Slide 1: 2014 Results
2014 Results Jacques Aschenbroich – CEO February 24, 2015 February 24, 2015 I 1
Slide 2: H2 highlights
H2 highlights +12% as reported Outperformance Sales of €6.4bn +6% like-for-like (2) in all main production regions and Business +14% as reported Groups OEM sales of €5.5bn +7% like-for-like (2) Operating margin*(1) up 15% to €471m 7.4% of sales Profitability Net income(1) up 20% to €300m 4.7% of sal
Slide 3: FY highlights
FY highlights Fueled by Order intake(1 ) of €17.5bn + 18% innovation +9% as reported Sales of €12.7bn +8% like-for-like (2) +11% as reported OEM sales of €10.9bn +9% like-for-like (2) 6.5-point outperformance Growth* Outperformance** Outperformance in all production World OEM sales +9.2% +6.5pts** r
Slide 4: FY highlights
FY highlights Operating margin* up 15% to €913m 7.2% of sales Profitability Net income up 28% to €562m 4.4% of sales continues to improve EPS up 27% €7.23 EBITDA(1) up 15% to €1,526m 12.0% of sales Free cash flow(1) of €327m after €341m in 2013 Strong ROCE(1) 31% balance sheet ROA(1) 20% Net debt(1)
Slide 5: 2015 outlook
2015 outlook Based on the following key assumptions for FY 2015: Automotive production: World: around +3% Europe (excl. Russia): around +2% Raw material prices and currencies in line with current levels Valeo confirms its objectives for 2015: Sales growth outperformance in the main production region
Slide 6: Order intake up 18% to €17.5bn
Order intake up 18% to €17.5bn confirming high growth potential February 24, 2015 I 6
Slide 7: Acceleration in order intake…
Acceleration in order intake… … leading to an acceleration in Valeo’s future organic growth Innovation fueling future organic growth as a % of order intake* FY order intake* €bn Innovation 35% (1) €bn 17.5 €bn 15 €bn 13 (1) Products and technologies sold by less than 3 years €bn 8.8 Order intake* €b
Slide 8: Breakdown of order intake: Europe, Asia & North America
Breakdown of order intake: Europe (44%), Asia (34%) & North America (18%) % of 2014 OEM sales* % of 2014 order intake* 18% SA 4% Asia excl. Asia China 34% 20% SA NA €6.0bn Asia 10% 3% Asia €3.1bn excl. NA 28% China €2.3bn 13% €3.1bn China 15% China 24% Europe €5.5bn Europe €7.8bn 49% 44% OEM sales o
Slide 9: Sales of €12.7bn, up 9% as reported
Sales of €12.7bn, up 9% as reported up 8% like-for-like OEM sales up 11% as reported up 9% like-for like, 6.5-point outperformance Aftermarket sales up 1% as reported stable like-for-like February 24, 2015 I 9
Slide 10: 2014 total sales up 9% as reported, up 8% like-for-like
2014 total sales up 9% as reported, up 8% like-for-like *Like-for-like growth +7%* +6%* +8%* 12,725 6,378 €m 3,309 Q4 14 H2 14 FY 14 As reported +13% As reported +12% As reported +9% Exchange rates +2.4% Exchange rates +1.2% Exchange rates -0.9% Perimeter +4.2% Perimeter +4.2% Perimeter +2.2% Februa
Slide 11: 2014 OEM sales, up 11% as reported, up 9% like-for-like
2014 OEM sales, up 11% as reported, up 9% like-for-like Aftermarket OEM sales -4%* -3%* 0%* *Like-for-like +7%* +7%* +9%* X,XXX growth 2,516 1,495 742 376 Q4 14 H2 14 FY 14 0%** +1%** +1%** 10,890 Miscellaneous 5,458 +30%* +10%* +13%* €m 2,814 Q4 14 H2 14 FY 14 340 **Change as +15%** +14%** +11%** r
Slide 12: OEM sales outpaced the global market by more than 6 points
OEM sales outpaced the global market by more than 6 points China 12-point outperformance; Europe 8-point outperformance Q4 Outperf. +6.2pts Like-for-like proforma 2014 World Outperf. OEM sales** +7.0% +8pts Production***+0.8% Outperf. Europe* +3pts OEM sales** +8% North America Production***0% OEM s
Slide 13: OEM sales outpaced the global market by 6.5 points
OEM sales outpaced the global market by 6.5 points Outperformance in all production regions 2014 Outperf. +6.5pts Like-for-like proforma 2014 World Outperf. OEM sales** +9.2% +6pts Production***+2.7% Outperf. Europe* +3pts OEM sales** +9% North America Production***+3% OEM sales** +8% Production***
Slide 14: Geographic repositioning
Geographic repositioning North America (US & Mexico) up 2 points to 20%, China up 1 point to 14% OEM sales by production region Sales including joint ventures consolidated proportionally Eastern Eastern Europe & Europe & Africa Africa 14% 14% Western Western Asia excl. Asia excl. Europe China Europe
Slide 15: Balanced customer portfolio
Balanced customer portfolio % of OEM sales Sales including joint ventures consolidated proportionally Other Other 6% 6% French* French* 16% German 16% German 30% 30% American American 21% 22% Asian** Asian** Asian** Asian** 26% 27% 29% 26% 2013 2014 * Excluding Nissan ** Including Nissan February 24
Slide 16: Above-market growth in all Business Groups
Above-market growth in all Business Groups CDA VIS 18% 28% Group €12.7bn PTS 26% THS 28% OEM sales growth Total sales growth (like-for-like) % FY 2014 sales (as reported) Q4 H2 FY FY Perimeter impact Sale of Access Mechanism CDA** +15% +14% +15% +3% business (effective April 30, 2013) Powertrain +1%
Slide 17: Operating margin, Net income
Operating margin* H2: up 15% to €471m (7.4% of sales) FY: up 15% to €913m (7.2% of sales) Net income H2: up 20% to €300m (4.7% of sales) FY: up 28% to €562m (4.4% of sales) * incl. JV & Associates in accordance with new IFRS standards February 24, 2015 I 17
Slide 18: Gross margin up 10% to €2,203m; operating margin up 15%
Gross margin up 10% to €2,203m or 17.3% of sales Mainly impacted by South America and by depreciation expense to sustain organic growth €2,203m +10% €2,009m -20bp -20bp -20bp +70bp 17.2% 17.3% FY 13 Volume inflation Performance in Depreciation to fuel future Non-recurring FY 14 South America growth
Slide 19: Net R&D expenditure at 5.4% of sales, up 10bps
Net R&D expenditure at 5.4% of sales, up 10bps Capitalized development expenditure Net R&D In €m & as a % of sales In €m & as a % of sales 286 296 +12% 2.5% 2.3% 685 2013 2014 614 +10bps Amortization of capitalized development expenditure 5.3% 5.4% In €m & as a % of sales 175 150 1.3% 1.4% FY 13 FY
Slide 20: SG&A expenses down 20bps to 5.2% of sales
SG&A expenses down 20bps to 5.2% of sales SG&A In €m & as a % of sales 656 629 Selling Selling expenses expenses 193 207 or 1.7% or 1.7% Admin. Admin. expenses -20bps expenses 436 449 or 3.7% or 3.5% FY 13 FY 14 -20bps 5.4% 5.2% February 24, 2015 I 20
Slide 21: Net income up 28% to €562m or 4.4% of sales
Net income up 28% to €562m or 4.4% of sales Effective tax rate at 19.2% FY 13* FY 14** Change Total sales (€m) 11,662 12,725 +9% Operating margin excl. JV & Associates (€m) 766 862 +13% As a % of sales 6.6% 6.8% +20bps JV & Associates (€m) 26 51 +96% As a % of sales 0.2% 0.4% +20bps Operating margin
Slide 22: EPS up 27%
EPS up 27% FY 13 FY 14 Change Net income (€m) 439 562 +28% EPS €5.71 €7.23 +27% Net income (€m) (excluding non recurring items) 501 593 +18% EPS (excluding non recurring items) €6.52 €7.63 +17% February 24, 2015 I 22
Slide 23: ROCE at 31%
ROCE at 31% FY 13 FY 14 Total sales €11.7bn €12.7bn Operating margin* 6.8% 7.2% ROCE 33% 31% ROA 20% 20% *incl. JV & Associates in accordance with new IFRS standards (1) See glossary page 36 February 24, 2015 I 23
Slide 24: Free cash flow of €327m
Free cash flow of €327m +€174m in H2 14 February 24, 2015 I 24
Slide 25: EBITDA of €1,526m, up 15% to 12.0% of sales
EBITDA of €1,526m, up 15% to 12.0% of sales 2013** 2014*** H1 H2 FY H1 H2 FY Comfort & Driving Assistance As a % of sales 12.6 14.1 13.3 14.2 14.8 14.5 Powertrain In €m & as a % of sales As a % of sales 10.9 10.2 10.5 12.4 12.2 12.3 Thermal As a % of sales 11.4 12.2 11.8 11.0 11.2 11.1 12.0% 11.4% V
Slide 26: Free cash flow of €327m
Free cash flow of €327m After investments of €936m FY 13 FY 14 EBITDA (€m) 1,327 1,526 +15% Operating working capital (€m) 138 (4) Restructuring & employee-related costs (€m) (43) (38) Other operating items (inc. taxes) (€m) (209) (221) Of which : Taxes (145) (163) Pensions (18) (25) Cash from opera
Slide 27: Investments of €956m
Investments of €956m Supporting growth in Asia, Eastern Europe & NA representing nearly 2/3 of recorded investments (as a % of sales) 7.7%** 7.5%** In €m Capex* 5.2% 5.2% +7% Capital. 956** 2.5% R&D 2.3% 896** FY 13 FY 14 610 Capex* 658 Development of footprint • Completed in 2014: 10 new sites 11 e
Slide 28: Strong balance sheet
Strong balance sheet February 24, 2015 I 28
Slide 29: Strong balance sheet
Strong balance sheet Leverage & gearing ratios at 0.2x and 12% respectively Net debt over stockholders’ equity Stockholders’ equity (€m) Net debt over EBITDA Net debt (€m) excluding non-controlling interests Net debt (€m) EBITDA 12 months rolling (€m) 2,740 2,381 2,413 1,526 1,327 1,401 525 351 341
Slide 30: Improved debt maturity profile
Improved debt maturity profile €700m bond (10-year maturity) + repurchase 2017 & 2018 maturities (€581m) in €m 2750 2500 2250 Undrawn credit lines 2000 3.8 year maturity 1750 1500 1250 Average maturity: 5.3 years 1000 Cash & cash equivalents 750 500 250 0 2015 2016 2017 2018 …. …. 2024 Cash & cash e
Slide 31: Dividend & 2015 outlook
Dividend & 2015 outlook February 24, 2015 I 31
Slide 32: Proposed dividend of €2.2/share, up 29%
Proposed dividend of €2.2/share, up 29% Payout ratio of 30% 2014 dividend of €2.2/share to be proposed at the next Shareholders’ Meeting Dividend distribution (m€) Dividend (€/share) 2.2 1.7 1.5 1.4 1.2 2010 2011 2012 2013 2014 EPS (€/share) 4.86 5.68 5.03 5.71 7.23 EPS excl. non -recurring 4.86 5.6
Slide 33: 2015 outlook
2015 outlook Based on the following key assumptions for FY 2015: Automotive production: World: around +3% Europe (excl. Russia): around +2% Raw material prices and currencies in line with current levels Valeo confirms its objectives for 2015: Sales growth outperformance in the main production region
Slide 34: 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, 2015 I 34
Slide 35: Share Information
Share Information Share Data • Bloomberg Ticker FR FP • Reuters Ticker VLOF.PA • ISIN Number FR 000130338 • Shares outstanding as of December 31, 2014 79,462,540 ADR Data • Ticker/trading symbol VLEEY • CUSIP Number 919134304 • Exchange OTC • Ratio (ADR: ord) 1:2 • Depositary Bank J.P. Morgan • Cont
Slide 36: Glossary
Glossary 1) Order intake corresponds to business awarded by automakers during the period (including joint ventures at least 50% controlled by the Group) less any cancellations, based on Valeo's best and reasonable estimates in terms of volumes, sale prices and project lifespans. Order intake for the
Slide 37: Back-up
Back-up February 24, 2015 I 37
Slide 38: Quarterly information
Quarterly information In €m (2014 as reported and 2013 restated in accordance with IFRS 11) Sales by segment Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Comfort & Driving Assistance Systems 623 569 515 531 552 572 573 614 Powertrain Systems 774 817 752 818 848 848 798 843 Thermal Systems 818 885
Slide 39: Statement of income with half year breakdown
Statement of income with half year breakdown 2013* 2014* In €m H1 H2 H1 H2 Sales 5,944 5,718 6,347 6,378 Gross margin 1,011 998 1,086 1,117 as a % of sales 17,0% 17.5% 17.1% 17.5% R&D expenditure, net (318) (296) (350) (335) Selling & administrative expenses (318) (311) (326) (330) Share in net earn
Slide 40: Segment information
Segment information Comfort & 2014 Driving Assistance Powertrain Thermal Visibility (€m) Systems Systems Systems Systems Others Total Sales: - Segment (excluding Group) 2,291 3,292 3,598 3,515 29 12,725 - Intersegment (Group) 20 45 39 99 (203) - EBITDA 336 410 404 382 (6) 1,526 Research & Developmen
Slide 41: Comfort & Driving Assistance Systems
Comfort & Driving Assistance Systems 2014 key figures: • Sales: €2.3bn (18% of Group sales) Sales performance • EBITDA: 14.5% (22% of Group EBITDA) Growth rate on a like-for-like basis • 14,195 employees OEM sales • 25 production units Like-for-like +15% +14% +15% • 8 development centers change • 9
Slide 42: Powertrain Systems
Powertrain Systems 2014 key figures: • Sales: €3.3bn (26% of Group sales) Sales performance • EBITDA: 12.3% (27% of Group EBITDA) Growth rate on a like-for-like basis • 18,412 employees OEM sales Like-for- like +1% +2% +5% • 37 production units change • 16 development centers • 5 research centers 3,
Slide 43: Thermal Systems
Thermal Systems 2014 key figures: • Sales: €3.6bn (28% of Group sales) Sales performance • EBITDA: 11.1% (26% of Group EBITDA) Growth rate on a like-for-like basis OEM sales • 19,359 employees Like-for-like +5% +5% +8% • 44 production units change • 8 development centers • 3 research centers 3,637 T
Slide 44: Visibility Systems
Visibility Systems 2014 key figures: Sales performance • Sales: €3.6bn (28% of Group sales) Growth rate on a like-for-like basis • EBITDA: 10.6% (25% of Group EBITDA) OEM sales +10%* +9%* +9%* • 24,912 employees Like-for- like change • 36 production units • 15 development centers • 5 research center
Slide 45: Safe Harbor Statement
Safe Harbor Statement Statements contained in this press release, which are not historical fact, constitute "Forward-Looking Statements". Even though Valeo’s management feels that the Forward-Looking Statements are reasonable, investors are put on notice that actual results may differ materially due
Slide 46: February 24, 2015 I 46
Valeo Automotive technology, naturally EN