2007 Results and Outlook

Transcription

1 March 12, Results and Outlook Thierry Morin - Chairman & CEO

2 Agenda Q4 07 and FY 07 review Valeo strategic positioning Value creation 2 March Results and Outlook

3 Q4'07 and FY 07 Review

4 Q4-07 Key Figures In euro million Q Q Change Total operating revenues* 2,438 2, % Operating income* as % of total op. revenues % % % pt Non strategic activities (3) 42 nm Net income as % of total op. revenues % % % pt * Excluding the wiring business, sold on December 31, 07, as required by IFRS 5 4 March Results and Outlook

5 Q4 operating margin walkdown % of Total operating revenues % 2.8% Q4-06 Raw materials Selling price Activity / Q4-07 adjustments Productivity 5 March Results and Outlook

6 2007 Highlights Sales & margin recovery acceleration Operational excellence demonstrated further Innovation gains market traction Portfolio alignment on its way 6 March Results and Outlook

7 2007 Key Figures In euro million Change Total operating revenues* 9,689 9, % Operating income* as a % of total op. revenues % % % pt Net income as a % of total op. revenues % % % pt Net income excl. impact from divestitures** % EPS from contd. operations ( )*** % Net financial debt % * Excluding the wiring business, sold on December 31, 07, as required by IFRS 5 ** Excluding capital gains and losses from the sale of non strategic activities *** Basic 7 March Results and Outlook

8 Total operating revenues In euro million +3.2% Like-for-Like , % 9, Perimeter Currencies Prices* Volume/mix * at identical functions -0.2% -1.5% -3.0% +6.2% March Results and Outlook

9 Revenue growth acceleration in H2 TOTAL OPERATING REVENUE - YOY CHANGES at same perimeter & exchange rate (2007) 5% 4% +4.8% +4.3% +3.8% 3% 2% 1% +2.3% +2.0% +1.6% Q1 Q2 Q3 Q4 H1 H2 9 March Results and Outlook

10 2007 net sales Geographical trends Market -2% Incl. D3: -5% +6%* North America 14% of total Sales Market +4% +1% Europe 67% of total Sales Market +7% Asia +12%* Market +18% +18%* South America 12% of total Sales 6% of total Sales *At same perimeter & exchange rate Valeo sales 10 March Results and Outlook

11 Original Equipment Touring Cars +15% SALES by customers % -1% +x% Customer performance +13% -3% +14% +1% -11% = +3% +5% +4% +3% +5% = -2% +14% +6% -1% +17% +6% +5% YOY changes at same perimeter & exchange rate 11 March Results and Outlook

12 Rebalancing customer exposure OE SALES ( )* Automaker Asians Big 3 German % 31.7 % 22.5 % % 21.8 % 24.5 % Mercedes & BMW PSA & Renault Fiat 7.5 % 28.1 % 5.0 % 10.6 % 26.7 % 4.4 % * Excluding VMA & VCS in March Results and Outlook

13 Results In euro million Change Total operating revenues 9,689 9, % Gross margin 1,497 1, % as % of sales 15.7% 15.5% pt 13 March Results and Outlook

14 LME Average Price (Spot) Euro / ton 2800 LME Average: CU + AL + AA + ZN* 2700 Q Q3 H1 Q3 Q4 Average , Average , H Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec * CU: Copper Cuivre, AL: Primary Aluminium, AA: Aluminium Alloy, ZN: Zinc 14 March Results and Outlook

15 Raw material tailwinds in Q4 Ppt of sales - cumulative Gross impact Net impact Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q March Results and Outlook

16 Results (cont.) In euro million Change R&D expenses (net)* as % of total op. revenues (534) 5.5% (526) 5.5% + 1.5% = SG&A as % of total op. revenues (617) 6.4% (617) 6.5% = (0.1 pt) Total overhead as % of total op. revenues (1,151) 11.9% (1,143) 12.0% + 0.7% (0.1 pt) Other income (expenses) as % of total op. revenues (27) 0.3% (49) 0.5% % (0.2 pt) Operating income as % of total op. revenues % % % pt * net of other operating revenues 16 March Results and Outlook

17 Margin improvement accelerates in Q4 Quarterly YOY change in operating margin (2007) 2 pt pt 0 pt pt Q1 Q2 Q3 Q4 17 March Results and Outlook

18 Results (cont.) In euro million Change Operating income % Cost of net debt Other financial inc./(expenses) Associates (51) (46) 8 (51) (8) (1) = nm nm Income before taxes % Taxes Effective tax rate Non strategic activities (83) 37.4% (59) (67) 31.6% % nm Minorities (7) (5) + 40% Net income % 18 March Results and Outlook

19 Valeo weathered the raw material shock OPERATING MARGIN adjusted for cumulative raw material headwinds ( *) OPERATING MARGIN % of total operating revenues ( ) 6,0% 5,0% 5.0% +2,5% +15,8% 3.6% 4,0% 3,0% Operating margin % Customer contributions Operating margin ,0% Operating margin (reported) -9.0% Supplier productivity Raw & product material reengineering price increases -15.2% Valeo productivity Price deflation** Operating margin (adjusted) * Excluding non strategic activities for the period ** Identical function 19 March Results and Outlook

20 Net financial debt walkdown In euro million Net Jan. 1, 2007 Free cash flow VCS disposal Other M&A Dividends Others Net Dec.31, March Results and Outlook

21 10 pt gearing reduction in 2007 In euro million 1,752 1,782 1,551 1, Shareholder s Equity incl. minority interests Net Debt Gearing 1,263 81% Gearing 55% 968 Gearing 45% 30/06/ /12/ /12/ March Results and Outlook

22 Return on capital employed analysis* Asset turn (x) Operating margin (%) ROCE (%) * Continued operations, before tax 22 March Results and Outlook

23 Valeo Strategic Positioning

24 Success factors QUALITY COST GLOBAL PRESENCE TECHNOLO GY Technology as differentiating factor 24 March Results and Outlook

25 Valeo Domains address industry opportunities Powertrain Efficiency Reconciling automobiles and the environment by contributing to the creation of cleaner, more fuel-efficient vehicles Driving Assistance Reconciling automobiles and safety by reinforcing the active aspects of accident prevention and avoidance Other Sales* 9.6bn Comfort Enhancement Reconciling automobiles and well-being by making vehicles easier to use and enhancing driver and passenger comfort * March Results and Outlook

26 CO 2 Regulation Europe: 120g CO 2 /km by g CO 2 /km by 2020 European Commission Japan: 16.8 km/l by 2015 Council for transport Policy February 2007 USA: 35 MPG by 2020 CAFE 26 March Results and Outlook

27 Fuel Economy solutions portfolio Power on Demand Low consumption A/C compressor -3% Thermal Management Transmission Automation UltimateCooling THEMIS DUAL CLUTCH transmission -3-5% -4% -4-6% - 40% Feasible! Air Systems Cooled EGR system -5-7% Hybridization MICRO HYBRID (from Stop-Start to Regenerative braking) -6-15% Engine Operation CAMLESS System % 27 March Results and Outlook

28 Powertrain Efficiency growth drivers CO 2 AND POLLUTANT REDUCTION % fitment rate Turbo gasoline EGR gasoline Micro hybrid Source Valeo 28 March Results and Outlook

29 Successful innovations StARS micro hybrid Offered on Citroën C2/C3 Development contracts with 5 other customers StARS Now standards on SMART fortwo mhd 29 March Results and Outlook

30 Accident Statistics ROAD SAFETY EVOLUTION in Europe Evolution EU road fatalities More than 100 people do not come back home everyday Source: July 2006 EU Commission 30 March Results and Outlook

31 Driving assistance growth drivers DRIVING ASSISTANCE (pct fitment rates) LED rear lighting Park Assist (including Park4U) 15 All around Cameras Source Valeo 31 March Results and Outlook

32 Successful innovations Blind spot detection system 2007 PACE Award winner 28 cars equipped by 2010 Best-in-class multi-beam radar system Significant new orders booked in H March Results and Outlook

33 Successful innovations Park4U Ultrasonic technology-based driving assistance system World premiere on the VW Touran. Now on VW Tiguan and Cross Touran 12 models to be equipped New generation introduced at the Frankfurt auto show 33 March Results and Outlook

34 Significant increase in potential content per vehicle through the Domain approach MAXIMUM CONTENT per vehicle Powertrain Efficiency 680 1, % Driving Assistance 710 1,230 Comfort Enhancement 940 1,250 2,430 3,960 Total +73% +63% +62% 34 March Results and Outlook

35 3.2bn or a third of new orders related to innovative products ORDER INTAKE/ X OE SALES (excluding VMA & VCS in 2006 & 2007) 1.1x 1.3x 1.3x 8.6bn 9.9bn 10.1bn Others +50% Innovative products March Results and Outlook

36 Focusing on Domains Disposal of the wiring harness business Achieved 255m in enterprise value (0.47X 2007 sales) 237m Group net financial debt reduction 213m Group goodwill reduction Rationale of the disposal Low value added Lack of customer diversification No value added to our Domain approach 36 March Results and Outlook

37 Focusing on Domains Acquisition of Connaught Electronics Expert in camera - based vision solutions for low speed maneuvering Strengthens the Driving Assistance Domain 37 March Results and Outlook

38 Quality levels - now a 10 ppm* organization 185 CUSTOMER RETURNS in parts per million sites 47% Including 15 sites at 0 ppm 86 sites 65% Including 18 sites at 0 ppm * Defective parts per million Single digit PPM sites 38 March Results and Outlook

39 Rationalized industrial footprint 31/03/ /12/2007 perimeter changes included LCC/ HCC BREAKDOWN* % 70% 68% % Productive workers 32% 28% 30% 66% 34% 62% 38% 56% 44% 52% 48% 31/03/2001 Closures Disposals Openings Acquis. 31/12/ HCC LCC * Continued operations 39 March Results and Outlook

40 Rebalancing new business to Asia ORDER INTAKE 2007 SALES Asia 20% Rest of World 2% Asia 12% Rest of World 2% South America 4% South America 6% North America 14% Europe 60% North America 14% Europe 66% 40 March Results and Outlook

41 Value Creation

42 2008 objectives Trading conditions Valeo Global car production growth: +2.5%, down from 5% in 2007 Raw material prices stabilize at a high level Customer mix improvement Moderate raw material tailwinds Short term operational levers: Rochester closure, Compressors Reengineering plan deployment Target operating margin improvement 42 March Results and Outlook

43 6% operating margin objective in 2010 Updated identified levers OPERATING MARGIN ( ) ppt IMPROVEMENT LEVERS 8% % 6% 4% 2% 2006A 2007A Structure productivity Raw material costs Growth Total 43 March Results and Outlook

44 Contract renewal will support raw material headwind absorption Copper ($/T) Signature SOP Contract H2-07/ SOP H1-09 Delta:$ Delta: $3,458 Contract H1-05/ SOP H Delta: $1,305 Contract H1-04/ SOP H H1-1 3 H2-1 2 H1-1 2 H2-1 1 H1-1 1 H2-1 0 H1-1 0 H2-0 9 H1-0 9 H2-0 8 H1-0 8 H2-0 7 H1-0 7 H2-0 6 H1-0 6 H2-0 5 H1-0 5 H2-0 4 H1-0 4 H2-0 3 H1-0 3 H2-0 2 H1-0 2 H March Results and Outlook

45 Investment case Upside potential from the Green and Safe drivers Resilient operational model and financial structure Value creation potential Steady dividend growth policy; 2007 proposal of 1.20/share 2010 financial targets 1.3 Bn EBITDA 27% ROCE 45 March Results and Outlook

46 Contact Investor Relations Rémy Dumoulin 43, rue Bayen F Paris Cedex 17 France Tel.: +33 (0) Fax: +33 (0) Web site: 46 March Results and Outlook

47 Back-up

48 Quarterly P&L (in euro million) 4Q 3Q 2Q 1Q 4Q 3Q 2Q 1Q NET SALES 2,397 Other operating revenues 41 TOTAL OPERATING REVENUES 2,438 GROSS MARGIN 386 as % of net sales 16.1% Research & Development expenditure (171) Selling expenses (51) Administrative expenses (109) Other income & expenses (8) OPERATING INCOME 88 as % of operating revenues 3.6% Cost of net debt (12) Other financial income and expense (11) Equity in net earnings of associates 2 INCOME BEFORE INCOME TAXES 67 Income taxes (13) INCOME FROM CONTINUING OPERATIONS54 Non-strategic activities (3) NET INCOME FOR THE PERIOD 51 Minority interests (1) NET INCOME ATTRIBUTABLE TO EQUITY 50 HOLDERS OF THE COMPANY 2, , % (156) (45) (97) (9) % (14) (15) 1 36 (23) 13 (52) (39) (1) (40) 2, , % (173) (48) (105) (13) % (13) (10) 5 72 (26) 46 (4) 42 (4) 38 2, , % (168) (49) (113) % (12) (10) 0 55 (21) 34 (0) 34 (1) 33 2, , % (163) (47) (110) (15) % (11) (11) (6) 23 (4) (1) 60 2, , % (146) (45) (94) (15) % (12) (6) 0 32 (22) 10 (2) 8 (1) 7 2, , % (161) (49) (110) % (14) (31) 80 (7) 73 (1) 72 2, , % (170) (49) (113) (20) % (14) (8) 2 45 (10) 35 (11) 24 (2) March Results and Outlook

49 Share Information Share Data Bloomberg Ticker Reuters Ticker ISIN Number Shares outstanding as per FR FP VLOF.PA FR ADR Data Ratio (ordinary share: ADR) Bloomberg Ticker Reuters Ticker ISIN Number Type Exchange Sponsor 1:2 VLEEY US VLEEY PK US Level 1 OTC JP Morgan Chase 49 March Results and Outlook

50 Enabling a better automotive world