Valeo Se · EURONEXT:FR
Valeo — Investor Day (March 2010)
46 slides from Valeo's investor day presentation, Mar 10, 2010
Slide 1: Investor day
Investor day March 10th, 2010
Slide 2: The new focused Valeo
The new focused Valeo Jacques Aschenbroich, CEO March 10th, 2010
Slide 3: Automotive technology, naturally
Automotive technology, naturally
Slide 4: International and focused top management in place
International and focused top management in place Jacques Aschenbroich CEO Martin Haub Hans-Peter Kunze Michel Boulain Luc Blériot Robert Charvier Géric Lebedoff Edouard de Pirey R&D & Sales & Human Resources COO CFO General Counsel Corporate Strategy Prod. Marketing Bus. Development & Planning Chri
Slide 5: Focus on CO2 emissions reduction in all market segments
Our main growth driver for the next decade Focus on CO2 emissions reduction in all market segments March 10th, 2010 I 5 I
Slide 6: My diagnosis: Strengths
My diagnosis Strengths Brand Quality Operational excellence & reactivity Committed people Global presence & diversified customer base Global leadership on most product lines Innovation Healthy financial situation March 10th, 2010 I 6 I
Slide 7: My diagnosis: Strengths and Weaknesses
My diagnosis Strengths Weaknesses Brand Unfocused strategy Quality Lack of growth Operational excellence & reactivity Poor profitability Committed people Obsolete organization Global presence & diversified customer base Global leadership on most product lines Innovation Healthy financial sit
Slide 8: Weaknesses and our commitments
Weaknesses Our commitments Unfocused strategy Focus on CO2 emissions reduction in all market segments Lack of growth Deliver above market organic Poor profitability growth in each region Obsolete organization Actively participate in industry consolidation Best-in-class profitability March 10
Slide 9: The new focused Valeo: Our commitments
The new focused Valeo 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 March 10th, 2010 I 9 I
Slide 10: In recent years, a societal revolution…
In recent years, a societal revolution… Environmental awareness Changing society Emerging economies CO2 emissions reduction and energy savings Safety Market segmentation March 10th, 2010 I 10 I
Slide 11: …leading to new consumer expectations
…leading to new consumer expectations Car as a status symbol For driving pleasure As a major investment Environment friendly Convenient Towards a more Trendy, safe and smart segmented Low cost products market March 10th, 2010 I 11 I
Slide 12: A crucial need for CO2 emissions reduction
A crucial need for CO2 emissions reduction For the citizen For the consumer Technology to be implemented to reduce CO2 emissions March 10th, 2010 I 12 I
Slide 13: 20% annual market growth for CO2 related products
Valeo market expectations for next decade 20% annual market growth for CO2 related products March 10th, 2010 I 13 I
Slide 14: The new focused Valeo: Our commitments
The new focused Valeo 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 March 10th, 2010 I 14 I
Slide 15: Global automotive production
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 March 10th, 2010 I 15 I
Slide 16: Levers to sustain growth over the decade
Levers to sustain growth over the decade Our products and Our customers technologies Hans-Peter Kunze Martin Haub March 10th, 2010 I 16 I
Slide 17: A well-balanced customer base
A well-balanced customer base 2009 Sales 2009 OE Sales by OEM Aftermarket Others (11%) German OEM (28%) €1.5B American OEM 16% (16%) 6.0Bn€ French OEM €6.0B (25%) Asian OEM (20%) OEM March 10th, 2010 I 17 I
Slide 18: Future growth secured by strong order intake
Future growth secured by strong order intake Order Intake 2013 Sales forecast : €10B (OI/OEM sales) Incl. €8.3B OE Sales 1,52x 1,45x €2.3B Target 1,29x €6.0B Booked 72% of 2013 OE Sales are 2007 2008 2009 already booked March 10th, 2010 I 18 I
Slide 19: Engine optimizing & downsizing
Engine optimizing & downsizing Thermal High performance engine cooling Exhaust Gas Recirculation (EGR) E-Valve Smart transmission Powertrain March 10th, 2010 I 19 I
Slide 20: Hybrid vehicles
Hybrid vehicles Powertrain Stop-Start solutions Regenerative braking Electrical motors Plug-in charging solutions ECU and powerelectronics Battery thermal management Thermal March 10th, 2010 I 20 I
Slide 21: Electric vehicles
Electric vehicles Electrical motors Powertrain Plug-in charging solutions ECU and powerelectronics Electric compressor Thermal Vehicle pre-conditioning HMI differentiation Driving assistance Comfort & Driving Assistance March 10th, 2010 I 21 I
Slide 22: Lower consumption & weight reduction across product range
Lower consumption & weight reduction across product range Powertrain Lower consumption Î High Efficiency Alternator Î Global Electric Energy Management Î Wiper motors Visibility Î LED Lighting Weight reduction Î Aquablade® Î Direct drive wiper motors Î New clutch range Powertrain Î New compressor ra
Slide 23: Sales for new CO2 related products to double by 2013
Sales for new CO2 related products to double by 2013 In euro billion 2013 Lower energy equipment consumption 0.7 Hybridization and electric vehicles 0.2 Reducing emissions for internal 0.1 combustion engines TOTAL €1B €1B targeted sales for CO2 related products in 2013 March 10th, 2010 I 23 I
Slide 24: Sales for new CO2 related products to reach €5B+ in 2020
Sales for new CO2 related products to reach €5B+ in 2020 In euro billion 2013 2020 Lower energy equipment consumption 0.7 1.9 Hybridization and electric vehicles 0.2 2.8 Reducing emissions for internal 0.1 0.6 combustion engines TOTAL €1B €5B+ Support innovation by maintaining R&D at 6% of Sales Mar
Slide 25: Address all car segments
Address all car segments Premium Î Highly innovative products Mass market Î Bringing state-of-the-art innovative products to mass market Low Cost Î Successful and fully amortized products Î Way of lowering costs for all product lines March 10th, 2010 I 25 I
Slide 26: Accelerate expansion in Asia and emerging countries
Accelerate expansion in Asia and emerging countries ≥ 60% of Capex Be competitive vs. emerging local suppliers Be local Î Develop specific products for local markets Î Leverage local R&D and engineering capacities Î Local managers, global values & processes Benefiting from growth in emerging countri
Slide 27: Levers to sustain growth over the decade
Levers to sustain growth over the decade 16 €15B Emerging Investment in emerging 14 countries countries Valeo Sales in euro billion Other 12 innovations €10B 10 Enlarge customer base CO2 related €7.5B innovations 8 Innovation in CO2 related 6 products Existing commercialized 4 products 2 Afterma
Slide 28: The new focused Valeo: Our commitments
The new focused Valeo 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 March 10th, 2010 I 28 I
Slide 29: 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 Maintain strictly disciplined approach to cash allocation March 10th, 2010 I 29 I
Slide 30: Portfolio assessment
Portfolio assessment All Business Groups have profitable growth potential Comfort & Powertrain Thermal Visibility Driving Assist. 2009 Order Intake / 1.5 1.7 1.5 1.5 Sales ratio 4Q09 EBITDA 9.9% 11.7% 10.4% 11.2% #1 Driving #2 Air #1 Electrical Assistance Conditioning #1 Wipers Systems Worldwide ran
Slide 31: Keep-or-sell assessment criteria for each business by 2013
Keep-or-sell assessment criteria for each business by 2013 ROCE* >20% Growth One of the 3 major worldwide players * Before restructuring, tax and goodwill March 10th, 2010 I 31 I
Slide 32: 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 Excellent pe
Slide 33: The new focused Valeo: Our commitments
The new focused Valeo 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 March 10th, 2010 I 33 I
Slide 34: New organization to better fit with automotive industry evolution
New organization to better fit with automotive industry evolution Shift in the value chain from car manufacturers towards automotive suppliers Automotive suppliers to play a more central role Î Innovation With ever higher client Î Economies of scale in a more fragmented market expectations Î Perfect
Slide 35: A new focused organization
A new focused organization 9 Industrial Branches 4 Business Groups 96 Industrial Divisions 16 Product Groups 27 members Management Committee 7 members Staff Committee March 10th, 2010 I 35 I
Slide 36: 4 balanced, coherent Business Groups with leading market positions
4 balanced, coherent Business Groups with leading market positions Comfort & Powertrain Thermal Visibility Driving Systems Systems Systems 2009 figures Assistance Headcount 9,800 12,600 13,300 15,100 Sales €1.3B €2.0B €2.3B €1.9B FY EBITDA 7.9% 10.3% 8.0% 7.5% Q4 EBITDA 9.9% 11.7% 10.4% 11.2% March
Slide 37: New organization with high growth & profitability potential
New organization with high growth & profitability potential Better fit with customer organization Benefit from synergies Promote innovation March 10th, 2010 I 37 I
Slide 38: Profitability strengthened through cost reduction program
Profitability strengthened through cost reduction program Breakeven point lowered by €1.1B Î Equivalent to around €7B of sales Negative operating working capital Î Positive contribution to free cash flow of €214M in 2009 March 10th, 2010 I 38 I
Slide 39: New Organization with lowered G&A
New Organization with lowered G&A Shared services Î Human resources Î Finance Î Supply chain Global purchasing organization Implementation following consultation with social partners in concerned countries G&A reduced from 4.5% to around 3% of sales as of 2012 March 10th, 2010 I 39 I
Slide 40: New Organization with lowered G&A
New Organization with lowered G&A +1.5 pt Operating margin as of 2012 March 10th, 2010 I 40 I
Slide 41: Capex optimization
Capex optimization Lower in mature markets Higher in emerging countries Favor fast growing product lines Capex ≤80% of Depreciation in 2010 & 2011 Target: 4-4.5% of sales as of 2013 March 10th, 2010 I 41 I
Slide 42: Tight control of Capex
Tight control of Capex +1 pt Operating margin from 2013 March 10th, 2010 I 42 I
Slide 43: Turnaround Visibility Systems Business Group
Turnaround Visibility Systems Business Group Visibility Systems Business Group turnaround already underway ROCE in line with Valeo average by 2013 March 10th, 2010 I 43 I
Slide 44: Turnaround Visibility Systems Business Group
Turnaround Visibility Systems Business Group +0.5 pt Operating margin in 2013 * In addition to the Group’s average profitability improvement March 10th, 2010 I 44 I
Slide 45: Best-in-class profitability
Best-in-class profitability 2009 2013 ∆ Sales €7.5bn €10bn +33% Operating 1.8% 6-7% + 4-5 pt margin ROCE* 7.1% ≥ 30% > +20 pt * Before restructuring, tax and goodwill March 10th, 2010 I 45 I
Slide 46: Automotive technology, naturally
Automotive technology, naturally