AGM Presentation

Valeo
Growth momentum
90 years of innovation
Jacques Aschenbroich
Chief Executive Officer
1
Valeo
Growth momentum
In a deeply changing world

and an accelerating automotive industry
Serving our customers
On the cutting edge of innovation
A solid financial performance
Valeo
Growth momentum

Robust expansion
in Asia and emerging markets
30%
Contribution of BRICS to global domestic product (GDP)
BRICS
28% of global GDP
25%
20%
China
17% of global GDP
15%
10%
5%
0%
1980
1985
1990
1995
Source: IMF World Economic Outlook, Goldman Sachs (current USD GDP)
2000
2005
2010
2015
2020
Uneven economic growth
North America: a return to growth
Europe: toward protracted stagnation?
Japan: a transitory renewal?
South America: chaotic expansion
The war for talent and skills

Number of engineering graduates per year
~200,000a
~550,000a
~ 2.2mb
~800,000c
a Source: BCG, Eurostat (includes engineering, manufacturing and construction)

b Source: BCG, National Bureau of Statistics of China
c Source: Engineering UK
A more volatile world

Crude oil WTI ($/b)
US natural gas ($/MMBTU)
140
14
120
12
100
10
8000
80
6000
60
40
20
Oil and gas

Market source
10000
75%
2,5
Copper ($/MT)
2,4
2,3
2,2
2,1
2
4000
1,9
2000
1,7
1,8
1 USD => INR
75%
Copper
1,6
1,5
25%
Dollar/Brazilian real
7
Valeo
Growth momentum

An accelerating automotive industry

World automotive production (in millions of units)
+3.4%/year
+4.5%/year
110
100
90
80
70
60
50
Source: LMC
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
From mature markets to emerging markets and Asia

Eastern
Europe
Japan
Eastern
Europe
China
Other
Asia
Other
5%
29%
3%
10%
South
America
Mexico
Japan
Western
Europe
17%
9%
74%
China
Western
Europe
26%
14%
2000
2017
37%
4%
3%
27%
USA + Canada
Source: Valeo automotive production
9%
Mature
Markets
17%
14%
USA + Canada
Other Asia
3% 5%
Mexico
South
America
Other
10
World automotive production in 2000
11
12
13
14
Vision 2030
15
Increase
in number of models by brand
Number of passenger car models
1992
2012
14 models
22 models
8 models
20 models
16
Priority focus on reducing CO2 emissions

while enhancing the pleasure of driving
Increasingly tough emissions standards

g CO2e/km
270
250
230
210
USA
China
190
170
Europe
150
130
Japan
117
105
95
110
90
2000
2005
2010
2015
A priority for carmakers as well as consumers
Simultaneously improving the driving experience
Source: International Council for Clean Transportation
2020
109
2025
17
2012, a pivotal year
Strong growth and margins

for global players
US auto industry comeback
Europe challenged by shrinking
demand and excess capacity
Global carmakers
15%
10%
Operating margin (%)
North American
divisions of US
carmakers
5%
0%
-40%
-20%
0%
20%
40%
60%
-5%
-10%
European carmakers*
and European divisions
Growth (%)
Source: financial data

* Mainly European carmakers
18
Valeo
Growth momentum

and an accelerating automotive market
Serving our customerson growth drivers
19
A growth strategy built around two priorities

CO2 Emissions reduction and innovation
Asia and emerging countries
With the goal of outperforming the market

in each region
20

on growth drivers
Hans-Peter Kunze
Group Senior Executive Vice-President, Sales & Business

Development
21
Growth in order intake far outpaces market

Automotive production
(millions of units)
Order intake
(bn)
14.9
16
12
9.7
10.0
10.1
100
9.2
80
7.7
+12%
per year
140
120
12.5
14
10
15.8
Order
intake
Automotive
production
+3.6%
per year
60
6
40
4
2
20
0
2005
2006
2007
2008
2009
2010
2011
2012
22
Growth in Valeo sales

led by German and Asian carmakers
Other
Asian
14%
U.S.
Other
7%
20%
U.S.
Asian
28%
18%
17%
24%
25%
German
French
18%
29%
French
2007
Original equipment sales by customer base
German
2012
23

surging in Asia and emerging markets
~60%
+4 pts
50%
54%
14%
2012
Eastern
Europe
27%
+13 pts
2017
vision
Asia
2011
37%
2007
Asia
&
Emerging
markets
South
America
Mexico
5%
38%
Western
Europe
8%
8%
United
States
Original equipment sales by manufacturing region
2012
24

surging in Asia and emerging markets
Asia will account for 50% of Valeos
growth by 2015
In 2014, China will be the leading market
alongside France
25

driven by our capacity for innovation
30% of order intake over the

last three years coming from
innovative products
26
Capacity for innovation

recognized by our customers and by the market
Example: orders for CO2 emissions reduction solutions up 70% since 2009
Air Intake Module
2005
2009
2010
2012
Product
Innovation
Pre-Development
Demonstrator
vehicle
Design & development,

Customer financial contribution
(prototypes, R&D)
Product
naming
Innovation
Partnership
with
Series
production
27
Capacity for innovation

recognized by our customers
Example: orders for intuitive driving solutions up 130% since 2009
Whats next?
2011
IAA Frankfurt
2015
2012
Pre-development
contract
Product
naming
Application
development
2015
Sept 2013
Launch of series
production
a world first
28
Valeo
Growth momentum

Serving our customerswith a strong brand
29
Valeo is a strong brand

Brand value is built on:
Innovation
Customer service
Quality
Operating performance
Valeo is an innovative business

- R&D effort up 50% from 2009 to 2012
- R&D > 10% OE sales
and is perceived as such

- Valeo ranks among the Top 100 most innovative
companies in the world
30

Our surging order intake attests

to customer confidence
Innovation
Customer service
H1
x2
Quality
15.8
12.5
H2
9.7
10.0
4.9
5.0
7.7
14.9
10.1
9.2
7.2
7.8
6.0
5.1
6.1
3.4
4.3
4.8
5.0
5.0
2005
2006
2007
2008
6.5
7.7
8.0
2011
2012
3.1
2009
2010
31

Innovation
Customer service
Quality
Continuous quality improvement
0 km quality
(parts per million)
32
15
11
14
7
12
DEC 2005 DEC 2006 DEC 2007 DEC 2008 DEC 2009 DEC 2010 DEC 2011 DEC 2012
2
Objective
The parts quality rate was 99.9993% at end-2012
32

Innovation
Customer service
Quality
A production system built on

operating excellence
THE 5 AXES
FOR CUSTOMER SATISFACTION

33
An ambitious ethics and compliance program
Training on antitrust and anticorruption provided to 13,000

employees, including all managers
Procedures and resources deployed across the organization
34
A steadfast commitment to social and

environmental responsibility
Safety
Environment
Reduction in
lost-time accidents
Reduction in direct CO2

emissions
(Number of accidents with lost-time

per million hours worked)
(t C02e/sales in m)
Top Employer
Diversity
Percentage of women among
new hires on permanent
contracts
+40%
5,5
- 52%
16
- 31%
11
2,64
2007
2012
2007
2012
32%
23%
1,120,000 training hours

in 2012
2009
2012
35
Embracing individual diversity
36
Valeo
Growth momentum

On the cutting edge of innovation: 90 years of innovation
37
Innovative products that reduce CO2 emissions

Since 2009, order intake for CO2 emissions reduction solutions has increased by over 70%
Main drivers
Hybrid/electric
Stop-Start
Combustion engine
improvement
Transmission improvement
Energy efficiency
Examples of innovations
Power
electronics
i-StARS
Range
extenders
Restarter
Air intake module

Dual clutch
transmission
Full LED
headlamps
Recent order intake
Orders from American and OEMs European
New order for i-StARS from a Japanese OEM
Launch with a European OEM
Only supplier mastering all technologies
First Full LED headlamps for the Ford Mondeo

and the Seat Leon
38
Intuitive solutions for uncompromised driving pleasure

Since 2009, order intake for intuitive driving solutions has increased by around 130%
Main drivers
Automated/connected
car
Examples of innovations
Recent order intake
Park4U
Remote
Order from a European OEM
Low-speed maneuvering
360Vue
/mega pixel
Launch from a European OEM
Safe & intuitive HMI
Multifunction
Touchscreen
Orders from European OEMs
39
A 1bn total R&D effort

Innovation at Valeo:
A 1bn total R&D effort
More than 10% of OE sales
8,800 employees
1,300 engineers hired each year, of which 300-400 in France thanks

to the research tax credit
This is what makes Valeo

a top global innovator
40
Cutting edge innovation:

The electric supercharger
Francine Laisney
Research Project Manager
41
A world first
Superchargers go electric
A revolution compared with the

conventional turbocharger:
Instant boost response 300 milliseconds
Reduces engine size and lowers engine RPM
without sacrificing performance
Cuts fuel consumption by 10% to 20%
Currently being tested by our main customers

42
Increased performance with equivalent fuel consumption
Acceleration improved by 27%*

(*at equivalent consumption)
43
Valeo
Growth momentum

44
Valeo has returned to growth

Sales (bn)
+8.2%
14
+12.8%
12
+28.4%
-3.8%/year
10
10.9
11.8
9.6
8
6
4
2
0
2005
2006
2007
2008
2009
2010
2011
2012
45
Performance excluding Japanese OEMs in line

with market
North America
Outperf.
+9pts*
Outperf.
+2pts*
(Detroit 3)
OE sales** +17%
Production +8%
South America
Europe
World (excl. Japan)
Perf.
0pt*
OE sales +2%
Production +2%
OE sales** -3%
Production -5%
Asia
-7pts*
OE sales** +14%
Production +4%
OE sales** -8%
Production -1%
* Like-for-like
** Valeo sales by destination
Note: Japanese car production heavily impacted by the 2011 earthquake
Outperf.
+10pts*
Detroit 3 (excluding Japanese OEMs)
Excluding Japanese OEMs
46
Valeo outperformed the market in all Asian

countries but Japan
-21pts*
-1pt*
Asia
Outperf.
+9pts*
China
OE sales +8%
Production +9%
Japan
OE sales** -1%
Production +20%
OE sales** +16%
Production +7%
26% of total sales
29% of Asian sales
40% of Asian sales
India
OE sales** +17%
Production +10%
Outperf.
+7pts*
South Korea
Outperf.
+10pts*
OE sales** +8%
Production -2%
20% of Asian sales
4% of Asian sales
* Like-for-like
** Valeo sales by destination
47
Net income of 380m with EPS of 5.03

Excl. non-recurring items, net income came to 420m
with EPS to 5.56
2011
2012
10 868
11 759
+8.2%
704
6.5%
725
6.2%
+3.0%
-0.3pt
0
0.0%
-0.5%
(53)
na
-0.5pt
704
6.5%
672
5.7%
-4.5%
-0.8pt
(71)
(35)
2
(103)
(30)
14
+45.1%
-14.0%
na
Income before tax (m)
600
553
-7.8%
Income tax (m)
(148)
(146)
-1.4%
Effective tax rate
25%
27%
+2pts
(1)
(24)
(2)
(25)
na
na
Net income for the year (m)

% of sales
427
3.9%
380
3.2%
-11.0%
-0.7pt
Net income excl. non-recurring items (m)
% of sales
427
3.9%
420
3.6%
-0.3pt
Earnings per share ()
5.68
5.03
-11.4%
Earnings per share excl. non-recurring items ()
5.68
5.56
-2.1%
Sales (m)
Operating margin (m)
% of sales
Other income and expenses (m)
% of sales
Operating income (m)
% of sales
Cost of net debt (m)
Other financial expenses (m)
Share of net earnings of associates (m)
Loss from discontinued operations (m)

Non-controlling interests and other (m)
Out of which
Access Mecanism
capital loss and
carve out costs of 49m &
restructuring of 11m
-1.6%
48
A top automotive equipment industry performer

Above average growth
over the past five years
130
Above average ROCE for 2012
50%
Growth in sales base of 100 in 2008
120
ROCE
40%
110
30%
100
20%
90
10%
80
70
0%
60
-10%
50
2008
-20%
2008
2009
Panel of 22 direct competitors

7 European 14 US 1 Japanese
2010
2011
2012
Valeo
Average
2009
2010
2011
Second and third quartiles
2012
49
Four business groups with balanced

performance
Change in EBITDA margin per business group
% of sales
2012
Comfort & Driving Assistance
11.9%
Powertrain
10.1%
Thermal
11.5%
Visibility
8.0%
14%
12%
10%
8%
6%
2008
2009
2010
2011
2012
Consolidated EBITDA: 1,260m (10.7% of sales)
50
Investment increased to 879m

to support growth
Tangible Capex
(% of sales)
+23%
879
5.4%
717
5%
2011
635
540
Tangible
Capex
2012
Increase in capitalized R&D driven by

improving profitability of order book
(% of sales)
177
2011
Capitalized R&D
244
2012
1.6%
2011
2.1%
2012
51
Free cash flow of 81m
After investment and the impact of the European downturn on working capital
(m)
2011
2012
EBITDA
1,212
1,260
(29)
(49)
Operating working capital

o/w impact of European downturn
(66)
(52)
(37)
(233)
(236)
(169)
(70)
(186)
(60)
898
938
(666)
(857)
232
81
Net interest expense
(57)
(66)
Other financial items
(402)
(195)
(227)
(180)
523
763
Restructuring costs
Other operating expenses (incl. taxes)
o/w:
Taxes
Pensions
Net cash from operating activities

Investment outlays (incl. capitalized R&D)
Free cash flow
(before interest payments)
Net cash flow

Net debt
Out of which tangible

Capex of (613)m &
capitalized R&D of
(244)m
Out of which dividend
payment to stockholders
of 106m & acquisition of
minority interests in China
JV of 52m
52
A solid financial structure

to support growth
Investment Grade rating affirmed by
Moodys and Standard & Poors
2,052
1,260
763
763
Dette
nette
Net debt
Ebitda
EBITDA
Leverage: 0.6x
In m at December 31, 2012
* Excluding non-controlling interests
Dette
nette
Net debt
Capitaux
propres
Equity
Gearing: 37%
53
Strong liquidity position
To cope with an uncertain European financial environment

m
Cash and cash equivalents
2 750
2 500
2 250
2 000
1 750
Undrawn credit lines

Liquidity:
EMTNs
Cash and cash equivalents: 1.3bn

Undrawn credit lines: 1.2bn
Average maturity: 3.3 years
EIB financing
Syndicated loan
1 500
1 250
1 000
750
500
250
0
2013
2014
2015
2016
2017
2018
54
2013 outlook
Based on the following market assumptions for FY 2013:
Automotive production:
Europe: - 4%
World: + 1%
Raw material prices in line with 2012 levels
Valeo has set the following objectives for 2013:
Performance higher than the market in each of the main production regions
Assuming an upturn in the European market in the second half of 2013, operating
margin in line with 2012 (in m), despite a decline in the first half of the year
as a result of market conditions
55
Valeos medium-term objectives

A strategy that is paying off
Reflecting the record order intake of the past few years driven by:
a portfolio of innovative products
expansion in Asia and emerging countries
2010-2012 profitability objectives achieved despite economic slowdown in Europe
Valeo is less dependent on the European market to meet its objectives:

Annual sales growth 3 percentage points above the market rate on average
Medium-term operating margin above 7%
Return on capital employed in the region of 30%
Taking into account the additional investments required to support the increase in order
intake, the Group has set as its priorities to generate positive free cash flow and maintain a
solid financial position
56
The Valeo share has outperformed

all the indices since January 1, 2013
Compared with the major indices

since December 31, 2012
VALEO
+38%
DJ US AUTOPARTS
+22%
DJ Industrials
+16%
DJ STOXX AUTO
+11%
DAX
+9%
SBF 120
+8%
CAC 40
+8%
* Closing share price on June 04, 2013
57
The Valeo share has outperformed

all the indices since before the crisis
Compared with the major indices

since December 31, 2007
VALEO
+84%
DJ US AUTOPARTS
+27%
DJ Industrials
+14%
DJ STOXX AUTO
+9%
DAX
+3%
SBF 120
-25%
CAC 40
-30%
* Closing share price on June 04, 2013
Valeo share price at highest level since 2001
58
Valeo to increase the dividend
2011
1.40
per share
Payout ratio
25%
2012
+7%
1.50
per share
+5 points
Payout ratio
30%
59

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Valeo

In a deeply changing world

Serving our customers

On the cutting edge of innovation

A solid financial performance

In a deeply changing world

Serving our customers

On the cutting edge of innovation

A solid financial performance

Contribution of BRICS to global domestic product (GDP)

Uneven economic growth

North America: a return to growth

Europe: toward protracted stagnation?

Japan: a transitory renewal?

South America: chaotic expansion

The war for talent and skills

a Source: BCG, Eurostat (includes engineering, manufacturing and construction)

A more volatile world

US natural gas ($/MMBTU)

Oil and gas

1 USD => INR

In a deeply changing world

Serving our customers

On the cutting edge of innovation

A solid financial performance

An accelerating automotive industry

From mature markets to emerging markets and Asia

Source: Valeo automotive production

World automotive production in 2000

World automotive production in 2012

World automotive production in 2017

World automotive production in 2030

Number of passenger car models

Priority focus on reducing CO2 emissions

Increasingly tough emissions standards

A priority for carmakers as well as consumers

Simultaneously improving the driving experience

Source: International Council for Clean Transportation

2012, a pivotal year

Strong growth and margins

Operating margin (%)

Source: financial data

In a deeply changing world

Serving our customerson growth drivers

On the cutting edge of innovation

A solid financial performance

A growth strategy built around two priorities

With the goal of outperforming the market

Serving our customers

Group Senior Executive Vice-President, Sales & Business

Growth in order intake far outpaces market

Growth in Valeo sales

Growth in Valeo sales

Original equipment sales by manufacturing region

Growth in Valeo sales

Growth in Valeo sales

30% of order intake over the

Capacity for innovation

Design & development,

Capacity for innovation

In a deeply changing world

Serving our customerswith a strong brand

On the cutting edge of innovation

A solid financial performance