Q3-2006 Results - Valeo · 2019-05-14 · Q3-2006 Results – October 20, 2006 4 Quarterly key...

QQ33--20020066 ResultsResults

Thierry MorinChairman & CEOThierry MorinChairman & CEOOctober 20, 2006

Property of Valeo – Duplication prohibitedQ3-2006 Results – October 20, 20062

Agenda

Quarterly performance

Outlook

Quarterlyperformance


Quarterly key figures

* Restated to account for non strategic activities (Valeo Motors and Actuators)

ChangeIn euro million

Total operating revenues

Gross marginas % of net sales

Operating incomeas % of total op. revenues

Net incomeas % of total op. revenues

Q3-2005*Q3-2006

2,332

36515.8%

813.5%

291.2%

2,263

33515.0%

452.0%

70.3%

-3.0%

-8.2%-0.8 pt

-44.4%-1.5 pt

-75.9%-0.9 pt


Year-To-Date key figures



Gross marginas a % of net sales

Operating incomeas a % of total op. revenues

Net incomeas a % of total op. revenues

Basic earnings per share (€)of which non strategic activities

9 months2005*

9 months2006

7,323

1,16916.1%

2403.3%

1011.4%

1.26(0.12)

7,572

1,17015.6%

2142.8%

1011.3%

1.32(0.06)

+3.4%

0.1%-0.5 pt

-10.8%-0.5 pt

0%-0.1 pt

+4,8%-50.0%

* Restated to account for non strategic activities


Adverse trading environment in Q3-06

Sharp production cuts in Western Europe and North America; Asia and Central Europe rising fast

French OEMs and D3 adjust output significantly amid very competitive market conditions

Still significant raw material headwinds


Q3-2005* Q3-2006

Volumes/mix

+1.1%

Gross change-3.0%

Currency impact: -0.8%Perimeter impact: -0.1%

Prices*: -3.2% *at identical function

2,3322,263

Total operating revenuesIn euro million



Q3-2006 net salesGeographical trends (yoy changes)

NorthNorth America America

-14%/-11%*

+8%/+5%*

SouthSouth AmericaAmerica+3%

-1%/ +4%*

AsiaAsia

+11%

EuropeEurope

-1%/-1%*0%

Light vehicle output

*Adjusted for currencies and perimeter

D3: -14%

-9%*


Benefits from customer diversification

-1%

0%

+17%

-3%

-1%

0%

+8%

-11% -3% +7% -6% -2% -2% +21% +2% +9%

9 months-20059 months-2006

-4%

+7% +3%

-5% +35%

Customer performance

OE/Touring car sales vs. light vehicle production


Results

ChangeQ3-2005Q3-2006

-3.0%

-8.2%-0.8 pt

2,332

36515.8%

2,263

33515.0%

In euro million


Gross marginas % of sales



Mixed trends in raw material spot prices

Non ferrous metals stabilized at historical highs

Significant decline in oil prices as from early August

Sharp rebound in steel prices


Aluminum price in Dollar / Ton (monthly average)

Spot price

1,417

1,840

2,473

1280

1780

2280

2780

20062001 2002 2003 2004 2005


1300

2300

3300

4300

5300

6300

7300

8300

7,602

1,525

3,858

2001 2002 2003 20052004 2006

Spot price

Copper priceIn Dollar / Ton (monthly average)


Brent Barrel in $*

17

27

37

47

57

67

77

2001 2002 2003 20052004

26.5

24.6

69.2

61.2

2006

Monthly average Brent high


Steel prices

Steel HDG (€/T- Average)

250

350

450

550

650

750

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 S2 06

656

595

587

651

697

658

478

422

364

30/09/06

Europe Japan US


0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

5

Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06

Compensated ~70% of raw material headwindsin Q3-06 (was ~60% in Q2-06)

Cumulative impact as a % of sales

2.0

4.5

(Index 100: 2003 average)

1.9

Net impactGross impact

1.1


March 2001170 sites (25% in LCC)

September 2006133 sites (44% in LCC)

Tunisia

Ongoing footprint rationalization

December 2005134 sites (44% in LCC)

BrazilGuarulhos (VSS)

Diadema and Cantareira (VSS)

Consolidation of two MateurSites (VECS)

IranSaveh (VEC)

ChinaWuxi (VEMS)

Opening

Closure

Czechowice (VECS)

Poland


Labor productivityIn euro million 30/09/0630/09/05

70,50072,000+2.1%

Staff(period end)*

Total operatingRevenues 7,323

7,572+3.4%

Perimeter: +300at constant perimeter: +1,200

HCC (1,800)LCC +3,000

* Excluding non strategic activities


Quality- 50% of sites with single digit ppm

Q2-2006

43 sites (32%)

Including 10 sites at 0 ppm

63 sites (45%)


69 sites (50%)


Q3-2006Q1-2006

Single digit PPM sites


Results (cont.)

Q3-2005*R&D expenses (net) As % of total op. revenues

SG&AAs % of total op. revenues

Total overheadAs % of total op. revenues

Other income & expensesAs % of total op. revenues

Operating incomeAs % of total op. revenues

Q3-2006

(130)5.6%

(152)6.5%

28212.1%

(2)-0.1%

813.5%

Change

(122)5.4%

(147)6.5%

(269)11.9%

(21)-0.9%

452.0%

(0.2 pt)

0 pt

(0.2 pt)

(0.8 pt)

(1.5pt)

In euro million



3.6% 2.9%

-2.5%

+1.7%

-0.3%

+0.3%-0.1%

RawMaterials

Q3-05*

Offsettingactions

Q3-06

Productivity Scope

Operating margin walkdown

+0.2%

Activity Overhead

as % of total operating revenues



Results (cont.)


Operating income

Cost of net debtOther financial inc./(expenses)

Income before taxes

TaxesEffective tax rate

Associates and minority interests

Non strategic activities

Net income

Q3-2005*81

(16)(14)

51

(15)29.4%

(2)

(5)

29

Q3-200645

(14)(6)

25

(23)92.0%

1

6

7


-44.4%

-12.5%-57.1%

-51.0%

+53.3%

-150.0%

-220.0%

-75.9%

Balance sheet


January 1, 2006 Sept 30, 2006

Shareholders' Equity incl. minority interests Net Debt

1,717*

1,080

Shareholders’ equity and net debtin euro million

1,077

1,684

Gearing: 64%Gearing: 63%

* adjusted

Corporate & Business highlights


Motors & Actuators business disposal

MOU signed with Japanese Group Nidec on October 19, 2006

Rationale for the disposalLack of critical massLow value added to our Domain strategyAttractive offer

Closing: target 31/12/2006


Rewarded innovations

2006 Nissan Global Supplier award for Innovation (ValeoClimate Control Japan)

Automechanika Innovation award for Power Line Communication

Pace Award nomination for Blind Spot Detection System

First Park4U contractfor Volkswagen


Changchun

12 years of presenceIndustrial Sites 13 R&D Centers 2Sales YTD 47%Employees 3,100

Shashi

Shanghai

Ongoing expansion in China

Wuhan

FAW-ZexelClimate Control Transmission

ElectricalSystems

WiperSystems

Wuxi

WiperSystems

Huada ZexelCompressor

ClimateControl

LightingSystems

TelmaRetarder

Switches & Detection

Shenzhen

Lighting R&D Center

Engine Management

SystemsSecurity Systems

Beijing

LoudiWenling

Nanjing

China Headquarters

Asia Purchasing Office

R&D centers

5 Axes Academy Ichikoh Valeo Lighting

Foshan

Opening in Q3-06

Climate control R&D Center

Valeo FawerCompressor

Outlook


Q4-2006 trading outlook

Q4-06 light vehicle production outlookEurope (West and Central): flatNorth America: -5% (-11% for D3)

Target to outperform our production benchmark

Raw material headwinds to stabilize

Expect ~80 bps yoy margin impact (net)


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

Back up


Quarterly P&L


(in euro million) 1Q-2005*1Q-2006 2Q-2005*NET SALESOther operating revenuesTOTAL OPERATING REVENUESGROSS MARGIN

as % of net salesResearch & Development expenditureSelling expensesAdministrative expensesOther income & expensesOPERATING INCOME

as % of operating revenuesCost of net debtOther financial income and expenseINCOME BEFORE INCOME TAXES

Income taxesEquity in net earnings of associated companiesINCOME FROM CONTINUING OPERATIONSNON STRATEGIC ACTIVITIESNET INCOME FOR THE PERIODMinority interestsNET INCOME ATTRIBUTABLE TO EQUITYHOLDERS OF THE COMPANY

2Q-20062,670

282,698437

16.4%(169)(51)(122)(21)102

3.8%(13)(14)75

(25)6

56(6)50(3)47

2,27419

2,293367

16.1%(157)(46)(113)(13)57

2.5%(10)(12)35

(10)(1)241

250

25

2,62728

2,655420

16.0%(169)(50)(118)(1)110

4.1%(15)16111(32)

382

(10)72(1)71

2,63024

2,654415

15.8%(176)(51)(122)(31)59

2.2%(16)(7)36

(12)2

26(1)25(2)23

3Q-2005*2,307

252,332365

15.8%(155)(45)(107)(2)81

3.5%(16)(14)51

(15)0

36(5)31(2)29

3Q-20062,235

282,263335

15.0%(150)(46)(101)(21)45

2.0%(14)(6)25

(23)0268

(1)7


2005 P&L restated for non strategic activities

(in euro million)NET SALESOther operating revenuesTOTAL OPERATING REVENUESGROSS MARGIN

as % of net salesResearch & Development expenditureSelling expensesAdministrative expensesOther income & expensesOPERATING INCOME

as % of operating revenuesCost of net debtOther financial income and expenseINCOME BEFORE INCOME TAXES

Income taxesEquity in net earnings of associated companiesINCOME FROM CONTINUING OPERATIONSNON STRATEGIC ACTIVITIESNET INCOME FOR THE PERIODMinority interestsNET INCOME ATTRIBUTABLE TO EQUITYHOLDERS OF THE COMPANY

20059 736

989 8341 55916,0%(646)(191)(452)(50)318

3,2%(52)(52)214(60)

6160(12)148(6)142


Share price evolution

20

25

30

35

40

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

1/10/0

626

/10/06

∆VALEOCAC 40CAC 40

30/12/0531.414,715

28.065,361

-10.7%+13.7%

18/10/06

DJ Stoxx Auto 230.86 265.70 +15.1%

∆


Share InformationShare Data / ADR Data

Share DataBloomberg TickerReuters TickerISIN NumberShares outstanding as per 30.09.2006

FR FPVLOF.PAFR 00013033877,551,319

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

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

Q3-2006 Results - Valeo · 2019-05-14 · Q3-2006 Results – October 20, 2006 4 Quarterly key...

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