Slide 1: 2015 Results
2015 Results Jacques Aschenbroich – CEO February 18, 2016 February 18, 2016 I 1
Slide 2: H2 highlights
H2 highlights Innovation Order intake(1) of €9.4bn +12% fueling future growth +14% as reported Sales of €7.2bn +8% like-for-like(2) Growth OEM sales of €6.3bn +15% as reported accelerating 7-percentage point outperformance +9% like-for-like(2) +6% as reported Aftermarket sales of €0.8bn +4% like-for
Slide 3: FY highlights
FY highlights Innovation Order intake(1) of €20.1bn +15% fueling future growth +14% as reported Sales of €14.5bn +7% like-for-like(2) +16% as reported OEM sales of €12.6bn +8% like-for-like(2) OEM sales outperformance Growth(2) Outperformance(3) growth World +8% +6pts accelerating throughout the yea
Slide 4: FY highlights
FY highlights +14% as reported Growth accelerating Sales of €14.5bn +7% like-for-like(2) Operating margin(1) of €1,116m up 22% 7.7% of sales Profitability Net income(1) of €729m up 30% 5.0% of sales Net income excl. non recurring items of €825m up 39% 5.7% of sales continuing to improve EPS up 29% €
Slide 5: 2016 outlook
2016 outlook Based on the following key assumptions for full-year 2016: Automotive production growth: World: around 2.5% Europe: around 2% China: around 5% North America: around 2% Raw material prices and currencies in line with current levels Valeo sets the following objectives for 2016
Slide 6: Order intake of €20.1bn, up 15%
Order intake of €20.1bn, up 15% confirming high growth potential February 18, 2016 I 6
Slide 7: Acceleration in order intake up 15%
Acceleration in order intake up 15%… … leading to stepped-up future organic growth Innovation fueling future organic growth… as a % of order intake** Order intake** €bn CAGR* €20.1bn Innovation Average over the period 37% (1) +13% €17.5bn €15bn €13bn (1) Products and technologies sold by less than 3
Slide 8: Acceleration in order intake fueling future organic growth
Acceleration in order intake fueling future organic growth China: local OEMs represent ~20% of OEM sales and 41% of order intake % of 2015 OEM sales* % of 2015 order intake* Asia 25% SA 28% 1% Asia €5.6bn excl. China 22% SA 2% Asia excl. Asia NA 8% China Order NA 13% 29% Intake/OE €5bn China €3.7bn
Slide 9: Growth accelerated throughout the year
Growth accelerated throughout the year Sales of €14.5bn, up 14% as reported up 7% like-for-like OEM sales, up 16% as reported up 8% like-for like, 6-point outperformance Aftermarket sales, up 7% as reported up 3% like-for-like February 18, 2016 I 9
Slide 10: Total sales growth accelerated throughout the year
Total sales growth accelerated throughout the year Like-for-like +6% +6% +7% +9% +7% 14,544 €m 3,581 3,717 3,449 3,797 Q1 15 Q2 15 Q3 15 Q4 15 2015 Reported +15% +15% +12% +15% +14% Q1 14 3,112 Q2 14 3,235 Q3 14 3,069 Q4 14 3,309 FY 14 12,725 Exchange rates +8.3% Exchange rates +8.8% Exchange rates
Slide 11: Total sales growth accelerated throughout the year
Total sales growth accelerated throughout the year H1 up 6%, H2 up 8% like-for-like Like-for-like +6% +8% +7% 14,544 7,298 7,246 €m H1 15 H2 15 2015 Reported +15% +14% +14% H1 14 6,347 H2 14 6,378 FY 14 12,725 Exchange rates +8.5% Exchange rates +5.5% Exchange rates +7.1% Scope +0.5% Scope 0.0% Scop
Slide 12: OEM Sales growth accelerated throughout the year
OEM Sales growth accelerated throughout the year Like-for-like +7% +6% +7% +12% +8% 12,600 €m 3,203 3,294 3,113 2,990 Q1 15 Q2 15 Q3 15 Q4 15 2015 Reported +16% +16% +13% +17% +16% Q1 14 2,677 Q2 14 2,755 Q3 14 2,644 Q4 14 2,814 FY 14 10,890 Exchange rates +8.7% Exchange rates +9.3% Exchange rates +
Slide 13: OEM sales growth accelerated throughout the year
OEM sales growth accelerated throughout the year 2015 up 8%, H2 up 9% and Q4 up 12% like-for-like Aftermarket +7%* excl. sales +6%* excl. sales +5%* excl. sales OEM sales from Korea from Korea from Korea 1,599 *Like-for-like +12%* +9%* +8%* X,XXX 2,516 786 399 Q4 15 H2 15 2015 +6%** +6%** +7%** +4%*
Slide 14: Outperformance accelerated throughout the year
Outperformance accelerated throughout the year H2 Outperf. +7pts Like-for-like World Outperf. OEM sales** +9% +8pts Production***+2% Outperf. Europe* +2pts OEM sales** +13% North America Production***+5% OEM sales** +6% Production*** +4% 48% of OEM sales 23% of OEM sales Outperf. +10pts Asia* excl.
Slide 15: Outperformance in all Asian production countries
Outperformance in all Asian production countries H2 Like-for-like Outperf +1pt Outperf Japan OEM sales* -3% +6pts Production** -4% Asia OEM sales* +8% 17% of Asian sales Outperf Production** +2% +15pts 27% of OEM sales Korea OEM sales* +18% Production** +3% 23% of Asian sales Outperf +3pts China OEM
Slide 16: Outperformance in all production regions
Outperformance in all production regions 2015 Outperf. +6pts Like-for-like World Outperf. OEM sales** +8% +6pts Production***+2% Outperf. Europe* +2pts OEM sales** +11% North America Production***+5% OEM sales** +5% Production*** +3% 49% of OEM sales 22% of OEM sales Outperf. +7pts Asia* excl. China
Slide 17: Outperformance in all Asian production countries
Outperformance in all Asian production countries 2015 Like-for-like Outperf Outperf +6pts +4pts Asia Japan OEM sales* +7% OEM sales* -2% Production** +1% Outperf Production** -6% +11pts 18% of Asian sales 27% of OEM sales Korea OEM sales* +12% Production** +1% 22% of Asian sales Outperf +4pts China
Slide 18: Outperformance with all Chinese customers
Outperformance with all Chinese customers pick-up 2015 Like-for-like Chinese OEMs representing: • ~20% of OEM sales • 46% of the local automotive production Outperf. +28pts Chinese OEMs OEM sales* +37% Production** +9% *Valeo OEM sales by destination **LMC estimates – light vehicle production Februa
Slide 19: Balanced geographic positioning
Balanced geographic positioning OEM sales by production region % of OEM sales Eastern Eastern Europe & Europe & Africa Africa 15% 15% Western Western Asia excl. Europe Asia excl. Europe China 36% China 34% 54% in Asia 14% 55% in Asia 13% & emerging & emerging countries countries China China 12% 14%
Slide 20: Balanced customer portfolio
Balanced customer portfolio % of OEM sales Other Other 6% 5% French* French* 16% German 15% German 30% 30% American American 22% 24% Asian** Asian** Asian** 26% Asian** 26% 26% 26% 2014 2015 * Excluding Nissan ** Including Nissan February 18, 2016 I 20
Slide 21: Growth accelerated throughout the year in all Business Groups
Growth accelerated throughout the year in all Business Groups VIS CDA 18% 28% Group €14.5bn 2015 total OEM sales growth PTS (like-for-like) 26% sales THS growth 28% (year-on-year) 2015 H2 Q4 Performance % 2015 sales CDA* +18% +13% +13% +15% Powertrain +13% +8% +10% +12% Thermal +12% +3% +5% +6%
Slide 22: Operating margin and Net income
Operating margin* H2: up 21% to €578m (8.0% of sales) FY: up 22% to €1,116m (7.7% of sales) Net income H2: up 26% to €385m (5.3% of sales) FY: up 30% to €729m (5.0% of sales) * incl. JV & Associates in accordance with new IFRS standards February 18, 2016 I 22
Slide 23: 2015 gross margin up 17% to €2,573m
2015 gross margin up 17% to €2,573m or 17.7% of sales Improvement driven by operational leverage and efficiency gains As a % of sales €2,573m +17% €2,203m +0.2pts -0.3pts +0.6pts -0.2pts +0.1pts 17.7% 17.3% 2014 Volume/ Operational Depreciation South America Exchange 2015 inflation efficiency linked
Slide 24: 2015 net R&D expenditure at 5.5% of sales
2015 net R&D expenditure at 5.5% of sales, up 10bps Capitalized development expenditure Net R&D In €m and as a % of sales In €m and as a % of sales 364 298 +16% 2.3% 2.5% 797 2014 2015 685 Amortization and impairment +10bps of capitalized development expenditure 5.4% 5.5% In €m and as a % of sales 2
Slide 25: SG&A expenses down 30bps to 4.9% of sales
SG&A expenses down 30bps to 4.9% of sales SG&A In €m and as a % of sales 716 656 Selling Selling expenses expenses 230 207 or 1.6% or 1.7% Admin. Admin. expenses -20bps expenses 449 486 or 3.5% or 3.3% 2014 2015 -30bps 5.2% 4.9% February 18, 2016 I 25
Slide 26: H2 operating margin up 21% to €578m
H2 operating margin* up 21% to €578m or 8.0% of sales As a % of sales +21% €578m €471m €477m +0.2pts +0.2pts +0.3pts +0.1pts -0.2pts 8.0% 7.4% 7.5% H2-14 IFRIC 21 (change H2-14 Gross Net R&D SG&A JV & Associates H2-15 published in accounting restated margin rules) * incl. JV & Associates in accordan
Slide 27: 2015 operating margin up 22% to €1,116m
2015 operating margin* up 22% to €1,116m or 7.7% of sales €1,116m +22% €913m €913m +0.4pts +0.2pts +0.0pts +0.0pts -0.1pts 7.7% 7.2% 7.2% 2014 IFRIC 21 (change 2014 Gross Net R&D SG&A JV & associates 2015 published in accounting restated margin rules) * incl. JV & Associates in accordance with new I
Slide 28: Net income up 30% to €729m or 5.0% of sales
Net income up 30% to €729m or 5.0% of sales Other expenses at €117m (primarily South America and Spain) , effective tax rate at 12.9% H2 14* H2 15 2014* 2015 6,378 7,246 +14% Total sales (€m) 12,725 14,544 +14% 458 545 +19% Operating margin excl. JV & Associates 862 1,060 +23% 7.2% 7.5% +30bps A
Slide 29: Other expenses of €117m in 2015
Other expenses of €117m in 2015 In €m 2014 2015 Other income & expenses (54) (117) of which: Restructuring plans (29) (69) Primarily South America and Spain Impairment gains and Including South America and (15) (27) loss on assets Argentina for -€42m February 18, 2016 I 29
Slide 30: EPS up 29%
EPS up 29% Excluding non-recurring items, EPS up 38% 2014* 2015 Change Net income (€m) 562 729 +30% EPS €7.23 €9.33 +29% Net income (€m) (excluding non- recurring items) 593 825 +39% EPS (excluding non-recurring items) €7.63 €10.56 +38% * Restated in accordance with IFRIC 21 February 18, 2016 I 30
Slide 31: ROCE at 33%
ROCE at 33% 2014* 2015 Total sales €12.7bn €14.5bn Operating margin** 7.2% 7.7% ROCE 30% 33% ROA 19% 20% * Restated in accordance with IFRIC 21 **incl. JV & Associates in accordance with new IFRS standards February 18, 2016 I 31
Slide 32: Free cash flow generation
Free cash flow generation H2: up 49% to €259m FY: up 73% to €565m February 18, 2016 I 32
Slide 33: EBITDA of €1,847m, up 21% to 12.7% of sales
EBITDA of €1,847m, up 21% to 12.7% of sales In €m and as a % of 2013 2014 2015 sales As a % of sales FY FY H1 H2 FY CDA 13.3 14.5 14.4 14.5 14.5 12.7% Powertrain 10.5 12.3 12.1 13.6 12.8 12.0% 11.4% Thermal 11.8 11.1 11.1 10.3 10.7 Visibility 9.9 10.6 11.8 13.1 12.4 Group 11.4 12.0 12.5 12.9 12.7 15
Slide 34: Investments of €1,125m
Investments of €1,125m Supporting the fast-growing order intake As a % of sales 7.5% 7.7% In €m +18% 5.2% Capex* 5.2% Capital. 2.3% R&D 2.5% 1,125 2014 2015 956 Capex* 761 Footprint development Total sq.m. end 2015: 2.4m 658 • Completed in 2015: 9 new sites 11 extensions 298 Capitalized R&D 364 +119
Slide 35: Free cash flow of €565m, up 73%
Free cash flow of €565m, up 73% Cash conversion rate (FCF/EBIDTA) at 31%, 21% in 2014 H2 14* H2 15 2014 2015 792 934 EBITDA (1) (€m) 1,526 1,847 +21% 25 8 Operating working capital (4) 56 (21) (21) Restructuring & employee-related costs (38) (32) (137) (92) Other operating items (inc. taxes) (221) (
Slide 36: Strong balance sheet
Strong balance sheet February 18, 2016 I 36
Slide 37: Strong balance sheet
Strong balance sheet Leverage ratio close to zero and gearing ratio at 4% Net debt* over EBITDA Net debt* over stockholders’ equity Stockholders’ equity (€m) Net debt* (€m) Net debt* (€m) EBITDA 12 months rolling (€m) excluding non-controlling interests After acquisition of Peiker & Spheros After ac
Slide 38: Debt maturity profile
Debt maturity profile 3000 2500 Undrawn credit lines 4 years’ maturity 2000 1500 Average maturity: 4.3 years 1000 Cash & cash equivalents 500 0 Dec 31, 2015 2016 2017 2018 … … 2024 BEI Financing EMTN Syndicated Loan Cash & equivalents Private Placements Undrawn Credits Lines February 18, 2016 I 38
Slide 39: Dividend & 2016 outlook
Dividend & 2016 outlook February 18, 2016 I 39
Slide 40: Proposed dividend of €3/share, up 36%
Proposed dividend of €3/share, up 36% Payout ratio of 32% 2015 dividend of €3/share to be proposed at the next Shareholders’ Meeting Dividend distribution (€m) Dividend (€/share) 3.0 2.2 1.7 1.4 1.5 1.2 2010 2011 2012 2013 2014 2015 EPS (€/share) 4.86 5.68 5.03 5.71 7.23 9.33 EPS excl. non - recurri
Slide 41: 2016 outlook
2016 outlook Based on the following key assumptions for full-year 2016: Automotive production growth: World: around 2.5% Europe: around 2% China: around 5% North America: around 2% Raw material prices and currencies in line with current levels Valeo sets the following objectives for 2016
Slide 42: Acquisition of 2 German Mittelstand
Acquisition of 2 German Mittelstand peiker, a tech leader in connected vehicle solutions Spheros, a market leader in the fast growing air conditioning market for buses February 18, 2016 I 42
Slide 43: peiker, a tech leader in connected vehicle solutions
peiker, a tech leader in connected vehicle solutions peiker, a key acquisition in the fast growing on board telematics market... 2015 sales of €310m Telematics is a strategic business for Valeo: – market of €2bn in 2015 – double-digit growth rate with TCU (Telematics Control Unit) take-rate in
Slide 44: peiker, a leader in high-tech telematics
peiker, a leader in high-tech telematics Wireless Main applications technology High Wifi hotspot, Video Streaming 4G, Wifi (Full Infotainment) Dynamic Map Update Email, Off-board Navigation Medium Audio Streaming 3G (Basic Infotainment) OTA* Software update Entry Emergency Call Stolen Vehicle (Regul
Slide 45: Spheros, a market leader in air conditioning for buses
Spheros, a market leader in the fast growing air conditioning market for buses Spheros, an opportunity to access a fast growing market: Air Conditioning for Buses 2015 sales of €250m Bus Air Conditioning & Heater market represents a growth opportunity for Valeo: – Market of €1.6bn in 2014 (+5%
Slide 46: Spheros at a glance
Spheros at a glance Global market leader in bus heating, pumps and air conditioning systems Strong financial profile with EBITDA Overview Products – 100% bus focus margin > Group one Spheros Group is the market leader in Sales A/C System Roof Hatches Electronics. bus Heating, Pumps and Air Conditi
Slide 47: 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 18, 2016 I 47
Slide 48: Share Information
Share Information Share Data • Bloomberg Ticker FR FP • Reuters Ticker VLOF.PA • ISIN Number FR 000130338 • Shares outstanding as of December 31, 2015 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 49: 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 50: Back-up
Back-up February 18, 2016 I 50
Slide 51: Comfort & Driving Assistance Systems
Comfort & Driving Assistance Systems 2015 key figures: • Sales: €2.7bn (18% of Group sales) • EBITDA: 14.5% (21% of Group EBITDA) Sales performance • 15,300 employees Total sales - • 26 production units change as +17% +17% +18% reported • 8 development centers • 9 research centers 2,720 Total sales
Slide 52: Powertrain Systems
Powertrain Systems 2015 key figures: • Sales: €3.8bn (26% of Group sales) • EBITDA: 12.8% (26% of Group EBITDA) Sales performance • 19,400 employees Total sales - • 36 production units change as +14% +12% +13% • 15 development centers reported • 6 research centers 3,762 Market share* and competitors
Slide 53: Thermal Systems
Thermal Systems 2015 key figures: • Sales: €4.1bn (28% of Group sales) • EBITDA: 10.7% (24% of Group EBITDA) Sales performance • 20,100 employees Total sales - • 48 production units change as +11% +11% +12% • 10 development centers reported • 3 research centers 4,074 Total sales (€m) Market share* a
Slide 54: Visibility Systems
Visibility Systems 2015 key figures: • Sales: €4.2bn (28% of Group sales) • EBITDA: 12.4% (28% of Group EBITDA) Sales performance Total sales - • 26,300 employees change as +17% +15% +16% • 35 production units reported • 15 development centers • 5 research centers 4,185 Market share* and competitors
Slide 55: Quarterly information
Quarterly information In €m (2014 restated in accordance with IFRIC 21) 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 Comfort & Driving Assistance Systems 623 569 515 531 552 572 573 614 657 679 663 721 Powertrain Systems 774 817 752 818 848 848 798 843 9
Slide 56: Outperformance accelerated throughout the year
Outperformance accelerated throughout the year Recovery in North America Q4 Outperf. +8pts Like-for-like World Outperf. OEM sales** +12% +9pts Production***+4% Outperf. Europe* +6pts OEM sales** +13% North America Production***+4% OEM sales** +9% Production*** +3% 47% of OEM sales 22% of OEM sales O
Slide 57: Outperformance in all Asian production regions
Outperformance in all Asian production regions Q4 Like-for-like Outperf Outperf +7pts +1pt Asia Japan OEM sales* +14% OEM sales* -2% Production** +7% Outperf Production** -3% +23pts 16% of Asian sales 29% of OEM sales Korea OEM sales* +24% Production** +1% 23% of Asian sales Outperf +2pts China Outp
Slide 58: Statement of income with half year breakdown
Statement of income with half year breakdown 2013 2014* 2015 In €m H1 H2 H1 H2 H1 H2 Sales 5,944 5,718 6,347 6,378 7,298 7,246 Gross margin 1,011 998 1,080 1,123 1,280 1,293 as a % of sales 17,0% 17.5% 17.0% 17.6% 17.5% 17.8% R&D expenditure, net (318) (296) (350) (335) (402) (395) Selling & adm
Slide 59: Segment information
Segment information Comfort & 2015 Driving Assistance Powertrain Thermal Visibility (€m) Systems Systems Systems Systems Others Total Sales: ● segment (excluding Group) 2,702 3,706 4,032 4,073 31 14,544 ● intersegment (Group) 18 56 42 112 (228) - EBITDA 394 482 437 521 13 1,847 Research & Developmen
Slide 60: Safe Harbor Statement
Safe Harbor Statement Statements contained in this press release, 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 r
Slide 61: February 18, 2016 I 61
Valeo Automotive technology, naturally ————————