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Valeo — Non-Deal Roadshow (November 2002)

47 slides from Valeo's roadshow presentation, November 2002

  1. Slide 1: Valeo added advertisements

  2. Slide 2: Bruno R. Bernard, Director of Financial Relations

    Bruno R. Bernard Director of Financial Relations Paris - November 2002

  3. Slide 3: Table of content

    Table of content • Introductory comments – Mission statement – Global presence • Our Vision for leadership – Cost competitiveness – Quality – Technology • 2001 and 2002 achievements • Prospects Nov. 2002 - Property of Valeo - Duplication prohibited 3

  4. Slide 4: Introductory comments

    Introductory comments

  5. Slide 5: Mission statement

    Mission statement …is an independent industrial group fully focused on the design, production and sale of components, integrated systems and modules for cars and trucks, in both the OEM and aftermarket segments. Nov. 2002 - Property of Valeo - Duplication prohibited 5

  6. Slide 6: Global presence

    Global presence (%H1 2002 sales) North America Europe % of total sales: 25% % of total sales: 66% 20 production sites 85 production sites (+ 10 North Africa) % of total sales: 6% % of total sales: 3% + associates = 25% of enlarged perimeter 13 production sites 14 production sites South America Asia

  7. Slide 7: Our vision for leadership

    Our vision for leadership

  8. Slide 8: Our vision for Leadership

    Our vision for Leadership • Cost competitiveness • Quality • Technology Nov. 2002 - Property of Valeo - Duplication prohibited 8

  9. Slide 9: Our vision for Leadership

    Our vision for Leadership • Cost competitiveness • Quality • Technology Nov. 2002 - Property of Valeo - Duplication prohibited 9

  10. Slide 10: Purchasing

    Cost competitiveness Purchasing • Reduction in number of suppliers 3,800 3,600 3,200 Goal: 3 000 09/30/01 12/31/01 09/30/02 end 2002 • VIPs « Valeo Integrated Partners » Goal: 90 65 50 35 09/30/01 12/31/01 09/30/02 end 2002 Nov. 2002 - Property of Valeo - Duplication prohibited 10

  11. Slide 11: Purchasing

    Cost competitiveness Purchasing • Reduction in number of suppliers 3,800 3,600 3,200 Goal: 3 000 09/30/01 12/31/01 09/30/02 end 2002 • VIPs « Valeo Integrated Partners » Goal: 90 65 50 35 09/30/01 12/31/01 09/30/02 end 2002 Nov. 2002 - Property of Valeo - Duplication prohibited 11

  12. Slide 12: Industrial restructuring

    Industrial restructuring Q1 2001 170 sites 77,000 employees December 2001 143 sites September 2002 139 sites 2003 target 130 sites 65,000 employees Nov. 2002 - Property of Valeo - Duplication prohibited 12

  13. Slide 13: VESI: restructuring in progress

    VESI: restructuring in progress • Timetable – Dec. 01: filing for Chapter 11 – April-June: agreements with union and creditors – 25th Sept. 02: out of Chapter 11 • Industrial restructuring – Rochester Headcount reduction program • Goal < 800 employees (before beg. 2004) – Focus : Wiper Systems – Tra

  14. Slide 14: Proven industrial methods

    Cost competitiveness Proven industrial methods • 5 core strategies • Accountability & entrepreneurship Total Quality Constant Supplier • Standardisation Innovation Integration Production System Involvement of Personnel Nov. 2002 - Property of Valeo - Duplication prohibited 14

  15. Slide 15: Proven industrial methods

    Cost competitiveness Proven industrial methods • 5 core strategies • Accountability & 4 Activities entrepreneurship • Standardisation 11 Branches 100 Divisions Nov. 2002 - Property of Valeo - Duplication prohibited 15

  16. Slide 16: Proven industrial methods

    Cost competitiveness Proven industrial methods • 5 core strategies • Accountability & entrepreneurship • Standardisation – Machines and tooling – Products and processes Nov. 2002 - Property of Valeo - Duplication prohibited 16

  17. Slide 17: Our vision for Leadership

    Our vision for Leadership • Cost competitiveness • Quality • Technology Nov. 2002 - Property of Valeo - Duplication prohibited 17

  18. Slide 18: Quality

    Quality • Experience curve – Asian exposure – Solving manufactuing issues for new Lighting technology • Widespread state of mind – Appointment of a Group Quality Director • Recognition by customers – US: Valeo Sylvania, « Supplier Award » (Mitsubishi) – Asia: Zexel Valeo CC, «Hi-Quality Award» (Niss

  19. Slide 19: Our vision for Leadership

    Our vision for Leadership • Cost competitiveness • Quality • Technology Nov. 2002 - Property of Valeo - Duplication prohibited 19

  20. Slide 20: Managing R&D

    Technology Managing R&D • R&D spendings: approx. 6% of sales • Increasing return on spendings through industrialisation of R&D – Generic projects leading to customer applications – Standard products to be customized – Growing number of projects / Reduced time to market Nov. 2002 - Property of Valeo

  21. Slide 21: Key growth domains

    Technology Key growth domains l l l l l Driveline Seeing and Electrical Energy Access and Thermal systems Being Seen Management Security systems Nov. 2002 - Property of Valeo - Duplication prohibited 21

  22. Slide 22: Partnerships

    Technology Partnerships IR Power modules Iteris Advanced vision systems Jabil Electronic circuit boards Ricardo Hybrid 42V prototype Raytheon Radars Parrot Bluetooth technology Saft 42V Batteries Nov. 2002 - Property of Valeo - Duplication prohibited 22

  23. Slide 23: Seeing and Being Seen

    Domains and partnerships illustrated: Seeing and Being Seen Blind spot detection IR Night Vision Cut In & System Pre Crash Stop & Go Rear camera & Park Assist Lane departure Warning System ACC Adaptative Front Lighting Systems Multi Sensor Rain Light Tunnel (Mist) Nov. 2002 - Property of Valeo - Dup

  24. Slide 24: Electric Energy Management

    Domains and partnerships illustrated: Electric Energy Management Starter-Alternator StARS ® l Fuel savings l Emission reduction l External Starter/Alternator l Start - Stop l Noiseless Start Nov. 2002 - Property of Valeo - Duplication prohibited 24

  25. Slide 25: Slide 25

  26. Slide 26: 2001 and 2002 achievements

    2001 and 2002 achievements

  27. Slide 27: 2001 and 2002 achievements

    2001 and 2002 achievements • Restoring profitability • Generating cash • Capturing growth Nov. 2002 - Property of Valeo - Duplication prohibited 27

  28. Slide 28: Quarterly improvement

    Quarterly improvement Cumulative Gross Margin (%) 17.1 17.2 16.5 16.2 15.8 15.0 Q1 H1 9 months 2001 2002 Nov. 2002 - Property of Valeo - Duplication prohibited 28

  29. Slide 29: Operating expenses

    Operating expenses (in million of euros and % of sales) R&D SG&A 6.2% 6.6% 200 200 6.1% 6.5% 150 150 100 100 145 136 153 146 50 50 Q3 2001 Q3 2002 Q3 2001 Q3 2002 Nov. 2002 - Property of Valeo - Duplication prohibited 29

  30. Slide 30: Operating expenses

    Operating expenses (in million of euros and % of sales) R&D SG&A 6.2% 6.6% 200 200 6.1% 6.5% 150 150 100 100 145 136 153 146 50 50 Q3 2001 Q3 2002 Q3 2001 Q3 2002 Nov. 2002 - Property of Valeo - Duplication prohibited 30

  31. Slide 31: Net Income

    Net Income Q3 2002 Q3 2001 Operating income 105 98 in % of sales 4.7% 4.2% • Financial income & charges net (15) (16) • Other income & expenses net (7) (33) • Income taxes (26) (9) • Associated companies 2 0 • Amortization of goodwill (23) (25) • Minority interests (5) (4) Net income 31 11 in % of s

  32. Slide 32: 2001 and 2002 achievements

    2001 and 2002 achievements • Restoring profitability • Generating cash • Capturing growth Nov. 2002 - Property of Valeo - Duplication prohibited 32

  33. Slide 33: Significant cash generation

    Significant cash generation • Cash flow (net result + depreciations) – Q3 2002: 177 million of euros (7.9% of sales) – vs. Q3 2001: 6.7% of sales • Working capital – Reduced by approx. 50 million of euros in Q3 • CAPEX – Q3 2002: 127 million of euros (5.7% of sales) – vs. Q3 2001: 7.5% of sales Nov.

  34. Slide 34: Strong balance sheet

    Strong balance sheet 2,262 2,125 Gearing: 29% Gearing: 25% 648 536 12/31/01 09/30/02 Shareholders' Equity Net Debt Nov. 2002 - Property of Valeo - Duplication prohibited 34

  35. Slide 35: 2001 and 2002 achievements

    2001 and 2002 achievements • Restoring profitability • Generating cash • Capturing growth Nov. 2002 - Property of Valeo - Duplication prohibited 35

  36. Slide 36: Capturing growth

    Capturing growth • Order taking: 1.25 x sales • New products • Starter-alternators • Double Xenon and bending lighting systems • Advanced thermal systems (motors and cabin) • Ultrasonic park assist • Slot measurement • Record-breaking order for HVACs • 1.1 bn Euro in sales Nov. 2002 - Property of Va

  37. Slide 37: Prospects

    Prospects

  38. Slide 38: Technology leader, growth prospects, increasing profitability

    • Technology leader • Superior organic growth prospects • Increasing profitability

  39. Slide 39: Slide 39

  40. Slide 40: valeo added

    valeo added

  41. Slide 41: Appendices

    Appendices

  42. Slide 42: Sales

    Sales

  43. Slide 43: Net growth

    Q3-2002 Sales Vs Q3-2001 Gross variation - 4.0% Perimeter + 3.0% Currencies + 3.1% Net growth + 2.1% Nov. 2002 - Property of Valeo - Duplication prohibited 43

  44. Slide 44: Sales by region

    Sales by region Change in Automotive Breakdown Sales Production Europe 66% + 1% - 1%(1) North America 23% + 2% + 9% South America 3% - 8% - 10% Asia 7% + 14% + 1%(2) (1) Western Europe (2) Japan + Korea Nov. 2002 - Property of Valeo - Duplication prohibited 44

  45. Slide 45: Sales by region

    Sales by region Change in Automotive Breakdown Sales Production Europe 66% + 1% - 1%(1) North America 23% + 2% + 9% South America 3% - 8% - 10% Asia 7% + 14% + 1%(2) (1) Western Europe (2) Japan + Korea Nov. 2002 - Property of Valeo - Duplication prohibited 45

  46. Slide 46: Sales by region

    Sales by region Change in Automotive Breakdown Sales Production Europe 66% + 1% - 1%(1) North America 23% + 2% + 9% South America 3% - 8% - 10% Asia 7% + 14% + 1%(2) (1) Western Europe (2) Japan + Korea Nov. 2002 - Property of Valeo - Duplication prohibited 46

  47. Slide 47: Slide 47

Valeo — Non-Deal Roadshow (November 2002) on 6ix