Slide 1: FY-2010 Results
FY-2010 Results Jacques Aschenbroich – CEO February 24, 2011
Slide 2: 2010 highlights
2010 highlights February 24, 2011 I 2 FY-10 Results I
Slide 3: H2-10 highlights
H2-10 highlights Sales of €4,845 m increasing by 20% Operating margin (1) of €325 m (6.7% of sales) Net result of €197 m (4.1% of sales) ROCE (4) of 32% February 24, 2011 I 3 FY-10 Results I
Slide 4: FY-10 highlights
FY-10 highlights Ahead of the strategic plan disclosed in March 2010 Sales of €9,632 m increasing by 28% Operating margin(1) of €617 m (6.4% of sales) Net result of €365 m (3.8% of sales) Earning per share of €4.86 ROCE(4) > 32% Net cash(2) generation of €440 m Net debt(3) lowered by €444 m at €278
Slide 5: FY-10 Key figures
FY-10 Key figures H2-09 H2-10 ▲ FY-09 FY-10 ▲ Total sales (M€) 4,027 4,845 +20% 7,499 9,632 +28% OE Sales (M€) 3,286 3,995 +22% 6,029 7,952 +32% Operating margin(1) (M€) 184 325 +77% 133 617 +364% as % of sales 4.6% 6.7% +2.1 Pt 1.8% 6.4% +4.6 Pt Net result (M€) 60 197 +228% (153) 365 NA as % of sal
Slide 6: H2-10 Results
H2-10 Results February 24, 2011 I 6 FY-10 Results I
Slide 7: Continuing improvement of OE & Aftermarket sales in H2
Continuing improvement of OE & Aftermarket sales in H2 In euro million and YoY variation H2-09 H2-10 ▲ Original Equipment 3,286 3,995 82% 82% +22% +16%* as % of sales Aftermarket 626 723 +15% +12%* as % of sales 15% 15% Miscellaneous 115 127 +10% +5%* as % of sales 3% 3% Sales 4,027 4,845 +20% +15%*
Slide 8: Outperformance in our main regions
Outperformance in our main regions H2 OE sales outperforming the market by 4Pts World H2-10 Valeo OE sales* +16% Production** +12% Production +16%** Production +5%** +42%* +11%* North America Europe Production +15%** +19%* Production +9%** Asia =* South America * At same perimeter & exchange rates *
Slide 9: Rebalanced geographical exposure
Rebalanced geographical exposure Increasing position in Asia at 20% of OE sales 66%* 58%* Europe Europe & Africa & Africa 7%* 8%* South South America America 14%* 13%* 14%* 20%* North Asia & North Asia & America others America others H2-07 H2-10 * In % of OE light vehicle sales February 24, 2011 I 9
Slide 10: H2-10 Key figures
H2-10 Key figures H2-09 H2-10 ▲ Total sales (M€) 4,027 4,845 +20% OE Sales (M€) 3,286 3,995 +22% Operating margin(1) (M€) 184 325 +77% as % of sales 4.6% 6.7% +2.1pts Net result (M€) 60 197 +228% as % of sales 1.5% 4.1% +2.6pts Earning per share 0.79 2.63 +1.84 ROCE(4) 7% 32% +25 Pts EBITDA(5) (as %
Slide 11: Profitability: continuing improvement in H2
Profitability: continuing improvement in H2 350 8 325 Operating margin(1) Sales 292 6.7% 300 (in € million and as % of sales) 7 (in € million) 6000 0.2 6 4,848 4,787 4,845 250 6.1% 0.19 5000 203 4,027 0.18 4.2% 200 184 5 3,829 4000 3,472 0.17 4.6% 4 150 0.16 3000 3 0.15 100 2000 0.14 2 0.13 50 1000
Slide 12: 2010 Results
2010 Results February 24, 2011 I 12 FY-10 Results I
Slide 13: Outperforming our main markets
Outperforming our main markets February 24, 2011 I 13 FY-10 Results I
Slide 14: Automotive production higher than pre-crisis level
Automotive production higher than pre-crisis level Fundamental shift towards Asian markets Light vehicles production* FY-07 FY-08 FY-09 FY-10 ▲ ▲ (million of vehicles) FY-10/09 FY-10/07 Europe 22.6 21.5 17.1 19.7 +15% -13% Asia 29.0 29.5 30.1 38.3 +28% +32% North America 15.0 12.6 8.5 11.9 +39% -21%
Slide 15: Performance of FY sales on a like-for-like basis
Performance of FY sales on a like-for-like basis In euro million +28% 7,499 9,632 Perimeter -0.4% Currencies +4.6% Sales at same perimeter and +24% exchange rate FY-09 FY-10 February 24, 2011 I 15 FY-10 Results I
Slide 16: OE and Aftermarket sales
OE and Aftermarket sales In euro million and YoY variation FY-09 FY-10 ▲ Original Equipment 6,029 7,952 +32% +27%* as % of sales 80% 83% Aftermarket 1,242 1,445 +16% +14%* as % of sales 17% 15% Miscellaneous 228 235 +3% -4%* as % of sales 3% 2% Sales 7,499 9,632 +28% +24%* *At same perimeter and exc
Slide 17: Outperforming our main regions
Outperforming our main regions Full Year OE sales outperforming the market by 2pts World YOY Valeo OE Sales* +27% Production** +25% Production +39%** Production +15%** +60%* +20%* North America Europe Production +28%** +36%* Production +12%** Asia +8%* South America * At same perimeter & exchange ra
Slide 18: Outperforming Asian market by 8 Pts
Outperforming Asian market by 8 Pts Production +28%** +36%* Asia Production +22%** Production +22%** 19% of sales +38%* +19%* Korea Japan Production +31%** 19% of sales 30% of sales +48%* China Production +34%** 40% of sales +81%* India 4% of sales * At same perimeter & exchange rates ** JD Power es
Slide 19: Rebalanced geographical exposure
Rebalanced geographical exposure Increasing position in Asia at 19% of OE sales 67%* 60%* Europe Europe & Africa & Africa 6%* 8%* South South America America 14%* 13%* 13%* 19%* North Asia & North Asia & America others America others 2007 2010 * In % of OE light vehicle sales February 24, 2011 I 19
Slide 20: Continued evolution of customers exposure
Continued evolution of customers exposure Increasing position towards German and Asian customers In % of OE sales 24% 28% German German 26% 23% French* French* 12% 9% Others Others 20% 18% 18% 22% American Asian** American Asian** 2007 2010 * Excluding Nissan ** Including Nissan February 24, 2011 I
Slide 21: BG outperformance
BG outperformance Worldwide Production** (YoY) +25% OE sales in line or higher than automotive production Comfort & Driving OE sales OE sales In M€ +27%* In M€ Powertrain +31%* Assistance Sales +27%* Sales +25%* 1,344 1,704 2,011 2,683 2009 2010 2009 2010 OE sales OE sales In M€ Thermal +23%* In M€
Slide 22: Order intake at record high
Order intake at record high €12.5 bn in 2010 Order Intake / OE Sales ratio 1.6x 1.5x 1.5x 1.3x €10.0bn €10.1bn €9.2bn €12.5bn 2007 2008 2009 2010 February 24, 2011 I 22 FY-10 Results I
Slide 23: Operating margin at 6.4% of sales and net result at 3.8% of sales
Operating margin at 6.4% of sales (1) and net result at 3.8% of sales February 24, 2011 I 23 FY-10 Results I
Slide 24: FY-10 results
FY-10 results Operating margin at 6.4% of sales (1) In euro million FY-09 FY-10 ▲ Total sales 7,499 9,632 +28% Gross margin 1,138 1,735 +53% % of sales 15.2% 18.0% +2.8pts Net R&D (473) (537) +14% % of sales -6.3% -5.6% -0.7pt SG&A expenses (532) (581) +9% % of sales -7.1% -6.0% -1.1pt Operating mar
Slide 25: Gross margin walkdown
Gross margin walkdown As % of sales -1.0pt +0.5pt +3.3pts 18.0% 15.2% Volume Net raw Labor FY-09 increase material productivity FY-10 impact February 24, 2011 I 25 FY-10 Results I
Slide 26: 2010 raw material headwind
2010 raw material headwind €1.3 bn of raw material purchased Aluminum Share of raw material In $ per ton In % of total raw material consumption USD/t Plastic 2 500 Steel 23 % 35 % 1 750 LME 42 % 1 000 janv-09 mai-09 sept-09 janv-10 mai-10 sept-10 janv-11 Aluminum spot $ Copper In $ per ton 10 950 10
Slide 27: Gross margin improvement
Gross margin improvement Streamlining the organization for a lightened cost structure Sales (in € million) 10000 9,632 0,2 9,567 9500 0,19 Gross margin 9000 8,677 0,18 (in € million & as % of sales) 8500 0,17 8000 0,16 7,499 7500 0,15 7000 0,14 1,735 20 6500 0,13 1700 19 6000 0,12 1,508 18.0% 5500 0
Slide 28: Operating margin walkdown
Operating margin walkdown (1) As % of sales +1.1pt +0.7pt 6.4% +2.8pts 1.8% Gross R&D SG&A FY-09 margin FY-10 February 24, 2011 I 28 FY-10 Results I
Slide 29: Net R&D expenses
Net R&D expenses R&D efforts sustained to comply with order intake at record high as % of sales -0.1pt In € million -1% 6.3% 5.7% 5.8% 5.6% 545 537 501 473 2007 2008 2009 2010 2007 2008 2009 2010 February 24, 2011 I 29 FY-10 Results I
Slide 30: SG&A expenses
SG&A expenses New organization implementation on track As % of sales -0.4 pt In € million -6% 6.9% 7.1% 6.4% 6.0% 2.0% 2.1% 2.0% 1.8% 617 596 4.4% 581 4.9% 5.0% 4.2% Selling Selling 532 Expenses Selling Expenses Selling Expenses 193 177 Expenses 171 2007 2008 2009 2010 156 Admin. Admin. Admin. Admin
Slide 31: Worldwide headcount evolution
Worldwide headcount evolution Cost structure adapted to industrial footprint Mature countries vs situation end of H1-2008 1000 Permanents Temporaries Global headcount 0 -1000 -2000 -3000 -4000 Permanents Temporaries Global headcount -5000 4000 -6000 -7000 H1-08 H2-08 H1-09 H2-09 H1-10 H2-10 2000 Jun
Slide 32: Break even point under strict control at €7.6 bn
Break even point under strict control at €7.6 bn Below the €8 bn target, in a context of a strong activity recovery 2010 vs 2009 2010 vs 2007 +28% +1% Sales € +2.1 bn € +0.1 bn +7% -10% Break even point € +0.5 bn € -0.8 bn Fixed costs +7% -8% Margin/variable costs -0.2pt +0.5pt Operating margin (1)
Slide 33: Operating margin
Operating margin (1) Sales Operating margin at 6.4% of sales (1) (in € million) 10000 9,632 0,2 9,567 9500 0,19 9000 0,18 8,677 8500 0,17 8000 0,16 7,499 7500 0,15 7000 0,14 6500 0,13 6000 0,12 5500 0,11 7 617 2007 2008 2009 2010 600 6.4% In € million & as % of sales 6 500 5 400 346 4 3.6% 300 230 3
Slide 34: EBITDA
EBITDA (5) Convergence of BG operating performance 13 Sales In € million & as % of sales 1200 1,150 11.9% (in € million) 12 10000 9,567 9,632 0,2 1000 933 11 9500 0,19 9.8% 792 9000 8,677 0,18 10 800 670 8500 0,17 9 8000 0,16 600 7,499 9.1% 8.9% 7500 0,15 8 7000 0,14 400 6500 0,13 7 6000 0,12 200 6
Slide 35: Improvement of the net income to 3.8% of sales
FY-10 Results Improvement of the net income to 3.8% of sales In € million FY-09 FY-10 ▲ Total sales 7,499 9,632 +28% Operating margin (1) 133 617 +364% as % of sales 1.8% 6.4% +4.6pts Other income & expenses (49) (27) -45% as % of sales -0.7% -0.3% +0.4pt Operating income 84 590 +602% as % of sales
Slide 36: ROCE higher than 30%
ROCE higher than 30% (4) February 24, 2011 I 36 FY-10 Results I
Slide 37: Capital turnover of 5.0
Capital turnover of 5.0 Strict management of capital employed Capital employed of €1.9 bn Working capital further improved by €35 M Capital turnover at (€335 M) 2010 = 5.0 Strict control of capex = 80% of depreciation February 24, 2011 I 37 FY-10 Results I
Slide 38: ROCE
ROCE 2010 profitability reaching 2013 financial targets 2013 FY-07 FY-09 FY-10 targets (March 2010, Investor’s day) Total sales €9.6 bn €7.5 bn €9.6 bn €10.0 bn Operating margin (1) 3.6% 1.8% 6.4% 6-7% Capital turnover 4.0 4.0 5.0 5.0 ROCE (5) 14% 7% 32% ≥ 30% February 24, 2011 I 38 FY-10 Results I
Slide 39: Net cash flow generation of €440 m
Net cash flow generation (2) of €440 m February 24, 2011 I 39 FY-10 Results I
Slide 40: Strong net cash flow generation of €440 M
Strong net cash flow generation of €440 M (2) Key factors Operating performance EBITDA(5) at €1,150 M (11.9% of sales) Net cash flow (2) Operating working capital of Further improvement by €35 M €440 M Capex Limited to 80% of depreciation in 2010 February 24, 2011 I 40 FY-10 Results I
Slide 41: Working capital and Capex
Working capital and Capex Further improvement of operating working capital Under strict control In € million - 35M€ FY-09 FY-10 Tangible investments at 80% of depreciation In € million (300) -2% (335) 479 Total Capex 468 Tangible investments 332 325 Capitalized R&D 147 143 FY-09 FY-10 February 24, 2
Slide 42: Cash generation of €440 m
Cash generation of €440 m in € million FY-09 FY-10 ▲ EBITDA (5) 670 1,150 +72% Operating working capital 214 31 -85% Restructuring & social costs (165) (72) -56% Other operational items (120) (118) -2% Capex (444) (464) +4% Free cash flow 155 527 +241% Interest (48) (52) +8% Other financial items (8
Slide 43: Debt reduction of €444 m coherent with our target: back to investment grade
Debt reduction of €444 m coherent with our target: back to investment grade February 24, 2011 I 43 FY-10 Results I
Slide 44: Debt ratios
Debt ratios Target: back to “Investment grade” Shareholders’ equity and net debt Net debt(3) (M€) Shareholders’ equity (M€) excluding minority interests Net financial debt(3) over EBITDA(5) 1,708 Net debt(3) (M€) EBITDA(5) 12 months rolling (M€) 1,468 1,233 1,150 722 1,005 438 278 Gearing Gearing Ge
Slide 45: Financial resources after convertible reimbursement
Financial resources after convertible reimbursement After January 1, 2011 Liquidity secured by 2500 Undrawn credit lines: €1.1 bn with 2 years average maturity 2250 Cash available after €463 m convertible bonds reimbursement 2000 1750 Long term financial debt Outstanding: €1.1 bn 1500 Portion at fix
Slide 46: FY-10 highlights
FY-10 highlights Ahead of the strategic plan disclosed in March 2010 Sales of €9,632 m increasing by 28% Operating margin(1) of €617 m (6.4% of sales) Net result of €365 m (3.8% of sales) Earning per share of €4.86 ROCE(4) > 32% Net cash(2) generation of €440 m Net debt(3) lowered by €444 m at €278
Slide 47: Acquisition of Niles
Acquisition of Niles February 24, 2011 I 47 FY-10 Results I
Slide 48: Niles, a leading player in Asia
Niles, a leading player in Asia Niles key figures (January to December 2010) Sales : ~ €435 m EBITDA > 13% Operating margin >7% Employees : ~3,500 (60% in competitive countries) A comprehensive product portfolio in Interior Controls Steering Column Switches Switches for Interior trim Door Switches P
Slide 49: Niles, a leading player in Asia
Niles, a leading player in Asia Rationale Increase exposure of Valeo in Asia Rebalance Comfort and Driving Assistance customer portfolio Cost synergies higher than 2% of sales Valeo, new worldwide leader in Interior Controls Transaction Multiples Acquisition of: 77.9% stake from RHJ EV/sales: 0.74x
Slide 50: Rebalanced geographic exposure
Rebalanced geographic exposure Niles, a perfect match with Valeo China Europe + Russia Korea Nafta Japan South America India Asean Valeo Interior Controls Sales Niles Sales February 24, 2011 I 50 FY-10 Results I
Slide 51: Rebalanced customer portfolio
Rebalanced customer portfolio Niles, a perfect match with Valeo Interior Controls OEM sales 35% German 32% French 1% French Valeo 96% 3% Niles 24% Asian Others North American 7% 2% North American Asian 17% French 18% German Valeo+ 12% Niles 48% Others Asian 5% North American February 24, 2011 I 51 F
Slide 52: 2011 outlook
2011 outlook February 24, 2011 I 52 FY-10 Results I
Slide 53: 2011 market assumptions
2011 market assumptions Automotive production (change YoY) Full year Europe (& Africa) 0% Asia (& others) +5% North America +8% South America +7% Worldwide +5% Raw material 2011 Under current raw material market conditions Aluminum ($/T) 2,500 Copper ($/T) 9,500 Zinc ($/T) 2,400 February 24, 2011 I
Slide 54: Valeo raw material risk management policy
Valeo raw material risk management policy LME Pass through for 65% of purchasing Balance (35%) hedged with 6 months rolling forward derivative contracts FY: 85% of risk neutralized Steel Pass through for 50% of purchasing Non quoted commodity FY: pass through for 50% February 24, 2011 I 54 FY-10 Res
Slide 55: 2011 outlook
2011 outlook Based on: Automotive production assumptions Raw material indexation clause and LME hedging in place OE sales outperformance in our main regions 2011 operating margin rate slightly higher than 2010 February 24, 2011 I 55 FY-10 Results I
Slide 56: Investor Day, March 9, 2011
Agenda INVESTOR DAY March 9, 2011 In Paris February 24, 2011 I 56 FY-10 Results I
Slide 57: 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 February 24, 2011 I 57 FY-10 Results I
Slide 58: Share Information
Share Information Share Data Bloomberg Ticker FR FP Reuters Ticker VLOF.PA ISIN Number FR 000130338 Shares outstanding as per 31.12.2010 78,209,617 ADR Data Ticker/trading symbol VLEEY CUSIP Number 919134304 Exchange OTC Ratio (ADR: ord) 1:2 Depositary Bank J.P. Morgan February 24, 2011 I 58 FY-10 R
Slide 59: Glossary
Glossary (1) Operating margin corresponds to operating income less other income and expenses (2) Net cash flow corresponds to free cash flow less financial expenses and after taking into account the payment of dividends and financial flows relating to mergers and acquisitions. (3) Net financial debt
Slide 60: FY-10 Results
February 24, 2011 I 60 FY-10 Results FY-10 Results I