Diapositive 1 - Valeo
Diapositive 1 - Valeo
Diapositive 1 - Valeo
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JPMorgan Paris Auto Show Investor<br />
Conference<br />
September 26, 2006<br />
1<br />
Thierry Morin<br />
Chairman & CEO<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Agenda<br />
What makes <strong>Valeo</strong> unique<br />
H1-06 achievements<br />
Business outlook<br />
Q&A<br />
2<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
What makes <strong>Valeo</strong> unique
The Group<br />
<strong>Valeo</strong> is an independent global<br />
industrial group fully focused<br />
on the design, production<br />
and sale of components,<br />
integrated systems and<br />
modules for cars and<br />
trucks, in both the OEM<br />
and aftermarket segments.<br />
4<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
<strong>Valeo</strong> Key Figures*<br />
Revenues<br />
R&D<br />
Net Income<br />
Employees<br />
Facilities<br />
WW Ranking**<br />
* As of December 31, 2005<br />
** Source Automotive News<br />
5<br />
€10.0bn<br />
€0.7bn<br />
€141m<br />
70,400 in 27 countries<br />
134<br />
12<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
A unique automotive supplier<br />
Global coverage<br />
Independent<br />
Balanced customer portfolio<br />
Leading market positions<br />
Strong Aftermarket<br />
R&D investment and technology offer<br />
Total Quality culture based on 5 Axes<br />
6<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Success factors<br />
QUALITY<br />
GLOBAL<br />
PRESENCE<br />
7<br />
COST<br />
TECHNOLOGY<br />
TECHNOLOGY<br />
Technology as differentiating factor<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Aggressively addressing discriminating factors<br />
Quality<br />
Tenfold improvement in quality levels to 19 ppm in 2.5<br />
years<br />
36% of sites at single digit ppm (June 30, 2006)<br />
Manufacturing footprint<br />
March 2001: 170 sites ow. 25% in LCC<br />
June 2006: 134 sites ow. 44% in LCC<br />
Purchasing<br />
# suppliers cut by 1,800 from March 2001 to ~2,700<br />
8<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Technology as differentiating factor<br />
To offer innovative solutions which differentiate the vehicle<br />
and provide car maker and driver benefits<br />
Components<br />
Systems<br />
Modules<br />
Services<br />
Domain<br />
Cross-Branch technological developments<br />
Selling synergies<br />
9<br />
Solutions<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
<strong>Valeo</strong> Three Domains<br />
Comfort Enhancement<br />
2005 Sales by Domains (€bn (€ bn)<br />
3.3<br />
Others<br />
0.7<br />
10<br />
3.5<br />
2.5<br />
Driving Assistance<br />
Powertrain Efficiency<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Driving Assistance Domain<br />
Front lighting<br />
Rear motor<br />
and linkage<br />
Front arms<br />
and blades<br />
Rear arms<br />
and blades<br />
Rear lighting<br />
Front motor<br />
and linkage<br />
Front end<br />
modules<br />
Lighting Systems<br />
Wiper Systems<br />
Steering<br />
actuators<br />
11<br />
Traffic Envirmt<br />
Sensing - ULS<br />
Strong market positions<br />
Detection Systems<br />
Worldwide leader<br />
Worldwide leader<br />
Regional leader<br />
Driveline<br />
Traffic Envirmt<br />
Sensing - VIS<br />
Steering Power<br />
Sensor<br />
Traffic Envirmt<br />
Sensing - VRS<br />
Braking<br />
actuators<br />
Module /<br />
system<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Powertrain Efficiency Domain<br />
Engine mgt.<br />
systems<br />
Engine<br />
electronics<br />
Clutches<br />
Engine thermal<br />
Cooling<br />
thermal<br />
Cooling module Alternators<br />
management<br />
Alternators<br />
management<br />
Transmissions<br />
Engine Cooling<br />
Automatic<br />
transmission<br />
Strong market positions<br />
Electrical Systems<br />
Engine Mgt Systems<br />
Clutch actuation<br />
12<br />
Powertain<br />
sensors<br />
Starters<br />
Among world leaders<br />
Worldwide leader<br />
Among world leaders<br />
Regional player<br />
Electrical energy<br />
management<br />
StARS Micro-hybrid<br />
A/C loop<br />
(hybrid)<br />
Wiring harness<br />
(engine)<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Domain approach<br />
Fuel Economy- 5 Areas of Improvement<br />
Power on<br />
Demand<br />
Thermal<br />
Management<br />
Transmission<br />
Automation<br />
Hybridization<br />
Engine Valve<br />
Control<br />
Low consumption<br />
A/C compressor<br />
BELTLESS engine<br />
THEMIS<br />
DUAL CLUTCH<br />
transmission<br />
MICRO-HYBRID<br />
StARS System<br />
MICRO HYBRID 2G with<br />
Regenerative braking<br />
CAMLESS System<br />
-3%<br />
13<br />
-4%<br />
-5%<br />
-6%<br />
- 10-15%<br />
Up to 40% achievable<br />
- 15-20%<br />
-20%<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Comfort Enhancement Domain<br />
Instrument<br />
panel module<br />
Elec. steering<br />
column lock<br />
Top column<br />
module<br />
HVAC<br />
14<br />
Access<br />
electronics<br />
Body closures Strong market positions<br />
Climate Control<br />
Compressors<br />
Security Systems<br />
Switches Systems<br />
Controls<br />
Among world leaders<br />
Regional player<br />
Regional leader<br />
Regional leader<br />
Air quality<br />
Body<br />
controller<br />
Latches<br />
Locksets Power closure<br />
Wiring<br />
Occupant<br />
Handles<br />
harness<br />
positioning<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
H1-2006 results and<br />
H2-06 trading outlook
H1-2006 key figures<br />
In euro million<br />
Total operating revenues<br />
Operating income<br />
as % of total op. revenues<br />
Net income<br />
Basic earnings per share (€)<br />
Return on capital employed<br />
Net financial debt<br />
16<br />
H1-2006<br />
5,309<br />
169<br />
3.2%<br />
94<br />
1.23<br />
11.9%<br />
1,053<br />
H1-2005*<br />
4,991<br />
159<br />
3.2%<br />
72<br />
0.87<br />
11.0%<br />
1,263<br />
Change<br />
+6.4%<br />
+6.3%<br />
0.0 pt<br />
+30.5%<br />
+41.4%<br />
+0.9 pt<br />
(16.6%)<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Total operating revenues<br />
In euro million<br />
4,991<br />
Gross change<br />
+6.4 %<br />
Currency impact: +2.1%<br />
Perimeter impact: +3.3%<br />
Prices*: -4%<br />
*at identical function<br />
Volumes/mix<br />
+5.0%<br />
H1-2005* H1-2006<br />
17<br />
5,309<br />
* Restated to account for non strategic activities (<strong>Valeo</strong> Motors and Actuators)<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
OE/ Passenger car sales vs. light vehicle<br />
production<br />
+1%<br />
+1%<br />
+19%<br />
+1%<br />
+6%<br />
18<br />
+1%<br />
+10% +10%<br />
H1-2005<br />
H1-2006<br />
LV production change (NA+Europe)<br />
-1% +43%<br />
-6% -2% +7% -2% -2% -1% +21% +7% +10%<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Gross margin<br />
(in % of sales)<br />
16.3%<br />
S1 05 S1 06<br />
19<br />
15.9%<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
3500<br />
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
Raw material prices<br />
1,417<br />
Average Spot price<br />
Aluminum price ($/T)<br />
+37%<br />
H1-05: $1,844<br />
H1-06: $2,534<br />
2001 2002 2003 2004 2005 2006<br />
Average Spot price<br />
852<br />
Zinc price ($/T)<br />
+113%<br />
* August<br />
H1-05: $1,295<br />
2001 2002 2003 2004 2005<br />
H1-06:<br />
$2,762<br />
* August<br />
2006<br />
2,460*<br />
3,347*<br />
20<br />
750<br />
700<br />
650<br />
600<br />
550<br />
500<br />
450<br />
400<br />
350<br />
300<br />
250<br />
8000 7,695*<br />
7500<br />
7000<br />
6500<br />
6000<br />
5500<br />
5000<br />
4500<br />
4000<br />
3500<br />
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
1,525<br />
476<br />
422<br />
364<br />
Average Spot price<br />
Copper price ($/T)<br />
+82%<br />
H1-06: $6,070<br />
H1-05: $3 333<br />
2001 2002 2003 2004 2005 2006<br />
Steel – Half-yearly evolution (€/T)<br />
Europe Japan US<br />
30/06/2006<br />
656 678<br />
Source: Steel Group Commodity Leader<br />
* August<br />
587<br />
595<br />
S1 99 S2 99 S1 00 S2 00 S1 01 S2 01 S1 02 S2 02 S1 03 S2 03 S1 04 S2 04 S1 05 S2 05 S1 06<br />
652<br />
573<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Compensated ~60% of raw material headwinds<br />
in Q2-06<br />
Cumulative impact as a % of sales<br />
3,5<br />
3<br />
2,5<br />
2<br />
1,5<br />
1<br />
0,5<br />
(Index 100: 2003 average)<br />
4<br />
0<br />
Net impact<br />
Gross impact<br />
Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06<br />
21<br />
2.0<br />
Q2-06 vs Q2-05<br />
Gross: (1.4pt)<br />
Net: (0.6 pt)<br />
3.4<br />
1.6<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Sales per head up 5%<br />
In euro million<br />
H1-05<br />
Total operating<br />
Revenues 4,991<br />
Staff<br />
(period end)*<br />
* Excluding non strategic activities<br />
70,500<br />
+6.4%<br />
+0.9%<br />
Perimeter: +700<br />
at constant<br />
perimeter: (100)<br />
HCC (1,800)<br />
LCC +1,700<br />
23<br />
H1-06<br />
5,309<br />
71,100<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Quality- On track to meet the single digit ppm<br />
target<br />
Customer returns in parts<br />
per million<br />
53<br />
32<br />
32<br />
19<br />
Q4-04 Q4-05 Q2-06<br />
24<br />
Q2-2006<br />
Single digit ppm sites<br />
Including 15 sites<br />
at 0 ppm<br />
63 sites (45%)<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Operating margin walkdown<br />
as % of total operating revenues<br />
H1-05<br />
-1.2%<br />
Raw<br />
materials<br />
+0.6%<br />
Customer<br />
Comp.<br />
+0.4%<br />
25<br />
+0.4%<br />
-0.3%<br />
Manufacturi R&D/ Scope<br />
ng SG&A<br />
Productivity/volumes<br />
3.9% 3.8%<br />
0.8%<br />
H1-06<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Net financial debt walkdown<br />
in euro million<br />
1,080<br />
Net debt<br />
31/12/2005<br />
(76) (6)<br />
Free<br />
cash flow<br />
Acquisitions<br />
net<br />
26<br />
87<br />
(32)<br />
Dividends Others<br />
1,053<br />
Net debt<br />
30/06/2006<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Shareholders’ equity and net debt<br />
in euro million<br />
* adjusted<br />
1,727*<br />
Gearing: 63% Gearing: 60%<br />
1,080<br />
December 31, 2005 June 30, 2006<br />
Shareholders' Equity incl. minority interests Net Debt<br />
27<br />
1,755<br />
1,053<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
H1-2006 strategic initiatives<br />
Disposals of Logitec and a 14.8% stake in Parrot<br />
Expansion and consolidation of lighting activities in<br />
China<br />
Motors and Actuators classified as non strategic<br />
activities<br />
28<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Second half trading outlook<br />
H2-06 light vehicle production outlook<br />
Europe (West and Central): flat<br />
North America: -6%<br />
Target to grow the content per vehicle<br />
Raw material headwinds to increase<br />
Target to maintain high compensation rates<br />
29<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Back up
Share Information<br />
Share Data / ADR Data<br />
Share Data<br />
Bloomberg Ticker<br />
Reuters Ticker<br />
ISIN Number<br />
Shares outstanding as per 30.06.2006<br />
ADR Data<br />
Ratio (ordinary share: ADR)<br />
Bloomberg Ticker<br />
Reuters Ticker<br />
ISIN Number<br />
Type<br />
Exchange<br />
Sponsor<br />
31<br />
FR FP<br />
VLOF.PA<br />
FR 000130338<br />
77,551,319<br />
1:2<br />
VLEEY US<br />
VLEEY PK<br />
US 9191343048<br />
Level 1<br />
OTC<br />
JP Morgan Chase<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Share price evolution<br />
40<br />
35<br />
30<br />
25<br />
20<br />
VALEO<br />
CAC 40<br />
30/12/05<br />
31.41<br />
4,715<br />
21/09/06<br />
28.15<br />
5,208.32<br />
∆<br />
∆<br />
-10.4%<br />
+10.5%<br />
DJ Stoxx Auto 230.86 256.41 +11.1%<br />
30/12/05 24/1/06 18/2/06 15/3/06 9/4/06 4/5/06 29/5/06 23/6/06 18/7/06 12/8/06 6/9/06<br />
32<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Quarterly P&L<br />
(in euro million) 2Q-2006 1Q-2006 2Q-2005* 1Q-2005*<br />
NET SALES<br />
Other operating revenues<br />
TOTAL OPERATING REVENUES<br />
GROSS MARGIN<br />
as % of net sales<br />
Research & Development expenditure<br />
Selling expenses<br />
Administrative expenses<br />
Other income & expenses<br />
OPERATING INCOME<br />
as % of operating revenues<br />
Cost of net debt<br />
Other financial income and expense<br />
INCOME BEFORE INCOME TAXES<br />
Income taxes<br />
Equity in net earnings of associated companies<br />
INCOME FROM CONTINUING OPERATIONS<br />
NON STRATEGIC ACTIVITIES<br />
NET INCOME FOR THE PERIOD<br />
Minority interests<br />
NET INCOME ATTRIBUTABLE TO EQUITY<br />
HOLDERS OF THE COMPANY<br />
* Restated to account for non strategic activities<br />
33<br />
2,627<br />
28<br />
2,655<br />
420<br />
16.0%<br />
(169)<br />
(50)<br />
(118)<br />
(1)<br />
110<br />
4.1%<br />
(15)<br />
16<br />
111<br />
(32)<br />
3<br />
82<br />
(10)<br />
72<br />
(1)<br />
71<br />
2,630<br />
24<br />
2,654<br />
415<br />
15.8%<br />
(176)<br />
(51)<br />
(122)<br />
(31)<br />
59<br />
2.2%<br />
(16)<br />
(7)<br />
36<br />
(12)<br />
2<br />
26<br />
(1)<br />
25<br />
(2)<br />
23<br />
2,670<br />
28<br />
2,698<br />
437<br />
16.4%<br />
(169)<br />
(51)<br />
(122)<br />
(21)<br />
102<br />
3.8%<br />
(13)<br />
(14)<br />
75<br />
(25)<br />
6<br />
56<br />
(6)<br />
50<br />
(3)<br />
47<br />
2,274<br />
19<br />
2,293<br />
367<br />
16.1%<br />
(157)<br />
(46)<br />
(113)<br />
(13)<br />
57<br />
2.5%<br />
(10)<br />
(12)<br />
35<br />
(10)<br />
(1)<br />
24<br />
1<br />
25<br />
0<br />
25<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
2005 P&L restated for non strategic activities<br />
(in euro million)<br />
NET SALES<br />
Other operating revenues<br />
TOTAL OPERATING REVENUES<br />
GROSS MARGIN<br />
as % of net sales<br />
Research & Development expenditure<br />
Selling expenses<br />
Administrative expenses<br />
Other income & expenses<br />
OPERATING INCOME<br />
as % of operating revenues<br />
Cost of net debt<br />
Other financial income and expense<br />
INCOME BEFORE INCOME TAXES<br />
Income taxes<br />
Equity in net earnings of associated companies<br />
INCOME FROM CONTINUING OPERATIONS<br />
NON STRATEGIC ACTIVITIES<br />
NET INCOME FOR THE PERIOD<br />
Minority interests<br />
NET INCOME ATTRIBUTABLE TO EQUITY<br />
HOLDERS OF THE COMPANY<br />
34<br />
2005<br />
9 736<br />
98<br />
9 834<br />
1 559<br />
16,0%<br />
(646)<br />
(191)<br />
(452)<br />
(50)<br />
318<br />
3,2%<br />
(52)<br />
(52)<br />
214<br />
(60)<br />
6<br />
160<br />
(12)<br />
148<br />
(6)<br />
142<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
Contact<br />
Investor Relations<br />
Rémy Dumoulin<br />
43, rue Bayen<br />
F-75848 75848 Paris Cedex 17<br />
France<br />
Tel.: +33 (0) 1.40.55.29.30<br />
Fax: +33 (0) 1.40.55.20.40<br />
E-mail: mail: remy.dumoulin@valeo.com<br />
Web site: www.valeo.com<br />
35<br />
JPMorgan Paris Auto show Investor Conference<br />
September 26, 2006
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