2% like-for-like July 27, 2015 I 10
Slide 11: H1 sales totaled €7.3bn, up 15% as reported
H1 sales totaled €7.3bn, up 15% as reported (up 6% like-for-like) Consistent performance over H1 Reported +15% +15% +15% 7,298 €m 3,581 3,717 Q1 15 Q2 15 H1 15 Like-for-like +6% +6% +6% Q1-2014 3,112 Q2-2014 3,235 H1-2014 6,347 Exchange rates +8.3% Exchange rates +8.8% Exchange rates +8.5% Scope +0.
Slide 12: Consistent performance in OEM sales, up 16% as reported
Consistent performance in OEM sales, up 16% as reported Improvement in aftermarket sales (up 6% as reported in Q1, up 10% as reported in Q2) Aftermarket OEM sales +6%* +10%* +8%* *Reported +16%* +16%* +16%* 813 400 413 Q1 15 Q2 15 H1 15 +1%** +3%** +2%** 6,316 +4%** excl. €m Sales from Korea 3,113 3
Slide 13: OEM sales outpaced the market in all production regions (Q2)
OEM sales outpaced the market in all production regions Outperf. Q2 +6pts Like-for-like Outperf. World +11pts OEM sales** +6% Production***0% Outperf. Europe* +1pt OEM sales** +10% North America Production***-1% OEM sales** +4% Production*** +3% 49% of Valeo sales 23% of Valeo sales Outperf. +3pts A
Slide 14: Above-market growth in all Asian countries (Q2)
Above-market growth in all Asian countries Q2 Like-for-like Outperf Outperf +3pts +4pts Asia Japan OEM sales* +4% OEM sales* -6% Production** +1% Outperf Production** -10% +3pts 17% of Asia sales 26% of Valeo sales Korea OEM sales* +5% Production** +2% 22% of Asia sales Outperf +3pts China Outperf O
Slide 15: OEM sales outpaced the market in all production regions (H1)
OEM sales outpaced the market in all production regions Outperf. H1 +6pts Like-for-like Outperf. World +8pts OEM sales** +7% Production***+1% Outperf. Europe* +1pt OEM sales** +10% North America Production***+2% OEM sales** +4% Production*** +3% 49% of Valeo sales 22% of Valeo sales Outperf. +3pts A
Slide 16: Above-market growth in all Asian countries (H1)
Above-market growth in all Asian countries H1 Like-for-like Outperf Outperf +4pts +7pts Asia Japan OEM sales* +6% OEM sales* -2% Production** +2% Outperf Production** -9% +6pts 18% of Asia sales 26% of Valeo sales Korea OEM sales* +5% Production** -1% 22% of Asia sales Outperf +5pts China Outperf OE
Slide 17: Ongoing geographic rebalancing
Ongoing geographic rebalancing… OEM sales by production region Eastern Eastern Europe & Europe & Africa Africa 15% 15% Western Europe Western 38% Europe 52% in Asia Asia 54% in Asia 35% & emerging 24% & emerging Asia countries countries 26% SA US US SA 3% 10% 11% Mexico 2% Mexico 10% 11% H1 2014 H1
Slide 18: A balanced, diverse customer portfolio
… And a balanced, diverse customer portfolio % of OEM sales Other Other 5% 6% French* 17% German French* German 30% 16% 30% American 22% American 23% Asian** Asian** Asian** Asian** 25% 26% 29% 26% H1 2014 H1 2015 * Excluding Nissan ** Including Nissan July 27, 2015 I 18
Slide 19: Above-market growth in all Business Groups
Above-market growth in all Business Groups CDA VIS 18% 28% Group €7.3bn PTS 26% THS 28% % H1 2015 sales Total sales growth OEM sales growth (year-on-year) (like-for-like) H1 Q1 Q2 H1 CDA +19% +13% +13% +13% Powertrain +14% +4% +7% +5% Thermal +13% +4% +1% +2% Visibility +16% +9% +7% +8% July 27, 201
Slide 20: Net income, up 34% to €344m
Net income, up 34% to €344m or 4.7% of sales Operating margin*, up 23% to €538m or 7.4% of sales * incl. joint ventures and associates in accordance with new IFRS standards July 27, 2015 I 20
Slide 21: Gross margin up 19% to €1,280m or 17.5% of sales
Gross margin up 19% to €1,280m or 17.5% of sales Improvement driven by volumes and operational efficiency €1,280m +19% €1,086m €1,080m +30bps -20bps +40bps -10bps +10bps -10bps 17,5% 17.1% 17.0% H1-14 IFRIC 21 H1-14 Volume/ Operational Depreciation South America Perimeter H1-15 published (change in
Slide 22: Operating margin up 23% to €538m or 7.4% of sales
Operating margin* up 23% to €538m or 7.4% of sales €538m +23% €442m €436m +20bps -20bps +50bps +0bps -10bps 7.4% 7.0% 6.9% H1-14 IFRIC 21 (change H1-14 Gross Net R&D SG&A Non-recurring H1-15 published in accounting restated margin (Valeo- rules) Sylvania 2014) * incl. JV & Associates in accordance w
Slide 23: Net R&D expenditure stable at 5.5% of sales
Net R&D expenditure stable at 5.5% of sales Strong R&D effort to sustain high order intake Capitalized development expenditure Net R&D In €m & as a % of sales In €m & as a % of sales 173 150 148 +15% 2.4% 2.3% 2.4% 402 H1 14 H2 14 H1 15 350 stable 5.5% 5.5% Amortization of capitalized development ex
Slide 24: G&A expenses down 10 basis points
G&A expenses down 10 basis points In €m & as a % of sales 363 326 Selling expenses Selling stable 115 expenses or 1.6% 103 or 1.6% Admin. Admin. -10bps expenses expenses 223 248 or 3.5% or 3.4% H1 14 H1 15 July 27, 2015 I 24
Slide 25: Net income up 34% to €344m or 4.7% of sales
Net income up 34% to €344m or 4.7% of sales H1 14* H1 15 Change Total sales (€m) 6,347 7,298 +15% Operating margin excl. JV & Associates (€m) 404 515 +28% As a % of sales 6.4% 7.1% +70bp JV & Associates (€m) 32 23 -28% As a % of sales 0.5% 0.3% -20bp Operating margin incl JV & Associates (€m) 436 53
Slide 26: Net income up 34%
Net income up 34% H1 14* H1 15 Change Net income (€m) 256 344 +34% EPS €3.29 €4.41 +34% Net income (€m) (excluding non-recurring items) 272 357 +31% EPS (excluding non-recurring items) €3.50 €4.58 +31% *Restated in accordance with IFRIC 21 July 27, 2015 I 26
Slide 27: ROCE at 32%
ROCE at 32% H1 14* H1 15 Total sales €6.3bn €7.3bn Operating margin** 6.9% 7.4% ROCE 32% 32% ROA 20% 21% *Restated in accordance with IFRIC 21 ** incl. JV & Associates in accordance with new IFRS standards July 27, 2015 I 27
Slide 28: Free cash flow of €306m, double H1 2014
Free cash flow of €306m, double H1 2014 July 27, 2015 I 28
Slide 29: EBITDA margin up 90bps to 12.5% of sales
EBITDA margin up 90bps or 24%, to 12.5% of sales H1 14** H1 15 Comfort & Driving Assistance As a % of sales 14.1% 14.4% In €m & as a % of sales Powertrain As a % of sales 12.2% 12.1% Thermal As a % of sales 11.0% 11.1% 12.5% Visibility 12.4% As a % of sales 9.3% 11.8% TOTAL 11.6% 12.5% 11.6% 11.6% 1
Slide 30: Investments of €535m
Investments of €535m Supporting the fast-growing order intake (as a % of sales) 7.4% In €m 7.0% Capex* +21% 4.6% 5.0% Capital. 535 2.4% R&D 2.4% H1 14 H1 15 444 Capex* 362 Development of footprint 294 Total sq.m. end 2014: 2.4m • Completed in H1: 3 new sites 6 extensions 150 Capitalized R&D 173 +60,
Slide 31: Free cash flow of €306m, double H1 2014
Free cash flow of €306m, double H1 2014 H1 14* H1 15 EBITDA (€m) 734 913 +24% Operating working capital (€m) (29) 48 Restructuring & employee-related costs (€m) (17) (11) Other operating items (incl. taxes) (€m) (84) (105) Of which: Taxes (74) (81) Pensions (12) (16) Cash from operating activities**
Slide 32: Strong balance sheet
Strong balance sheet July 27, 2015 I 32
Slide 33: Leverage & gearing ratios at 0.1x and 7% respectively
Leverage & gearing ratios at 0.1x and 7% respectively Moody’s LT rating upgraded to Baa2 stable outlook (May 12, 2015) Gearing: net debt/stockholders’ equity Stockholders’ equity (€m) Leverage: net debt/EBITDA Net debt (€m) excluding non-controlling interests Net debt (€m) EBITDA 12 months rolling (
Slide 34: Debt maturity profile
Debt maturity profile 3000 2500 Undrawn credit lines 4.5-year maturity 2000 1500 Average maturity: 4.6 years 1000 Cash & cash equivalents 500 0 2015 2016 2017 2018 … … 2024 BEI Financing EMTN Syndicated Loan Cash & equivalents Private Placements Undrawn Credits Lines July 27, 2015 I 34
Slide 35: 2015 outlook
2015 outlook July 27, 2015 I 35
Slide 36: 2015 outlook
2015 outlook Based on the following key assumptions for full-year 2015: Automotive production growth consistent with LMC estimates: World: between 2% and 3% Europe (excl. Russia): between 4% and 5% China: between 4% and 5% Raw material prices and currencies in line with current levels Valeo raises i
Slide 37: Contact 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 Website: www.valeo.com July 27, 2015 I 37
Slide 38: Share Information
Share Information Share Data Bloomberg Ticker FR FP Reuters Ticker VLOF.PA ISIN Number FR 000130338 Shares outstanding as of June 30, 2015 79,462,540 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
Slide 39: Glossary
Glossary 1) Order intake corresponds to business awarded by automakers during the period (including joint ventures at least 50%-owned by the Group) less any cancellations, based on Valeo’s best reasonable estimates in terms of volumes, selling prices and project lifespans. based on Valeo's best reas
Slide 40: Back-up
Back-up - Valeo TT AT€TW~~—~Suly 27,2015 40 ,
Slide 41: Comfort & Driving Assistance Systems
Comfort & Driving Assistance Systems 2014 key figures: • Sales: €2.3bn (18% of Group sales) • EBITDA: 14.5% (22% of Group EBITDA) Sales performance • 14,195 employees Total sales - • 25 production units change as +19% +19% +19% reported • 8 development centers • 9 research centers 1,336 Total sales
Slide 42: Powertrain Systems
Powertrain Systems 2014 key figures: • Sales: €3.3bn (26% of Group sales) • EBITDA: 12.3% (27% of Group EBITDA) Sales performance • 18,412 employees Total sales - • 37 production units change as +12% +15% +14% • 16 development centers reported • 5 research centers 1,926 Market share* and competitors
Slide 43: Thermal Systems
Thermal Systems 2014 key figures: • Sales: €3.6bn (28% of Group sales) • EBITDA: 11.1% (26% of Group EBITDA) Sales performance • 19,359 employees Total sales - • 44 production units change as +14% +11% +13% • 8 development centers reported • 3 research centers 2,046 Total sales (€m) Market share* an
Slide 44: Visibility Systems
Visibility Systems 2014 key figures: • Sales: €3.6bn (28% of Group sales) Sales performance • EBITDA: 10.6% (25% of Group EBITDA) Total sales - change as +17% +16% +16% • 24,912 employees reported • 36 production units • 15 development centers • 5 research centers 2,094 Market share* and competitors
Slide 45: Quarterly information
Quarterly information In €m (2014 restated in accordance with IFRIC 21) Sales by segment Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Comfort & Driving Assistance Systems 623 569 515 531 552 572 573 614 657 679 Powertrain Systems 774 817 752 818 848 848 798 843 948 978 Thermal Systems
Slide 46: Statement of income with half year breakdown
Statement of income with half year breakdown 2013 2014* 2015 In €m H1 H2 H1 H2 H1 Sales 5,944 5,718 6,347 6,378 7,298 Gross margin 1,011 998 1,086 1,123 1,280 as a % of sales 17,0% 17.5% 17.1% 17.6% 17.5% R&D expenditure, net (318) (296) (350) (335) (402) Selling & administrative expenses (318) (311
Slide 47: Segment information
Segment information Comfort & H1 2015 Driving Assistance Powertrain Thermal Visibility (€m) Systems Systems Systems Systems Others Total Sales: ● segment (excluding Group) 1,327 1,898 2,022 2,035 16 7,298 ● intersegment (Group) 9 28 24 59 (120) - EBITDA 192 231 227 247 16 913 Research & Development
Slide 48: Safe Harbor Statement
Safe Harbor Statement Statements contained in this press release, 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
Slide 49: Valeo - Automotive technology, naturally
Valeo Automotive technology, naturally EN