H1-2003 RESULTS Thierry Morin Chairman and CEO Key Figures in million euros Sales Gross Margin in % of sales H1-2003 H1-2002 ∆ 4,846 5,184 - 6.5% 863 17.8% 888 17.1% +0.7 pt 241 5.0% 240 4.6% + 0.4 pt 102 68 + 50% 21% 27% - 6 pt Operating income in % of sales Net income Gearing Property of VALEO – Duplication prohibited 2 July 25, 2003 Sales Sales Variation in million euros 5,184 Gross change (6,5%) 4,846 Currency impact (6,2%) Net change At constant currencies (0,3%) S1-2002 Property of VALEO – Duplication prohibited S1-2002 4 July 25, 2003 Sales Variation by continent North America Market Europe +1% Valeo* (4%) (1%) (12%) Market South America Valeo* Asia +19% +13% +9% +3% Market Valeo** Market Valeo* * at constant currencies ** at constant currencies and inflation Property of VALEO – Duplication prohibited 5 July 25, 2003 Results Gross Margin Quarterly improvement in % of sales* 18.1% 2003 2002 17.5% 17.7% 16.5% 2001 Q1 Q2 Q3 Q4 * Quarterly data approved as sincere Property of VALEO – Duplication prohibited 7 July 25, 2003 Gross margin Half-yearly improvement in % of sales* 2003 17.8% 17.6% 17.1% 2002 2001 17.0% 15.8% S1 Property of VALEO – Duplication prohibited S2 8 July 25, 2003 Gross margin Industrial footprint rationalization Europe United States (1) (1) Fort Worth (Switches and Detection System) March 2001 170 sites December 2001 143 sites December 2002 140 sites (4) (4) (1) (1) Barcelone (Lighting) Jablonec (Wiring) Transfert de Bietigheim (Wipers) Sainte Savine (Switches and Detection System) Wiring (4) (4) India Wiring Brazil +1 +1 Sao Paulo Interlagos (Switches and Detection System) Argentina (1) (1) Carmen de Areco (Switches and Detection System) Property of VALEO – Duplication prohibited 9 June 2003 130 sites July 25, 2003 Gross margin Supplier integration Suppliers Valeo Integrated Partners 3,500 2,700 98 80 Dec 02 June 03 Property of VALEO – Duplication prohibited Dec 02 10 June 03 July 25, 2003 R&D in million euros and in % of sales 309 296 Quarter* 152 144 6.0% 6.1% 6.2% 6.0% H1-2002 H1-2003 Q1-2003 Q2-2003 * quarterly data approved as sincere Property of VALEO – Duplication prohibited 11 July 25, 2003 SG & A in million euros and in % of sales 339 326 Quarter* 167 159 6.5% 6.7% 6.9% 6.6% H1-2002 H1-2003 Q1-2003 Q2-2003 * quarterly data approved as sincere Property of VALEO – Duplication prohibited 12 July 25, 2003 Operating income Quarterly improvement in % of sales* 5.5% 2003 2002 4.5% 5.4% 3.8% 2001 Q1 Q2 Q3 Q4 * quarterly figures approved as sincere Property of VALEO – Duplication prohibited 13 July 25, 2003 Operating income Half-yearly improvement in % of sales* 5.3% 2003 5.0% 4.6% 4.4% 2002 3.3% 2001 H1 Property of VALEO – Duplication prohibited H2 14 July 25, 2003 Net income in million euros Operating income in % of sales Net financial charge Other income and expenses net H1-2003 H1-2002 ∆ 241 5.0% (17) 240 4.6% + 0.4 pt (33) (47%) (67) (4.7) (22) (45) (50) (4) 102 2.1% (7) Taxes Goodwill amortization Minorities and associated companies Net income in % of sales Property of VALEO – Duplication prohibited 15 (60) 68 1.3% + 50% July 25, 2003 Balance Sheet & Cashflow Cashflow in million euros and in % of sales Net income + depreciation 7.8% Working capital requirement 8.6% 2.4% 1.3% H1-2002 H1-2003 Property of VALEO – Duplication prohibited H1-2002 17 H1-2003 July 25, 2003 H1 Cash generation Net operational cash (before restructuring) + 468 – o/w change in operating working capital + 20 Exceptional net cashflow (tax, …) +86 Net CAPEX (238) Balance before restructuring + 316 Restructuring (117) Net cash from operating & investing activities + 199 Net debt down to 414 M euro Property of VALEO – Duplication prohibited 18 July 25, 2003 Shareholder’s equity / Net debt in millions euro 2,101 2,005 Gearing: 27% Gearing: 21% 564 414 December 31, 2002 June 30, 2003 Shareholder’s Equity Property of VALEO – Duplication prohibited 19 Net Debt July 25, 2003 Outlook Valeo in 2003 Significant order intake Sales in line with market Continuing operating improvement Property of VALEO – Duplication prohibited 21 July 25, 2003 Order intake Ratio to Sales 1.3 1.2 1.0 2001 Property of VALEO – Duplication prohibited 2002 22 S1-2003 July 25, 2003 Order intake Growth drivers North America competitiveness S1-2002 0.4 1.7 S1-2003 Technological attractiveness 2.0 S1-2002 2.4 S1-2003 Japanese market penetration S1-2002 S1-2003 Property of VALEO – Duplication prohibited 23 1.7 2.5 July 25, 2003 Awards EPCOS/SIA award of technological innovation Third year in a row Electronically interfaced alternator Customer awards Transmissions Korea Division – Hyundai/Kia Motors Electrical Systems Mexico Division – Ford Valeo Service – Groupe Auto Union - 2nd year in a row Achievement Award from Toyota - Yaris headlamps Logistics of Wipers Systems Spain Division – GM Property of VALEO – Duplication prohibited 24 July 25, 2003 Valeo in 2003 Significant order intake Sales in line with market Continuing operating improvement Property of VALEO – Duplication prohibited 25 July 25, 2003