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5. Faurecia S.A. Business Report FY ended 2015

*1: Restated according to IFRS5.

Factors
1) Net Sales
-For FY ended Dec. 2015, the Company's sales grew 11.2% year-on-year to EUR 18,770.4 million.
-In Europe, product sales increased by 8.7% year-on-year. (where growth of automotive production was 3.8%.)
  In North America, product sales increased by 5.2% year-on-year. (where growth of automotive production was 2.7%.)
-In terms of customers, product sales increased by 23.8% for Renault-Nissan year-on-year. (in Europe: 26.9%, in North America: 28.4%)

2) Operating Income
-Operating income in the 2nd half of 2015 represents 4.8% of sales.  This figure was already reaching the target set in 2013 for the year 2016.

Divestiture

-December 2015, the Company announced that it has signed a MOU (Memorandum of Understanding) with Compagnie Plastic Omnium to divest its Automotive Exteriors business (bumpers and front-end modules) for an enterprise value of EUR 665 million. The composite business, the Faurecia plant for Smart in Hambach (France) and two joint ventures in Brazil and China are not included in the deal. The transaction is expected to close during 2016. (From a press release on December 14, 2015)

Joint Ventures

<China>
-"Dongfeng Faurecia Automotive Interior Company", a 50-50 joint venture between Faurecia and Dongfeng Hongtai, began constructing a plant in the Wuhan Economic & Technological Development Zone. The plant will have a land area of approximately 30,000 square meters, and is expected to be completed and start operations by August 2016. It will be able to produce 1 million sets of auto parts such as instrument panels, door panels, noise insulation components, and plastic interior/exterior components per year. Its products will be supplied to Dongfeng Peugeot-Citroen Automobile, Dongfeng Passenger Vehicle Company, Renault, Dongfeng Honda Automobile, and other automakers. Sales are expected to reach CNY 3 billion by 2020. Another JV with Dongfeng Hongtai, "Dongfeng Faurecia Automotive Exterior Company", will manufacture exterior parts in a new manufacturing facility in Chengdu, Sichuan Province that will supply parts to Dongfeng and its automotive affiliates. (From a press release on July 31, 2015 and November 31, 2015)

-The Company and Beijing WKW Automotive Parts Co. Ltd., a Chinese interior and exterior trim systems manufacturer, signed a 50/50 joint-venture agreement to create an entity named "Beijing WKW-FAD Automotive Interior Parts Co. Ltd. (BWKWFAD)". The Company will have an industrial footprint in China to serve its customers, starting with Infiniti and Volvo. With total planned investment of EUR 14 million (CNY 100 million), BWKWFAD will be specialized in interior aluminum decoration parts for the Asian market, covering development, manufacturing, assembly and marketing. Besides, the company will also provide after-sales services and technical consulting. (From a press release on October 12, 2015)

<Brazil>
-The Company and Magneti Marelli Holding S.p.A. announced the start of production of their joint-venture delivering interior and exterior parts for vehicles assembled at the new Fiat Chrysler Automobiles plant in Goiana (Pernambuco, Brazil). Named FMM Pernambuco Componentes Automotivos Limitada, the joint-venture is initially majority-owned by Magneti Marelli (65%), while Faurecia holds 35%. The joint-venture targets annual sales of above the EUR 200 million mark in the long run. The joint-venture manufactures vehicle interior parts such as instrument panel, cockpit, center console and door panels, as well as exterior parts such as bumpers and spoilers. In Goiana, the new plant is set-up in the strategic supplier park located within the FCA plant area, and has started delivering parts for the "Jeep Renegade". (From a press release on May 7, 2015)

Recent Development Outside France

<India>
-The Company will supply interior parts to Isuzu Motors Limited in India. The parts will be supplied for low cost pickup trucks that Isuzu plans to produce in India. This will be Company's first deal with Isuzu. The Company will produce the parts at its interior parts plant in Chennai in southern India. The Company received the order because the Japanese interior suppliers that Isuzu traditionally uses in Japan and Thailand to provide parts have no plants in India. The Company will supply the parts in time for the start of production at Isuzu's plant in India in 2016. (From an article in the Nikkan Jidosha Shimbun on July 22, 2015)

Contracts

-Major Contracts for FY ended Dec. 2015

Awards

-Faurecia Automotive Seating and Interior Systems activities have been selected by the Volkswagen Group as strategic partners within the "Future Automotive Supply Tracks" (FAST) corporate initiative. This nomination is a confirmation of the Company's significant performance in the supply of automotive seat structures and instrument panels for Volkswagen Group vehicles. (From a press release on September 2, 2015)

-The Company has just stepped up to second place in the Jaguar Land Rover Supplier League, a regularly customer-audited Group of 26 major suppliers. Faurecia Interior Systems considerably improved its Supplier League results this year thanks to a strong turnaround of the Fradley plant (UK).  (From a press release on June 24, 2015)

-Faurecia Emissions Control Technologies (FECT) has received a PSA Peugeot-Citroen Supplier Award in the category of Program Management. All four Faurecia business groups have contributed to the "C4 Cactus" with important design, comfort, weight-saving and emissions-reducing components from seats, bumpers, carpets to exhaust lines. Five Faurecia sites - Porrino (Interior Systems), Orense (Interior Systems), Audincourt (Automotive Exteriors), Sielest (Automotive Seating), Meru (Interior Systems) - were also presented with a 'best plant' award. (From a press release on June 23, 2015)

Outlook for FY ending Dec. 31, 2016

• Growth in Sales: Between 1% and 3% (like-for-like)
• Operating margin: Between 4.6% and 5.0% (FY ended Dec. 2015: 4.4%)
• Net cash flow: around EUR 300 million (FY ended Dec. 2015: EUR 303 million)

*1: Restated according to IFRS5.

R&D Structure

-The Company has 6,000 engineers and technicians working in 30 R&D centers across 11 countries.

R&D Facilities

<Korea>
-In December 2015, the Company has signed an agreement with the Yongin City government to establish a comprehensive research center in Korea. The Company will invest USD 68 million to construct the facility with a total floor area of 3,855 square meters on 8,089 square meters of land. The new research center is scheduled to be completed in the second half of 2016. It will integrate the Company's existing research facilities in Korea, and will engage in R&D of new technologies to reduce emissions and improve fuel economy. The new research center will work on a technique for reducing NOx emissions from automobiles by 20% by using ammonia gas instead of using urea water. The center will work with 25 Korean companies which includes Hyundai Motor Group. Once commercialized, it is to be incorporated into Hyundai and Kia vehicles.

<Japan>
-The Company will open a development base in Japan for Nissan Motor Co., Ltd. The development base will be located close to the Nissan Technical Center (Atsugi City, Kanagawa Prefecture), and will start its operations at the end of 2015 or beginning of 2016. The Company has been globally producing and supplying automotive seats and interior parts for Nissan, in cooperation with NHK Spring Co., Ltd. and other companies. With the new development base, the Company intends to further expand its business with Nissan. (From an article in the Nikkan Jidosha Shimbun on July 21, 2015)

Technological Alliance

-The Company and Stanford University's Center for Design Research, have formed a partnership aimed at studying potential behavioral changes in an autonomous vehicle. The Company and Stanford have identified several important challenges the industry must address to mitigate consumer apprehension to new driving modes. Stanford research data suggest that increased Situation Awareness helps drivers of autonomous vehicles feel confidence and trust in the system. Technologies like Advanced Driver Assistance System (ADAS) warnings can provide important information on what the vehicle is doing when used properly. However, drivers report that they often find the use and interface of these systems complicated and sometimes turn them off, reducing their benefit. Keeping the driver alert and ready for a transfer of control is also a critical issue that was identified. Providing information in new ways that easily attract attention and effectively increase the driver's Situation Awareness must be explored. In addition, safely enabling new user scenarios and mitigating motion sickness are also important challenges. (From a press release on November 12, 2015)

Products Development

Cover Carving Technology：CCT
-The Company has developed a light sculpted panel using Cover Carving Technology (CCT) for the front-seat backs of the new Renault "Talisman" Sedan and Estate. This Faurecia-patented CCT technology has enabled to offer three centimeters of extra knee room for rear passengers and weighs 1 kg less per row than conventional plastic seat back shells. Engineered and developed at the Company's Automotive Seating TechCenter in Magny-Vernois (France), and manufactured on the first European dedicated production line at the Company's Sao Joao da Madeira plant (Portugal), the technology is readily available for automakers to deploy in their upcoming vehicles.  (From a press release on September 30, 2015)
-The Company is nominated for one of the finalists of Automotive News Pace Award 2016 with this technology.

Gasoline Particulate Filter (GPF)
-Faurecia S.A. introduced the world's first gasoline particulate filter (GPF), designed to help passenger vehicles meet strict new regulations in China and Europe. While the diesel particulate filter (DPF) has long been available to remove soot and other particulates from diesel engines, the GPF is designed specifically for gasoline engines, principally those employing direct-injection systems. While Diesel Particulate Filters are made of silicon carbide, the gasoline particulate filter substrate is cordierite. The GPF can be applied to all gasoline-powered cars and trucks and is likely to become standard equipment. The Company has been producing the GPF since 2014 for a premium vehicle manufactured by a major European automaker. (From a press release on April 20, 2015)

Exhaust System Adaptive Valve
-The Company developed an adaptive valve which halves total muffler weight. The adaptive valve, located ahead of the rear muffler in the intermediate pipe, is self-adjusting, activated by the flow of exhaust gas.
-The Company is nominated for one of the finalists of Automotive News Pace Award 2016 with this technology.