Second half and full year 2006 results. Grégoire Olivier Frank Imbert 2007 February 5

Transcription

1 Second half and full year 2006 results Grégoire Olivier Frank Imbert 2007 February 5

2 Second half and full year 2006 results 2006 Results Frank Imbert Outlook Grégoire Olivier

3 2006 Results Frank Imbert Chief Financial Officer 2007 February 5

4 2006 key figures (in m) 2H Sales 5, ,648.7 Change vs N-1* + 2.1% + 0.9% Operating income (15.9) 69.2 % of sales (0.3)% 0.6% Impairment of assets (233.5) (233.5) Restructuring (61.6) (169.2) Net income (399.7) (447.9) Change in financial debt (45.7) (94.3) Net financial debt (as of Dec. 31) 1,698.5 * Excluding monoliths and at constant exchange rates 4

5 2006 highlights Continued sales growth Decline in operating income Decrease in volumes in Western Europe Prices/raw materials squeeze effect Start-up costs in the United States Exceptional provisions for restructuring and impairment in Vehicle Interiors Tightly managed financial debt 5

6 Automotive production declines in Western Europe 1H 2H 2006 Europe - Western - Central 0.5% 0.4% 0.4% (2.5)% (1.9)% (2.2)% +19.8% +12.9% +16.3% North America 1.9% (9.2)% (3.5)% South America 3.3% 4.4% 3.8% China 46.1% 56.2% 51.6% Source: Faurecia 6

7 Major launches in the second half of 2006 BMW Mini BMW X5 Citroën C4 Picasso Chrysler Sebring Dodge Nitro Ford Edge Hyundai Kia Opel Corsa Toyota Corolla 7

8 Strong growth in exhaust systems > 2006 sales Breakdown of sales per business segment Change 2006/2005* As a % Monoliths 11.8 (0.2)% Seating Exhaust systems 11.0 (1.0)% Vehicle interiors Front end modules Seating (2.9)% Front end modules 29.7 Exhaust systems 14.4% Vehicle interiors Monoliths 61.9% * At constant exchange rates 8

9 Continued customer diversification > 2006 sales per customer (excluding Monoliths) Change 2006/2005 As a % Chrysler 197.2% VW PSA Hyundai 43.6% Toyota 30.4% Hyundai 1.0 BMW 12.6% Ford 10.7% Chrysler Toyota Others BMW Daimler 7.4 GM Renault Ford (9.4)% (13.1)% Daimler 9.9% VW 4.8% GM 0.5% PSA Renault-Nissan * At constant exchange rates (+5.6% including Monoliths) 9

10 Continued geographical diversification Breakdown of sales by geographical origin (excluding Monoliths) Change 2006/2005 * Europe LC 41.5% Europe HC 81.7% 76.9% 71.0% China 30.0% North America 19.4% Rest of the world China North America Europe LC 3.1% 1.2% 8.8% 4.4% 3.9% 1.9% 10.4% 6.9% 4.3% 2.5% 12.2% 9.9% Rest of the world 8.7% (6.3)% Europe HC * At constant exchange rates 10

11 Decline in operating margin 2.4% (0.7)% (0.6)% Volume / mix Western Europe Price/raw material squeeze (0.5)% USA start-ups 0.6%

12 Rise in raw material prices > Change December 2004 / December 2006 /metric ton C3 Propylene +40% $/metric ton Diesel +51% Dec. 04 June 05 Dec. 05 June 06 Dec Dec. 04 June 05 Dec. 05 June 06 Dec. 06 Pence therm Gas +11% /MWh Electricity +62% Dec. 04 June 05 Dec. 05 June 06 Dec Dec. 04 June 05 Dec. 05 June 06 Dec

13 Strong growth in North America > Change Sales in US$m +45% 1,534 1, Monoliths 1, Exhaust systems Vehicle interiors Seating % 5.4% 3.8% Capex (% of sales) 5,386 6,958 9,362 Employees New sites 13

14 Faster migration of industrial footprint Provisions for restructuring ( m) Employees Others Countries Spain Germany Europe HC -19% Excluding Europe +55% France Europe LC +94%

15 Vehicle Interiors Impairment A world market going through a critical period: A key module for manufacturers, for their image and need for differentiation Increase in the number of models Transfer of development costs Historic rise in raw material costs Competitors under Chapter 11 or withdrawing from the market Faurecia: 2005/2006 impairment decision Recovery plan in progress 15

16 Tightly managed debt in m Change EBITDA (171) Other flows (819) (681) Change Financial debt as of Dec. 31 (1,604) (1,698) (94) 16

17 2006 second half results (in m) 2H H 2006 Change Sales 5, , % Gross profit (19.0)% % of sales 7.3% 5.6% R&D expense Brut (299.5) (293.1) (2.2)% Net (132.6) (155.6) 17.3% % of sales 2.5% 2.7% SG&A expenses (152.1) (177.6) 16.8% % of sales 2.8% 3.1% Operating income (15.9) % of sales 2.0% (0.3)% (2.3)pt 17

18 2006 full year results (in m) Change Sales Gross profit % of sales R&D expense Brut Net % of sales SG&A expenses % of sales Operating income % of sales 10, , % (16.0)% 7.7% 6.1% (628.1) (610.6) (2.8)% (259.5) (285.1) 9.9% 2.4% 2.4% (320.5) (357.1) 11.4% 2.9% 3.1% % 0.6% (1.8)pt 18

19 Results per segment (in m) Interior modules Sales Operating income % of sales Others modules Sales Operating income % of sales Faurecia Group Operating income % of sales 8, % 2, % % 8,270.8 (44.5) (0.5)% 3, % % 19

20 2006 results (cont.) (in m) Operating income Impairment of assets Restructuring Other income and (expense), net Interest expense, net Other financial income and (expense) Corporate income taxes Net income from consolidated companies Net income of companies accounted for by the equity method Net income before minority interests Net income Minority interests (180.0) (137.5) 2.5 (65.5) (12.6) (52.8) (178.7) 5.9 (172.8) (182.5) (233.5) (169.2) 16.7 (86.6) (3.4) (35.2) (442.0) 4.4 (437.6) (447.9)

21 Tightly managed debt (in m) 2H Cash flow from operations Change in working capital requirement 87.3 Operating cash flow Capital expenditure (148.4) Development costs (103.9) Net financial investments (1.6) Other (5.8) Net financial debt (increase)/decrease (45.7) (433.9) (302.2) (215.8) (208.3) (9.2) (1.6) (66.8) 22.6 (60.9) (94.3) Net financial debt (as of Dec. 31) Shareholders' equity (as of Dec. 31) Gearing 1, , , ,

22 Outlook Grégoire Olivier Chairman and CEO 2007 February 5

23 Successful customer diversification > Reported sales (in bn) As a % As a % Daimler Other Renault PSA VW Hyundai PSA VW 18 Chrysler Toyota 2.3 Other 6.8 BMW Daimler Renault Ford GM 23

24 Sustained geographical diversification Europe HC 81.7% 76.9% 71.0% Rest of the world China North America Europe LC 3.1% 1.2% 8.8% 4.4% 3.9% 1.9% 10.4% 6.9% 4.3% 2.5% 12.2% 9.9%

25 International presence combining proximity to OEMs and competitiveness 3 Canada USA Mexico North America 19 sites 7,000 employees Western Europe 95 sites 42,000 employees United Kingdom France Portugal Luxemburg Belgium + 1 The Netherlands +1 Spain +1 Germany +2 Sweden Slovenia + 3 Eastern Europe 38 sites 7,000 employees 38 Turkey Poland Czech Republic + 5 Slovakia Romania Iran + 2 Russia India 1 10 China + 8 Asia 14 sites 2,000 employees + 1 Korea 2 1 Japan Brazil 8 Tunisia 1 Sites Argentina 1 South America 9 sites 2,000 employees South Africa New sites

26 General business environment Growth drivers for Faurecia's businesses Outlook 26

27 General business environment Growth drivers for Faurecia's businesses Outlook 27

28 Increase in the number of models European market Number of brands > 400 k vehicles 14 Trends 6 PSA Renault 1970s 2005 Number of models % Audi Volkswagen BMW > +50% models in 5 years % 10 top brands Total 10 top brands Total 28

29 Changes in "Business Models" BMW Seating 5/7 Series 1/3 Series Mini Toyota Specification Design OEM Engineering Parts management Assembly /JIT Tier 1 Toyota Boshoku In-house Subcontractor *Source Global Insight 29

30 Market constraints and requirements Quality Security Innovation and differentiation Services Market Price pressure Migration to LCC Capital expenditure in major markets (USA, China) Faurecia s strengths Extensive technical and innovative resources Differentiation capacity Global cost structure Worldwide footprint close to the OEMs 30

31 Faurecia has room to progress further - + z z z z z Innovation / technology equal to the very best Architecture competency Perceived quality/design know-how Management of complex platforms and modules Worldwide presence z z z Insufficient standardization and high development costs Cost base still too high Cost of non-quality Worldwide platforms Metal Front Seat Metal Rear Seat Cockpit Structure Front end Carrier Door Module Complete Exhaust Line 2nd half and full year 2006 results 31

32 General business environment Growth drivers for Faurecia's businesses Outlook 32

33 Faurecia tomorrow Rank among the top 3 for each of its modules in terms of profitability Become competitive for all parts Offer a competitive advantage in System and Architecture design Achieve "Best-in-Class" status for complex assembly work Become a Strategic Partner for each of the major worldwide manufacturers Conseil d Administration 2 février

34 6 Targets for future progress 1. Pursue organic growth Accompany our customers No major acquisitions 2. Impose greater discipline on program management Selectivity in the acquisition of programs Management of profitability throughout the entire life of the programs 3. Generate cash flow Enhance profitability Increase standardization Promote make or buy decisions and low capital intensive business models Conseil d Administration 2 février

35 6 Targets for future progress 4. Increase our competitiveness Migration of industrial footprint to LCC Reduction in production costs Supplier base in LCC Make fixed costs more flexible 5. Optimize our Engineering-Development activity Reduction in development costs and lead-times Expansion of the Development footprint in LCC 6. Maintain our leadership in Product/Process Innovation Conseil d Administration 2 février

36 1 Exhaust Systems Key business figures (2006) 2.7 billion Sales (with Monoliths) 8,200 Employees 33 Factories 14 Countries 1 R&D Center 6 D&D Centers HOT PART + COLD PART Exhaust pipe Exhaust manifold Particulate filter Muffler Catalytic converter Decoupling element DIESEL Average price: 210 excluding Monoliths: 60 Average price: 80 GASOLINE Average price: 145 without Monoliths: 60 36

37 1 Exhaust Systems Principal growth drivers Continue profitable growth Maintain our technological leadership Creation of R&D centers in China and Korea Examples of innovation: heat recovery (RTE), new materials, etc. Increase our competitiveness Industrial presence in LCC Enhanced factory efficiency and adjustments in structure Suppliers: changes in the Make or Buy strategy 37

38 2 Vehicle Interior Systems Key business figures (2006) Instrument panels 8.1 million/year Door modules 0.5 million/year Door panels 25.6 million/year Cockpits via a JV with Siemens VDO 3.6 million/year 3.5 billion Sales 22,300 Employees 67 Sites in 15 countries 5 R&D centers 20 Customer platforms 2nd half and full year 2006 results 38

39 2 Vehicle Interior Systems Principal growth drivers Selectivity in the choice of new programs SPE Award Innovations in architecture IP without Cross Car Bean Door module Dodge Nitro PUR cast Award Development in low cost countries Consolidation of competitors Mercedes-Benz S-Class 39

40 2 Consolidation of competitors Vehicle Interior Systems World Vehicle interior market North America (% market share) Europe (% market share) Faurecia Visteon Visteon 4 JCI 28.5% 52.5% Peguform Magna 5 Venture 5.5 C&A 12 C&A 2 Lear Others Delphi Other Faurecia JCI Lear Antolin Magna 40

41 3 Seating Key figures (2006) Expertise & System Program Management JIT Assembly Headrest 4.8 billion Sales Covering Foam 32,200 Employees Seat Frame 76 Factories in 17 countries Articulation Cushion frame 7 R&D centers Seat Track 41

42 3 Seating Principal growth drivers Growth driven by demand for comfort and safety Ultra-functional seating Innovations New seat-adjustment systems Need for differentiation = design, style BMW X Car of the Year Standardization of structures Restructuring in Europe and new presence in Asia Saturn Aura 42

43 4 Bumpers and Front End Modules Key business figures (2006) 0.7 billion Sales 17 Factories 1 R&D Center 2 D&D Centers Employees Front End Modules 1,000,000/year N 1 in Europe Sales 392m Audi, BMW, Chrysler Bumpers 4,000,000/year N 4 in Europe Sales 224m PSA, Renault, VW Front End carrier 2,600,000/year N 1 in Europe Audi, BMW, Chrysler, VW, PSA, Renault Engine ventilation 2,300,000/year N 3 in Europe Sales 73m PSA, Renault, Nissan 43

44 4 Bumpers and Front End Modules Principal growth drivers Consolidation of the Bumpers market in France: Partial acquisition of Cadence Innovation + 80m in sales Optimization of 4 French sites Development of Front End Modules, especially outside Europe Audi TT Citroën C6 Material recycling 44

45 5 The "Breakthrough Quality Plan" A tried & tested toolbox Customers A new state of mind Supplier Development Production Active involvement by the entire management team Involvement of the Executive Committee Faurecia Excellence Ssystem 2008 targets: 15 Customer PPM 0 Safety Alerts 45

46 General business environment Growth drivers for Faurecia's businesses 2007 Outlook 46

47 2007 Outlook Continued growth in line with 2006 Improvement in operating income as of the second half of 2007 Significant reduction in provisions for restructuring Close control over debt 47

48 Questions & Answers 2007 February 5

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