Slide 1: H1 2017 Results
H1 2017 RESULTS JACQUES ASCHENBROICH – CHAIRMAN & CEO July 20, 2017 CONFIDENTIAL
Slide 2: The New Valeo: A Virtuous Circle
THE NEW VALEO: A VIRTUOUS CIRCLE H1 2016 H1 2017 Year-on-year Net R&D (as a % of sales) 6.0% 6.1% +20% +0.1pts Order intake (€bn) 12.8 14.9 +16% VV na VV Valeo Siemens eAutomotive (€bn) 3.0 na na Innovative products (in % of order intake) 45% 42% na -3pts Sales (€bn) 8.1 9.5 +16% na Gross margin (as
Slide 3: Q2 Highlights
Q2 HIGHLIGHTS +12% as reported Sales of €4.7bn +5% like-for-like(1) +11% as reported OEM sales of €4.1bn +5% like-for-like(1) OEM sales outperformance Growth(1) Outperformance(2) Sustained World +5% +5pts sales growth Europe +2% +5pts China +23% +25pts Asia (excluding China) +3% -1pt Incl. India +22
Slide 4: H1 Highlights
H1 HIGHLIGHTS Fueled by Order intake(1) of €14.9bn +16% innovation and Valeo Siemens eAutomotive of €3.0bn na +16% as reported Sales of €9.5bn +9% like-for-like(2) +16% as reported OEM sales of €8.2bn +9% like-for-like(2) OEM sales outperformance Growth(2) Outperformance(3) Sustained World +9% +6pts
Slide 5: H1 Highlights: Stable operating margin, cash generation
H1 HIGHLIGHTS Gross margin of €1,761m up 18% 18.6% of sales Operating margin(1) of €754m up 17% 8.0% of sales Stable operating margin after Ichikoh’s integration Net income(1) of €506m up 20% 5.3% of sales Net income excl. non recurring items of €514m up 14% 5.4% of sales EPS up 19% €2.13 EPS excl.
Slide 6: 2017 Outlook
2017 OUTLOOK Based on the following assumptions: An increase in global automotive production of between 1.5% and 2% Raw material prices and exchange rates in line with current levels Valeo confirms its objectives for 2017: Sales growth outperforming the market by more than 5 percentage points A slig
Slide 7: Confirming Our High Growth Potential
HALF YEAR ORDER INTAKE OF: €14.9BN (EXCL. VALEO SIEMENS EAUTOMOTIVE), UP 16% €3.0BN AT VALEO SIEMENS EAUTOMOTIVE CONFIRMING OUR HIGH GROWTH POTENTIAL July 20, 2017 CONFIDENTIAL
Slide 8: Acceleration in Order Intake Growth to €14.9bn
ACCELERATION IN ORDER INTAKE GROWTH TO €14.9BN (EXCL. VALEO SIEMENS AUTOMOTIVE) UP 16% E AND VALEO SIEMENS EAUTOMOTIVE TO €3.0BN… …CONFIRMING VALEO’S FUTURE CAPACITY TO OUTPERFORM AUTOMOTIVE PRODUCTION Order intake** Innovation fueling future organic growth as a % of order intake** €bn Innovation 10
Slide 9: Geographical Repositioning Towards Asia
GEOGRAPHICAL REPOSITIONING TOWARDS ASIA BOOK TO BILL OF 1.8TIMES THE OEM SALES, BETTER THAN 2016 % of H1 2017 OEM sales* % of H1 2017 order intake* SA 20% 3% 21% SA Asia 2% NA excl. China Asia Asia excl. Asia NA China 30% Order €3.0bn 15% 41% €1.8bn 15% €2.6bn Intake/OEM €6.0bn sales ratio* China As
Slide 10: Successful Start for Valeo Siemens eAutomotive
SUCCESSFUL START FOR VALEO SIEMENS EAUTOMOTIVE WITH €3.0BN OF ORDER INTAKE OVER FIRST-HALF 2017 Join forces to create a global champion of innovative and affordable high voltage components and systems for Hybrid and Electric Vehicles with a world-class portfolio, excellent customer reputation, engag
Slide 11: Diesel Keeps on Declining in Europe
DIESEL KEEPS ON DECLINING IN EUROPE Annual Diesel Vehicles Sales %, Western Europe, 1990 to 2017 (April) 56 55 53 53 53 53 51 52 52 49 50 48 46 47 44 40 36 32 28 25 23 22 22 22 20 17 14 15 Source: Frost & Sullivan (2017 : January to April) Begining of 2017, Diesel sales decrease is accelerating 11 J
Slide 12: NEV Sales Keep Increasing with China Leading
NEV* (BEV**+PHEV***+FCEV****) SALES KEEP ON INCREASING WITH CHINA LEADING THE WAY NEV* Sales Worldwide Split of NEV* Sales (number of vehicles) January to April 2017 260 452 Per region +37% 10% 189 705 36% 33% 21% Jan to April Jan to April 2016 2017 China US Europe RoW Source: Frost & Sullivan *New
Slide 13: NEV Sales in China
NEV* (BEV**+PHEV***+FCEV***) SALES KEEP ON INCREASING WITH CHINA LEADING THE WAY NEV* Sales in CHINA (number of vehicles) 92 767 +43% 64 659 Jan to April Jan to April 2016 2017 NEVs in China are growing faster than on a global base. Source: Frost & Sullivan *New Energy Vehicle ** Battery Electric Ve
Slide 14: No Single Solution in Electrification
THERE IS NO SINGLE SOLUTION IN ELECTRIFICATION EACH SOLUTION WILL ALLOW TO MULTIPLE THE PTS CONTENT PER CAR LOW VOLTAGE SOLUTIONS (12V & 48V) HIGH VOLTAGE SOLUTIONS MEDIUM HIGH CITY SMALL PREMIUM LARGE POWER x2 x2 x3 x9 x7 • ZERO EMISSION (ZE) • ALTERNATIVE TO • LONG HAUL • PERFORMANCE • LOW COST AR
Slide 15: Valeo Siemens eAutomotive €3.0bn Order Intake
SUCCESSFUL START FOR VALEO SIEMENS EAUTOMOTIVE WITH €3.0BN IN TOTAL ORDER INTAKE OVER FIRST-HALF 2017 % of H1 2017 order intake Charger 20% China Electric motor 35% Europe 48% Inverter 65% 32% Order intake of €3.0bn 15 July 20, 2017 CONFIDENTIAL
Slide 16: Sustained Sales Growth
SUSTAINED SALES GROWTH SALES OF €9.5BN, UP 16% AS REPORTED UP 9% LIKE-FOR-LIKE OEM SALES, UP 16% AS REPORTED UP 9% LIKE-FOR-LIKE, 6-POINT OUTPERFORMANCE AFTERMARKET SALES, UP 14% AS REPORTED UP 5% LIKE-FOR-LIKE July 20, 2017 CONFIDENTIAL
Slide 17: Sustained Sales Growth
SUSTAINED SALES GROWTH H1 SALES UP 16% AS REPORTED, UP 9% LIKE-FOR-LIKE Like-for-like +13% +5% +9% 9,464 4,767 4,697 €m Q1 17 Q2 17 H1 17 Reported +22% +12% +16% Q1 16 3,917 Q2 16 4,213 H1 16 8,130 Exchange rates +1.8% Exchange rates +0.8% Exchange rates +1.3% Scope +7.3% Scope +5.6% Scope +6.4% 17
Slide 18: Sustained OEM Sales Growth
SUSTAINED OEM SALES GROWTH H1 OEM SALES UP 16% AS REPORTED, UP 9% LIKE-FOR-LIKE Aftermarket OEM sales +8%* +1%* +5%* *Like-for-like +13%* +5%* +9%* 963 487 476 Q1 17 Q2 17 H1 17 +19%** +10%** +14%** 8,235 Miscellaneous 4,174 4,061 +38%* +21%* +27%* €m Q1 17 Q2 17 H1 17 266 **Reported +21%** +11%** +
Slide 19: Q2 OEM Growth: 5-Point Global Outperformance
SUSTAINED OEM SALES GROWTH LEADING TO A 5-POINT GLOBAL OUTPERFORMANCE Q2 OEM OEM sales** Like-for-like 47% of Valeo sales** sales** +5% OEM +2% World 21% of Valeo sales** sales** Europe* Production***0% Production*** -3% +4% North NorthAmerica America Outperf. +5pts Outperf. +5pts OEM sales** +6% Pr
Slide 20: Q2 Outperformance in Asia and China
12-POINT OUTPERFORMANCE IN ASIA 25-POINT OUTPERFORMANCE IN CHINA Q2 Like-for-like 27% of Asian sales* OEM 30% of total sales* OEM sales* sales* +14% Japan +13% Production** +8% Asia 18% of Asian sales* OEM sales* Production** +1% Outperf. +6pts -7% South Korea Production** 0% Outperf. +12pts Underpe
Slide 21: H1 OEM Growth: 6-Point Global Outperformance
SUSTAINED OEM SALES GROWTH LEADING TO A 6-POINT GLOBAL OUTPERFORMANCE H1 OEM OEM sales** Like-for-like 48% of Valeo sales** sales** +9% OEM +7% World 21% of Valeo sales** sales** Europe* Production***+3% Production*** +1% +8% North NorthAmerica America Outperf. +6pts Outperf. +6pts OEM sales** +6% P
Slide 22: H1 Outperformance in Asia and China
10-POINT OUTPERFORMANCE IN ASIA 21-POINT OUTPERFORMANCE IN CHINA H1 Like-for-like OEM 26% of Asian sales* sales* 29% of total sales* OEM sales* Japan +8% +14% Production** +7% Asia 18% of Asian sales* OEM sales* Outperf. +1pt Production** +4% -2% South Korea Production** -1% Outperf. +10pts Underper
Slide 23: Balanced Geographic Positioning
BALANCED GEOGRAPHIC POSITIONING OEM sales by production region % of OEM sales Eastern Eastern Europe & Europe & Africa Africa 16% 16% Western Western Asia excl. Europe Europe China 35% Asia excl. 32% 53% in Asia China 12% 57% in Asia & emerging 15% & emerging countries countries China 13% China US S
Slide 24: A Balanced Customer Portfolio
A BALANCED CUSTOMER PORTFOLIO % of OEM sales Other Other 6% 6% French* French* German 14% 16% German 30% 28% American American 20% 22% Asian** Asian** Asian** 26% Asian** 32% 26% 26% H1 2016 H1 2017 * Excluding Nissan ** Including Nissan 24 July 20, 2017 CONFIDENTIAL
Slide 25: Sustained Growth in the Business Groups
SUSTAINED GROWTH IN THE 4 BUSINESS GROUPS H1 2017 OEM sales growth total sales (like-for-like) CDA growth 19% (year-on-year) Q1 Q2 H1 VIS 31% Group €9.5bn CDA* +11%** +10% +4% +7% PTS 23% THS 27% Powertrain +8% +11% +1% +6% % H1 2017 sales Thermal +15%*** +15% +7% +11% Visibility +29%**** +14% +8% +
Slide 26: Gross Margin, Operating Margin, Net Income
GROSS MARGIN UP 18% TO €1,761M (18.6% OF SALES) OPERATING MARGIN* UP 17% TO €754M (8.0% OF SALES) NET INCOME UP 20% TO €506M (5.3% OF SALES) * Including joint ventures and associates July 20, 2017 CONFIDENTIAL
Slide 27: Gross Margin Up 18% to €1,761m
GROSS MARGIN UP 18% TO €1,761M OR 18.6% OF SALES IMPROVEMENT DRIVEN BY GROWTH IMPACT AND EFFICIENCY GAINS As a % of sales €1,761m +18% €1,488m +0.1pts -0.4pts -0.1pts +0.7pts 18.3% 18.6% H1 16 Volume/ Operational efficiency Costs Perimeter H1 17 inflation improvement linked to growth Exchange rate (
Slide 28: Net R&D Expenditure at 6.1% of Sales
FURTHER TO RECORD ORDER INTAKE NET R&D EXPENDITURE UNDER CONTROL AT 6.1% OF SALES IN LINE WITH 2017 INVESTOR DAY PRESENTATION Capitalized development Net R&D expenditure In €m and as a % of sales In €m and as a % of sales 278 209 228 2.6% 2.7% 2.9% +20% 582 H1 16 H2 16 H1 17 485 Amortization and imp
Slide 29: SG&A Expenses Up 10 bps to 4.8% of Sales
SG&A EXPENSES UP 10 BPS TO 4.8% OF SALES SELLING EXPENSES UP 10 BPS AND G&A STEADY AT 3.2% OF SALES SG&A SG&A as a % of sales In €m +18% 454 384 Selling expenses Selling +10bps expenses €149m €124m 4.7% 4.8% Admin. Admin. Selling Selling expenses expenses expenses €260m €305m expenses 1.5% 1.6% H1 1
Slide 30: Operating Margin Up 17% to €754m
OPERATING MARGIN* UP 17% TO €754M OR 8.0% OF SALES STABLE AFTER ICHIKOH INTEGRATION As a % of sales +17% €754m €647m -0.2pts** +0.3pts -0,1pts 8.0% 8.0% H1 16 Gross Net R&D Perimeter H1 17 margin SG&A (mainly Ichikoh) * Including joint ventures and associates **rounded figures 30 July 20, 2017 CONFI
Slide 31: Operating Margin Table
OPERATING MARGIN UP 17% TO €754M OR 8.0% OF SALES STABLE AFTER ICHIKOH INTEGRATION H1 16 H1 17 Total sales (€m) 8,130 9,464 +16% Gross margin 1,488 1,761 +18% As a % of sales 18.3% 18.6% +30bps Net R&D expenditure 485 582 +20% As a % of sales 6.0% 6.1% +10bps SG&A 384 454 +18% As a % of sales 4.7% 4
Slide 32: Net Income Up 20% to €506m
NET INCOME UP 20% TO €506M OR 5.3% OF SALES H1 16 H1 17 Total sales (€m) 8,130 9,464 +16% Operating margin incl. JV & Associates 647 754 +17% As a % of sales 8.0% 8.0% = Other income & expenses (34) (23) -32% As a % of sales -0.4% -0.2% +20bps Operating income 613 731 +19% As a % of sales 7.5% 7.7%
Slide 33: Net Income and EPS
NET INCOME UP 20% EXCLUDING NON-RECURRING ITEMS, NET INCOME UP 14% H1 16 H1 17 Change Net income (€m) 422 506 +20% EPS €1.79 €2.13 +19% Net income (€m) (excluding non- recurring items) 451 514 +14% EPS (excluding non-recurring items) €1.91 €2.16 +13% 33 July 20, 2017 CONFIDENTIAL
Slide 34: ROCE at 33% and ROA at 22%
ROCE AT 33% AND ROA AT 22% H1 16 H1 17 Total sales €8.1bn €9.5bn Operating margin* 8.0% 8.0% ROCE 36% 33% ROA 21% 22% *including joint ventures and associates 34 July 20, 2017 CONFIDENTIAL
Slide 35: Free Cash Flow Generation €99m
FREE CASH FLOW GENERATION €99M IN LINE WITH 2017 INVESTOR DAY PRESENTATION July 20, 2017 CONFIDENTIAL
Slide 36: EBITDA of €1,215m, Up 16%
EBITDA OF €1,215M, UP 16% TO 12.8% OF SALES VISIBILITY EBITDA MARGIN AT 13.3% DOWN 60BPS FURTHER TO ICHIKOH’S INTEGRATION (FEBRUARY 1ST) In €m and as a % of sales As a % of sales H1 16 H1 17 12.9% 12.8% Comfort & Driving Assistance 14.4 14.5 Powertrain 12.7 12.8 12.5% Thermal 10.0 10.3 Visibility 13
Slide 37: Recorded Capex of €894m
RECORDED CAPEX (INCLUDING CAPITALIZED R&D) OF €894M OR 9.4% OF SALES (UP 44% OR 180BPS) SUPPORTING RECORD HIGH ORDER INTAKE AND FUTURE GROWTH As a % of sales In €m +44% 894 +180bps 619 9.4% 616 410 Capex* 7.6% Capital. 278 209 R&D 6.5% 5.0% Capex* H1 16 H1 17 2.6% Capitalized R&D 2.9% H1 16 H1 17 *e
Slide 38: EBITDA and Free Cash Flow
EBITDA OF €1,215M, UP 16% FREE CASH FLOW OF €99M, DOWN 71% H1 16 H1 17 EBITDA (€m) 1,047 1,215 +16% Operating working capital * 36 (45) High growth in China Restructuring & antitrust (18) (77) Other operating items (incl. taxes) (128) (160) Of which: Taxes (133) (150) Pensions (11) 2 Cash from opera
Slide 39: Strong Balance Sheet
STRONG BALANCE SHEET July 20, 2017 CONFIDENTIAL
Slide 40: Debt Ratios
DEBT RATIOS Shareholders’ equity and net debt Net financial debt over EBITDA Net debt (€m) Shareholders’ equity (€m) Net debt (€m) EBITDA 12 months rolling (€m) excluding minority interests 4 ,117 4 ,116 2,312 3 ,533 2,144 1,977 2,060* 2,060* 1,118 739 537 1,118 June 30, Dec 31, June 30, 2016 2016 2
Slide 41: Debt Maturity Profile - End of June 2017
DEBT MATURITY PROFILE - END OF JUNE 2017 4000 Outstanding Maturity Coupon amount 3500 EMTN May 2018 €273m 4.875% BEI loan Nov 2018 (2 annuities) USD 51.5m 6M USD Libor +1.9% 3000 Undrawn credit lines Convertible 2.6years June 2021 USD 575m 0% bond maturity 2500 EMTN January 2023 €500m 0.625% EMTN Ja
Slide 42: 2017 Outlook
2017 OUTLOOK July 20, 2017 CONFIDENTIAL
Slide 43: 2017 Outlook
2017 OUTLOOK Based on the following assumptions: An increase in global automotive production of between 1.5% and 2% Raw material prices and exchange rates in line with current levels Valeo confirms its objectives for 2017: Sales growth outperforming the market by more than 5 percentage points A slig
Slide 44: Takeover of Ichikoh
TAKEOVER OF ICHIKOH, AUTOMOTIVE LIGHTING SPECIALIST IN ASIA July 20, 2017 CONFIDENTIAL
Slide 45: Takeover of Ichikoh, Automotive Lighting Specialist in Asia
TAKEOVER OF ICHIKOH, AUTOMOTIVE LIGHTING SPECIALIST IN ASIA Following the successful takeover bid, Valeo increased its interest in Ichikoh to 55.08% of the share capital Consolidated by Valeo as from February 1, 2017 Strategic objectives Strengthen Valeo's relationships with Japanese customers, by i
Slide 46: Contacts - Investor Relations
CONTACTS Investor Relations Valeo 43, rue Bayen F-75848 Paris Cedex 17 France Thierry Lacorre E-mail: thierry.lacorre@valeo.com Website: www.valeo.com 46 July 20, 2017 CONFIDENTIAL
Slide 47: Share Information
SHARE INFORMATION Share Data • Bloomberg Ticker FR FP • Reuters Ticker VLOF.PA • ISIN Number FR 0013176526 • Shares outstanding as of June 30, 2017 239,143,131 ADR Data • Ticker/trading symbol VLEEY • CUSIP Number 919134304 • Exchange OTC • Ratio (ADR: ord) 1:2 • Depositary Bank J.P. Morgan • Contac
Slide 48: Glossary
GLOSSARY 1) Order intake corresponds to business awarded by automakers during the period (including joint ventures at least 50%-owned by the Group) less any cancellations, based on Valeo's best reasonable estimates in terms of volumes, selling prices and project lifespans. Unaudited indicator. 2) Op
Slide 49: Back-up
BACK-UP July 20, 2017 CONFIDENTIAL
Slide 50: Comfort & Driving Assistance
COMFORT & DRIVING ASSISTANCE OEM sales Like-for-like +10% +4% +7% change Market share* and competitors: 2016 key figures: • Sales: €3.4bn (20% of Group sales) • EBITDA: 14.7% (23% of Group EBITDA) - Driving Assistance: Valeo no.1 Total sales (€m) 1,837 Valeo + Bosch + Continental ~ 57%* • 17,400 emp
Slide 51: Powertrain Systems
POWERTRAIN SYSTEMS OEM sales Like-for- like +11% +1% +6% Market share* and competitors: 2016 key figures: change • Sales: €4bn (24% of Group sales) - Transmission Systems: Valeo no.2 • EBITDA: 13.3% (25% of Group EBITDA) Luk + Valeo + ZF Sachs ~ 47%* • 20,700 employees - Electrical Systems & Power •
Slide 52: Thermal Systems
THERMAL SYSTEMS OEM sales Like-for-like +15% +7% +11% change 2016 key figures: • Sales: €4.6bn (28% of Group sales) Market share* and competitors: • EBITDA: 10.0% (22% of Group EBITDA) 2,594 Thermal Systems: Valeo no.2 • 22,800 employees Total sales (€m) Denso + Valeo + Hanon + Mahle ~ 55%* • 57 pro
Slide 53: Visibility Systems
VISIBILITY SYSTEMS OEM sales Like-for- like +14% +8% +11% change Market share* and competitors: 2016 key figures: • Sales: €4.6bn (28% of Group sales) • EBITDA: 13.9% (30% of Group EBITDA) - Lighting Systems: Valeo-Ichikoh no.2 Total sales (€m) 2,953 Koito + Valeo-Ichikoh + Magnetti Marelli ~ 60%* •
Slide 54: Quarterly Information (in €m)
QUARTERLY INFORMATION (IN €M) Sales by segment Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Comfort & Driving Assistance Systems 623 569 515 531 552 572 573 614 657 679 663 721 794 866 825 877 938 899 Powertrain Systems 774 817 752 818 8
Slide 55: Statement of Income with Half Year Breakdown
STATEMENT OF INCOME WITH HALF YEAR BREAKDOWN 2013 2014* 2015 2016 2017 In €m H1 H2 H1 H2 H1 H2 H1 H2 H1 Sales 5,944 5,718 6,347 6,378 7,298 7,246 8,130 8,389 9,464 Gross margin 1,011 998 1,080 1,123 1,280 1,293 1,488 1,532 1,761 as a % of sales 17,0% 17.5% 17.0% 17.6% 17.5% 17.8% 18.3% 18,3% 18.6% R
Slide 56: Segment Information
SEGMENT INFORMATION Comfort & H1 2017 Driving Assistance Powertrain Thermal Visibility (€m) Systems Systems Systems Systems Others Total Sales: 9,464 ● segment (excluding Group) 1,824 2,139 2,582 2,901 18 ● intersegment (Group) 13 24 12 52 (101) EBITDA 266 276 267 392 14 1,215 Research & Development
Slide 57: Safe Harbor Statement
SAFE HARBOR 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 respec
Slide 58: Valeo - Smart Technology for Smarter Cars
Valeo SMART TECHNOLOGY FOR SMARTER CARS