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Valeo — Shareholder Meeting (June 2010)
52 slides from Valeo's shareholder meeting presentation, Jun 3, 2010
Slide 1: Combined Shareholders' Meeting
Combined Shareholders’ Meeting June 3, 2010
Slide 2: Corporate governance
Corporate governance Pascal Colombani Chairman of the Board of Directors June 3, 2010
Slide 3: Respecting best practices in terms of corporate governance
Respecting best practices in terms of corporate governance June 3, 2010 I 3 I
Slide 4: Appointment of Board Members
Appointment of Board Members Daniel Camus Jérôme Contamine June 3, 2010 I 4 I
Slide 5: Appointment of Board Members
Appointment of Board Members Michel de Fabiani Noëlle Lenoir June 3, 2010 I 5 I
Slide 6: Nomination, Remuneration and Corporate Governance Committee
Nomination, Remuneration and Corporate Governance Committee 8 meetings with an attendance rate of 87.5% June 3, 2010 I 6 I
Slide 7: Audit Committee
Audit Committee 5 meetings in 2009 with an attendance rate of 93.75% June 3, 2010 I 7 I
Slide 8: Strategy Committee
Strategy Committee 4 meetings in 2009 with an attendance rate of 94.11% June 3, 2010 I 8 I
Slide 9: Combined Shareholders' Meeting
Combined Shareholders’ Meeting Jacques Aschenbroich Chief Executive Officer June 3, 2010
Slide 10: Creating value through growth
Creating value through growth June 3, 2010 I 10 I
Slide 11: Our main growth drivers
Our main growth drivers CO2 emissions reduction in all market segments Asia and emerging countries June 3, 2010 I 11 I
Slide 12: My diagnostic upon arriving
My diagnostic upon arriving Strengths Brand Quality Operational excellence & reactivity Committed people Global presence & diversified customer base Global leadership on most product lines Innovation Healthy financial situation June 3, 2010 I 12 I
Slide 13: My diagnostic upon arriving
My diagnostic upon arriving Strengths Weaknesses Brand Unfocused strategy Quality Lack of growth Operational excellence & reactivity Poor profitability Committed people Global presence & diversified Obsolete organization customer base Global leadership on most product lines Innovation Health
Slide 14: Today
Today Weaknesses Our commitments Focus on CO2 emissions reduction in all market segments A share value that does not correspond to reality Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability Increase value of Valeo June 3, 2
Slide 15: Creating value through growth
Creating value through growth Our commitments Focus on CO2 emissions reduction in all market segments Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability June 3, 2010 I 15 I
Slide 16: CO2 emissions reduction - a necessity
CO2 emissions reduction - a necessity For the citizen For the consumer For the automotive industry: source of growth and profitability Technology to be developed to reduce CO2 emissions June 3, 2010 I 16 I
Slide 17: 20% annual market growth for CO2 related products
Valeo forecast for the decade 20% annual market growth for CO2 related products June 3, 2010 I 17 I
Slide 18: 80% of Valeo portfolio linked to CO2 emissions reduction
80% of Valeo portfolio linked to CO2 Best seller emissions reduction 50 models equipped, more than 10 automakers Engine optimization and downsizing Hybrid vehicles Electric vehicles Reduced consumption and weight Smart driving June 3, 2010 I 18 I
Slide 19: Sales for new CO2 related products to double by 2013
Sales for new CO2 related products to double by 2013 Valeo sales for CO2 related products (in billion €) Maintain R&D at 6% 5 of sales to support 1 innovation 0.5 2009 2013 2020 June 3, 2010 I 19 I
Slide 20: Creating value through growth
Creating value through growth Our commitments Focus on CO2 emissions reduction in all market segments Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability June 3, 2010 I 20 I
Slide 21: Return to strong structural market growth after 2009 crisis
Return to strong structural market growth after 2009 crisis 2013-2020 Back to historical growth Global automotive production Emerging countries >> mature markets m r annu th pe grow 2010-2013 .5% 3-3 Strong recovery 2008-2009 crisis 1993 crisis 1990 2000 2010e 2020e June 3, 2010 I 21 I
Slide 22: A well-balanced customer base
A well-balanced customer base 2009 Sales Others Aftermarket German American 11% OEM €1.5B OEM 28% 16% €6Bn 25% €6.0B 20% French Asian OEM OEM OEM June 3, 2010 I 22 I
Slide 23: 7.5% annual growth, higher than market growth
7.5% annual growth, higher than market growth, thanks to a sustained level of order intake Order Intake 2013 Sales forecast: €10B (OI/OEM sales) Incl. €8.3B OE Sales 1,52x 1.52x 1,45x 1.45x €2.3B Target 1.29x 1,29x €6.0B Booked 72% of 2013 OE Sales are 2007 2008 2009 already booked June 3, 2010 I 23
Slide 24: Accelerate growth in emerging countries
Accelerate growth in emerging countries Double our presence in China and India in 4 years Valeo sales in China and India (in € Bn) 3 3 1 Over 60% of investments 0.5 in Asia and in emerging countries 2009 2013 2020 June 3, 2010 I 24 I
Slide 25: Creating value through growth
Creating value through growth Our commitments Focus on CO2 emissions reduction in all market segments Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability June 3, 2010 I 25 I
Slide 26: Strong financial structure increasing strategic options
Strong financial structure increasing strategic options Boost fast growing businesses through acquisitions Assess possibility for transformational transactions Continuous portfolio assessment June 3, 2010 I 26 I
Slide 27: Actively participate in future industry consolidation
Actively participate in future industry consolidation Ongoing consolidation of car manufacturers Potential acceleration of automotive supplier consolidation Valeo meets all criteria to play a leading role in this consolidation Î Global Î High innovation capacity and system integration Î Operational
Slide 28: Creating value through growth
Creating value through growth Our commitments Focus on CO2 emissions reduction in all market segments Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability June 3, 2010 I 28 I
Slide 29: 2009 investment, 2010 improvement, 2013 best-in-class profitability
2009: Despite the crisis, Valeo invested to prepare the future 2010: Strong improvement expected 2013: Best-in-class profitability June 3, 2010 I 29 I
Slide 30: 2009 results
2009 results June 3, 2010 I 30 I
Slide 31: Summary
Summary An unprecedented economic crisis A year of contrasts High reactivity in the face of the crisis A sound financial situation 2010 outlook June 3, 2010 I 31 I
Slide 32: An unprecedented economic crisis, a year of contrasts
An unprecedented economic crisis A year of contrasts June 3, 2010 I 32 I
Slide 33: Global automobile production
Global automobile production Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Full impact of scrapping +44 schemes Yearly change in % +21 Accelerated growth in Asia and Brazil in Q4-09 +4 +3 Î China +103% & India +51% -2 Î Brazil +52% -4 -21 -23 -34 June 3, 2010 I 33 I
Slide 34: Valeo performance in each region of the world in 2009
Valeo performance in each region of the world in 2009 Market -21% -13%* Market -33% -31%* Europe North America 64% of sales Market +2% 10% of sales =* Asia Market -2% 18% of sales +5%* Europe Q1-09 Q2-09 Q3-09 Q4-09 South America Valeo* -38% -22% -6% +34% 8% of sales Market -40% -28% -14% +11% *At c
Slide 35: Gross margin
Gross margin 3000 Sales (M€) 0,2 in M€ and % of sales 2500 2,437 2,411 2,309 0,19 2,079 2,114 0,18 2000 1,750 1,848 1,913 0,17 1,624 0,16 Gross margin (M€ and % of sales) 1500 0,15 450 20 1000 0,14 406 0,13 400 391 19 500 375 0,12 0 0,11 350 17.7% 18 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q
Slide 36: Operating margin
Operating margin 3000 Sales (M€) 0,2 In M€ and % of sales 2500 0,19 0,18 2000 0,17 0,16 1500 0,15 Operating margin (M€ and % of sales) 1000 0,14 0,13 150 5.5% 500 6 0,12 4.7% 0 0,11 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 3.7% 4 3.1% 3.6% 113 100 116 90 2 50 65 0.8% 68 0 0 15 15 Highes
Slide 37: High reactivity in the face of the crisis
High reactivity in the face of the crisis June 3, 2010 I 37 I
Slide 38: Strong reduction in break-even point in 2009
Strong reduction in break-even point in 2009 Production costs -210 M€ Fixed cost R&D reduction -40 M€ Break-even point - €1.1Bn SGA -90 M€ Margin on + 33 base points variable costs June 3, 2010 I 38 I
Slide 39: Despite the crisis: R&D maintained at high level
Despite the crisis: R&D maintained at high level Net R&D in % of sales +0.5pt +0.5pt 6.3% In M€ 5.8% Gross R&D 687 -5% -5% 655 186 182 Net R&D 2008 2009 501 473 -6% -6% 2008 2009 June 3, 2010 I 39 I
Slide 40: Strong reduction in administrative expenses
Strong reduction in administrative expenses In % of sales In M€ +0.2pt +0.2pt 6.9% 7.1% -11% -11% 2.1% 2.1% 596 Selling 532 expenses Selling 4.8% 5.0% expenses 177 41 156 2008 2009 Administrative Administrative expenses expenses 419 376 95 2008 2009 June 3, 2010 I 40 I
Slide 41: A sound financial situation
A sound financial situation June 3, 2010 I 41 I
Slide 42: Key figures
Key figures In million euros 2008 2009 ▲ Q4 08 Q4-09 ▲ Sales 8,677 7,499 -14% 1,750 2,114 +21% Gross margin 1,327 1,138 -14% 212 375 +77% % of sales 15.3% 15.2% -0.1pt 12.1% 17.7% +5.6pts Operating margin 230 133 -42% (38) 116 NA % of sales 2.7% 1.8% -0.9pt -2.2% 5.5% +7.7pts Net income (207) (153)
Slide 43: A balanced performance by Business Group
A balanced performance by Business Group Q4-09 EBITDA margin Comfort & Driving Assistance Systems % of sales 9.9% Powertrain Systems % of sales 11.7% Business Group aver. Thermal Systems Q4-09: % of sales 10.4% 10.9% Visibility Systems % of sales 11.2% 10.9% of EBITDA in Q4-09 thanks to a lower brea
Slide 44: Investments
Investments R&D expenditures In million euros == Investments 147 147 638 -25% 2008 2009 479 Capital investments -32% -32% €139M in emerging countries, or 42% of the total 491 332 €49M for innovative products, or 15% of the total 2008 2009 2008 2009 June 3, 2010 I 44 I
Slide 45: Rigorous management of working capital
Rigorous management of working capital Operating working capital (M€) -€210M Dec-08 Dec-09 (90) (300) June 3, 2010 I 45 I
Slide 46: Despite the crisis: debt reduction of €99M
Despite the crisis: debt reduction of €99M (M€) FY-08 FY-09 Change EBITDA 792 670 -122 Social and restructuring costs (79) (165) -86 Operating working capital 179 214 +35 Investments (613) (444) +169 Other (161) (120) +41 Free cash flow 118 155 +37 (before interest) Net debt 821 722 -99 June 3, 2010
Slide 47: A sound financial situation despite the crisis
A sound financial situation despite the crisis Shareholders’ equity and net debt In million euros Net debt EBITDA (12 months rolling) (M€) Net debt Shareholders’ equity Excluding minority interests 821 841 1,311 1,233 792 1,128 722 821 841 722 670 Gearing Gearing 75% Gearing 63% 59% 518 31/12/2008 3
Slide 48: A sound financial situation
A sound financial situation Undrawn credit lines at June 30, 2010 (estimated): €1,116M Available cash: €860M Expected improvement in Valeo rating with the objective of a return to “Investment grade” Ability to finance targeted acquisitions June 3, 2010 I 48 I
Slide 49: 2010 outlook: Strong improvement expected
2010 outlook: Strong improvement expected First half 2010 Î Sales on the order of €4.7Bn (+35% vs H1 2009) Î Operating margin close to 6%, highest half-year level in the past 8 years 2010 Î Confident to achieve 2010 guidance announced on February 24 (operating margin rate close to double that record
Slide 50: 2013 objective: Best-in-class profitability
2013 objective: Best-in-class profitability 2009 2013 ∆ Sales €7.5Bn €10Bn +33% Operating margin 1.8% 6-7% + 4-5 pts ROCE* 7.1% ≥ 30% > +20 pts * Before restructuring, taxes and goodwill June 3, 2010 I 50 I
Slide 51: Evolution of the Valeo share vs stock market indicators
Evolution of the Valeo share vs stock market indicators (since start of 2009) May 31, 2010 30 VALEO DJ US Auto Parts 20 DJ STOXX AUTO SBF 120 10 CAC 40 0 Jan. Apr. July Oct. Jan. Apr. July 09 09 09 09 10 10 10 June 3, 2010 I 51 I
Slide 52: Valeo - Automotive technology, naturally
SONNEI June 3, 2010152 Valeo Automotive technology, naturally