Slide 1: H1 2022 Results
H1 2022 Results CHRISTOPHE PÉRILLAT CEO
Slide 2: Table of contents
H1 2022 RESULTS Table of contents 01 H1 highlights 05 H1 Free cash flow 02 Sustainable growth 06 Move Up plan 03 H1 outperformance 07 Backup slides 04 H1 EBITDA & operating margins VALEO RESERVED | JULY 22 2
Slide 3: H1 highlights
01 H1 highlights RESILIENT RESULTS IN A CHALLENGING ENVIRONMENT 2022 GUIDANCE CONFIRMED VALEO RESERVED | JULY 22
Slide 4: H1 Highlights
01 H1 Highlights FEBRUARY 25 JUNE 7 JUNE 14 Launch of the Move Up plan with new 2025 financial €2.9bn in H1 2022 Stellantis chose Valeo’s 3rd generation LiDAR for its level 3 targets order intake achieving €4bn automation capability 2021/22 target for VSeA Valeo’s value creation strategy 3rd generati
Slide 5: A turbulent environment weighing on production and input costs
01 A turbulent environment… …weighing on production & input costs Global Light Vehicle Production Electronic components Vehicle losses vs pre-crisis level Valeo’s guidance: shortage > 50BN 20,000+ base & downside components references scenario purchased every year 82.9 (11.8) Million units (14.4) 79
Slide 6: H1 financial highlights: sales
01 H1 financial highlights Group Sales OEM Sales Aftermarket Sales €9,419M €7,813M €1,140M Up 2% lfl vs. 2021 Up 1% lfl vs. 2021 Up 11% lfl vs. 2021 Exchange rates: +3.4% Exchange rates: +3.8% Exchange rates: +0.2% Scope: -0.4% Scope: -0.3% Scope: -0.9% Outperf. of 3pts 3pts excl. geographical mix “ Rob
Slide 7: H1 financial highlights: operating margin, JV, net income
01 H1 financial highlights Operating margin JV & Associates Net income (excl. JV & Associates) €258M €(76)M €(48)M 2.7% of sales (0.8)% of sales (0.5)% of sales “ “ “ Resilient profitability in an Valeo Siemens eAutomotive on track Including €32m in gross inflationary environment to reduce its losses b
Slide 8: H1 financial highlights: EBITDA, free cash flow, CAPEX
01 H1 financial highlights EBITDA Free cash flow Recorded CAPEX* €1,111M €179M €364M 11.8% of sales Up 23% vs. 2021 3.9% of sales “ “ Resilient profitability in an Strict control over Capex inflationary environment €337M investment cash outflows in H1 2022 VALEO RESERVED | JULY 22 *Excl. impact of IFRS 1
Slide 9: 2022 guidance confirmed
01 2022 guidance confirmed 2022* Based on the latest automotive production estimates released by S&P Global on July 15, 2022, current Sales (in billions of euros) 19.2-20.0 levels of raw material and energy prices, constructive pricing discussions with our customers and the EBITDA (as a % of sales) 1
Slide 10: Sustainable growth at the heart of our strategy
02 Sustainable growth at the heart of our strategy PIONEER IN CLEANER AND SAFER MOBILITY VALEO RESERVED | JULY 22
Slide 11: Committed to the United Nations Sustainable Development Goals (SDGs)
02 Committed to the United Nations Sustainable Development Goals (SDGs) 4 MEGATRENDS TO SUPPORT VALEO’S GROWTH, FULLY ALIGNED WITH THE UN’s SDGs LEADER IN TECH INNOVATION Interior Autonomous, connected driving & electrification Electrification ADAS Lighting Experience Acceleration Acceleration Everywh
Slide 12: Valeo's sustainability impact through innovation & technology
02 Valeo’s sustainability impact through innovation & technology eMotor EESM* 800V SiC technology LiDAR Scala 3 Partnership with Renault Partnership with SOP 2024 SOP 2025 / Opti 2027 STMicroelectronics SOP 2025 +2% to 3% efficiency gain +3% to 5% efficiency gain Less accidents Rare-earth free Enablin
Slide 13: An ESG leader recognized by rating agencies
02 An ESG leader recognized by rating agencies #1 #1 #1 72/100 10.7 low-risk B- Prime #1 #1 #1 A- 62.2% Climate Change AAA Most represented auto parts company in ESG indices including Global ESG CAC40 ESG ESG Leaders Leaders VALEO RESERVED | JULY 22 13
Slide 14: H1 outperformance in all regions
03 H1 outperformance in all regions 3PTS ON A WORLDWIDE BASIS VALEO RESERVED | JULY 22
Slide 15: H1 OEM sales outperformance in all regions
03 H1 OEM sales outperformance in all regions China +4pts outperf. 15% of OEM sales World North America 21% of OEM sales South America 2% of OEM sales Europe (incl. Africa) 45% of OEM sales Asia (incl. China) 32% of OEM sales 3pts +6% OEM sales lfl +13% OEM sales lfl -2% OEM sales lfl +1% OEM sales lfl
Slide 16: H1 OEM sales outperformance: Asia
03 H1 OEM sales outperformance China India Japan South Korea 48% of Asian sales 4% of Asian sales 20% of Asian sales 21% of Asian sales Asia +5% OEM sales lfl +9% OEM sales lfl -6% OEM sales lfl -6% OEM sales lfl 1pt +1% Production* +16% Production* -14% Production* -2% Production* outperformance Produc
Slide 17: Comfort & Driving Assistance Systems
Comfort 03 & Driving ADAS momentum Assistance continued in the 1st half CONTRIBUTING TO SAFER MOBILITY Systems Benefiting from ADAS acceleration CDA OEM sales & Reinvention of interior experience 7pts outperformance vs H1 2021 3rd Gen LiDAR (Scala 3) order with Stellantis to equip multiple models Maj
Slide 18: Powertrain Systems
Powertrain 03 Systems Before high-voltage acceleration CONTRIBUTING TO GREENER MOBILITY Benefiting from PTS OEM sales electrification acceleration 0pt outperformance vs H1 2021 Creating a champion in electrification by taking the control of VSeA on July 4, 2022 €4BN high-voltage powertrain order intake
Slide 19: Thermal Systems
Thermal 03 Systems Towards electrification acceleration CONTRIBUTING TO GREENER MOBILITY Benefiting from THS OEM sales electrification acceleration +5pts outperformance vs H1 2021 >60% of H1 2022 order intake in electrification Battery thermal management preserving battery range and longevity and enabli
Slide 20: Visibility Systems
Visibility 03 Systems Temporarily impacted by product and customer mix effects CONTRIBUTING TO GREENER & SAFER MOBILITY Benefiting from VIS OEM sales lighting everywhere -1pt outperformance vs H1 2021 Global #1 in Visibility market First orders wins in central area illuminated grille/logo Business Gr
Slide 21: H1 EBITDA & operating margins at 11.8% & 2.7% of sales
04 H1 EBITDA & operating margins at 11.8% & 2.7% of sales IMPACTED BY PERSISTENT DIFFICULT ECONOMIC CONDITIONS VALEO RESERVED | JULY 22
Slide 22: Resilient gross margin in an unfavorable environment
04 Resilient gross margin in an unfavorable environment As a % of sales (0.3)pt (1.3)pt +1.2pt (0.3)pt Net inflation impact, in line with the guidance of €200M Favorable product mix 17.6% over 2022 Wage increase higher impact & efficiency 16.9% inflation impact program H1 2021 Volume Raw material net H
Slide 23: Net R&D costs at 7.1% of sales
04 Net R&D costs at 7.1 % of sales (€M) H1 2021 H1 2022 ▲ Gross Research and Development expenditure As a % of sales (851) (9.5)% (959) (10.2)% +13% +70bps 7.1% IFRS impact 46 3 -93% Net R&D cost Subsidies and grants, and other income 49 63 +29% Broadly in line with Move Up objective of Research & D
Slide 24: H1 operating margin at 2.7% of sales
04 H1 operating margin* at 2.7% of sales As a % of sales (0.7)pt (1.1)pt Gross margin impacted by higher input costs & production losses due to (0.1)pt electronic components 4.6% shortage and lockdown in China Gross R&D expenditure in line with order intake & projects momentum IFRS impact ** at zero
Slide 25: EBIT margin at 2.7% of sales, EBITDA margin at 11.8%
04 EBIT margin at 2.7 % of sales EBITDA margin at 11.8% of sales 16.9% (€M) H1 2021 H1 2022 ▲ Gross margin Total Sales 8,994 9,419 5% impacted by higher input costs & production losses Gross margin 1,586 1,589 0% As a % of sales 17.6% 16.9% -70bps R&D expenditure (756) (893) +18% As a % of sales (8.
Slide 26: H1 net income of €(48)M
04 H1 net income of €(48)M (€M) H1 2021 H1 2022 ▲ Total Sales 8,994 9,419 5% Other income & expenses Operating margin incl. JV & associates 296 182 -39% €(71)M including €32M one-off As a % of sales 3.3% 1.9% -140bps impairment charge linked to full writedown of our Russian assets Other income & exp
Slide 27: H1 free cash flow of €179M
05 H1 free cash flow of €179M HIGHER THAN EXPECTATION VALEO RESERVED | JULY 22
Slide 28: EBITDA margin by Business Group
05 EBITDA margin by Business Group EBITDA BY BUSINESS GROUP (IN €M AND IN % OF SALES) Impacted by persistent difficult market conditions CDA PTS €1,111M -1.5pts -0.6pts 11.8% of sales Profitability impacted by: €298M €300M €294M €287M Inflationary pressure on raw materials, energy and wages 16.8% 15.3%
Slide 29: Recorded CAPEX down by 23% YoY
05 Recorded CAPEX down by 23% YoY In €M and as a % of sales €545M* €417M* IFRS 16** IFRS 16 INVESTMENT CASH OUTFLOWS*** €176M €53M -€5M* -20bps €337M €369M €364M 4.1% 3.9% Strong discipline on investment cash outflows at 3.6% of sales to preserve cash generation H1 2021 H1 2022 * Excl. capitalized R&
Slide 30: H1 free cash flow at €179m
05 H1 free cash flow at €179m Working Capital (€M) H1 2021 H1 2022 Negative working capital impact notably due to EBITDA 1,205 1,111 voluntary inventory increase to secure deliveries to Change in operating working capital (218) (35) customers Restructuring & social costs (54) (17) Other operating ite
Slide 31: Balanced debt profile
05 Balanced debt profile Average maturity: 2.8 years Undrawn credit €1.8BN facilities As of June 30, 2022 Undrawn Bridge to bond €650M Extension Senior bond (EMTN) Schuldschein Nominal options Maturity Amount Coupon Maturity Amount Coupon Two 6-months September 2022 €600M 0.375% April 2023 €115M 0.95
Slide 32: Leverage ratio of 1.48x EBITDA
05 Leverage ratio of 1.48x EBITDA Cash & Cash equivalent Net debt Leverage & gearing €3.3BN €3.1BN Net debt/EBITDA ratio covenant 3.5x 123% 91% 94% 2.73x 84% 89% -1.7x 1.96x 1.48x 1.25x 1.34x June 30, 2022 June 30, 2022 <0.7x Credit ratings Net debt/EBITDA ratio Gearing ratio (RHS) LT Outlook ST As
Slide 33: Move Up plan
06 Move Up plan ON TRACK VALEO RESERVED | JULY 22
Slide 34: Strong business momentum
06 Strong business momentum Electrification ADAS Order intake & book to bill Acceleration Acceleration €4BN HV order intake 3rd Gen LiDAR order with achieving our 2021/2022 Stellantis to equip target multiple models €2.9BN VSeA €1.1BN >60% THS order intake Major contract with BMW Valeo in electrificat
Slide 35: Valeo H1 book to bill at 1.7x OEM sales
06 Valeo H1 book to bill at 1.7x OEM sales China 2.2x Book to bill ratio 21% of Order intake North America South America Europe (incl. Africa) Asia (incl. China) €13.1BN €4.5BN order intake €0.1BN order intake €4.4BN order intake €4.1BN order intake order intake 34% of order intake 1% of order intak
Slide 36: Major orders win in ADAS
06 Major orders win in ADAS 3rd Multi HW/SW ADAS Generation LiDAR Scala order order with To equip multiple models To equip BMW’s “Neue Klasse” of Stellantis’ brands EV platform Thanks notably to higher Including both domain controller, resolution, Scala 3 enables level sets of sensors & integrated 3
Slide 37: Valeo Siemens eAutomotive
06 Valeo Siemens eAutomotive An electric champion Activity ramp up & reduced losses H1 2022 July 4th ~€700M €375M sales Integration as Net debt Strong acceleration expected in H2 scheduled impact 50% losses reduction confirmation in VSeA’s net income in 2022 vs 2021 Achieving our €2.9BN €4bn 2021/202
Slide 38: Committed to our 2025 targets
06 Sales EBITDA FCF €27.5BN ~14.5% €0.8BN - €1.0BN Committed To our 2025 >5pts EBIT Leverage Targets* OUTPERF. OVER 2021/25 VS. IHS ~6.5% <0.7x CAGR** 2021-2025 HV BUSINESS DIVESTMENT OF INTEGRATION NON-STRATEGIC SYNERGY EFFICIENCY PLAN ASSETS PTS THS CDA VIS €120M €100M €500M 15% 11% 16% 10% per ye
Slide 39: Backup slides
07 Backup slides VALEO RESERVED | JULY 22
Slide 40: Q2 sales
07 Q2 sales €M Reported: +9% +7% -3% +8% Like for like: +4% +7% -7% +4% Exchange rates: +4.9% +1.6% +4.6% +4.3% Scope: -0.4% -0.9% -0.5% -0.4% VALEO RESERVED | JULY 22 40
Slide 41: Q2 OEM sales outperformance
07 Q2 OEM sales outperformance China 4pts outperf. 14% of OEM sales World North America 21% of Valeo sales South America 2% of Valeo sales Europe (incl. Africa) 46% of Valeo sales Asia (incl. China) 31% of Valeo sales 4pts +12% OEM sales lfl +26% OEM sales lfl +3% OEM sales lfl -1% OEM sales lfl outperf
Slide 42: H1 sales
07 H1 sales €M Reported: +4% +11% +3% +5% Like for like: 1% +11% 0% +2% Exchange rates: +3.8% +0.2% +3.7% +3.4% Scope: -0.3% -0.9% -0.2% -0.4% VALEO RESERVED | JULY 22 42
Slide 43: H1 geographic & customer positioning
07 H1 geographic & customer positioning OEM sales by production region (% of OEM sales) H1 2021 H1 2022 ▲ Western Europe 33% 31% -2pp % US Asia & emerging countries 8% 59% 8% 61% Stable +1pp 61 Of which Asia excluding China 17% 16% -1pp of OEM Sales Of which China 14% 16% +2pp Exposure to Asian Of w
Slide 44: H1 Segment information
07 H1 Segment information H1 2022 CDA* PTS THS VIS Other Total (€m) Sales: Segment (Excluding Group) 1,940 2,490 2,135 2,617 159 9,341 Intersegment (Group) 18 59 36 22 (57) 78 EBITDA 300 287 162 328 34 1,111 Research & Development expenditure, net (367) (174) (155) (190) (7) (893) Investments in pro
Slide 45: Strong ESG practices in automotive industry with ambitious targets
07 Strong ESG practices in automotive industry with ambitious targets E S G Carbon neutrality across 3 scopes Employee safety as #1 priority Separation of roles of Chairman by 2050(1) with accident frequency rate < 1.0 by 2025 and CEO in January 2022 Intermediate CO2eq reduction target of Promote di
Slide 46: 2019-2025 ESG outlook
07 2019-2025 ESG outlook 2019 base year 2021 (var vs. 2019) 2025e (var vs. 2019) Emissions reduction (Scope 1, 2 & 3) in MtCO2 49.6 45.0 (-9%) 37.9 (-24%) Scope 1 & 2 emissions in tCO2/€m 57.6 45.2 (-22%) 40.0 (-31%) E Energy consumption in MWh/€m 142 161 (13%) 134 (-6%) ISO 50001 energy management
Slide 47: Contacts
Contacts INVESTOR RELATIONS VALEO 100, rue de Courcelles 75173 Paris Cedex 17 France Thierry Lacorre E-mail: valeo.corporateaccess.mailbox@valeo.com Website: www.valeo.com VALEO RESERVED | JULY 22 47
Slide 48: Share information
Share information Share Data ADR Data Ticker/trading symbol VLEEY Bloomberg Ticker FR FP CUSIP Number 919134304 Reuters Ticker VLOF.PA Exchange OTC ISIN Number FR0013176526 Ratio (ADR: ord) 1:2 Shares outstanding as of June 30, 2022 242,574,781 Depositary Bank J.P. Morgan Contact at J.P. Morgan – AD
Slide 49: Glossary
Glossary Order intake corresponds to business awarded by automakers during the period to EBITDA corresponds to (i) operating margin before depreciation, amortization and Valeo, and to joint ventures and associates based on Valeo’s share in net equity, (except impairment losses (included in the opera
Slide 50: Safe harbour statement
Safe harbour statement Statements contained in this document, which 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 with respe
Slide 51: Smart technology for smarter mobility
SMART TECHNOLOGY FOR SMARTER MOBILITY