2011 Registration Document - Valeo

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5 Financial PAGE 242 and accounting information Consolidated fi nancial statements for the year ended December 31, 2011 Analysis of the sensitivity of net equity to metal price risk The table below shows the impact on equity and income of a 10% variation in metal futures prices at December 31, 2011 and 2010. 2011 2010 Income gain Equity gain Income gain Equity gain (in millions of euros) (loss) (loss) (loss) (loss) Impact of a 10% rise in metal futures prices - 10 - 10 Impact of a 10% fall in metal futures prices - (10) - (10) For the purposes of the sensitivity analysis, it is assumed that all other variables remain unchanged over the period. 6.2.1.3 Interest rate risk A detailed description of the Group’s interest rate risk management policy is set out in section 2.1.4, page 57 . Exposure to interest rate risk The Group uses interest rate swaps to convert the interest rates on its debt into either a variable or a fixed rate, either at origination or during the term of the loan. Cash and cash equivalents are mainly invested in variable-rate instruments. Debt is essentially at fixed rates. The interest rate derivatives used by the Group to hedge against changes in the value of its fixed-rate debt are designated as fair value hedges under IAS 39. These derivatives are recorded at fair value in the statement of 2011 Registration D ocument - VALEO financial position, with changes in fair value taken to income. For the effective portion of the hedge, the impact on income is offset by a symmetrical revaluation of the hedged item. On August 5, 2009, the Group set up an interest rate swap to hedge the variable-rate interest on its EIB loan. This derivative was designated as a cash flow hedge. The fair value of the swap is initially recognized in the statement of financial position, with subsequent changes in fair value taken to other comprehensive income until the hedged interest falls due. At December 31, 2011, the impact in stockholders’ equity of changes in the fair value of this swap was a negative 1 million euros. At the end of the reporting period, the Group’s net interest rate position based on nominal values can be analyzed as follows: 2011 Less than 1 year 1 to 5 years More than 5 years Total nominal amount Fixed Variable Fixed Variable Fixed Variable Fixed Variable (in millions of euros) portion portion portion portion portion portion portion portion Total Financial liabilities 190 193 431 527 528 40 1,149 760 1,909 Loans - - - (58) - - - (58) (58) Cash and cash equivalents - (1,295) - - - - - (1,295) (1,295) Net position before hedging 190 (1,102) 431 469 528 40 1,149 (593) 556 Derivative instruments (107) 107 225 (225) - - 118 (118) - Net position after hedging 83 (995) 656 244 528 40 1,267 (711) 556 2010 (in millions of euros) Less than 1 year 1 to 5 years More than 5 years Total nominal amount Fixed portion Variable portion Fixed portion Variable portion Fixed portion Variable portion Fixed portion Variable portion Total Financial liabilities 505 77 749 295 25 56 1,279 428 1,707 Loans - - - (85) - - - (85) (85) Cash and cash equivalents - (1,316) - - - - - (1,316) (1,316) Net position before hedging 505 (1,239) 749 210 25 56 1,279 (973) 306 Derivative instruments - - 62 (62) 56 (56) 118 (118) - Net position after hedging 505 (1,239) 811 148 81 - 1,397 (1,091) 306
Financial and accounting information Consolidated fi nancial statements for the year ended December 31, 2011 Analysis of sensitivity to interest rate risk At December 31, 2011, 64% of long-term debt is at fixed rates (85% at December 31, 2010). Fixed-rate debt carried at amortized cost is not included in the calculation of sensitivity to interest rate risk. The Group’s exposure to interest rate risk therefore arises solely on its variable-rate debt. The tables below show the impact on income and equity of a sudden 1% rise in the interest rates applied to variable-rate financial assets and liabilities, after hedging: 2011 (in millions of euros) 6.2.1.4 Equity risk A detailed description of the Group’s equity risk management policy is set out in section 2.1.4, page 58 . The assets comprising pension funds are detailed in Note 5.9.2, page 230. The Group’s cash and cash equivalents are set out in Note 5.10.4, page 234. 6.2.2 Liquidity risk A detailed description of the Group’s liquidity risk management policy is set out in section 2.1.5, page 58 . The Group looks to maintain very broad access to liquidity in order to meet its commitments and investment requirements. It borrows long-term funds either through banks or public debt markets. In 2005, Valeo issued Euro Medium Term Note for 600 million euros maturing in 2013. These notes were redeemed in 2011 in an amount of 200 million euros and in January 2012 in an amount of 89 million euros. In 2011 and at the beginning of 2012, two new bond issues were carried out for 500 million euros each within the scope of the Euro Medium Term Note program. The maximum amount that can be issued under this program is 2 billion euros. The bond issues mature in 2018 and 2017, respectively. These issues allowed the Group to repay its two 225 million euro syndicated loans ahead of term on January 30, 2012. In 2011, Valeo also took out a 250 million euro loan from three banks with the aim of financing its acquisition of Niles Income gain (loss) Equity gain (loss) Impact of a 1% rise in interest rates 7 6 2010 (in millions of euros) Income gain (loss) Equity gain (loss) Impact of a 1% rise in interest rates 10 9 Similarly, at December 31, 2011, a sudden 1% fall in interest rates would have the opposite impacts for the same amount. in Japan. The Group had a drawdown right for 75 million euros granted by the European Investment Bank (EIB) which was due to expire in March 2012. This right was exercised in November 2011. The total amount of EIB loans is therefore 300 million euros. Valeo also has: cash totaling 1,295 million euros at December 31, 2011; confirmed bank credit lines totaling 1.1 billion euros with an average maturity of 3.4 years. None of these credit lines had been drawn down at December 31, 2011 or December 31, 2010; a Euro Medium Term Note financing program for a maximum of 2 billion euros, on which 900 million euros had been drawn down at December 31, 2011 and 1,311 million euros at end-January 2012; a short-term commercial paper financing program for a maximum amount of 1.2 billion euros. However, given Valeo’s P3 short-term debt rating, the regulations applicable to monetary funds restrict its access to this market. Covenants: The credit lines, syndicated loans and EIB loans are subject to an early repayment clause related to the Group’s net debt/EBITDA ratio, which must not exceed 3.25. For this purpose, EBITDA corresponds to the Group’s operating margin before depreciation, amortization and impairment. It therefore excludes other income and expenses, except for restructuring costs representing over 50 million euros. Failure to comply with this ratio would cause the credit lines to be suspended – triggering early repayment of any drawdowns 2011 Registration D ocument - VALEO 5 PAGE 243
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2011 Registration Document containi
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2011 Registration D ocument contain
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How do you explain these strong res
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Evaporato r 1.1 Key figures 6 1.1.1
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1.1.3 Sales by market As a % of sal
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1.1.9 Earnings per share (basic ear
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1.2 Valeo’ s strategy 1.2.1 Lates
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The reduction of CO 2 emissions and
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To ensure product design, quality a
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1.3 Presentation of Valeo 1.3.1 His
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Creation of a joint venture with th
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1.3.3 Operational excellence Operat
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In order to ensure the efficient ma
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To this end, the Group has made a n
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Industrial and Logistics The role o
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Strategy and organization In 2011,
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communicating vehicle, for example,
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egularly renewed external certifica
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Alternator Reversible System), whic
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The number of orders placed and the
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the heat pump system thus minimize
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1.4.3 Comfort and Driving Assistanc
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The Group experienced two more succ
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1.4.4 Visibility Systems Sales: 2.5
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Main competitors on the lighting sy
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SWF, Marchal and PJ brands. This in
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2.1 Main risks AFR 52 2.1.1 Operati
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2011. However, no assurance can be
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Crisis management The Valeo Risk M
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Foreign currency risk Group entitie
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investment grade, to being downgrad
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2.2 Insurance and risk coverage The
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I-Stars alternator /s tarter motor
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Based on market and customer feedba
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Strengthening and deployment of goo
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Valeo and sustainable development R
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and production and cover the use of
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Valeo’s Health, Safety, Environme
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Regular HSE audits ISO 14001 Risk a
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3.3.2 Key environmental performance
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Energy consumption 202 1,861 Respon
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In 2011, packaging materials consum
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and reuses 45% of the total amount
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Atmospheric VOC emissions 141 1,296
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3.3.3 Environmental performance ove
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3.4 Valeo’s social performance Th
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Overtime In 2011, 7,647,515 hours o
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Severity rate 0.20 0.18 0.14 09 10
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Since 2008, the management of these
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French scope Achievements in 2011
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Training requirements are analyzed
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Departures Valeo and sustainable de
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Breakdown of women by socio-profess
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In France To meet its recruitment r
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Valeo and sustainable development V
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agreement of 2008 and the Code of E
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Valeo and sustainable development V
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Here are some tangible examples of
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estored to health, the FMEA will wi
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Valeo and sustainable development S
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Diversity Valeo and sustainable dev
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: Full indicator : Partial indicat
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: Full indicator : Partial indicat
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AquaBlade® wiper system 4.1 Corpor
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Board of Directors At December 31,
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Gérard Blanc Independent d irector
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Michel de Fabiani Director Member o
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Michael Jay Independent d irector M
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Noëlle Lenoir Independent d irecto
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Georges Pauget Independent d irecto
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Other declarations concerning membe
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Summary of compensation paid and st
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mandatory health, death and disabil
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In addition, all the stock options
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Compensation paid to the Chairman o
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Employment contract, supplementary
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performance shares granted to the O
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4.3 Organization and operation of t
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Corporate governance Report of the
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Steinhorst as a d irector to replac
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Committees created by the Board The
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At the beginning of 2011, the Appoi
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Agreements governed by Article L.22
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Corporate governance Report of the
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There is no specific pension plan f
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Valeo’s policies and behavioral p
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The internal control system is audi
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Corporate governance Statutory Audi
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Brand licensing agreements Corporat
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Smart key 5.1 Analysis of 2011 cons
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Sales grew faster than the market i
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5.1.2 Financial position Stockholde
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2009 In 2009, investments in proper
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Financial and accounting informatio
Page 193 and 194: 5.2.4 Consolidated statement of cas
Page 195 and 196: Number of shares (in millions of eu
Page 197 and 198: Note 1 Accounting policies The cons
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Page 201 and 202: Business combinations are accounted
Page 203 and 204: Impairment tests are carried out as
Page 205 and 206: 1.14.5 Debt Bonds and other loans
Page 207 and 208: 1.19 Subsidies and grants This capt
Page 209 and 210: 2.1.2 Acquisition of a controlling
Page 211 and 212: 3.1 Key segment performance indicat
Page 213 and 214: Note 4 Notes to the statement of in
Page 215 and 216: Goodwill No impairment losses were
Page 217 and 218: 4.9.2 Diluted earnings per share Fi
Page 219 and 220: 2010 (in millions of euros) Softwar
Page 221 and 222: 5.4 Investments in associates Chang
Page 223 and 224: Impairment losses taken against inv
Page 225 and 226: 2010 Financial and accounting infor
Page 227 and 228: 5.9 Provisions Changes in provision
Page 229 and 230: Breakdown of obligations 2011 (in m
Page 231 and 232: Movements in obligations 2011 (in m
Page 233 and 234: 2010 (in millions of euros) France
Page 235 and 236: 500 million euros in seven-year bon
Page 237 and 238: 5.10.5 Net debt Financial and accou
Page 239 and 240: Note 6 Additional disclosures 6.1 F
Page 241 and 242: Fair value of foreign currency deri
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Page 247 and 248: At December 31, 2011 Financial and
Page 249 and 250: 6.3.3.2 Other commitments given Val
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Page 259 and 260: 5.4 Analysis of Valeo ’s results
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Page 267 and 268: 6.1 Tax group and taxable profit Va
Page 269 and 270: Note 8 Operating receivables At Dec
Page 271 and 272: 9.2 Additional paid-in capital Addi
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Page 275 and 276: Note 12 Operating and other payable
Page 277 and 278: 14.3 Interest rate risk hedging Fin
Page 279 and 280: Note 17 List of subsidiaries and af
Page 283 and 284: Fan unit 6.1 Stock market data 282
Page 285 and 286: 6.1.2 Share performance over 18 mon
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to allow the implementation of any
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6.6.2 Authorized, unissued capital
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Impact of tender offers (56,330 at
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Impact of tender offers (56,330 at
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Start Date and conditions Number of
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The Company is entitled to identify
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360Vue ® came ra 7.1 Principal pro
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7.1.5 Corporate purpose The Company
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Additional information Information
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COMMERCIAL ENTITIES is established
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7.4.2 Annual information document T
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Press releases published on the Val
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7.5.2 Fees paid to the Statutory Au
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Bare chip wiring for electronic pow
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Cross-reference tables Cross-refere
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2011 Registration D ocument - VALEO
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2011 Registration Document - Valeo

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