Slide 1: Q3-2008 Results
Q3-2008 RESULTS Thierry Morin – Chairman & CEO October 21, 2008
Slide 2: Agenda
Agenda 1 Quarterly financial performance 2 Business highlights 3 Outlook October 21, 2008 – Q3-2008 Results I 2 I
Slide 3: Quarterly financial performance
Quarterly financial performance
Slide 4: Quarter summary
Quarter summary Trading conditions Valeo Significant production cuts in core Volume resilience markets Price competitiveness Productivity gains, cost cutting initiatives Rising raw material costs Compensated ¾ of gross impact Cash focused/ Ample access to Liquidity constraints/ Higher liquidity inte
Slide 5: Quarterly key figures
Quarterly key figures In euro million Q3-2008 Q3-2007 Change Total operating revenues 2,112 2,245 -5.9% Gross margin 315 340 -7.4% as a % of net sales 15.2% 15.4% - 0.2 pt Operating margin 65 73 -11.0% as a % of total operating revenues 3.1% 3.3% - 0.2 pt Net income 6 (40) nm as a % of total operati
Slide 6: Year-to-Date key figures
Year-to-Date key figures 9 months 9 months In euro million Change 2008 2007 Total operating revenues 7,026 7,251 -3.1% Gross margin 1,106 1,111 -0.5% as a % of net sales 16.0% 15.5% + 0.5 pt Operating margin 268 250 +7.2% as a % of total operating revenues 3.8% 3.4% + 0.4 pt Net income 106 31 +241.9
Slide 7: Total operating revenues
Total operating revenues In euro million == Q3-2007 Q3-2008 Prices * Perimeter/ forex -5.9% 2,245 2,112 Perimeter -1.6% Forex -1.6% Prices* -2.7% Volumes* 0% *at identical functions October 21, 2008 – Q3-2008 Results I 7 I
Slide 8: Q3-2008 OE light vehicles net sales (yoy change)
Q3-2008 OE light vehicles net sales (yoy change) Market -1% Market -16% -7%* -14%* Europe North America 64% of total Sales 12% of total Sales Market +3% +14%* Asia Market +14% 14% of total Sales +20%* South America 9% of total Sales Valeo sales *At same perimeter & exchange rate October 21, 2008 – Q
Slide 9: Results
Results In euro million Q3-2008 Q3-2007 Change Net sales 2,076 2,214 -6.2% Gross margin 315 340 -7.4% as a % of net sales 15.2% 15.4% October 21, 2008 – Q3-2008 Results I 9 I
Slide 10: Gross margin
Gross margin As % of sales + 0.3 pt - 0.1 pt - 0.4 pt 15.4% 15.2% Raw material Pass through/ Activity/ prices Contract renewal Productivity Q3-2007 Q3-2008 October 21, 2008 – Q3-2008 Results I 10 I
Slide 11: Raw material impact
Raw material impact ppt of sales - cumulative Gross impact Net impact 5.1 4.7 4.7 4.3 4.3 4.5 4.2 3.6 2.1 2.2 2.2 2.2 1.8 1.9 1.9 1.8 1.8 0.7 1.1 1.6 0.5 2004 2005 2006 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 October 21, 2008 – Q3-2008 Results I 11 I
Slide 12: Slight relief from non ferrous metals
Slight relief from non ferrous metals Euro / Ton 2 600 LME Average: CU + AL + AA + ZN* 2 500 Q3 €2,426 -5.4% 2 400 Q3 €2,294 2 300 2 200 2 100 2 000 ay ay ne ne ly ov ly b g b g ch ch r n r n pt pt ct ec Ap Ap Au Au Ja Ja Fe Fe Ju Ju O Se Se M M N Ju Ju ar ar D M M 2007 2008 * CU: Copper Cuivre, AL:
Slide 13: Major burden from steel
Major burden from steel HR price evolution- In Dollar / Ton 1,127 1300 1100 Spot Price 900 700 500 236 300 100 Nov Nov Nov Nov Nov Janv Janv Janv Janv Janv Janv Mai Juil Mai Juil Mai Juil Mai Juil Mai Juil Mai Juil Sept Sept Sept Sept Sept Sept Mars Mars Mars Mars Mars Mars 2003 2004 2005 2006 2007
Slide 14: Brent Barrel in $
Brent Barrel in $ 135 Brent Monthly Average 115 $98.2 95 75 55 $24.6 35 15 Oct Oct Oct Oct Oct Oct Oct Avr Avr Avr Avr Avr Avr Avr Juil Juil Juil Juil Juil Juil Juil Juil Janv Janv Janv Janv Janv Janv Janv 2001 2002 2003 2004 2005 2006 2007 2008 October 21, 2008 – Q3-2008 Results I 14 I
Slide 15: Results (cont.)
Results (cont.) In euro million Q3-2008 Q3-2007 Change R&D expenses (net) (108) (125) -13.6% as a % of total operating revenues 5.1% 5.6% SG&A (142) (142) = as a % of total operating revenues 6.7% 6.3% Total overhead (250) (267) -6.4% as a % of total operating revenues 11.8% 11.9% Other income & exp
Slide 16: Focus on R&D costs
Focus on R&D costs In euro million and in % of total operating revenues - 8% Q3-2007 Q3-2008 156 (6.9%) 144 (6.8%) 31 Customer financing + 16% 36 Net expense Net expense - 14% 125 5.6% 108 5.1% October 21, 2008 – Q3-2008 Results I 16 I
Slide 17: Results (cont.)
Results (cont.) In euro million Q3-2008 Q3-2007 Change Operating income 50 64 -21.9% Cost of net debt (10) (14) -28.6% Other financial expenses (12) (15) -20.0% Associates 1 1 = Income before taxes 29 36 -19.4% Taxes (20) (23) -13.0% Effective tax rate 71.4% 65.7% Non strategic activities (1) (52) -
Slide 18: Balance sheet
Balance sheet
Slide 19: Shareholder's equity and net debt
Shareholder’s equity and net debt In euro million 1,766 1,782 1,813 Shareholder’s Equity incl. minority interests Net Debt 932* 799 735 Gearing Gearing Gearing 1,263 53% 45% 968 41% 30/09/2007 31/12/2007 30/09/2008 * Excluding VCS (€ 92m) October 21, 2008- Q3-2008 results I 19
Slide 20: Solid debt structure
Solid debt structure Debt Maturity Profile 600 Current maturities of long-term debt Short-term debt 500 Other 400 Bond issues Syndicated loans 300 OCEANE 200 100 Debt Structure 0 <1 year 2009 2010 2011 2012 2013 and Gross €1,427m beyond LT Debt €1,294m Net €735 m €1,037m at fixed rate Cash Short ter
Slide 21: Business highlights
Business highlights
Slide 22: Quarter highlights
Quarter highlights Footprint optimization Î Announced consolidation of rear lighting capacity in Europe Î New joint-venture in India for the production of lighting systems (oct 2) Innovation Î 2008 Automechanika Innovation Award for StARS micro-hybrid Î Micro-hybrid StARS extended to other Smart mod
Slide 23: Outlook
Outlook
Slide 24: Trading conditions in Q4-2008
Trading conditions in Q4-2008 Global car production outlook deteriorates materially Erratic car production schedules Steel prices at record highs Softening aluminum and copper prices October 21, 2008 – Q3-2008 Results I 24 I
Slide 25: Worsening production outlook
Worsening production outlook Light vehicle production forecasts for H2-08 (yoy changes) Europe Q3 Q4 July 15 + 0.9 October 14 - 0.9 - 2.5 North America Q3 Q4 July 15 - 9.3 - 4.9 - 5.1 Asia + 7.2 July 15 October 14 - 14.2 - 15.9 + 3.4 + 2.5 October 14 - 0.8 Q3 Q4 October 21, 2008 – Q3-2008 Results I
Slide 26: Meeting the Q4-2008 challenges
Meeting the Q4-2008 challenges Aggressive cost structure alignment Î Freeze on overtime Î Temporary workforce adjustments Î Factory temporary shutdowns Î Strict control over R&D and SG&A Î Freeze on subcontracting Î Additional material costs reduction Selling price adjustments Confirm 2008 operating
Slide 27: Contact Investor Relations
Contact Investor Relations Rémy Dumoulin 43, rue Bayen F-75848 Paris Cedex 17 France Tel.: +33 (0) 1.40.55.29.30 Fax: +33 (0) 1.40.55.20.40 E-mail: remy.dumoulin@valeo.com Web site: www.valeo.com October 21, 2008- Q3-2008 results I 27
Slide 28: Back-up
Back-up
Slide 29: Quarterly P&L
Quarterly P&L 2008 2007 2006 (in euro million) 3Q 2Q 1Q 4Q 3Q 2Q 1Q 4Q 3Q 2Q 1Q Net Sales 2,076 2,407 2,435 2,397 2,214 2,472 2,472 2,341 2,125 2,483 2,487 Other operating revenues 36 37 35 41 31 35 27 35 28 28 23 Total operating revenues 2,112 2,444 2,470 2,438 2,245 2,507 2,499 2,376 2,153 2,5
Slide 30: Share Information
Share Information Share Data Bloomberg Ticker FR FP Reuters Ticker VLOF.PA ISIN Number FR 000130338 Shares outstanding as per 30.09.2008 78,209,617 ADR Data Ratio (ordinary share: ADR) 1:2 Bloomberg Ticker VLEEY US Reuters Ticker VLEEY PK ISIN Number US 9191343048 Type Level 1 Ex
Slide 31: Enabling a better automotive world
a Enabling a better automotive world