2005 Results and Outlook · 2019-05-14 · Property of Valeo – Duplication prohibited 2005 Results and Outlook – February 2006 17 Below gross margin costs are contained In euro

Property of Valeo – Duplication prohibited2005 Results and Outlook – February 2006

1

2005 Results and Outlook

Thierry MorinChairman & CEOThierry MorinChairman & CEOFebruary 10, 2006


2

Agenda

Highlights and key figures

Sales and automotive markets

Results

Cash flow and balance sheet

Strategic highlights

Outlook

Highlights andKey Figures


4

2005 Highlights

Market share gains

Resilient margins despite challenging trading conditions

Strong cash generation allows for quick de-leveraging

Structural competitiveness further strengthened

Selective acquisitions and innovation strategy reinforce Domains and growth potential


5

2005 Key Figures

ChangeIFRS- In euro million

Total operating revenues

Operating incomeas a % of total op. revenues

Net income as a % of total op. revenues

Free cash flow

20042005

10,033

3073.1%

1411.4%

240

9,293

3333.6%

241*2.6%

292*

+8.0%

-7.8%-0.5 pt

-41.5%-1.2 pt

-17.8%

* Including a €83m fiscal one-off item


6

Q4-05 Key Figures

ChangeIFRS- In euro million


Operating incomeas % of total op. revenues

Net incomeas % of total op. revenues

Net financial debt

Q4-2004Q4-2005

2,557

773.0%

381.5%

1,080

2,306

371.6%

200.9%

497*

+10.9%

+108.1%+1.4 pt

+90%+0.6 pt

+117.3%

*as of Jan. 1, 2005

Sales & AutomotiveMarkets


8


Perimeter: + 7.0%Currencies: + 1.7%Prices: - 4.5%**at identical functions

10,033

2004 2005

9,293

+8.0%

+ 3.8%Volumes

In euro million


9

2005 net sales

EuropeEurope+4% / +3%*69% of Sales

+34% / +19%* 4% of Sales

+33% / +10%* 10% of Sales

NorthNorth AmericaAmerica- 1% / +1%*15% of Sales

SouthSouth AmericaAmerica AsiaAsia

== --1%1%

+12%+12% +3%+3%

*at constant perimeter, currencies and selling prices

+1% World World automotiveautomotive productionproduction

Western Europe: -3%

Big 3: -4%


10

OE sales by customer (touring cars)

Customer

Production change

+4% -4% +2% = -5% -4% -5% +8%+6%

+ 5%

+ 11%

+ 29%

Hyundaï

+ 16% Toyota

+ 18%

+ 1%

2005

2004

Tier’s 1

+ 16%

=

+ 4%

- 10%

+ 6%

Results


12

Gross margin

Change

Net sales

Other operating revenues


Gross margin% of net sales

20042005

9,933

100

10,033

1,58716.0%

9,229

64

9,293

1,59817.3%

+ 7.6%

+56.3%

+ 8.0%

- 0.7%-1.3pt

IFRS- In euro million


13

Gross margin walkdown

Raw materials CustomerCompensations

Volumes Acquisitions Wipers/HVAC

Productivity

17.3% 16.0%

-1.2%

+0.5% +0.0%-0.3%

-0.8%

+0.4%

as % of net sales

Gross marginFY-2004

Gross marginFY-2005

Raw material impact(as % of gross margin)

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405

Gross Net


14

Cost base optimisation - Purchasing

SuRe : - 370 suppliers2,688 suppliers at year end 2005

LCC suppliers26% up from 22% end of 2005


15

LCC footprint implementation

5 closures in Southern Europe; 4 openings in Slovakia, Romania and China

44% of manufacturing sites in LCC- 51% of productive workforce in LCC (48% in 2004 and 38% in 2001)

Rochester closure planned for Jul. 2008

CLOSURE Orense (Spain)VLS

Alcala (Spain)VT

Mostoles (Spain)VSS

Melfi (Italy)VECS

Martos* (Spain)VLS

ACQUISITION

Sablé (France)VEMS

Ste-Florine (France)VEMS

Brioude (France)VEMS

Chonburi (Thailand)VCC

OPENING Kosice (Slovakia)VSS

Anaka (Japan)VCC

Shonan (Japan)VEC

Pitesti (Romania)VECS

Timisoara (Romania)VLS

Wuxi (China)VSS

Q1 Q2 Q3 Q4 2005

5

4

6

* Rationalization


16

Raising quality standards

Customer returns in partsper million

48 sites (36%)

Including 10 sites at 0 ppm

Q4-2005

Q4-03 Q4-04 Q4-05

185

5332

Single digit PPM sites


17

Below gross margin costs are contained

ChangeIn euro million 2004

Gross marginas % of net sales

Net R&D expenses*as % of total op. revenues

SG&Aas % of total op. revenues

Other income & expensesas % of total op. revenues

Operating incomeas % of total op. revenues

2005

1,58716.0%

(561)5.6%

(659)6.6%

(60)0.6%

3073.1%

1,59817.3%

(539)5.8%

(630)6.8%

(96)1.0%

3333.6%

- 0.7%-1.3 pt

+ 4.1%- 0.2 pt

+ 4.6%- 0.2 pt

- 37.5%- 0.4 pt

- 7.8%- 0.5 pt

* Including other operating revenues (mainly customer contributions to development costs)


18

From operating income to net income

ChangeIn euro million

Operating income

Cost of net debt

Other financial inc./(expenses)

Associates

Income before taxes

TaxesEffective tax rate

Minority interests

Net income

20042005

307

(54)

(52)

6

207

(60)29.9%

(6)

141

333

(33)

(39)

5

266

(17)*6.5%

(8)

241*

- 7.8%

+ 63.6%

+33.3%

+20.0%

- 22.2%

+252.9%

-25.0%

- 41.5%* Including a €83m fiscal one-off item

Cash Flow andBalance sheet


20

Strong cash flowChangeIn euro million 20042005

• EBITDA• Cash tax• Change in working capital

Operating cash flow• Grants including customer contributions• Interest paid• Acquisitions of intangible assets• Acquisitions of tangible assets

Free cash flow• Acquisitions• Dividends and buy back• Others• Change in net cash

• Fiscal one off item

Free cash flow excluding items

812(28)45

82926

(28)(122)(413)

292(73)(90)(60)69

83

209

778(65)107

82039

(33)(145)(441)

240(466)(348)705*131

0

240

(34)(37)62(9)13(5)

(23)(28)

(52)(393)(258)76562

(83)

31* Mainly change in long term financial debt


21

Inventory managementEuro million and % of sales / total operating revenues

2001 2002 2003 2004 2005

7.6%

6.4%5.9% 6.1%

6.4%753

628570 567

658

598*

* 2004 perimeter

IFRS French GAAP


22

Working capital managementEuro million and % of sales / total operating revenues

70101

208234

409

2001 2002 2003 2004 2005

4.1%

2.4%2.2%

1.0%0.7%

IFRS French GAAP


23

Net financial debt walkdownin euro million

Net debt@ Jan. 1, 2005

Freecash flow

Acquisitionsnet

Dividends Buy backs Others Net debt@ Dec.31, 2005

+9

497(240)

+466

+96

+252

1,080


24

Gearing down 11 ppt in H2-05in euro million

Jan. 1, 2005 Jun. 30, 2005 Dec. 31, 2005

Shareholders' Equity incl. minority interests Net Debt

1,874

497

Gearing: 27% Gearing: 73%

1,263

1,725

Gearing: 62%

1,749

1,080

Business and strategichighlights


26

Leveraging our Central European presence

Central Europe accounts for 4.1m vehicles or ~20% of European production biased towards A & B segments

Leveraging our presence8,900 staff in 15 sitesKey partner to Toyota/ PSA B0 platform in theCzech Republic and PSA in SlovakiaKey partner to Renault Dacia in Romania Sales up 45% in 2005


27

Majors steps in order to complete our strategic ambition to derive 25% of our revenues from Asia by 2010

Acquisition of Bosch minority interests in our HVAC/compressor activities in Asia including China

Decisions to expand our manufacturing base in ChinaJV with FAW (compressors for HVAC systems)JV with Hangsheng (Ultrasonic Park Assist)

Consolidation of our Thailand HVAC joint ventures

Acquisition of 50% of Threestar, a leading manufacturer of radiators in Korea


28

Strengthening our Domains

StrengtheningAcquisition of JCEED for €316m on 1/03/2005 Order intake / sales : 2.3x in 2005 with customerdiversification, increased Diesel exposure (EGR)Accretive to earnings and cash flow

StrengtheningAcquisition of Zexel VCCNew Compressor Branch

InnovationsLaneVue, blind spot detection, dynamic bending lights(US first)

Powertrain Efficiency

Comfort Enhancement

Driving Assistance

Outlook


30

2006 trading conditions

Soft car production in core markets(Europe -1%, NA flat)

Unstable raw material situation

Ford/ GM and US suppliers restructuring


31

2006 trading conditions and corporate objectives

Corporate objectives

Growing the content per car furtherImproving return on capital employed Sustained cash generationStrengthening the order book


32

Contact

InvestorInvestor RelationsRelations

Rémy DumoulinRémy Dumoulin43, rue 43, rue BayenBayenFF--75848 Paris Cedex 1775848 Paris Cedex 17FranceFranceTel.: +33 (0) 1.40.55.29.30Tel.: +33 (0) 1.40.55.29.30Fax: +33 (0) 1.40.55.20.40Fax: +33 (0) 1.40.55.20.40EE--mailmail: : [email protected]@valeo.comWeb site: Web site: www.valeo.comwww.valeo.com

mailto:[email protected]

http://www.valeo.com/

Back-up


34

Share InformationShare Data / ADR Data

Share DataBloomberg TickerReuters TickerISIN NumberShares outstanding as per 30.06.2005

FR FPVLOF.PAFR 00013033877,492,849

ADR DataRatio (ordinary share: ADR)Bloomberg TickerReuters TickerISIN NumberTypeExchangeSponsor

1:2VLEEY USVLEEY PKUS 9191343048Level 1OTCJP Morgan Chase


35

Quarterly P&L (2004 - 2005)

• Net sales• Total Revenues

• Gross Margin% of net sales

• R&D expenses% Total Revenues

• SG&A% Total Revenues

• Other income and expenses

• Operating income% Total Revenues

• Cost of net debt% Total Revenues

• Other financial income and expenses% Total Revenues

• Income before taxes% Total Revenues

• Income Taxes

• Equity in net earnings of associated companies

• Net income from consolidated companies% Total Revenues

• Minority interests

• Net income% Total Revenues

2,3622 379

40817.3%

(152)6.4%(165)7.0%(20)

883.7%

(9)(0.4%)

(9)(0.4%)

703.0%

36

1

1074.5%

(2)

1054.4%

2,4552,469

44018.1%

(152)6.2%(163)6.6%(5)

1345.5%

(8)(0.3%)

(9)(0.4%)

1174.8%

(37)

2

823.2%

(4)

783.2%

2,1262,139

35916.9%

(145)6.8%(146)6.7%(7)

743.5%

(8)(0.4%)

(11)(0.5%)

552.6%

(16)

1

401.8%

(2)

381.8%

T1

2,2862,306

39117.1%

(154)6.7%(156)6.8%(64)

371.6%

(8)(0. 3%)

(10)(0.4%)

190.9%

0

1

200.9%

0

200.9%

2,3242,344

37716.2%

(161)6.9%(164)7.0%(17)

552.3%

(11)(0.5%)

(8)(0,3%)

361.5%

(10)

(1)

261.1%

-

261.1%

2 0 0 4 2 0 0 5

Q1 Q2 Q3 Q4 Q1 Q2IFRS – in euro million)

2,7222,751

44816.5%

(173)6.3%(175)6.4%(31)

983.6%

(13)(0.5%)

(15)(0.5%)

702.8%

(25)

6

511.6%

(3)

481.7%

Q32,3562,381

37015.7%

(158)6.6%(158)6.8%(2)

773.2%

(16)(0.7%)

(13)(0,5%)

482.0%

(16)

0

321.3%

(2)

301.3%

Q42,5312,557

39215.5%

(169)6.6%(162)6.3%(10)

773.0%

(14)(0.6%)

(16)(0.6%)

481.9%

(9)

1

39

(1)

381.4%

Documents

2005 Results and Outlook · 2019-05-14 · Property of Valeo – Duplication prohibited 2005 Results and Outlook – February 2006 17 Below gross margin costs are contained In euro