F2016 ACTIVUITY AND SUSTATINABLE DEVUELOPMENT REPORRT E
Contents
Valeo 2016 Activity and Sustainable Development Report
Profile
02 Interview with the Chairman
Interview with Jacques Aschenbroich,
Chairman and Chief Executive Officer
Board of Directors 04
05 Operations Committee
Valeo is an automotive supplier, partner to all automakers worldwide. As a technology company, Valeo proposes innovative products
Outstanding performance 06
10
13Shareholder information Stimulate inventive thinking
and systems that contribute to the reduction of CO2 emissions and to the development
of intuitive driving.
Speed up our development
14 The three revolutions of the automotive industry
16 Electrification and smart engines
18 Autonomous and connected car
20 Mobility and digital
22 Innovation, driving growth
26 Valeo innovation ecosystem
2916.5 billion euros in sales 11.1% of OE sales invested in R&D
32 countries
Valeo, a world leader in each of its businesses 31
Making driving intuitive 32 Reducing CO2 emissions 34 Controlling pollutant emissions 36 Ensuring perfect visibility 38
Valeo Service, the recognized aftermarket specialist 40
Broad and balanced global footprint 42 Plant of the Future in support of operational excellence 48
53Strengthen our commitments
91,800 employees
155 plants
20 research centers
38 development centers
15 distribution platforms
54 Supporting Valeo's sustainable growth
Sustainable development, a deciding factor for customers
A performance acknowledged by non-financial rating agencies
Eco-design: a deep-rooted approach
An efficient environmental strategy
Purchasing, an integral part of sustainable development
62 Attracting, developing and retaining tomorrow's talent
65 Community initiatives led by each of Valeo's sites
Activity and Sustainable Development Report - Valeo - 2016 1
Interview
Jacques Aschenbroich,
Chairman and Chief Executive Officer of Valeo
In 2016, Valeo achieved the best results in its history. What drove this performance?
These results were driven by the new Valeo we have created: more technologically focused, innovative, dynamic and profitable. Quarter after quarter, our growth continues to accelerate, outperforming the market in all regions worldwide with, in 2016, increases of 17% in our order intake to 23.6 billion euros,
14% in our sales to 16.6 billion euros and 27% in our net income to 925 million euros. These results underline the relevance of our strategy, based on innovation in the areas of CO2 emissions reduction and intuitive driving, and reflect the quality and expertise of our some 100,000 employees worldwide.
Is that why you decided to raise your 2021 objectives at your Investor Day in March?
Our recent trajectory puts us well ahead of the plan set out in 2015. We therefore decided to set a new, more ambitious target, which remains perfectly achievable in light of our healthy outlook for the coming years. So, we have lifted our sales target from
20 billion euros by 2020 to more than 27 billion by 2021,
The two focuses of Valeo's growth strategy
Innovation
Innovative technologies for CO2 emissions reduction and intuitive driving.
Geographical expansion
Geographical expansion in
high-growth potential regions, especially in Asia and emerging countries.
representing average annual sales growth of 10% and an outperformance of more than 7 percentage points compared to global automotive production. This growth will be powered first and foremost by higher content per vehicle, thanks to the new opportunities within the automotive industry. To support this rapid expansion, Valeo will continue to hire new talent, with the aim of adding 10,000 employees per year on average over the next five years.
What key strengths will help Valeo achieve these objectives?
Our growth model is based on innovation and organic growth, but we have also completed several acquisitions to boost our technological potential and geographical footprint in Germany, South Korea and Japan. We are also investing in high-growth potential regions such as China, Southeast Asia and India.
And most importantly, our products are innovative: 50% of our order intake is for products that didn't even exist three years ago. Valeo currently ranks first or second worldwide in each of its businesses,
and boasts technological leadership in the three areas that are disrupting the automotive industry: drivetrain electrification, autonomous vehicles,
and mobility driven by the development of digital technology.
The market for the "vehicle of the future" is highly competitive. How will Valeo maintain its technological leadership in this area?
By ensuring that innovation remains the cornerstone of our strategy.
In 2016, we invested close to 1.6 billion euros in R&D, filed over 1,800 patents worldwide and were the top French company in terms of the number of patents filed. We are going to continue on this path to foster the emergence of new products that improve mobility, help protect the environment and enhance
in-vehicle safety and well-being. As I see it, economic growth and mobility go hand in hand, and electric, autonomous, shared cars are a way of striking the right balance between vehicle usage and quality of life in urban areas.
For a major group like Valeo, a start-up mindset means remaining agile and innovative, and constantly transforming ourselves to offer our customers the right technologies.Jacques Aschenbroich
Chairman and Chief Executive Officer of Valeo
And we have all the technologies needed for this new mobility to take shape. Nonetheless, we must remain open to change, take a long-term view of our markets and the related technologies, and remain unrelenting with regard to cost control and competitiveness in each of our businesses as well as in each of the 32 countries where we operate. And we must also attract
the world's most talented engineers to help us achieve our growth plan.
You seem particularly confident about Valeo's future...
I am very confident in the future of our Group and believe the best is yet to come. The deep-seated shifts currently taking place in the automotive industry are of huge benefit for Valeo and represent a source of growth and opportunity.
2 Activity and Sustainable Development Report - Valeo - 2016 3
Board of Directors
Of the Board of Directors' 14 members, 93% are independent and 42% are women.
The principal role of the Board of Directors is to determine Valeo's business strategies and ensure that they are implemented effectively.
The Board of Directors met on eight occasions in 2016, i.e., twice as many meetings as the minimum stipulated in the Internal Procedures, with a 96% average effective attendance rate.
Mari-Noëlle Jégo-Laveissière Executive Vice-President of Innovation, Marketing & Technologies, Orange
Ulrike Steinhorst
Member of the Board of Directors, Mersen SA;
President, Nuria Consultancy
Jacques Aschenbroich Chairman and Chief Executive Officer since February 18, 2016
Daniel Camus
Chief Financial Officer, The Global Fund
C. Maury Devine
Director (various companies)
Noëlle Lenoir Partner, Kramer Levin Naftalis & Frankel LLP
Véronique Weill
Chief Customer Officer, AXA Group; Chief Executive Officer, AXA Global Asset Management
Gérard Blanc
Director (various companies)
Pascal Colombani
Chairman, TII Stratégies SAS; Senior Advisor, J.P. Morgan Chase and A.T. Kearney;
Corporate Director, TechnipFMC
Sophie Dutordoir
Director (various companies)
Thierry Moulonguet
Director (various companies)
Jérôme Contamine Executive Vice-President, Chief Financial Officer, Sanofi
Michel de Fabiani
Vice-President, Franco-British Chamber of Commerce and Industry
Georges Pauget
Chairman, Économie Finance et Stratégie SAS
Operations Committee
Under the authority of the Chairman and Chief Executive Officer, Valeo's Operations Committee meets once a month and comprises
15 members. Its role
is to review operational management, coordinate projects and implement the Group's strategy. The Committee is responsible for ensuring that the Group meets its objectives and adheres to the
continuous improvement process through the
5 Axes methodology.
Maurizio Martinelli President, Visibility Systems Business Group
Éric Schuler
President, Valeo Service
Jacques Aschenbroich
Chairman and Chief Executive Officer
Fabienne de Brébisson Vice-President, Communications
Xavier Dupont
President, Powertrain Systems Business Group
Axel Maschka
Senior Vice-President, Sales & Business Development
Jean-François Tarabbia Senior Vice-President, Research & Development and Product Marketing
Geoffrey Bouquot Vice-President, Corporate Strategy and External Relations
Robert Charvier
Chief Financial Officer
Éric-Antoine Fredette
General Counsel
Francisco Moreno President, Thermal Systems Business Group
Marc Vrecko
President, Comfort & Driving Assistance Systems Business Group
Catherine Delhaye
Chief Ethics and Compliance Officer
Bruno Guillemet
Senior Vice-President, Human Resources
Christophe Périllat
Chief Operating Officer
4 Activity and Sustainable Development Report - Valeo - 2016 5
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