Valeo Se · EURONEXT:FR
Valeo — FY2002 Earnings Presentation
36 slides from Valeo's earnings presentation, March 2003
Slide 1: 2002 Results & 2003 Outlook
2002 R E S U L T S & 2003 OUTL O O K B r u n o- R o l a n d B e r n a r d , Director of Financial Relations
Slide 2: Key figures
Key figures (in million e u r o ) First 9 Q 4 - 2002* 2002 2001 ∆ months 2002* • Sales 7,425 2,378 9,803 10,234 - 4% • Gross Margin 1,275 427 1,702 1,675 % sales 17.2% 18.0% 17.4% 16.4% +1 pt • Operating i n c o m e 345 142 487 388 % sales 4.6% 6.0% 5.0% 3.8% +1.2 pt • Net i n c o m e b e f o r e g
Slide 3: Sales & Market
Sales & Market
Slide 4: Change in sales
Change in sales • 2002 sales 9.8 billion e u r o s • Gross variation - 4.2% – C h a n g e s i n perimeter - 2.4 % – Currencies - 1.4% • Net variation - 0.4 % 4 2002 Results & 2003 Outlook
Slide 5: Sales by region
Sales by r e g i o n Europe North America % sales: 66% % sales: 24% % change*: -2 % % change*: +1% Production: -2% P r o d u c t i o n : +6% % sales: 6% % sales: 3% +Z e x e l J V , Ichikoh and others (~ 1,900 M e u r o s ) % change*: -2 % % change*: +17% Production: -5% Production: +10% South Ameri
Slide 6: Results
R e s u lts
Slide 7: Gross margin
Gross margin Q u a t e r l y i m p r o v e m e n t* 18.0 17.7 2002 17.0 17.0 16.7 16.5 17.3 +1.0 pt 2001 15.0 *unaudited quarterly f i g u r e s Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 7 2002 Results & 2003 Outlook
Slide 8: Gross margin: ongoing actions
Gross margin O n g o i n g actions (1) l R a t i o n a l i z a t i o n of industrial f o o t p r i n t l R a t i o n a l i z a t i o n of l o g i s t i c s l I n c r e a s e d supplier i n t e g r a t i o n 8 2002 Results & 2003 Outlook
Slide 9: Gross margin: ongoing actions (2)
Gross margin O n g o i n g actions (2) l R a t i o n a l i z a t i o n of industrial footprint – Geographical reorganization Europe United States (4) +3 (2) Q1/2001 +1 Morocco 170 sites Brazil 31/12/2001 (2) 143 sites +1 31/12/2002 140 sites 9 2002 Results & 2003 Outlook
Slide 10: Gross margin: ongoing actions (3)
Gross margin O n g o i n g actions (3) l R a t i o n a l i z a t i o n of industrial footprint – Geographical reorganization – Increased Standardization • Manufacturing process • Equipment • Components – VESI 10 2002 Results & 2003 Outlook
Slide 11: Gross margin: ongoing actions (4)
Gross margin O n g o i n g actions (4) l R a t i o n a l i z a t i o n of i n d u s t r i a l t o o l – Geographical reorganization – Increased standardization – VESI • Out of Chapter 11: September 2002 • R o c h e s t e r headcount - mid - 1998: 4,500 - D e c e m b e r 2001: 2,600 - J a n u a r y 2
Slide 12: Gross margin: ongoing actions (5)
Gross margin O n g o i n g actions (5) l R a t i o n a l i z a t i o n of industrial footprint l R a t i o n a l i z a t i o n of l o g i s t i c s – I m p l e m e n t a t i o n o f n e w logistics function – R e d u c e d n u m b e r of carriers • Q 1 - 2001: 1,090 • D e c e m b e r 2001 : 875 • D
Slide 13: Gross margin: ongoing actions (5)
Gross margin O n g o i n g actions (5) l R a t i o n a l i z a t i o n of i n d u s t r i a l t o o l l R a t i o n a l i z a t i o n of l o g i s t i c s l I n c r e a s e d supplier i n t e g r a t i o n – Volume concentration - Q 1 - 2001: 4,500 s u p p l i e r s - D e c e m b e r 2001: 3,600 sup
Slide 14: Operating income
Operating income Q u a t e r l y i m p r o v e m e n t* 6.0 5.4 2002 4.6 4.5 4.2 4.7 +1.2 pt 3.8 2001 2.0 *unaudited quarterly f i g u r e s Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 14 2002 Results & 2003 Outlook
Slide 15: Operating income
Operating income (in million e u r o ) 2002 2001 ∆ Gross margin 1,702 1,675 % sales 17.4% 16.4% + 1 pt R & D (577) (619) % sales 5.9% 6.0% SG & A (638) (668) % sales 6.5% 6.5% Operating income 487 388 % sales 5.0% 3.8% + 1.2 pt 15 2002 Results & 2003 Outlook
Slide 16: Asbestos exposure
Asbestos exposure l Products containing asbestos never m a n u f a c t u r e d in N o r t h A m e r i c a l S i n c e 1989, a s b e s t o s eliminated f r o m p r o d u c t s in Europe l Financial exposure – Total risk h e d g e d: 40 M euros • 35 M e u r o s i n p r o v i s i o n s • 5 M euros cove
Slide 17: Pension benefits and related items
P e n s i o n benefits and related items l Obligations: 851 M e u r o s Hedge ratio: 89 % • provisions : 642 M euros (incl. N o r t h A m e r i c a 2 7 7 M e u r o s ) • invested assets : 118 M euros l Equity risk limited to invested assets è no impact on 2002 results 17 2002 Results & 2003 Outlook
Slide 18: P&L
P&L (in million e u r o ) 2002 2001 • Operating i n c o m e 487 388 • Financial expenses -net (62) (62) • O t h e r i n c o m e a n d e x p e n s e s - net (74) (738) • Taxes (106) (42) Effective rate 30.2% n.s. • Net i n c o m e b e f o r e g o o d w i l l 230 (471) • Net i n c o m e 135 (591) 18 2
Slide 19: Balance sheet & cashflow
Balance sheet & cashflow
Slide 20: Cashflow
Cashflow • N e t operational c a s h ( before restructuring) +1 032 – o / w c h a n g e i n o p e r a t i n g w o r k i n g capital +203 • Net CAPEX - 583 • Balance before restructuring +449 • Restructuring -230 • N e t c a s h f r o m o p e r a t i n g a n d i n v e s t i n g a c t i v i t i e s +
Slide 21: Industrial efficiency and working capital
Industrial efficiency and w o r k i n g capital (in % of sales)* 7.6 -17% 6.4 3.8 -45% 2.1 2001 2002 * excluding transferred business Inventories WC 21 2002 Results & 2003 Outlook
Slide 22: Shareholders' equity / net debt
Shareholders’ equity / net debt (in million euro) 2,262 2,101 G e a r i n g : 29% G e a r i n g : 27% 648 564 12/31/2001 12/31/2002 Shareholders' equity Net debt 22 2002 Results & 2003 Outlook
Slide 23: Provisions for reorganization expenses
P r o v i s i o n s f o r reorganization expenses (in million euro) - 326 740 -9 - 40 365 12/31/2001 Utilizations Written back Currencies 12/31/2002 a n d reclassifications 23 2002 Results & 2003 Outlook
Slide 24: Dividend per share
D i v i d e n d per s h a r e (in e u r o ) 1.50 1.05 0.50 l T o t a l y i e l d ( F e b . 2003): Tax credit 0.35 5.5 % 1.00 l P a y out ratio: Net 0.70 61 % 2001 2002 proposal D i v i d e n d s (82 M e u r o s ) S h a r e c a n c e l l a t i o n (51 M e u r o s ) 24 2002 Results & 2003 Outlook
Slide 25: Outlook
Outlook
Slide 26: Return on assets
Return on assets l Restored margins of maneuver l Goal: Increasing return on assets Profitability Assets 26 2002 Results & 2003 Outlook
Slide 27: Increasing profitability
Increasing profitability • S a l e s growth • C o s t base control Profitability Assets • Selective disposal program • Optimal use of assets • Investment control 27 2002 Results & 2003 Outlook
Slide 28: Order intake
Order intake Sales ratio 1.2 1.0 2001 2002 28 2002 Results & 2003 Outlook
Slide 29: Expected increase in sales
E x p e c t e d i n c r e a s e in sales l S u c c e s s achieved during range renewal – Discriminating factors • competitiveness • quality • global capacity – e x a m p l e : Climate Control contract l New products generated from R&D – Differentiating factor: technological offer • Starter- alternat
Slide 30: Assets
Assets • S a l e s growth • C o s t base control Profitability Assets • Selective disposal program • Optimal use of assets • Investment control 30 2002 Results & 2003 Outlook
Slide 31: Optimal use of assets
Optimal use of a s s e t s l Industrial efficiency – Standardization – WC management l Asset turnover – 2001: 3.3 – 2002: 3.8 l CAPEX control – Stabilized at 6 % o f s a l e s 31 2002 Results & 2003 Outlook
Slide 32: Human resources
Human resources (in %) Turnover of Engineers and Managers 13.9 10.3 7.8 2000 2001 2002 32 2002 Results & 2003 Outlook
Slide 33: 2003 market prospects
2003 market p r o s p e c t s l H i g h i n v e n t o r y l e v e l s in U n i t e d S t a t e s l W e a k d e m a n d in E u r o p e a n d N o r t h America Fall i n v o l u m e s 33 2002 Results & 2003 Outlook
Slide 34: Valeo in 2003
V a l e o in 2003 l Change in the management structure l Higher order intake l Sales in line w i t h m a r k e t l Continuing operating improvement 34 2002 Results & 2003 Outlook
Slide 35: Valeo in 2003
V a l e o in 2003 l Change in the management structure l Higher order intake l Sales in line w i t h m a r k e t l Continuing operating improvement 35 2002 Results & 2003 Outlook
Slide 36: valeo added
valeo added