2007 Reference document (PDF) - Valeo

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3 Consolidated PAGE 96 fi nancial statements at December 31, 2007 Notes to consolidated financial statements 3. Notes to the statement of income To enable a meaningful comparison between the three periods presented, the figures for 2005 and 2006 published in February 2007 have been adjusted to reflect the sale of the Wiring H arness activity (see note 2.1.1). 3.1. Net sales Group net sales advanced 1.3% to 9,555 million euros in 2007 from 9,436 million euros in 2006, despite a negative 1.5% net currency impact. Changes in the scope of consolidation did not have a material impact on net sales. 3.2. Personnel expenses 2007 Reference document - VALEO Consolidated net sales advanced by 2.9% between 2006 and 2007 on a comparable Group structure and exchange rate basis. The above figures do not include net sales for the Wiring H arness activity sold in December 2007. These are presented under “Income/ (loss) from non-strategic activities” in 2007, 2006 and 2005, and totaled 551 million euros, 545 million euros and 571 million euros, respectively. 2007 2006 As restated 2005 As restated Total employees (excluding non-strategic activities) (1) 61,200 58,700 56,900 (1) Including temporary staff. The statement of income presents operating expenses by function. Operating expenses include the following personnel-related expenses: (In millions of euros) 2007 2006 As restated 2005 As restated Wages and salaries (1) 1,686 1,699 1,636 Social charges 399 402 368 Share-based payments (2) 11 11 7 Pension expenses in respect of defined contribution schemes 96 105 116 (1) Including temporary staff. (2) Including employer taxes in respect of stock options and free share awards. Pension costs under defined benefit plans are set out in note 4.9.2. 3.3. Other income and expenses (In millions of euros) < Contents > 2007 2006 As restated 2005 As restated Claims and litigation 25 (3) (9) Restructuring costs (37) (36) (15) Impairment of fixed assets (26) (14) (11) Other 11 4 - Other income and expenses (27) (49) (35) 1 2 3 4 5 6
3.3.1. Claims and litigation In the year ended December 31, 2007, the Group wrote back a provision for 22 million euros following the settlement of a commercial dispute. In 2006, this caption mainly included costs relating to commercial and labor disputes in progress. 3.3.2. Restructuring costs Restructuring expenses of 37 million euros and 36 million euros were recognized in 2007 and 2006, respectively, comprising costs relating to the streamlining and closure of industrial sites, mainly in Western Europe. 3.3.3. Impairment of fixed assets ■ Property, plant and equipment and intangible assets (excluding goodwill) Impairment losses on property, plant and equipment and intangible assets mainly result from impairment tests carried out at the level of C ash-G enerating U nits (CGUs) in accordance with the following methodology: ■ the value in use of CGUs is calculated using post-tax cash flow projections covering a period of five years, prepared on the basis of the budgets and medium-term plans drawn up by Group divisions. The projections are based on past experience, macroeconomic data for the automobile market, order books and products under development; ■ cash flows beyond the five-year period are extrapolated using a growth rate of 1%. This rate is the same as that used in 2006 and 2005, and is below the average long-term growth rate for the Group’s business sector; ■ in 2007, cash flows were discounted based on a weighted average cost of capital (WACC) of 7.5% after tax (7.5% in 2006 and 7% in 2005). An independent expert was consulted in determining the method to be used to compute WACC. In 2007, WACC was calculated based on a sample of 20 automotive parts suppliers and a market risk premium of 4.5% (4.9% in 2006 and 4.8% in 2005). As a result of these tests, the Group recognized impairment losses of 26 million euros in 2007. These reflect changes to medium-term Consolidated fi nancial statements at December 31, 2007 Notes to consolidated financial statements business forecasts as a result of a more pessimistic or uncertain sales outlook and mainly concern one CGU within each of the Interior Controls and Compressors P roduct F amilies, and an Engine Cooling CGU based in Iran. The impairment losses were recognized against property, plant and equipment and intangible assets (24 million euros) and against goodwill (2 million euros) relating to the Engine Cooling CGU in Iran. In 2006 and 2005, impairment losses were recognized against a Lighting Systems CGU for an amount of 14 million euros and 11 million euros, respectively. ■ Sensitivity of CGU impairment tests to discount and growth rates An increase of 0.5% in the discount rate would result in an additional impairment loss of 7 million euros being recognized against intangible and tangible assets. A 0.5% decrease in the discount rate would lead to a reversal of 6 million euros in impairment recognized against fixed assets. A 0.5% increase in the growth rate would lead to the reversal of 5 million euros in impairment losses taken in 2007. ■ Goodwill Goodwill is allocated to C ash-G enerating U nits (CGUs) on the basis of the P roduct F amily to which it relates. Goodwill is tested for impairment at least once a year, using the same method as that used for the CGUs described above. No impairment losses were recognized by the Group in 2007 as a result of these tests other than the write-down on goodwill relating to the CGU in Iran. A 0.5% increase in the discount rate would have no impact on goodwill impairment tests. 3.3.4. Other < Contents > In 2007, this caption mainly includes capital gains on disposals of property assets amounting to 27 million euros. The balance includes costs relating to strategic transactions. In 2006, this caption includes the capital gain on the sale of Zexel Logitec Company for an amount of 14 million euros, as well as costs relating to strategic transactions. 2007 Reference document - VALEO 3 PAGE 97 1 2 3 4 5 6
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2007 Reference document
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Group profile 2007 Valeo is an inde
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Gross margin In % of net sales Oper
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Basic earnings per share for the ye
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valeo added TM < Contents > 1 Activ
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1998 ■ Acquisition of the Electri
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The Group 1. Description and organi
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■ ■ ■ ignition components; in
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■ LED front and rear lighting and
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Valeo Climate Control has four prod
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4.1.1.2. Internal mobility and indi
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4.2.2. Environment Environmental pr
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4.3.1. Purchasing The role of Valeo
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4.3.4. Projects The Projects Depart
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Geographical presence The Group opt
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■ In a world first, the Volkswage
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Other contributions from Valeo Prod
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■ ■ The Group also continued to
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valeo added TM Accounting methods 3
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production (source: J.D. Power). In
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Change in stockholders’ equity 1.
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Provisions The balance sheet at Dec
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At the Board of Directors meeting h
Page 47 and 48: 1.2. Environmental risks In the var
Page 49 and 50: 4.3. Credit risk Valeo is exposed t
Page 51 and 52: Outlook In 2008, Valeo is aiming to
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Page 55 and 56: Percentage of ISO 14001 and OHSAS 1
Page 57 and 58: The 2007 reporting scope excludes s
Page 59 and 60: The increase in the ratio of energy
Page 61 and 62: Overall, Valeo used higher tonnages
Page 63 and 64: All Valeo Group sites will be certi
Page 65 and 66: 2.6. Reducing all types of pollutio
Page 67 and 68: Social indicators This social indic
Page 69 and 70: 1.2.1. Permanent contracts Number o
Page 71 and 72: Breakdown of 2007 departures by geo
Page 73 and 74: 3. Equality between men and women i
Page 75 and 76: Valeo’s “Well-being and effecti
Page 77 and 78: At December 31, 2007, 11,738 employ
Page 79 and 80: 8. Disabled employees Valeo amended
Page 81 and 82: valeo added TM 3 < Contents > Conso
Page 83 and 84: Consolidated statements of income (
Page 85 and 86: Consolidated statements of cash flo
Page 87 and 88: Consolidated statement of changes i
Page 89 and 90: The proportionate consolidation met
Page 91 and 92: 1.11. Property, plant and equipment
Page 93 and 94: ■ OCEANE bonds Bonds convertible
Page 95 and 96: 2. Changes in the scope of consolid
Page 97: 2.3.3. Balance sheet Consolidated f
Page 101 and 102: 3.6.2. Effective tax rate The effec
Page 103 and 104: 4.2. Other intangible assets At Dec
Page 105 and 106: Changes in property, plant and equi
Page 107 and 108: Summarized financial data in respec
Page 109 and 110: 4.8. Stockholders’ equity 4.8.1.
Page 111 and 112: 2006 Consolidated fi nancial statem
Page 113 and 114: 4.8.7. Minority interests Changes i
Page 115 and 116: ■ Breakdown of obligations At Dec
Page 117 and 118: (In millions of euros) France Other
Page 119 and 120: Consolidated fi nancial statements
Page 121 and 122: 4.10.3. Short-term debt At December
Page 123 and 124: 5. Additional disclosures 5.1. Segm
Page 125 and 126: 5.2. Financial instruments 5.2.1. F
Page 127 and 128: 5.2.2. Fair value of derivatives At
Page 131 and 132: At December 31, 2006 (In millions o
Page 135 and 136: 5.6. Contingent liabilities The Gro
Page 137 and 138: 6. Restatement of prior year financ
Page 139 and 140: Companies Countries % voting rights
Page 147 and 148: valeo added TM < Contents > 4 Corpo
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appointed Gérard Blanc, Pascal Col
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■ to check that internal procedur
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1.10. General Management of the Com
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2. Internal control procedures 2.1.
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2.4. Review of work carried out in
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Composition of the Board of Directo
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Name First appointed Helle Kristoff
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valeo added TM 5 < Contents > Infor
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Auditors Statutory Auditors ■ −
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Martin Haub Vice-President, Product
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Name/business address Jérôme Cont
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Name/business address Georges Pauge
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Jérôme Contamine graduated from
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Under these R ules, independent Dir
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Fixed compensation and benefits-in-
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compensation, 1,905,169 euros to va
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Share grants to the ten employees r
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Information on the Company and its
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2. Authorized, unissued capital Sec
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Exercise date and conditions Nbre d
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1.1. Major shareholders To the best
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the relevant disclosure threshold h
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2. Dividends Dividends per share ov
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3. Ownership structure Primarily on
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8. Monthly trading volumes Informat
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Information on the Company and its
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valeo added TM 6 < Contents > Other
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Annual information document Other i
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Other i nformation Annual informati
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November 2007 November 9, 2007 - Ex
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Other i nformation Person responsib
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The printer of this report is envir
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