Financial Overview

(in million euros)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	Rate of change (%)	Factors
Sales	11,759	10,868	8.2	1)
EBITDA	1,260	1,212	4.0	2)

Factors
1) Sales
-Sales in 2012 increased by 8.2% to 11,759 million euros. Original equipment sales represented 84% of the Company's sales.

-In 2012, original equipment sales was up 8% as global automotive production advanced 6% mainly due to growth in Asia and the rise in new vehicle registrations in North America. Asia accounted for 26% of the Company's sales, compared with 22% in 2011.

2) EBITDA
-In 2012, EBITDA in the Visibility Systems Business Group fell by 21.1%, reflecting the lackluster aftermarket and start-up costs for new projects.

-In 2012, EBITDA in the Powertrain Systems Business Group grew by 22.8% from the previous year.

Acquisitions

-In 2012, the Company. announced that it has acquired an 80% shareholding in Wuhu Ruby Automotive Lighting Systems from Wuhu Chery Technology, a subsidiary of Chery Automobile. Chery Technology will retain a 20% stake in the company. Located at Wuhu in Anhui province, China, this joint venture, which will be renamed Wuhu Valeo Automotive Lighting Systems, will develop, manufacture and sell Valeo Lighting Systems products, mainly for Chery Automobile in the Chinese market. The business will be integrated within the Group's Visibility Systems Business Group. (From a press release on January 3, 2012)

Divestitures

<The sale of Valeo's access mechanisms business to U-SHIN>
-In 2012, U-SHIN Ltd. announced on November 30 that the company will acquire the Access Mechanism Product Group of Valeo on March 29, 2013. U-SHIN will spend 17.1 billion yen to purchase all shares in a new company Valeo is establishing for the business in the Netherlands. With this move, U-SHIN is going to increase its presence in the international arena including the emerging markets, aiming to become one of the three largest suppliers in the global key set and door handle market. Valeo's Access Mechanism Product Group develops, produces and sells key sets, latches, steering locks, and door handles. (From an article in the Nikkan Jidosha Shimbun on Dec. 3, 2012)

-In 2012, U-SHIN Ltd. announced on July 31 it will dispose of its 414,900 shares to Kajima Corporation to obtain about 200 million yen in fund. In June, U-SHIN entered into negotiations with French-based Valeo on acquiring Valeo's access mechanism sector handling products like key sets, latches, steering locks and door handles. U-SHIN is going to appropriate the 200 million yen fund in part for this takeover expenses. The company, which has plans to raise the overseas share in its total sales from the current nearly 30 percent to over 70 percent shortly, is aiming to expand its global operations by putting Valeo's access mechanism division under its control. (From an article in the Nikkan Jidosha Shimbun on August 2, 2012)

-In 2012, Valeo S.A. announced that it is in negotiations to sell its Access Mechanisms Business to Japan-based U-SHIN. The Access Mechanisms Business comprises products such as the locksets, steering column locks, handles and latches. Broadly present in Europe and South America, the business generated 620 million euros in revenue in 2011. It operates 12 plants and has 4,500 employees. The proposed divestment is aligned with Valeo's strategy of focusing on solutions to reduce CO2 emissions and on stepping up its development in Asia and the emerging markets. (From a press release on June 25, 2012)

Business Partnership

-In 2012, the Company and V. Johnson Enterprises have formed a joint venture called Detroit Thermal Systems (DTS) to acquire the climate control business of Automotive Components Holdings (ACH) currently located within its Sheldon Road plant in Plymouth Township, Michigan, the U.S. V. Johnson Enterprises will hold 51% of DTS, while Valeo will hold the remaining 49%. Ford Motor Company and ACH signed definitive agreements with DTS for the sale of the business on October 25, 2012. V. DTS will produce climate control systems and components for the automotive industry, including supporting current product supply commitments to Ford previously held by ACH. Ultimately, DTS is expected to employ approximately 500 people. The acquisition will strengthen Valeo's Thermal Systems operations and its position with Ford Motor Company in North America and the rest of the world. (From a press release on October 29, 2012)

-In 2012, Ichikoh Industries, Ltd. announced that the company and Valeo of France, its joint-venture partner, have reached a basic agreement to restructure their existing lighting businesses in China. The majority of each company's subsidiaries and affiliates in the country will be placed under the management of Valeo Ichikoh Holding Co., Ltd., a Valeo-Ichikoh joint venture created to oversee their operations in China. The holding company is owned 85 percent by Valeo, and 15 percent by Ichikoh. (From an article in the Nikkan Jidosha Shimbun on Sep. 11, 2012)

Investment Outside France

-In 2012, the Company announced that it inaugurated the extension to its plant in Veszprem, Hungary, which produces comfort and driving assistance systems. The enlarged facility will enable Valeo to increase the plant's production capacity by 50% in the coming years. The cornerstone was also laid for a new R&D building, which will double the area dedicated to R&D at the site. The Veszprem plant has more than doubled its sales in four years. The plant extension and new R&D facility will make this site the Group's largest plant in Eastern Europe producing driving assistance systems. The Veszprem plant, which currently employs more than 1,200 people, produces such high technology systems as top column modules, onboard computers and other interior control systems that are mounted on the steering column and instrument panel. (From a press release on June 8, 2012)

-In 2012, the Company announced that it inaugurated the Valeo Niles plant in Huadu Auto City, Guangzhou, Guangdong Province, China. This plant is part of Valeo's Comfort and Driving Assistance Business Group and will help to increase driving safety and comfort by providing an extensive array of switch products. The plant currently has 160 employees and the plan is to grow to 1,500 in the coming years. (From a press release on May 11, 2012)

Contracts

-In 2012, the Company announced that the BeamAtic lighting automation and LaneVue lane departure warning applications will equip the new mass-market Renault "Scenic", "Grand Scenic", "Megane", "Megane Coupe" and "Megane Estate" facelift vehicles. These applications are embedded in the Valeo multifunctional camera, located between the windshield and the rearview mirror. (From a press release on May 9, 2012)

-In 2012, the Company announced that it is supplying its new range of FullLED headlamps for the Citroen Number 9 concept car, which will be presented at the 2012 Beijing Motor Show. The three "low beam" modules, a mere 9mm wide for 40mm high, are completed by a high beam module fitted with a floating lens. (From a press release on April 23, 2012)

R&D Expenditure

(in million euros)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011
Comfort and Driving Assistance Systems	171	153
Powertrain Systems	147	130
Thermal Systems	149	154
Visibility Systems	131	124
Other	-	-
Total	598	561

R&D Facilities

-At the end of 2012, the Group had 21 research centers and 40 development centers.

-In 2012, the Company announced that it inaugurated the extension to its plant in Veszprem, Hungary, which produces comfort and driving assistance systems. The enlarged facility will enable Valeo to increase the plant's production capacity by 50% in the coming years. The cornerstone was also laid for a new R&D building, which will double the area dedicated to R&D at the site. The Veszprem plant has more than doubled its sales in four years. The plant extension and new R&D facility will make this site the Group's largest plant in Eastern Europe producing driving assistance systems. The Veszprem plant, which currently employs more than 1,200 people, produces such high technology systems as top column modules, onboard computers and other interior control systems that are mounted on the steering column and instrument panel. (From a press release on June 8, 2012)

R&D Activities
-In 2012, at the ongoing Paris Motor Show running through October 14, the Company showcased its new technologies to reduce CO2 emissions from automobiles. Its highlights included a new hybrid technology called the Hybrid4all, an electric supercharger, and an air intake module. The Hybrid4all offers hybrid powertrains on any type of vehicles, especially on entry-level models. Combined with an automatic engine stop-start function, a regenerative braking system and a torque assist mechanism, the hybrid technology can deliver fuel savings of up to 15 percent. The electric supercharger is designed to improve throttle response from small engines at low revolutions. When coupled with an energy recovery system, it contributes to fuel savings of nearly 20 percent. The new air intake module for diesel and gasoline engines improves the air/fuel mixture drawn into the engine, enhancing the efficiency and performance of the cooling system, which leads to cleaner and more compact engines with a supercharger. Some other solutions on exhibition were a new multifunction control panel and an LED headlamp projector. (From an article in the Nikkan Jidosha Shimbun on Oct. 4, 2012)

Capital Expenditure

(in million euros)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Comfort and Driving Assistance Systems	214	209	127
Powertrain Systems	262	226	158
Thermal Systems	148	117	88
Visibility Systems	234	156	89
Other	21	9	6
Total	879	717	468