Financial Overview

(in million EUR)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	Rate of change (%)	Factors
Sales	12,110	11,759	3.0	1)
- Original Equipment (OE)	10,275	9,910	3.7
- Aftermarket	1,517	1,454	4.3
EBITDA	1,356	1,260	7.6	2)

Factors
1) Sales
-Sales in 2013 increased by 3.0% year-on-year. Original equipment sales represented 85% of the Company's overall sales.

-Original equipment sales increased by 3.7% year-on-year.

-OE sales ratio and Sales growth rate by region (FY ended Dec. 31, 2013)

(%)

	Sales ratio	Sales growth rate (year-on-year)
Europe/Africa	50.2	2.1
North America	19.0	12.3
Asia (excl. China)/Middle East/Oceania	13.4	(10.5)
China	12.6	28.6
South America	4.8	(14.0)
Total	100	3.7

2) EBITDA
-In 2013, EBITDA increased by 7.6% year-on-year. Efficiency recovered in Visibility Systems Business Group, and there was an upward trend in the aftermarket.

Acquisitions

<Visibility Systems>
-On 21st January 2014, in line with the agreement communicated in June 2013, the Company has acquired entire stake hold by Osram GmbH in their North American joint venture, Valeo Sylvania LLC, for a price of USD 104 million. Following the sale, Valeo will own 100% of Valeo Sylvania shares. Valeo Sylvania produces lighting systems.

<Powertrain Systems>
-In September 2013, the Company announced the acquisition of Eltek Electric Vehicles, which is a Norwegian company fully dedicated to designing, developing, manufacturing, assembling and commercializing worldwide on-board chargers for passenger cars and commercial vehicles. This acquisition will enable the Company to accelerate and expand the development of Its offer for hybrid and electric vehicles. With this acquisition, the Company will complete its offer in power electronics by adding high efficiency conversion solutions to the ongoing development of high efficiency inverters with several original equipment manufacturers.

Divestitures

<Comfort and Driving Assistance Systems>
-The Company sold all shares in Valeo's Access Mechanism Business to U-shin Ltd. on May 24, 2013 for approximately JPY 20.2 billion.

Joint Ventures

<Comfort and Driving Assistance Systems>
-The Company announced that Valeo Japan Co., Ltd. merged Valeo Niles (Niles Co., Ltd.), its wholly-owned subsidiary, effective November 1, 2013. In accordance with this merger, Valeo Niles' four wholly-owned subsidiaries, Jonan Industrial Co., Ltd., Akita Niles Co., Ltd., Niles Personnel Service Co., Ltd., and Ami Co., Ltd., were also integrated into Valeo Japan.

New Company

<Powertrain Systems>
-In November, 2013, the Company held an inauguration ceremony for its new production subsidiary, Wuxi Valeo Automotive Components Systems Co., Ltd. The new Wuxi facility will develop, produce and sell engine components and related products such as actuators, sensors, and engine controllers.

Strong sales in China

-Shanghai Valeo Automotive Electrical Systems Co., Ltd., a subsidiary of Valeo has produced over 10 million alternators during 2013, breaking its previous record of 9 million that was set in 2012.

-Valeo Wenling Automotive Systems Co. Ltd. announced that it has already won wiper programs worth CNY 870 million in 2.5 months, from January to middle of March 2013. Sales have been growing steadily at the company; they reached CNY 460 million in 2010, CNY 600 million in 2011, and CNY 740 million in 2012. The company has approximately 1,000 employees as of March 2013.

Contracts

-Semi-automatic parking assistance system (Park4U): adopted in Mercedes "E Class" and Mercedes "new S Class".

-360Vue multi-camera system with megapixel technology: adopted in Mercedes "GLK".

-Touch screen: adopted in Peugeot "308", Mitsubishi "eKwagon" and Nissan "DAYZ".

-BiLED projector module: adopted in BMW "i3" and "new Mini".

-FullLED lighting system: adopted in Volkswagen "new e-Golf", Cadillac "Escalade" and Volvo's entire XX60 range.

Awards

-Major awards given in FY ended Dec. 31, 2013

Products	Customers	Factory	Contents
Corporate
-	Toyota Motors Europe	Corporate	Excellent cost management and value analysis category
-	Ford	Corporate	Continuous pursuit of excellence in new business field
Thermal Systems
Air intake module for MDB modular diesel engine platform	Volkswagen	-	For outstanding entrepreneurial performance
Front end module	Chrysler	Highland Park plant (U.S.)	For outstanding quality performance
-	Mercedes-Benz de Brasil	Itatiba plant (Brazil)	Quality operational excellence award
Comfort and Driving Assistance Systems
-	Toyota Motors Europe	Rakovnic plant (Czech Republic)	For excellent supply
Visibility Systems
-	Toyota Motors Europe	Angers plant (France)	For excellent quality
-	Volvo	Angers plant (France)	For excellent quality

R&D Expenditure

(in million EUR)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011
Powertrain Systems	165	145	130
Thermal Systems	152	147	154
Comfort and Driving Assistance Systems	169	169	153
Visibility Systems	148	129	124
Other	9	8	-
Total	643	598	561

R&D Facilities

-As of Dec. 31, 2013, the Group has 16 research centers and 35 development centers. 9,400 employees were engaged.
-Breakdown of 51 R&D centers by region: Europe/Africa 28, Asia 15, North America 5, South America 3

R&D Activities

4 main development topics

• Reduction of CO2 emissions
• Weight reduction and the energy footprint
• Expertise in lighting systems
• Intuitive driving

Technological Alliance

<Comfort and Driving Assistance Systems>
-In November 2013, the Company and Fujitsu Ten Limited signed a technological partnership contract for the advanced automotive safety system development. The aim of the partnership is to jointly develop sensing technology to detect obstacles in the car's path by combining Fujitsu Ten's millimeter wave radar and Valeo's front camera. Merging the advantageous properties of the millimeter wave radar that is adept at identifying relative distance and detecting objects, and the camera that recognizes an object itself, the two companies will develop a highly accurate and reliable sensing technology unaffected by the external environment, including, weather, time of day, etc.

-In September 2013, the Company and Safran S.A. signed a partnership agreement to conduct joint research on driver assistance systems and autonomous driving. By combining their expertise in the latest image recognition technologies and other advanced technologies, the two French companies intend to boost innovative product development and create new markets. The joint research will focus on four main research areas: 1) driver attention monitoring 2) 360 angle visibility around the vehicle 3) visibility in extreme weather and 4) remote and/or automated operation of a vehicle. In the partnership's initial phase, the companies will develop technological solutions for 1) and 2) by 2014. Then from 2014 through 2016, the two companies will focus on solutions for 3) and 4). The studies on these solutions will allow the companies to accelerate development of more advanced solutions in the field of driver assistance systems and autonomous driving for automobiles and military vehicles.

R&D Activities

Radiator tanks
-The Company will manufacture radiator tanks that utilize Technyl eXten, a new polyamide material developed by Solvay Engineering Plastics, and supply them to Renault-Nissan. The new material with high hydrolysis resistance has excellent resistance to corrosion from salt that is used on road surfaces to melt snow and ice.

Wiper systems
-The new wiper system co-developed with Mercedes-Benz is to locate the injector to the blade rubber parts of the wiper unit to ensure an unobstructed view of the road while washing the windshield and at the same time halving the amount of liquid required. This AquaBlade system is adopted in Mercedes "SL Class" and "S Class".

Air intake module
- This air intake module which includes water-cooling intercooler, which is co-developed with Volkswagen, is a new system used to downsize engines and increase their efficiency. Vehicles equipped with the module feature a better torque and run more smoothly with less turbo lag when shifting gears. They are in line with Euro6 and Euro7. With the EGR, air pollutant such as NOx is reduced by 2 - 3%.

-Other development cases in FY ended Dec. 31, 2013

Products	Description	Improvement	Contribution to Driving assistance and Safety
Powertrain Systems
Hybrid4All	Hybridization of powertrains, Energy recovery in braking phase, Stop-start function	Fuel saving of up to 15%	-
Electric supercharger	Downsizing/downspeeding powertrains, Energy recovery in braking phase	Fuel saving of 8-10%	-
Dual dry clutch	Consumption reduced compared with AT, No hydraulic fluid	CO2 emission reduction by 6-10%	Improved driving comfort
Thermal Systems
Control valve on the engine's water circuit	Optimized engine warming	Fuel savings of up to 3% NOx's reduction：10%	-
Battery thermal management modules	For hybrid and electric drivetrains	Increased vehicle travel range and battery life.	-
Comfort and Driving Assistance Systems
Park4U parking assistance system	Semi-automatic parking assistance system	-	Parking assistance, Detection of obstacles, Automated parking
Visibility Systems
BiLED Headlamps	100% LED headlamp technology with one lens used for both low- and high-beam headlamps	-	Improved visibility
BeamAtic Headlamps	This system makes it possible to drive with high beams on at all times without blinding other drivers.	-	Improved visibility without blinding other drivers. Automated function.
360Vue multi camera system	Offer a view of the vehicle's surroundings transmitted by a system of cameras.	-	Improved peripheral view.

Capital Expenditure

(in million EUR)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011
Powertrain Systems	261	262	226
Thermal Systems	178	148	117
Comfort and Driving Assistance Systems	232	214	209
Visibility Systems	252	234	156
Other	16	21	9
Total	939	879	717

-Investment ratio by region: Western Europe 37%, Asia 31%, Eastern Europe 17%, North America 10%

Investments Outside France

<China>
-In July 2013, the Company has inaugurated the Valeo Nanjing expansion plant in Yangtze Delta Region, Nanjing, China. On top of current activity for clutches and torque converters, the Nanjing plant will also be the first site in the world for Valeo to produce double-clutch transmission systems. In 2012, three new plants were opened (Guangzhou, Wuhu and Huadu). In 2013, two other plants are being extended (Foshan and Wuhan) and four other new ones are under construction.

<Mexico>
-In 2013, the Company has inaugurated the extension to the plant in Rio Bravo in Mexico. The plant belongs to the Comfort and Driving Assistance Systems. Once the extension is fully operational, the plant will be the main electronics production center for the region.

<Korea>
-In 2013, the Company has inaugurated a dry dual clutch production unit and R&D center in Sechon in South Korea.