Combined Shareholders Meeting June 3, 2010 Corporate governance - PowerPoint PPT Presentation

Combined Shareholders’ Meeting June 3, 2010

Corporate governance Pascal Colombani Chairman of the Board of Directors June 3, 2010

Respecting best practices in terms of corporate governance I June 3, 2010 I 3

Appointment of Board Members Daniel Camus Jérôme Contamine I June 3, 2010 I 4

Appointment of Board Members Michel de Fabiani Noëlle Lenoir I June 3, 2010 I 5

Nomination, Remuneration and Corporate Governance Committee 8 meetings with an attendance rate of 87.5% I June 3, 2010 I 6

Audit Committee 5 meetings in 2009 with an attendance rate of 93.75% I June 3, 2010 I 7

Strategy Committee 4 meetings in 2009 with an attendance rate of 94.11% I June 3, 2010 I 8

Combined Shareholders’ Meeting Jacques Aschenbroich Chief Executive Officer June 3, 2010

Creating value through growth I June 3, 2010 I 10

Our main growth drivers CO 2 emissions reduction in all market segments Asia and emerging countries I June 3, 2010 I 11

My diagnostic upon arriving Strengths Brand Quality Operational excellence & reactivity Committed people Global presence & diversified customer base Global leadership on most product lines Innovation Healthy financial situation I June 3, 2010 I 12

My diagnostic upon arriving Strengths Weaknesses Brand � Unfocused strategy Quality � Lack of growth Operational excellence & reactivity � Poor profitability Committed people � Obsolete organization Global presence & diversified customer base Global leadership on most product lines Innovation Healthy financial situation I June 3, 2010 I 13

Today Our commitments Weaknesses Focus on CO 2 emissions reduction in all market segments � A share value that does not correspond to reality Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability Increase value of Valeo I June 3, 2010 I 14

Creating value through growth Our commitments Focus on CO 2 emissions reduction in all market segments Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability I June 3, 2010 I 15

CO 2 emissions reduction - a necessity For the citizen For the consumer For the automotive industry: source of growth and profitability Technology to be developed to reduce CO 2 emissions I June 3, 2010 I 16

Valeo forecast for the decade 20% annual market growth for CO 2 related products I June 3, 2010 I 17

80% of Valeo portfolio linked to CO 2 Best seller emissions reduction 50 models equipped, more than 10 automakers Engine optimization and downsizing Hybrid vehicles Electric vehicles Reduced consumption and weight Smart driving I June 3, 2010 I 18

Sales for new CO 2 related products to double by 2013 Valeo sales for CO 2 related products (in billion €) Maintain R&D at 6% 5 of sales to support innovation 1 0.5 2020 2013 2009 I June 3, 2010 I 19

Creating value through growth Our commitments Focus on CO 2 emissions reduction in all market segments Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability I June 3, 2010 I 20

Return to strong structural market growth after 2009 crisis 2013-2020 Back to historical growth Global automotive production Emerging countries >> mature markets 3-3.5% growth per annum 2010-2013 Strong recovery 2008-2009 crisis 1993 crisis 1990 2000 2010e 2020e I June 3, 2010 I 21

A well-balanced customer base 2009 Sales Others Aftermarket German OEM 11% American OEM 28% €1.5B 16% €6Bn 25% €6.0B 20% French Asian OEM OEM OEM I June 3, 2010 I 22

7.5% annual growth, higher than market growth, thanks to a sustained level of order intake Order Intake 2013 Sales forecast: €10B (OI/OEM sales) Incl. €8.3B OE Sales 1,52x 1.52x 1,45x 1.45x €2.3B Target 1.29x 1,29x €6.0B Booked 72% of 2013 OE Sales are already booked 2007 2008 2009 I June 3, 2010 I 23

Accelerate growth in emerging countries Double our presence in China and India in 4 years Valeo sales in China and India (in € Bn) 3 3 Over 60% of investments 1 in Asia and in 0.5 emerging countries 2020 2013 2009 I June 3, 2010 I 24

Creating value through growth Our commitments Focus on CO 2 emissions reduction in all market segments Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability I June 3, 2010 I 25

Strong financial structure increasing strategic options Boost fast growing businesses through acquisitions Assess possibility for transformational transactions Continuous portfolio assessment I June 3, 2010 I 26

Actively participate in future industry consolidation Ongoing consolidation of car manufacturers Potential acceleration of automotive supplier consolidation Valeo meets all criteria to play a leading role in this consolidation � Global � High innovation capacity and system integration � Operational excellence (quality, cost, 5 Axes) � Independent and healthy financial situation I June 3, 2010 I 27

Creating value through growth Our commitments Focus on CO 2 emissions reduction in all market segments Deliver above market organic growth in each region Actively participate in industry consolidation Best-in-class profitability I June 3, 2010 I 28

2009: Despite the crisis, Valeo invested to prepare the future 2010: Strong improvement expected 2013: Best-in-class profitability I June 3, 2010 I 29

2009 results I June 3, 2010 I 30

Summary An unprecedented economic crisis A year of contrasts High reactivity in the face of the crisis A sound financial situation 2010 outlook I June 3, 2010 I 31

An unprecedented economic crisis A year of contrasts I June 3, 2010 I 32

Global automobile production Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 � Full impact of scrapping +44 schemes Yearly change in % +21 � Accelerated growth in Asia and Brazil in Q4-09 +3 +4 � China +103% & India +51% -2 � Brazil +52% -4 -21 -23 -34 I June 3, 2010 I 33

Valeo performance in each region of the world in 2009 Market -21% -13%* Market -33% Europe -31%* North America 64% of sales Market +2% = * 10% of sales Asia 18% of sales Market -2% +5%* Europe Q1-09 Q2-09 Q3-09 Q4-09 South America Valeo* -38% -22% -6% +34% 8% of sales Market -40% -28% -14% +11% *At constant perimeter and exchange rates I June 3, 2010 I 34

Gross margin Sales (M€) in M€ and % of sales 3000 0,2 2,437 2,411 0,19 2,309 2500 2,114 2,079 0,18 1,848 1,913 1,750 1,624 2000 0,17 0,16 Gross margin (M€ 1500 and % of sales) 0,15 450 20 1000 0,14 406 0,13 391 500 400 375 19 0,12 0 0,11 17.7% Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 350 18 318 310 16.8% 300 17 16.2% 268 16% 15.3% 250 16 212 14.5% 185 Recovery in Q2-09 200 15 150 14 Highest level in 5 years 12.1% 100 13 11.4% in Q4-09 50 12 0 11 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 I June 3, 2010 I 35

Operating margin Sales (M€) In M€ and % of sales 3000 0,2 0,19 2500 0,18 2000 0,17 0,16 1500 0,15 Operating margin (M€ and % of sales) 1000 0,14 0,13 5.5% 500 150 6 0,12 4.7% 0 0,11 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 3.7% 4 3.6% 3.1% 113 100 116 90 2 65 68 50 0.8% 0 Highest level in 5 years 15 15 0 in Q4-09 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 -2 (66) (38) -2.2% -50 -4 -4.1% -100 -6 I June 3, 2010 I 36

High reactivity in the face of the crisis I June 3, 2010 I 37

Strong reduction in break-even point in 2009 Production costs -210 M€ Fixed cost R&D -40 M€ reduction Break-even point - €1.1Bn SGA -90 M€ Margin on + 33 base points variable costs I June 3, 2010 I 38

Despite the crisis: R&D maintained at high level Net R&D in % of sales +0.5pt 6.3% +0.5pt In M€ 5.8% Gross R&D 687 -5% -5% 655 186 182 Net R&D 2008 2009 501 473 -6% -6% 2008 2009 I June 3, 2010 I 39

Strong reduction in administrative expenses In % of sales In M€ +0.2pt +0.2pt 7.1% 6.9% -11% -11% 2.1% 2.1% 596 532 Selling 4.8% 5.0% expenses Selling expenses 177 156 2008 2009 41 Administrative Administrative expenses expenses 419 376 95 2008 2009 I June 3, 2010 I 40

A sound financial situation I June 3, 2010 I 41

Key figures In million euros ▲ ▲ 2008 2009 Q4 08 Q4-09 Sales 8,677 7,499 1,750 2,114 -14% +21% Gross margin 1,327 1,138 212 375 -14% +77% % of sales 15.3% 15.2% -0.1pt 12.1% 17.7% +5.6pts Operating margin 230 133 (38) 116 -42% NA 2.7% 1.8% -0.9pt -2.2% 5.5% +7.7pts % of sales Net income (207) (153) (313) 56 -26% NA Free cash flow* 118 155 14 153 +31% NA Net debt 821 722 821 722 -12% -12% * Before interest I June 3, 2010 I 42