1. technology and computing

Investor Day
Strategy to double sales in China and Group update
Shanghai
November 11, 2014
Investor Day
Shanghai
November 11, 2014
China Market
Faurecia China
Jingcheng Li
November 11, 2014
China believes that a strong central government will lead
to a powerful Nation based on its 5,000 year history
People’s Republic of China: 100 Years Development
Foundation of the
Republic of China
1911
The 3rd Plenary Session of the
18th Central Committee of the
CPC for “Deepening Reform”
Foundation of the
People’s Republic
of China
1921
Foundation of CPC
1949
1978
2013
The 3rd Plenary Session of the 11th
Central Committee of the CPC for
“Reform and Opening “
Communist Party of China: 100 Years Development
The 100th Anniversary
of the People’s
Republic of China
2021
The 100th
Anniversary of
CPC
2049
In 35 years:
•
•
•
•
2nd World Eco Power
GDP +142 times
Urban revenue +71 times
Rural revenue +59 times
China is now going for the Chinese Dream:

1921 – 2021: 100 years of CPC foundation,
China will reach a comfortable level at the whole nation

1949 – 2049: 100 years of PRC foundation,
China will reach the same level as that of the developed
countries

By the end of 21st century: China rejuvenation
will be realized step by step and China re-becomes
the world first powerful country
Chinese Dream realization will improve people living conditions and boost consumption
Investor Day – Shanghai – November 11, 2014
4
2014 China dilemma: Stimulus or Reform
China government has chosen to deepen the reforms
Export
China
GDP
Drivers
“Global weak
demand"
Investment
"Debubble! –
post 4 trillion
Plan"
Consumption
“Limited social
protection"

Super-imposed effect in 2014
 Speed shift of GDP growth
 Pain of structure reform
 Digestion of post 4tr. Plan

30 “Golden Years” now limited by
 Natural resources
 Environment impact
 Labor force and cost

GDP drivers shift becomes must
 Public debt control & reduction
 Consumption and wage policy
 Core technologies & Innovation
China is committed to conduct further reforms aiming at the new development model
Investor Day – Shanghai – November 11, 2014
5
"The Rule of Law": main theme of 4th plenary session
of 18th Central Committee of CPC, historical milestone
Direction & Consequences

What does it
mean?




What does it
include?





How to
understand?


China history and culture deeply marked by Confucianism
Confucianism privileges moralisim rather than laws
In ancient China, "Law" means punishment, different from Western
"Law" has no link to human rights and powers’ separation notion
Legislation: reinforcement of the role of People’s Congress
Administration: the rule of the law for government
Judicial organ: more independent and justice
Respect of Law: population with law mindset in daily life
Under the leadership of CPC and socialist market economy
Better balance between the rule of law and individual perfection
Restriction of government power, thus reduce corruption source
New reforms need to be conducted on the basis of laws
China will provide a more healthy business environment
Investor Day – Shanghai – November 11, 2014
6
2014 China automotive industry is marked by top level
government exchange between Europe and China
Anti trust fine
On OEM and
Auto parts
Child seats
In cars
Anti Trust
Investigation
Incentives
for new
energy cars
Euro V from
1/1/2015
Scrap of Yellow
Label vehicles
German PM Merkel
China visit
Car air
Purifier
standard
Jan
Mar
May
July
Sept
DF / Renault JV
XI Jinping
Europe visit
DF / PSA
Daimler
BMW
VW
Volvo
Yanfeng JCI
Interior
merger
FVW new sites
In Qingdao &
Tianjin
DF Infiniti new JV
DF PSA
Chengdu new site
Oct
Capital increase of VW in
its JV with FAW:
49% vs. 40%
Main market trends


PV growth High H1 and Low H2
Local brands losing some share


Global OEMs capacity expansion
Regulation: anti-trust, environment, safety
China automotive industry continues to grow, with more regulation and new norms
Investor Day – Shanghai – November 11, 2014
7
China market is maturing in terms of regulation and norms
Air cleaning becomes a priority for government
Environment
Emission
Gasoline
Diesel
2010
2018
2013
China IV
(EU IV)
China V
(EU V)
China IV China V
2015
2018
Recall policy
Air quality (PV)
2013, enlarge vehicle scope, defects definition,
clarify responsible party, increase fine for OEMs
who refuse recall
2015, Air quality standards inside vehicles
(PV), set mandatory standards for volatile
organic compounds & specified pollutants'
limits
China VI
(TBD)
China Three Guarantees
Fuel consumption limits (PV)
2015
2020
2025
6.9 L / 100 km
5.0 L / 100 km
4.0 L / 100 km
2013, Guarantee for repair, replacement, &
return within 3 years cf car lifetime, provide
more protection to consumer
NEV subsidy plan
Child seat
2010
2013
• Pilot in 25 cities
• Subsidy by battery energy
• Focus on Beijing, Yangtze
& Pearl river delta regions
• Subsidy by battery endurance
distance
2012, Restraint system of vehicles for children
(ECER44), enhance the protection of children
safety
Implications


Health
Safety
Constant innovation required in emission technology
to meet environment requirements
Lightweight solutions contribute to reach fuel
consumption targets
Investor Day – Shanghai – November 11, 2014
Implications


Product quality improvement is
a priority
International standards move
8
Implications


Request continuous attention
and development on new material
Potential cost-up pressure
Car selling price comparison between China and Europe
Margin on Premium and SUV under pressure
Global Brand
EU CAR PRICE (€)
9,000-14,000
CN JV CAR PRICE (€)
Chinese Brand
Segment
CAR MODEL
A00
Not produced
VW UP
12,000-18,000
A
13,000-22,000
8,000-14,000
Geely EC7
B
22,000-39,000
11,000-23,000
Geely EC8
C
38,000-90,000
Audi A6
71,000-134,000
5,000-7,000
Geely SC6
VW Passat
36,000-56,000
4,000-7,000
A0
10,000-15,000
VW Golf
24,000-42,000
CAR PRICE (€)
Geely Panda
VW Polo
19,000-26,000
CAR MODEL
D/E
89,000-350,000
Not present
Not present
BMW 7 Series
24,000-31,000
SUV
22,000-42,000
VW Tiguan
Note: EU car price incl. sales tax, exchange rate: EURO/RMB=1/8.2
Investor Day – Shanghai – November 11, 2014
10,000-13,000
Geely GX7
Source: www.cars-of-europe.com, www.bitauto.com
9
Six automakers share over 80% of the market
European
U.S
Japanese & Korean
PV brands
Others
Chinese OEM groups
59%
24%
12%
Chinese Market Volume
Brand Share
['000]
SAIC
26%
3,013
FAW
16%
1,857
DongFeng
17%
1,977
Chang'an
10%
1,121
BAIC
8%
961
GAC
6%
750
GreatWall
3%
357
Geely-Volvo
2%
241
BYD
2%
261
Brilliance
3%
317
Chery
2%
257
Others
5%
606
Market share
20%
4%
2%
1%
0%
10%
4%
5%
5%
5%
10%
3%
32%
Volume ['000] 2,369
472
197
89
42
1,116
524
591
612
563
1,116
299
3,729
Global OEMs enjoys 2014 market growth with continuous capacity expansion
Investor Day – Shanghai – November 11, 2014
JV
10
Source: Auto 2000 Aug, Faurecia internal analysis
2015 auto growth continues despite some pressure from macro
economy and will be key for new China auto industry policy
Forecasts

Domestic
Economic
Growth




Automotive
industry
Development



Potential Impacts
GDP between 7.0% to 7.3%
Population at 1.37 billion
Urbanization rate at 55.4%
High pressure on CO2 control




PV volume growth around +9.9%
Euro V nationally implemented
New industrial policy release
13th Five Year Plan direction




Unemployment rate to increase
Big consumer market to stimulate
Public debt control and financing innovation
Pillar industries support to maintain growth
2015 PV production volume at 18.7m units
Yellow Label vehicles scrap plan results
China local brands development
Emission control, light weight, safety
2015 main focus: 3rd Edition of China Automotive Industry Policy
Source: China State Information Center
Investor Day – Shanghai – November 11, 2014
11
China automotive industry faces some strategic topics
to be clarified in 2015 with long term impact
3rd Edition of China Automotive Industry Policy
st
1 Edition in 1994:
2nd Edition in 2004:
3rd Edition in 2015:
Main Target
Market against Technology
Consolidation by SOE OEMs
Powerful automotive country
"Perceived" Results
Market open mainly to global OEMs
Own Brands development difficulties
Mastering core technology / innovation
13th Five Year Plan Direction
CO2 focus: China CO2 peak forecasted between 2025 and 2030, light weight and emission controls
China Local Brand Support Policy
Each Chinese OEM will find out its own way to develop further the local brands
Anti-Trust Scrutiny Evolution
China moves toward the international practices
OEM 50/50 JV Evolution
OEM Joint Venture Agreements extension, the latest is FVW for 25 years
Chinese and global OEMs relationship will be closer via different forms: cross participation, M&A etc.
New China Automotive Industry Policy may focus on new energy cars and local brands
Investor Day – Shanghai – November 11, 2014
12
China economy will live with deep changes to maintain
a steady growth in the coming 10 years
13th Five Year Plan (2016 - 2020)

Domestic
Economic
Growth




Automotive
industry
Development



14th Five Year Plan (2021 - 2025)
GDP around 7.3%, 2020 below 7.0%
Population at 1.41 billion
Urbanization rate at 60%
Urban family number: 270m in 2020

PV volume growth 9.4%, 2020 at 26.4m
Euro VI introduction, 5l per 100km
Own brands turnaround
New energy significant growth







GDP around 6.3%, 2025 below 6.0%
Population at 1.44 billion
Urbanization rate at 64%
Urban family number: 340m in 2025
PV volume growth at 4.4%, 2025 at 31.7m
Further weight reduction
China becomes global player
China powerful automotive country
China market still offers important potential for the coming years
Source: China State Information Center
Investor Day – Shanghai – November 11, 2014
13
China vehicle production hits 22 m units in 2013,
and will exceed 30 m units by 2017
China vehicle production volume 2009 – 2020 E [m units]
CAGR = ~6%
31
3
CAGR = 7%
18
19
3
3
4
3
11
12
2010
19
2
22
3
6
‘10-'13
33
3
6
CVE
LCV
2012
1)
1%
2)
8%
'13-'20
3%
6%
Total
Production
Volume
[m units]
16
W. Europe
4
11
213
235
24
PV
3)
17%
6%
Total car
parc
[m units]
60
Car owner ship
[units/1,000
people]
2017 E
2020 E
740
490
63
Market consensus on China automotive volume turn-point: 40m units
Source: IHS 2014 Aug, Faurecia China internal analysis
1) CVE refers to truck/bus above 3.5 tons 2) LCV refers to commercial vehicles up to 3.5 tons 3) PV refers to cars, incl. MPV and SUV 4) incl. Pickup
Investor Day – Shanghai – November 11, 2014
8
85
16
2013
4)
11
4)
22
2011
CAGR
4
13
Key figures of PV Market - 2013
14
470
SUVs are increasingly favored by Chinese OEMs, premium
and entry segments are also gradually gaining share
Share of body-type
[m units]
Share of brand tier
[m units]
16
22
24
Sedan
12%
11%
11%
A/B
47%
16%
40%
39%
16
5%
C
15%
15%
D/E
6%
6%
MPV
28%
29%
SUV
2017 E
2020 E
66%
4%
20%
2013


China PV market is still dominated by C
segment, accounting for ~40% M/S
SUVs are increasingly favored by
Chinese customers, esp. for 2nd-time
purchase, due to their roominess


22
8%
63%
24
10%
61%
29%
29%
29%
2013
2017 E
2020 E
Share of brand origin
[m units]
Premium
MID
Entry
As premium brands are pushing
forward their localization in China,
their share is expected to increase
Entry brands are now recovering and
expected to achieve ~30% M/S


16
10%
22
9%
24
8%
14%
14%
14% U.S.
20%
19%
19% Japan
26%
27%
27% Europe
30%
31%
32% China
2013
2017 E
Source: IHS 2014 Aug
15
2020 E
In general, the market is relatively stable,
with Chinese brands increasing thanks
to government support
Japanese OEM performance to be
impacted by bilateral relationship
Growth and mix trend still support profitability improvement
Investor Day – Shanghai – November 11, 2014
Korea
Chinese OEMs will become more and more global via
partnership reinforcement and cross-border M&A operations
In the past
Full value chain including auto parts
Specific car development for China

More active Chinese partner
More confident to drive decisions

Global market and own brands
Chinese OEMs focus export / go global



SOEs / POEs / Global OEMs
All kinds of cooperation

New energy, hybrid, EV
Vehicle, mainly PV
Localizing foreign cars

Passive Chinese partner
In learning curve

Chinese market
Global car makers in China



6 SOEs / Global OEMs
Captive and capitalistic

Internal combustion engine
Value chain
coverage





Market focus

Market
players

Technology
direction




Impact on suppliers
Core technology
Brands
Funds, market, HR
Technology, brands
Missing to
China
Work split
In the future











M&A - Partnership
Local brands support
JV with OEM as key strength
Differentiation and innovation
Customer intimacy to focus
Address decision makers
China full service capabilities
Global footprint
Business model challenge
Capability and competitiveness
Regulation
Light weighting
China has spent US$15bn for OEM and Auto Part acquisition outside China
Starting from Oct. 2014, 98% cross border M&A need no more approval from Beijing
Investor Day – Shanghai – November 11, 2014
16
China auto part market competition is well structured
Technology, engineering localization rate and platform capabilities
remain key success drivers

OEM CAPTIVE PLAYERS



GLOBAL PLAYERS


LOCAL PLAYERS


China Top OEM have auto part integration strategy
Global ambition to be realized via M&A operations
Market is getting more and more open
Technology and innovation driven suppliers
Market mix requiring higher technology and quality
performance
Capable of managing global platforms
Cost driven competition and customer intimacy focus
Lack of global presence and access to technology
Faurecia is well armed to face the competition in China with a strong team
Investor Day – Shanghai – November 11, 2014
17
Key takeaway for China market
1
China new government team has defined the development objectives, strategy and roadmap
for the coming 10 years, positive impact on automotive industry is expected
2
China‘s PV market will continue to grow with 1.5 million units more per year till 2020
with a mix moving up and tightened regulation toward the international standards
3
China government support focuses on local brand and new energy solution development
4
Chinese partners will increase their decision power in the JV with global OEMs
and 50/50 business model can be in further evolution in 5 to 10 years period
5
China market environment is positive for Faurecia who has already
a solid presence and will accelerate the deployment of its strategy
Investor Day – Shanghai – November 11, 2014
18
Faurecia China development strategy definition takes fully
into account market and Group’s expectations
Key Assumptions
Market components
Impact on
Strategy Design
Political stability
Geopolitical and social tension
Neutral
China
Macro Economy
GDP ≈7% per year
Inflation ≈4%
Positive
China Automotive
Industrial Policy
Local Brand support
New energy car support
Positive
Neutral
China Regulation
Environment focus
Safety and health focus
Positive
Footprint strategy
Increasing decision power
Positive
Challenging
China
Auto Parts
International standard move
M&A development
Positive
Challenging
China Competition
Technology and Innovation
Differentiation focus
Challenging
15% to 20% of Group sales
Profitable and cash generating
Positive
China
Political Environment
China
Global & Local OEMs
Faurecia Group
Expectation
2018 plan
> € 4.0 bn
2016 plan
> € 3.0 bn
Faurecia China
Strategy
2014 Forecast
≈ € 2.3 bn
+ 17% vs. 2013
Faurecia has solid presence and clear strategy roadmap in China
Investor Day – Shanghai – November 11, 2014
19
Investor Day
Shanghai
November 11, 2014
China Strategy
Faurecia China
Jean-Michel Vallin
November 11, 2014
Faurecia celebrates in 2014 its 20 years’ localization in China,
providing a solid base for business acceleration
>€2bn
>€1bn
1994
2002
2005
Manufacturing


Raw material,
components, process,
equipment
Quality system, lean
production system
WAVE 1
Investor Day – Shanghai – November 11, 2014
2010 2011
Industrialization


Engineering
and validation
Program
management
WAVE 2
22
2013 2014 2015
R&D and Innovation



Tech Center fully autonomous
Advanced development
for China market needs
Local innovation
WAVE 3 & 4
A consistent strategy focused on 6 dimensions
to sustain profitable long term growth
1
2
Organic growth with core
and emerging clients



3
Partnership as OEM intimacy
leverage
Global program acquisition
Customer portfolio diversification
Product portfolio diversification



OEM connection
Regional presence
Business development booster
5
4
Program development to
drive profitability and cash



KPI constant improvement
ECRs efficient management
VA/VE portfolio enhancement
Investor Day – Shanghai – November 11, 2014
Manufacturing operational
excellence at benchmark level



Quality & HSE best in class
Flawless new launches
Operation and cost optimization
6
World class R&D providing
value to customers



Fully-owned, worldwide network
Deep expertise localization
Innovation and industrial style
23
Strong leadership team
to drive the growth plan



A strong Chinese mgmt. team
Training and development plan
Organization and resources
Faurecia has 23% CAGR for the past years and forecasts
€2.3 Bn sales in 2014, a new faster-than-market growth year
2014 Forecast
Total Sales
€ bn
≈ €2.3 Bn Sales*
1.0
CAGR = 23%
1.2
2.0
~2.3
1.5
38 Plants
2010
R&D
4 centers
750 engineers
2011
2012
2013
2014
35
36
38
2012
2013
2014
Total Plants
25
30
≈ 12,800 employees
Present in 21 cities
2010
* Including €0.2bn non consolidated sales
Investor Day – Shanghai – November 11, 2014
24
2011
Faurecia has now deployed its 4 Business Groups in China
FECT and FAS Metal in market leading position
First operation
1994: Wuhan
First operation
2002: Changchun (Structures)
2003: Wuhan (Complete seat)
2004: Wuxi (Mechanism)
First operation
2005: Changchun
First operation
2011: Changchun
2014 Forecast
16 plants
Total sales: ≈ € 1,150m 1)
≈ 4,400 employees
27% Market Share
2014 Forecast
10 plants
Total Sales: ≈ € 830m 1)
≈ 4,900 employees
15% Market Share Metal
5% M/S Complete Seat
2014 Forecast
11 plants
Total Sales: ≈ € 260m 2)
≈ 2,800 employees
4% Market Share
2014 Forecast
1 plant
Total Sales: ≈ € 80m 3)
≈ 550 employees
2% Market Share
1) Consolidated sales 2) Consolidated and non-consolidated sales ; 3) mainly non-consolidated
Investor Day – Shanghai – November 11, 2014
25
A manufacturing footprint of 38 plants in 2014,
covering the 6 main auto regions
North
North-East Region
2004
2007
2012
Yantai
Qingdao
Beijing
1996
2002
2005
2010
2011
2011
2012
Central Region
1994
2003
2006
2010
2012
2013
2014
Wuhan
Wuhan
Wuhan
Wuhan
Xiangyang
Nanchang
Changsha
6
East Region
3
2000
2004
2005
West Region
2003
2007
2010
2011
2012
2012
Chongqing
Chongqing
Chengdu
Chengdu
Chongqing
Chengdu
South Region
2010
2010
2012
2012
2012
2013
Guangzhou
Foshan
Foshan
Foshan
Shenzhen
Shenzhen
Investor Day – Shanghai – November 11, 2014
Changchun
Changchun
Changchun
Changchun
Changchun
Shenyang
Changchun
6
7
10
2008
2012
2012
2012
2012
2013
2014
6
★ China Headquarter
26
Seats
★
Interior
Exterior
Shanghai
Wuxi
Shanghai
Shanghai
Shanghai
Nanjing
Shanghai
Cixi
Yancheng
Nanjing
Cixi
Beilun
Exhaust
R&D centers
R&D Strategy focused on competence and expertize
full localization under 100% Faurecia control
R&D Strategy





FECT Tech Center Opened in April 2011
3 fully owned R&D centers integrated
in the global network with 750 engineers
Application centers in six regions
Continuous reinforcement of local team
and competences
More innovation focus
Design and style as differentiation factor
R&D and Program headcount evolution
China HQ & New Tech Center Opened in March 2013
1,200
750
2014
900
2015
Investor Day – Shanghai – November 11, 2014
2017
27
Manufacturing strategy focused on best in class operations
through full FES deployment and margin enhancement
Among best performing plants
Customer PPM [2014]
Dated on Sep. 2014
8
#1
Anting
FAS
#1
Wuxi
FAS
#4
Nanjing
FIS
#5
Wuhan
FECT
#8
Guangzhou
FAS
#9
Yantai
FECT
#9
Chengdu
FAS
#9
Wuhan
FIS
6
GM
“2013 GM
Supplier Quality
Excellence Award”
4
1
FAS
FIS
FECT
FAE
DPCA
“2013 GM Special
Award”
New Plant Launching Model
FAW-VW
“Top 10 Excellent
Quality Award”
8 Chinese Plants in Group Top 10
22 Chinese Plants audited
82%@A Rank; Average 64%
(All plant managers are Chinese)
Investor Day – Shanghai – November 11, 2014
Recognized by Customers
KM&I
“2013 Best
Supplier Award”
28
Faurecia China targets to double its size in the coming years
thanks to OEM volume growth and portfolio expansion
Sales forecast
Comments
> € 4bn

Faurecia to grow twice as fast
as the market (15% CAGR)

Strengthening relationships
with Chinese automakers:
 ChangAn for FIS, to extend
 Geely for FIS, FECT
 JMC for FECT
 Other opportunities
> € 3bn
≈ € 2.3bn
2014
Investor Day – Shanghai – November 11, 2014
2016
2018
29
Faurecia‘s partnership with China ChangAn Group
progresses smoothly in line with the strategic plan
Partnerships objectives
ChangAn Affiliated OEMs
50/50 JV established in 2013
 Interior business as first step scope
 Potential extension to other Faurecia product lines
 Significant businesses award since creation
Chang'an

PV Volume
Growth
Interior Systems sales evolution
2014 YTD
1.7m
+26%
JV footprint
€M
~ 210
~150
~20
2016
2018
2020
Faurecia will continute to deploy this strategy with other Chinese OEMs
Investor Day – Shanghai – November 11, 2014
30
Footprint strategy focused on business support
and capex optimization through volume massification


Key Strategy

Core technology / standard
product / techno plants:
densification of volume

JIT to follow customers

Cross BG building solution

Capex optimization

Vertical integration
to catch added value
New footprint focus regions – OEM new entry points
Changchun
Beijing
Nanjing
Chengdu
Wuhan
Chongqing
Plant Number

2014: 38

2018: 55

5 YR Investment: € 400 M
Investor Day – Shanghai – November 11, 2014
Shenyang
Shanghai
Hangzhou
Changsha
Guangzhou
31
Human Resources strategy focused on supporting
growth through leadership and competence build up
DEVELOP A STRONG LEADERSHIP TEAM
 Multi-cultural
 Highly motivated
 Result oriented
REINFORCE HR FOUNDATIONS
 Group key values in team’s daily behavior
 Full deployment of all Group HR tools
 C&B in line with Group guidelines and market
PROVIDE RIGHT RESOURCES FOR GROWTH
 Reservoir and retention
 Career path anticipation
 Training in China and abroad
Investor Day – Shanghai – November 11, 2014

Balance of nationality, seniority and competence

Chinese people in key Division Management Positions

100% Plant Managers are Chinese

Regular staffing reviews

New employees induction and training plans

Regular benchmarking to be competitive

HR KPI close monitoring

University campus campaigns for new graduates

Clear career path for management evolution

FES China School to prepare Faurecia mindset
32
Key takeaways
Faurecia
China
Market environment
remains positive
High confidence
to respect commitment
to Group
Investor Day – Shanghai – November 11, 2014

A solid presence and good financial results

A clear vision and target

A clear strategic roadmap

A motivated team

Market providing significant growth potential
toward international standards

Customer and product portfolio diversification focus

Competition close follow-up and constant benchmarking

Deliver budget year by year

Raise contribution to Group earnings in mid-term plan

HR and management development
33
Investor Day
Shanghai
November 11, 2014
Human Resources
Faurecia China
Kathy Sun
November 11, 2014
Property of Faurecia - Duplication prohibited
China demography overview
Source: Desktop research
Investor Day – Shanghai – November 11, 2014
36

The most populous country:
1.37 billion, 20% of total worldwide
population; of which
the 770 million workforce
(56% of total Chinese population)

Dense population in East
& Central China and sparse in
West; 240 million migrant workers

Birth rate decreases because
of the family planning policy
from last century

Unemployment rate is about
4.3% in recent 5-year average

Manufacturing takes a larger
proportion of GDP (40%) & fiscal
revenue (50%)
Total Faurecia workforce in China reaches approx. 12,800
people in 2014 and will reach ~16,900 in 2017
Distribution of Faurecia’s workforce in China (2014)
Evolution of Faurecia’s workforce
Total workforce in 2014: ≈12,800
CAGR = +11%
16 900
13 900
CAGR = +28%
10 985
NORTHERN REGION
Changchun
Total: 3,020
Shenyang
Beijing
CENTRAL REGION
Total: 2,750
5 271
Nanchang
Yancheng
Wuhan
Nanjing Wuxi
Chongqing
Anting Shanghai
Cixi
Xiangyang
Chengdu
Ningbo
Xiangtan
SOUTH WESTERN REGION
Total: 2,350
Property of Faurecia - Duplication prohibited
Qingdao
Yantai
Guangzhou
Foshan
Shenzhen
2 080
3 200
1 003
2010
SHANGHAI OFFICE
SH Office: 1,400
EASTERN REGION
Total: 3,280
2013
M&P*
37
2015
2017
China all
With CAGR at 28% in the past,
the increase in the coming years
is still significant, but at a moderate rate.
* Managers and professionals
Investor Day – Shanghai – November 11, 2014
2 870
Faurecia China has developed a local management team
with limited expatriate support
The expatriate structure analysis
Expat vs total M&P
Expat category
Expat in mgt team
Expatriate 1%
Technical
expert
Management
Expatriate
15%
48%
52%
Local
99%
85%
Property of Faurecia - Duplication prohibited
Total M&P
All Plant Managers are Chinese.
With 27 expatriates dedicated to China, 14 are for Technical/Expert positions
The strategy is to promote Chinese people for the management functions
and to have technical expatriates to transfer the know how
Source: Desktop research
Investor Day – Shanghai – November 11, 2014
38
HR Mission
Provide talented and committed people on time through systematic
anticipation to enrich talent pipeline and develop Faurecia Culture
HR STRATEGY
Work on Employer Branding
to boost company attractiveness
Anticipate key resources growth
to meet future business needs
Develop strong leadership team and ensure
key technical competence on board
KEY ACTIVITIES









Retain talents with Faurecia Values

Property of Faurecia - Duplication prohibited

HR foundation: make sure country
alignment while managing diversity
Investor Day – Shanghai – November 11, 2014



39
Promote in media communication channel
Deploy CSR program in China
Extend cooperation with target universities
Golden Triangle and localization deployment
Strategic recruitment for next generation leaders
Young Talents program to stabilize talent foundation
Promote Management & Technical parallel career path
Prepare new leaders through Leadership & Management
program and Individual Development Plan
Focus on talent identification and internal mobility
Individual Career path designed in advance
Provide competitive package for talents
Ensure legal compliance and group alignment
Respect regional guidelines
HR Information System fully on board
Faurecia golden triangle plan has been developed
to ensure that new plants launch at Faurecia standards
Mother plant
New plant
Plant
mgr
1st level: Plant Management Team
Golden Triangle: 1+2
 1 plant manager
 2 of 6 key functions filled internally
6 key functions = HR, ME, Quality, UAP, FES, PC&L

28
82 people
moved
& promoted
2nd level: Engineer & Professional


Local hiring in advance and train in mother plant
For tech. plant, internal transfer experience
1 key
funct. Mgr
Property of Faurecia - Duplication prohibited
Below level: Junior Professional & operator


JP: "Young Talents Program"
Operator: train in mother plant and involve from PMS phase 2
Investor Day – Shanghai – November 11, 2014
40
54
1 key
funct. Mgr
Faurecia university in Asia is also aimed at developing the Faurecia
culture/value and strengthening the competency management
Faurecia University in Asia
Property of Faurecia - Duplication prohibited
Induction Program
Investor Day – Shanghai – November 11, 2014
41
Management Skill
FES Knowledge
Functional Knowledge
Leadership
No. of trainees covered:
2014 – 1,000; 2015 – 1,200
Faurecia China talent acquisition strategy
… Acquire Talents for Future
2013
Executive
2012
Sr. Manager
2014
50 planned
30 hired
25 hired
Strategic
Recruitment
1st Line Manager
83%
Retained
Till 2013
Professional Experienced
Property of Faurecia - Duplication prohibited
2013
Junior Professional
Investor Day – Shanghai – November 11, 2014
2012
Young Talents
113 hired
Program
42
177 hired
2014
140 planned
Culture transformation in line with new values
fully underway in China
In 2014 the Group launched a
cultural transformation project called
Being Faurecia based on three key
managerial values
 Entrepreneurship
 Autonomy
 Accountability

Exemplarity: Tracy LI
(Chengdu FAS Plant Manager, Value: Entrepreneurship)
In China this has been received
with enthusiasm as it is in line with
the way that we manage our
business through taking initiatives,
focus on performance and results
and celebrating success
Property of Faurecia - Duplication prohibited

Wuxi Model Line
Value: Autonomy
Accountability
Investor Day – Shanghai – November 11, 2014
43
Property of Faurecia - Duplication prohibited
Key take-away for Faurecia China HR
1
China headcount will increase from 12,800 today to 16,900 in 2017
2
China Government trend is to support the workers with more protection
through regulations and salary increase in order to maintain social harmony.
Productivity is becoming a key objective.
3
Faurecia HR KPIs are globally outperforming the market, which is well
highlighted by the company's internal Employee Engagement Survey of 2013
4
Internal promotion, talent attraction, retention and management development
remain the key challenges, as the market will grow even more competitive,
especially at the manager level
5
Faurecia China organization has been reinforced with creation of Divisions
supported by corporate functions, keeping Faurecia culture and value as a priority
Investor Day – Shanghai – November 11, 2014
44
Investor Day
Shanghai
November 11, 2014
Automotive Seating
Faurecia China
Sam Xia
November 11, 2014
FAS China growth at 18% CAGR in the past 4 years
2014 Forecast
Total Sales
Business Awards
€M
€M
CAGR = 18%
> 2,400
≈ 830
712
≈ € 830m Total Sales
1,920
583
423
1,560
466
10 Plants
2010
R&D
2 centers
300 engineers
2011
2012
2013
2014e
Plant Number
8
10
9
10
5
Property of Faurecia - Duplication prohibited
≈ 4,900 employees
2010
Investor Day – Shanghai – November 11, 2014
2011
2012
2013
47
2014
2009+2010
2011+2012
2013+2014e
2014: 10 Plants

Complete Seat (3 Plants)

Front Seat Frame (5 Plants)

Mechanisms - Recliners (1 Plant)

Mechanisms -Tracks (1 Plant)
Property of Faurecia - Duplication prohibited
FAS China is composed of 4 product families
Complete Seat
Frames
Mechanisms
Comfort &Trim
First operation
2003: Wuhan
First operation
2002: Changchun
First operation
2004: Wuxi
First operation
2013: Wuhan
2014 operation scale
650k carsets /year
2014 operation scale
2,700k carsets /year
2014 operation scale
15M recliners /year
15M tracks/year
2014 operation scale
350k carsets /year
2014 Market Share 5%
2014 Market Share 13%
2014 Market Share 16%
Investor Day – Shanghai – November 11, 2014
48
FAS China business development strategy
3 priorities to secure the sales growth
1 "Partnership for
Top Line Initiatives
Complete Seat"
"Global Platform
2 for Frames"
Property of Faurecia - Duplication prohibited
3 "New Customers"
Investor Day – Shanghai – November 11, 2014

Leverage the existing Faurecia JV

Develop new partnership projects

Other opportunities

Secured the business awards of Global Generic Platforms
with VW, PSA, Nissan, BMW, GM and Ford

Benefit from the new generation of Mechanisms

Product 100% localization strategy for cost competitiveness

Further develop new emerging customers in China
e.g. Renault, Fiat-Chrysler

Confirm 2013 business breakthrough with Ford

Opportunities with Japanese/Korean OEMs following
global approach, e.g. Hyundai
49
Property of Faurecia - Duplication prohibited
Bottom Line Initiatives
FAS China profitability enhancement strategy
6 Priorities to sustain profitability
1 "Customer mix"

Focus on Premium brands: BMW, Audi, Cadillac …

Focus on product innovation & generic system solutions
2

Vertical integration for Complete Seat (Foams, Covers & Accessories)

Stamping & painting for Frames
3 “Product mix"

Maintain leadership in highly profitable mechanisms business

Value-creating innovation in mechanisms and frames
4 "Footprint optimization"

Maximum loading of current metal plants (fixed cost optimization)

Low CAPEX JIT Plants

Purchasing (supplier panel, mandatory supplier management)

Focus on value analysis / value engineering (VA/VE) & 6 sigma

Engineering Change Request (ECR) managements in serial life phase

Constantly improve operating income / Upfront costs / IRR / Max Cash
Out during each program phase

Reduce D&D, development core team cost

Control the total upfront / CAPEX optimization
"Vertical integration"
5 "Cost improvement"
"Business Development
6 & Program Management"
Investor Day – Shanghai – November 11, 2014
50
FAS China is balancing its customer portfolio
Key accounts remain global OEMs
€ 1.7bn
€ 1.2bn

VW remains 1st key account

2018 Sales split
 European
 Japan/Korean
 American
 Chinese
€ 830m

Property of Faurecia - Duplication prohibited
2014
Investor Day – Shanghai – November 11, 2014
2016
2018
51
65%
19%
11%
5%
4 customers
above € 200m Sales
FAS China will have 17 plants in 2018: 6 new JIT plants
and 1 new metal plant are in preparation
JIT
Frame
Mechanisms
3 plants
5 plants
2 plants
2014
10 plants
• Northeast 1
• Central 2
2018
+7 plants
•
•
•
•
Northeast 1
Central 2
East 1
South 1
"JIT Module"
"Footprint Centralization"
"Base Area"
+ 6 plants
+ 1 plant
+ 0 plant
Number of plants every year
Property of Faurecia - Duplication prohibited
• East 2
JIT plants: Plan 6 new footprints
Year
‘13
‘14
‘15
‘16
‘17
‘18
Plan number
10
10
14
15
16
17
Investor Day – Shanghai – November 11, 2014
Metal plants: Densify the production by main
automotive regions to benefit from volume effect
Mechanisms plants: Fully load the current ones
52
FAS China R&D strategy
Global network and local presence with customer proximity
R&D Strategy
China HQ & New Tech Center Opened in March 2013

2 (Shanghai and Wuxi) fully owned R&D centers,
1 D&D plateau in Wuhan, 1 JV R&D in Changchun,
integrated in the global R&D network,

Test facilities certified by global OEMs

Continuous reinforcement of local team and competences

Industrial style as differentiation factor

“East Works” for advanced innovation
Headcount Evolution
CAGR 28%
Validation Recognized by OEM
VW
300
Ford
244
196
GM
146
PSA
Property of Faurecia - Duplication prohibited
R-N
2011
2012
Investor Day – Shanghai – November 11, 2014
2013
Local OEM
2014
53
100%
85%
100%
100%
90%
100%
FAS China product plan on Complete Seats
Global & Customization – Next generation
OEM Focus
We Focus
Customization - Integrated Intelligence
Luxury trend for brand
Self Adjustment
Connected with smart accessories
Offboard Wellness Assessment
Audio & comfort
End User Focus
Shape adjustment for comfort
Health
Tactile Seat Display
Smart Fit
“Magic” flexibility
Heat & Vent
We Focus
Personalized trend
Foot massage module
2nd social row
Global Concern
Removable cover
We Focus
Property of Faurecia - Duplication prohibited
Environment trend
Bamboo
Investor Day – Shanghai – November 11, 2014
54
Air Cleaner
Safety
Cover Carving
FAS China product plan on Front Seat Structure
Generic & Modular – Next generations with weight & cost reduction
2006
2009
2011
2012
2013
11.9 Kg
2014
2015
2016
SOP
12.0 Kg
Customer A
1-1


2015-2023
CHINA


2013-2022
CHINA


2013-2022
CHINA


2014-2021
CHINA
15.59 Kg
Customer B
2-1
2-2
11.5 Kg
10.5 Kg
Customer C
3-1
3-2
11.5 Kg
13.7 Kg
8.5 Kg
Customer D
4-1
4-3
4-2
~15.0 Kg
11.5 Kg
Customer E
Property of Faurecia - Duplication prohibited
2013-2018
CHINA
1-2
17.07 Kg
5-1
5-2
Next generation
Investor Day – Shanghai – November 11, 2014


Developed in China
55
FAS China product plan on Mechanisms
Global & Standard – Next generations with size, weight & cost reduction
2003
2006
2008
2010
2011
2012
2013
2014
2015
-19% vs. Recliner I
-35% vs. Recliner III
Recliner III
Recliner IV
Recliners
Recliner I
Recliner II
-16% vs. Track II
Tracks
Track I
Track II
Track III
-10% vs. E-pump1
Property of Faurecia - Duplication prohibited
E-Pumps
Only 1 worldwide production facility in
China
Investor Day – Shanghai – November 11, 2014
E-Pump I
56
2016 SOP
E-Pump II
Property of Faurecia - Duplication prohibited
Key takeaways
1
FAS China achieved 18% CAGR in the past 4 years, reaching €830m by 2014.
It has developed leading market shares in Frames (#2 at 13%)
and Mechanisms (#1 at 16%)
2
FAS China targets to maintain sales at 20% CAGR in the next 4 years
which will lead to 3% to 6% market share increase per product line,
sales of €1.7b in 2018
3
FAS China has formulated clear customer, product, manufacturing strategies
to ensure growth and profitability, including customer mix, footprint optimization,
vertical integration, and program cost improvements
4
FAS China benefits from solid HR foundation on which it will further develop
the organization strength and competitiveness, with 7,700 people in 2018
Investor Day – Shanghai – November 11, 2014
57
Investor Day
Shanghai
November 11, 2014
Emissions Control Technologies
Faurecia China
Thierry Aubry
November 11, 2014
FECT is the market leader of emission control in China
2014 Forecast
Total Sales
Business Awards
€m
€m
CAGR = 23%
990
≈ € 1.1bn Total Sales
≈ € 660m Product Sales
15 Plants
Property of Faurecia - Duplication prohibited
R&D
1 center
288 engineers
499
2010
607
2011
≈ 1,100
2,440
778
~2,300
1,680
2012
2013
2009+2010
2014e
2011+2012
2013+2014e
Total Plants
11
9
12
14
15
2013
2014
> 4,400 employees
2010
Investor Day – Shanghai – November 11, 2014
2011
60
2012
Property of Faurecia - Duplication prohibited
FECT China is composed of 4 product families
Manifolds
Catalytic Converters
Mufflers
Complete Lines
First operation
2008: Qingdao
First operation
1998: Changchun
First operation
1994: Wuhan
First Operation
1994: Wuhan
2014 operation scale
> 2 Mio parts / year
2014 operation scale
> 4 Mio parts / year
2014 operation scale
> 3 Mio parts / year
2014 operation scale
> 1 Mio parts / year
Investor Day – Shanghai – November 11, 2014
61
3 priorities have been strategically planned
for the next 5 years by FECT
FECT China strategy
China Innovation
Commercial
Vehicles
Property of Faurecia - Duplication prohibited
OEM Alliance
Reinforce market driven
innovation
Drive the growth
of commercial vehicle
emission business
Build customer alliance
throughout China
Investor Day – Shanghai – November 11, 2014

Marketing driven innovation focus on China requirements

Speed up innovation to market

Build up innovation experts and specialists team locally in China

Strengthen China CVE product portfolio to meet the demand
of stricter China emission standards

Alliance market approach with Cummins Emission System

Leverage LVE footprint, experience and size to support CVE

Strengthen customer partnerships through JV activities

Reinforce customer relationship to improve business opportunity

Achieve win-win for both OEM and FECT
62
FECT in superior position through technology
and global organization
Competition landscape in China
Market share in 2013
27%
Others
Total
of around 20
Competitors
Faurecia

FECT is clear market leader
with 27% market share

Diversified competition

Technology is FECT strength

Global program management
is key competitive advantage
Tenneco
Calsonic Kansei
Property of Faurecia - Duplication prohibited
Lihe
Sejong
Sango
Source: FECT China
Investor Day – Shanghai – November 11, 2014
63
FECT China with very balanced customer portfolio
€ 1.6bn
€ 1.4bn
CVE
€ 1.1bn
LVE
Property of Faurecia - Duplication prohibited
2014
Investor Day – Shanghai – November 11, 2014
2016
64
2018
FECT China will reach 30% market share in CVE in 2018
CVE Business development
FECT is targeting to reach 30%
market share in the next 5 years
Market volume evolution on road (M Units)
3.6
3.8
4.1
4.4
4.5
3.6
2014
2015
2016
Non emissionized
2017
2018
2020
After treatment system
Property of Faurecia - Duplication prohibited
After treatment systems shall reach 3.6 M Units in 2018
Driving CVE business growth by the alliance with CES (Cummins Emission System)
and partnership with local players
 Develop technology co-operation with Chinese CV OEMs

Investor Day – Shanghai – November 11, 2014
65
FECT China Footprint
Techno plants
JIT plants
CVE
8 plants
6 plants
1 plant
2014
15 plants
•
•
•
•
2018
+3 plants
Northeast:1
Central 2
East: 4
West: 1
• Central 2
• East 3
• South 1
"JIT Sequence delivery"
+ 3 plants
"Technology capacity"
+ 0 plant
Property of Faurecia - Duplication prohibited
Year
‘13
‘14
‘15
‘16
‘17
‘18
Plan number
14
15
16
17
18
18
+ 0 plant
JIT plants: Plan 3 new footprints
Techno plants: Complete exhaust system
production capacity, key components manufacturing
CVE: Fully loading the current one
and use LVE actual footprints
Number of plants every year
Investor Day – Shanghai – November 11, 2014
• Central
66
Our focus in the next 5 years will be reinforcing
product strategy and promoting innovation
Product & Technology roadmap
2013
2013
2015
2015
Fabricated T Manifold
Mono and Airgap
Emissions reduction
Property of Faurecia - Duplication prohibited
Acoustic Performance
Brazed cold end
Energy recovery
EHRM (4)
2. Ammonia Storage and Delivery System
Investor Day – Shanghai – November 11, 2014
Modular NVH solution
Ultra light-weight cold end
Compact EHRS (5)
3. Exhaust Dynamic Sound Technologies
67
2020
2020
ASDS (2)
Closed couple SCR :
U shape – C-mixer
EVO valve/Electric valve
Weight reduction
1. Gasoline Particulate Filter
2017
2017
EDST (3)
GPF (1)
Noise dampers
LW hot end
Direct oil gear box heating
Rankine
4. Exhaust Heat Recovery Manifold
5. Exhaust Heat Recovery System
Property of Faurecia - Duplication prohibited
Key takeaways
1
FECT has a clear market leader position on China market
with over 25% market share
2
With 10% CAGR over the 2014-2018 period,
FECT will increase market share in China
3
Innovation and technology, strong growth in CVE market and alliance strategy
with OEMs as main pillars of FECT China strategy plan
4
FECT China has proven operational excellence including program management,
footprint optimization and talent management and retention
Investor Day – Shanghai – November 11, 2014
68
Investor Day
Shanghai
November 11, 2014
Interior Systems
Faurecia China
Richard Zhang
November 11,2014
FIS China Growth at 24% CAGR in the past 4 years
2014 Forecast
Total Sales
Business Awards
€m
€m
CAGR = 24%
~270
>1,000
≈ € 270m Total Sales
116
477
136
257
13 Plants
2010
R&D
1 center
300 engineers
2012
2014e
2009+2010
13
2014: 13 Plants
Plant Number
8
5
Property of Faurecia - Duplication prohibited
≈ 2,800 employees
2010
Investor Day – Shanghai – November 11, 2014
2011+2012 2013+2014e
2012
2014
71

12 Technology Plants

1 JIT Plant
Property of Faurecia - Duplication prohibited
FIS China is Composed of 4 product families
Cockpit
Instrument Panel
Door Panel
Acoustic Modules
First operation
2006: Chongqing
First operation
2005: Changchun
First operation
2005: Changchun
First operation
2010: Changchun
2013 operation scale
> 300k units / year
2013 operation scale
1 Mio parts / year
2013 operation scale
2.2 Mio parts / year
2013 operation scale
0.7 Mio parts / year
Investor Day – Shanghai – November 11, 2014
72
Current merging of the market leaders open
great opportunities for Faurecia Interior Systems
Market share in 2014
Market consolidation underway
Yanfeng
Yanfeng
Others
Number
of player
42 (mainly
Chinese)
Property of Faurecia - Duplication prohibited
Yanfeng and Visteon had long-standing joint venture
covering all automotive regions and OEMs

Yanfeng purchased all shares of joint venture in 2013

Yanfeng Interior China estimated sales € 2.1 bn
in 2012

Yanfeng is now in the process of absorbing
JCI Interiors (excluding electronics)

JCI Interiors has JVs with FAW, BAIC
and GAC groups

JCI China Interior sales (excluding electronics)
€ 1.04 bn
JCI
4%
Calsonic Kansei

Mobis
Faurecia
Current merging of both leaders combined with an "over-splitting" of the market by local players
is creating a very favorable business and partnership momentum for Faurecia Interior System
Investor Day – Shanghai – November 11, 2014
73
Our sustainable business model is based on 4 key drivers
Toward 10% Market Share through a sustainable business model
Property of Faurecia - Duplication prohibited
Entrepreneur and
committed People
Investor Day – Shanghai – November 11, 2014
Strategic
Partnership
Programs &
Operations efficiency
74
Product &
Innovation
Partnership and customer strategy
Strategic partnership will be a key success factor
Our customer strategy is based on 4 main pillars
1
2
Reinforced customer intimacy, to better address:
Strategic Partnerships
Enhance Market Share
Chang An
(Ford , DS and CA own brand)
Other opportunities
Expected turnover
3
Standalone approach
Select Relevant
and Sustainable Business
SVW
FVW
Geely
Property of Faurecia - Duplication prohibited
€ 270m
2016
Investor Day – Shanghai – November 11, 2014
Diversification
Diversify customer portfolio
Guangdong Auto Group-CFA
Others
Ford remains our Number one customer
 2018 Sales split
 European
38%
 Japan/Korean 18%
 American
32%
 Chinese
12%
 CAGR around 30%

~ € 750m
~ € 400m
2014
4
2018
75
Industrial Strategy
Priority is to saturate our existing "Technology" footprint
Techno
JIT
12 plants
1 plant
2014
13 plants
•
•
•
•
Northeast
East
South
Central
2018
+7 plants
1
3
2
2
• Central 1
"Fast response"
+ 6 plants
"Ensure capacity"
+ 1 plant
Techno plants: To saturate our existing footprint
which covers the main automotive basins.
Property of Faurecia - Duplication prohibited
Number of plants every year
Year
‘14
‘15
‘16
‘17
‘18
Plan number
13
14
15
18
20
Investor Day – Shanghai – November 11, 2014
JIT plants: To set up 6 new JITs supplied
by our technoplant an ensuring quick response
to customer needs while limiting investments.
76
Product & innovation strategy
Addressing upgrading, personalization and environment trend
Upgrading
Premium
Quality
Slush Lite
IMP
Decostitich
LOCOP
Cut & Sew
Piping
Matching with growing perceived quality expectations of Chinese market
Personalized
trend
Aluminum
Sliding Dock
Ambient Lighting
Wi-charging
Property of Faurecia - Duplication prohibited
Addressing enrichment and technology trends of Chinese market
Environment
trend
NAFI
Air Purification
Introducing global green technologies as well as specific technologies for China
Investor Day – Shanghai – November 11, 2014
77
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Key Takeaways
1
FIS China has engaged a successful growth and profitability allowing
to target more than € 750m total sales by 2018
2
Strategic partnership with OEM is a key driver to address this ambitious plan.
Our recent but successful CCAG JV is demonstrating the relevance of this approach
3
Operations and programs optimization are a must to be able to propose
a competitive and profitable business model in China Interior market
4
People are at the center of this strategy. Priority is to develop and reinforce our team,
enhancing entrepreneurship, continuous improvement and execution mindset
Investor Day – Shanghai – November 11, 2014
78
Investor Day
Shanghai
November 11, 2014
Investor Day
Strategy update
Yann Delabrière
November 11, 2014
2014 - 2016: Selective growth strategy confirmed

Benefit from selective resource allocation strategy

Accelerate in Asia

Leverage global platforms

Develop value-added technologies
Investor Day – Shanghai – November 11, 2014
81
Faurecia Automotive Seating
On track to meet its 2016 targets
Key drivers
Update on priorities
2016 Targets

Mechanisms leadership and Generic frames

China and Asian customer growth

Customer diversification in particular growth with Nissan and Ford

Value creating innovations based on fuel economy (weight reduction) and
smart comfort

Mechanisms and frames on track to reach over 8% operating margin in 2016

Back to growth in North America, with significant launches in H2 2014
and operational turnaround confirmed

Single European division successfully created, profitability improving

Renault-Nissan on track to become second largest client

China opportunities confirmed

Total sales > € 7.1bn

Operating margin > 5.0%

ROCE* > 20%
Investor Day – Shanghai – November 11, 2014
82
Faurecia Emissions Control Technologies
Ahead of its roadmap, 2016 targets upgraded
Key drivers
Update on priorities
2016 new Targets

Capture the growth of the Commercial Vehicle markets especially in China

Increase value-added through innovations: environmental performance
(NOx and particulates); fuel economy (weight reduction, energy recovery);
acoustic performance (sound design)

Europe recovery is well engaged, further optimization to come

North America turnaround ahead of plan

Product and process standardization well underway

CVE growth rate of around 20% CAGR confirmed, driven by partnership
with Cummins and regulation introduction especially in China moving
to Euro 5

Business awards for energy recovery systems and SCR and interest
in sound design demonstrate relevance of technology strategy

Total sales > € 7.4bn (value-added sales > € 4.0bn)

Operating margin close to 5.0%, (up from > 4.0%)
now above 8.0% on value-added sales

ROCE* > 25% (up from around 25%)
Investor Day – Shanghai – November 11, 2014
83
*: Pre-tax and including goodwill
Faurecia Interior Systems
Improving in evolving environment, 2016 targets adjusted
Key drivers
Update
2016 Targets

Selective growth strategy with focus on cash model

Profitability increased through operational improvement

Benefit from trend towards consolidation in the market

Accelerate in Asia

Expand higher profitability product lines (decoration, HMI)

Consolidation underway should improve competitive environment

Strong operational improvement in Europe, North America
is progressing

China growth acceleration confirmed

Breakthrough in bio materials with clear roadmap
towards 30% weight reduction

Total sales > € 4.5bn

Operating margin > 4.0% (from > 4.5%)

ROCE* around 15% (from around 20%)
Investor Day – Shanghai – November 11, 2014
84
*: Pre-tax and including goodwill
Faurecia Automotive Exteriors
On track to meet its 2016 targets
Key drivers
Priorities update
2016 Targets

Remain market leader in Europe

Front End Modules (FEM) strategic review

South America turnaround

Develop long term potential for Composite Technologies

Awarded first composite tailgate business and composite floors
co-development with OEMs

Margin improvement actions in North Europe (ex. Plastal) to accelerate

South America capacity utilization rate close to 100% in 2016
and operational cost management underway

Total sales > € 2.0bn (or > € 1.5bn excl. FEM)

Operating margin 4.5% - 5.0%

ROCE* > 20%
Investor Day – Shanghai – November 11, 2014
85
*: Pre-tax and including goodwill
Management transformation and reinforcement
to support deployment of strategy

Being Faurecia: Major initiative launched in 2014
to transform corporate culture with two main axes
 New values of entrepreneurship, autonomy
and accountability to drive focus on performance
and value creation
 Strengthened people management
and people development in order
to better develop talent internally

Executive Committee will be strengthened and diversified
with three new appointments effective in the first quarter 2015.
All these appointments are internal promotions.

This management reinforcement at all levels will facilitate our ability
to implement our strategic plan
Investor Day – Shanghai – November 11, 2014
86
2016 Targets are fully confirmed
Sales above 21 billion euros
Operating margin 4.5 – 5.0%
Net cash flow around 300 million euros
ROCE* > 20%
Investor Day – Shanghai – November 11, 2014
87
*: Pre-tax and including goodwill
Investor Day
Shanghai
November 11, 2014
Investor Day
Group financial strategy and targets
Michel Favre
November 11, 2014
Reminder of financial targets
ROCE to increase by 50% from 14% in 2013 to over 20% in 2016
ROCE *
> 20%
13%
Property of Faurecia - Duplication prohibited
2012

Increasing operating
margin from 3.0% in 2013
to 4.5% - 5.0% in 2016

Capex + capitalized R&D
around € 800m

Asset turn to improve
by 20bp to close to 5x
14%
2013
2014
2015
2016
* Pre-tax and including goodwill
Investor Day – Shanghai – November 11, 2014
90
Reminder of the financial targets
Net Free Cash Flow generation around € 300m in 2016
Net Free Cash Flow in €m

Increasing EBITDA margin
(>150bps gain or > € 300m
contribution)

Improved Capital Employed

Additional factoring
of receivables in 2014

Reduced financial
expenses (€ 150m objective
in 2016 vs € 200m in 2013)
Around 300
144
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2013
Positive
2014
Investor Day – Shanghai – November 11, 2014
2016
91
Reminder of the financial targets
Optimize resource allocation
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4 key priorities

Priority to strategic OEMs

Priority to the two Business Groups (Emissions Control Technologies
and Automotive Seating) which require lower Capex and capitalized R&D

Priority to new footprint expansion mainly in Asia

Negotiate better financing terms with OEMs for development cost
Investor Day – Shanghai – November 11, 2014
92
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Financial priorities and resource allocation

€ 100m per year dedicated to research and innovation expenses
(within the R&D budget)

€ 50m per year from 2015 onwards for restructuring expenses to continue
to optimize the industrial footprint and increase the average size of our plants

€ 100m of Capex for process standardization

Around € 100m capital allocation over 2015-2016 to buy-back minorities
Investor Day – Shanghai – November 11, 2014
93
Main profitability drivers by region
Asia >8% and N. America and Europe >4% operating margin
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Main drivers
Growth
(volume & mix)

Asia is our top priority and it is where growth prospects are the best

North America is restarting a cycle of secular growth
Commercial margin
(Project management & re-pricing)

North America is where better project and commercial management should
help the most

In South America, re-pricing to take into account high inflation,
lower volumes and currency swing is key to a margin recovery
Footprint optimization

Footprint optimization is an ongoing process and will lead to sizeable
margin expansion
Standardization

North America and Europe is where standardization is expected
to yield savings
Operational performance

North America and to a certain degree South America will benefit
from operational improvements
Geographical mix

With Asia being the fastest growing region and also the most profitable
region, it is helping overall margin expansion
Operating margin improvement
(2014-2016)

100 – 150bp
Investor Day – Shanghai – November 11, 2014
94
Financial targets by region (updated vs initial)
FAURECIA
2016 initial
2016 updated
Comment
> 21.0
> 21.0 (> 20.5 excl. FEM)
Depending on strategic
review outcome
4.5% to 5.0%
4.5% to 5.0%
Europe
> 10.7
> 10.7 (> 10.2 excl. FEM)
North America
> 5.4
> 5.4
Asia
> 3.8
Close to 4.0
Upgraded
South America & rest of world
> 1.1
Close to 1.0
Adjusted
4.0% - 5.0%
4.5% - 5.0%
Upgraded
5.0%
> 4.0%
Adjusted
> 7.0%
> 8.0%
Upgraded
Breakthrough in profitability
and focus on cash generation
Breakthrough in profitability
and focus on cash generation
Group total sales (in €bn)
Operating margin
as % of total sales
Total sales (in €bn)
Depending on strategic
review outcome
Operating margin
(% of total sales)
Europe
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North America
Asia
South America & rest of world
Investor Day – Shanghai – November 11, 2014
95
Regional perspective
Better balanced portfolio
Product sales by region
2014
2016
South America
& rest of world
South America
& rest of world
Asia
14%
4%
5%
Asia
56%
52%
Europe
25%
26%
North
America
Property of Faurecia - Duplication prohibited
North
America
Investor Day – Shanghai – November 11, 2014
18%
96
Europe
Main profitability drivers by Business Group
All Business Groups above 4% operating margin
Property of Faurecia - Duplication prohibited
Main drivers
Growth
(volume & mix)

Automotive Seating & Emissions Control Technologies
are the fastest growing Business Groups
Commercial margin
(Project management & re-pricing)

Interior Systems will benefit the most from improved project
management and also re-pricing
Footprint optimization

Automotive Seating, Emissions Control Technologies and Interior
Systems will benefit the most from continuous footprint optimization
Standardization

Automotive Seating with generic frames and Emissions Control
Technologies with industrial standardization will generate sizeable
savings
Operational performance

Interior Systems is where improved operational performance
especially in North America will yield significant margin expansion
Geographical mix

Interior Systems will grow very fast in Asia where margins are higher
and therefore will benefit from a favorable mix improvement.
Operating margin improvement (2014-2016)

100 – 150bp
Investor Day – Shanghai – November 11, 2014
97
Financial targets by Business Group (updated vs initial)
FAURECIA
2016 initial
2016 updated
Comment
> 21.0
> 21.0 (> 20.5 excl. FEM)
Depending on strategic review outcome
4.5% to 5.0%
4.5% to 5.0%
> 20%
around 300
> 20%
around 300
> 7.1
> 7.4
> 4.5
> 2.0
> 7.1
> 7.4
> 4.5
> 2.0 (>1.5 excl. FEM)
Operating margin (% of total sales)
Automotive Seating
Emissions Control Technologies
Interior Systems
Automotive Exteriors
> 5.0%
> 4.0%
> 4.5%
4.5% - 5.0%
> 5.0%
close to 5.0%
> 4.0%
4.5% - 5.0%
Upgraded (> 8.0% on value-added sales)
Adapted
ROCE **
Automotive Seating
Emissions Control Technologies
Interior Systems
Automotive Exteriors
> 20%
around 25%
around 20%
> 20%
> 20%
> 25%
around 15%
> 20%
Upgraded
Adapted
Group total sales (in €bn)
Operating margin
as % of total sales
ROCE *
Net cash flow (in €m)
Property of Faurecia - Duplication prohibited
Total sales (in €bn)
Automotive Seating
Emissions Control Technologies
Interior Systems
Automotive Exteriors
Investor Day – Shanghai – November 11, 2014
98
Depending on strategic review outcome
* pre-tax and including goodwill
Generate strong cash flow in 2016
Tight WCR control
€ 5m additional for 1%
sales change
Capex and
capitalized R&D
around at € 800m
Significant profitability
increase from 3.0%
to 4.5% - 5.0% OM
Free cash flow before interest and tax of around 80% of operating income
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Optimize financial expenses and taxes (around 32% tax rate)
Net cash flow around € 300m
Investor Day – Shanghai – November 11, 2014
99
Cash Flow generation
Main drivers
Driver
EBITDA

Higher operating income (> 150bp margin improvement between 2013 and 2016)
and higher D&A
Change in WCR

Improvement partially offsetting sales growth
Capex + capitalized R&D

Strong discipline and selective capital allocation according to new footprint
opportunities
Restructuring

Continuous footprint optimization
Finance expenses

Tax & Other
Property of Faurecia - Duplication prohibited
Net cash flow
Investor Day – Shanghai – November 11, 2014
Refinancing will generate sizeable savings (Objective € 150m in 2016 vs
€ 200m in 2013)
 Higher taxes from higher PBT to be partially offset by recovery of tax losses
carry forward

Objective of around € 300m by 2016
100
WCR optimization
Zoom on main drivers
Property of Faurecia - Duplication prohibited
Driver

Reduction of customer overdues & alignment of customer terms
Receivables

Factoring programs extension with additional lines in new countries and general
business growth
Inventories

Reduction of minimum 1 day (out of 11 days)
Payables

Gain of 1 day through alignment and reverse factoring
Other

Geographical mix & contingencies will weigh on WCR
Investor Day – Shanghai – November 11, 2014
101
Debt & financing
Property of Faurecia - Duplication prohibited
Financing strategy

Objective to be 100% financed by capital markets
(factoring customer receivables and issuing bonds)

Ensure liquidity and independence through a 5 year syndicated credit
facility (€1.2bn) with our core international partner banks

Go back to the bond market to refinance our existing and expensive bonds
through a new bond
Investor Day – Shanghai – November 11, 2014
102
Debt & financing
Reduce net debt & financial expenses
Status
Conversion of the 2015 Oceane in December 2013
√
Debt reduction from net cash flow generation in 2013 and 2014
√
Rating improvement (Fitch at BB-)
√
Increase factoring (cheapest way to be financed)
√
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Net debt / EBITDA ratio of around or below 1.0x by 2016
Investor Day – Shanghai – November 11, 2014
103
Update on refinancing
Status
Renewal of the € 1.2bn, 5 year syndicated facility
at better conditions
√
Refinancing of the 2019 HY bond (€ 250m) at better conditions
Call option in June 2015
Refinancing of the 2016 HY bond (€ 490m) at better conditions
Maturity in December 2016
Option to force conversion in early
January 2016 if share price above € 25
Conversion of the 2018 convertible bond (€ 250m)
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Net debt / EBITDA ratio of around or below 1.0x by 2016
Investor Day – Shanghai – November 11, 2014
104
Conclusion
Faurecia is well on track to achieve its 2016 targets
Large opportunities with refinancing
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First phase is accomplished
Investor Day – Shanghai – November 11, 2014
105
Contact & Share data
Investor Relations
Share Data
Eric-Alain Michelis
Bloomberg Ticker:
Reuters Ticker:
Datastream:
ISIN Code:
2, rue Hennape
92735 Nanterre
France
Property of Faurecia - Duplication prohibited
Tel: +33 1 72 36 75 70
Cell: +33 6 64 64 61 29
Fax: +33 1 72 36 70 30
E-mail: eric-alain.michelis@faurecia.com
Web site: www.faurecia.com
EO:FP
EPED.PA
F:BERT
FR0000121147
ADR Data
Ticker:
Ratio:
Agent:
FURCY
2 ADRs for 1 share
Citi Group
Bonds ISIN Codes
2016
bonds : XS0704870392
2013 Results & 2014 Objectives – February 12, 2014
2018 convertible : FR0011321363
Investor Day – Shanghai – November 11, 2014
2019 bonds : XS0778917814
106
Safe Habor Statement
This report contains statements that are not historical facts but rather forward-looking statements. The words
"will," "may," "designed to," "outlook," "believes," "should," "anticipates," "plans," "expects," "intends,"
"estimates" and similar expressions identify these forward-looking statements. All such statements are based
upon our current expectations and various assumptions, and apply only as of the date of this report.
Our expectations and beliefs are expressed in good faith and we believe there is a reasonable basis for them.
Property of Faurecia - Duplication prohibited
However, there can be no assurance that forward-looking statements will materialize or prove to be correct.
Because such statements involve risks and uncertainties such as automotive vehicle production levels, mix
and schedules, financial distress of key customers, energy prices, raw material prices, the strength of the
European or other economies, currency exchange rates, cancellation of or changes to commercial contracts,
liquidity, the ability to execute on restructuring actions according to anticipated timelines and costs, the
outcome could differ materially from those set out in the statements.
Except for our ongoing obligation to disclose information under law, we undertake no obligation to update
publicity any forward-looking statements whether as a result of new information or future events.
Investor Day – Shanghai – November 11, 2014
107
Investor Day
Shanghai
November 11, 2014