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Valeo — Auto Suppliers Day 2009

40 slides from Valeo's conference presentation, Dec 15, 2009

  1. Slide 1: Auto Suppliers Day

    Auto Suppliers Day Vincent Marcel Vice President Financial Affairs and Strategic Operations December 15, 2009

  2. Slide 2: Agenda

    Agenda 1 Q3-09 Financials 2 Business development 3 Trading update Auto Suppliers Day _ December 15, 2009 I 2 I

  3. Slide 3: Q3-2009 Financials

    Q3-2009 Financials

  4. Slide 4: Return to a positive net income in Q3

    Return to a positive net income in Q3 „ Positive net income of €4 million Î First time, after 3 consecutive quarters of losses „ Margins reach highest levels for a 3rd quarter since 2005 Î Gross margin at 16.2% of sales (+1.7pt vs Q2) Î Operating margin at 3.6% of sales (+2.8pts vs Q2) Î Positive op

  5. Slide 5: Financial highlights

    Financial highlights „ Financials Q3 Q1-09 Q2-09 Q3-09 Î Improving sales trend (yoy) -33% -23% -8% Î Gross margin improvement (% of sales) 11.4% 14.5% 16.2% Î Operating margin improvement (% sales) -4.1% 0.8% 3.6% Î Positive net income (M€) (159) (54) 4 Î Free Cash Flow* generation (M€) (88) 84 6 Î

  6. Slide 6: Quarterly Sales

    Quarterly Sales In euro million +3.5% 1,848 1,913 Q2-2009 Q3-2009 Auto Suppliers Day – December 15, 2009 I 6

  7. Slide 7: Geographic mix Q3-09

    Geographic mix Q3-09 OEM passenger cars (yoy change) Market -13% -6%* Market -21% Europe -20%* 62% of sales North America Market +14% 11% of sales +13%* Asia 18% of sales Market -7% -6%* South America Worldwide Q3-2009 9% of sales Valeo* -6% Market -3% *At same perimeter & exchange rate Auto Supplie

  8. Slide 8: Stable customer mix

    Stable customer mix In euro million) End of September (% of sales) German 29% French* 26% Asian** 19% US customers 17% * Excluding Nissan ** Including Nissan Auto Suppliers Day – December 15, 2009 I 8

  9. Slide 9: Quarterly Results

    Quarterly Results In euro million Q3-08 Q1-09 Q2-09 Q3-09 ▲YOY Total sales 2,079 1,624 1,848 1,913 -8% Gross margin 318 185 268 310 -3% % of sales 15.3% 11.4% 14.5% 16.2% +0.9pt Net R&D (111) (114) (120) (114) +3% % of sales -5.4% -7.0% -6.5% -6,0% -0.5pt SG&A expenses (142) (137) (133) (128) -10% %

  10. Slide 10: Gross margin

    Gross margin In euro million and % of sales Sales (in € million) 3 000 20% 19% 2 500 2,437 2,411 18% 2,079 1,913 2 000 1,750 1,848 17% 1,624 16% 1 500 15% 1 000 14% Gross margin (in € million and % of sales) 13% 500 450 20 12% 406 0 11% 391 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 400 19 350 18 318

  11. Slide 11: Gross margin walkdown

    Gross margin walkdown As % of sales -0.7pt +2.6pts 15.3% -2.5pts 16.2% +1.5pt Volume Raw material Cost Others Q3-08 drop impact reductions Q3-09 Auto Suppliers Day – December 15, 2009 I 11

  12. Slide 12: Operating margin

    Operating margin In Euro million and % of sales Sales (in euro million) 3 000 20% 19% 2 500 2,437 2,411 18% 2,079 2 000 1,913 17% 1,750 1,848 1,624 16% 1 500 15% 1 000 14% Operating margin 13% (in € million and % of sales) 500 12% 140 6 0 11% 120 4.7% 5 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 100

  13. Slide 13: Sustained R&D efforts

    Sustained R&D efforts In euro million and % of sales In % of sales +0.7pt 6.0% In € million 5.3% Net R&D +3% 111 114 Q3-2008 Q3-2009 Q3-2008 Q3-2009 Auto Suppliers Day – December 15, 2009 I 13

  14. Slide 14: SG&A expenses adjusted to sales

    SG&A expenses adjusted to sales In euro million and % of sales In % of sales -0.1pt 6.8% 6.7% 2.0% 2.0% In € million -0.1pt -10% 4.8% 4.7% 142 Selling 128 Expenses Selling Q3-2008 Q3-2009 42 Expenses 38 Administ. Administ. Expenses Expenses Administ. 100 Expenses -10% 90 Q3-2008 Q3-2009 Auto Supplie

  15. Slide 15: Break-even point lowered

    Break-even point lowered Q4-08 Q1-09 Q2-09 Q3-09 Cost savings program €373 million YTD 144 183 130 60 Headcount reduction Since November 2008 Permanent employees (1,400) (1,800) (1,300) (600) Cash outlays (10) (23) (46) (54) Auto Suppliers Day – December 15, 2009 I 15

  16. Slide 16: Headcount adjustment

    Headcount adjustment Worldwide automotive production yoy changes in % 5 70000 +3 0 -2 -21 -34 -23 -3 60000 -5 59,700 58,400 50000 -10 52,500 51,200 49,100 50,100 -15 40000 Permanent and temporary headcount variation vs situation end of Q2-2008 -20 Global headcount 30000 -25 20000 Permanents Temporar

  17. Slide 17: Operating margin walkdown

    Operating margin walkdown As % of sales +1.6pt -0.4pt -3.6pts +1.5pt Variable costs 3.1% 3.6% Fixed costs +1.4pt Volume Raw material Cost Others Q3-08 drop impact reductions Q3-09 Auto Suppliers Day – December 15, 2009 I 17

  18. Slide 18: Q3 Results (cont.)

    Q3 Results (cont.) in euro million Q3-08 Q1-09 Q2-09 Q3-09 ▲YOY Sales 2,079 1,624 1,848 1,913 -8% Operating margin 65 (66) 15 68 +5% as % of sales 3.1% -4.1% 0.8% 3.6% +0.5pt Other income & expenses (15) (17) (20) (9) -40% as % of sales -0.7% -1.0% -1.1% -0.5% +0.2pt Operating income 50 (83) (5) 59

  19. Slide 19: Cash flow & Balance sheet

    Cash flow & Balance sheet

  20. Slide 20: Continued focus on cash management

    Continued focus on cash management „ Positive contribution of working capital „ Tight control of Capex Î 78% of depreciation Î Emerging countries representing 60% of Capex „ Net financial debt reduction of €24 millions Î Despite restructuring costs Auto Suppliers Day – December 15, 2009 I 20

  21. Slide 21: Working capital

    Working capital Working capital (in % of sales) In euro million Working capital -5.6% -5.6% -€46M -€46M June-09 Sept-09 June-09 Sept-09 450 Inventories 468 1,205 Customers 1,249 (1,474) Suppliers (1,562) (536) Other WC (556) (355) (401) Auto Suppliers Day – December 15, 2009 I 21

  22. Slide 22: Strict control of capex

    Strict control of capex Capitalized R&D In euro million +3% Capex 33 34 -37% Q3-2008 Q3-2009 Tangible investments 155 -48% 98 122 64 Q3-2008 Q3-2009 Q3-2008 Q3-2009 Auto Suppliers Day – December 15, 2009 I 22

  23. Slide 23: Capex YTD

    Capex YTD Capitalized R&D In euro million +11% Capex 119 107 -28% 9 months 2008 9 months 2009 Tangible investments 467 -40% 335 360 216 9 months 2008 9 months 2009 9 months 2008 9 months 2009 Auto Suppliers Day – December 15, 2009 I 23

  24. Slide 24: Free Cash Flow

    Free Cash Flow In euro million Q3-08 Q1-09 Q2-09 Q3-09 EBITDA 190 73 156 192 Restructuring and social costs (23) (23) (46) (54) Working capital 9 6 171 12 Capex (156) (133) (123) (115) Others (39) (11) (74) (29) Free cash flow (19) (88) 84 6 (before interest payments) Auto Suppliers Day – December 1

  25. Slide 25: Net debt over EBITDA ratio

    Net debt over EBITDA* ratio Shareholders equity and net debt In euro million Net Debt Shareholders Equity excl. minority interests Net Debt EBITDA (12 rolling months) 1,311 821 841 1,128 1,161 817 792 821 841 817 Gearing 75% Gearing 70% Gearing 63% 518 520 31/12/2008 30/06/2009 30/09/2009 Leverage L

  26. Slide 26: Business development

    Business development

  27. Slide 27: Business highlights

    Business highlights „ Operational excellence Î 10 ppm Î 26% of sites at 0 ppb „ Major innovations presented by all Business Groups at the IAA Frankfurt Auto Show Î Range of solutions for the various stages of hybridization up to electric vehicule Î Beamatic® Premium Î Aquablade® Î Park4U® latest dev

  28. Slide 28: Hybridization Roadmap

    Hybridization Roadmap From Stop-Start to Electric Drivetrain -100% -25% ELECTRIC FULL HYBRID and DRIVELINE PLUG-INs -15% MILDHYBRID -12% MICRO - MILD HYBRID with Ultracapacitors MVEG cycle -6% MICRO-HYBRID Full Electric Drive Part Electric Drive Torque Assistance Regenerative Braking Stop & Start Au

  29. Slide 29: BeamAtic Premium

    BeamAtic Premium Projector Module in L-Shaped Beam Position Gold International “Grand Prix” Award for Automotive Innovation at Equip’Auto The Comfort of driving permanently in High Beam without glaring the other road users Auto Suppliers Day – December 15, 2009 I 29

  30. Slide 30: Investment in emerging countries

    Investment in emerging countries „ 60% of Capex in 2009 „ Presence in China Î 4 Business Groups already represented Î Facilities in the 5 automotive industry hubs – Shanghai, Wuhan, Nanjing, Guangzhou and Changchun Î 3,995 people in 15 production plants and 6 development centers „ Last investment in

  31. Slide 31: Trading update

    Trading update

  32. Slide 32: Automotive environment improvement

    Automotive environment improvement „ Q4 automotive production better than expected Î Positive lag effect of scrappage incentives Î Strong rebound of Asian emerging markets „ Worldwide automotive production Î H2 : +6% Î Full year : -13% Auto Suppliers Day – December 15, 2009 I 32

  33. Slide 33: Financial outlook for Valeo

    Financial outlook for Valeo „ Sales expectations raised Î Continuation of sequential growth in Q4 Î At least, +17% year-on-year „ Margin improvement Î Q4 significantly better than Q3 Î Despite receding raw materials tailwind Î Thanks to operating leverage and positive impact of fixed costs reduction

  34. Slide 34: Management priorities

    Management priorities „ Implementation of the new organization „ Lower break-even point* Î Fixed costs reduction program on track Î Cost reduction plan yielding €373M at the end of September „ Cash consumption under control Î Capex significantly below depreciation Î Positive contribution of working

  35. Slide 35: 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 Auto Suppliers Day – December 15, 2009 I 35

  36. Slide 36: Back-up

    Back-up

  37. Slide 37: Year to date key figures

    Year to date key figures In euro million 9 months 9 months 2008 2009 ▲YOY Total sales 6,927 5,385 -22% Gross margin 1,115 763 -32% as % of sales 16.1% 14.2% -1.9pt Operating margin 268 17 -94% as % of sales 3.9% 0.3% -3.6pts Net income 106 (209) na Free cash flow* 104 2 -98% Net debt 735 817 +11% *

  38. Slide 38: Quarterly P&L

    Quarterly P&L new format 2008 2009 2007 new format new format (in euro million) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q „ Net Sales 2,472 2,472 2,214 2,397 Other operating revenues 27 35 31 41 „ Total operating revenues / Sales 2,499 2,507 2,245 2,438 2,437 2,411 2,079 1,750 1,624 1,848 1,913 „ Gross margi

  39. Slide 39: Share Information

    Share Information Share Data ƒ Bloomberg Ticker FR FP ƒ Reuters Ticker VLOF.PA ƒ ISIN Number FR 000130338 ƒ Shares outstanding as per 30.11.2009 78,209,617 ADR Data ƒ Ratio (ordinary share: ADR) 1:2 ƒ Bloomberg Ticker VLEEY US ƒ Reuters Ticker VLEEY PK ƒ ISIN Number US 9191343048 ƒ Type Level 1 ƒ Ex

  40. Slide 40: Enabling a better automotive world

    a Enabling a better automotive world

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