Slide 1: FY-2011 Results
FY-2011 Results Jacques Aschenbroich – CEO February 22, 2012
Slide 2: Highlights
Highlights February 22, 2012 I 2 FY-11 Results
Slide 3: Highlights
Highlights FY-11 OE Sales growth higher than production in the main regions and in each of our businesses Sales €10.9 bn up 13% New geographic and customer positioning towards Asia Successful integration of Niles Order intake at record level €14.9 bn up 27% CAGR since 2009 Net income up 17% and oper
Slide 4: Highlights
Highlights FY-11 Free cash flow generation of €232 m Despite higher capex requirements in H2 to sustain strong order intake Second successive year of ROCE > 30% (2) Strong balance-sheet with net debt at €523 m as of Dec. 31, 2011 (7) Dividend of €1.40 per share up 17% to be proposed at the next AGM
Slide 5: Record order intake at €14.9 billion
Record order intake at €14.9 billion +27% CAGR since 2009 H2 CAGR H1 +27% 14.9 € bn 12.5 7.2 10.0 10.1 9.7 9.2 6.0 7.7 4.9 5.0 4.9 3.4 6.1 7.7 6.5 4.8 5.1 5.1 4.3 3.1 2005 2006 2007 2008 2009 2010 2011 February 22, 2012 I 5 FY-11 Results
Slide 6: Break even point under strict control
Break even point under strict control lowered by 12pts since 2007 % sales 95% 91% 88% 79% 76% 75% 2007 2008 2009 2010 2011 2015 In line with strategic plan February 22, 2012 I 6 FY-11 Results
Slide 7: Sustainability of margins at a higher level
Sustainability of margins at a higher level Operating margin(1) Net income M€ and % of sales M€ and % of sales 750 7,0% 700 6.4% 6.5% 650 6,0% 600 704 550 500 617 5,0% 450 400 3.8% 3.4% 3.6% 4,0% 350 3.8% 300 374 2.7% 0,4 4,0% 346 3,0% 3.9% 250 320 427 200 1.4% 1.7% 1.8% 150 230 0,2 365 2,0% 2,0% 0.
Slide 8: Guidance
Guidance 2012 outlook Based on: - 3% and 4% growth in global automotive production - Despite a 5% decline in European production - RM prices at current levels OE sales growing faster than production in the main regions 2012 operating margin level (in million euros) in the same magnitude of the prior
Slide 9: OE sales growth higher than production in the main regions and in each of our businesses
OE sales growth higher than production in the main regions and in each of our businesses February 22, 2012 I 9 FY-11 Results
Slide 10: Total sales €10.9 bn, up 13%
Total sales €10.9 bn, up 13% Total sales H2-11 + 14%, Q4-11 + 15% M€ 5,534 263 +14% 4,845 5,271 Perimeter +5.2% Total sales Currencies Like-for-like -0.8% +10% M€ 10,868 H2-10 H2-11 263 +13% Successful integration 10,605 9,632 of Niles Contribution €227 m Perimeter -+2.4% Currencies -0.7% Like-for-l
Slide 11: Strong performance of sales +13%
Strong performance of sales +13% Strong performance of OE sales and contribution of Niles In M€ and YoY variation H2-10 H2-11 ▲ ▲ FY-10 FY-11 ▲ ▲ like-for-like like-for-like 3,995 4,697 7,952 9,207 +18% +12% Original Equipment +16% +13% 82% 85% % of sales 83% 85% 723 693 Aftermarket 1,445 1,412 -4%
Slide 12: OE sales up 16%, higher than production
OE sales up 16%, higher than production Improvement of product mix, market share gains in Asia OE sales M€ 4,697 +18% 244 10,868 3,995 OE sales M€ 9,632 4,453 9,207 Perimeter +6.3% +16% 244 Currencies -0.7% Like-for-like 7,952 +12% H2-10 H2-11 8,938 Perimeter +3.2% Currencies -0.7% Like-for-like +13
Slide 13: OE sales growth higher than production for 9 quarters in a row
OE sales growth higher than production for 9 quarters in a row OE Sales on a “like-for-like” basis vs automotive production (million of vehicles) Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Production* +22% +51% +31% +15% +9% +7% -1% +6% +3% Valeo** +29% +51% +32% +17% +14% +17% +12% +14%
Slide 14: OE sales growth higher than production in the main regions
OE sales growth higher than production in the main regions… … and in each of our businesses Outperform +9pts* Outperform Outperform World +21pts* Production +4% +5pts* North America Production +10% Europe Production +7% 15% of Valeo sales 56% of Valeo sales Outperform +10pts* Underperform Asia -3pts
Slide 15: Asian OE sales growth higher than production
Asian OE sales growth higher than production Market share gains Outperform Asia +10pts* Outperform Production +0% +2pts* 22% of Valeo sales Japan Outperform Production -12% +14pts* 29% of Valeo sales Korea Outperform Production +9% +14pts* 22% of Valeo sales Outperform China Production +3% +12pts* I
Slide 16: New geographical positioning: Asia 25% of OE sales
New geographical positioning: Asia 25% of OE sales H2 representative of Valeo new profile after Niles & Japan recovery % of OE sales 6% 13% 7% 14% 22% 15% 67% 56% FY 2007 FY 2011 7% 15% 25% 53% Asia Europe & Africa North America South America H2 2011 February 22, 2012 I 16 FY-11 Results
Slide 17: Reinforcement of our future positioning on the most promising markets
Reinforcement of our future positioning on the most promising markets as Asia & emerging countries Asia at 30% of 2011 order intake Emerging countries are pulling growth 2011 OE sales 2011 order intake Order intake in € bn (BRIC + Turkey + Asean) 4.2 Nafta 12% Asia Nafta 29% 15% Asia South America S
Slide 18: OE sales growth higher than production in each of our businesses
OE sales growth higher than production in each of our businesses… … and in the main production regions Outperform Comfort & Driving Outperform Powertrain +15pts Assistance +10pts OE Sales +19% OE Sales +29% (Like-for-like + 14%) Stop-Start contributing up to 4pts to BG Low speed manoeuvring outperfo
Slide 19: Double dry clutch
Powertrain Systems Strong growth potential Powertrain Double dry clutch outperformance Reduced fuel consumption +15pts vs manual clutch Order intake - Transmission Product value X10 times Major OEMs in Europe, Asia & Nafta Positioning of Valeo Transmission 2011 sales 2010 OI 2011 OI N°1: LuK N°2: Va
Slide 20: Low speed maneuvering
Comfort & Driving Assistance Systems Strong growth potential Comfort & Driving Low speed maneuvering Assistance For more comfort at low speed outperformance +10pts Volume of park-assist systems ultrasonic sensors (in million units): Increasing take-rate of park- assist systems 18% CAGR Valeo innovat
Slide 21: LED
Visibility Systems Strong growth potential Visibility LED outperformance -70% electricity cons. vs +8pts standard lighting Order intake - Visibility Increased value vs standard lighting Higher expected take-rate vs Xenon premium lighting 2011 sales 2010 OI 2011 OI Positioning of Valeo Lighting N°1:
Slide 22: Air management cooling
Thermal Systems Strong growth potential Thermal Air management cooling outperformance Reducing CO2 emissions +5pts Order Orderintake intake– -Powertrain PowertrainThermal Thermal Order intake > 2x OE sales two years in a row Air management cooling growth driven by turbo take rate Positioning of Vale
Slide 23: New customer positioning with Asian customers
New customer positioning with Asian customers… … on a par with German customers at 29% of OE sales % of OE sales 14% 9% 24% 17% 29% 17% 20% 20% 25% 25% FY 2007 FY 2011 7% 17% 29% 18% 29% German Asian (incl. Nissan) French (excl. Nissan) American Others H2 2011 February 22, 2012 I 23 FY-11 Results
Slide 24: Net income up 17% and operating margin at 6.5% of sales
Net income up 17% and operating margin at 6.5% of sales (1) February 22, 2012 I 24 FY-11 Results
Slide 25: Increase of operating margin at 6.5% of sales
Increase of operating margin at 6.5% of sales (1) thanks to fixed costs reduction… -1.3pt +0.5pt +0.6pt 6.7% 6.5% Walkdown H2-10 Gross margin R&D SG&A H2-11 +0.6pt +0.5pt +0.7pt -1.0pt +0.4pt … despite raw materials, 6.4% 6.5% temporary capacity shortages, Japan & Thailand FY-10 Gross margin R&D SG&
Slide 26: Gross margin mainly impacted by increase in RM prices
Gross margin mainly impacted by increase in RM prices, temporary capacity shortages, Japanese earthquake and flood in Thailand +0.9pt -1.3pt -0.9pt 18.1% 16.8% Walkdown H2-10 H2-10 Volume Net raw material Volume increaseNet raw material impact Others Others H2-11 H2-11 increase impact +1.1pt -1.6pt
Slide 27: Operating margin increase to 6.5% of sales
Operating margin increase to 6.5% of sales (1) despite 1.6pt impact from RM headwind Aluminum Copper 2000 €/T 8000 €/T 7500 1900 7000 1800 6500 1700 6000 5500 1600 5000 1500 4500 1400 4000 2010 2011 2010 2011 Gross impact - ▲ % FY-11 % of Net impact consumption H1-10 / H2-10 / FY-10 / FY-10/FY-11 H1
Slide 28: Net R&D at €561 m to sustain strong order intake
Net R&D at €561 m % of sales to sustain strong order intake -0.4pt 5.6% 5.2% M€ +4% 561 FY-10 FY-11 537 FY-10 FY-11 February 22, 2012 I 28 FY-11 Results
Slide 29: Lean organization is delivering SG&A stable
Lean organization is delivering SG&A stable while sales increasing by 13% M€ -1% 581 578 Selling Selling Expenses Expenses 171 181 181 Admin. Admin. Expenses Expenses 410 410 397 405 % of sales FY-10 FY-11 6.0% -0.7pt 5.3% 1.8% 1.7% 4.2% 3.6% FY-10 FY-11 February 22, 2012 I 29 FY-11 Results
Slide 30: Net income of €427 m, up 17%
Net income of €427 m, up 17% EPS of €5.67 H2-10 H2-11 ▲ FY-10 FY-11 ▲ 4,845 5,534 +14% Total sales (M€) 9,632 10,868 +13% 325 359 +11% Operating margin(1) (M€) 617 704 +14% 6.7% 6.5% -0.2pt % of sales 6.4% 6.5% +0.1pt 4 1 -75% Other income & expenses (M€) (27) 0 na 0.1% 0.0% -0.1pt % of sales -0.3%
Slide 31: EBITDA of €1,212 m at 11.2% of sales
EBITDA of €1,212 m at 11.2% of sales (4) Powertrain impacted by rare earth & temporary capacity shortages FY-11 Comfort & Driving Assistance % of sales 12.2 % M€ & % of sales Powertrain % of sales 8.6% 11.9% 11.2% Thermal % of sales 11.4% Visibility % of sales 10.9% 9.1% 8.9% 1,150 1,212 14% 792 670
Slide 32: Free cash flow generation of €232 m
Free cash flow generation (2) of €232 m February 22, 2012 I 32 FY-11 Results
Slide 33: Capex of €717 m to sustain order intake
Capex of €717 m to sustain order intake Asia & emerging countries, 59% of 2011 investments Capex excl. capitalized R&D (% of sales) 5.0% 3.3% M€ +53% 717 2010 2011 468 540 Capex excl. 325 capitalized R&D Capitalized R&D (% of sales) 143 Capitalized R&D 177 1.5% 1.6% FY-10 FY-11 2010 2011 February 22
Slide 34: Net financial debt at €523 m post Niles acquisition
Net financial debt at €523 m post Niles acquisition, capex, dividend and share buy-back H2-10 H2-11 FY-10 FY-11 586 610 EBITDA(4) (M€) 1,150 1,212 (1) (18) Operating working capital (M€) 31 (29) Taxes: (18) (25) Restructuring & social costs (M€) (72) (52) (169) m€ (86) (110) Other operational items
Slide 35: Strong balance-sheet
Strong balance-sheet February 22, 2012 I 35 FY-11 Results
Slide 36: Strong financial structure
Strong financial structure Keeping our “investment grade” status as a high priority Net financial debt (7) over EBITDA (4) Shareholders’ equity and net debt Net debt (M€) Shareholders’ equity (M€) excluding minority interests Net debt (M€) EBITDA (4)12 months rolling (M€) 1,212 1,936 1,708 1,150 1,2
Slide 37: Active debt management and new debt profile
Active debt management and new debt profile As of January 31, 2012 Long – term debt management Liquidity secured by Undrawn credit lines: 1,1 bn€ – New bond issue Repurchase 2013 - Total 289 M€ Weighted Average Maturity: 3,30years 500 M€ - May 2018 New bond issue Syndicated loan 500 M€ - January 201
Slide 38: Proposed dividend payment of €1.40/share, up 17%
Proposed dividend payment of €1.40/share, up 17% Reflecting strong fundamentals 2011 dividend of €1.40/share proposed at the next Shareholders Meeting 2010 2011 EPS 4.86 5.67 Dividend 1.20 1.40 Payout ratio 25% 25% February 22, 2012 I 38 FY-11 Results
Slide 39: Second successive year of ROCE > 30%
Second successive year of ROCE > 30% (2) February 22, 2012 I 39 FY-11 Results
Slide 40: Second successive year of ROCE > 30%
Second successive year of ROCE > 30% ROCE(2) & ROA(3) at 31% and 19% respectively FY-10 FY-11 Total sales €9.6 bn €10.9 bn Operating margin (1) 6.4% 6.5% Capital turnover* 5.0 4.9* ROCE (2) 32% 31% ROA (3) 19% 19% * Proforma full year in closing perimeter February 22, 2012 I 40 FY-11 Results
Slide 41: Outlook
Outlook February 22, 2012 I 41 FY-11 Results
Slide 42: Outlook
Outlook Based on: 3% to 4% growth in global automotive production despite a 5% decline in European production RM prices at current levels 2012 guidance: OE sales growth higher than production in the main regions 2012 operating margin level (in million euros) in the same magnitude of the prior year F
Slide 43: 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 22, 2012 I 43 FY-11 Results
Slide 44: Share Information
Share Information Share Data Bloomberg Ticker FR FP Reuters Ticker VLOF.PA ISIN Number FR 000130338 Shares outstanding as per 31.12.2011 78,628,798 ADR Data Ticker/trading symbol VLEEY CUSIP Number 919134304 Exchange OTC Ratio (ADR: ord) 1:2 Depositary Bank J.P. Morgan Contact at J.P. Morgan – ADR J
Slide 45: Glossary
Glossary (1) Operating margin corresponds to operating income less other income and expenses (2) ROCE corresponds to operating margin/capital employed less goodwill calculated over the last 12 months (3) ROA corresponds to operating income/committed capital plus goodwill (4) EBITDA corresponds to op
Slide 46: Back-up
Back-up February 22, 2012 I 46 FY-11 Results
Slide 47: H2 and Q4 2011 sales
H2 and Q4 2011 sales In M€ and YoY variation Q4-10 Q4-11 ▲ ▲ H2-10 H2-11 ▲ ▲ like-for-like like-for-like +18% +10% Original Equipment 2,066 2,435 3,995 4,697 +18% +12% 82% 85% % of sales 82% 85% 363 357 -2% -2% Aftermarket 723 693 -4% -2% 15% 12% % of sales 15% 13% 74 80 +8% +6% Miscellaneous 127 14
Slide 48: Quarterly information
Quarterly information in € million Sales by segments Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Comfort and Driving 408 440 418 438 481 489 567 620 Assistance Powertrain Systems 636 708 625 714 767 782 743 834 Thermal Systems 693 754 735 751 783 776 777 804 Visibility Systems 591 595 547 621 66
Slide 49: Half year P&L
Half year P&L 2009 2010 2011 (in € million) H1 H2 H1 H2 H1 H2 Total sales 3,472 4,027 4,787 4,845 5,334 5,534 Gross margin 453 685 856 879 916 927 as % of sales 13.0% 17.0% 17.9% 18.1% 17.2% 16.8% R&D expenditures (234) (239) (267) (270) (285) (276) Selling & administrative expenses (270) (262) (297
Slide 50: Half year segment information
Half year segment information H1-10 and H1-11 First-half 2011 Comfort and Driving (in €m) Assistance Powertrain Thermal Visibility Others TOTAL Systems Systems Systems Systems Net sales • segment (excluding Group) 956 1 537 1 545 1 284 12 5 334 • intersegment (Group) 14 12 14 20 (60) - EBITDA 107 16
Slide 51: Half year segment information
Half year segment information H2-10 and H2-11 Second-half 2011 Comfort and Driving (in €m) Assistance Powertrain Thermal Visibility Others TOTAL Systems Systems Systems Systems Net sales • segment (excluding Group) 1 168 1 562 1 565 1 227 12 5 334 • intersegment (Group) 19 15 16 18 (68) - EBITDA 157
Slide 52: Highlights by segment
Highlights by segment FY-10 and FY-11 FY-2011 Comfort and Driving (in €m) Assistance Powertrain Thermal Visibility Others TOTAL Systems Systems Systems Systems Net sales • segment (excluding Group) 2 124 3 099 3 110 2 511 24 10 868 • intersegment (Group) 33 27 30 38 (128) - EBITDA 264 268 359 279 42
Slide 53: Safe Harbor Statement
Safe Harbor Statement Statements contained in this press release, which are not historical fact, constitute “Forward- Looking Statements”. Actual results may differ materially due to numerous important factors and risks to which Valeo is exposed. Such factors include, among others, the Company’s abi
Slide 54: Automotive technology, naturally
Automotive technology, naturally