Accelerating Value Creation
Investor day April 19, 2016
Building Strong Foundations
Yann Delabrière April 19, 2016
A reminder of November 2013 commitments Clear strategy boosting profitable growth and cash generation
Accelerate in Asia
Develop value-added technologies
Leverage global platforms
Combine growth with cash generation
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2016 sales above 21 billion euros (CAGR ~5%)
Investor Day – April 19, 2016
Operating margin 4.5% - 5.0%
Net cash flow around 300 million euros
Asia >8% Europe 4.5% – 5.0% North America >4.0%
3
ROCE above 20%
Successful selective growth strategy
Organic CAGR 5.9% consistently outperforming market global automotive production (2.9%) and target of 5%
€ billion 20.7
Sustainable growth with cash discipline
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Total sales
17.4
Capex and capitalized R&D stabilized below 4.8% of total sales
Strongest growth in Asia with 13.4% CAGR compared to automotive production at 3.5%
North America 6.8% CAGR compared to automotive production at 4.3%
Investor Day – April 19, 2016
2012
4
18.0
2013
18.8
2014
2015
Delivering profitability targets for all regions
6 months ahead of 2016 target of 4.5% – 5.0%
North America achieved breakthrough and reached 5.1% operating margin in H2 already exceeding 2016 target of >4.0%
Operating margin € million and % of sales
1200 1000 800
4.4%
600
Asia continuously improved operating margin to achieve 9.4% sales in 2015 despite more challenging environment in China. Margins consistently above 2016 target of 8.0%
400 200
4.5% - 5.0%
4.8%
3.6% 3.0%
3.0%
2012
2013
0 2014
2015
North America operating margin
Asia operating margin
% of total sales
% of total sales
H2 2015
9.4%
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3.9% 2.0%
2.1%
2012
2013
Investor Day – April 19, 2016
8.9% 8.0%
1.7% 2014
2015
2012 5
8.3%
2013
2014
2015
2016 target
Delivering cash targets Net cash flow
€ million
Delivered 2016 cash target of 300 million euros a year ahead of schedule
216
144
303
Around 300
2015
Target 2016
2012 2013
2014
-559
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Net debt
With early conversion of convertible bond in January 2016 and on completion of ongoing sale process of Automotive Exteriors, net debt almost eliminated
€ million Dec. 31, 2012
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2015
963 1,807 Investor Day – April 19, 2016
6
1,519
1,388
A performing and resilient company Net debt / EBITDA
ROCE* Above 2016 target of 20%
2
1,6
22% 1,2
18% 0,8
14% 13% 0,4
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0 End 2012
End 2013
End 2014
End 2015
End 2016
2012
2013
* Pre-tax including Goodwill Investor Day – April 19, 2016
7
2014
2015
2016
A global company Well-balanced geographically
A truly global engineering network close to customers
% product sales
660 engineers
1,350 engineers
1,370 engineers
1,000 engineers
100 engineers
Auburn Hills Columbus
Bavans Brières Méru
Ausburg Hagenbach Neuburg Stadhagen
Shanghai Wuhan
Seoul
RoW Asia
North America
14%
5%
2012
25%
56%
Europe
665 engineers
RoW Asia
17%
2015
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Pune
4%
(IFRS5)
North America
Yokohama
30%
Investor Day – April 19, 2016
49%
Europe
Industrial and engineering footprint close to customers in all automotive regions Global processes and project management to ensure consistent delivery for global platforms Business development will continue rapidly in Asia
8
A customer centric company Product sales by customer CVE Others Hyundai Kia 4.8 1.7 Daimler 5.3 1.6 Fiat Chrysler 6.8 BMW
8.4
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Renault-Nissan
Others CVE Hyundai Kia 6.5 1.9 Fiat Chrysler 1.8 5.1
VW Group 25.3
BMW
2012
8.0
GM
In % of total
Daimler 14.2
10.6
19.8
6.3
2015
6.9
(IFRS5)
16.7
Ford
8.3
PSA
GM 13.3
13.2
13.4
PSA
Ford
Member of supplier Council for FCA Ford PSA
Strategic relationships with all major customers VW FAST supplier for all Businesses Ford ABF partner Renault Nissan Alliance Growth Partner (AGP)
Customer centric organization: Key Account management and global Customer Business Units
Benchmark operational excellence
Investor Day – April 19, 2016
VW Group
9
Renault-Nissan
A technology leader aligned with industry trends
Weight reduction of up to 100 kg representing 10 g/CO2
HMI solutions and smart surfaces for connected car
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Premium interiors & decoration
Advanced comfort and connected seats
72 co-innovation projects with 11 customers More than 6,000 engineers in 30 R&D Centers Around 500 patents filed per year
Investor Day – April 19, 2016
10
Energy recovery systems can reduce fuel consumption by a further 5-10 g CO2/km
Air quality solutions for cars and trucks
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Two Faurecia technologies for lightweight solutions win 2016 PACE Award Adaptive Valve
Cover Carving Technology
Allows mufflers to be 30% smaller and the exhaust system to be up to 20 % lighter
Allows new design options with greater durability and overall quality 11
Refocused business portfolio Three Business Groups with global leadership positions and strong development potential Automotive Seating
Total sales 2015 Operating margin H2 2015
Interior Systems
€ 6.2bn 5.4%
Market share
Total sales 2015 Operating margin H2 2015
Emissions Control Technology
€ 5.0bn 4.4%
Market share
Total sales 2015 Operating Margin H2 2015
€ 7.5bn 5.1% 9.2% VA sales
Market share 14%
12%
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Complete seats
17%
27%
Frames & mechanisms
Leader in global platforms with standard frames Global leadership and strong profitability of mechanisms business Rapid organic growth (CAGR 6.2%)
Investor Day – April 19, 2016
14%
Benefiting from consolidation of market Diverse portfolio of products and technologies Most premium interior supplier Value-creating business 12
Leader in global platform standardized solutions Leader in technologies for fuel economy (lightweight, energy recovery) Leader in depollution for cars and trucks
A company with strong foundations embarking on next phase of strategy
Robust and Resilient business model
Solid balance sheet
High Free Cash Flow
Strong customer portfolio
Well-balanced geographically
Strong potential for future value creation
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Experienced and dynamic teams Strong technology portfolio sustainable mobility and life on board
Global leadership position in each segment
Financial flexibility
Investor Day – April 19, 2016
13
The Profitable Growth Journey
Patrick Koller April 19, 2016
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The Profitable Growth Journey
2016 - 2018: Strong organic profitable growth commitment
Expanding Value Spaces
Robust Balance Sheet management
Sustainable Mobility and Cockpit of the Future
Investor Day – April 19, 2016
15
2016 - 2018 Our key objectives
6%
6%
> €500 m
€5
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of total sales Total sales CAGR 2016 - 2018
2018 Operating Margin
400 bps above market growth
7% of value added* sales
Investor Day – April 19, 2016
2018 Net Cash flow
16
2018 Earnings Per Share
* Value added sales: Total sales less Monolith sales
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Profitable growth drivers
Investor Day – April 19, 2016
Growth Drivers
Profitability Drivers
Customer portfolio
Order book profitability
Geographical balance
Manufacturing excellence
Product mix/Value Spaces
Cost efficiency
Growth 400 bps above automotive production
7% Operating Margin on VA Sales in 2018 17
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Profitable growth drivers
Investor Day – April 19, 2016
Growth Drivers
Profitability Drivers
Customer portfolio
Order book profitability
Geographical balance
Manufacturing excellence
Product mix/Value Spaces
Cost efficiency
Growth 400 bps above automotive production
6% Operating Margin in 2018 18
Global Strategic Partnerships with customers representing 65% of sales in 2015 VW confirmed as largest customer now at around 20% of sales FAST supplier for all three Business Groups will drive strategic dialog and technology strategy alignment. It will lead to increased innovation and technology content Strong growth in Asia
ABF partner and member of Supplier Council Leading supplier of Interior Systems and Emissions Control Technologies Growing customer for Automotive Seating
Alliance Growth Partner Global platform strategy of Renault-Nissan drives profitable growth (8% CAGR) Innovation accelerating (sculpted cover, emissions control, interiors)
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Member of Supplier think tank Key supplier of after treatment solutions and lightweight technologies Reference supplier for interiors and seating
Investor Day – April 19, 2016
19
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Premium customer portfolio expansion
Successful experience with German premium brands for all Business Groups High perceived quality – Mercedes-Benz S-Class is the reference Complex programs Technology
Expanding premium portfolio with other brands Jaguar Land Rover Volvo Infiniti Cadillac
34 co-innovation projects with premium brands
Premium brands represent >20% of sales Investor Day – April 19, 2016
20
Photo CT6
Development priorities
Accelerate growth with Asian customers through stronger engineering support
Increase engineering resources for Japanese customers and two new business development offices
Emissions Control Technologies won first orders from Honda
Technology and business partnerships
Growth driven by Jeep global platforms
Expanding HMI expertise through Alfa Romeo interiors
Cummins partnership accelerating growth in Commercial Vehicles
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Leverage Emissions Control relationship with Hyundai Kia and strengthen organization in a new tech center to open in Korea in 2016. Sales with Hyundai Kia will more than double by 2020
Rapid growth driven by increased regulation and strong technology offer
Sales with these customers will grow at 15% CAGR Investor Day – April 19, 2016
21
Accelerating in China through expansion with fast growing Chinese OEMs
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Target 5 billion euros of Total Sales in China by 2020 Automotive production to grow by an additional 1 million vehicles per year
Total Sales in China € billion
20% Sales with Chinese customers by 2018 - 2 years ahead of plan Target 30% sales with Chinese OEMs by 2020 Partnership model as demonstrated by partnerships with Chang’An and Dongfeng strengthen our growth prospects These two consolidated joint ventures will represent €2.5 billion of sales by 2020
4.0
5.0
2.5 2016
2018
2020
Implementation of regulation providing major opportunities in Commercial Vehicle (CVE) segment CVE sales in China to show over 40% CAGR
Operational model transformation in progress sustaining long term profitability at >8% in Asia Investor Day – April 19, 2016
22
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Value Spaces and innovation accelerating growth
A number of our existing product lines have strong growth and margins 200 – 400 bps above Faurecia average. We call them Value Spaces
Exist in all Business Groups and have high technology content
Will show close to 15% CAGR
Product sales Value Spaces € bn 3 2 2016
2018
Commercial Vehicles SCR Systems
Mechanisms & Mecatronics
Connected HMI & Smart Surfaces
Lightweight materials,
Energy recovery
Comfort and Trim Systems
Acoustic performance
Composites
Investor Day – April 19, 2016
23
Faurecia will outperform market by 400 bps between 2016 and 2018 25 000 Targeted
20 000
Growth objectives secured
Record order intake in 2015 of €21 billion
Current order book €54 billion
10 000 Current
5 000 0 2016
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2017
15% growth per year
in China
in Value Spaces
2018
2019
Order intake
with new customers
95% of 2018 sales already secured
Awarded
15 000
Total sales in € bn 21 14 2013
24
18
2014
2015
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Profitable growth drivers
Investor Day – April 19, 2016
Growth Drivers
Profitability Drivers
Customer portfolio
Order book profitability
Geographical balance
Manufacturing excellence
Product mix/value spaces
Cost efficiency
Growth 400 bps above automotive production
7% Operating Margin on VA Sales in 2018 25
Secured profitability from order intake to launch of production
New programs entering into production will represent €5.7 bn of "new" sales (€2.1 bn of net additional sales)
These programs secure 7% margin on VA Sales commitment for 2018
Higher profitability of new programs entering production € bn
1.7
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7.4
Specific drivers for margin improvement
Selective commercial strategy since 2013
Higher innovation content and value spaces accelerating
Strong program management and launch execution
Geographical mix
Investor Day – April 19, 2016
5.1
1.5 2016
2017 End of Production Sales
26
2018 Start of Production Sales
Three stages of operational performance breakthroughs
Step 3 Step 2
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Step 1
Standardization & Massification Well underway
Benchmark LCC manufacturing footprint Major restructuring completed 2010
Investor Day – April 19, 2016
Digitalization Major savings ahead
2015
2020 27
Step 1
Industrial footprint The European benchmark Evolution of Direct Labor Headcount
44%
2010
66%
31%
38%
31%
43% 2019
2015
7%
12% 19%
19% HCC Permanent Contracts
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HCC Non Permanent Contracts
LCC Permanent Contracts
LCC Non Permanent Contracts
LCC represented 44% of Direct Labor head count in 2010, and 57% in 2015 and will be up to 62% by 2019 Resilience of the organization is strong – Non-permanent heacount represented 28% of HCC headcount in 2015
Investor Day – April 19, 2016
28
Step 2
Massification The European benchmark
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Evolution of sales by techno plant in Europe (€m)
2010
2015
2019
Increase
Automotive Seating
76.8
110.1
150.7
+96%
Emissions Control Technologies
54.3
83.3
112.0
+106%
Interior Systems
52.9
64.2
69.8
+32%
TOTAL
61.7
79.4
97.1
+57%
Sales by Techno Plant will increase 57 % in 2019 versus 2010
Investor Day – April 19, 2016
29
Step 3
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Digital productivity A significant opportunity already engaged
Material Consumption - savings potential €80 m
Simulation of processes optimizing design, validation and launch costs
Reduction of process variability through manufacturing intelligence
Industrial added value – savings potential €80 m
Improved labor efficiency through automation and digital management control
Organizational optimization linked to process control, predictive maintenance and digital communication tools
Capex reduction of up to 20%
Improved asset management through predictive maintenance and internet of objects
Investor Day – April 19, 2016
30
Cost efficiency
Engineering efficiency through reduction of hourly rates and number of hours per standard development module
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Objective: 30% hourly rate reduction Objective: 15 - 20% reduction of work content linked to more simulation, standard development modules and digital efficiency
Functions and SG&A at lean benchmark level
Objective: targeted cost reduction (versus 2015) up to €100 m
Objective: increase Shared Services efficiency (actual costs above €200 m)
Investor Day – April 19, 2016
31
Expanding Value Spaces
Hervé Guyot April 19, 2016
Expanding Value Spaces
Megatrends alignment
Core Competencies
Customer centric company
Balance sheet robustness
Value spaces High growth potential driven by technology and market demand Profitability 200 – 400 bps above Faurecia average Adjacent to core business and supported by them
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Ambition Expand Value Spaces to reach above 30% of Total Sales Faurecia to become leader in Sustainable Mobility & Cockpit of the Future Investor Day – April 19, 2016
33
Automotive megatrends Environmental Protection Connectedness Autonomous driving
Competences
Customer partnerships and core competencies will enhance Value Spaces
Value Spaces
Core competencies Systems architecture and integration Design and Perceived Quality Comfort & Trim Systems Safety Acoustics Thermal management Emissions control HMI technologies Mechatronics Global Platforms
Value Spaces
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34
Customer centric Customers
Investor Day – April 19, 2016
34
Automotive market megatrends Environmental Protection
Connectedness
Tighter regulations
Measurements in real driving conditions
HMI with optimized ergonomics and perceived quality
Connectedness between driver and OEM
More lightweight
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Autonomous driving
Connectedness via smartphones and applications
Progressive equipment in the car market (safety, infrastructures, cost)
Important implication on interiors (including seats)
Production of hybrid vehicles in 2025
Additional HMI market growth until 2025
Production of semi or fully autonomous vehicles in 2035
27 million
+ €13 bn
20-35% of market
Comfort and safety remain at the heart of automakers preoccupations Investor Day – April 19, 2016
35
Automotive technology trends Environmental Protection CO2 reduction
Lightweight
Powertrain efficiency
ICE
Hybrid vehicles
Electric vehicles
Fuel cell Energy recovery
Connectedness
Autonomous driving
Human Machine Interface revolution
Advanced communication and information for driver and passenger
Infotainment / Navigation and access to external applications
Step 1
Driver assistance (today)
Step 2
Urban traffic (2018-2025)
Step 3
Long distance regulation trip (2020-2030)
Step 4
Full autonomous (post 2020-2030)
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Emissions
NOx and particulates
Light vehicles and trucks
Investor Day – April 19, 2016
Cockpit of the future
36
Faurecia technology for Environmental Protection Pursue our leadership in fuel economy and emissions reduction technologies Emissions reduction (NOx, CO, HC, particulates)
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Lightweight solutions for reduced CO2 emissions
Lightweight materials (composites, bio-materials)
Development of low cost carbon fiber
Systems design and architecture
Innovative processes
SCR solutions leadership with close coupled devices
Trucks and off-road equipment
Energy recovery for fuel economy
Faurecia offer reduces 100 kg or 10 g of CO2/km Investor Day – April 19, 2016
37
Heat to heat
Heat to electricity
Connectedness and Autonomous driving will radically impact cockpit of the future
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Become leader in cockpit of the future through strong focus on HMI, comfort and safety
Interior electronics embedded in cockpit
New materials and smart surfaces: black panels, active decoration
Integrated smartphones and tablets
Infotainment solutions and access to external applications
Sensors and data collection for health and well being
Modular interiors adaptable to driving conditions
Advanced comfort solutions
Investor Day – April 19, 2016
38
Value Spaces market growth potential represents €50 bn by 2025 Environmental Protection
+€8B
Cockpit of the future
Value Spaces market growth estimate by 2025*
Lightweight materials + €2 bn
Composites + €3 bn
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Commercial vehicles, off-road & high horsepower emissions controls + €9 bn
Connected HMI technologies + €13 bn
Smart surfaces and decoration + €2 bn
Mechanisms and mechatronics + €5 bn
Comfort and Trim systems + €14 bn
Health monitoring + €1 bn
Energy recovery + €1 bn
Investor Day – April 19, 2016
39
*Source Oliver Wyman, Faurecia
Technology Value Space Expansion
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Enhance our technology and expertise Electronics, sensors, big data, actuators, intelligent surfaces, carbon fiber, materials..
Investor Day – April 19, 2016
Enlarge innovation ecosystem
40
Strategic opportunities
Enhanced innovation ecosystem Scouting network
Toronto Silicon Valley
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Paris
Faurecia Ventures
Munich Tel Aviv
Dedicated investment vehicle & resources
Driven by acquiring new expertise and technologies
Academic research establishments and laboratories
Industrial Partnerships
Minority stakes
Initially €50 million investment
FORCE to accelerate development of low cost carbon-fibre
Shanghai
Faurecia teams with internal or external scouts
Investor Day – April 19, 2016
Partnerships
41
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Conclusion
Faurecia strategy in place to accelerate technology and value creation
Value Spaces selected and aligned with major auto trends
Strengthen our Value Spaces with new technologies and competencies
Combination of enhancing internal expertise and strategic opportunities
Consolidation opportunities with strong customer support, focused on Asia and emerging markets
Investor Day – April 19, 2016
42
Robust Balance Sheet Management
Michel Favre April 19, 2016
2016 - 2018 Our key objectives
6%
6%
> €500 m
€5
of total sales Total sales CAGR 2016 - 2018
2018 Operating Margin
400 bps above market growth
7% of value added* sales
Investor Day – April 19, 2016
2018 Net Cash flow
44
2018 Earnings Per Share
* Value added sales: Total sales less Monolith sales
Robust cash generation 2018 Target: Generate sustainable net cash flow above €500 m
EBITDA enhancement to around 12% of VA sales (or 10% on total sales)
Operating margin increase
Higher D&A
Tight WCR control
Continuous inventory optimization (Faurecia 4.0), reverse factoring
Capex + Capitalized R&D
Maintained below 5% of sales
Lower financial expenses
Low interest rate secured
Lower net debt level
€50 m over 2017-2018
Cash tax rate around 25%
Net cash flow above €500 m in 2018 Investor Day – April 19, 2016
45
Drivers for solid EPS growth 2018 Target: To reach €5 or +67% versus 2015 2018
Comment
Operating income
Operating margin enhancement : Reach around 7% of VA sales (or 6% on total sales)
Restructuring expenses
Continuous optimization: Around €50 m per year
Net financial expenses
€50 m savings over 2017-2018 to around €100 m
Income tax
Tax rate to fall below 30% thanks to recovery of tax losses carry forward in France & South America
Minority interest & associates
To remain almost stable at around €-65 m through some buy-out in China
EPS 2018: €5 Investor Day – April 19, 2016
46
Robust balance sheet allowing flexibility & resilience
Financing plan achieved at very competitive cost
Two recent, 7-year bonds issued at 3.125% and 3.625% interest rate
2 very expensive bonds redeemed (around €750 m)
Syndicated facility being renegotiated to get better conditions and 5 years maturity
Strong ratios restored: Net Debt / EBITDA was 0.6x at end 2015
Bolt-on/acquisitions value creation objectives
EPS & EBITDA short term accretive
Net Debt / EBITDA to stay around 1.0x
Strong financial discipline Investor Day – April 19, 2016
47
ROCE*: To further improve 2018 Target: Above 28%
>28%
22%
Asset turn: to remain very high above 5.0x
18%
13%
2012
14%
2013
2014
2015
2016
2017
2018
2018 ROCE*: > 28% Investor Day – April 19, 2016
48
* Pre-tax and including goodwill
Upgrade Faurecia perception Rating roadmap 2013
Platform/Value Spaces development
Around 7.0% (on VA sales) target
>€500 m target and positive free cash flow in down cycle
Formalized/high financing flexibility Net debt / EBITDA: Around 1.0x
Low level of debts / huge savings on financial expenses
Competition position Robust profitability
Financial policy Financial ratios (1)
Debt rating
B1/B+
Investor Day – April 19, 2016
2018
Faurecia has the scale in its 3 businesses
Scale
Free cash flow through the cycle
Today
(or 6% on total sales)
Ba2/BB
49
(1) Debt /Ebitda; Ebita/interest expense; Net debt/net capitalization
Focus on profitable growth, value creation and a robust balance sheet
Solid growth through strong outperformance (400bp)
Value creation
Profitability enhancement mostly driven by internal factors (over 150bp gain between 2015 and 2018)
Sustainable net cash flow generation (above €500 m in 2018)
EPS growth of 67% between 2015 and 2018 (from €3 to €5)
Robust balance sheet
Strong financial discipline
Inexpensive financing
Strong ratios: net debt/EBITDA to stay around 1.0x; ROCE to gain over 600bp
Investor Day – April 19, 2016
50
Emissions Control Technologies
Christophe Schmitt - Mathias Miedreich April 19, 2016
Strong sales growth driven by technology and regulation
>7% CAGR
2015
Value through stringent regulations (passenger cars)
2025
Total sales €7.4 bn
Forward to an emissionized world (trucks and high horsepower)
Total sales ~€15 bn
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Technology leadership
Market leadership reinforced Investor Day – April 19, 2016
52
The world is getting emissionized Emissions Control Market* Value € billion
66
25
41
41
2015-2025 Key Growth Drivers 1
2
On Road regulations (light and commercial)
+16 bn Powertrain technology evolutions (ICE, Hybrid)
3 Expansion of Off-Road & High Horsepower (HHP) legislation
Property of Faurecia - Duplication prohibited
2015
+9 bn
2025
Increase in market value coming from new regulations, new systems and new markets Investor Day – April 19, 2016
53
* Includes substrates and PGMs. Excludes urea tanks, HPEGR, sensors
1
Passenger car: regulations (CAFE, RDE) drive the need for more efficient and cleaner vehicles 200 180
Average CO2 emissions (g/km)
CO2 emissions reduction: CAFE
US
180
160
CHN
160
EUR
140 130
120
125 115
100
95
80
Target
95 90?
Target Target
75?
60 2015
2020
2025
Time (year)
By 2025 will need to go from average 6L/100km to 3.3L/100 km Fuel efficent vehicles through Lightweight (10 kg represents 1g CO2/km) Energy Recovery
-40%
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Europe Average NOx emissions Diesel (g/km)
Homologation cycle
Pollutants (NOx) emissions reduction: RDE
4.5x
Real-driving emissions
2.1x
1.5x
0.36* 0.08 2015
0.08
0.08
0.17
2017
2020
-70% Investor Day – April 19, 2016
* ICCT Study
0.12
54
Introduction of RDE from 2017 will drive a need for a 70% reduction in emissions compared with 2015 Cleaner passenger cars through Advanced after-treatment solutions
1
On-road commercial vehicles: India and China regulation converging with mature markets, driving market value up NOx Emissions Limits (g/kWh)
Emissions Control Market Value (€ bn) On-road commercial vehicles 17.0
6
11.0
5
13.0
4 Europe
3
2015
China India
2
2020
China On-road commercial vehicles (€ bn)
Brazil
5.8
1
2.8
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2025
2010
2015
2020
1.0
2025
2015 Investor Day – April 19, 2016
55
2020
2025
The world is getting emissionized Emissions Control Market* Value € billion
66
25
41
41
2015-2025 Key Growth Drivers 1
2
On Road regulations (light and commercial)
+16 bn Powertrain technology evolutions (ICE, Hybrid)
3 Expansion of Off-Road & High Horsepower (HHP) legislation
Property of Faurecia - Duplication prohibited
2015
+9 bn
2025
Increase in market value coming from new regulations, new systems and new markets Investor Day – April 19, 2016
56
* Includes substrates and PGMs. Excludes urea tanks, HPEGR, sensors
2
Powertrain technology evolutions will drive the need for more sophisticated exhaust systems on ICE engines World light vehicle production (Million vehicles/year) by powertrain technology 120 Non ICE
100
EV/Fuel Cell Hybrid
80 60 ICE
CNG/LPG
40 Diesel
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20 Gasoline
2015
Investor Day – April 19, 2016
2020
2025
2030
57
TREND #1: Internal combustion engine (ICE) remains in >90% of cars by 2030 More sophisticated exhaust lines to meet regulations
TREND #2: Hybrids grow from 3% of market to >45% in 2030
Hybrid vehicles need Energy Recovery systems
2
Strong increase in the value of the exhaust line driven by more sophisticated after-treatment systems GASOLINE
DIESEL
HYBRID
+60%
+210%
+130% Value
280
(€ per vehicle)
Euro 5
Catalyst
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Architecture
Investor Day – April 19, 2016
360
120 Euro 6d (2020)
Catalyst + Particulate filter + Low pressure EGR
Euro 5
Catalyst + Particulate filter
Euro 6d (2020)
NOx trap + SCR Filter + SCR + Low pressure EGR
58
370
580
120 Euro 5
Catalyst
Euro 6d (2020)
Catalyst + Particulate filter + Low pressure EGR + Energy recovery
The world is getting emissionized Emissions Control Market* Value € billion
66
25
41
41
2015-2025 Key Growth Drivers 1
2
On Road regulations (light and commercial)
+16 bn Powertrain technology evolutions (ICE, Hybrid)
3 Expansion of Off-Road & High Horsepower (HHP) legislation
Property of Faurecia - Duplication prohibited
2015
+9 bn
2025
Increase in market value coming from new regulations, new systems and new markets Investor Day – April 19, 2016
59
* Includes substrates and PGMs. Excludes urea tanks, HPEGR, sensors
3
Legislation for Off-road and High Horse Power is expanding creating new demand and new business models for advanced exhaust systems Increasing number of regulated Off-road and HHP engines
Increase in value of Off-road and HHP market*
(% of engines)
(€ billion) 5.7
27%
33% 3.3
75% 73%
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2015 Not Emissionized
Investor Day – April 19, 2016
67%
1.2
2020
25%
0.4
2025
2015
Emissionized
2020
After-market
60
2025 First-fit
* Includes substrates and PGMs. Excludes urea tanks, HPEGR, sensors
2030
Increase in market value coming from new regulations, new systems and new markets 2015-2025 Market Growth Drivers 1
On Road regulations (light and commercial) 2
Property of Faurecia - Duplication prohibited
3
Implications for exhaust systems providers: +16 bn
Powertrain technology evolutions (ICE, Hybrid) Expansion of Off-Road & High Horsepower (HHP) legislation
More sophistication
More innovation
New business models
+9 bn Faurecia’s key enabler to capture growth = TECHNOLOGY
Investor Day – April 19, 2016
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Faurecia Value Spaces for fuel economy and air quality LIGHTWEIGHT TECHNOLOGIES -20 KG
ENERGY MANAGEMENT
Fuel Economy
Brazing process
Acoustic Valve Resonance free pipe
Exhaust Heat Recovery System
Exhaust Heat Power Generation
POLLUTANT MANAGEMENT FOR COMMERCIAL VEHICLES , OFF- HIGHWAY AND HIGH HORSE POWER
Property of Faurecia - Duplication prohibited
Air Quality
Investor Day – April 19, 2016
62
Faurecia Lightweight technologies contribute to CO2 reduction through significant weight reduction ACOUSTIC VALVES & RESONANCE FREE PIPE
BRAZING & PARTIAL DOUBLE LAYER
Evolutionary material thickness reduction
Adaptive Valve
Electric Actuated Valve Resonance Free Pipe
CUSTOMER BENEFITS
MARKET SHARE TARGET
30%
Property of Faurecia - Duplication prohibited
40% mass reduction: 20 kg Reduced CO2 emissions: 2g/km Increased fuel economy Investor Day – April 19, 2016
63
Revolutionary system redesign using active components
Energy Recovery Technologies CO2 reduction from wasted heat EXHAUST HEAT RECOVERY SYSTEM (EHRS)
30% of energy is lost in the exhaust gas Compact EHRS Exhaust Heat Recovery System
CUSTOMER BENEFITS
Recover energy lost through exhaust heat transfer
Accelerate powertrain and cabin heating
Increase electric range (hybrid)
MARKET SHARE TARGET
30%
Property of Faurecia - Duplication prohibited
Reduced CO2 emissions: 3g/km Increased fuel economy (up to 7% on hybrid vehicles)
Investor Day – April 19, 2016
64
EHRS makes Hyundai Ioniq more fuel efficient
Faurecia EHRS
Property of Faurecia - Duplication prohibited
Faurecia EHRS technology used on all hybrid versions
Hyundai flagship green car
SOP January 2016 Investor Day – April 19, 2016
65
Energy Recovery Technologies Fuel economy from heat transformation EXHAUST HEAT POWER GENERATION
30% 30% of of energy is is energy lost lost in in the the exhaust exhaust gas gas EHPG Exhaust Heat Power Generation
CUSTOMER BENEFITS
Recover energy lost through exhaust gas heat by transforming it into useable power via Rankine Cycle
Power used to charge a battery (Hybrid) or boost powertrain (Truck)
MARKET SHARE TARGET
30%
Property of Faurecia - Duplication prohibited
Reduced CO2 emissions: 40g/km Increased fuel economy (5%)
Investor Day – April 19, 2016
66
SCR Commercial Vehicle Cleaner power for on-road applications COMPACT MIXER
CUSTOMER BENEFITS
Compact AdBlue® mixing device enabling breakthrough architectures
Improved mixing performance to cope with future powertrain technologies
MARKET SHARE TARGET
25%
Property of Faurecia - Duplication prohibited
40% less mass/volume: - 80kg DeNOx efficiency compliant with future regulations
Investor Day – April 19, 2016
67
Technology gives Faurecia leadership position with over 50% of China’s heavy/medium duty market for CN6 2021 China HD/MD Truck and Bus engine market share
MARKET SHARE TARGET
Others
6% 13% 12%
Property of Faurecia - Duplication prohibited
21%
Customer Awards for CN6 regulation engines
2021: CN6 introduction
35%
14%
Dongfeng
17%
Faurecia Emissions Control Sales China on-road commercial vehicles
17%
Global Partnership 2015 Investor Day – April 19, 2016
68
2020
2025
Breakthrough in de-NOx performance through Ammonia Storage Delivery System (ASDS) ASDS FOR ON-HIGHWAY
NOx reductant (NH3) stored in a salt within a cartridge allowing two times more density than Automotive Ad Blue (30% urea)
Unique de-NOx performance in Real Driving Conditions
Easy-to-handle, no deposit
Alternative to AdBlue®
CUSTOMER BENEFITS Easy maintenance for end-user
Property of Faurecia - Duplication prohibited
Volume saving (-45%) 50% - 80% less NOx than AdBlue in urban driving
Investor Day – April 19, 2016
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Ammonia Storage Delivery System commercial trials confirm technology performance in urban buses
ASDS for HD Application
Fleets Demonstration
OEM Program Development
Refill Station In Shanghai
By collaboration with environment protection organizations
With leading CV OEMs to meet the regulation of CN5 and CN6
To feed fleet operation and to exemplify process of refill industrialization
NS5
ASDS
NS4
Faurecia ASDS Industry-best solution to effectively treat NOx emissions for CVE, superior to AdBlue-based solutions in City Driving Conditions.
55% lower
Ad-Blue
Property of Faurecia - Duplication prohibited
Engine Out 0
ASDS for LD Application
Investor Day – April 19, 2016
2
4
6
8
10
NOx g/kw.h
70
*1000 hours operation, city bus with 6.7L Euro4 engine
New Value Space Ammonia Storage Delivery System for marine applications BREAKTHROUGH IN DE-NOX PERFORMANCE
NOx reductant (NH3) stored in a bulk salt and patent process to release in large volume of NH3 gas.
Utilizes higher exhaust temperatures pre-turbo, Does not require exhaust to be heated, TCO benefit
On Engine application, no mixing length required, simplified after treatment
CUSTOMER BENEFITS Space saving (-45%), versus AdBlue®
Property of Faurecia - Duplication prohibited
Weight saving (-36% versus liquid urea solution)
Reduces impact of Sulfur on SCR function, (eliminates Scrubbers)
Investor Day – April 19, 2016
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Strong sales growth driven by technology and regulation
>7% CAGR
2015
Value through stringent regulations (passenger cars)
2025
Total sales €7.4 bn
Forward to an emissionized world (trucks and high horsepower)
Total sales ~€15 bn
Property of Faurecia - Duplication prohibited
Technology leadership
Market leadership reinforced Investor Day – April 19, 2016
72
Cockpit of the Future Strategic Directions for Faurecia
Jean-Michel Renaudie April 19, 2016
Automotive world is entering an accelerated disruptive sequence
Autonomous vehicles become reality Assisted-drive in the street Full autonomy in motion
New mobility models pop-up Car-sharing Ride-sharing t New mobility players
Technology is more & more a differentiator Connectivity Sensors & Big-data Powertrain solutions & electrification Light-weight
Investor Day – April 19, 2016
Automotive megatrends lead to a complete renewal of the car’s interior These evolutions will make car interiors become increasingly:
1. Smart Connected Intuitive
2. Versatile Adaptive Transformable
3. Empathetic Welcoming Responsive Proactive
What is HMI (Human-Machine Interface) for Faurecia? Progressive fusion of display into Interiors parts
HMI BUILDING BLOCKS
DISPLAYS
SURFACE CONTROLS
COCKPIT DESIGN AND ARCHITECTURE
I
Electronics know-how
+
Investor Day – April 19, 2016
KEY COMPONENTS
Drivers and Center Displays Passenger Displays Doors and Seat Displays
Center Stack Film for touch display Haptic feedback
Mechanical components Decoration Surfaces
76
Faurecia
Faurecia
current
target
HMI market growth A major opportunity Growth of Interior HMI market
Scope of Interior HMI market (2025, € bn)
2015 Doors HMI (~€7 bn)
Driver zone HMI (~€7 bn)
Central zone HMI (~€9 bn)
2025
Passenger zone HMI (~€4 bn)
+90%
€27 bn
€14 bn
2015
Interior HMI
Faurecia targets 10% to 20% market share
(€27 bn) Investor Day – April 19, 2016
2025
77
HMI transformation is already happening "Real-life" evolution towards electronics and interiors fusion
Electronics and Interiors Separated Electronics Brain and display in one infotainment box
2010
Split of Electronics Brain and Display "Multifunctions" displays appear
2014
Full black panel effect Displays appear Electronics become seamless-integrateddecoration parts
2016
Display fully integrated into decoration part "Smart Surfaces
2018+
HMI transformation is already happening "Real-life" evolution towards electronics and interiors fusion Market trend 2015
Market trend 2025
Electronics and Interiors Separated Electronics Brain and display in one infotainment box
2010
2015
Market trend 2025
Split of Electronics Brain and Display "Multifunctions" displays appear
2014
2015
Market trend 2025
Full black panel effect Displays appear Electronics become seamless-integrateddecoration parts
2016
2015
2025
Display fully integrated into decoration part "Smart Surfaces"
2018+
Cockpit of the Future for autonomous modes Need for a "new desirable car experience" Driving modes Occupations Driving
Driving
Assisted
Autonomous
Hands-on
Hands-off to Eyes-off
Mind-off
Active driving (driving fun)
Assisted driving, Audio
Productive (individual) Mobile home/office
Relaxing (social) Canopy, train ride
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Assisted driving with phoning, SMS, e-mails…
Office work, phoning…
Relaxing, sightseeing,…
Sleeping, dining, reading, playing, sightseeing, video watching…
Cockpit of the Future Faurecia as the lead architect of a new customer experience
Smart-decoration Transformers
Investor Day – April 19, 2016
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Some Use Cases are already in implementation phase at Faurecia
Use Case 1 Deco-display
Use Case 3 Cockpit Transformer
Use Case 2 Intuitive connectivity for Cockpit & HMI 2025
Use Case 4 Active Wellness
Cockpit of the Future: Take-Away Faurecia as the lead architect of a new customer experience
Massive on-going transformation of Automotive Interiors with progressive fusion of Electronics and Interiors / Deco parts
2025+
Faurecia’s strategic positioning is at the center of the transformation through: Global Interior leadership (>10M Interiors per year) and our unique proprietary technologies Multiple co-operations with mobility players, including other Tier 1s partnerships Additional Value Creation through specific venture approach
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Accelerating Value Creation
Patrick Koller April 19, 2016
Our Ambition
Property of Faurecia - Duplication prohibited
Become leader in Sustainable Mobility & Cockpit of the Future
Investor Day – April 19, 2016
Expand Value Spaces to reach > 30% of sales
85
Net cash flow objective > 3% of total sales
Ensuring the means to support our ambition
6%
6%
> €500 m
€5
of total sales Total sales CAGR 2016 - 2018
2018 Operating Margin
400 bps above market growth
7% of value added* sales
Investor Day – April 19, 2016
2018 Net Cash flow
86
2018 Earnings Per Share
* Value added sales: Total sales less Monolith sales
A team and culture to achieve our ambition An experienced, multi-national and motivated team
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A strong culture giving us organizational agility, entrepreneurship and leadership competencies for our future development
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