Valeo : Press release – Q1 2017 Sales

In the first quarter of 2017, like-for-like growth in original equipment sales outpaced automotive production in all Business Groups:

• buoyed by their attractive portfolio of technologies focused on CO emissions reduction, like-for-like original equipment sales for the Powertrain Systems and Thermal Systems Business Groups grew by 11% and 15%, respectively;
• like-for-like sales for the Comfort & Driving Assistance Systems and Visibility Systems Business Groups rose 10% and 14%, respectively, reflecting the market's keen interest in intuitive driving and LED lighting technologies. First-quarter sales for the Visibility Systems Business Group, which surged 30%, include the contribution of Ichikoh, which has been fully consolidated in Valeo's consolidated financial statements since February 1, 2017.

2017 outlook

Based on the following assumptions:

• an increase in global automotive productionof between 1.5% and 2%;

• raw material prices and exchange rates in line with current levels.

Valeo confirms its objectives for 2017:

• sales growth outperforming the market by more than 5 percentage points;
• a slight increase in operating margin (as a % of sales and before acquisitions)

Highlights

On February 28, 2017at Valeo's Investor Day in London, Jacques Aschenbroich, Chairman and Chief Executive Officer, Christophe Périllat, Chief Operating Officer, Robert Charvier, Chief Financial Officer, and the management teams of the four Business Groups presented Valeo's new strategic plan and financial objectives for 2021.

As the world leader in COemissions reduction and intuitive driving, Valeo is intent on continuing its R&D efforts in order to meet its customers' needs and leverage new growth opportunities for powertrain electrification, autonomous and connected vehicles, as well as new forms of mobility driven by digital technology. All four Business Groups will harness the potential stemming from these new opportunities within the automotive industry, and will undergo several waves of growth as these new technologies enter production. Valeo has solid fundamentals thanks to its diversified customer and geographic positioning with a footprint that is set to increase in high-growth potential regions, notably in Asia, which is expected to account for 37% of original equipment sales by 2021 (versus 27% in 2016).

Building on the growth in the order intake due to the success of its innovations, over the 2016-2021 period, the Group is aiming to accelerate organic growth through higher content per vehicle and a better product mix, to improve profitability and to increase free cash flow generation with, by 2021:

• sales of over 27 billion euros, representing average annual sales growth in excess of 10% and outperforming automotive production by more than 7 percentage points;
• operating margin (as a percentage of sales) of around 9%;
• free cash flow generation of 3.7 billion euros over the 2017-2021 period, twice the level recorded over the 2012-2016 period of 2 billion euros.

On March 6, 2017, Valeo entered into an agreement with an Investment Services Provider to buy back Valeo shares. The shares will be allocated to cover the implementation of any stock option purchase plans and the allotment of shares to employees as part of their involvement in the performance of the Company or pursuant to a company savings plan.

On March 8, 2017, the European Commission published its decision to fine Behr, Calsonic, Denso, Panasonic, Sanden and Valeo a total of 155 million euros for breach of European antitrust rules between 2004 and 2009 concerning supplies of air conditioning and engine cooling components to automakers. The fine handed down to Valeo amounts to 26.8 million euros. At the end of July 2011, antitrust investigations were initiated against several automotive suppliers (including Valeo), in particular by the US and European antitrust authorities.

On March 13, 2017, Valeo acquired all of the outstanding shares of gestigon, a German start-up specialized in developing 3D image processing software for the vehicle cabin.

On March 27, 2017,Valeo took first place in France's 2016 INPI industrial property institute ranking, with 994 patents published in France in 2016 versus 668 in 2015 (third place), illustrating the importance accorded to innovation in the Group's strategy, particularly its drive to reduce COemissions and develop intuitive driving.

Including share in net earnings of equity-accounted companies, see Financial Glossary, page 6.
Including Ichikoh, Valeo-Kapec and FTE.
See Financial Glossary, page 6.

Upcoming events

Annual Shareholders' Meeting: May 23, 2017

First-half 2017 results: July 20, 2017

Third-quarter 2017 sales: October 24, 2017

Financial Glossary

• Operating margin including share in net earnings of equity-accounted companies corresponds to operating income before other income and expenses.
• Free cash flowcorresponds to net cash from operating activities (excluding the change in non-recurring sales of receivables) after taking into account acquisitions and disposals of property, plant and equipment and intangible assets.

Safe Harbor Statement

Statements contained in this document, which are not historical fact, constitute 'forward-looking statements'. These statements include projections and estimates and their underlying assumptions, statements regarding projects, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Even though Valeo's Management feels that the forward-looking statements are reasonable as at the date of this document, investors are put on notice that the forward-looking statements are subject to numerous factors, risks and uncertainties that are difficult to predict and generally beyond Valeo's control, which could cause actual results and events to differ materially from those expressed or projected in the forward-looking statements. Such factors include, among others, the Company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions. The risks and uncertainties to which Valeo is exposed mainly comprise the risks resulting from the investigations currently being carried out by the antitrust authorities as identified in the Registration Document, risks which relate to being a supplier in the automotive industry and to the development of new products and risks due to certain global and regional economic conditions. Also included are environmental and industrial risks as well as risks and uncertainties described or identified in the public documents submitted by Valeo to the French financial markets authority (Autorité des marchés financiers- AMF), including those set out in the 'Risk Factors' section of Valeo's 2016 Registration Document registered with the AMF on March 24, 2017 (under no. D.17-0226).

The Company assumes no responsibility for any analyses issued by analysts and any other information prepared by third parties which may be used in this document. Valeo does not intend or assume any obligation to review or to confirm the estimates of analysts or to update any forward-looking statements to reflect events or circumstances which occur subsequent to the date of this document.