Slide 1: Investor Presentation September 2024
Investor Presentation September, 2024 FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 1
Slide 2: Valeo in 2023
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Valeo in 2023 85% OEM Sales €22.0bn 10% Aftermarket 3 Divisions* Total Sales 2023 Total Sales 5% Miscellaneous VALEO POWER €11.6bn (former Powertrain and Thermal) 112,740 175 66 VALEO BRAIN €4.9bn employees plants R&D Ce
Slide 3: Valeo is a powerful motor of the auto revolution
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Valeo is a powerful motor of the auto revolution We are taking concrete and rapid actions to anticipate tomorrow Our 5 Axes model is fully ESG centric Total Quality Product Production development Systems 5 Axes for custo
Slide 4: Our technological solutions are sustainable
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Our technological solutions are sustainable By innovating to support a more sustainable mobility Valeo is assertively facilitating the transition to cleaner and safer mobility. Alternative Performance Indicators* Mobilit
Slide 5: A balanced worldwide presence
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. A balanced worldwide presence Europe 48% 32% Asia 55,230 employees 38,179 employees 75 production sites 72 production sites 16% China 18,300 employees 35 production sites Americas 20% 19,331 employees 28 production sites
Slide 6: Beyond 2025, transformation, supported by higher margin contracts
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Beyond 2025, transformation, Supported by higher margin contracts Order Intake €34.9bn €32.6bn Strong level of order intake illustrates the right product Margin ++ positioning of the Group €20.3bn Margin + The orders gen
Slide 7: Valeo Brain Division
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Valeo Brain Division World leader of ADAS & Acceleration of Software Defined Vehicle (SDV) The broadest portfolio of technologies 2023 € 4.9bn TOTAL SALES* 25,500 EMPLOYEES +10% OEM SALES GROWTH* 27 PRODUCTION SITES ADAS
Slide 8: Acceleration of ADAS, Software & SDV
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Acceleration of Adas, Software & SDV POWERTRAIN & MODEL AGNOSTIC Valeo Brain‘s market X2.2 ~€100bn in 8 years Additional Opportunities* coming BRAIN from SDV and Software as a product €45bn Ongoing Business** with Embedd
Slide 9: World leader in ADAS
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. World leader in Adas Strong Market Trend World Leader 65% 87% 2023 2030 BRAIN L0 L1 L2 L3 L4 supported by ● Regulations ● NCAP Safety ratings Thanks to technology ● Innovations and scale INVESTOR PRESENTATION | SEPTEMBER
Slide 10: Software Defined Vehicle creates new large opportunities
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Software Defined Vehicle creates new large opportunities SEVERAL MULTI BILLIONS CONTRACTS SIGNED IN 2023 ON LARGE COMPUTING UNITS Hardware evolution Valeo competitive positioning Reliable management BRAIN DC of large cont
Slide 11: 2023 highlights – Brain
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. 2023 highlights ADAS, SDV & Interior Experience represent half of 2023 Valeo’s orders with greater embedded margins 5 new orders in high-performance computing units since 2022 including BMW and Renault BRAIN Already €300
Slide 12: Valeo Power Division
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Valeo Power Division Bringing synergies for a stronger competitiveness All electrification technologies 2023 € 11.6bn TOTAL SALES* 48,700 EMPLOYEES +11% OEM SALES GROWTH* 119 PRODUCTION SITES Valeo 3-in-1 eAxle is a Valeo
Slide 13: New energy vehicles (BEV+PHEV) promised spectacular growth
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. New energy vehicles (BEV+PHEV) promised to spectacular growth Share of NEV (BEV+PHEV) production in the world POWER 70% 53% 28% 14% 2022 2025 2030 2035 INVESTOR PRESENTATION | SEPTEMBER 2024 Source: 2023 Shareholders Mee
Slide 14: Leading to a spectacular growth, out of our market
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Leading to a spectacular growth, out of our market X3.8 ~€150bn in 8 years POWER e-Powertrain* 40% outsourced €39bn E-Thermal* 90% outsourced 2022 2030 INVESTOR PRESENTATION | SEPTEMBER 2024 * Mild Hybrids, New Mobility,
Slide 15: Valeo Power bringing together all electrification technologies
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Valeo Power bringing together all electrification technologies POWER Full System View for best technologies Synergies for competitiveness INVESTOR PRESENTATION | SEPTEMBER 2024 Source: 2023 Shareholders Meeting Presentati
Slide 16: 2023 highlights – Power
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. 2023 highlights Solid Strong pipeline Competitive order book of innovations structure For high-voltage Rare earth free motor Lean and efficient powertrain with Renault (EESM) organization POWER All regions Smart Heat Pump
Slide 17: Valeo Light Division
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Valeo Light Division Designs innovative, high-performance, smart exterior and interior lighting as well as wiper systems and sensor cleaning solutions 2023 € 5.5bn TOTAL SALES* 32,200 EMPLOYEES +5% 15 mm height ThinBilit
Slide 18: Lighting is everywhere
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Lighting is everywhere VALEO LIGHT, WORLD LEADER ON A GROWING MARKET Lighting market X1.9 ~€50bn in 8 years LIGHT €27bn 2022 2030 INVESTOR PRESENTATION | SEPTEMBER 2024 Source: 2023 Shareholders Meeting Presentation. 18
Slide 19: Valeo Light
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Valeo light #1 WORLDWIDE Lighting is everywhere Powertrain agnostic LIGHT Customers use Valeo’s technology to make cars more desirable Lighting = Brand & model signature Increased software & technology content High take
Slide 20: 2023 highlights – Light
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. 2023 highlights Numerous production launches in Europe, North America and China Multiple orders in illuminated fascia & logo LIGHT Business extending to many surfaces of the car, interior & exterior New sophisticated LED
Slide 21: Valeo Aftermarket
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 01. Valeo Aftermarket Supplies spare replacement parts and services to car dealer networks and the independent aftermarket. 2023 € 2.3bn 1,400 TOTAL SALES EMPLOYEES (VALEO SERVICE) Valeo Canopy is the 1st Outstanding technic
Slide 22: Circular economy, Valeo 4R
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 02. Circular economy, Valeo 4R The program addresses the full range of circularity issues. In particular, the approach focuses on: Preventing, managing and recycling ROBUST DESIGN REPAIR Process waste Maximize product Give s
Slide 23: Valeo sustainable development
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 02. Valeo sustainable development* A long-term sustainable growth strategy Innovation Environmental eco-efficiency CEO = ESG criteria at → Product decarbonization & solutions to → Energy & carbon decarbonize mobility efficienc
Slide 24: Cap 50 Plan: Our carbon reduction plan
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 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% Upstr
Slide 25: Exposure to European Taxonomy
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 02. 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
Slide 26: Human Capital
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 02. Human Capital Training & Accident Rate Turnover & Engagement Quality of life at Work (QLW) working From Home 93% employees trained voluntary turnover 55% Managers & Professionals 7.2% rate of Managers & professionals pla
Slide 27: Research & Development
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 02. Research & Development Europe (including Africa) 16 Research centers 18 Development centers Asia (including, China, the Middle East & Oceania) 19,376 19 Engineers Research 3 Research centers centers €2.6bn 21 Development
Slide 28: Valeo is recognized as an ESG leader by rating agencies
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 02. Valeo is recognized as an ESG leader by extra-financial rating agencies* Most represented auto parts company in ESG indices including: #1 #2 #1 CAC40 SBT 1.5° 68 /100 10.1** LOW RISK B-Prime Global ESG Leaders #1 #1 TOP 3
Slide 29: 2022-2025 Financial Recovery; Beyond 2025 Transformation
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 03. STEP 1 STEP 2 2022 - 2025 BEYOND 2025 Financial Recovery Transformation Based on existing customer contracts Through higher margin orders INVESTOR PRESENTATION | SEPTEMBER 2024 Source: 2023 Shareholders Meeting Presentat
Slide 30: 2024 & 2025 Roadmap
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 03. 2024 & 2025 ROADMAP FY 2023 FY 2024 FY 2025 reported guidance (a) (b) objectives (b) Sales €22.0bn ~€22.0bn €23.5bn to €24.5bn EBITDA 12.0% 12.1% to 13.1% 13.5% to 14.5% (as % of sales) Operating margin 3.8% 4.0% to 5.0%
Slide 31: Levers to expand operating margin from 2023 to 2025
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 03. Levers to expand operating margin from 2023 to 2025 As a % of sales 5.5% to ~+0.5 pts 6.5% ~+0.8 pts ~+0.9 pts 3.8% Self-help measures Selectivity & of order other intake ~+0.6 pts ~+0.3 pts operational & Sales New effici
Slide 32: Ambitious cost reduction actions
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 03. Ambitious cost reduction actions Transformation driven by cost reduction 2 Incl. merger between PTS and THS New Power Division At Group Level 1 single entity Cost base adjustment focused in 2024 & 2025 Coherent, comprehe
Slide 33: Selectivity of order intake for optimizing cash generation
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 03. Selectivity of order intake for optimizing Transformation driven by strong cash culture 3 cash generation Order intake in billion Valeo applies high selectivity €34.9 on new orders €32.6 → Higher embedded margins → Highe
Slide 34: Continuous improvement of profitability and free cash flow generation
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 03. Continuous improvement of profitability and free cash flow generation Operating Margin in millions and as % of sales Free Cash Flow in millions ~€800* one-off exceptional cost of self-help measures €150 €1,440 €990 ~€500*
Slide 35: To conclude: a new Capital Market Day in 2025
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 03. To conclude A NEW CAPITAL MARKET DAY IN 2025 Sales increase EBIT increase FCF increase around €2bn in 2 years more than 60% in 2 years more than 60% in 2 years to around €24bn in 2025 to around €1.5bn in 2025 €800m in 20
Slide 36: Financials
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 04. FINANCIALS More detailed information FY 2023 guidance achieved H1 2024 results INVESTOR PRESENTATION | SEPTEMBER 2024 36
Slide 37: 2023 guidance fully achieved
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 04. 2023 guidance fully achieved Group Sales EBITDA Operating margin Free cash flow FY 2023 €22.0bn €2,647m €838m €379m RESULTS 12.0% 3.8% FY 2023 GUIDANCE €22bn - €23bn 11.5% - 12.3% 3.2% - 4.0% > €320m INVESTOR PRESENTATION
Slide 38: Total sales amounting to €22.0bn, up 11% lfl adj.
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS • 04.0 Total sales amounting to €22.0bn, up 11% lfl adj. 2 Full Year sales by type Total sales OEM Aftermarket Miscellaneous €22,044m €18,701m €2,267m €276m incl. high-voltage powertrain €1,447m (vs 1,041m* in 2022) +11% +13%
Slide 39: Net income at 1.0% of sales
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 04. Net income at 1.0% of sales, up 50% on an adj. basis Despite increase in cost of net debt Other expenses FY 2022 €m FY 2023 €(111)m adjusted* Operating margin excl. JV & associates 494 838 As a % of sales 2.4% 3.8% of wh
Slide 40: Free Cash Flow of €379m
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 04. Free Cash Flow of €379m EBITDA Improvement in EBITDA contribution FY 2022 €m FY 2023 adjusted* €2,647m or 12.0% of sales EBITDA 2,323 2,647 As a % of sales 11.4% 12.0% Capex (PP&E) Under strict control in a context of st
Slide 41: H1 margins and free cash flow aligned with FY guidance
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 04. H1 margins and free cash flow aligned with FY guidance Group Sales EBITDA Operating margin Free cash flow after one-off restructuring costs H1 2024 RESULTS €11.1bn €1,383m €445m €121m 12.4% 4.0% vs. H1 2023 +1% lfl +6% or +
Slide 42: Focus on self-help measures & cost control
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 04. Focus on self-help measures & cost control Gross margin → Good control of operations +1.4pts → First effects of self-help measures On track R&D → Increased efficiency to achieve Peak reached in Q1 → Start of R&D and IFRS
Slide 43: H1 sales by type
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS • 04.0 H1 sales by type 2 Total sales OEM Aftermarket Miscellaneous €11,117m €9,295m €1,190m €632m +1% lfl growth -1% lfl growth +5% lfl growth +30% lfl growth Reported growth: -1.0% Reported growth: -2.6% Reported growth: +2.0%
Slide 44: Leverage ratio down to 1.5x
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 04. Leverage ratio down to 1.5x Undrawn Cash & cash credit lines equivalents Net debt in €bn €3.0bn €4.5bn €4.0bn €4.0bn €1.6bn June 30, 2024 June 30, 2024 June 30, 2023 Dec. 31, 2023 June 30, 2024 Green bonds and credit rat
Slide 45: Debt profile
STRATEGY & MARKETS | SUSTAINABILITY | TRANSFORMATION & TARGETS | FINANCIALS 04. Debt profile Average maturity: 3 years Undrawn €1.6BN credit facilities As of June 30, 2024 Cash & cash €3.0BN equivalents As of June 30, 2024 Sustainability-linked senior bond (EMTN) EIB loan Maturity Amount Coupon Matur
Slide 46: Glossary
Glossary Order intake corresponds to business awarded by automakers during the period to Free cash flow corresponds to net cash from operating activities (excluding changes in Valeo, and to joint ventures and associates based on Valeo’s share in net equity, (except non-recurring sales of receivables
Slide 47: 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 48: Full Year 2023 Results | February 29, 2024
FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 48