H1-2010 Results Jacques Aschenbroich CEO July 27, 2010 Agenda 1 - PowerPoint PPT Presentation

H1-2010 Results Jacques Aschenbroich – CEO July 27, 2010

Agenda 1 H1-10 Highlights 2 OE sales outperforming the market in each region 3 Highest operating margin recorded in the last 10 years 4 Strong cash flow generation and significant debt reduction 5 2010 outlook 6 Ahead of the 2013 Strategic Plan July 27, 2010 I 2 H1-10 Results I

H1-10 Highlights July 27, 2010 I 3 H1-10 Results I

H1-10 highlights � OE sales outperforming the market in each region � Order intake at a record level � Operating margin of 6.1%, the highest level in 10 years � Positive impact of break-even point decrease � Turnaround of the Visibility Systems Business Group � Strong free cash flow generation of €291M � Net financial debt significantly reduced to €438M � 2010 outlook � Given current market conditions, operating margin revised upwards to higher than 5% � Ahead of the 2013 Strategic Plan July 27, 2010 I 4 H1-10 Results I

H1-10 Key figures H1-08 H1-09 H1-10 ▲ H1-10/H1-09 Total sales (M€) 4,848 3,472 4,787 +38% OE Sales (M€) 4,026 2,743 3,957 +44% Worldwide automotive production – light 36.7 26.3 36.5 +39% vehicles (M units) Gross margin (as % of sales) 16.4% 13.0% 17.9% +4.9pts Operating margin (as % of sales) 4.2% -1.5% 6.1% +7.6pts EBITDA (as % of sales) 10.4% 6.6% 11.8% +5.2pts Net result (as % of sales) 2.1% -6.1% +9.5pts 3.5% Free cash flow* (M€) 123 (4) 291 na Net cash flow (M€) 177 (49) 241 na Net financial debt (M€) 621 841 438 -48% ROCE** 17% -1% 25% * Before interest payments ** Operating margin / capital employed excluding goodwill, 12 months rolling July 27, 2010 I 5 H1-10 Results I

OE sales outperforming the market in each region July 27, 2010 I 6 H1-10 Results I

Worldwide automotive production Continued improvement Worldwide automotive production (*) YoY change in % H1-08 H2-08 H1-09 H2-09 H1-10 39% 8% 3% -12% Automotive production by region (*) -28% YoY change in % H1-08 H2-09 ▲ H1-10 ▲ H2-09/H2-08 H1-10/H1-09 (M units) (M units) (M units) -3% +23% Europe +Africa 12.2 9.1 10.0 +23% +43% Asia +others 15.6 17.0 18.7 -10% +72% North America 6.9 5.1 5.9 +11% +17% South America 2.0 2.0 2.0 +8% +39% Worldwide 36.7 33.2 36.6 * JD Power light vehicle production estimates July 27, 2010 I 7 H1-10 Results I

OE sales World H1-10 Outperforming the market in each region Valeo* +40% Production +39% Production +72%** Production +23%** +86%* +31%* North America Europe 12% of sales 61% of sales Production +43%** +59%* Asia Production +17%** +19%* 19% of sales South America 8% of sales * At same perimeter & exchange rates ** JD Power estimates July 27, 2010 I 8 H1-10 Results I

Asian OE sales Outperforming the market in each country Production +43%** +59%* Asia Production +47%** Production +37%** 19% of sales +49%* +55%* Japan Korea 32% of sales Production +47%** 19% of sales +72%* China 40% of sales Production +36%** +89%* India 4% of sales * At same perimeter & exchange rates ** JD Power estimates July 27, 2010 I 9 H1-10 Results I

Customer mix Increasing position with German and Asian customers Customers H1-08 H1-09 H1-10 (% of OE sales) German 25% 29% 27% French* 25% 26% 24% Asian** 18% 19% 21% American 19% 16% 18% * Excluding Nissan ** Including Nissan July 27, 2010 I 10 H1-10 Results I

Sales by Business Group Powertrain and Thermal Business Groups outperforming the market Powertrain Comfort & Driving Assistance In M€ In M€ Sales Sales +41% +35% 848 1,344 627 952 Worldwide Worldwide Production production +39%* +39%* H1-10 H1-09 H1-09 H1-10 Thermal Visibility In M€ In M€ Sales Sales +43% +31% 1,447 1,186 1,013 904 Worldwide Worldwide production production +39%* +39%* H1-10 H1-09 H1-09 H1-10 * JD Power light vehicles production estimates July 27, 2010 I 11 H1-10 Results I

H1-10 sales Exchange rates impact In € million Sales +38% 4,848 4,787 Perimeter +0.2% 3,472 Currencies +3.3% Sales at same perimeter and +34% exchange rate H1-08 H1-09 H1-10 Main exchange rates variation vs Euro : Appreciation of Real Brazil, Polish Zloty and South Korean Won July 27, 2010 I 12 H1-10 Results I

Order intake Record order intake at €6.5 billion Customers H1-10 (% of order intake) German 31% French* 24% Asian** 18% American 23% Order intake * Excluding Nissan (Order Intake / OE Sales) ** Including Nissan 1.64x 1.52x 1.45x 1.29x 2007 2008 2009 H1-10 July 27, 2010 I 13 H1-10 Results I

Highest operating margin recorded in the last 10 years July 27, 2010 I 14 H1-10 Results I

H1-10 results Highest operating margin recorded in the last 10 years ▲ H1-08 H1-09 H1-10 In million euros Total sales 4,848 3,472 4,787 +38% Gross margin 797 453 856 +89% % of sales 16.4% 13.0% 17.9% +4.9pts Net R&D (276) (234) (267) +14% -5.6% % of sales -5.7% -6.7% +1.1pt SG&A expenses (318) (270) (297) +10% % of sales -6.6% -7.8% -6.2% +1.6pt Operating margin 203 (51) 292 na % of sales 4.2% -1.5% 6.1% +7.6pts Operating income 182 (88) 261 na % of sales 3.8% -2.5% 5.5% +8.0pts Net result 100 (213) 168 na % of sales 2.1% -6.1% 3.5% +9.6pts July 27, 2010 I 15 H1-10 Results I

Gross margin walkdown As % of sales -0.8pts +1.0pt +4.7pts 17.9% 13.0% Raw material Volume Productivity gains H1-10 impact H1-09 increase & mix product July 27, 2010 I 16 H1-10 Results I

Worldwide headcount evolution Flexibility of the cost structure vs situation end of H1-2008 Permanents Temporaries Global headcount 3000 0 -3000 -6000 -9000 -12000 -15000 -18000 -21000 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 July 27, 2010 I 17 H1-10 Results I

Gross margin In euro million and as % of sales Sales (in € million) 6000 0,2 4,848 0,19 4,787 5000 0,18 4,027 3,829 4000 0,17 3,472 0,16 3000 0,15 Gross margin 2000 0,14 0,13 1000 0,12 856 900 20 0 0,11 797 H1-08 H2-08 H1-09 H2-09 H1-10 800 19 685 17.9% 700 18 600 17 530 16.4% 17.0% 453 500 16 400 15 300 14 13.8% 200 13 13.0% 100 12 0 11 H1-08 H2-08 H1-09 H2-09 H1-10 July 27, 2010 I 18 H1-10 Results I

Net R&D expenses -0.1pt as % of sales R&D efforts sustained 6.7% -3% In € million 5.7% 5.6% 276 267 H1-08 H1-09 H1-10 234 H1-08 H1-09 H1-10 July 27, 2010 I 19 H1-10 Results I

SG&A expenses New organization implementation on track - 0.4pt As % of sales -7% In € million 7.8% 6.6% 6.2% 2.3% 2.0% 1.8% 5.5% 318 4.6% 4.4% 297 270 Selling Expenses Selling 94 H1-08 H1-09 H1-10 Selling Expenses Expenses 87 79 Admin. Admin. Admin. Expenses Expenses Expenses 224 191 210 H1-08 H1-09 H1-10 July 27, 2010 I 20 H1-10 Results I

Operating margin Highest margin recorded in the last 10 years Sales (in € million) 6000 0,2 0,19 4,848 4,787 5000 0,18 4,027 3,829 4000 0,17 3,472 0,16 3000 0,15 2000 0,14 Operating margin 0,13 1000 (in € million & as % of sales) 0,12 350 7 0 0,11 6.1% H1-08 H2-08 H1-09 H2-09 H1-10 300 6 250 4.6% 5 4.2% 292 200 4 184 203 150 3 100 2 0.7% 50 1 27 0 0 ����� ����� ����� ����� ����� (51) -50 -1 -1.5% -100 -2 July 27, 2010 I 21 H1-10 Results I

H1-10 Results Strong improvement of net income ▲ H1-08 H1-09 H1-10 In € million Total sales 4,848 3,472 4,787 +38% Operating margin 203 (51) 292 na as % of sales 4.2% -1.5% 6.1% +7.6pts Other income & expenses (21) (37) (31) -16% as % of sales -0.4% -1.1% -0.6% +0.5pt Operating income 182 (88) 261 na as % of sales 3.8% -2.5% 5.5% +8.0pts +52% Cost of net debt (22) (21) (32) -62% Other financial expenses (6) (37) (14) na Associates 7 (40) 11 Income before taxes 161 (186) 226 na +81% Taxes (56) (26) (47) na Effective tax rate 36% NA 22% na Non strategic activities (1) 1 (2) na Minority interest and others (4) (2) (9) Net income 100 (213) 168 na July 27, 2010 I 22 H1-10 Results I

Strong cash flow generation and significant debt reduction July 27, 2010 I 23 H1-10 Results I

Strong cash generation of €291 M Key factors Operating performance � EBITDA at €564 M (11.8 % of sales) Free cash flow Operating working capital of � Further improvement by €41 M to - €341 M €291 M Tangible investments � Limited to 60% of depreciation in H1 2010 Net financial debt Reduced by €284 M to €438 M by June 30, 2010 July 27, 2010 I 24 H1-10 Results I

Working capital and Capex Under strict management Further improvement of working capital In € million - €41M H1-09 H1-10 (300) Tangible capex < 60 % of depreciation In € million -16% (341) 152 128 H1-10 H1-09 July 27, 2010 I 25 H1-10 Results I

Strong cash generation Net financial debt reduced by €284 M to €438 M over H1-10 H1-08 H1-09 H1-10 in € million EBITDA 503 229 564 Operating working capital 39 177 32 Restructuring & social costs (39) (69) (54) Other operational items (84) (85) (27) Capex (296) (256) (219) Free cash flow 123 (4) 291 (before interest payments) Interest (34) (39) (43) Other financial items 88 (6) (7) Net cash flow 177 (49) 241 Net financial debt 621 841 438 July 27, 2010 I 26 H1-10 Results I