Slide 1: 2023 Results & 2025 Move Up Plan progress review
2023 RESULTS & 2025 MOVE UP PLAN progress review February 29, 2024 Christophe Périllat Edouard de Pirey Chief Executive Officer Chief Financial Officer FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 1
Slide 2: Summary
Summary 01 02 03 04 05 Highlights 2023 2025 Financial Backup Results & Move Up roadmap to Slides Performance strategic plan 2025 targets For purposes of comparison with prior periods, this presentation has been prepared based on adjusted figures meaning: adding 100% of the former VSeA figures for 2021
Slide 3: Highlights
01 Highlights Christophe Périllat Chief Executive Officer FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 3
Slide 4: 2023 guidance fully achieved
01 2023 guidance fully achieved FY 2023 Group Sales EBITDA Operating margin Free cash flow RESULTS €22.0bn €2,647m €838m €379m 12.0% 3.8% FY 2023 Group Sales EBITDA Operating margin Free cash flow GUIDANCE €22bn - €23bn 11.5% - 12.3% 3.2% - 4.0% > €320m FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 4
Slide 5: H2 commitments completed
01 H2 commitments completed Deliver first Finalize Finalize Positive WC €500m step of THS new phase remaining contribution divestment recovery of synergies inflation to FCF program +2.0pts and efficiency negotiations H2 EBITDA margin vs H1 programs ~€400m signed (6 transactions) €100m ongoing FULL YEAR
Slide 6: Continuous financial improvement since 2021
01 Continuous financial improvement since 2021 FY 2021 FY 2022 FY 2023 adjusted* adjusted* Sales €18,014 €20,407 €22,044 (in millions) EBITDA 11.3% 11.4% 12.0% (as % of sales) Operating margin 1.7% 2.4% 3.8% (as % of sales) Free cash flow €(102)m €205m €379m FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024
Slide 7: Strong customer confidence in Valeo's technologies
01 Strong customer confidence in Valeo’s technologies Further improvement in embedded margins €34.9bn €32.6bn ADAS & Int. Exp. Electrification acceleration acceleration More than half €6bn in new orders of 2023 Group order intake in high-voltage electric €20.3bn powertrain 2019/2021 2022 2023 Margin e
Slide 8: 2023 ESG performance on track to achieve our 2025 objectives
01 2023 ESG performance on track to achieve our 2025 objectives Carbon Gender diversity Impeccable business footprint & Safety practices towards end to end integrity CO2 emissions* (scopes 1, 2, 3) Women in managers & engineers New, 2 revised Codes -9% in absolute value 25.5% (+1.4pts vs. 2022) code
Slide 9: 2023 Results & Performance
02 2023 Results & Performance Edouard de Pirey Chief Financial Officer FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 9
Slide 10: Total sales amounting to €22.0bn, up 11% lfl adj.
02 Total sales amounting to €22.0bn, up 11% lfl adj. Full Year sales by type Total sales OEM Aftermarket Miscellaneous €22,044m €18,701m €2,267m €1,076m incl. high-voltage powertrain €1,447m (vs 1,041m* in 2022) +11% +13% +4% +4% lfl adjusted growth* lfl adjusted growth* lfl adjusted growth* lfl adjusted
Slide 11: OEM sales performance by region
02 OEM sales 3 pts global outperformance Perf.* by region 3 pts outperformance in Europe Ongoing customer repositioning in China to bear fruit from H2 2024 World Europe (including Africa) North America Asia (excluding China) China South America +3 pts +3 pts -1 pt +9 pts -6 pts In line adjusted** ou
Slide 12: Operating margin +140 basis points on an adj. basis
02 Operating margin +140 basis points on an adj. basis Efficiency, At 3.8% of sales inflation recovery & activity Efficiency plan on track As a % of sales +0.8 pts +0.1 pts 3.8% +0.5 pts R&D expenses +0.8 pts Increasing efficiency in R&D: 2.4% → Order intake, +58% over the last 2 years → Gross R&D*, +30
Slide 13: Net income at 1.0% of sales, up 50% on an adj. basis
02 Net income at 1.0% of sales, up 50% on an adj. basis Despite increase in cost of net debt FY 2022 €m FY 2023 adjusted* Operating margin excl. JV & associates 494 838 As a % of sales 2.4% 3.8% JV & associates** 193 17 Operating margin incl. JV & associates 687 855 Other expenses As a % of sales 3.
Slide 14: FY segment information
02 FY segment information Sales EBITDA margin €4.7bn** €6.9bn** Comfort & Driving €4.2bn** Powertrain Assistance Systems (CDA) EBITDA Systems (PTS) €6.0bn** 11.8% margin +4 pts OEM sales outperf. 15.8% +9 pts adjusted OEM sales outperf.* 8.9% EBITDA 14.8% Highest EBITDA of the Group Ahead of schedul
Slide 15: Free Cash Flow of €379m
02 EBITDA Free Cash Flow of €379m Improvement in EBITDA contribution €m FY 2022 FY 2023 €2,647m or 12.0% of sales adjusted* EBITDA 2,323 2,647 As a % of sales 11.4% 12.0% Capex (PP&E) Under strict control in a context of strong Tangible CAPEX (property, plant & equipment) (845) (964) increase in ord
Slide 16: Leverage ratio down to 1.5x, vs 1.7x a year ago
02 Leverage ratio down to 1.5x, vs 1.7x a year ago Financial net debt remains stable Undrawn Cash & Cash credit lines equivalents Net debt in €bn €3.0bn €4.0bn €4.0bn €1.7bn Dec. 31, 2023 Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Credit ratings Gearing ratio Leverage ratio LT Outlook ST Net debt/Sha
Slide 17: Dividend of €0.40 per share
02 Proposed dividend per share Progressive increase to €0.40 per share €0.40 €0.38 €0.35 Dividend of €0.40 per share To be proposed at the next Shareholders’ Meeting on May, 23 2024 2021 2022 2023 FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 1717
Slide 18: 2025 Move Up strategic plan
03 2025 Move Up strategic plan Christophe Périllat Chief Executive Officer FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 18
Slide 19: Unique positioning of Valeo on key trends in our industry
03 Unique positioning of Valeo on key trends in our industry Move Up strategy validated by our customers The market is offering Valeo numerous opportunities Valeo has pricing power and is highly selective on new orders €34.9bn €32.6bn Margin ++ ELECTRIFICATION ADAS ACCELERATION ACCELERATION Margin €
Slide 20: We are accelerating Valeo's transformation
03 We are accelerating Valeo’s transformation Transformation driven by Transformation driven by Transformation driven by order intake cost reduction strong cash culture -> Growth acceleration supported -> One-off exceptional self-help -> Extreme selectivity of orders by attractive and leading measur
Slide 21: 2024 & 2025 roadmap
03 2024 & 2025 roadmap Previous 2025 FY 2023 FY 2024 FY 2025 objectives reported guidance (a) (b) objectives (b) (Feb. 2022 based on 98.5m LV) Sales €22bn €22.5bn to €23.5bn €24.5bn to €25.5bn ~€27.5bn EBITDA 12.0% 12.1% to 13.1% 13.5% to 14.5% ~14.5% (as % of sales) Operating margin 3.8% 4.0% to 5.
Slide 22: Continuous improvement of profitability and free cash flow generation
03 Continuous improvement of profitability and free cash flow generation Operating Margin in millions and as % of sales Free Cash Flow in millions one-off exceptional cost of self-help measures ~€800* €150 €1,500 €1,035 ~€500* €838 Operating Operating margin €379 €150 margin 6.0% ~€650** 4.5% mid poin
Slide 23: ADAS & SDV
03 ADAS & SDV Acceleration of ADAS & SDV Interior Experience → Powertrain and model agnostic ADAS market → ADAS & Ix represent half of 2023 Valeo’s orders with greater embedded margins X2.2 in 8 years → L2/L2+ market acceleration driven by regulations and feature adoption ~€100bn → Key business part
Slide 24: Electrification journey
03 Electrification Electrification journey -> High selectivity and monitoring, given market dynamics Electrification market -> VSeA integration was the right choice: X3.8 in 8 years ~€150bn 1 business unit including ICE and EV Operational flexibility and synergies powertrain solutions Powertrain* New pr
Slide 25: Combining Powertrain and Thermal Systems into 1 single business group
03 Electrification Combining Powertrain and Thermal Systems into 1 single business group to strengthen our Electrification market product offering and drive synergies X3.8 in 8 years ~€150bn Electrification is the future of both Powertrain & Thermal Systems 1. Optimisation of all components through sys
Slide 26: Lighting everywhere
03 Lighting Lighting everywhere Lighting really is everywhere Lighting market Powertrain agnostic X1.9 in 8 years ~€50bn Customers use Valeo’s technology €27bn to make cars more desirable Lighting = Brand and model signature 2022 2030 Increased software and technology content High take rate for adva
Slide 27: Performance driven by ADAS & lighting
03 Performance driven by ADAS & lighting Sales Recovery expected in PTS & THS EBITDA margin ~€6bn* Project to combine PTS & THS within a single Business Unit €4.7bn* ~€7.5bn* ~18% Comfort & Driving EBITDA €6.9bn* ~12% Assistance Systems (CDA) 14.8% margin Powertrain 11.8% EBITDA margin 2023 2025 exp
Slide 28: Financial roadmap to 2025 targets
04 Financial roadmap to 2025 targets Edouard de Pirey Chief Financial Officer FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 28
Slide 29: Levers to expand operating margin from 2023 to 2025
04 Levers to expand operating margin from 2023 to 2025 As a % of sales 5.5% to 6.5% ~+0.5 pts ~+0.8 pts ~+0.9 pts 3.8% Self-help measures Selectivity & of order other intake ~+0.6 pts ~+0.3 pts operational & Sales New efficiency R&D growth business improvements efficiency 01 02 03 FULL YEAR 2023 RESUL
Slide 30: Sales acceleration in 2025
04 Sales acceleration in 2025 Transformation driven by order intake 1 Driven by significant step up in order intake Conservative assumptions for greater comfort 2025 light vehicle production (in million units) €24.5 to €25.5bn -7% 98.5 -3% 91.7 €22bn S&P est. Feb. 2022 89.0 S&P est. Feb. 2024 Basis f
Slide 31: Transformation driven by sales growth & higher margins in new order intake
04 Transformation driven by sales growth & Transformation driven by order intake 1 higher margins in new order intake As a % of sales €24.5bn ~+0.3 pts in margin to New business €25.5bn Higher margins ~+0.6 pts in margin embedded in Sales growth new orders Step up in order intake registered Growth a
Slide 32: Ambitious cost reduction actions
04 Ambitious cost reduction actions Transformation driven by cost reduction 2 Incl. merger between PTS and THS At Group Level PTS and THS segments operational improvement Cost base adjustment focused in 2024 & 2025 Project to merge into 1 single entity €300m in one-off exceptional self-help Leaner &
Slide 33: Selectivity of order intake for optimizing cash generation
04 Selectivity of order intake for optimizing Transformation driven by strong cash culture 3 cash generation Order intake in billion Valeo applies high selectivity on new €34.9 orders €32.6 → Higher embedded margins → Higher contribution from customers €20.3 Selectivity reducing the need 2019/2021 a
Slide 34: Acceleration of R&D efficiency
04 Acceleration of R&D efficiency Transformation driven by strong cash culture 3 Gross R&D Efficiency through as % of sales ➢ Platforms, artificial intelligence and IS tools 11.8% ➢ Hyper selectivity of new orders ~10% R&D Capitalization IFRS impact ➢ 2024 impact at ~2.4 pts similar to H2 2023 ➢ Reachi
Slide 35: Increasing cash flow generation
04 Increasing cash flow generation Transformation driven by 3 strong cash culture Driven by higher contribution from EBITDA and strict control over PP&E and R&D ~€800* EBITDA 2025 expected Higher profitability in millions one-off exceptional cost of self-help measures €150 ~€3.5bn ~14% of sales or (mi
Slide 36: To conclude
04 To conclude Sales More than 11% in 2 years Clear strategy with clear to around €25bn in 2025 (mid point) priorities EBIT More than 60% in 2 years More agile & competitive organization to around €1.5bn in 2025 (mid point) FCF More than 60% in 2 years Committed & focused €800m in 2025 €650m in 2025
Slide 37: Thank you
Thank you Q&A FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 37
Slide 38: Backup slides
05 Backup slides FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 3838
Slide 39: Continuous financial improvement since 2021
05 Continuous financial improvement since 2021 FY 2021 FY 2022 S1 2023 S2 2023 FY 2023 adjusted* adjusted* Sales €18,014 €20,407 €11,212 €10,832 €22,044 (in millions) EBITDA 11.3% 11.4% 11.6% 12.0% 12.0% (as % of sales) Operating margin 1.7% 2.4% 3.2% 4.4% 3.8% (as % of sales) Free cash flow €(102)m €
Slide 40: Q4 total sales amounting to €5,615m, up 5%
05 Q4 total sales amounting to €5,615m, up 5% Full Year sales by type Total sales OEM Aftermarket Miscellaneous €5,608m €4,724m €531m €353m incl. high-voltage powertrain €378m +9% +10% +2% -% lfl growth lfl growth lfl growth lfl growth Year-on-year change: +5% Year-on-year change: +6% Year-on-year chang
Slide 41: Q4 OEM sales performance by region
05 Q4 OEM sales Performance* by region Europe North South World (including Africa) America Asia (excluding China) China America 0pts +3pts +4pts +6pts -10pts -3pts performance Q4 +10% +11% +10% +9% +11% -7% lfl growth FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 * S&P Global Mobility estimates as of Fe
Slide 42: Q4 sales by Business Group
05 Q4 sales by Business Group Sales by Business Group Change Change (in millions of euros) Q4 2022 Q4 2023 in sales in OEM sales* Perf.** Comfort & Driving Assistance Systems*** 1,156 1,166 1% 8% -1pt Powertrain Systems 1,560 1,746 12% 16% +7pts Thermal Systems 1,180 1,189 1% 5% -4pts Visibility Sys
Slide 43: H2 total sales amounting to €10,832m, up 2%
05 H2 total sales amounting to €10,832m, up 2% Full Year sales by type Total sales OEM Aftermarket Miscellaneous €10,832m €9,157m €1,100m €575m incl. high-voltage powertrain €xxxm +7% +7% +2% +6% lfl growth lfl growth lfl growth lfl growth Year-on-year variation: +2% Year-on-year variation: +2% Year-on-
Slide 44: H2 OEM sales performance by region
05 H2 OEM sales Performance* by region Europe North South World (including Africa) America Asia (excluding China) China America -1pt -1pt +2pts +7pts -9pts in line performance H2 +10% +7% +9% +11% +3% -2% lfl growth FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 * S&P Global Mobility estimates as of Febr
Slide 45: H2 sales by Business Group
05 H2 sales by Business Group Sales by Business Group Change Change (in millions of euros) H2 2022 H2 2023 in sales in OEM sales* Perf.** Comfort & Driving Assistance Systems*** 2,276 2,324 2% 8% 0pts Powertrain Systems 3,140 3,294 5% 9% +1pt Thermal Systems 2,372 2,335 -2% 4% -4pts Visibility Syste
Slide 46: H2 income statement
05 H2 income statement (€m) H2 2022 H2 2023 ▲ Sales 10,618 10,832 +10% Gross margin 1,858 2,039 +10% As a % of sales 17.5% 18.8% 130 bps R&D expenses -987 -1029 +4% As a % of sales -9.3% -9.5% -20 bps Administrative and selling expenses -494 -535 +8% As a % of sales -4.7% -4.9% -20 bps Operating mar
Slide 47: FY geographic positioning
05 FY geographic positioning OEM sales by production region (% of OEM sales) FY 2022 FY 2023 ▲ Western Europe 29% 30% +1pt North America 8% 6% -2pts Asia & emerging countries Of which Asia excluding China 63% 15% 64% 15% +1pt stable 64% of OEM sales Of which China 18% 17% -1pt Exposure to Asian Of w
Slide 48: FY Segment information (reported basis)
05 FY Segment information (reported basis) CDA* PTS THS VIS Other Total Full-Year 2023 (€m) Sales: 4,655 6,865 4,719 5,541 264 22,044 Segment (Excluding Group) 4,618 6,767 4,652 5,536 471 22,044 Intersegment (Group) 37 98 67 5 (207) - EBITDA 690 812 359 736 50 2,647 Research & Development expenditur
Slide 49: R&D expenses at 9.2% of sales
05 R&D expenses at 9.2% of sales 2022 (€m) 2023 ▲ adjusted* Gross Research and Development expenditure -2,110 -2,607 23.6% As a % of sales -10.3% -11.8% -1.5bps Capitalized development expenditure 660 995 50.8% As a % of sales 3.2% 4.5% +1.3bps Amortization and impairment of capitalized development
Slide 50: Debt profile
05 Debt profile Average maturity: 3 years Undrawn credit €1.7BN facilities As of Dec. 31, 2023 Cash & cash equivalents €3.0BN As of Dec. 31, 2023 Senior bond (EMTN) Schuldschein Maturity Amount Coupon Maturity Amount Coupon January 2024 June 2025 €700M €600M 3.250% 1.500% April 2025 April 2025 €90M €
Slide 51: Taxonomy figures illustrating Valeo's sustainable positioning
05 Taxonomy figures illustrating Valeo’s sustainable positioning Preparing for the future by transiting towards net zero and circular economy Electric Business Thermal Business Visibility Business 2023 Turnover Capex Opex Taxonomy-eligible portion* 21% 14% 19% Taxonomy-alignment portion* 19% 13% 19%
Slide 52: 2019-2025 ESG performance
05 2019-2025 ESG performance 2019 2023 2025e base year (change vs. 2019) Emissions reduction (Scope 1, 2 & 3) - validated by SBTi in Mt CO2 eq. . 49.6 45.2 45.3 (-9%) Energy consumption in MWh/€m 142 133 134 (-6%) E Water consumption Production of hazardous and non-hazardous waste in cu.m/€m in t/€m
Slide 53: An ESG leader recognized by rating agencies
05 An ESG leader recognized by rating agencies #1 #2 #1 68/100 10.1* B- Prime low-risk #1 #1 Top3 A- Climate Change AAA 63/100 A Climate Water Valeo is included in major ESG indices CAC40 ESG Global ESG ESG Leaders CAC40 SBT 1.5° Leaders FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 # Auto Parts excl.
Slide 54: Share information
05 Share information Share Data ADR Data Ticker/trading symbol VLEEY Bloomberg Ticker FR FP CUSIP Number 919134304 Reuters Ticker VLOF.PA Exchange OTC ISIN Number FR0013176526 Ratio (ADR: ord) 1:2 Shares outstanding as of Dec. 31, 2023 244,633,504 Depositary Bank J.P. Morgan Contact at J.P. Morgan –
Slide 55: Glossary
05 Glossary Order intake corresponds to business awarded by automakers during the period to Free cash flow corresponds to net cash from operating activities (excluding changes in Valeo, and to joint ventures and associates based on Valeo’s share in net equity, (except non-recurring sales of receivabl
Slide 56: Safe harbour statement
05 Safe harbour 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 re
Slide 57: FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024
FULL YEAR 2023 RESULTS | FEBRUARY 29, 2024 57