Slide 1: 2013 Results
2013 Results Jacques ASCHENBROICH – CEO February 20, 2014 February 20, 2014 I 1
Slide 2: Highlights: Acceleration in Q4 & H2 2013
Highlights Acceleration in Q4 & H2 2013 In Q4 Total sales up 13% like-for-like Acceleration in OEM sales up 17% like-for-like (10pt outperformance) Aftermarket sales up 11% like-for-like In H2 Total sales up 12% on a like-for-like basis Operating margin up 16% reached 6.9% of sales (2) Net income up
Slide 3: Highlights FY 2013
Highlights FY 2013 Order intake of €14.8bn (1) Sales of €12.1bn, up 9% like-for-like (3% on a reported basis) OEM sales, up 10% like-for-like, 6pt outperformance Aftermarket sales, up 8% like-for-like Operating margin, up 10% to reach €795m or 6.6% of sales Net income, up 18% Tax rate of 20.5%, down
Slide 4: 2014 outlook
2014 outlook Based on the following key assumptions for FY 2014: Automotive production: World: +2% to +3% Europe: +1% to +2% Raw material prices and currencies in line with current levels Valeo has set the following objectives for 2014: Sales growth outperformance in the main production regions A sl
Slide 5: In Q4, total sales up 13%
In Q4, total sales up 13% like-for-like Acceleration in OEM sales, up 17% like-for-like (10pt outperformance) Aftermarket sales up 11% like-for-like February 20, 2014 I 5
Slide 6: Acceleration of sales growth throughout 2013
Acceleration of sales growth throughout 2013 With strong performance of OEM (+17%*) and aftermarket (+11%*) sales in Q4 OEM sales In M€ Total sales €m 0%* +12%* +13%* +17%* 2,575 2,675 2,564 *Like-for-like 2,461 growth +1%* +10%* +12%* +13%* Q1 13 Q2 13 Q3 13 Q4 13 -1%** +6%** +3%** +7%** 3,039 3,12
Slide 7: OEM sales growth outpaced the global market by 10pts
OEM sales growth outpaced the global market by 10pts Outperformance in all regions Q4 Q3 Outperf. +10pts* World Outperf. OEM sales*** +17% Outperf. +9pts* Production**** +7% +8pts* North America Europe** OEM sales*** +13% OEM sales*** +14% Production**** +5% Production**** +5% 18% of Valeo sales 49%
Slide 8: Double-digit OEM sales growth in all the Business Groups
Double-digit OEM sales growth in all the Business Groups With strong performance of Visibility and Comfort & Driving Assistance OEM sales growth like-for-like Q1 Q2 Q3 Q4 CDA -3% +10% +18% +20% Powertrain -2% +7% +6% +13% Thermal -3% +8% +10% +13% Visibility +10% +26% +23% +22% February 20, 2014 I 8
Slide 9: Full year 2013 data
Full year 2013 data February 20, 2014 I 9
Slide 10: Order intake of €14.8bn
Order intake of €14.8bn confirming growth potential February 20, 2014 I 10
Slide 11: Innovation fueling future organic growth
Innovation fueling future organic growth High-quality order intake at €14.8bn % of order intake CAGR +14% Innovation 30%* €bn 15.1* 14.8* 14.0* 11.9* 7.4 7.5 9.4* 9.6* 6.6 8.9* 8.8* 5.6 *Products or technologies sold by less than 3 years 7.1* 4.6 4.9 4.6 2.8 5.8 7.4 7.7 7.3 6.3 4.3 4.3 4.8 4.7 3.0 2
Slide 12: China and North America fueling future organic growth
China and North America fueling future organic growth Acceleration in China (24% of OI, 13% of OEM sales) and NA (22% of OI, 19% of OEM sales) % of 2013 OEM sales* % of 2013 order intake* SA 5% SA Asia excl. 5% Asia NA NA excl. China Asia 19% China Asia 22% 13% 37%** 13% 26% China 13% China 24% Euro
Slide 13: Sales of €12.1bn, up 9% like-for-like or 3% reported
Sales of €12.1bn, up 9% like-for-like or 3% reported OEM sales, up 10% , like-for like 6pt outperformance Aftermarket sales up 8% like-for-like February 20, 2014 I 13
Slide 14: 2013 sales totaled €12.1bn, up 9% like-for-like
2013 sales totaled €12.1bn, up 9% like-for-like Up 3% on a reported basis after disposal of Access Mechanisms (April 30, 2013) €m *Like-for-like growth +9%* +6%* + %* +12%* + %* +13%* 12,110 6,166 5,944 3,039 FY 13 H1 13 H2 13 Q4 13 Year-on-year +3% Year-on-year +3% Year-on-year +3% Year-on-year +4%
Slide 15: Strong & balanced growth between OEM and aftermarket
Strong & balanced growth between OEM (+10%) and aftermarket (+8%) Gradual entry into production of high order intake (OEM business) Aftermarket €m OEM sales €m +8%* +6%* +11%* +11%* *Like-for-like growth +10%* +6%* +15%* +17%* 1,517 765 752 384 FY 13 H1 13 H2 13 Q4 13 +4%** +5%** +4%** +5%** 10,275
Slide 16: Acceleration of the outperformance in H2 vs H1
Acceleration of the outperformance in H2 vs H1 H2 OEM sales outpaced the global market by 9pts vs 5pts in H1 Outperformance H1 Outperformance H2 Q3 H1 H2 +5pts* +9pts* H1 H2 H1 H2 +6pts* +8pts* World +10pts* +14pts* Europe** North America H1 H2 +0pt* +5pts* Asia** excl. China H1 H2 H1 H2 -5pts* +9pt
Slide 17: 2013 OEM sales outpaced the global market by 6pts
2013 OEM sales outpaced the global market by 6pts Outperformance in all production regions, improvement in SA FY Outperf. +6pts* World OEM sales*** +10% Outperf. Outperf. +7pts* +12pts* Europe** OEM sales*** +7% North America OEM sales*** +17% 50% of Valeo sales 19% of Valeo sales Outperf. +3pts* As
Slide 18: OEM sales produced in Asia & emerging countries at 54%
OEM sales produced in Asia & emerging countries at 54% (37% in 2007) Geographic repositioning of Valeo’s businesses OEM sales by production region 54%* 50%* 2013 2011 37%* Eastern Europe & Africa 2007 14% Western Europe 37% Asia 27% US SA 9% 4% Mexico 9% *Share of Valeo total OEM production made In
Slide 19: German & Asian customers representing 57% of OEM sales
German & Asian customers representing 57% of OEM sales Customer portfolio remained firm and diversified % of OEM sales Other Other 7% 6% French* French* German 16% German 18% 29% 30% American 21% American 18% Asian** Asian** Asian** Asian** 27% 28% 29% 26% FY 12 FY 13 * Excluding Nissan ** Including
Slide 20: Above-market growth in all Business Groups
Above-market growth in all Business Groups Visibility & Comfort & Driving Assistance especially dynamic CDA VIS 18% 26% Group €12.1bn PTS 28% THS 28% % 2013 sales Total sales OEM sales (like-for-like growth) (like-for-like growth) FY FY H1 H2 Q4 CDA +9% +10% +3% +19% +20% Powertrain +6% +6% +2% +10%
Slide 21: H2 and FY operating margin up
H2 operating margin up 16% to 6.9% of sales Net income up 40% FY operating margin up 10% to 6.6% of sales Net income up 18% February 20, 2014 I 21
Slide 22: H2 gross margin up 10% to €1,036m
H2 gross margin up 10% to €1,036m or 17.4% of sales FY gross margin up 6% to €2,073m or 17.1% of sales €m & % of sales 1,036 +10% 942 -30bp +30bp 0bp +100bp 17.4% 16.4% H2 2,073 H2 12 Volume Emerging Startup Others H2 13 +6% inflation countries exchange rates of new plants 1,948 -30bp +70bp +20bp -1
Slide 23: H2 operating margin up 16% to €411m
H2 operating marginup 16% to €411m or 6.9% of sales FY operating margin up 10% to €795m or 6.6% of sales €m & % of sales +16% 411 355 0bp -30bp +100bp 6.2% 6.9% H2 795 +10% 725 H2 12 Gross Net R&D SG&A H2 13 margin +10bp +50bp -20bp 6.6% 6.2% FY FY 12 Gross Net R&D SG&A FY 13 margin February 20, 201
Slide 24: Net R&D expenditure at 5.3% of sales, up 20bp
Net R&D expenditure at 5.3% of sales, up 20bp Strong R&D effort to sustain high order intake Amortisation of capitalised Development expenditure €m & % of sales 72 79 76 65 Net R&D 1.2% 1.1% 1.3% 1.3% €m & % of sales H1 12 H2 12 H1 13 H2 13 +7.5% 643 Capitalised development expenditure 598 €m & % of
Slide 25: Sound management of SG&A expenses, down 10bp
Sound management of SG&A expenses, down 10bp G&A expenses stable at 3.6% of sales €m & % of sales +1.6% 625 635 Selling Selling expenses expenses 196 196 Admin. Admin. expenses expenses 429 439 FY 12 -10bp FY 13 5.3% 5.2% February 20, 2014 I 25
Slide 26: Breakeven point improvement to 76% of sales
Breakeven point improvement to 76% of sales Breakeven point significantly lower than pre-crisis level Breakeven point In % sales 95% 91% 88% 79% 78% 76% 76% 75% 2007 2008 2009 2010 2011 2012 2013 MT objective February 20, 2014 I 26
Slide 27: Net income up 18% to €439m
Net income up 18% to €439m Effective tax rate of 20.5% H2 12* H2 13 Change FY 12* FY 13 Change 5,760 5,944 +3% Total sales (€m) 11,759 12,110 +3% 355 411 +16% Operating margin (€m) 725 795 +10% 6.2% 6.9% +70bp % of sales 6.2% 6.6% +40bp (31) (26) n/a Other income & expenses (€m) (53) (67) n/a -0.5%
Slide 28: ROCE back to 30%
ROCE back to 30% (4) FY 12 FY 13 Total sales €11.8bn €12.1bn Operating margin 6.2% 6.6% Capital turnover 4.5* 4.6* ROCE 28%* 30%* ROA (5) 17% 19% *Proforma excluding Access Mechanisms business February 20, 2014 I 28
Slide 29: Free cash flow generation of €202m in H2, €315m over the FY
Free cash flow generation of €202m in H2, €315m over the FY February 20, 2014 I 29
Slide 30: 2013 EBITDA margin improvement at 11.2%
2013 EBITDA margin improvement at 11.2% (6) H2 EBITDA margin at 11.6% H1 2013 H2 2013 FY 2013 Powertrain % of sales 10.3% 10.3% 10.3% Thermal % of sales 11.2% 12.0% 11.6% In M€ & % of sales Visibility % of sales 8.8% 9.9% 9.4% Comfort & Driving Assistance 12.1% % of sales 12.5% 13.7% 13.1% 11.8% 11.
Slide 31: Generation of free cash flow totaling €315m in 2013
Generation of free cash flow totaling €315m in 2013 after working capital improvement of €118m & investment flows of €909m (7.5% of sales) FY 12 FY 13 EBITDA (€m) 1,260 1,356 Operating working capital (€m) (49) 118 Restructuring & employee-related costs (€m) (37) (43) Other operating items (inc. tax
Slide 32: Investments of €939m
Investments of €939m Supporting growth in the most dynamic markets (Asia, Eastern Europe & NA) (% of sales) 7.5% 7.8% €m +7% Capex* 5.4% 5.4% Capital. 939 2.1% R&D 2.4% 879 FY 12 FY 13 Capex* 649 635 Industrial development over the period 244 Capitalised R&D 290 2011-2013 11 new plants FY 12 FY 13 (
Slide 33: Strong balance sheet
Strong balance sheet February 20, 2014 I 33
Slide 34: Strong balance sheet
Strong balance sheet Leverage & gearing ratios at 0.3x and 15% respectively Net debt over shareholders’ equity Net debt over EBITDA Net debt (€m) Shareholders’ equity (€m) excluding non-controlling interests 2,380 Net debt (€m) EBITDA 12 months rolling (€m) 2,133 2,052 1,260 1,274 1,356 763 457 366
Slide 35: Debt profile as of December 31, 2013
Debt profile as of December 31, 2013 Liquidity : Debt: Cash & cash equivalents: €1.5bn Maturity Amount Coupon Undrawn credit lines: €1.1bn 3M Euribor Syndicated Loan June 2016 €250m + 1.3% Average maturity of credit lines : 3 years Aug 2016 (redeemable in 4 equal 6M Euribor BEI financing €225m annua
Slide 36: New €700m bond and repurchase of €581m in bonds
New €700m bond (10-year maturity) + repurchase of €581m in bonds (maturing in 2017 & 2018) Improved debt maturity profile (6 years average maturity vs 3.5 years previously) Liquidity : Debt: Cash & cash equivalents: €1.5bn Outstanding Maturity Coupon Undrawn credit lines: €1.1bn amount 3M Euribor Av
Slide 37: Dividend & 2014 outlook
Dividend & 2014 outlook February 20, 2014 I 37
Slide 38: Proposed dividend of €1.70/share
Proposed dividend of €1.70/share, Stable dividend policy with a payout ratio of 30% 2013 dividend of €1.70/share to be proposed at the next Shareholders’ Meeting 2010 2011 2012 2013 EPS 4.86 5.68 5.03 5.71 EPS 4.86 5.68 5.56 6.52 excl. non recurring items Dividend 1.20 1.40 1.50 1.70 Payout ratio 25
Slide 39: 2014 outlook
2014 outlook Based on the following key assumptions for FY 2014: Automotive production: World: +2% to +3% Europe: +1% to +2% Raw material prices and currencies in line with current levels Valeo has set the following objectives for 2014: Sales growth outperformance in the main production regions A sl
Slide 40: 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 Web site: www.valeo.com February 20, 2014 I 40
Slide 41: Share Information
Share Information Share Data Bloomberg Ticker FR FP Reuters Ticker VLOF.PA ISIN Number FR 000130338 Shares outstanding as of December 31, 2013 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 –
Slide 42: Glossary
Glossary 1) 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. Order intake for the Access Mechanisms business was not included in order intake d
Slide 43: Back-up
Back-up February 20, 2014 I 43
Slide 44: H2 OEM sales outpaced the global market by 9pts
H2 OEM sales outpaced the global market by 9pts Outperformance in all production regions, improvement in SA H2 Outperf. Q3 +9pts* World Outperf. OEM sales*** +15% +8pts* Production**** +6% Outperf. Europe** +14pts* OEM sales*** +12% Production**** +4% North America OEM sales*** +19% 49% of Valeo sal
Slide 45: Half year P&L
Half year P&L 2011 2012* 2013 In M€ H1 H2 H1 H2 H1 H2 Total sales 5,334 5,534 5,999 5,760 6,166 5,944 Gross margin 916 927 1,006 942 1,037 1,036 as % of sales 17.2% 16.8% 16.8% 16.4% 16.8% 17.4% R&D expenditure, net (285) (276) (313) (285) (332) (311) Selling & administrative expenses (286) (292) (3
Slide 46: Segment information
Segment information Comfort & FY 2012 Driving Powertrain Thermal Assistance Visibility (€m) Systems Systems Systems Systems Others Total Sales: ● segment (excluding Group) 3,237 3,313 2,487 2,698 24 11,759 ● intersegment (Group) 29 27 23 36 (115) - EBITDA 331 385 300 222 22 1,260 Research & Developm
Slide 47: Quarterly information
Quarterly information In M€ Sales by segment Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Comfort & Driving Assistance 481 489 567 620 657 634 616 603 629 570 521 530 Powertrain Systems 767 782 743 834 855 826 784 802 833 877 810 881 Thermal Systems 783 776 777 804 864 855
Slide 48: 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 num
Slide 49: Valeo: Automotive technology, naturally
Valeo Automotive technology, naturally EN