Investor Day Sustainable Mobility
June 27, 2017
Agenda
1
Introduction
Patrick Koller
2
Growth via technology in automotive
Mathias Miedreich
3
Growth beyond automotive
Curt Miller
4
Electric vehicles
Christophe Bouly
5
Star Technologies
Annika Isaksson Christophe Bouly
6
Faurecia Clean Mobility leadership
Christophe Schmitt
Investor Day – London – June 27, 2017
2
Agenda
1
Introduction
Patrick Koller
2
Growth via technology in automotive
Mathias Miedreich
3
Growth beyond automotive
Curt Miller
4
Electric vehicles
Christophe Bouly
5
Star Technologies
Annika Isaksson Christophe Bouly
6
FCM performance leadership
Christophe Schmitt
Investor Day – London – June 27, 2017
3
2012 – 2016 Accelerating value creation and strategic flexibility CAGR +11%
Order intake: three year rolling Value-added sales in € billion
CAGR +22% (in €m)
Operating margin % of value-added sales 6.2 5.4
53 4.3
47
3.5
43 2012 - 2014
2013 - 2015
2014 - 2016
2013
2014
Net debt in € million 2013
2014
2016
22%
342
1,519
963
53 15%
1,388
Investor Day – London – June 27, 2017
2016
ROCE*
2015
47
2015
2013 4
25%
16% 2014
2015
2016
2017 will be major step to achieve 2018 objectives
+6%
+400 bp above market
2017 Value-added sales growth
2017 GUIDANCE 6.4 - 6.8% > €350m of VA sales 2017 Operating margin
2017 Net cash flow
Around €4 2017 Earnings per share
2018 OBJECTIVES +6%
7%
+400 bp above market
of VA sales
> €500m
€5
Value-added sales CAGR 2016 - 2018
2018 Operating margin
2018 Net cash flow
2018 Earnings per share
Investor Day – London – June 27, 2017
5
Strategic priorities Sustainable mobility and smart life on board
Market growth* €25 billion by 2030
Become a valued key player in the new automotive landscape providing intelligent solutions for an enhanced and sustainable driving experience * Value added sales
Investor Day – London – June 27, 2017
6
Market growth* €40 billion by 2030
Many different powertrains will co-exist driven by different urbanization patterns Relevance of powertrain type
Global population by city archetype (billion) Optimized ICE
8.6 7.3
0.7 0.4
0.6 0.3
1.5
1.1 2.8
2.1
Hybrids
Electric
High income, suburban sprawl (eg Los Angeles)
Hybrid, BEV, FCEV*
High income, dense cities (eg London)
Hybrid, BEV**
Green Gasoline, Hybrid, FCEV
Low income, suburban sprawl (eg Chongqing)
Low income, dense cities (eg Mumbai)
3.2
3.2
2015
2030
Investor Day – London – June 27, 2017
Green Gasoline, BEV
Green Gasoline, Hybrid, BEV, FCEV
Rural areas
Not relevant
Source: McKinsey center for Future Mobility
* Fuel Cell Electric Vehicle 7
Typical technologies
Highly relevant ** Battery Electric Vehicle
Faurecia will offer broad range of technology solutions to enlarged customer base
Increase in technology content for all types of passenger car
Average content/vehicle increase by at least 60% by 2030
New markets becoming emissionized creating new opportunities
Commercial Vehicles: on and off highway
High Horsepower/Industry
Electric vehicles and new mobility solutions are an opportunity for Faurecia
Battery Electric Vehicles (BEV)
Fuel Cell Electric Vehicles (FCEV)
Real time data emissions
Investor Day – London – June 27, 2017
8
Strategy to reach > €10 billion sales in Clean Mobility by 2030 >7% CAGR 2016-2030
Freedom from powertrain mix
High value content on electric vehicles
Leverage existing technologies and competencies into adjacent markets
Expand breakthrough DeNox technologies into new markets
Develop service offer based on real-time data emissions
Increased market share across the board
Increased profitability, cash generation and ROCE
Investor Day – London – June 27, 2017
9
Agenda
1
Introduction
Patrick Koller
2
Growth via technology in automotive
Mathias Miedreich
3
Growth beyond automotive
Curt Miller
4
Electric vehicles
Christophe Bouly
5
Star Technologies
Annika Isaksson Christophe Bouly
6
FCM performance leadership
Christophe Schmitt
Investor Day – London – June 27, 2017
10
Faurecia’s vision of powertrain electrification In line with market consensus LIGHT VEHICLES: GLOBAL POWERTRAIN MIX TO 2030 Faurecia Vision 3%
11% Pure EV
Roland Berger 3%
BCG 3%
10% Pure EV
11% Pure EV
13%
17%
19%
IHS 3%
5% Pure EV
19% 34% Hybrids
38% Hybrids
36% Hybrids
12% ICE Diesel
83%
79%
77%
2025
2030
Investor Day – London – June 27, 2017
77% 51% ICE Gasoline
42% ICE Gasoline
2020
15% ICE Diesel
3% ICE Diesel
11% ICE Diesel
2016
35% Hybrids
46% ICE Gasoline
40% ICE Gasoline
2016
2020
2025
2030
2016
11
2020
2025
2030
2016
2020
2025
2030
Internal combustion engines (ICE) will remain dominant Electrification is a clear trend Worldwide volume by powertrain (million units)
103.1 0.2
93.0
3.1
5.6
23.7
17.8
108.0 6.5
32.4
2.3
116.5 10.4
Key trends TOTAL VOLUME
+ 1.5 to 2.0% CAGR
ICE VOLUME
+ 0.7 to 1.1% CAGR
DIESEL
- 30 to 50%
HYBRID
x 7 to 9
BEV
x 50
FUEL CELL
Take off post 2025
Electric Vehicle (BEV & FCEV)
43.3
14.4 12.9 12.4
69.4
61.9
56.2
2017
2022
2025
ICE gas
ICE diesel
Hybrids
Investor Day – London – June 27, 2017
ICE Engine
48.1
2030 BEV
Fuel cell
12
CO2 regulation in all key geographies will drive system content increase in particular for hybrid vehicles CO2 targets
Faurecia star technologies
g/km
€/vehicle Faurecia accessible market in value added sales*
Integrated low pressure EGR 150
Gasoline
Ultra-compact Energy recovery
130
110 95
Electric Heated Catalyst
2020
2025
Gasoline Particulate filter
160
2020
170
+30%
210
Hybrid
Real Time CO2 Emissions
Current
2020 2025
Sources: ICCT, FCM analysis Investor Day – London – June 27, 2017
Current
2025
Lightweight technologies (10g CO2 = 130 kg) 2015
Emission control system value
170
+70%
190 290
*European average excluding monoliths
310
13
360
Reduction of diesel share is improving Faurecia's value mix Faurecia's vision: NOx targets
Faurecia star technologies
Emission control system value
Base 100 in 2016 100
€/vehicle Value added sales*
Electric Heated Catalyst
Diesel +67% - Faurecia content + 17%
Ultra-Compact SCR BlueBox®
50
Diesel Particulate Filter Lightweight technologies
Current
180
2020
190
2025
270
210
20
ASDSTM 2015
2020
2025
Real Time Emissions
Faurecia accessible content
Total content Sources: ICCT, FCM analysis Investor Day – London – June 27, 2017
*European average excluding monoliths 14
425 450
Faurecia Clean Mobility sales on light vehicles will outpace the market FCM ICE LIGHT VEHICLE VA SALES (€bn) Growth drivers 7.7 +5% CAGR
3.9
6.2
4.7
2016
2020
2025
2030
CAGR 16-30
Market size (€bn)
14.4
16.0
21.5
27.0
4.6%
Market share
27%
29%
29%
29%
Based on Faurecia vision for global powertrain mix 2030, excluding pure EV sales Investor Day – London – June 27, 2017
15
Faurecia will outpace the market growth, enabled by a strong innovation & technology portfolio for all powertrains
Reduction of diesel share is improving Faurecia's value mix
Faurecia Clean Mobility sales growth for ICE light vehicles secured even if EV share almost triples
Agenda
1
Introduction
Patrick Koller
2
Growth via technology in automotive
Mathias Miedreich
3
Growth beyond automotive
Curt Miller
4
Electric vehicles
Christophe Bouly
5
Star Technologies
Annika Isaksson Christophe Bouly
6
FCM performance leadership
Christophe Schmitt
Investor Day – London – June 27, 2017
16
On-Highway: Regulations in China and India will significantly increase average content per vehicle from 2020 Faurecia's vision on regulation
2016
CHINA
INDIA
CN IV BS III
2022
CN V
CN VI
BS IV
BS VI
EPA 10
USA
E.U.
2019
EU VI
EU VI D
2025 CN VI
Key technologies
Regulation impact on future emissionized vehicles
Complete system breakthrough
€/vehicle Faurecia accessible market in value added sales*
Diesel Oxidation Catalyst + Diesel Particulate Filter + Mixer + SCR
D*
Current
BS VI
24* EU VII*
40% reduction in weight 60% space saving ASDSTM Best deNOx technology
350
India Current
Major content change
*excluding monoliths 17
+215%
95
BS VI
Investor Day – London – June 27, 2017
+130%
150
China VI
D* CARB
China
300
Off-Highway: China and India content per vehicle increases dramatically Faurecia's vision on regulation
Key technologies
Regulation impact on future emissionized vehicles €/vehicle Faurecia accessible market in value added sales*
2016
2019
2022
2025
China CHINA INDIA
USA
E.U.
China III (Stage IIIA)
China NR IV (Stage IIIB)*
BS III (Stage IIIA)
Tier 4*
Tier 4 Final
Tier 5*
Stage IV
Stage V
Current
Diesel Oxidation Catalyst + Diesel Particulate Filter
China NR IV
400
India ASDSTM Current
Major content change
*excluding monoliths 18
x10
30
Tier IV
Investor Day – London – June 27, 2017
x8
50
300
Commercial vehicles Faurecia targets 27% market share globally by 2030 2016 market share
12%
Highly fragmented
Competitor A
Drivers of increased market share
Globalization of engine strategies favors two global actors
Patented technologies and innovations e.g. Compact mixer, ASDSTM
Strategic partnerships and JVs with key customers
China 38% of market volume Others
21%
31%
Competitor B 17%
17%
Global Partnership
Investor Day – London – June 27, 2017
Others 10%
JV / strategic relationship
14% Dongfeng
19
India 10% of market volume 28%
Commercial opportunies
Volvo 20% Ashok Leyland 22%
29%
19%
Global Partnership
Strategic relationship
Faurecia sales on commercial vehicles to grow more than twice as fast as the market FCM COMMERCIAL VEHICLE VA SALES (€bn) Growth drivers
1.5 +12.2% CAGR
1.0
0.7
Huge impact in value due to tightened regulations in China and India
Technology as a key driver for market share gain
Global platform and strategic partnership
0.3
2016
2020
2025
2030
CAGR 16-30
Market size (€bn)
2.5
3.4
4.8
5.5
5.8%
Market share
12%
21%
21%
27%
Investor Day – London – June 27, 2017
20
High Horsepower and industrial applications offer adjacent market opportunities for our technologies Emissionized adjacent markets
After treatment for High Horsepower engines
Applications
Medium & low speed
Marine propulsion
> 5,000 Horsepower
Marine power supply
Power generation
Railway
Construction
Industrial
Semiconductor industry
LCD panel industry
High speed
C > 750 Horsepower
DeNOx for Industry
Investor Day – London – June 27, 2017
Manufacturing sites
21
High Horsepower will be more and more emissionized HHP REGULATION DEVELOPMENT IN KEY GEOGRAPHIES
Power Generation
Global
Key regulations reinforced between 2022 and 2025
Local NAO Europe
HHP
China India ROW 2015
2020
>80% emissionized
Investor Day – London – June 27, 2017
2021
2022
50%-80% emissionized
2023
2024
20%-50% emissionized
22
2025
2030
10%
≈ 20%
Operating margin
Investor Day – London – June 27, 2017
24
Agenda
1
Introduction
Patrick Koller
2
Growth via technology in automotive
Mathias Miedreich
3
Growth beyond automotive
Curt Miller
4
Electric vehicles
Christophe Bouly
5
Star Technologies
Annika Isaksson Christophe Bouly
6
FCM performance leadership
Christophe Schmitt
Investor Day – London – June 27, 2017
25
Fuel cell and battery electric vehicles will coexist on different segments 2030 COMPARED PERFORMANCE OF BATTERY AND FUEL CELL Battery EV
Fuel cell EV
Short Range Vehicles €3,000
Faurecia Clean Mobility significant sales potential over €0.7bn by 2030
Potential sales not included in FCM electric vehicle sales forecast
Production
Stainless steel expertise and high purchasing power Global Faurecia footprint
29
Faurecia targeting around 20% market share on battery pack and fuel cell tank sales FCM ELECTRIC VEHICLE (BEV & FCEV) VA SALES* (€bn) Growth drivers 0.8
+21.7% CAGR
Faurecia Clean Mobility is developing product offer for battery electric vehicles and fuel cell vehicles
0.3
0
0
2016
2020
2025
2030
CAGR 25-30
Market size (€bn)
0.2
0.4
1.7
4.0
18.7%
Market share
0%
0%
18%
20%
* Excluding fuel stacks Investor Day – London – June 27, 2017
30
Battery packs and fuel cell tanks allow €300 average content for electric vehicles by 2030 Fuel cell stacks would represent over €0.7bn additional revenue potential
Expanding competencies through partnerships such as with Stelia, Ad-Venta, CEA and building on thermal management and energy efficiency expertise
One Faurecia fuel cell vehicle will be on the road in 2019
Agenda
1
Introduction
Patrick Koller
2
Growth via technology in automotive
Mathias Miedreich
3
Growth beyond automotive
Curt Miller
4
Electric vehicles
Christophe Bouly
5
Star Technologies
Annika Isaksson Christophe Bouly
6
FCM performance leadership
Christophe Schmitt
Investor Day – London – June 27, 2017
31
ASDSTM Best-in-class deNOx technology allowing real-time date monitoring
5
NOx tracker
NOx emissions (base 1)
4
3 2
Adblue
ASDSTM installation
1
ASDSTM
Ammonia gas stored in a salt
Best deNOx performance at low temperatures (e.g. city driving)
ASDSTM can reduce NOx emissions by a factor of up to 4 vs. Adblue
Investor Day – London – June 27, 2017
32
Live monitoring of deNOx performance of each vehicle
Providing real time performance data to cities & mobility operator
Growth potential ASDSTM unique performance makes it suitable for many uses ASDSTM APPLICATIONS Industrial
Bus and Truck
NOx removal for city driving vehicles and cold climates
NOx removal in manufacturing plants, & industrial diesel
Opportunity: passenger cars
Superior deNOx performance (RDE in cities & cold climates)
Retrofit of existing city trucks and buses: e.g. London, Seoul, Copenhagen, …
Industrial emissions: cleaning of intensive NOx generating processes (e.g. semi-conductor)
Retrofit of existing cars to support upcoming city emission regulations
First Fit on new city vehicles: comply with regulations while saving energy
Diesel generators: deNOx of exhaust gas for gen-sets working at low temperatures
First Fit on hybrid diesel cars running at low temperatures
Combination system Adblue & ASDSTM
Investor Day – London – June 27, 2017
33
Retrofit Cost effective solution to improve air quality in the short term ASDSTM Retrofit more effective than fleet conversion to electric
Retrofit volume potential 26 million commercial vehicles
For fleet of 5,000 buses
Commercial vehicles fleet (million)
Investment NOx removed (€m) over 8 years over 8 years (tons) Retrofit
75
18,700 x33
Electric conversion
2,500
26
€ per kg of NOx removed
Japan/Korea
5
NAO pre-EPA07
9
Europe EU IV & V
9
China CN III & IV
4 x0.7
13,325
x47
188
ASDSTM retrofit achievable in 3 years Electric vehicle migration not achievable in less than 8 years for full fleet
Investor Day – London – June 27, 2017
3
34
Around 400 buses already equipped and >30 million km driven
Seoul (Korea) Order received for 20,000 buses and trucks
London (UK) Tender for 5,000 buses ongoing
Copenhagen (DK) 300 buses equipped 30m km driven
In discussions with Aachen, Austin, airports, Indianopolis, Lyon, Munich, Portland, Santiago, USA school buses….. Investor Day – London – June 27, 2017
35
Accessible market size is almost €3bn by 2025 ASDSTM SYSTEM: 2025 MARKET OPPORTUNITY (VA SALES €m) €1,600m Retrofit
1
25%
€1,100m
3 50%
2
First fit
Growth strategy
75%
4 50%
Priority 1: commercial vehicles & industrial
Investor Day – London – June 27, 2017
Priority 2: diesel generators & light vehicles
36
1
Retrofit market for city vehicles
2
First fit OEM business for city driving commercial vehicles
3
Develop LV retrofit solution for light vehicles and industry
4
Enable city Low Emission Zone (LEZ) driving: ultra green diesel
Long-term sales target to reach >€1.0bn with superior profitability FCM ASDSTM SYSTEM VA SALES* (€m) Growth Drivers > 1,000
Unique, patented deNOx performance in real road conditions (incl. low engine temperature)
Perfectly suited for city vehicles and industry in retrofit and first fit applications
Access to NOx performance data in real time sold to cities
A new market up to €2.7bn by 2025
+25% CAGR
400 100
0 2016
2020
2025
2030
Superior profitability driven by cartridge refilling and services Investor Day – London – June 27, 2017
37
Gasoline Low Pressure EGR system gives up to 10g CO2 reduction in real driving conditions
EGR stands for Exhaust Gas Recirculation Investor Day – London – June 27, 2017
38
Strong market growth at 25% CAGR driven by regulations and fuel savings Gasoline low pressure EGR system addressable market (€ bn)
Gasoline low pressure EGR system market drivers
5.4 +25% CAGR
Key technology to reduce CO2 for gasoline turbo engines
In 2030, more than 50 million engines will require Low Pressure EGR systems
2.2
0.6 2020
2025
2030
EGR stands for Exhaust Gas Recirculation Investor Day – London – June 27, 2017
39
Faurecia will achieve 20% market share and over €1bn revenue by 2030 FCM LOW PRESSURE EGR SYSTEMS SALES (€bn) Growth Drivers 1.1
Faurecia is uniquely positioned as a systems integrator enabling breakthrough offer with 30% less volume and cost
Faurecia technology allows up to 10g CO2 reduction
Development partnership with strategic customer
+30% CAGR
0.3 0 2020
2025
2030
Superior margin potential driven by high technology content of integrated system EGR stands for Exhaust Gas Recirculation Investor Day – London – June 27, 2017
40
Real time emissions for clean cities
Cities / Mobility operators’ needs
Cities compliance with mandatory Air Quality improvement targets
Clean Mobility in Smart Cities initiatives (C40)
Monitoring and incentives for environmental-friendly driving behaviors
Faurecia will provide real time emissions through smart sensors and digital services Investor Day – London – June 27, 2017
41
Real time emissions for clean cities is an important market opportunity Market opportunities
Digital service and sensors market*
LV fleet, million vehicles
€bn
Connected car 2.7
New opportunities thanks to car data generation and analytics +39% CAGR
1,050 550
0.7 0.1
70 2020
2025
2030
2020
2025
Smart mobility New disruptive services * Assuming sensors become obligatory equipment on all vehicles Investor Day – London – June 27, 2017
42
2030
Real time emissions for clean cities will generate €0.8bn revenue by 2030 FCM REAL TIME EMISSIONS SALES* (€bn) Growth Drivers 0.8
+44% CAGR
NOx Tracker know how
Expertise & exclusive technology
0.2
2020
2025
2030
Superior margin potential driven by recurring revenue business model * Assuming sensors become obligatory equipment on all vehicles Investor Day – London – June 27, 2017
43
Emissions measurement (sensors)
Data acquisition and analytics
Strategic partnerships with startups and top IT players
Agenda
1
Introduction
Patrick Koller
2
Growth via technology in automotive
Mathias Miedreich
3
Growth beyond automotive
Curt Miller
4
Electric vehicles
Christophe Bouly
5
Star Technologies
Annika Isaksson Christophe Bouly
6
Faurecia Clean Mobility leadership
Christophe Schmitt
Investor Day – London – June 27, 2017
44
Bright future for clean mobility market KEY MARKET DRIVERS
Market growth* 2016 – 2030 + €25bn Investor Day – London – June 27, 2017
* Value added sales
Stringent regulations and new ultra green technology breakthroughs
All markets getting emissionized including China, India CV, HHP engines, industrial
Nearly 50% of the market will be electrified: a great opportunity
Smart Cities will drive new Clean Mobility requirements
Accurate real time emissions data key to restoring trust and enabling Clean Mobility 45
Strong technology ecosystem enables higher technology content and access to new mobility fields Share of new technologies in value added sales
Technology and market ecosystem Air Quality / Acoustics
NDA
Innovation
HHP / CV
32% 60%
NDA
Electrification NDA
Baseline
68% 40%
NDA
Real Time Emission
NDA
NDA
NDA
Investment Investor Day – London – June 27, 2017
Partnership
Exploration 46
2020
2025
New technologies spend: 21% CAGR 2016-20
# patents 40% CAGR 2016-20
Leading Clean Mobility with >€10bn revenues in 2030 including €3bn of high technology new business FAURECIA VALUE ADDED SALES BY MARKET SEGMENT (€bn) >10.7 > 7% CAGR
5.5
7.9 0.3 0.4
Electric vehicles
0.8 0.7
CAGR 23% 2025-2030
HHP/Industrial
CAGR 21% 2020-2030
1.5
Commercial vehicles CAGR 12% 2016-2030
0.7
3.9
2016
Light vehicles
7.7
0.3
CAGR 5% 2016-2030
6.2
4.7
2020
2025
Innovation & business development
2030
47
800
CAPEX
1,600
Combined: €400m per year
Around 7% of VA sales
Asset light
Based on Faurecia vision for global powertrain mix 2030 Investor Day – London – June 27, 2017
1.0
0.1
4.2
Investment in €m 2017 -2022
Faurecia Clean Mobility will more than triple operating income with high cash conversion
In €m
2016
2020
2025
2030
CAGR (in %) 2016 - 2030
Value added sales
4,195
5,500
7,900
>10,700
>7%
o/w LV
3,855
4,700
6,200
7,700
5%
o/w CVE, HHP & other
340
800
1,700
>3,000
17%
Operating income
394
around 600
around 1,000
> 1,500
11%
Margin in %
9.4%
11%
> 12%
15%
-
Cash flow conversion (in % of operating income)
around 50%
50 - 55%
> 55%
> 55%
-
ROCE (in%)
28%
28 - 30%
> 30%
> 30%
-
Investor Day – London – June 27, 2017
48
Strategic transformation of Faurecia Clean Mobility Strategic Drivers
Vision
Be the leading clean mobility company with benchmark technology and profitability
Strategic freedom vs powertrain mix
Investor Day – London – June 27, 2017
New clean emissions value spaces through innovation for ICE & hybrid Expand commercial vehicles & industrial
Solutions for electric vehicles & new mobility
49
Ambition 2030
Value added sales
> €10bn
> 7% CAGR 2016-2030
Profitability
> €1.5bn operating income
15% of VA sales
Other financials
Cash conversion > 55%
ROCE >30%
Investor Day – London – June 27, 2017
