First Half 2005 Results

1
First Half 2005 Results
2005
Pierre LéviFrank Imbert
July 21
2
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• No invitation or recommendation to invest

• Forward looking statement

3
First Half 2005 Results
? / 1H04
1H05
(In millions)

• Sales 5,612.7 2.5
• Operating margin 2.9 (1.1)pt
• Restructuring costs 62.4 38.5
• Net income 34.5 (25.2)
• Net debt 1,618.6 75.3

Vs Dec. 31, 2004
At comparable data
4
A particularly difficult environment
gt First half year summary
-

• Sales outside Europe
• Further progress in operations
• Development - Order book
• - RD activities
• - New plants
• - Measures to enhance competitiveness

• Raw materials
• Volumes in Europeespecially in first quarter
• Maturity of some vehicles

5
Raw material prices significantly impact
operating margin
4.0
(1.3) pt
2.9
0.2 pt
Rawmaterials
Progressplan
Operating margin 1H 2004
Operating margin 1H 2005
6
Agenda

• 1st half 2005 highlights
• Results
• Outlook
• Automotive Seating

Pierre Lévi Frank Imbert Pierre Lévi Gérard
Chochoy
7
Agenda

• 1st half 2005 highlights
• Results
• Outlook
• Automotive Seating

Pierre Lévi Frank Imbert Pierre Lévi Gérard
Chochoy
8
Decrease in automotive production in first half
2005
gt 2005/2004 change in volume by geographic zone
1Q
2Q
1H
Europe North America South America China
(3.5) (5.0) 11.0 (5.1)
2.0 (2.2) 18.4 5.5
(0.7) (3.6) 14.9 0.6
9
First half 2005 growth declined, yet still
outpacing the market
12.0
8.4
7.2
4.4
2.5
Faureciasales
1.6
European automotive sales
(0.2)
(0.7)
(1.3)
(1.3)
1H 2003
2H 2003
1H 2004
2H 2004
1H 2005
Excluding monoliths and at constant exchange
rates and on a comparable basis
10
Faurecia continues to expanded itscustomer
portfolio
gt Change in sales by OEM first half 2005
versus first half 2004
1H 2005 sales by OEM m
(In millions)
Toyota
21.4
99.9 546.0 406.8 295.3 1,546.7 1,238.9 837.3 404.
8
Ford Group
15.0
GM Group
8.9
BMW
3.0
PSA Peugeot Citroën
1.7
VW Group
(1.0)
(1.8)
Renault-Nissan
(3.9)
Daimler Chrysler
2.5
Excluding monoliths and at constant exchange
rates and on a comparable basis
11
Sales by Business Group
Business Group
1H05( m)
1H05 / 1H04change
1H05 / 1H04change
Automotive Seating 2,544.3 2.8 2.4
Vehicle Interior 1,743.4 (3.6) (1.7)
Vehicle Interior modules 4,287.7 0.1 0.7
Exhaust Systems 935.3 7.0 15.2 Front
end 389.7 7.3 7.3 Other modules 1,325.0
7.1 10.6 Total 5,612.7 1.7 2.5
Excluding monoliths and at constant exchange
rates and on a comparable basis
12
Significant 1st half 2005 innovations
13
Significant 1st half 2005 innovations
14
Significant 1st half 2005 innovations
15
Faurecia continues to grow outside Europe
gt Change in first half 2005 sales
NorthAmerica
Asia
14
40
SouthAmerica
23
Excluding monoliths and at constant exchange
rates and on a comparable basis
15
16
Rollout of the progress plan
1
Manufacturing and redeploying the industrial
footprint
2
Purchasing plan
3
Program management
4
RD efficiency
17
Industrial performance continues to improve
1
gt Fewer accidents gt Fewer faulty parts delivered
100
100
68
36
29
48
- 40 / yr
Accidents
30
- 44 / yr
23
Defaults
2002
1H05
2003
2004
18
Industrial footprint evolution
1
2004
2005
2006
10
9
6
Openings
Poissy - France - JIT Rastatt - Ger. -
JIT Kosice - Slovakia Talmaciu -
Romania Auburn Hills - USA - JIT Lordstown -
USA - JIT Hermosillo - Mexico Rosslyn - South
Africa. - JIT Changchun 3 - China Wuxi - China
Leipzig Ger. - JIT Jelcz -
Poland Walbrzych - Poland Hlohovec -
Slovakia Lozorno - Slovakia - JIT Cleveland -
USA Changchun 4 - China Wuhan - China Anting -
China
Western Europe
Banbury - UK - JIT Trnava - Slovakia - JIT
Central Europe
Outside Europe
Fraser - USA Sterling Heights - USA -
JITSterling Heights - USA Toledo - USA - JIT
-1
-1
Closures


Norfinch - Canada
Beaugency France
JIT Just-In-Time plant
Project
18
19
Accelerated restructuring efforts
1
Impact on 1H 2005 result ( m)
Headcount
France 392 (22.8) Germany 469 (16.4) Spain 188 (14
.6) Others 292 (8.6) TOTAL 1st half
2005 1,341 (62.4)
20
Purchasing program
2
gt Reduce number of suppliers gt Increase
lower-cost countries sourcing
2,700
Mid-term objectives
2,400
2,100
1,950
1,500
suppliers
40
lower-cost countries purchasing
21
18
14
10
2002
1H05
2004
2003
21
Program management
3
gt Start-up costs controlled
21 million versus 29 million in first half 2004
22
RD efficiency
4
Flers (Fr)

• Organization by area of technical expertise

Global development center for seat
mechanisms 3 sites grouped at 1 industrial
campus Engineering school Mechanisms school

• Redeployment and modernization of RD centers

Brières (Fr)
Global development center
for complete seats
Magny-en-Vernois (Fr)

• Implementation of common tools
• "1,000 ideas" initiative

Seat foam development center
23
Agenda

• 1st half 2005 highlights
• Results
• Outlook
• Automotive Seating

Pierre Lévi Frank Imbert Pierre Lévi Gérard
Chochoy
24
Margins were adversely impacted by higher raw
material costs
gt Income statement
1H 2005 1H 2004 Change
(IFRS in millions )
Sales Gross profit of sales RD
expenses Gross Net of sales SGA expenses
of sales Operating income Before amortization
of goodwill of salesAfter amortization of
goodwill of sales EBITDA of sales
5,612.7 455.5 8.1 328.6 127.0
2.3 168.5 3.0 160.0 2.9 160.0 2.9
400.0 7.1
5,520.6 523.8 9.5 295.6 139.4
2.5 161.8 2.9 222.6 4.0 162.9
3.0 479.7 8.7
1.7 (13.0) 11.2 (8.9)
4.1 (28.1) (16.6)
25
in both segments
1H 2005 1H 2004 Change
(IFRS in millions)
Vehicle interior Sales 4,287.7 4,283.3
0.1 - at constant scope and exchange
rates 0.7 Operating margin 2.5
3.9 Other modules Sales 1,325.0 1,237.3
7.1 - excluding monoliths 933.5 892.8 4.6
- at constant scope and exchange rates
10.6 Operating margin 4.2 4.9
Total 5,612.7 5,520.6 1.7 - excluding
monoliths and at constant scope and exchange
rates 2.5 Operating margin 2.9 4.0
Before amortization of goodwill (contractual
customer relations)
26
Accelerated restructuring efforts
gt Income statement (continued)

1H 2005

1H 2004
(IFRS in millions)
162.9 (27.9) (34.7) (5.4) (28.3) 66.6
(0.6) 66.0 59.7 6.3
3.0 (0.5) (0.6) (0.1) (0.5) 1.2 1.2 1.1
Operating income Other income and (expenses),
net Interest expense net Other financial
income and expenses Corporate income tax Net
income from consolidated companies Income from
companies accounted for by the equity
method Net income before minority interest Net
income Minority interest
160.0 (62.4) (34.5) (15.4) (13.8) 33.9 5.0
38.9 34.5 4.4
2.9 (1.1) (0.6) (0.3) (0.3) 0.6 0.7 0.6
Before amortization of goodwill (contractual
customer relations)
27
Increase in financial debt
1H 2004
1H 2005
gt Cash flow statement
(IFRS in millions)
Cash flow from operations Change in working
capital requirement Net cash provided by
operating activities Capital expenditureDevelopme
nt costs Financial investment Other Change in net
financial debt
386.6 11.2 397.8 (192.4) (109.1) (24.3)
(32.5) 39.5
292.7 17.4 310.1 (214.4) (119.9)(3.4) (47.7) (75.
3)
1,543.3 1,618.6
Net debt December 31, 2004 June 30, 2005
28
Agenda

• 1st half 2005 highlights
• Results
• Outlook
• Automotive Seating

Pierre Lévi Frank Imbert Pierre Lévi Gérard
Chochoy
29
Second half in line with the first
FAURECIAS RESPONSES
CHALLENGES

• Sales outside Europe
• Further progress in operations
• Development - Order book
• - RD activities
• - New plants
• - Measures to enhance competitiveness

• Raw materials
• Volumes in Europe
• Maturity of some vehicles

30
Agenda

• H1 2005 highlights
• Results
• Outlook
• Automotive Seating

Pierre Lévi Frank Imbert Pierre Lévi Gérard
Chochoy
31
Faurecia's vision and strategic objectives
1
Become a key partner for all OEMs
3
2
Steadily improve toward best-in-class
profitability
Grow faster than the market
32
Faurecia's vision and strategic objectives
1
Become a key partner for all OEMs
3
2
Steadily improve toward best-in-class
profitability
Grow faster than the market
33
A world leader in Automotive Seating
gt Key Figures

• 4.8 billion in sales (43 of total sales)
• 84 sites
• 25,000 employees
• 12 RD centers
• 2,000 engineers and technicians

34
A world leader in Automotive Seating
gt International market share in volume
JCI 22
Other34
Magna3
Lear 21
OEMs4
Faurecia10
Toyoda Boshuku6
35
Present in all light vehicle segments
Renault Scenic
Toyota Yaris
Peugeot 407
Smart
MPV Segment C
Segment B
Segment D
Segment A
Audi A8
Audi Q7
SAAB 9.3
Ford Transit Connect
Segment F
SUV
Cabrio
LCV
36
Highly integrated playercomplete seat
components
Head rest
Back frame
Trim cover
Recliner
Seat frame
Cover
Foam
Adjustment mechanism
37
European and world leader in mechanisms
Recliner
External clients BMW Group DC Group Fiat Ford
Group GM Group Honda Hyundai Maruti Mitsubishi
Nissan PSA Renault Suzuki Tata Toyota VW Group
Adjustment mechanism
Mecanisms market share N 1 in Europe N 1
Worldwide
38
European and world leaderin frames
External clients BMW Group DC Group Ford
Group GM Group Mitsubishi Nissan PSA Renault Su
zuki Toyota VW Group
Back frame
Front seat
Seat frame
Rear seat
Frames market share N 1 in Europe N 1
Worldwide
39
Key player in complete seat sector
External clients BMW Group DC Group Ford
Group GM Group Mitsubishi Nissan PSA Renault To
yota VW Group
Complete seat market share N 1 in Europe N
3 Worldwide
40
Present among all OEMs
gt 2004 sales by OEMs
Other7
DaimlerChrysler 3
Ford Group 3
PSA Peugeot-Citroën 32
BMW 5
GM Group7
Renault-Nissan20
VW Group 23
41
International presence
84 plants
Canada
USA
Netherlands
Poland
UK
Germany
Japan
1
Czech Republic
Slovakia
China
France
Romania
Mexico
1
Turkey
Portugal
Spain
India
Tunisia
12 RD centers
Brazil
42
Faurecia's vision and strategic objectives
1
Become a key partner for all OEMs
3
2
Steadily improve toward best-in-class
profitability
Grow faster than the market
43
Growth strategy
2
gt Key drivers
(in billions)
4.8
1.9

• VISION
• Growth in Automotive Seating
• Consolidation of European market shares
• Further growth outside Europe

• OUTSIDE EUROPE
• North AmericaGM, Chrysler

• EUROPE
• Renault Growth
• Outsourcing PSA
• Diversification of clients BMW, DC, GM, Toyota

1995
2004
2009
44
Front seats
2
gt Front occupants
Renault 19
Megane

• Safety standards - Reinforcement- Side
  airbags- 5 Euro NCAP
• Comfort- Height adjustment- Arm rests-
  Adjustable head rests
• Style

45
2nd row rear seats
2
gt Rear occupants

• Flexible configuration- Fold-away back rest
• Comfort- Seat adjustment- Recline adjustment-
  Customized settings

Peugeot 307 SW
46
2
3rd row rear seats
gt Seating for 7 occupants

• Easy access to 3rd row
• Comfortable 3rd row seats
• Removable seats
• Fold-away seats

VW Sharan MPV
Renault Grand Scenic
47
Functional development is a key driver through
innovation
2
gt Example C segment ( / vehicle)
Front seats 3 on average / year
325
275
260
Rear seats 5 on average / year
215
230
200
170
130
1995
2010
2000
2005
Source Faurecia, C-segment Europe
48
Automotive Seating a growing market
2
gt In billions
28
2005
WORLD
32
2010
9
2005
EUROPE
10
2010
NORTH AMERICA
7.6
2005
8.3
2010
4.5
2005
JAPAN
5.0
2010
6.6
2005
OTHER
8.7
2010
49
Strengthening position in Europe
2
gt European market share in volume
Other6
OEMs10
Faurecia30
Lear 25
JCI 29
50
Strong growth outside Europe
2
gt Growth in 2001 / 2004 sales
North America
Asia
86
x2.5
South America
x5
50
FIRST HALF 2005 RESULTS JULY 21, 2005
51
2
Key player in complete seat sector
Europe
North America
China
1. Faurecia 30 2. JCI 29 3. Lear 25 4.
OEMs 10 5. Magna 2
1. JCI 59 2. Lear 16 3. Faurecia 4
1. JCI 38 2. Lear 33 3. Magna 10 4.
Faurecia 3 5. Toyoda Boshuku 2
52
Faurecia's vision and strategic objectives
1
Become a key partner for all OEMs
3
2
Steadily improve toward best-in-class
profitability
Grow faster than the market
53
Capitilize on Faurecias strenghts
3

• Evolve towards the best global cost structure
• Utilize vertical integration
• Capture value through innovation
• Sell services

54
3
Evolve towards the best global cost structure
Canada
3
USA
2
Poland
6
Germany
Japan
1
4
Czech Republic
2
China
France
3
15
Romania
1
Mexico
1
Turkey
Portugal
Spain
1
4
1
3
India
Component production in LCC
Tunisia
Purchasing in LCC
1
60
50
Brazil
1
30
25
2005
2005
Low cost countries
55
Utilize vertical integration
3
gt Example of a 325 segment B seat
Operating margin objective
Consolidated objective
12-15
6-7
Mechanisms 40
6-7
Metal frames 70
Capital intensive
5-6
Foam covers 140
Assembly JIT services 50
3-4
Misc. items 25
3-4
56
3
Capture value through innovation
gt Anti-submarining system
Without
With

• Better occupant safety
• Reduce cost for OEMs
• Capture value for Faurecia

57
3
Capture value through innovation
gt High performance foam

• Better overall comfort for occupants
• Lighter seats and distinctive feature for the
  OEMs
• Capture value for Faurecia

58
3
Capture value through innovation
gt 2nd and 3rd row fold-away seats

• Flexible configuration seating / access to rear
  seating / loading
• Differentiate vehicle from other vehicles
• Capture value for Faurecia

59
3
Sell services, an integral part of the OEM system

• OEM engineering
• Development
• Technical developments
• Series life
• OEM sites
• Assembly and flexibility
• "In time" delivery
• Quality control
• Supply
• Logistics

60
Faurecia advantagesin Automotive Seating
1
Become a key partner for all OEMs
3
2
Steadily improve toward best-in-class
profitability
Grow faster than the market
61
First Half 2005 Results
2005
Appendix
July 21
62
Decline in European automotive production in 1st
half 2005
In thousands of vehicles 1H 2005
gt Change by OEM
574 240 913 1,827 1,332 721 1,511 1,170 482
13.1
BMW
3.9
Toyota
3.8
GM Group
1.4
VW Group
0.9
Renault Nissan
(0.2)
DaimlerChrysler
PSA Peugeot Citroën
(2.4)
(5.4)
Ford Group
(13.0)
Fiat Group
(0.7)
Source Faurecia
Compared with first half 2004
63
Gearing and return on capital employeed
December 31, 2004
June 30, 2005
(IFRS in millions)
Net debt Gearing ROCE (excluding Goodwill) ROIC
(including Goodwill)
1,618.6 0.97 10.7 6.5
1,543.3 0.94 12.5 7.5
rolling 12 months
64
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