Financial Overview

(in million euros)

	FY2011	FY2010	Rate of change (%)	Factors
Sales	10,868	9,632	12.8	1)
EBITDA	1,212	1,150	5.4	2)

Factors
1) Sales
-Sales in 2011 increased by 12.8% to 10,868 million euros, due to its favorable product mix and market share gains. Original Equipment sales represent 85% of the Company's sales.

-In 2011, every product group's Original Equipment sales exceeded global automotive production growth (4%), due to its innovative products and the growing importance of their technologies (Stop-Start systems, parking aid technologies, innovative lighting systems etc.).

2) EBITDA
-In 2011, Powertrain Systems Business Group's EBITDA decreased by 2.5% year-on-year, due to higher rare-earth prices and the temporary capacity shortages at certain manufacturing plants.

-Thermal Systems Business Group's EBITDA fell by 1.1% from the previous year, impacted by the earthquake in Japan and floods in Thailand.

Acquisitions

-The Company has acquired the Variable Torque Enhancement System (VTES) business of British automotive technology development company Controlled Power Technologies (CPT) to deliver a range of electric superchargers to its customers. The electric superchargers respond much faster than conventional exhaust-driven turbochargers. Highly efficient at low engine revolutions, electric superchargers make it possible to reduce engine size, an important factor in reducing fuel consumption. When coupled with a the Company's energy recovery system, electric superchargers can deliver fuel savings of up to 20% in the standard European driving cycle. VTES will be integrated into the Company's Powertrain Systems Business Group. (From a press release on December 6, 2011)

<Niles>
-The Company announces the closing of the acquisition of Niles from RHJ International SA and Nissan. The company will join the Comfort and Driving Assistance Business Group (internal controls, internal electronics and access mechanisms), as of July 1, 2011. Niles generated sales of 412 million euros (47 billion yen) in 2010, employs 3,900 people at eight production sites. (From a press release on June 30, 2011)

-The Company announced the signing of an agreement with RHJ International SA and Nissan to acquire Niles, a Japan-based automotive switch supplier which would reinforce the Company's Comfort and Driving Assistance Systems Business Group. The transaction amounts to 320 million euros. With this acquisition, the Company would strengthen its relationship with Japanese automakers, particularly Nissan. (From a press release on February 23, 2011)

Business Partnership

-The Company and Great Wall Motors signed a strategic partnership agreement. Under the agreement, both sides will enhance cooperation in regard to established areas including windshield wipers, generators, starters, and clutches; and on this basis, expand technical exchange and cooperation on powertrain components, visual systems, thermal systems, driver assistance systems and other areas. Since 2005, the Company began supporting the Great Wall Wingle with windshield wipers, and the Great Wall GW491QE model engines with generators and starters. (From a press release on July 16, 2011)

Awards

-Major awards in 2011 are as below;

Business Group	Presenter	Awards
Valeo Group	Nissan	Nissan Global Innovation Award
Powertrain Systems	GM	Supplier of the year award
Wuxi site, China of Access Mechanisms Product Group (in Comfort and Driving Assistance Systems)	JAC	Best supplier award in the technical innovation category
Wuhan site, China of Lighting Systems Product Group (in Visibility Systems)	Geely	Best supplier award
Martos site, Spain of Lighting Systems Product Group (in Visibility Systems)	PSA Peugeot Citroen	Supplier award for the delivery of spare parts
Electrical Systems Product Group in North America (in Powertrain Systems)	Volkswagen	Volkswagen commercial excellence award
Amiens site of Transmission Systems Product Group (in Powertrain Systems)	Toyota Europe	Certificate of recognition in the supply category
Valeo Group	Toyota Europe	Certificate of recognition in the cost management category
Czechowice site, Poland of Electrical Systems Product Group (in Powertrain Systems)	Toyota Europe	Certificate of recognition in the quality category
Mondeville site, France of Engine Management System Product Group (in Powertrain Systems)	Toyota Europe	Certificate of recognition in the quality category

R&D Expenditure

(in million euros)

	FY2011	FY2010
Comfort and Driving Assistance Systems	153	140
Powertrain Systems	130	146
Thermal Systems	154	133
Visibility Systems	124	121
Other	-	(3)
Total	561	537

R&D Facilities

-At the end of 2011, the Group had 21 research centers and 40 development centers.

-7,600 associate are engaging in research and development worldwide. The Company plans to increase 1,000 engineers in 2012.

	Research centers	Development centers
Western Europe	16	14
Eastern Europe	-	4
North America	1	5
South America	-	4
Asia	4	12
Africa	-	1
Total	21	40

R&D Activities
-In 2011, the Company's research and development policy is focused on three main topics;

• Reduction of CO2 emissions
• Weight reduction and the energy footprint
• Smart driving

Capital Expenditure

(in million euros)

	FY2011	FY2010	FY2009
Comfort and Driving Assistance Systems	209	127	112
Powertrain Systems	226	158	167
Thermal Systems	117	88	86
Visibility Systems	156	89	110
Other	9	6	4
Total	717	468	479

 
-Capital expenditure in 2011 was mainly earmarked for torque converters, ultrasonic sensors, heat exchangers and lighting product lines.

-Significant investments were undertaken in 2011 to set up and extend capacity of facilities in China, Mexico, Romania, Poland, India, Hungary, South Korea and Brazil.

Investment Outside France

<China>
-The Company announced that it has inaugurated two new sites in China: an Electronics Expertise Center in Shenzhen, Guangdong province and a wiper systems production plant in Wenling, Zhejiang province, China. The new Electronics Expertise Center, located within the Company's Shenzhen production plant, will develop electronic components for electric vehicles. The new Wenling production plant of 15,600 square meters will replace the former plant. (From a press release on April 1, 2011)