Professional Documents
Culture Documents
CONTENTS
1 2 3
Introduction to Faurecia
Board of Directors, ExecutiveCommittee andAuditors Key gures
3
4 5
Corporate governance
8.1. 8.2. 8.3. 8.4. 8.5. Board of Directors The Executive Committee Senior Management Internal control Statutory Auditors report prepared inaccordance with ArticleL.225-235 oftheFrench Commercial Code
73
74 93 95 96
7
8 10 13
103
Consolidated statement
9.1.
105
15
16 18 20 21
27
28 31 34 36 38 39
9.7.
Consolidated statement 107 ofcomprehensive income Balance sheet consolidated 108 Consolidated cash ow statement 110 Consolidated statement ofchanges 111 inequity Notesto the consolidated nancial 113 statements Consolidated companies 166 asofDecember31, 2011 Statutory Auditors report ontheconsolidated nancial statements 172
10
Quality
5.1. 5.2. 5.3. 5.4. Quality achievements Faurecia Excellence System (FES) Customer awards Outlook 2012
49
50 51 52 53
11
6 7
55
56 58 62
244
Contents
Statement by the person responsible Cross-reference table with theinformation contained intheannual nancial report Cross-reference table
249
250 251 252
63
Registration Document
2011
The French version of this Registration Document (document de rfrence), including the annual nancial report, was led with the Autorit des marchs nanciers (AMF) on 25th April 2012, pursuant to Article212-13 of the AMFs General Regulations. It may only be used in connection with a nancial transaction if it is accompanied by a memorandum approved by the AMF. This document has been prepared by the issuer under the responsibility of its signatories. The English language version of this Registration Document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions expressed therein the original language version of the document in French takes precedence over this translation.
Faurecia
1
Introduction to Faurecia
CONTENTS
KEY FIGURES 4
Faurecia
Introduction to Faurecia
Board of Directors, ExecutiveCommittee andAuditors
Faurecia
Introduction to Faurecia
Key gures
Key gures
16,190.2 (+15.0%)* 13,795.9 (+17.9%)* 650.9 371.3 201.7
9,292.2 (-22.2%)*
2010
2011
Operating income (1) (in m and as a % of sales)
1,104.5 941.2
395.3
169.1
4.3% 2009
6.8% 2010
EBITDA (2) (in m and as a % of sales)
6.8% 2011
1.8% 2009
2.2% 2010
Capital expenditure (in m and as a % of sales)
2.8% 2011
5.3% 2009
5.0% 2010
Gross R&D expenditure (3) (in m and as a % of sales)
4.7% 2011
302.7
2009
2010
Total headcount
2011
(1) Definition in Note1.15 to the consolidated financial statements. (2) Operating income plus depreciation, amortization and provisions for impairment in value of property, plant and equipment and intangible assets (See Note5.5 to the consolidated financial statements). (3) Gross value before capitalized development costs and amounts billed to customers (See Note5.4 to the consolidated financial statements). (4) Definition in Note26.1 of the notes to the consolidated financial statements. Faurecia REGISTRATION DOCUMENT 2011
Faurecia
2
Business review 2011
CONTENTS
2.1. 2.2.
8 10
10 11
2.3.
OTHER MODULES
2.3.1. 2.3.2. Emissions Control Technologies Automotive Exteriors
13
13 14
In accordance with Article28 of European Commission Regulation809/2004, the following information is incorporated by reference in this Registration Document: c the consolidated financial statements, the parent company financial statements, the corresponding Statutory Auditors reports, the comments on the consolidated financial statements and significant events of theyear by business, set out respectively on pages101 to 171, 179 to 201, 172 to 173, 202 to 203 and 8 to 20 of the 2010 Registration Document filed with the AMF on April28, 2011 under number D.11-0379; c the consolidated financial statements, the parent company financial statements, the corresponding Statutory Auditors reports, the comments on the consolidated financial statements and significant events of theyear by business, set out respectively on pages93 to 157, 166 to 189, 158 to 159, 190 to 191 and 8 to 22 of the 2009 Registration Document filed with the AMF on April28, 2010 under number D.10-0334.
Faurecia
Faurecia
Product sales to the Renault-Nissan group represented 11.5% of Faurecias total product sales. They were up 11.7% compared to 2010 on a reported basis and 3.6% on a like-for-like basis, totaling 1,424.0million. They were up 49.8% in North America and 32.8% in South America, but were flat in Europe (-0.1%) and Asia (-0.2%). Product sales to the Ford group accounted for 11.0% of the Faurecia Groups total product sales, totaling 1,357.2million in 2011. They were up 15.1% on a reported basis and 11.7% on a like-for-like basis, with 28.9% of growth in North America and 6.0% in Europe. Product sales to the BMW group amounted to 1,045.9million (8.4% of the Faurecia Groups total product sales). They were up 6.5% on a reported basis and 5.9% on a like-for-like basis. Growth mainly occurred in North America (+11.7%), with the increase in Europe coming to 2.8%, on like-for-like basis at constant exchange rates. Product sales to the General Motors group in 2011 registered a 0.5% increase on a reported basis and a 2.7% increase on a like-for-like basis, totaling 1,052.8million (8.5% of total product sales). On a like-for-like basis, sales were up 22.8% in Asia and 4.6% in North America. They were down 19.5% in Europe. Product sales to the Daimler group totaled 584.9million (4.7% of the Faurecia Groups total product sales). They were up 28.1% on a reported basis and 15.6% on a like-for-like basis, with increases of 6.8% in Europe and 282.4% in North America. The latter increase was attributable to the start of deliveries of seats and interior parts for the new Mercedes M-Class. In 2011, product sales to Fiat-Chrysler were up 82.1% (83.3% on a like-for-like basis), 13.2% to Geely-Volvo (12.9% on a likefor-like basis) and 47.6% to Hyundai/Kia (48.7% on a like-forlike basis). They were down 22.3% to Toyota (20.6% at constant exchange rates).
25.3% VW Group
Product sales to the Volkswagen group totaled 3,136.8million in 2011, up 20.8% on a reported basis and 15.0% on a like-forlike basis. They accounted for 25.3% of the Faurecia Groups total product sales. On a like-for-like basis, the increase was 13.7% in Europe, 29.6% in North America, 18.1% in Asia and 5.5% in South America. Product sales to the PSA Peugeot Citron group totaled 2,061.0million in 2011, up 5.7% on a reported basis and 6.1% on a like-for-like basis. They accounted for 16.6% of the Faurecia Groups total product sales. On a like-for-like basis, sales growth was driven by Asia (+11.5%) and South America (+34.5%). In Europe, product sales growth was 3.3%.
(in millions)
H2 2010
6,970.0 3,784.6 3,185.4 5,341.4 2,140.5 1,270.5 3,411.0 1,275.8 654.6 1,930.4
H2 2011
8,039.9 4,240.5 3,799.4 6,058.9 2,319.9 1,492.3 3,812.2 1,478.3 768.4 2,246.7
Chg.*
12.7% 9.8% 17.9% 11.9% 6.1% 14.5% 9.2% 18.9% 12.5% 16.7%
2010
13,795.9 7,663.8 6,132.1 10,695.8 4,343.2 2,635.7 6,978.9 2,478.0 1,239.0 3,716.9
2011
16,190.2 8,626.7 7,563.5 12,391.1 4,769.9 3,075.3 7,845.1 2,934.6 1,611.3 4,545.9
Chg.*
13.1% 10.8% 17.5% 12.9% 8.3% 14.1% 10.5% 20.7% 10.9% 17.2%
Total sales Interior Modules Other Modules Product sales Automotive Seating Interior Systems Interior modules (sub-total) Emissions Control Technologies Automotive Exteriors Other modules (sub-total)
*
Faurecia
Employees
30,272
Sites
76
Countries
24
R&D Centers
18
The Automotive Seating business generated 4,981.2million in sales in 2011, up 9.0% compared to 2010 on a reported basis and 7.5% on a like-for-like basis. Product sales totaled 4,769.9million, versus 4,343.2million in 2010, up 9.8% on a reported basis and 8.3% on a like-for-like basis. The increase in the second half of theyear was 8.4% on a reported basis and 6.1% on a like-for-like basis. In Europe, product sales rose by 2.2%year-on-year on a reported basis to 3,131.4million (2.3% on a like-for-like basis). With product sales totaling 880.0 million, North America recorded 38.4% increase in annual growth on a reported basis, including 52.5% growth in the second half of 2011 compared with the second half of 2010. These sales factor in the seat systems plant business in Madison, in the amount of 107.7million for theyear. On a like-for-like basis, growth was 26.4% for theyear and 34.6% in the second half of theyear. The gain was attributable in large part to the ramp-up of the new Mercedes M-Class and sustained sales to Volkswagen (Jetta, new Beetle, Passat in the new Chattanooga plant). In South America, product sales totaled 265.8million in 2011, a 32.1% increase from 2010 on a reported basis (35.3% on a like-for-like basis). In the second half of theyear, the increase was 17.7% on a reported basis and 24.1% on a like-for-like basis. In Asia, product sales totaled 464.9million, up 8.8% over the fullyear on a reported basis (9.4% on a like-for-like basis) and 8.4% in the second half (8.3% on a like-for-like basis). Product sales to the majority of our customers were up, in particular, to Renault-Nissan, VW and Daimler, due to the launch of new vehicles for which Faurecia is a supplier and to the incorporation of new business within Faurecias scope of consolidation, and to Chrysler due to growth in the North American market. Theyear 2011 was marked by the launch of mass production of the Daimler M-Class in the USA and the VW Up! in Europe,
* Source: Faurecia.
for which Faurecia supplies complete seating units. Theyear also saw the continuation of the worldwide roll out of front seating frame platforms developed and produced by Faurecia Automotive Seating for Nissan, General Motors, Volkswagen and PSA with new applications in Europe, North America, South America and Asia. These new generation standard frames (which are now fitted in more than 50different models) have helped Faurecia bolster its leading position1* in the international seating platform market. During theyear, Faurecia managed over 65complete seat and seating frame programs in total and delivered over 150million seating components and subassemblies, including mechanisms, front and rear frames, covers, foam components and headrests, integrated into over fivemillion complete seatunits. In 2011, Faurecia added the Madison (USA) just-in-time complete seat production unit to its businesses, purchased from Johnson Controls. This plant produces over 200,000complete seats ayear, which are delivered to the Nissan plant in Canton. This acquisition means that Faurecia is now one of Nissans largest complete seat suppliers in North America. The launch of the production of seat frames for Nissan in the USA in 2012 and 2013 will add to this business. Sales and marketing activities were again strong in 2011, with a high number of new program wins for complete seat units, mechanisms and other components. Over 60% of this new business was won for new vehicles or following a bid process, which led to Faurecia capturing further market share. The main growth drivers are concentrated in North America, China and Russia with GM, BMW and Renault-Nissan, meaning that the Group was able to spread its sales growth more evenly across geographic regions. New market share was won from the competition in international frame platforms and seating mechanisms at a number of customers, strengthening Faurecias position in these segments. The main contract renewals during theyear concerned BMW and VW in Europe and Renault in Brazil, for both complete seat units and seating
10
Faurecia
frames. Faurecias Automotive Seating business now ranks number three worldwide for complete seat units and number one for frames and mechanisms*. During the year, the Group continued to streamline its manufacturing base, closing three facilities in Europe. The Group has 76factories (including 34just-in-time sites) located in 22countries. The process to transfer all of the mechanism production and Research& Development units from Flers to the new Caligny site was completed in November2011. Innovation is still a priority for Faurecia Automotive Seating, with a particular focus on Premium solutions, lighter-weight products and international seating platforms. Product weight reduction is a key requirement of automakers and has become an essential element of the product development process. Faurecia Automotive Seating offers innovative solutions combining new materials with optimal design concepts that can lighten the weight of each seat unit by several kilograms. The international, modular, platform approach means that international carmakers can be offered a product which is
relevant, and can be manufactured, based on a portfolio of standard components and sub-assemblies in every region of the world. The quest for optimal competitiveness is key to all of Faurecia Automotive Seatings new developments, including entry-level product solutions for emerging markets. Thisyear, Faurecia Automotive Seating took part in the Shanghai, Frankfurt and LosAngeles motor shows, where it presented its vision for the Premium (Premium Seating) and entry-level (Performance Seating) segments, at the same time as adding a new version of the Smart Fit seat which enables seating comfort to be adjusted, via GPS, for road conditions as well as for the occupants position. Throughout 2011, 4.5% of the businesss sales were devoted to research and development. 56 of the 102 patents filed in 2011 were for new inventions, bringing the total number of active patents to 1,846. Close to 20customer events dedicated to innovation and the acquisition of new programs were organized all over the world in 2011.
Employees
23,865
Sites
68
Countries
24
R&D Centers
7
Interior Systems sales totaled 3,645.5million in 2011, up 17.9% on a reported basis versus 2010, and 15.6% on a like-for-like basis. Product sales totaled 3,075.3million, versus 2,635.7million in 2010, up 16.7% on a reported basis, and 14.1% on a like-forlike basis. In the second half of theyear, product sales were up 17.5% and 14.5% respectively. In Europe, product sales totaled 2,056.5million in 2011, up 14.0% versus 2010 on a reported basis, and 8.4% on a like-forlike basis. In North America, sales amounted to 622.3million, up 29.9% on a reported basis versus 2010, or 35.6% at constant exchange rates. In South America, product sales totaled 192.2million in 2011, up 17.6% compared to 2010 on a reported basis, and 19.8% on a like-for-like basis. In Asia, the Interior Systems business product sales totaled 137.8million, slightly decreasing 0.3% on a reported basis and 0.2% on a like-for-like basis. However, during the second-half of theyear, product sales were up 7.1% and 6.5% respectively. Like 2010, this was another particularly eventfulyear in terms of production launches. In Europe, in particular, there were production launches for the MercedesSLK, Opel Zafira, Dacia
* Source: Faurecia.
Duster, Volkswagen Up, Citron DS5, Ford Focus and Toyota Yaris. North America started production of instrument panels for the new Chrysler Sebring, Volkswagen Passat and Volkswagen New Beetle. South America started production of instrument panels for the Chevrolet Astra and the Dacia Sandero. New contracts continued to be won in 2011. Faurecia Interior Systems won 88 contracts estimated to be worth 3,026million in product sales. In line with its strategy of consolidating its technological leadership, in early 2011, Faurecia acquired Angell-Demmel Europe, the world leader in metal automotive interior trim parts. In 2011, Faurecia Angell-Demmel, based in Lindau (Germany), achieved 111.7million worth of sales with the leading German carmakers Audi, BMW, Daimler and Volkswagen. This company employs 1,177people at two industrial sites in Lindau and Kennelbach (Austria) and a design, development and prototyping center in Lindau. TheSAS joint venture with Continental, which specializes in just-in-time assembly and delivery of complete cockpit modules comprising instrument panels with built-in electronics and circuitry (and which is world leader in this sector), enabled Faurecia to deliver 4.4 million ready-assembled modules, resulting in sales of 3,576.6 million, up 10.8% compared to2010.
Faurecia
11
Faurecia Interior Systems is pursuing its ambitious expansion plans in China. As a result of the strategic alliance entered into with the Geely group in 2010, six new plants are being built. One became operational at the end of 2011, and the other five were still under construction or in the launch phase on that same date. Based in Chengdu, Cixi, Beilun, Lanzhou, Jinan and Xiangta, the six plants aim to develop, produce and deliver interior automobile systems to all the Geely brands in China. Additionally, the Group has formed a company in which Faurecia has a 50% interest, together with Guangneng, the Chinese plastic parts supplier, to deliver interior parts to the Changan Ford JV in Chongching. Guangneng will also start gradually producing injection tools, under Faurecias supervision. Faurecia Interior Systems has also built two new plants based in Pluak Daeng (Thailand) and Chennai (India), which will be operational in the first half of 2012. In North America, a new plant in Louisville (USA) was launched in the third quarter of 2011 and another in Fraser (USA) is currently under construction. In Europe, three new plants are being built to consolidate Faurecia Interior Systems position in Kaluga (Russia), Gorzow (Poland) and Kosice (Slovakia). The Interior Systems business also pursued its roll out of the FaureciaExcellenceSystem (FES), leading to a major shift in its manufacturing performance. This improvement has been recognized by several of the groups customers. The Washington (England) plant was recognized by Nissan Europe in the meilleure progression usine [most improved plant] category whereas the Orhangazi (Turkey) plant won the prize for the best plant in terms of quality, cost and delivery times, awarded by Oyak RenaultNissan.
Innovation, which is a key function for Faurecia Interior Systems, is very much focused on carmakers requirements. A great deal of effort has been put into weight reduction, use of renewable materials, expanding the use of natural fibers, optimizing architectures and replacing oil-based products with bio-sourced components. A particular focus has been placed on developing a portfolio of trim technologies. Faurecias unique and particularly diversified offer of trim materials and components provides carmakers with original solutions for making their vehicle interiors more attractive and ensures product differentiation. The development of vertical integration and products designed to be manufactured in any part of the world means that Faurecia can offer the most competitive solutions. Faurecia Interior Systems engineering expertise was recognized internationally at the 41st Society of Plastics Engineers awards ceremony, when Faurecia won three awards in the Automotive Innovation category, alongside its customers, Ford and Chrysler. These prizes were awarded for the development of the MuCell molding technology, recognized in the Process category. This technology enabled the weight of the instrument panels on the Ford Escape and Kuga 2012, produced in the Faurecia Interior Systems (FIS) plant in Louisville (Kentucky, United States) to be reduced significantly. FISs achievements in the area of passive safety system integration with the RALF concept which is found in numerous new vehicles, including the new Ford Focus, was also recognized. Finally, the Engineering teams were recognized with a special award from the panel of judges for their performance in developing instrument panels for the latest Chrysler vehicles.
12
Faurecia
Sales
5,779.3million
Employees
18,550
Sites
70
Countries
21
The Emissions Control Technologies business generated total sales of 5,779.3million in 2011, up 20.9% on a reported basis and 20.5% at constant exchange rates and excluding sales of catalytic converter monoliths. Product sales excluding catalytic converter monoliths totaled 2,934.6million in 2011, increasing 18.4% on a reported basis and 20.7% on a like-for-like basis. In the second half of 2011, product sales increased by 15.9% on a reported basis and 18.9% at constant exchange rates. By geographic region, product sales (excluding catalytic converter monoliths) rose by 11.9% in Europe (11.7% on a likefor-like basis), 26.4% in North America (32.0% on a like-for-like basis) and 27.8% in Asia (28.7% on a like-for-like basis). They were down 5.7% in South America (-3.9% on a like-for-like basis). In the second half of 2011, product sales rose by 6.7% in Europe (6.8% on a like-for-like basis), 25.8% in North America (31.9% on a like- for-like basis) and 26.9% in Asia (27.3% on a like-forlike basis). They were down 9.4% in South America (-4.5% on a like-for-like basis). Theyear 2011 was filled with mass production start-ups, with 88vehicle launches. In Europe, in particular, there was the launch of the new 2.0l GTDI from BMW, equipped with a complete module formed by the turbo, the manifold and the catalytic converter, the launch of the AudiQ3 from the PQMix platform, shared with the VW Tiguan, equipped with self-contained systems for its gasoline and diesel engines as well the launch of the Land Rover Evoque, equipped with complete exhaust lines. In Russia, where Faurecia Emission Control Technologies supplies the cold section of the Avtovaz Priora. In North America, the Chattanooga production plant launched the production of exhaust systems for the VW Passat. Faurecia Emissions Control Technologies also launched the complete exhaust line for the Chrysler 300C onto the commercial vehicles
(1) Source: Faurecia.
market as well as hot section equipment for Cummins, John Deere andHino. In Asia, the GM Global Small platform was launched thisyear in South Korea, as well as the GM Colorado and Ford Ranger pick-ups in Thailand, both equipped with complete exhaust lines. In 2011, Faurecia Emissions Control Technologies held onto its position as world market leader(1) with over 99new programs won. Its increasingly significant position in the Chinese market continued with the majority of new programs coming from Chinese carmakers such as FAW, Geely, Changan, Dongfeng, JMC and Guangzhou. A significant number of contracts were also won in Europe with our major clients VW, Ford and PSA. Business continued to grow on the commercial vehicles market due to consolidation of the partnership with Cummins and the acquisition of new programs at DAF, Cummins and John Deere. Faurecia Emissions Control Technologies is present on all automotive markets worldwide, with an overall manufacturing presence covering 70sites and 7 research and development centers. In April 2011, expansion of the research and development center for customers in Shanghai began. This center is focusing on developing emissions control to anticipate future Chinese standards, improving engine energy consumption and designing optimal acoustic solutions. Thisyear, Faurecia Emissions Control Technologies consolidated its presence on the Indian market with the acquisition of Yutaka Autoparts Limited, a manufacturer of complete exhaust systems based in Pune and supplying Indian carmakers, in particular, Tata. The expansion of the Chennai site is also part of Faurecias strategy of supporting its global customers, in this case, Hyundai. Tata and Hyundai can be added to the list of existing Indian customers such as Ford, Nissan and Toyota. In South Korea, Faurecia Emissions Control Technologies strengthened its position by opening a third plant. This plant,
Faurecia
13
located in Yeoncheon, will reinforce the existing system for filling Hyundai orders. It supplies cold sections for the new version of the Accent and Veloster models, as well as the hot sections for the Korean brands Gamma 1.4L/1.6L, Nu 2.0L and Tau 4.6L/5.0L. Innovation continues to be a priority for Faurecia Emissions Control Technologies. The business presented some new products at the Frankfurt motor show, such as the fabricated isolated manifold designed for gasoline engines combined with a dual entry turbo as well as new processes such as the brazing and forming technologies used to significantly reduce the weight of exhaust lines.New concepts were also demonstrated, such as the post-treatment module for the range extender. Thiscompact module comprising a manifold coupled
to a catalytic converter, a resonator and a silencer demonstrated Faurecias ability to rise to this new specific challenge in terms of emissions control, acoustics and packaging. Faurecia Emission Control Technologies reinforced its capacity to treat diesel emissions by making a strategic investment in Amminex A/S, a Danish company with the latest expertise in the treatment of nitrous oxides and the inventor of the Ammonia Storage and Delivery System (ASDS). This technology is a gaseous selective catalytic reduction (SCR) system, providing an alternative to liquid SCR systems. It will offer major advantages to carmakers in terms of satisfying the Euro6 standard and the future Euro7 standard.
Sales
1,784.2million
Employees
5,894
Sites
29
Countries
9
Sales from the Automotive Exteriors business totaled 1,784.2million in 2011, up 32.1% compared to 2010 on a reported basis, and 12.1% on a like-for-like basis. The reported change in sales factors in the contribution from Plastal Germany in the first quarter of 2011, in the amount of 135.9million, and that of Plastal Spain in the first ninemonths of theyear, in the amount of 121.6million. Product sales totaled 1,611.3 million in 2011. They were up 30.1% on a reported basis. Product sales were up 10.9% compared with 2010 on a like-for-like basis. During the second half of 2011, product sales increased 17.4% compared with the same period of 2010 on a reported basis and 12.5% on a like-for-like basis. Theyear 2011 was marked by the deployment of Faurecias growth strategy outside Europe. It was focused, on the one hand, on South America, with orders being won for major programs for PSA and VW with the construction of two plants in Brazil, one in Sao Bernardo do Campo (State of Sao Paulo) and the second in Porto Real (State of Rio de Janeiro) as well as the construction of the Malvinas plant in Argentina. The strategy was also put into practice in China, with the creation of a joint venture with the HuaXiang group, which supplies the FAW-Volkswagen groups with exterior parts in Changchun. Lastly, Faurecia Automotive Exteriors has agreed to build a plant in Belvidere (Illinois) in the United States for the launch of various programs for Chrysler.
There were seventeen product launches in 2011, in particular, the AudiA4 facelift front-end module, the VW Passat and VW up technical front-ends, the AudiA6 S-Line, VW Tiguan, BMW Srie 5GT, Ford Focus, Opel Zafira, Porsche911 and Citron DS5 fenders, as well as the fan unit for the VW Up. The innovations applied to program in 2011 involved not only the international deployment of the NewTech process, but also product/process solutions responding to carmakers style requirements. In particular, self-colored grilles or the use of laser welding as an assembly method for body trim components. Finally, as part of its weight reduction strategy and, more specifically, its strategy to reduce the weight of structural parts, Faurecia signed a number of major partnership deals for composites, including one with the Fraunhofer Institute in Karlsruhe. It also furthered this strategy by creating an international chair dedicated to industrial composites for automotive applications with the cole Centrale de Nantes. The Automotive Exteriors business now has a total of 29plants in nine countries, 23 of which in Europe, two in the United States, three in South America and one in China. The research and development centers are located in Audincourt, France, Weissenburg and Gaimersheim, Germany, Barcelona, Spain and Auburn Hills, United States. Two research and development centers are shared with other Faurecia businesses: Pune in India and Shanghai in China.
14
Faurecia
3
Results of operations andnancing
CONTENTS
3.1.
RESULTS OF OPERATIONS
3.1.1. 3.1.2. Operating income Net income
16
16 17
3.3. 3.4.
20 21
21 23 25
3.2.
18
3.4.3.
Faurecia
15
16
Faurecia
Faurecia
17
18
Faurecia
Net debt therefore amounted to 1,224.1million as ofyear-end 2011, versus 1,196.8million as ofyear-end 2010. The Groups shareholders equity sharply increased, rising from 810.5million as ofyear-end 2010 to 1,153.9million as ofyearend 2011, due mainly to net income for theyear. At the end of 2011, Faurecia carried out a number of refinancing transactions aimed at reinforcing its credit lines and extending the maturity of its debt: c issuance of a Schuldschein, medium-term, three to five-year loan of 58million provided by a pool of German banks; c issuance of a 350million bond maturing in December2016, issued at 99.5% of par value, with a coupon of 9.375%. This placement, carried out in a challenging financial environment, was a major success with fixed-income investors, with demand representing four times the value of the issue. This proves Faurecias capacity to refinance directly in the debt markets. To enter these markets, the Company sought a rating
from Moodys, and was awarded a Ba3 rating with a positive outlook. The proceeds of the bond enabled repayment of the 250million PeugeotSA credit line set up in November2008; c lastly, Faurecia made the early repayment of a syndicated loan awarded by its pool of banks in November2008, and renegotiated a new syndicated loan with the same pool of banks for a total amount of 1,150million in two tranches, one three-year tranche renewable twice and one five-year tranche. A previous clause, which made the continuation of the loan conditional on PeugeotSA keeping a 40% stake in Faurecias share capital, was replaced by a classic change of control clause. As a consequence of these transactions, Faurecia does not forecast any significant refinancing before the end of 2014, or more likely the end of 2016 if, as in the past, the three-year tranche of the syndicated loan is renewed. Faurecias financing is therefore completely autonomous.
Faurecia
19
3.3. Outlook
For 2012, Faurecia forecasts a 3 to 5% increase in global automobile production. Production is forecast to increase 5 to 7% in North America, 4 to 6% in South America, and 7 to 9% in China. However, it should decrease 4 to 6% in Europe (including Russia). Faurecia will continue to be favorably impacted by the split of its sales in Europe, with 50.4% of product sales achieved with German carmakers during the second half of 2011, and the split of these sales by segment, with 40.2% of product sales achieved with premium carmakers. In North America, sales will be favorably impacted by new programs launched in 2011 and 2012 and gains in market share. In China, Faurecia should benefit from starting its new production sites and starting business with new carmakers. Operating income should be impacted by the drop in automobile production in southern Europe. This negative impact should be absorbed by a better outlook in northern Europe and through flexible cost structures. Net cash flows should be boosted by depreciation, amortization and impairment to a greater extent than in 2010 (approximately 50million) and by a decrease in outflows corresponding to restructuring. On the other hand, capital expenditure should reach a maximum in 2012 (500million), as well as research and development costs capitalized at 250million. Lastly, finance costs will be higher due to the refinancing transactions carried out in November2011. On this basis, Faurecias objectives for 2012 are as follows: c total sales of between 16.3 and 16.7 billion, a 1 to 3% increase of sales; c operating income of between 610million and 670million; c net cash flow at breakeven.
20
Faurecia
Faurecia
21
The proportion of purchases of steel and plastics managed directly by the Group represented a moderate 7% of consolidated sales in 2011. If commodity prices were to rise steeply, Faurecia could not guarantee that it would be able to pass on all of such price increases to its customers, which could have an unfavorable impact on the Groups sales, results and overall financial position.
c Faurecia may not succeed in integrating the acquired companies, their technologies, product ranges and employees; c Faurecia may not be in a position to retain some key employees, customers or suppliers of the acquired companies; c Faurecia may be forced or wish to terminate pre-existing contractual relationships with costly and/or unfavorable financial conditions; and c Faurecia may increase its debt with a view to financing these acquisitions or refinancing the debt of the acquired companies. As a result, the benefits expected from future acquisitions or those already made may not be confirmed within the expected time frames and/or levels and, consequently, may affect the Faurecia Groups financial position.
3.4.1.9. Competition
The global automotive supply sector is highly competitive. Competition is based mainly on price, technology, quality, delivery and customer service as whole. There are no guarantees that Faurecia products will be able to compete successfully with those of its competitors. Supply contracts are mostly awarded through competitive bids, and are often subject to renewed bidding when their terms expire.
22
Faurecia
The sensitivity of the Groups income and equity as of December31, 2011 to changes in exchange rates of transaction currencies used by Group subsidiaries other than their functional currency (with all other variables remaining constant) are as follows:
Currency
as of December31, 2011 Currency uctuation assumptions (depreciationof currency/EUR) Exchange rate after currency depreciation Impact on pre-tax income Impact on equity
USD
1.29 5.0% 1.36 0.85 4.11
CZK
25.79 5.0% 27.08 (3.29) (1.02)
CAD
1.32 5.0% 1.39 (2.99) 0.00
MXN
18.05 5.0% 18.95 (0.15) 0.12
GBP
0.84 5.0% 0.88 0.01 (0.32)
PLN
4.46 5.0% 4.68 0.34 (4.79)
ZAR
10.48 5.0% 11.01 0.28 0.00
Faurecia
23
These impacts reflect (i)the effect on income of changes in exchange rates used for theyear-end valuation of assets and liabilities denominated in a foreign currency, net of the impact of the change in fair value of existing hedging instruments; and (ii)the effect on equity of changes in the fair value of hedges of forecast transactions (cash flow hedges). Faurecia centrally manages currency risks relating to the commercial transactions of the Groups subsidiaries, mainly using forward purchase and sale contracts and options as well as foreign currency financing. Faurecia manages the hedging of interest rate risks centrally, through the Group Finance and Treasury department, which reports to Group General Management. Management decisions are made by a Market Risk Management Committee that meets on amonthly basis. Currency risks on forecast transactions are hedged based on estimated cash flows determined in forecasts validated by Group General Management. The related derivatives are classified as cash flow hedges when there is a hedging relationship that satisfies the IAS39 criteria. Subsidiaries whose functional currency is not the euro are granted inter-company loans in their operating currencies. Although these loans are refinanced in euros and eliminated in consolidation, they contribute to the Groups currency risk exposure and are therefore hedged through swaps. Details of net balance sheet positions and a breakdown of hedges by currency are provided in Note30-1 of the consolidated financial statements.
As of December31, 2011, the Group complied with all of these conditions, as shown below: c net debt*/EBITDA** <2.50; c EBITDA**/net interest >4.50. Furthermore, this credit facility includes certain covenants concerning asset disposal (any disposal representing over 15% of theGroups total consolidated assets requires the prior approval of banks representing two-thirds of the syndicate) and the debt of certain subsidiaries. On November9, 2011, Faurecia issued bonds with a principal amount of 350million, maturing on December15, 2016. These bonds bear interest at a rate of 9.375%, payable on June15 and December15 eachyear, and for the first time on June15, 2012. They were issued at 99.479% of their nominal value and are listed on the Luxembourg stock exchange. They also have an EBITDA/gross interest coverage clause and restrictions on borrowings of the same type as the syndicated bank loan. The cost of issuing these bonds was spread over the life of the bonds when it was recorded in the accounts. To access such finance, the Company initiated the Moodys rating process, and the bonds (which are guaranteed by a number of subsidiaries) were assigned a BA3 rating with a positive outlook. On February21, 2012, Faurecia extended this original bond issue by issuing additional bonds with a principal amount of 140million at a price of 107.5% of par value. These bonds are fungible with the initial issue. Both the syndicated loan and the bond issue are guaranteed by some Group subsidiaries.
On November 26, 2009, Faurecia issued OCEANE bonds with a principal amount of 211.3million convertible into, or exchangeable for new or existing shares, due January1, 2015. These bonds bear interest at a rate of 4.50%, payable on January1 eachyear and for the first time on January1, 2011. They have a nominal value of 18.69per bond. Faurecia may redeem the bonds in advance at any time starting from January15, 2013, at par plus accrued interest, provided that all ofthe outstanding bonds are redeemed and the product of (i)the arithmetic mean of the opening quoted prices for the Companys shares on Euronext Paris calculated over 20consecutive trading days, as selected by the Company from the 40trading days preceding the date of notice of such early redemption and (ii) the share grant ratio in force on each date concerned, exceeds 130% of the nominal value of the bonds. Faurecia also has the option of redeeming all or some of the bonds at any time by repurchasing them either on or off-market, or by means of public tender or exchange offers, or all of the bonds, at nominal value plus accrued interest, if the number of outstanding bonds is less than 10% of the total number of bonds issued.
* Consolidated net debt. ** Operating income plus depreciation, amortization and funding of provisions for impairment of property, plant and equipment and intangible assets, corresponding to the past 12months.
24
Faurecia
The bonds can be converted by their holders at any time as from their date of issue. The criteria relating to their compulsory early redemption, due to a change of control, are the same as those described above for the syndicated credit facility. In accordance with IAS39, the fair value of the OCEANE bonds is recorded under two components: c an issue liability component calculated based on prevailing market interest rates for similar bonds with no conversion option. This component has been recognized at amortized cost in an amount of 183.7million net of the related issue costs. The estimated effective interest rate is 7.6%; c an issue equity component corresponding to the conversion option, calculated based on the difference between the fair
value of the OCEANE bonds and the liability component. This component was recognized in equity for 23.3million net of the related issue costs. In addition to the above-described bank and bond debt, part of Faurecias liquidity requirements is met through receivables sale programs. Proceeds from receivables sold came to 535.2million as of December31, 2011 (see Note26-4 to the consolidated financial statements), including 461.7million from receivables that were sold and derecognized (see Note18 to the consolidated financial statements). Lastly, Faurecia regularly issues commercial paper to investors, mainly in France.
Faurecias industrial risk prevention policy aims to reduce accidents caused by fire and to encourage Group sites to achieve excellence in fire safety by obtaining the HPR (Highly Protected Risk) label from Faurecias insurer. The HPR policy is based on the following priorities: c fire safety audits conducted by the Groups insurer on an annual basis. 133sites were audited in 2011, including 31new sites. 85% of active sites were audited less than 3years ago. 53% of the Groups sites are classified as HPR or pre-HPR;
Faurecia
25
c incorporating fire safety factors into the early stages of any plant design or major refurbishing of existing sites, through fire partitioning and ensuring that adequate fire safety equipment, such as extinguishers, is available; c analysis and assessment of feedback, fires or simple outbreaks of fire are systematically analyzed and the results of this analysis shared with the plants HSE network; c an intranet-based fire safety management system, through which the HPR policy is relayed to the entire Group by placing audit results, technical specifications, experience-based information and best practices online. In terms of loss, 2011 was marked by a major fire on the foam production line in the acoustic products plant in Washington, UK, estimated at approximately 4million. Two claims for client default following the earthquake in Japan and the floods in Thailand are currently being processed by the Groups insurer.
The coverage for buildings and equipment is based on replacement value. Coverage is organized around a Master policy, which includes direct coverage for the freedom of services area, with local policies for subsidiaries in countries located outside this area. Special coverage has been set up to cover specific risks in certain countries. Since July2010, the premiums applicable to the capital at risk (direct loss and annual gross margin) are directly dependent on the HPR classification given to the site following an audit by the insurance company. Theyear 2011 was also marked by the launch of the RIMS (Risk& Insurance Management System), a huge platform which gathers together all of the information held by the Group and relating to insurance (loss, public liability, local and master policies), prevention and claims in the same Internet/IT environment and shared with brokers and insurers. In 2011, the legal entities insured and sites and equity and prevention modules were developed and became operational.
LIABILITY INSURANCE
Faurecia renewed its liability insurance policy on January1,2011. The new policy includes a slight increase in premiums to cover Emcon and to extend operating liability coverage to the second line. In July2011, a third line was set up, aiming to expand recall coverage. In 2011, the Group paid approximately 4.5million in premiums for all its liability coverage policies, including product liability insurance applicable after delivery to customers. Liability insurance covers operating liability, product liability after delivery and environmental liability. Liability insurance takes the form of a Master policy combined with local policies taken out in countries where Faurecia hassubsidiaries.
26
Faurecia
4
The Groups Human ResourcesPolicy
CONTENTS
4.1.
28
28 29 30
4.4.
36
36 36 36
4.2.
SKILLS DEVELOPMENT
4.2.1. 4.2.2. Employee empowerment Developing the potential of managers andtechnicalexperts
31
31 31
Group employee savings plan in France 37 Stock options and share grants subject to performance requirements 37
4.3.
34
34
4.5.
38 39
4.6.
4.3.2.
34 35 35
4.3.3. 4.3.4.
Faurecia
27
16.1
15 1 5
10 1 0
8.7 5.6
4.2
2.7 2.4
1.7
0.8
28
Faurecia
With regard to work-related accidents with or without lost time, we have obtained an FR1t of 3.2 (i.e. 60% better than in 2009). Out of a total of 227internal sites, 81% of the units (including the sites acquired in 2010) did not experience an accident with lost time and, therefore have an FR0t of 0 a 25-point improvement over 2009.
55.2
50
40
30
28.4
20
10
Faurecia
29
30
Faurecia
Faurecia
31
North America, 72.9% in South America, 52.7% in Asia and 26% for the rest of the world. Furthermore, in 2011, the Group signed 103 international corporate volunteer (VIE) contracts, and 78% of the young managers and technical experts who completed their VIE period in 2011 were then hired. It is crucial for us to leverage the experience and expertise of our managers and technical experts as we experience this period of rapid growth. Thanks to our succession and development plans, 82.4% of senior manager positions were filled through internal promotions. Similarly, 72.7% of plant manager positions were filled through internal promotions. Byapplying this strategy, we can offer attractive career development opportunities to our managers and technical experts.
This means that Faurecia can offer its people international assignments and projects in order to boost the diversity of its teams. The Group also places great importance on the international dimension of its Senior Management team while taking steps to attract, develop and retain local talent across the globe. In keeping with this strategy, 49% of the Groups Senior Management team is non-French, and 72% of the managers and technical experts identified as high-potential are from nonWestern European countries. Lastly, a stable employee base is essential for safeguarding our investment in human capital. In 2011, the resignation rate was 7.5%. This was an increase compared to 2010, when the rate was particularly low due to the recession. In 2011, the rate was impacted by the dynamic labor market in emerging countries and North America. The 3.5% rate recorded for the Groups senior management, and for European countries, is still, however, lower than its historic 2008 pre-recession value.
4.2.2.4. Training and Providing Development Opportunities toManagers and Technical Experts
In 2011, 186training sessions were provided as part of the Faurecia University program. A total of 1,941employees from 32countries took part in these sessions, a significant increase compared to 2010.
32
Faurecia
The key priority of the Groups training policy is developing the skill sets of future senior-level managers, based on the Global Leadership programs. Experts and managers destined for key positions such as plant manager, program manager, foreman and Autonomous Production Unit manager, are prepared for taking up their role in full through dedicated training sessions. A new program designed for research and development center managers is being developed in order to supplement these training sessions in 2012. Another focal point of our training policy is strengthening business-specific expertise. Theyear 2011 was marked by the deployment of new training programs for human resources managers at industrial sites and for those responsible for monitoring teaching programs. The challenge posed by globalization has also resulted in Faurecia University offering two new programs which will be rolled out in 2012. The Global Program Managers course should
enable experienced Program Managers to take up the challenges posed by the complexity of the programs managed in the form of global platforms. Faced with an increasing number of Group employees who regularly work with China and Russia, a Chinese Intercultural Awareness program has been developed and a Russia Intercultural Awareness program is to be developed in 2012, in order to facilitate dialog and enhance our teams performance in these new environments. Industrial training programs, which serve as a basis for the FaureciaExcellenceSystem (FES), focus on industrial tools and the Groups methodologies and are provided in-house at the site level. Faurecia Automotive Seating and Faurecia Interior Systems have both rolled out training courses at technical academies dedicated to their specific products and processes.
Faurecia
33
34
Faurecia
Faurecia
35
36
Faurecia
Faurecia
37
38
Faurecia
of which of which % % open-en- Registe- Tempoopen-en- Registe- Tempored rary ded ded Total Total red rary ememem- contracts em- contracts ememployees (CDI) ployees ployees ployees (CDI) ployees ployees
49,859 15,973 5,180 8,952 4,215 79.3% 78.6% 91.0% 52.0% 65.4% 41,695 10,975 4,500 3,715 3,304 6,528 1,596 270 2,883 210 48,223 12,571 4,770 6,598 3,514 81.2% 75.2% 88.1% 50.7% 61.8% 4.0% 31.1% -0.3% -0.7%
76.3%
77.1%
12.2%
5.8% 11.2%
-0.8
Total employees
The Groups total workforce increased by 8,503 people, or +11.2%, in 2011. Excluding acquisitions, total workforce increased by 6,715 people, or +8.9%. The proportion of staff employed under open-ended contracts decreased from 77.1% to 76.3%. The proportion of staff on fixed-term contracts rose from 7.7% to 9.3%, and the proportion of temporary staff fell from 15.2% to 14.4%. Total employment grew in all geographic regions in 2011.
This change was, in part, due to the new businesses acquired in 2011 (Angell-Demmel in Germany, Madison in the USA, Yukata in India). Over 1,300 new employees joined the Group, including 540 in Europe, 235 in North America and 532 in Asia. On a like-for-like basis, registered employees increased by 6,534 people (+10.2%). This reflects Faurecias business growth, especially in North America, in Asia and in other countries.
Temporary employees
The number of temporary employees rose by 662 people in 2011, up 5.8%. Excluding acquisitions, total employees increased by 181 people, up 1.6%. At the end of December2011, the percentage of temporary employees totaled 14.4%.
Registered employees
The Groups registered employees increased by 7,841 people in 2011 (up 12.2%). This increase was particularly marked in North America (+3,413), in Europe (+1,654) and in Asia (+1,586).
Faurecia
39
2010 registered employees Technicians, foremen& Managers adminis& trative professtaff sionals
7,781 838 1,122 664 440 6,935 1,965 335 1,250 258
Operators& workers
Europe North America South America Asia Other 27,922 10,715 3,354 2,258 3,042
Total
43,349 14,388 5,057 5,301 3,935
Operators& workers
26,979 8,172 3,043 1,801 2,606
Total
41,695 10,975 4,500 3,715 3,304
Year-onyear change
4.0% 31.1% 12.4% 42.7% 19.1%
FAURECIA
47,291
11,893
12,846
72,030
42,601
10,845
10,743
64,189
12.2%
Registered employees increased by 12.2% in 2011. On a like-forlike basis, registered employees increased by 10.2%. In Europe, registered employees increased 4.0%, +3.5% of which was for workers, +1.9% for technicians, foremen& administrative staff and +8.1% for managers. This increase was due, in part, to the integration of 540employees who joined the Group as a result of the acquisition of AngellDemmel in Germany. On a like-for-like basis, registered employees rose by 2.7%, due to the favorable impact of a rise in volumes in Germany, Poland and Slovakia in particular, in North America, registered employees grew by 31.1%, irrespective of socio-professional category. The impact of the integration of 235 employees from the Madison plant in the USA accounted for 2.1% of this increase. On a like-
for-like basis, registered employees were up 29.0% due to increased production volumes, mainly in Mexico and in the USA. South America experienced 12.4% in employee growth, mainly due to strong growth in Brazil and to the production start-up in Uruguay. The numbers were up by 10.2% for workers, 11.3% for technicians, foremen& administrative staff and 35.5% for managerial staff. In Asia, registered employees were up 42.7% and up 28.4% on a like-for-like basis, largely due to the influence of a sustained level of production, mainly in China, and increased employees at our other Indian sites. 532 people joined the Group due to acquisitions in 2011 (Yukata in India). Other countries posted a 19.1% increase in registered employees due, in particular, to the boom in business in South Africa, Russia and Morocco.
Total
43,349 14,388 5,057 5,301 3,935
Total
41,695 10,975 4,500 3,715 3,304
Total
4.0% 31.1% 12.4% 42.7% 19.1%
FAURECIA
64,199
7,831
72,030
58,352
5,837
64,189
10.0%
34.2%
12.2%
40
Faurecia
The number of employees working under open-ended contracts increased by 5,847 (i.e. +10.0%) and the number of employees working under fixed-term contracts increased by 1,994 (i.e. +34.2%). Excluding acquisitions, the number of employees working under open-ended contracts increased by 4,645 (i.e. +8.0%) and the number of employees working under fixed-term contracts increased by 1,889 (i.e. +32.4%). Breakdown by type of contract was stable between 2010 and 2011. Permanent staff accounted for 89.1% of the Groups registered employees in 2011, versus 90.9% in 2010. Acquisitions resulted in 1,202 new permanent employees, including 464 in Europe (Germany), 234 in North America (United States) and 504 in Asia (India). This represents 21.0% of the increase in this type of contract.
Excluding acquisitions, the number of employees working under open-ended contracts fell by 120employees in Europe as a result of the finalization of the restructuring plans launched during the recession. The number of employees working under these types of contracts increased by 2,859 in North America, by 512 in South America, by 811 in Asia and by 583 in other countries, in line with the recovery. The number of fixed-term contracts increased by 34.2%. They accounted for 10.9% of employees at the end of 2011, compared to 9.1% at the end of 2010. The number of employees working under this type of contract rose by 1,994 people, mainly in Europe (Germany and Slovakia), in North America (Mexico) and in Asia (India) in order to achieve a rapid response to the upturn in business in these regions.
130 0
90 0
2,303 1,615
1,004 653
2,622 3,814
961 1,173
2,281 3,244
672 557
1,390 1,566
440 224
8,726 10,239
3,167 2,607
TOTAL
943
314 13,896
5,263 16,773
6,174 13,515
4,433
8,181
Women accounted for 26.0% of the Groups registered employees, the same as in 2010. Faurecia is quite a young group as 60.2% of regular employees are less than 40years of age and 28.3% less than 30. 10,719 registered employees are over 50 (14.9%). For all age brackets, the breakdown by staff category remained stableyear-on-year, with 66% of the registered employees corresponding to operators& workers and 17% to technicians, foremen,administrative staff, managers& professionals.
8,181 5,263 943 6,174 4,433 2,538 314 20 - 29 30 - 39 40 - 49 > 50 < 20 Men
Women
Faurecia
41
Total
540 235 532 -
Operators& workers
391 210 87 -
Managers& professionals
31 21 187 -
FAURECIA
1,202
105
1,307
688
380
239
This table summarizes the impact of changes in scope in 2011 by contract type and by staff category. 92% of the employees added under these acquisitions work under open-ended contracts.
53% are operators& workers, 29% are technicians, foremen& administrative staff, and 18% are managers& professionals a breakdown that is slightly different to Faurecias pre-acquisition staffing situation, given the integration of the FTCI tech center in India (mainly technicians, foremen& administrative staff& managers and professionals).
Registered employees
Europe North America South America Asia Other
Total
3,704 5,231 2,011 1,165 1,470
Total
73.4% 65.0% -6.6% 77.9% -1.1%
FAURECIA
10,348
10,115
20,463
6,512
7,069
13,581
58.9%
43.1%
50.7%
This table showsyear-on-year changes in hiring, excluding changes in scope and excluding the impact of transfers from fixed-term to open-ended contracts. The number of hires as a whole increased by 50.7% compared to 2010, with a 59% rise in open-ended contracts and a 43% rise in fixed-term contracts. This increase followed on from the nearly 49% growth already recorded in 2010, in the light of the upturn in the automobile industry worldwide. In Europe, employees were hired under open-ended contracts mainly in Germany and Poland and under fixed-term contracts not only in Germany but also in Slovakia.
In North America, open-ended and fixed-term contract hires rose sharply in the United States and Mexico respectively to support business growth. In South America, the volume of hires was similar to that of 2010, confirming the growth being witnessed in this region. Business in Asia experienced strong growth. This resulted in double the number of hires, particularly under open-ended contracts, compared to 2010, mainly in China and India. In other countries, and mainly in Morocco, the consolidation of the Groups industrial sites and their increased workload explains a volume of hires similar to that of 2010 (all contract types included).
42
Faurecia
2010
Registered employees
Europe North America South America Asia Other
Technicians, foremen& Managers & Operators& administra- professioworkers tive staff nals Total
6,424 8,633 1,879 2,073 1,454 2,613 4,515 1,487 654 1,176 759 335 484 243 201 332 381 40 268 93
Total
3,704 5,231 2,011 1,165 1,470
FAURECIA
14,964
3,042
2,457
20,463
10,445
2,022
1,114
13,581
Operators& workers represented 73% of external hires in 2011, compared to 15% for technicians, foremen& administrative staff and 12% for managers& professionals, vs. 77%, 15% and 8% respectively in 2010. These figures do not include internal changes in scope in 2011. Hires of operators& workers rose by 43% in 2011, mainly in Europe, North America and Asia, due to business growth in these regions.
The volume of hires of technicians, foremen& administrative staff was up by over 50% compared to 2010, with particularly high levels of business again in Europe, North America and in Asia. Hires of managers& professionals, which were very much affected by the 2008/2009 recession, more than doubled in 2011 compared to 2010. Here again, all regions showed strong growth.
2010
Registered employees
Europe North America South America Asia Other
Managers& professionals 58 74 0 5 4
Technicians, foremen& Managers& Operators& administra- professioworkers tive staff Total nals
782 1,591 51 99 186 627 1,043 0 79 252 109 69 36 27 9 21 71 0 9 1
Total
757 1,183 36 115 262
FAURECIA
2,253
315
141
2,709
2,001
250
102
2,353
The number of transfers from fixed-term to open-ended contracts increased nearly 15% in 2011 compared to 2010. 13% of this increase pertains to operators& workers, 26% to technicians, foremen& administrative staff and over 38% to
managers and professionals. This increase was in addition to the rise in external hires in 2011. It was particularly significant in North America (Mexico) and in Europe (Poland and Romania).
Faurecia
43
Registered employees
Europe North America South America Asia Other
Group layoffs
915 122 2 0 0
Other
1,729 1,106 147 239 231
Total
4,737 3,600 925 676 718
FAURECIA
*
3,615
4,168
1,237
4,908*
13,928
2,490
3,675
1,039
3,452 10,656
The number of employees who left the Group in 2011 totaled 13,928, versus 10,656 the previousyear, representing a more than 30% increase. Of these departures, 35% corresponded to the expiration of fixedterm contracts. Resignations accounted for 27.6% of departures in 2011, compared to 23.3% in 2010. They rose 45% by volume in 2011. The highest rises were recorded in North America and Asia which are both regions which witnessed a high turnover in the labor market in 2011.
In Europe , on the other hand, the rise in the number of resignations was still below the Groups average, at nearly 30%. Individual and group layoffs accounted for 38.8% of total departures, down from 44.2%. The proportion of individual layoffs was up 13.4% compared to 2010, the number of collective layoffs was up 19%, mainly due to industrial restructuring in Spain (Figueruelas site) and in Sweden (Torsas site).
FAURECIA
1,577,609
25
1,173,638
21
The average number of training hours rose sharply in 2011. Itaveraged 25 hours per employee Group-wide, compared to 21 hours in 2010.
The total number of training hours in 2011 increased by over 34% over the period, impacted strongly by ongoing training programs in North America (Mexico) and in Asia (China andIndia).
44
Faurecia
2010
69 34 17 54 19
217
193
Maintaining its internationally diverse group of expatriates goes hand-in-hand with the Groups efforts to expand internationally.
2010
1,114 6 13 7 15
FAURECIA
1,197
1,155
Faurecia employs nearly 1,200 disabled people, the vast majority in Europe. Thecriteria used to define disabled employees are those set down in the legislation of each country.
In Europe particularly France such legislation tends to favor a more proactive approach than in other countries. The proportion of disabled employees in France remains stable, representing just over 4% of the Groups workforce in this country.
Registered employees
Europe North America South America Asia Other
Weekend(3)
364 0 0 79 63
Other
17,119 4,687 1,428 2,969 681
Total
43,349 14,388 5,057 5,301 3,935
FAURECIA
(1) Two shifts. (2) Three shifts. (3) Reduced weekend hours.
18,788
25,852
506
26,884
72,030
Staff work schedules within the Group are aimed at meeting customer needs, based on production capacity at our sites. Shift work and weekend work mainly concern the production sites and together account for 62.7% of the Groups registeredemployees.
Faurecia
45
FAURECIA
736
727
Practically all of the Groups part-time employment contracts are in Europe, particularly France. Part-time staff accounted for 2.7% of the Groups regular employees in France in 2011, the same as in 2010.
The incorporations of Plastal Allemagne and Espagne in 2010, and Angel Demmel in Germany in 2011 also contributed to the rise in this category of personnel in 2011.
Overtime (inhours)
1,818,070 3,077,584 427,948 1,299,193 418,863
% hours worked
2.7% 14.2% 6.1% 18.1% 6.8%
FAURECIA
9,126,353
7.2%
7,041,658
6.4%
Overtime hours are determined in accordance with the legislation of each country.
The increase observed between 2011 and 2010 (+0.8 points) was mainly due to a sharp growth in business, especially in North America and in other countries (South Africa and Morocco in particular).
FAURECIA
2.5%
2.6%
46
Faurecia
Absenteeism reported was due to illness, workplace accidents and various unauthorized absences. The number of hours of employee absence was up 10% in 2011 compared to 2010, rising from 2.9million to 3.2million hours in total.
At the same time, the number of hours worked increased by 15% from 109.8million to 126.6million hours over the period.
Ongoing subcontracting
1,666 237 315 592 279
Total
2,265 342 497 694 315
Ongoing subcontracting
1,545 159 262 435 160
Total
2,019 209 324 471 186
FAURECIA
1,024
3,089
4,113
648
2,561
3,209
The use of subcontractors increased by more than 28% in2011. This rise was mainly due to the integration of subcontractors in relation to our changes in scope in 2010 and 2011 in Europe, North and South America.
Use of subcontractors was also considerable in Asia as a result of our strong growth in the region.
(in thousands)
Accommodation
2,266 1,979 921 5,052 257
Transportation
9,167 3,441 2,128 2,980 2,406
Catering
8,613 1,202 4,116 2,980 900
Medical care
4,831 10,576 4,381 6,236 989
Subsidies
5,202 166 733 239 87
Total
48,438 19,137 12,794 20,750 5,088
FAURECIA
10,476
20,123
17,812
27,012
24,357
6,427
106,207
The total was up by more than 24% in 2011. In addition to the increase in this item of expenditure following changes of scope in 2011, supplementary protective measures
(medical services, mutual and risk insurance) were established, particularly in Asia (China and India) in order to back the development and support of our employees in these regions.
Faurecia
47
48
Faurecia
5
Quality
CONTENTS
5.1. 5.2.
QUALITY ACHIEVEMENTS
50
5.3. 5.4.
52 53
Faurecia
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Quality
Quality achievements
230 235
102
35
22
15
18
15
Since 2009, a global QRCI competition has been organized everyyear with all production and research and development sites taking part. The competition rewards the best regional performances for each of Faurecias business groups, as well as recognizing the best sites worldwide. The 2011 competition finale took place on March 2, 2012 and the Audincourt Automobile exteriors site was recognized as the world leader in this process. The aim of the QRCI Competition is not only to select the best site or the best example of QRCI application, but above all, to train operational management in effective problem resolution.
50
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Quality
Faurecia Excellence System (FES)
56% 50%
2010
2011
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Quality
Customer awards
52
Faurecia
Quality
Outlook 2012
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6
Research and development
CONTENTS
6.1. 6.2.
56 58
58 59
6.2.3. 6.2.4.
60 61
6.3.
62
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Research and development (R&D) represents a strategic challenge for Faurecia. It is the starting point for the Groups innovative product and process creations and for future customer applications. R&D activities are structured around two main divisions: c the Research and Innovation Unit, which covers upstream activities prior to program acquisitions. This Unit is critical to enabling the Group to provide an appealing and competitive offering to its customers, which it achieves by designing new products and processes, proposing innovative solutions and developing generic products and processes; c the Program Engineering Unit, which covers customerspecific vehicle programs. It is a downstream unit responsible for ensuring that programs are completed within the set timeframes and in compliance with the required cost and quality levels. R&D accounted for 760million of gross expenditure in 2011 (4.7% of sales). 100million of this was spent on innovation over the same period.
5,000engineers and technicians based at over 40centers across the globe represent the Groups R&D community. 390patents were filed in 2011. Technological development and innovation are key priorities for Faurecia. Technological development continued to accelerate in 2011, supported by a strong focus on academia. Faurecia signed strategic partnership agreements with universities in the form of contracts or chairs as well as investing in technological research institutes (IRT). Faurecia also deployed its skills management policy by means of an ambitious plan with rigorous monitoring requirements. 272experts are now skilled in the Groups 60different areas of expertise. Skills sharing, wherever relevant, ensures optimal use of such expertise. The Company is forecasting this community of experts to be expanded to include more than 400experts by 2015. General Managements involvement in monitoring innovation plans via Technology Sessions and participation in the Experts Forum, shows that the Company is committed to technology and innovation, believing these to be key drivers of its success.
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This pragmatic approach was also rolled out in 2011 via the Collections by Faurecia concept. This palette of trim solutions enables carmakers to choose pre-approved materials which can be introduced into their products rapidly and with the utmost reliability.
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Size reduction
Reducing product size maximizes passenger room and helps reduce vehicle size. The goal is to provide the users of a certain vehicle class with the interior space of the next highest line. Development of new, lighter and more compact seat mechanisms and of composite backrests increases capacity by 15 to 20mm. Optimization of front-end modules by integrating ISOstandard safety functions is another avenue of investigation which saves around 20mm, which can then be gained on the length of the vehicle.
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Pollution reduction
Faurecia develops all technologies for reducing nitrogen-oxide and particulate emissions for off- and on-road passenger cars and commercial vehicles; these technologies either use systems for re-circulating exhaust gas back to the engine intake or autonomous systems, in particular selective catalysis. In partnership with Amminex, Faurecia develops and industrializes the ASDS (Ammonia Storage and Delivery System) process which stores ammonia in a compact gaseous form, allowing for improved performance over a traditional liquid-form storage system. The first projects to use this technology have begun with a number of automakers.
Customization
Decoration is a key element of customization. For Faurecia, it is a strategic focal point. The product offering for vehicle interior parts breaks down into two large families: add-on trim such as painted, filmed, aluminum or wood inserts, and integrated decorations such as DecoSkin (trim integrated into the surface of a part), DecoStitch (stylish sewing lines) applied to series production on the Laguna3. Other processes can be used to enhance surfaces, i.e. dualcolored, metallic or mother-of-pearl instrument panels. The same approach is applied to automotive exterior parts, through specific painting of some elements and add-on films or parts. Customization cannot be fully applied to the detriment ofstandardization. For this reason, Faurecia systematically searches for the best balance between these two aspects by optimizing product and process architectures, thereby reducing the diversity of components. Additionally, Faurecia has developed a seat concept called SmartFitTM which makes it possible to customize automatic adjustment foreach occupant in line with their measurements. The seat can also adapt to driving conditions (city, highway, sport, etc.) by connecting to GPS, or provide additional wellbeing functions such as massage. Linked to the seats electronic system, SmartFitsTM Bluetooth interface can transmit information from an iPhone, simplify seat commands and optimize theoccupants comfort and security.
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Faurecia developed collections which were shown at the Frankfurt and Los Angeles motor shows. These are the result of combining attractive designs with advanced and innovative technologies, thereby enabling new freedoms in terms of industrial design as well as new user functions. They make use of all the materials, styles and technologies available for vehicle interiors. The Collections by Faurecia use 15technologies, 250colors and graphic designs in over 4,000parts which make up five tables corresponding to 2012 trends.
Lastly, at the Los Angeles motor show, Faurecia presented a Ready-to-Wear concept and demonstrator applied to Interior Systems. This concept is the synthesis of the best technologies and functionalities that Faurecia can implement for the majority of vehicle applications. It uses authentic materials (high quality wood, leather, aluminum and textiles) and trims, innovative man/machine interfaces, a wireless cell phone charger, interior ventilation built into trim parts, a foot and leg massage system and weight optimization for visible structural components.
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Investment
In 2011, the Groups continuous innovation work resulted in filing 390new patents. Higher than in previousyears, this number demonstrates Faurecias commitment to innovation, despite heavy economic constraints. It should also be noted that these patents pertain to products, materials, and manufacturing processes, demonstrating the efforts made by Faurecia to optimize the entire product value chain. In 2011, R&Ds commitment to innovation was embodied by: c the inauguration of the Worldwide R&D and Innovation Center for complete seats and Automotive Seating structures; c the opening of the Minbei Development center in China for the Emissions Control entity; c furthermore, Faurecia announced the opening of an R&D center in China which, by the end of 2012, will bring together the Seating, Interior and Exterior Systems divisions, in Shanghai. Eventually, this center will have 350engineers and technicians.
Collaboration
To expand and enhance its expertise, Faurecia is constantly forming new partnerships with suppliers as well as research institutes. This approach, which is particularly evident in the field of plastics and metals, makes it possible to achieve lighterweight designs at the best possible cost. The launch of a chair on composites with the cole Centrale de Nantes is a big step in the direction of the academic world and opens the door to other initiatives in this area.
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Engineering
As of today, Faurecia operates 38R&D Centers around the world. Each business groups Research and Development is spread across our three main geographic areas Europe, America and Asia. It is managed as a separate entity and possesses all the resources necessary to carry out the projects which it is assigned. Since it is structured as a network, it can run worldwide programs and commit as many of its resources as are needed through its worldwide workforce, or commit the right quality of resources needed through its roster of experts, particularly for vehicle innovation or application projects.
Project Management
Vehicle application programs follow a unique process, bringing together all the participants needed to develop and launch a new, mass-produced product. This process, known as PMS
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7
Faurecia and the environment
CONTENTS
7.1.
7.2. 64
64 65
69
69 69 70
65 7.2.3. 66 67 68
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Faurecia contributes to improved environmental performances thanks both to the performance of its industrial sites in respect of energy consumption, greenhouse gas emissions and waste production, and to the contribution of its products to the environmental performance of its clients cars. Faurecia contributes largely to the reduction of emissions through the technologies it develops to reduce pollutants in exhaust, mainly particles and nitrogen oxides, and to the
reduction of CO2 emissions by helping reduce vehicle weight, the biggest factor in reducing cars energy consumption, but also by its developments in the areas of recovery and recycling of energy in exhaust. Lastly, Faurecia factors the need to recycle into its design approach through the optimized reuse of production waste and the use of recycled materials, offering its clients an ever-broader range of technical solutions using bio-based materials.
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These emissions standards will require the development of new post-treatment solutions for the exhaust line, which can reduce NOx emissions. Several technologies are under development: c selective catalytic reduction (SCR) using an external tank that contains AdBlue to reduce emissions; c low-pressure exhaust gas recirculation (LP-EGR), which requires the exhaust line to be fitted with an electric valve; c and the NOx trap (Lean NOx Trap). These technologies are already being used in the utility vehicle market in Europe and North America. The most stringent regulations make particulate filters and SCR or EGR systems mandatory for commercial vehicles. In addition, some applications require innovations such as the Thermal RegeneratorTM. These NOx treatment technologies have already been incorporated into Faurecias product offering, and are already included in several models that are looking ahead to the Euro6 standard or similar regulations. These vehicles include: the BMW 5 Sries 5 3.0L, which offers LNT as an option; the AudiQ7; the VW Touareg 3.0L V6 TDI; or the new Mercedes S350 V6, each equipped with their own type of SCR system.
Faurecias latest developments and newest concepts include: ASDS (Ammonia Storage and Delivery System), a selective catalytic reduction system that uses the storage of ammonia in compact gaseous form (alternative to liquid SCR systems) and delivers very precise amounts of ammonia. However, pollutants are not the only area of innovation or development work in the field of emissions control, which also covers CO2emissions: c exhaust-heat recovery technology for conventional and hybrid vehicles that extracts heat from the exhaust gases to reduce the amount of time that engines must run to warm up and sufficiently heat the cabin of the car; c a thermoelectric generator which converts the exhaust gas heat into electric energy supplied to the on-board electronics; c the Rankine system converts the exhaust thermal energy into mechanical or electrical energy. This trend towards stricter emissions standards requires exhaust systems to be fitted with highly specific equipment, and as such represents a significant growth opportunity for the Group in all of its markets.
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The Automotive Exteriors business also offers a growing number of applications that can use materials derived from recycled plastics. Applications such as absorbers, bumper frames and spoilers were tackled first, while the introduction of recycled materials into decorative parts such as bumper surfaces has been proposed for future vehicles, following studies. Lastly, we are also looking into new sources of materials from end-of-life products in order to broaden the range of available second-life materials at the same cost and with the same performance. Life-cycle analyses show that the use of recycled materials can reduce the environmental impact of manufactured products. Faurecia, like its automaker customers, has considerably extended its panel of suppliers of recycled materials with a view to integrating recycled parts into increasingly technical applications.
7.1.5.2. Bio-materials
In 2007, Faurecia Interior Systems launched a research project called Biomat, aimed at replacing fossil-based materials with materials derived from fully renewable resources. Faurecias objective is to develop a biopolymer for vehicle interior applications. These are technical materials, which meet the strict requirements of the automotive industry in terms of
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safety, regulatory compliance, heat resistance, dynamic fatigue, odors, VOC (volatile organic compound) emissions, etc. They can be processed using traditional processes (existing investments), and the price per kilogram is competitive compared with more conventional materials used for vehicle interiors. This research, which is due to end soon, should ultimately result in an industrial application with high volumes of materials derived from renewable resources.
Moreover, the work undertaken on biopolymer compounds in the Automotive Exteriors business continues with a view to achieving the performances required for semi-structural applications, while the Seats and Acoustics businesses are now ready to use plant-derived polyols in seat foam and soundproofing, allowing biomass to account for about 5% of the resulting foam.
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NUMBER OF ISO14001-CERTIFIED SITES AND SITES WITH AN ISO14001 CERTIFICATION ACTION PLAN
16 20 38 33 49 46 49 65 61
NUMBER OF PERSONS TRAINED IN ENVIRONMENTAL ISSUES NUMBER OF HOURS AND ASSOCIATED COSTS
31091
47
17406 19693 16974 14749 15062 13083 14388 13527 12611 12151 10891 10719 9609
89
97
107
136
148
2005 2006 2007 2008 2009 2010 2011
2007
2008
2009
2010
2011
Number of people trained Number of hours
Number of sites whithout any ISO 14001 certication action plan Number of sites with an ISO 14001 certication action plan Number of ISO 14001-certied sites
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69
29% Groundwater
The overall increase in energy consumption stemmed chiefly from electricity (an increase of 8.7%, or 105,684 MWh). Consumption of natural gas and liquefied petroleum gas (LPG) increased by just 2.4% (15,359MWh) and 2.2% (1,621MWh) respectively, while the quantity of fuel oil consumed was cut by 29.3% (6,717MWh). The reduction in the consumption of fuel oil at Group sites was mainly attributable to the removal from service or replacement of equipment (forklifts, generators, etc.) or activities (engine test benches). In 2011, 63% of energy consumed was electricity, 32% natural gas, 3% liquefied petroleum gas (LPG), 1% fuel oil and 1% steam.
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Atmospheric emissions from Faurecia sites result mainly from natural gas, liquefied petroleum gas and fuel oils. These three sources generated approximately 159,000metric tons of CO2 in 2011, an almost identical amount as in 2010. Faurecias electricity consumption in 2011 also resulted in the indirect emission of 470,500metric tons of CO2, an increase of nearly 6% compared with 2010, in line with the trend in electricity consumption (+8.6%). The reduction in fuel consumption has resulted in a 21% reduction in SO2 emissions compared with 2010. Of the Groups 229sites surveyed, 162 are required to report self-monitoring data to the local authorities on the quality of their atmospheric emissions.
63% Electricity
N2O (t)
5.98 0.69 0 0 0 0.08
CH4 (t)
9.57 0.27 0 0.02 0.01 0.08
SO2 (t)
1.33 0.60 0.17 5.50 0.77 4.93
NO2 (t)
143.55 16.46 0.01 0.93 0.26 5.18
158,590
6.75
9.94
13.29
166.40
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Waste generation
The Group generated 203,203 metric tons of waste in 2011 (including hazardous and non-hazardous waste and metal waste not recycled internally). Total waste increased by nearly 13.8% compared with 2010, attributable mainly to the inclusion of new sites (12 additional sites compared with 2010) and to increased output across multiple sites. Across the Group, the number of hours worked increased by 15.9%year-on-year. In terms of hours worked, therefore, the amount of waste generated on these sites fell by 1.8% to 1.50kg per hour worked (compared with 1.53kg per hour worked in 2010). In 2011, non-hazardous waste accounted for 55% of waste products, scrap metal recycled externally 37%, and hazardous waste just 8%. The quantity of hazardous waste decreased slightly between 2010 and 2011 to 17,044metric tons. Lastly, it should be noted that 14,258metric tons of byproducts (mainly ground scrap plastic) were directly reused as raw materials internally in 2011.
69,546
75,194
91,892
110,966
17,132 2010
17,044 2011
Metallic waste recycled externally Non-hazardous classied waste Hazardous classied waste
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8
Corporate governance
CONTENTS
8.1.
BOARD OF DIRECTORS
8.1.1. Members, conditions forthepreparation and organization ofthework oftheBoard of Directors Members of Faurecias Board ofDirectors
74
74
Internal control procedures: participants andorganization Risk analysis and risk management procedures Description of internal control procedures Internal control procedures relating to quality risk management Internal control procedures for the preparation and processing of accounting and nancial information Key trends
96 98 98 99
8.1.2.
78 8.4.6.
8.2.
93
93 93 94 8.4.8. 8.4.7.
100 102
8.3. 8.4.
95 96
96
8.5.
103
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Corporate governance
Board of Directors
Sections8.1.1, 8.1.2.2.1 and 8.4 of this chapter of this Registration Document constitute the Chairmans report to the Shareholders Meeting pursuant to ArticleL.225-37 of the French Commercial Code. The aim of this report, prepared by the Chairman of the Board of Directors, is to provide an account of the Boards composition, the conditions governing the preparation and organization of its work during 2011, and the internal control and risk management procedures introduced by Faurecia. The report also indicates any potential limitations applied by the Board of Directors to the powers exercised by the Chairman& Chief Executive Officer and refers to the principles and rules defined by the Board in order to determine the remuneration and benefits of the corporate officers, the rules governing the participation of shareholders in the Shareholders Meetings as well as factors that may be relevant in the event of a tender offer.
It was prepared in accordance with the Act of July3, 2008 which amended various provisions of French corporate law to align them with European Community law andthe AFEP-MEDEF Corporate Governance Code applicable to listed companies which the Board of Directors has adopted as its reference framework for defining and implementing the Groups corporate governance rules and which can be viewed on the MEDEFs website (http://www.medef.fr). Finally, this report was approved by the Board of Directors at its April17, 2012 Meeting, was sent to the AMF at the same time as this Registration Document and can be viewed on Faurecias website: www.faurecia.fr.
Since the changes brought about at this Meeting and at the date this Registration Document was drawn up, Faurecias Board of Directors has 12members: Yann DELABRIRE Eric BOURDAIS DE CHARBONNIERE Jean-Pierre CLAMADIEU Lee GARDNER Jean-Claude HANUS Hans-Georg HRTER Linda HASENFRATZ Ross McINNES Robert PEUGEOT Thierry PEUGEOT FrdricSAINT-GEOURS Philippe VARIN Director, Chairman& Chief Executive Officer Director Director Director Director Director Director Director Director Director Director Director
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Corporate governance
Board of Directors
Six of these members are considered to be independent within the meaning of the Corporate Governance Code. They are Mr.Eric Bourdais de Charbonnire, Mr.Jean-Pierre Clamadieu, Mr.Lee Gardner, Mr.Hans-Georg Hrter, Ms.Linda Hasenfratz, Mr.Ross McInnes. Five directors hold or have held executive management or supervisory positions within the PSA Peugeot Citron group, the parent company of which, PeugeotSA, is a Faurecia majority shareholder with 57.43% of the Companys capital. They are Messrs.Jean-Claude Hanus, RobertPeugeot, ThierryPeugeot, Frdric Saint-Geours and PhilippeVarin. Lastly, Mr.Yann Delabrire has been Faurecias Chairman and Chief Executive Officer since February16, 2007. The members of the Board of Directors bring together a range of premier quality managerial, industrial and financial skills. Faurecias directors enhance the work and discussions of the Board and its committees thanks to their broad range of experience gained in the automotive industry and in business sectors that differ from Faurecias. They also contribute their international experience. Finally, they act in the best interests of all shareholders and are fully involved in defining Faurecias corporate strategy so that they can actively contribute to and support the decisions of the Board. Apart from the Chairman and Chief Executive Officer, no member of the Board of Directors holds an executive management or salaried position within a Group company. In accordance with the applicable legal and regulatory requirements and the Companys bylaws, the term of office of directors is currently fiveyears. This term of office, which is longer than recommended by the Corporate Governance Code, allows, in the opinion of the Board of Directors, the recommendations set out in the AFEP-MEDEF Code to be taken into consideration, providing shareholders the opportunity to give their opinion regularly enough on the nomination of directors, the continual requirements and long-term implication needed in the automotive industry. Indeed, it more closely reflects the average production and marketing cycles for automakers vehicle ranges. Further information on each director and details of directorships and other positions held by them are provided in section8.1.2 of this Registration Document.
The internal rules of the Board of Directors which may be consulted by shareholders at the Companys headquarters or on Faurecias corporate website (www.faurecia.com) govern the role of the Board and of its committees. They also organize its work. The internal rules thus describe the Boards modus operandi and its role in the management of the Company and the Group as carried out in accordance with the law and the Companys bylaws. They specify the rights and responsibilities of Board members, particularly regarding the prevention of conflicts of interest, the holding of multiple directorships and the need for strict confidentiality as well as diligence in taking part in the Boards work. In addition they set out rules governing transactions involving Faurecias shares, as recommended by the Autorit des marchs financiers. In order for it to be able to properly exercise its functions the Board of Directors has included the following requirements in its internal rules: (i) the Chairman, assisted by the Board Secretary, shall be responsible for sending any useful information to the other Board members; (ii) where items on the agenda at a Board or Committee meeting require specific analysis or review, information and/or documentation on the issues concerned shall be provided on a timely basis prior to the Meeting; (iii) the Board shall be regularly informed of any significant events affecting the Companys affairs; (iv) the Board is authorized to make use of video- or teleconference facilities on an exceptional basis, provided that at least four directors including the Chairman attend the Meeting in person at the venue specified in the notice of meeting in order to facilitate attendance at meetings as well as the decision-making process. The Board of Directors decides which type of management structure the Company applies. The Companys management may be placed under the responsibility of either the Chairman of the Board of Directors or another person appointed by the Board who holds the title of Chief Executive Officer. Since the Board meeting of September8, 2006, the positions of Chairman and Chief Executive Officer have been combined. The Board of Directors confirmed this management structure at its meeting of February16, 2007.
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Corporate governance
Board of Directors
1.
The Board of Directors met five times in 2011. The rate of attendance was 96.60%. At each of its meetings, the Board was informed of the Groups operating results and sales and earnings outlook. The budgets for 2011 (as revised at the end of the first-half) and 2012 were presented at the Board meeting of July25, 2011 and December21, 2011 respectively. The Board examined and approved the 2010 parent company and consolidated financial statements, at its meeting of February7, 2011; and the 2011 consolidated interim financial statements, at its July25, 2011 meeting. The Board meeting of July25, 2011 examined the Groups 2011-2015 medium-term Business Plan. The renegotiation of the Groups financing was examined and approved by the Board at its February7,2011 and July25,2011 meetings. The strategy of the Groups four businesses was debated during the October 13, 2011 and December 21, 2011 meetings in particular. At its meeting on April14, 2011, the Board of Directors decided to submit a resolution to the Shareholders Meeting to shorten directors terms of office, approved the Registration Document and convened an Ordinary and Extraordinary General Shareholders Meeting. During this Meeting, the Board also ensured that its internal rules were in line with the November3, 2010 AMF recommendation. At its meeting in July25, 2011, the Board of Directors decided on a third share grant plan (plan no.3) and authorized the launch of an ADR program.
More specifically, its role is to conduct an in-depth review of the interim and annual financial statements, the Groups most significant financial transactions and its reporting schedules. It also monitors off-balance sheet commitments and factors that enable the Groups risks to be assessed. In particular, the Committee is responsible for preparing the Board meetings held to review the interim and annual financial statements and for informing the Board on these subjects. To that end, it reviews the financial statements before they are submitted to the Board and issues an opinion on: c the application and relevance of the accounting policies and methods used, and also reviews material risks; c the appointment, fees and audit program of the Statutory Auditors and issues relating to their independence. As part of its review of the Companys parent company and consolidated financial statements, the Committee ensures that Senior Management and the Statutory Auditors formally approve accounting policies that have a significant impact on the presentation of the financial statements and that these accounting policies are presented to the Board of Directors. It also ensures that Senior Management explains and substantiates to the Board the main accounting options that are selected and that the Statutory Auditors review these options. Finally, the Committee ensures that the Statutory Auditors have access to all the information they require for performing their duties and are given the means to relay any significant observations. As part of its internal control remit, the Audit Committee also monitors the effectiveness of internal control and risk management systems. The Committee is given a presentation by the Head of Internal Audit once ayear on this issue. The Committee also ensures the independence of the Statutory Auditors.
2.
Members
The Audit Committee is governed by its internal rules which provide that committee members are all directors and that these may not use proxies. The term of office of committee members is the same as that of their directorships. All committee members must be members of the Companys Board of Directors, excluding those in executive management positions. Committee members must show evidence of specific skills in the area of finance or accounting and the majority of them must be independent as defined in the Corporate Governance Code. The Audit Committee currently has three members: Messrs. Eric Bourdais de Charbonnire, Ross McInnes and Frderic SaintGeours. It is chaired by Mr.Ross McInnes. The Committee includes two independent directors, one of whom is its Chairman. The number of independent directors is therefore two-thirds of the Committee members, as recommended in the Corporate Governance Code. All of its members have proven financial or accounting experience and expertise.
Responsibilities
The general remit of the Audit Committee is to assist the Board of Directors in monitoring the preparation and verification of accounting and financial information.
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Board of Directors
At each of its meetings the Committee members reviewed the Groups cash position, financing and liquidity. During its various meetings, the Audit Committee was also given presentations by the Groups Chief Financial Officer, the Head of the Internal Audit department and the Head of the Accounting and Tax department. The Statutory Auditors gave their observations during each meeting. The Chairman of the Committee submitted reports on the Committees work to the Board of Directors on February7, April14, July25 and December21, 2011.
3.
The Strategy Committee was set up by the Board of Directors on October15, 2009.
4.
Members
Strategy Committee members are all directors. The term of office of committee members is the same as that of their directorships. The internal rules of the Strategy Committee stipulate a minimum of three members. The Chairman of the Board of Directors is automatically a member of the Strategy Committee as is the Chief Executive Officer, provided he is a director. The Board of Directors appoints a Committee Chairman from among its members for a term identical to that of his directorship. The internal rules of the Strategy Committee stipulate that at least one Committee member must be independent as defined in the Corporate Governance Code. The Strategy Committee is currently composed of four members: Messrs. Yann Delabrire, Lee Gardner, Hans-Georg Hrter and Philippe Varin. It is chaired by Mr.Philippe Varin. The Strategy Committee therefore includes two independent directors. Beyond the provisions of the internal rules, the number of independent directors is therefore in line with the threshold recommended in the Corporate Governance Code.
Members
The members of the Appointments and Compensation Committee are all members of the Board of Directors. They are appointed in a personal capacity and may not use proxies. The term of office of committee members is the same as that of their directorships. The composition of the Committee may be changed at any time as decided by the Board. The Appointments and Compensation Committee is composed of three members: Mr.Jean-Pierre Clamadieu (its Chairman), Mr.Jean Claude Hanus and Ms.Linda Hasenfratz. The Committee includes two independent directors, one of whom is its Chairman. In line with the Corporate Governance Code, no corporate officers are members of the Committee and the majority of its directors are independent.
Responsibilities
The role of the Appointments and Compensation Committee is to prepare matters for the Boards discussion, notably regarding (i) the selection and appointment of new directors, (ii) corporate officers compensation, (iii) setting the terms and performance conditions applicable to stock option and share grant plans for corporate officers, and (iv) the periodic review of directors compensation. The Committee coordinates and monitors the assessment duties of the Board of Directors. It takes part in the major decisions regarding the composition and reappointment of the Group Executive Committee and determines its compensation.
Responsibilities
As part of its general remit to analyze the Groups overall strategic vision, the Strategy Committee prepares the matters to be discussed by the Board of Directors. To this end, it issues proposals, opinions and recommendations on: c the Groups strategic and medium-term plans; c plans to acquire new businesses, including acquisitions of both assets and companies; c plans to dispose of assets, companies or equity interests belonging to the Group; c plans to set up joint ventures with partners. To fulfill its remit, the Strategy Committee may call on external auditors or any other experts internal or external to the Group and on the Chairman of Faurecias Audit Committee to report on any issue relating to investments, risks and the impact on the Groups financing in relation to projects submitted to it.
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Corporate governance
Board of Directors
The Meeting held on April8, 2011 discussed the duration of directors terms of office, the conditions for a share grant plan aimed at inciting executives and key managers interest in the Groups medium-term performance, and reviewed the compensation of the Groups Executive Committee. The Committee, during its July18, 2011 meeting, took note of the Executive Committee replacement plan, it also decided to propose that the Board implement a third share grant plan (plan no.3). Finally, at its November21, 2011 meeting, the Appointments and Compensation Committee came to a decision regarding the reappointment of members of the Board of Directors whose terms of office are due to expire and the suggestions to be presented to the Board of Directors. It launched preliminary studies of changes to the long-term incentive plan for the Groups management and examined the issue of the assessment of the work of the Board of Directors as recommended by the Corporate Governance Code.
A new assessment will be carried out by an external consultant at the end of 2012.
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Board of Directors
Directorships/Positions
Within the Company Chairman and Chief Executive Officer of Faurecia Outside the Company As of December31, 2011, Mr.Yann Delabrire also held the following directorship: c Director of Capgemini Over the last veyears, Mr.Yann Delabrire has also held the following directorships and positions, which he no longer holds: c Chief Financial Officer of PeugeotSA c Chairman and Chief Executive Officer of Banque PSA Finance c Chairman and Chief Executive Officer of Compagnie Gnrale de Crdit auxParticuliers Credipar c Director of Peugeot Citron AutomobilesSA c Director of Automobiles Citron c Director of Gefco c Chairman of Pergolese Investissements c Chief Executive Officer of Grande Arme Participations c Chairman of the Supervisory Board of SIT c Permanent representative of PeugeotSA on the Board of Directors ofAutomobiles Peugeot c Manager of PSA Services SrL (Italy) c Chairman of the Board of Directors of Peugeot Citron ArgentinaSA (Argentina) c Chairman of the Supervisory Board of Peugeot Finance International (Netherlands) c Vice-Chairman and director of PSA InternationalSA (Switzerland) Within the Company
c Director of Faurecia
ric BOURDAIS DE CHARBONNIRE Mr. ric Bourdais de Charbonnire has been adirector of Faurecia since February8, 2010. His term of office will expire at the Annual Shareholders Meeting to be held in 2015 to approve the financial statements for theyear ended December31, 2014. Aged 72, Mr.ric Bourdais de Charbonnire joined JP Morgan in 1965, and went on to hold various positions within it. From 1987 to1990 he was the Executive Vice-President, Head of Europe. In 1990, he joined Michelin asChief Financial Officer, and subsequently became a member of the Group Executive Council. Hehasbeen Chairman of the Supervisory Boardsince September2000. Mr. ric Bourdais de Charbonnire held 100Faurecia shares as of December31, 2011. Business address: MICHELIN 46, avenue de Breteuil 75324 Paris cedex 07
Outside the Company As of December31, 2011, Mr.ric Bourdais de Charbonnire also held thefollowing directorships and positions: c Chairman of the Supervisory Board of Michelin c Member of the Supervisory Board of ODDO Over the last veyears, Mr.ric Bourdais de Charbonnire has also held thefollowing positions, which he no longer holds: c Member of the Supervisory Board of ING group c Member of the Board of Directors of ThomsonSA
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Corporate governance
Board of Directors
Directors
Jean-Pierre CLAMADIEU Mr.Jean-Pierre Clamadieu has been a director of Faurecia since May29, 2007. Aged 53, Mr. Jean-Pierre Clamadieu was in charge of various divisions of Rhodia, also serving as its Chief Executive Officer from October2003 to March2008, and then as its Chairman and CEO until October2011. He has been the Deputy Chief Executive Officer of Solvay since September8, 2011. His term of office will expire at the Annual Shareholders Meeting to be held in 2012 to approve the financial statements for theyear ended December31, 2011. As of December 31, 2011, Mr. Jean-Pierre Clamadieu held 364Faurecia shares. Business address: SolvaySA Rue de Ransbeek 310 B-1120 Brussels Lee GARDNER Mr.Lee Gardner has been a director of Faurecia since February8,2010. His term of office will expire at the Annual Shareholders Meeting to be held in 2015 to approve the financial statements for theyear ending December31, 2014. Aged 65, Mr. Lee Gardner joined One Equity Partners in 2001. In 2008, he became Chairman and CEO of Emcon Technologies, a member of the OEP group, a position he relinquished following the sale of Emcon Technologies to Faurecia. He is currently a director of Precision Gear Holdings. He has also kept his position as Partner and Managing Director of One Equity Partners. As of December31, 2011, Mr.Lee Gardner held 27,310Faurecia shares. Business address: One Equity Partners Suite 170 100 Bloomeld Hills Parkway Bloomeld Hills Michigan 48304 USA
Directorships/Positions
Within the Company
c Director of Faurecia
Outside the Company As of December31, 2011, Mr.Jean-Pierre Clamadieu also held the following directorships and positions: c Deputy Chief Executive Officer of Solvay c Chairman of the Board of Directors of Rhodia c Director of the SNCF c Member of the Supervisory Board of Solvay GmbH (Germany) c Director of Solvay Finance (Luxembourg)SA c Director of Solvay IbericaSL(Spain) c Director of Solvay America,Inc. (United States) Over the last veyears, Mr.Jean-Pierre Clamadieu has also held the following directorships and positions, which he no longer holds: c Chief Executive Officer of Rhodia until March2008 c Chairman and CEO of Rhodia until October27, 2011
Outside the Company As of December31, 2011, Mr.Lee Gardner also held the following directorship: c Director of Precision Gear Holdings Over the last veyears, Mr.Lee Gardner has also held the following directorships and positions, which he no longer holds: c Director and Chairman of Emcon Technologies c Director of OEP Precision Holdings LLC c Director of PolaroidInc. c Director of MauserWerke GmbH c Director and Chairman of Progress Rail
80
Faurecia
Corporate governance
Board of Directors
Directors
Jean-Claude HANUS Mr. Jean-Claude Hanus has been a director ofFaurecia since February21, 2000. His term of office will expire at the Annual Shareholders Meeting to be held in 2016 to approve the financial statements for theyear ending December31, 2015. Aged 65, Mr.Jean-Claude Hanus has spent his entire career with the PSA Peugeot Citron group, where he was director of Legal Affairs, Institutional Relations and Internal Audit, and then Company Secretary until September 1, 2011, when he retired. As of December31, 2011, Mr.Jean-Claude Hanus held 100Faurecia shares. Business address: Ple Moveo Technopole du Madrillet 50, rue Ettore Bugatti 76800 Saint-tienne-du-Rouvray
Directorships/Positions
Within the Company
c Director of Faurecia
Outside the Company As of December31, 2011, Mr.Jean-Claude Hanus also held the following position: c Chairman of Ple Moveo since June7, 2011. Over the last veyears, Mr.Jean-Claude Hanus has also held the following directorships and positions, which he no longer holds: c Company Secretary and director of Legal Affairs, Institutional Relations and Internal Audit at PeugeotSA c Director of Association Auxiliaire de lAutomobile c Director of Automobiles Peugeot c Director of Compagnie Gnrale de Crdit aux Particuliers Credipar c Permanent representative of PeugeotSA on the Board of Directors of Banque PSA Finance c Permanent representative of PeugeotSA on the Board of Directors of GefcoSA c Chairman of DJ6 c Chairman of Grande Arme Participations c Director of Peugeot Citron Automobiles EspaaSA c Director of PCMA Holding BV c Permanent representative of PeugeotSA on the Board of Directors ofAutomobiles Citron c Director of Comit des Constructeurs Franais Automobiles
Faurecia
81
Corporate governance
Board of Directors
Directors
Hans-Georg HRTER Mr. Hans-Georg Hrter has been a director of faurecia since May26, 2010. His term of office will expire at the Annual Shareholders Meeting to be held in 2015 to approve the financial statements for theyear ending December31, 2014. Aged 66, Hans-Georg Hrter spent his entire career with the ZF group, which he joined in 1973. He was appointed Chairman of the Managing Board of ZFFriedrichshafen AG in January2007. As of December31, 2011, Mr.Hans-Georg Hrter held 720 Faurecia shares. Business address: ZF Friedrichshafen AG 88038Friedrichshafen Germany
Directorships/Positions
Within the Company
c Director of Faurecia
Outside the Company As of December31, 2011, Mr.Hans-Georg Hrter also held the following directorships and positions: c Chief Executive Officer of ZF Friedrichshafen AG c Member of the Supervisory Board of ZF Lenksysteme GmbH SchwbischGmnd c Member of the Supervisory Board of Flughafen Friedrichshafen GmbH c Member of the Supervisory Board of Klingelnberg AG c Member of the Advisory Committee of Landesbank BadenWrttemberg c Member of the Advisory Committee of Zeppelin Luftschifftechnik c Member of the Advisory Committee of Allianz Global Corporate& Specialty AG c Member of the Advisory Committee of VDA Herstellergruppe III, TeileundZubehr c Member of VDA Rohstoffausschuss c Member of the Supervisory Board of LVI, Landesverband der BadenWrttembergischen Industrie e.V. c Member of the Stiftungsrat of Zeppelin University Friedrichshafen c Member of Stifterverband Deutsche Wissenschaft e.V. c Member of Stiftung Deutsche Sporthilfe c Member of Max-Planck-Gesellschaft c Member of Institut Deutsche Wissenschaft c Member of the Advisory Committee of Unterfrnkische berlandzentrale eG Over the last veyears, Mr.Hans-Georg Hrter has also held the following directorships and positions, which he no longer holds: c Member of the Supervisory Board of ZF Getriebe GmbH, Saarbrcken c Member of the Supervisory Board of ZF Lemfrder GmbH, Lemfrde c Member of the Supervisory Board of ZF Passau GmbH, Passau c Member of the Supervisory Board of ZF Sachs AG, Schweinfurt c Member of the Supervisory Board of Automobilindustrie (VDA)
82
Faurecia
Corporate governance
Board of Directors
Directors
Linda HASENFRATZ Ms. Linda Hasenfratz has been a director ofFaurecia since May26, 2011. Her term of office will expire at the Annual Shareholders Meeting to be held in 2016 to approve the financial statements for theyear ending December31, 2015. Aged 45, Ms.Linda Hasenfratz has been Chief Executive Officer of Linamar Corporation since August2002. She was also its President from April1999 to August2004, and its Chief Operating Officer from September1997 to September1999. She has been a director since 1998. As of December31, 2011, Ms.Linda Hasenfratz held 100 Faurecia shares. Business address: Linamar Corporation 287 Speedvale Ave., W., Guelph, Ontario, Canada, N1H 1C5
Directorships/Positions
Within the Company
c Director of Faurecia
Outside the Company As of December31, 2011, Ms.Hasenfratz also held the following directorships and positions: c Chief Executive Officer of Linamar Corporation since 2002 c Director of Linamar Corporation since 1998 c Vice-President of the Board of Governors, Royal Ontario Museum since 2002 c Director of Canadian Imperial Bank of Commerce (CIBC) since June2004 c Director of Original Equipment Manufacturers Association since November2005 c Director of the Canadian Council of Chief Executives since October2010 c Member of the Catalyst Canadian Board of Advisors since 2003 Over the last veyears, Ms.Hasenfratz has not held any directorships and positions that she no longer holds. Within the Company
c Director of Faurecia
FrdricSAINT-GEOURS Mr.Frdric Saint-Geours has been a director ofFaurecia since July20, 2009. His term of office will expire at the Annual Shareholders Meeting to be held in 2012 to approve the financial statements for theyear ended December31, 2011. Aged 61, Frdric Saint-Geours is a graduate of the Institut dtudes Politiques in Paris, holds a degree in Economics and is a graduate of the cole Nationale dAdministration. He joined the PSA Peugeot Citron group in 1986, holding various positions including Chief Financial Officer and Head of the Peugeot brand. He was appointed Member of the Managing Board and Chief Financial and Strategic Development Officer in June2009, and Head of Brands in January2012. As of December31, 2011, Mr.Frdric SaintGeours held 100Faurecia shares. Business address: PSA Peugeot Citron 75 avenue de la Grande-Arme 75116 Paris
Outside the Company As of December31, 2011, Frdric Saint-Geours also held the following directorships and positions: c Member of the Managing Board of PeugeotSA c Executive Vice-President, Finance and Strategic Development, then Head of PSA Peugeot Citron group Brands as of January2012 c Chairman and Chief Executive Officer of Banque PSA Finance c Chairman of the Supervisory Board of Peugeot Finance International NV c Vice-Chairman of Dongfeng Peugeot Citren Automobiles CompanyLtd c Vice-Chairman and Chief Executive Officer of PSA InternationalSA c Director of Changan PSA Automobiles Co.Ltd c Director of Gefco c Director of Automobiles Citron c Director of Peugeot Citron AutomobilesSA c Director of PCMA Holding BV c Permanent representative of PeugeotSA on the Board of Directors of Automobiles Peugeot c Director of Casino Guichard-Perrachon Over the last veyears, Frdric Saint-Geours has also held the following directorships and positions, which he no longer holds: c Member of the Supervisory Board of Peugeot Deutschland GmbH c Director of Peugeot EspaaSA c Director of Automobiles Peugeot c Chief Executive Officer of Automobiles Peugeot c Permanent representative of Automobiles Peugeot on the Board of Directors of Gefco c Permanent representative of Automobiles Peugeot on the Board of Directors of Banque PSA Finance
Faurecia
83
Corporate governance
Board of Directors
Directors
Ross McINNES Mr.Ross McInnes has been a director ofFaurecia since May29, 2007. His term of office will expire at the Annual Shareholders Meeting to be held in 2012 to approve the financial statements for theyear ended December31, 2011. Aged 58, Mr. Ross McInnes held the position ofChief Financial Officer of Eridania Beghin-Say from 1991 to 2000, and became a director in 1999. He joined Thomson-CSF (Thales) in 2000, as Senior Vice-President and Chief Financial Officer, before joining the PPR group in 2005, as Senior Vice-President Finance and Strategy. From 2007 to 2009 he held the position of ViceChairman of Macquarie Capital Europe. In March 2009 Mr Ross McInnes joined the Safran group as Advisor to the Chairman of the Management Board. In June 2009 he then became Chief Operating Officer responsible for Economic and Financial Affairs. He was a member of the Management Board from July 2009 to April 2011. On April 21, 2011 he was appointed Deputy Managing Director responsible for Economic and Financial Affairs by Safrans Board of Directors. As of December31, 2011, Mr.Ross McInnes held 100 Faurecia shares. Business address: SAFRAN 2, boulevard du Gnral Martial Valin 75015 Paris
Directorships/Positions
Within the Company
c Director of Faurecia
Outside the Company As of December31, 2011, Mr.Ross McInnes also held the following directorships and positions: c Deputy Managing Director responsible for Economic and Financial Affairs at Safran c Director of Vallaroche Conseil c Permanent representative of the Board of Directors of tablissements Vallaroche (company represented: Safran) c Director of Messier-Bugatti-Dowty c Permanent representative of the Board of Directors of Soreval (Luxembourg) (company represented: tablissements Vallaroche) c Director of Aircelle c Director of Sagem Dfense Scurit c Director of Morpho c Director of Snecma c Director of Turbomeca c Director of Safran USA,Inc. (United States) c Director of Financire du Planier c Permanent representative of the Board of Directors of Gnrale de SantSA (company represented: Sant Europe Investissements Srl) c Permanent representative of the Board of Directors of SantSA (Luxembourg) (company represented: Sant Europe Investissements Srl) c Director of Limoni SpA (Italy) Over the last veyears, Mr.Ross McInnes has also held the following directorships and positions, which he no longer holds: c Member of the Management Board of Safran c Director of SME c Director of Messier-DowtySA c Permanent representative of the Board of Directors of MessierDowtySA (company represented: Safran) c Chairman of the Management Board of Gnrale de SantSA c Director of SantSA (Luxembourg) c Chairman of Chartreuse& Mont-BlancSAS c Vice-Chairman of Macquarie Capital EuropeLtd (UK) c Director of Macquarie Autoroutes de FranceSAS c Director of EiffarieSAS c Director of Autoroutes Paris-Rhin-Rhne c Director of AREA and AdelacSAS c Director of Chartreuse& Mont-Blanc Global Holdings SCA (Luxembourg), Chartreuse& Mont-Blanc GPSARL (Luxembourg) and Chartreuse& Mont-Blanc Holdings Sarl (Luxembourg) c Director of Bienfaisance Holding c Director of Electro Banque c Member of the Supervisory Board of Gnrale de SantSA c Member of the Supervisory Board of PistoSAS c Permanent representative of the Board of Directors of La Financire de Brienne (company represented: tablissements Vallaroche) c Permanent representative of SantSARL on the Supervisory Board of Gnrale de SantSA c Censor at the Board of Gnrale de SantSA
84
Faurecia
Corporate governance
Board of Directors
Directors
Robert PEUGEOT Mr.Robert Peugeot has been a director ofFaurecia since May29, 2007. His term of office will expire at the Annual Shareholders Meeting to be held in 2012 to approve the financial statements for theyear ended December31, 2011. Aged 61, Mr.Robert Peugeot is Chairman and CEO of FFP. Robert Peugeot studied at the cole Centrale de Paris and INSEAD. He has held various senior positions within the PSA Peugeot Citron group, and was a member of the Group Executive Committee from 1998 to 2007, holding the position of Vice-President, Innovation and Quality. He has been a member of the Supervisory Board of Peugeot SA since February 2007 and has chaired the Strategy Committee since December 2009. He is also a member of the Finance Committee and of the Appointments and Governance Committee. He has been responsible for FFPs development since end 2002. As of December31, 2011, Mr.Robert Peugeot held 100 Faurecia shares. Business address: FFP 75, avenue de la Grande-Arme 75116 Paris
Directorships/Positions
Within the Company
c Director of Faurecia
Outside the Company As of December31, 2011, Mr.Robert Peugeot also held the following directorships and positions: c Chairman and Chief Executive Officer of FFP c Member of the Supervisory Board of PeugeotSA c Member of the Supervisory Board of Herms International c Member of the Supervisory Board of IDI Emerging MarketsSA c Permanent representative of FPP on the Supervisory Board ofZodiacAerospace c Director of Sanef c Director of Imerys c Director of Holding Reinier c Director of tablissements Peugeot Frres c Director of Sona c Director of DKSH AG c Permanent representative of FFP, Chairman of Financire GuiraudSAS c Manager of SCI Rodom c Manager of SCI CHP Gestion Over the last veyears, Mr.Robert Peugeot has also held the following directorships and positions, which he no longer holds: c Chairman and Chief Executive Officer of SimanteSL c Director of Fomento de Construcciones y ContratasSA (FCC) c Director of LFPF (La Franaise de Participations Financires) c Director of Aviva Participations c Member of the Supervisory Board of Aviva France c Director of GIE de recherche et dtudes PSA Renault c Director of Immeubles et Participations de lEst c Director of Alpine Holding c Director of WRG GroupLtd c Director of B-1998-SL c Director of FCC ConstructionSA c Member of the Supervisory Board of Citron Deutschland AG c Director of Citron Denmark A/S c Director of Citron UKLtd
Faurecia
85
Corporate governance
Board of Directors
Directors
Thierry PEUGEOT Mr. Thierry Peugeot has been a director ofFaurecia since April17, 2003. His term of office will expire at the Annual Shareholders Meeting to be held in 2016 to approve the financial statements for theyear ending December31, 2015. Aged 54, Mr.Thierry Peugeot has been Chairman of the Supervisory Board of PeugeotSA since the end of 2002. A graduate of ESSEC, Mr.Thierry Peugeot began his career at the Marrel group as Export Manager for the Middle East and Anglophone Africa, before becoming director of Air Marrel America. In 1988, he joined PSA Peugeot Citron group, initially as Area Manager for South-East Asia at Automobiles Peugeot, before becoming CEO of Peugeot do Brasil and CEO ofSLICA (Peugeots main sales subsidiary) in Lyon. In 2000 he was appointed Head of International Key Accounts at Automobiles Citron. He subsequently became director of Services and Parts for Citron and a member of the Groups Management Committee. In December2002, he was appointed Chairman of the Supervisory Board of PeugeotSA. As of December31, 2011, Mr.Thierry Peugeot held 628 Faurecia shares. Business address: PSA Peugeot Citron 75, avenue de la Grande-Arme 75116 Paris Philippe VARIN Mr.Philippe Varin has been a director ofFaurecia since April9, 2009. His term of office will expire at the Annual Shareholders Meeting to be held in 2016 to approve the financial statements for theyear ending December31, 2015. Aged 59, Mr.Philippe Varin is a graduate of cole Polytechnique and cole des Mines de Paris. He held different positions of responsibility within Pechiney group prior to his appointment as director ofthe Rhenalu Division in 1995, and then asdirector of the Aluminum Sector and member of the Executive Board in 1999. He was appointed as Chief Executive of Anglo-Dutch steel group Corus in 2003, a position he held until April2009 when he joined PeugeotSA as Chairman of the Managing Board. As of December31, 2011, Mr.Philippe Varin held 20Faurecia shares. Business address: PSA Peugeot Citron 75, avenue de la Grande-Arme 75116 Paris
Directorships/Positions
Within the Company
c Director of Faurecia
Outside the Company As of December31, 2011, Mr.Thierry Peugeot also held the following directorships and positions: c Chairman of the Supervisory Board of PeugeotSA c Chairman of the Compensation Committee of PeugeotSA c Member of the Appointments and Governance Committee of PeugeotSA c Member of the Strategy Committee of PeugeotSA c Vice-Chairman and Chief Operating Officer of tablissements Peugeot Frres c Director of Socit Anonyme de Participations (SAPAR) c Director of Air LiquideSA c Director of Compagnie Industrielle de Delle (CID) c Permanent representative of CID on the Board of Directors of LISI c Member of the Compensation Committee of LISI c Director and member of the Holding Committee of FFP Over the last veyears, Mr.Thierry Peugeot has also held the following directorships, which he no longer holds: c Director of Franaise de Participation Financire c Director of AMC Promotion c Chairman and director of Immeubles et Participation de lEst
Outside the Company As of December31, 2011, Mr.Philippe Varin also held the following directorships and positions: c Chairman of the Management Board of PeugeotSA c Director of Banque PSA Finance c Director of Gefco c Chairman of the Board of Directors of Peugeot Citron AutomobilesSA c Director of PCMA Holding BV c Non-executive director of BG group PLC Over the last veyears, Mr.Philippe Varin has also held the following directorships, which he no longer holds: c Director of Tata Steel EuropeLtd c Director of Tata SteelLtd c Director of Tata Steel UKLtd
86
Faurecia
Corporate governance
Board of Directors
CONFLICTS OF INTEREST
As provided for in the Board of Directors internal rules of procedure, each director must disclose to the Board any conflicts of interest (including any potential conflicts of interest) relating to issues on the agendas of Board meetings, and must refrain from taking part in the vote on the matters in question. No such situations arose in 2011. Aside from regulated agreements, which are the subject of a report to the Shareholders Meeting, no service agreement has been entered into between a member of the Board of Directors and Faurecia or any of its subsidiaries. The Board of Directors strengthened its rules relating to conflicts of interest by adopting a procedure regarding the use of insider information. This procedure provides that no transactions may be carried out involving the Companys shares until the related information has been made public. Directors and certain categories of personnel, who are all included in a regularly updated list, must disclose any trades they carry out in Faurecias shares to the Company which then informs the markets. On April14, 2010, the Board of Directors modified its internal rules of procedure for the purpose of: c setting out situations where directors could encounter conflicts of interest and restating the confidentiality and discretion incumbent on directors with regard to information not in the public domain acquired during the course of their duties; c setting up blackout periods during which directors are prohibited from carrying out transactions involving Faurecia shares, in particular periods during which interim or annual
results or quarterly revenue are reported; directors are accordingly prohibited from trading on Faurecia securities (including derivatives), including through the exercise of stock options, during the following periods: c from the date of the annual December meeting of Faurecias Board of Directors up to and including the third day following the announcement of Faurecias annual results, c within 30calendar days prior to the announcement of interim results, and up to and including the third day following the announcement, this deadline having been extended from 15 to 30days by the Board meeting of April14, 2011, and the internal rules of procedure amended accordingly, c within 15 calendar days prior to the publication of quarterly revenue and up to and including the third day following the announcement, c throughout the period between the dates on which the Company (acting through its management) becomes aware of information that, if it became public, would be liable to have a significant impact on the share price of Faurecia, or the price of related financial instruments, and the date on which this information is made public. In the case of doubt on the nature of the information in its possession, each director may refer to the Group Chief Financial Officer, who has 24 hours to issue an opinion on the prospective transaction in his capacity as ethics officer, c creating a position of compliance officer to facilitate the handling of securities transactions and sensitive information discussed by the Board.
Declarant
Ross McInnes, on behalf of anindividual linked to him
Financial Instrument
Type of transaction
Date of transaction
Unit price
Amount of transaction
Shares
Sale
January3, 2011
January4, 2011
Euronext Paris
22.42
22,420
INDEPENDENCE
The independence of the members of the Board of Directors of Faurecia is assessed in accordance with the criteria set by the AFEP-MEDEF Code of Corporate Governance for listed companies. Six of them are considered to be independent within the meaning of the Code. They are Messrs. ric Bourdais de Charbonnire, Jean-Pierre Clamadieu, Hans-Georg Hrter, Ross McInnes and Lee Gardner, and Ms.Linda Hasenfratz. Mr.Lee Gardner, appointed to the Board after the acquisition of the Emcon group, and who holds positions in One EquityPartners (JPMorgan Chase group), a major shareholder of Faurecia until October20, 2010, only became an independent director once the Board had
noted that he no longer had relationships with the Company or a shareholder that were liable to call his independence into question after the disposal by One Equity Partner of its 13% holding in Faurecias capital. Therefore, as recommended by the Corporate Governance Code, over one-third of Faurecias Board of Directors is made up of independent directors.
DIRECTORS COMPENSATION
Directors compensation is paid in the form of attendance fees allocated by the Board of Directors. Total attendance fees were decided by the Ordinary Shareholders Meeting of May27, 2003, and are apportioned among Board members.
Faurecia
87
Corporate governance
Board of Directors
At its meeting of April14, 2010, the Board decided that as of January1, 2010: c directors would receive a fixed portion of attendance fees amounting to 12,000 in recognition of their directorship position, and a variable portion representing a maximum of 2,000 based on the number of Board meetings attended; c Committee members receive a fixed portion of attendance fees amounting to 7,000 and a variable portion of 1,500 per relevant Committee meeting; c the Chairman and Chief Executive Officer waives all attendance fees for his participation in Board or Committee meetings;
c members of the Board of Directors holding executive management or associate positions in a company that is a shareholder of the Group do not receive any attendance fees in respect of their position on Faurecias Board of Directors. At the Meeting, Mr.Thierry Peugeot indicated that he would waive attendance fees for Faurecia. Directors received gross attendance fees in respect of 2010 and 2011 in the amounts detailed in the table below:
Attendance fees
TABLE NO.3 (NUMBERING IN LINE WITH THE AMF RECOMMENDATION OF DECEMBER22, 2008)
Amount ofattendance fees paid in2011(in )
31,500 35,000 0 24,000 26,500 36,500 0 36,500 33,000 0 0 0 0
Directors
ric BOURDAIS DE CHARBONNIRE Jean-Pierre CLAMADIEU Yann DELABRIRE Frank ESSER* Linda HASENFRATZ** Hans-Georg HRTER Jean-Claude HANUS Lee GARDNER Ross McINNES FrdricSAINT-GEOURS Thierry PEUGEOT Robert PEUGEOT Philippe VARIN
TOTAL
* Director until May26, 2011. ** Director since May26, 2011.
212,500
86,500
245,000
90,000
Directors are not entitled to any termination benefits or deferred compensation for the loss of their corporate office. In 2009, the controlling company, PeugeotSA, paid fixed and variable compensation as well as benefits in kind to the following officers who also hold a corporate office within Faurecia. In his capacity as Chairman of the Managing Board of PeugeotSA since June1, 2009, Mr.Philippe Varin received 1,302,700 in respect of 2011. In his capacity as member of the Managing Board of PeugeotSA, Mr. Frdric Saint-Geours received 620,700 in respect of
2011. In his capacity as Chairman of the Supervisory Board of PeugeotSA, Mr.Thierry Peugeot received 515,000 in respect of 2011. In his capacity as member of the Supervisory Board of PeugeotSA, Mr.Robert Peugeot received 90,000 in respect of 2011. Faurecia does not have any information concerning the compensation of its corporate officers who are not also corporate officers of the controlling company. Faurecia specifies that no compensation other than the attendance fees mentioned above was paid to any of its directors by the Company or its subsidiaries during the pastyear.
88
Faurecia
Corporate governance
Board of Directors
On the recommendation of the Appointments and Compensation of January19, 2012, the Board, at its meeting of February7, 2012, set Mr.Delabrires variable compensation in respect of 2011 at 393,400. This Board also set Mr.Delabrires fixed compensation for 2012. Lastly, it decided which portion of his variable compensation for thatyear would be based on operating results, cash flow and the implementation of the Groups strategy. Having waived any compensation in his capacity as member of the Board of Directors and member of the Strategy Committee, Mr.Yann Delabrire received no attendance fees for 2011. Mr.Yann Delabrire did not receive or exercise any company stock options in 2011. At its meeting of December17, 2009, the Board reviewed its plan for the allocation of free shares and decided that any shares granted to the Chairman would henceforth be subject to the same performance conditions as share allocations for other members of Faurecias Senior Management. To this end, the Board of Directors decided, on July25, 2011, that share allocation plan no.3 will be subject to performance conditions related to net income before tax and before the recognition of asset disposals and changes in the scope of consolidation in 2013. The Board also decided that the Chairman and Chief Executive Officer should keep 30% of his allocation until the expiry of his term of office, regardless of the number of times it is renewed. If the performance condition set out in plan no.3 is achieved by the end of 2013, Mr.Yann Delabrire will be allocated a maximum of 52,000shares. The benefits in kind granted to Mr.Yann Delabrire correspond to a company car for business use as well as the services of a driver. Mr.Yann Delabrire is a member of the supplementary pension scheme set up for all of Faurecias managerial employees in France, which comprises: c a defined contribution plan relating to salary tranchesA andB with total contributions representing 1% on tranche A and 6% on trancheB of the compensation without the beneficiarys participation; c a defined benefit plan relating to salary trancheC whose contribution rate corresponds to 1% of salary trancheC multiplied by the beneficiarys years of seniority within Faurecia. Further information on the supplementary pension scheme can be found in Note 25-F to the consolidated financial statements. The Chairman and Chief Executive Officer is not entitled to any deferred compensation in the event that he loses his corporate office. The Chairman and Chief Executive Officer does not receive any other form of compensation from Faurecia. The tables below provide an analysis of Mr.Yann Delabrires compensation. Only applicable tables are shown.
RESTRICTIONS PLACED BY THE BOARD ONTHEPOWERS OFTHECHAIRMAN AND CHIEF EXECUTIVE OFFICER
The Board of Directors has entrusted its Chairman with responsibility for the Companys general management. The Boards internal rules, which are available on the Companys website at www.faurecia.fr, specify the terms and conditions of performance of the Boards own responsibilities as well as the duties of the Chairman. The Chairman must obtain approval from the Board before carrying out any acquisition, disposal or joint venture project representing a total asset value of over 100million and/or revenue in excess of 300million. These rules also state that the Board should be consulted on all company and Group strategic decisions at the Chairmans initiative. At its meeting of July25, 2011, the Board of Directors authorized the Chairman and Chief Executive Officer to give endorsements or guarantees subject to an overall ceiling of 50million, with a limit of 10million per transaction. If the Group is required to provide advance payment guarantees or performance bonds for contracts with successive performance commitments, the Chief Executive Officer is authorized to provide guarantees representing a maximum of 5million per transaction, subject to the same overall ceiling. Through its internal rules and within the scope of the applicable laws governing its activities, the Board has the powers to deal with all matters required for the efficient running of the Company.
Faurecia
89
Corporate governance
Board of Directors
Year 2011
1,100,771.60 1,085,040
TOTAL
2,100,353
2,185,811.60
Amount due
610,000 700,000* 0 7,371
Amount due
700,000 393,400*** 0 7,371.60
Amount paid
700,215.08 700,000**** 0 7,371.60
Fixed compensation Variable compensation Exceptional bonus Attendance fees Benets in kind
TOTAL
1,317,371
959,767
1,100,771.60
1,407,586.68
* Amount due in respect of fiscalyear 2010 and paid in 2011. ** Amount due in respect of fiscalyear 2009 and paid in 2010. *** Amount due in respect of fiscalyear 2011, to be paid in 2012. **** Amount paid in respect of fiscalyear 2010.
Stock options granted to Mr.Yann Delabrire during prioryears by Faurecia and other Group companies
TABLE NO.4 (NUMBERING CONSISTENT WITH THE AMF RECOMMENDATION OF DECEMBER22, 2008)
Value of options based on the method used in the consolidated nancial statements
911,090 603,624
Yann DELABRIRE
Exercise period
4/16/2011 4/16/2017 4/10/2012 4/10/2016
TOTAL
1,514,714
108,000
As far as the Company is aware, there are no hedges on the Companys stock subscription options.
90
Faurecia
Corporate governance
Board of Directors
Yann DELABRIRE
Acquisition date
Vesting date
Performance conditions
Plan no.1
37,050
383,468
6/23/2012
Pretax net income ofthe Group as of December31, 2011 before gains on asset disposals and change in the scope 6/23/2014 ofconsolidation Pretax net income ofthe Group as of December31, 2012 before gains on asset disposals and change in the scope 7/21/2015 ofconsolidation Pretax net income ofthe Group as of December31, 2013 before gains on asset disposals and change in the scope 7/25/2016 ofconsolidation
Plan no.2
37,050
399,514
7/21/2013
Plan no.3
52,000
1,085,040
7/25/2014
TOTAL
*
1,868,022
The number of performance shares given in this table is the maximum number and corresponds to 130% of the number of shares used in the valuation.
Faurecia
91
Corporate governance
Board of Directors
Plan no.18
Shareholders Mtg of May29, 2007 Board meeting of April10, 2008 60,000 4/10/2012 4/10/2016 28.38 0 0 60,000
Date of Shareholders/Board meeting authorizing stock option grants Adjusted total number of shares available for subscription Start of exercise period Expiration date Adjusted exercise price Exercise conditions (where the plan includes more than one tranche) Number of shares purchased on exercise of stock options asofDecember31, 2011 Total stock options canceled or forfeited Stock options outstanding atyear-end
No other corporate officer received stock options. Historical data in respect of stock subscription or purchase is provided in Note22 to the consolidated nancial statements.
TABLE NO.10 (NUMBERING IN LINE WITH THE AMF RECOMMENDATION OF DECEMBER22, 2008)
Compensation or benets due or potentially due because of leaving orchanging office
Yes No
Yann DELABRIRE
Employment Contract
Yes No
Position: Chairman andChiefExecutive Officer Start of term: February16, 2007 End of term: 2012 Annual Meeting
*
X*
Supplementary pension plan applicable to all of Faurecias managerial employees (see section8.1.2.2).
92
Faurecia
Corporate governance
The Executive Committee
Name
Yann DELABRIRE Jean-Marc HANNEQUIN Frank IMBERT Patrick KOLLER Thierry LEMNE Jacques MAUGE Bruno MONTMERLE Christophe SCHMITT Jean-Pierre SOUNILLAC
Position
Chairman of the Board of Directors and Chief Executive Officer Executive Vice-President, Faurecia Emissions Control Technologies Chief Financial Officer Executive Vice-President, Faurecia Automotive Seating Executive Vice-President, Group Communications Executive Vice-President, Faurecia Automotive Exteriors Executive Vice-President, Group Strategy Executive Vice-President, Faurecia Interior Systems Executive Vice-President, Group Human Resources
Faurecia
93
Corporate governance
The Executive Committee
94
Faurecia
Corporate governance
Senior Management
Faurecia
95
Corporate governance
Internal control
96
Faurecia
Corporate governance
Internal control
c the Group Executive Committee, which orchestrates the Groups strategy, allocates the resources required to implement this strategy, sets the objectives for all Group entities and verifies that these objectives are met; c monthly operations committee meetings are held between Group Senior Management and the executive team of each business in order to review management indicators. This Committee particularly focuses on the various key aspects of development programs relating to quality, financial performance and respecting deadlines; c the Financing and Treasury department, the Financial Control department, the Quality department, the Legal Affairs department and the Country Financial departments, which all play a specific role in the internal control process on account of their cross-functional skills; c the Operational Risk Committee which is charged with both ensuring that the major risks identified by the Group are correctly monitored and that the indicators used to measure these risks are pertinent; c the Internal Audit department which reviews the internal control system and any changes to the related processes; ensures that the Groups procedures comply with the applicable legislation and market recommendations; verifies that the system as a whole is complete, consistent and relevant; ensures that procedures are respected via regular tests and checks. In the event of shortfalls, it ensures that corrective measures are taken and reports on the systems effectiveness. The Internal Audit department reports directly to the Groups Finance department. While centralized at Group headquarters, it has remote offices in the United States, Germany and China. Its work is approved and supervised by the Chairman of the Board and the Audit Committee. The role of the Internal Audit department is to ensure continuous improvement in the effectiveness of all systems of internal financial control, by applying a systematic and methodical approach. It is authorized to take action where required in relation to any Group process throughout the world. It conducts its assignments in a wholly objective manner and systematically supports its findings with precise facts and figures that have been duly verified. All of the Internal Audit departments work is made available to Group Senior Management, to which it reports regularly on the progress of its assignments and the measures taken to reach its objectives. Tracking the recommendations sent by the Internal Audit to the audited sites is accomplished by (i) an analysis by questionnaire three, six and twelvemonths after the final report, (ii) monitoring by the Operations Committee, and (iii) a post-audit on site if that is deemed necessary. It presents its audit plan, as well as the reports it has drawn up including a self-assessment of its performance to the Group Executive Committee twice ayear, and to the Audit Committee once ayear. In 2004, the department drew up an Internal Audit Charter which defines its roles and remit, as well as the purpose and methods of its assignments.
The Operational Risk Committee, set up on November10,2011, and chaired by the Head of the Internal Audit department, convenes the entities subject to major risks within the Group. This Committee is charged with defining, monitoring, quantifying and prioritizing these risks in accordance with Group objectives. Its deliberations include an evaluation of the usefulness over time of the key indicators of each major risk as well as the measures needed to reinforce their control or to manage them. Finally, the Committee assists the Head of the Internal Audit department compile and control information regarding risks for the Audit Committee. The work of the Groups internal departments is rounded out by the actions of external parties, including: c the Statutory Auditors. The latter are not directly involved, through their statutory duty, in the internal control or risk management systems. They are aware of them, make use of the Internal Audit reports to improve their understanding of the Company and give a wholly independent opinion as to their pertinence. They perform an audit of the Group everyyear within the scope of their statutory audit engagement on the Groups consolidated financial statements and other audit engagements regarding the financial statements of Group entities. In accordance with French company law, the financial statements of the Company and the Group are certified by two audit firms which undertake a joint review of the full accounts and the procedures used for preparing them and also examine certain Group internal control processes concerning the preparation of accounting and financial information. Backed by members of their networks in each of the Groups host countries, these two audit firms perform statutory or contractual audit engagements for all of the Groups fully consolidated companies. The Statutory Auditors present their comments on the Chairmans report with respect to those internal control procedures which have to do with preparing and processing financial and accounting data, and certify that other disclosures required by law have been made; c third-party organizations which carry out the following certification processes for the whole Group over a three-year cycle: c environment (ISO14001), c quality (ISO/TS); c engineers from fire and property & casualty insurance companies which conduct a two-yearly audit at each of Faurecias sites with the aim of: c assessing fire risks and any potential impact on production and customers, c assessing whether the prevention and protection measures in place are adequate, c issuing recommendations on reducing risks.
Faurecia
97
Corporate governance
Internal control
Program control
Program control measures are subject to specific procedures. Each contract signed with a customer represents a program and corresponds to a project which: c responds to a specific request from an automaker (Request for Quotation or RFQ) for the supply of complex automotive equipment; c meets set objectives concerning quality, cost and lead times; c meets the Groups profitability criteria. The life of a program can stretch to tenyears, from the beginning of the development phase (including the order-placing phase and start-up of industrial production) to the end of series life (production). Every program is subject to control procedures and tools throughout its life. The program management system (PMS) lays out a strict succession of steps for the entire duration of a program. Each program involves various milestones from the bid processing stage to the end of product life. As part of this control system, program reviews are carried out once amonth by the business group concerned. Formal reports of these reviews are required and a certain number of documents must be submitted. This process is designed to identify program risks on an ongoing basis, in order to draw up and implement the necessary action plans. Right from its inception i.e.during the filing of the bid each program is subject to a forward-looking financial analysis in the form of a Business Plan (BP). BPs are prepared in accordance
98
Faurecia
Corporate governance
Internal control
with a standard method developed and monitored by Group management. The BP is regularly updated as assumptions are changed. Therefore, it contains all the information required to assess a program at every stage, from the preparation of the quotation, through contract negotiations, to the developmentphase. To improve program effectiveness, an excellence plan for program management has been put in place. It covers methodology, quality, profitability and the program managers individual development. The aim of this plan is ensure that development procedures are strictly applied and that deadlines are met, right from the business acquisition phase through to series production. As part of the plan the Group monitors progress indicators on amonthly basis. An audit process has been set up to ensure the plan is complied with and to identify and standardize best practices for program teams.
Code of Ethics
The Faurecia Group is deeply committed to respecting the fundamental principles of accountability, integrity and ethical conduct. The Groups Code of Ethics forms an integral part of the FCPs. It defines the general rules on ethical behavior
applicable on a day-to-day basis to all of Faurecias employees in their relations both inside and outside the Group, as well as to the Groups partners. The Code also describes how the Group seeks to implement its core values of respecting customers, shareholders, the people it works with and the environment. In addition to strengthening the measures already in place, the Code introduced a whistle-blowing procedure enabling employees to notify Faurecia, in confidence, of any breaches of the law or Group procedures. A reinforced warning procedure, accessible to all Group employees who are aware of matters that relate to serious risks to the Company in terms of its accounting, financial auditing and anti-corruption measures, has been established. This procedure allows Faurecia to refer to an outside organization which gathers and initially processes the alert procedures. If circumstances warrant, the organization contacts the Faurecia Group through its Chairman and CEO, who can ask the Groups Internal Audit department to carry out the necessary investigation. The Code of Ethics has been widely relayed throughout the Group notably via intranet so that all employees can access it and comply with it at all times and in all circumstances. It is aimed at developing a sense of accountability and involvement among the Groups employees. During Internal Audits, auditors systematically check that everyone at the plant level is familiar with the Code.
Faurecia
99
Corporate governance
Internal control
8.4.7. INTERNAL CONTROL PROCEDURES FOR THE PREPARATION AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION
Principles applied to the preparation of financial statements
The Board of Directors is collectively responsible for publishing reliable financial and accounting information. The Audit Committee is expected to study and prepare certain of the Boards deliberations. It issues proposals, opinions and recommendations within its sphere of competence. TheCommittee has a consultative role only, and acts under the authority of the Board, to whom it reports whenever necessary. It is the Audit Committees assignment to review theyearly and half-yearly parent company financial statements of the Faurecia Group. It may hear from outside auditors, without the Financial department necessarily being present, as well as from the Groups Chief Financial Officer, who may be supported by any employee he or she chooses. Group Senior Management relies on input from the Accounting, Consolidation, Financial Control and Financial Communications departments. The Accounting department preparesmonthly consolidated financial statements and the interim and annual financial information that is issued publicly. It ensures that local financial managers properly prepare the subsidiaries financial statements and that they do so in compliance with local regulations. Itdefines the Groups accounting principles in accordance with IFRSnorms and sees that all subsidiaries follow them. It also prepares the financial statements of FaureciaSA. The internal control procedures necessary to produce reliable accounting data are implemented at the local level. These include, among others, physical inventorying, a separation of tasks and reconciliations with independent sources of information. The following principles are implemented across the Group regarding the preparation of financial statements: c ensuring that information about transactions is complete; c ensuring that transactions comply with the applicable accounting principles; c periodically reviewing the value of assets. Ensuring consistency between financial reporting tools and the Groups operating systems is vital for the preparation of reliable financial and accounting information. The volume of information involved, the quality and integrity required to process the information and ever-tighter financial reporting deadlines enabling management to respond quickly and to efficiently control operations require the use of effective information systems. The major systems upgrade program that began in July2008 at sites in France was rolled out in Europe, Asia and South America in 2009. It will continue to be gradually implemented across the Groups various sites. The Groups financial statements are prepared using information provided by each subsidiary and integrated into the Magnitude reporting and consolidation system. The accounting data submitted by each subsidiary are prepared in accordance with the Groups accounting policies, which comply with IFRSas adopted by the European Union. An IFRSaccounting manual is included in the Faurecia Core Procedures system, which can be accessed via the intranet. Each subsidiarys accounting information comprises income statements prepared by nature and by function, as well as a breakdown by business segment, an analysis of current and deferred taxes, a balance sheet, a cash flow statement, and a statement of commitments and contingent liabilities. Inter-company transactions are enteredmonthly using the ICS software. The Finance department also uses short- and medium-term forecasts to verify the value of cash-generating units; actuarial reports to assess pension and other employee benefit obligations; and fair-value measurements of derivatives confirmed by the Groups banking counterparties. In each subsidiary, the head of accounting and the financial controller have access to all the information they require in order to draw up accurate financial statements in compliance with local GAAP for the statutory accounts and with the Groups accounting policies for reporting purposes. At every interim and annual close the heads of all subsidiaries are required to prepare an IFRS/local GAAP reconciliation for equity and income and expenses. Every month instructions are sent to the accountants and financial controllers specifying the closing procedures to be followed. In addition, training sessions on the BO Finance systems are regularly provided to newly recruited accounting and financial staff. The preparation ofmonthly reporting packages requires each entity to ensure it has the appropriate resources to draw up quality information.
100
Faurecia
Corporate governance
Internal control
effectiveness of the internal control system. The underlying aim is to gradually strengthen the roles and responsibilities of the accounting function and enhance reporting processes, as well as to increase the effectiveness of information systems and reinforce financial controls relating to programs. In addition, it is intended to help build the skill sets of the employees involved and boost their motivation as their tasks will be more interesting and rewarding than previously.
Faurecia
101
Corporate governance
Internal control
same stringent procedures, and is used to define the targets set in the budget.
Preparation of the annual report/Registration Document is coordinated by the Legal Affairs department. A wide number of people who are experts in their field contribute to the process, ensuring that the document contains in-depth, high-quality and broad-ranging information. The Registration Document is then reviewed and approved by the Board of Directors before it is published. Financial press releases are systematically reviewed by the Finance department, and annual and half-yearly earnings announcements are also approved by the Board of Directors.
102
Faurecia
Corporate governance
Statutory Auditors report preparedinaccordance with ArticleL.225-235 oftheFrench Commercial Code
8.5. Statutory Auditors report preparedinaccordance with ArticleL.225-235 oftheFrench Commercial Code (Codedecommerce) onthereport prepared bytheChairman oftheBoardofDirectors ofFaurecia
This is a free translation into English of a report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with and construed in accordance with French law and professional auditing standards applicable in France. To the Shareholders, In our capacity as Statutory Auditors of Faurecia, and in accordance with ArticleL.225 235 of the French Commercial Code (Code de commerce), we hereby report on the report prepared by the Chairman of your Company in accordance with ArticleL.225-37 of the French Commercial Code (Code de commerce) for theyear ended December 31, 2011. It is the Chairmans responsibility to prepare and submit for the Board of Directors approval a report on internal control and risk management procedures implemented by the Company and to provide the other information required by ArticleL.225-37 of the French Commercial Code (Code de commerce) relating to matters such as corporate governance. Our role is to: c report on any matters as to the information contained in the Chairmans report in respect of the internal control and risk management procedures relating to the preparation and processing of the accounting and financial information; and c confirm that the report also includes the other information required by ArticleL.225-37 of the French Commercial Code (Code de commerce). It should be noted that our role is not to verify the fairness of this other information. We conducted our work in accordance with professional standards applicable in France.
Information on the internal control and risk management procedures relating to the preparation andprocessing of accounting andfinancial information
The professional standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairmans report in respect of the internal control and risk management procedures relating to the preparation and processing of the accounting and financial information. These procedures consist mainly in: c obtaining an understanding of the internal control and risk management procedures relating to the preparation and processing of the accounting and financial information on which the information presented in the Chairmans report is based and of the existing documentation; c obtaining an understanding of the work involved in the preparation of this information and of the existing documentation; c determining if any material weaknesses in the internal control procedures relating to the preparation and processing of the accounting and financial information that we would have noted in the course of our work are properly disclosed in the Chairmans report. On the basis of our work, we have no matters to report on the information relating to the Companys internal control and risk management procedures relating to the preparation and processing of the accounting and financial information contained in the report prepared by the Chairman of the Board of Directors in accordance with ArticleL.225-37 of the French Commercial Code (Code de commerce).
Other information
We confirm that the report prepared by the Chairman of the Board of Directors also contains the other information required by ArticleL.225-37 of the French Commercial Code (Code de commerce). Neuilly-sur-Seine and Paris-La Dfense, April19, 2012 The Statutory Auditors PricewaterhouseCoopers Audit Dominique Mnard Ernst& Young Audit Denis Thibon
Faurecia
REGISTRATION DOCUMENT 2011
103
104
Faurecia
9
Consolidated statement
CONTENTS
9.1.
CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME BALANCE SHEET CONSOLIDATED CONSOLIDATED CASH FLOW STATEMENT CONSOLIDATED STATEMENT OFCHANGES INEQUITY
NOTESTO THE CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED COMPANIES ASOFDECEMBER31, 2011 STATUTORY AUDITORS REPORT ONTHECONSOLIDATED FINANCIAL STATEMENTS
113
9.2. 9.3.
166
110
9.7.
9.4.
172
111
Faurecia
105
Consolidated statement
106
Faurecia
Consolidated statement
Consolidated statement ofcomprehensive income
Notes
4 5 5 5
2011
16,190.2 (14,806.4) (222.3) (510.6) 650.9
2010
13,795.9 (12,593.3) (303.2) (443.8) 455.6 87.2 (123.2) 8.1 (98.7) (25.6) 303.4 (85.9) (3.9) 213.6
2009
9,292.2 (8,840.1) (207.9) (335.9) (91.7) 6.9 (141.0) 12.3 (135.3) (43.9) (392.7) (42.2) 6.3 (428.6)
SALES Cost of sales Research and development costs Selling and administrative expenses OPERATING INCOME (LOSS) Other non operating income Other non operating expense Income from loans, cash investments and marketable securities Finance costs Others nancial income and expense INCOME (LOSS) BEFORE TAX OF FULLY CONSOLIDATED COMPANIES Current taxes Deferred taxes NET INCOME (LOSS) OF FULLY CONSOLIDATED COMPANIES Share of net income of associates: Before tax After tax CONSOLIDATED NET INCOME (LOSS) Attributable to owners of the parent Attributable to minority interests Basic earnings (loss) per share (in ) Diluted earnings (loss) per share (in )
6 6
(19.0) 475.5
8 8
13 46.0 33.7 413.3 371.3 42.0 9 9 3.37 3.11 26.7 18.8 232.4 201.7 30.7 1.87 1.79 14.8 11.3 (417.3) (433.6) 16.3 (6.85) (6.85)
2011
413.3 (6.3) (7.6) 1.3 (1.2)
2010
232.4 (1.3) (0.8) (0.5) 53.8
2009
(417.3) 4.2 1.9 2.3 8.6
CONSOLIDATED NET INCOME (LOSS) Gains (losses) arising on fair value adjustments tocashowhedges of which recognized in equity of which transferred to net income (loss) for the period Exchange differences on translation of foreign operations
TOTAL COMPREHENSIVE INCOME (EXPENSE) FOR THE PERIOD Attributable to owners of the parent Attributable to minority interests
Faurecia
107
Consolidated statement
Balance sheet consolidated
Notes
10 11 12 13 14 15 16 8
Dec.31, 2011
1,260.6 464.2 1,733.4 71.0 38.8 35.4 16.9 78.3 3,698.6
Dec.31, 2010
1,230.8 435.2 1,575.5 43.6 15.3 27.8 14.5 86.2 3,428.9 734.0 1,387.7 223.3 100.7 0.0 605.8 3,051.5
Dec.31, 2009
1,039.9 396.9 1,224.6 31.0 11.2 23.5 18.9 72.0 2,818.0 438.6 1,025.9 171.0 79.9 1.7 357.8 2,074.9
Goodwill Intangible assets Property, plant and equipment Investments in associates Other equity interests Other non-current nancial assets Other non-current assets Deferred tax assets TOTAL NON-CURRENT ASSETS Inventories, net Trade accounts receivables Other operating receivables Other receivables Other current nancial assets Cash and cash equivalents TOTAL CURRENT ASSETS
17 18 19 20 30 21
TOTAL ASSETS
7,264,6
6,480,4
4,892.9
108
Faurecia
Consolidated statement
Balance sheet consolidated
LIABILITIES
(in millions)
Notes
Dec.31, 2011
Dec.31, 2010
Dec.31, 2009
EQUITY Capital Additional paid-in capital Treasury stock Retained earnings Translation adjustments Net income (loss) for the period attributable to owners of the parent EQUITY ATTRIBUTABLE TO OWNERS OFTHE PARENTS Minority interests TOTAL SHAREHOLDERS EQUITY Long-term provisions Non-current nancial liabilities Other non-current liabilities Deferred tax liabilities TOTAL NON-CURRENT LIABILITIES Short-term provisions Current nancial liabilities Prepayments from customers Trade payables Accrued taxes and payroll costs Sundry payables TOTAL CURRENT LIABILITIES 27 28 24 26 8 24 26 22 23 22 772.6 282.4 (1.7) (357.1) 86.4 371.3 1,153.9 113.5 1,267.4 218.8 1,240.1 1.5 15.5 1,475.9 322.3 615.6 138.5 2,762.0 507.6 175.3 4,521.3 772.6 282.4 (10.4) (529.8) 94.0 201.7 810.5 87.7 898.2 214.5 1,114.9 1.3 29.2 1,359.9 416.6 687.7 87.8 2,419.9 452.8 157.5 4,222.3 626.1 130.1 (10.4) (99.4) 44.1 (433.6) 256.9 45.8 302.7 193.9 1,232.2 2.3 7.1 1,435.5 320.3 528.1 80.8 1,730.6 371.7 123.2 3,154.7
TOTAL LIABILITIES
7,264.6
6,480.4
4,892.9
Faurecia
109
Consolidated statement
Consolidated cash ow statement
Notes
Full-year 2011
413.3 460.7 (1.8) 2.7 (12.7) 2.4 45.2 909.8
Full-year 2010
232.5 497.8 3.9 (5.9) (3.8) (0.4) (86.4) 637.7 (35.3) (80.7) (33.6) 298.6 (47.8) (14.8) 86.4 724.1 (304.3) (154.3) 30.2 17.3 31.0 25.9 (39.8) (394.0) 330.1
Full-year 2009
(417.3) 496.6 (6.3) (1.4) 13.7 (2.4) 15.9 98.8 (5.1) 100.2 (66.8) 18.7 (14.2) (44.2) (11.4) 87.4 (169.1) (104.4) (12.0) 20.1 0.0 (24.8) (19.0) (309.2) (221.8)
I - OPERATING ACTIVITIES Consolidated net income (loss) Depreciation and amortization Deferred tax (benets) charges Increase (decrease) in long-term provisions Share of net income of associates, net of dividendes received Capital (gains) losses on disposals of non-current assets Others* CASH FLOW FROM OPERATIONS Increase (usage& decrease) in short-term provisions Change in inventories Change in trade accounts receivables Change in trade payables Change in other operating receivables and payables Change in other receivables and payables (Increase) decrease in working capital requirement CASH FLOWS PROVIDED BY OPERATING ACTIVITIES II - INVESTING ACTIVITIES Additionals to property, plant and equipment Capitalized development costs Acquisitions of investments (net of cash and cash equivalents) Proceeds from disposal of property, plant and equipment Proceed from disposal of nancial assets Change in investment-related receivables and payables Other changes CASH FLOWS PROVIDED BY INVESTING ACTIVITIES CASH PROVIDED (USED) BY OPERATING AND INVESTING ACTIVITIES (I)+(II) III - FINANCING ACTIVITIES Issuance of shares by Faurecia and fully-consolidated companies (net of costs) Option component of convertible bonds Dividends paid to owners of the parent company Dividends paid to minority interests in consolidated subsidiaries Issuance of debt securities and increase in other nancial liabilities Repayment of debt and other nancial liabilities NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES IV - OTHER CHANGES IN CASH AND CASH EQUIVALENTS Impact of exchange rate changes on cash and cash equivalents NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OFYEAR CASH AND CASH EQUIVALENTS AT END OFYEAR
*
24
12
1.2 (27.6) (26.7) 925.1 (881.9) (9.9) 6.2 24.3 605.8 26 630.1
4.2 0.0 0.0 (6.0) 77.6 (188.0) (112.2) 30.1 248.0 357.8 605.8
446.1 23.3 0.0 (9.3) 214.4 (502.7) 171.8 (17.9) (67.9) 425.7 357.8
O/w badwill from Plastal Germany and Plastal Spain acquisition: 84.3million for the fullyear 2010.
110
Faurecia
Consolidated statement
Consolidated statement ofchanges inequity
(in millions)
Total
SHAREHOLDERS EQUITY AS OFDECEMBER31, 2008 BEFORE APPROPRIATION OF NET INCOME (LOSS) Net income (loss) Translation adjustments Changes in fair value of hedging instruments TOTAL INCOME (EXPENSE) RECOGNIZED IN EQUITY Capital increase 2008 dividends Measurement of stock options Purchases and sales of treasury stock Changes in scope of consolidation Recognition of 2008 losses of the parent company SHAREHOLDERS EQUITY AS OFDECEMBER31, 2009 BEFORE APPROPRIATION OF NET INCOME (LOSS) Net income (loss) Translation adjustments Changes in fair value of currency and interest rate hedging instruments TOTAL INCOME (EXPENSE) RECOGNIZED IN EQUITY Capital increase 2009 dividends Measurement of stock options and shares grant Purchases and sales of treasury stock Option component of convertible bonds Changes in scope of consolidation
24,395,048 170.8
198.9 (11.5)
(175.3) (433.6)
33.7
(13.7)
202.9 (433.6)
40.6
243.5
16.3 (417.3) (1.8) 8.6 4.2 14.5 (404.5) 446.1 (9.3) (9.3) 3.4 0.2 23.3 0.0
10.4 4.2
89,448,504 626.1
130.1 (10.4)
(523.5) 201.7
44.1
(9.5)
256.9 201.7
49.9
49.9
4.6
Faurecia
111
Consolidated statement
Consolidated statement ofchanges inequity
(in millions)
Equity Translaattribution table to adjust- Cash ow owners of Minority ments hedges the parent interests
Total
SHAREHOLDERS EQUITY AS OFDECEMBER31, 2010 BEFORE APPROPRIATION OF NET INCOME (LOSS) 110,366,728 772.5 Net income (loss) Translation adjustments Changes in fair value of currency and interest rate hedging instruments TOTAL INCOME (EXPENSE) RECOGNIZED IN EQUITY Capital increase 2010 dividends Measurement of stock options and shares grant Purchases and sales of treasury stock Changes in scope of consolidation and other SHAREHOLDERS EQUITY AS OFDECEMBER31, 2011 BEFORE APPROPRIATION OF NET INCOME (LOSS) 110,368,345 772.6
(1)
282.4 (10.4)
(317.2) 371.3
94.0
(10.8)
810.5 371.3
(7.6)
(7.6)
(6.3) 371.3 1,617 0.1 (27.6) 11.1 8.7 (2.3) (4.0) (7.6) (6.3)
282.4
(1.7)
31.3
86.4
(1) Capital increase arising from the conversion of bonds for the Group part. (2) O/w 270,814 of treasury stock as of 12/31/2009& 2010, 46,872 as of 12/31/2011 (cf. Note22.3).
112
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
Summary of signicant accounting policies114 Changes in scope of consolidation Events after the balance sheet date Information by operating segment Analysis of operating expenses Other income and expense Other nancial income and expense Corporate income tax Earnings per share Goodwill Intangible assets Property, plant and equipment Investments in associates Other equity interests Other non current nancial assets Other non current assets Inventories and work in progress Trade accounts receivable 118 119 119 125 126 127 128 130 131 132 133 134 136 136 136 137 137
NOTE19 NOTE20 NOTE21 NOTE22 NOTE23 NOTE24 NOTE25 NOTE26 NOTE27 NOTE28 NOTE29 NOTE30 NOTE 31 NOTE32 NOTE33 NOTE34 NOTE35
Other operating receivables Other receivables Cash and cash equivalents Shareholders equity Minority interests Long and short term provisions Provisions for pensions and other post employment benets Net debt Accrued taxes and payroll costs Sundry payables Financial instruments
138 138 138 139 141 142 144 149 153 153 154
Hedging of currency and interest rate risks 158 Commitments given and contingent liabilities Related party transactions Fees paid to the Statutory Auditors 163 164 165
Faurecia
113
Consolidated statement
Notesto the consolidated nancial statements
Faurecia SA and its subsidiaries (Faurecia) form one of the worlds leading automotive equipment suppliers in four vehicule businesses: Automotive Seating, Emission Control Technologies, Interior Systems and Automotive Exteriors. Faurecias registered office is located in Nanterre, in the Hautsde-Seine region of France. The Company is quoted on the Eurolist market of Euronext Paris.
The consolidated financial statements were approved by Faurecias Board of Directors on February7, 2012. The accounts were prepared on a going concern basis.
NOTE1
The consolidated financial statements of the Faurecia Group have been prepared in accordance with International Financial Reporting Standards (IFRS) published by the IASB, as adopted by the European Union and available on the European Commission website: http://ec.europa.eu/internal_market/accounting/ias/ index_fr.htm These standards include International Financial Reporting Standards and International Accounting Standards (IAS), a well as the related International Financial Reporting Interpretations Committee (IFRIC) interpretations. The standards used to prepare the 2011 consolidated financial statements and comparative data for 2010 and 2009 are those published in the Official Journal of the European Union (OJEU) as of December31, 2011, whose application was mandatory at that date. The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all of the years presented. Since January1, 2011 Faurecia has applied the amendments and revisions to the existing standards IAS1, IAS21, IAS24R, IAS28, IAS31, IAS32, IAS34, IAS39, IFRS3R, IFRS7, IFRS8; these amendments did not have any material impact on the consolidated financial statements as from December31, 2010. Moerover, Faurecia has not applied by anticipation the standards, amendments or interpretations: c adopted by the European Union but which application is due after December31, 2011 (amendments to IFRS7); c not yet adopted by the European Union as of December31, 2011 (standards IFRS9, IFRS10, IFRS11, IFRS12, IFRS13, IAS27, IAS28, IAS19, amendments to IAS1, IAS12). The amendment to IAS19 Employee benefits suppresses notably the possibility retained by Faurecia to apply the corridor method. All actuarial gains and losses as well as service costs will be directly accounted for as liablilities in the balance sheet (see Note25.2 Pension benefit obligations). Actuarial variances will be fully recognized through other comprehensive income (expense) directly in equity and past service costs in period net income. This amendment defines also the return on assets as the discount rate used to measure the benefits liability.
114
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
1.2 Goodwill
In case of a business combination, the aggregate value of the acquisition is allocated to the identifiable tangible and intangible assets acquired based on their fair value determined at their acquisition date. A goodwill is recognized when the aggregate of the consideration transferred and the amount of any non-controlling interest in the acquiree exceed the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. In accordance with IAS36, goodwill is not amortized but is tested for impairment at least once ayear and more often if there is an indication that it may be impaired. For the purpose of impairment testing, goodwill is allocated to cash-generating units (CGUs). A CGU is defined as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The CGU to which goodwill is allocated represents the lowest level within the operating segment at which goodwill is monitored for internal management purposes. The Group has identified the following CGUs: c Automotive Seating; c Emissions Control Technologies; c Automotive Exteriors; c Automotive Seating. The carrying amount of assets and liabilities thus grouped is compared to the higher of its market value and value in use, which is equal to the present value of the net future cash flows expected, and their net market value including costs of disposal.
Certain tooling is produced or purchased specifically for the purpose of manufacturing parts or modules for customer orders, which are either a) not sold to the customer, or b) paid for by the customer on delivery of each part. In accordance with IAS16, this tooling is recognized as property, plant and equipment. It is depreciated to match the quantities of parts delivered to the customer over a maximum of threeyears, in line with the rate at which models are replaced. Investment grants are recorded as a deduction from the assets that they were used to finance. Property, plant and equipment acquired under finance leases which transfer substantially all the risks and rewards incidental to ownership of the asset to the lessee are recorded under assets at the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The recognized assets are subsequently depreciated as described above. An obligation of the same amount is recorded as a liability.
Faurecia
115
Consolidated statement
Notesto the consolidated nancial statements
The assets are grouped at the lowest levels for which there are separately identifiable cash flows (Cash Generating Units, or CGUs). Impairment tests are performed on each group of intangible assets (development costs) and property, plant and equipment attributable to a customer contract. This is done by comparing the aggregate carrying amount of the group of assets concerned with the present value of the expected net future cash flows to be derived from the contract. An impairment loss is recorded when the assets carrying amount is higher than the present value of the expected net future cash flows. A provision is also recorded for losses to completion on loss-making contracts. In case of triggering event, impairment testing is also carried out on general and corporate assets grouped primarily by type of product and geographic area. The cash inflows generated by the assets allocated to these CGUs are largely interdependent due to the high overlap among the various manufacturing flows, the optimization of capacity utilization, and the centralization of research and development activities. Manufacturing assets whose closure is planned are tested independently for impairment.
testing based on the most appropriate financial analysis criteria. An impairment loss is recognized where appropriate. The criteria generally applied are the Groups equity in the underlying net assets and the earnings outlook of the Company concerned.
1.7 Inventories and work-in-progress 1.6 Financial assets and liabilities (excluding derivatives)
A - DEFINITIONS
In accordance with IAS39, the Group classifies its financial assets in the following categories: loans and receivables, available-forsale financial assets, and financial assets at fair value through profit or loss. They are recorded on the following balance sheet items: Other equity interests (Note14), Other non-current financial assets (Note15), Trade account receivables (Note18), Other operating receivables (Note19), Other receivables (Note20) and Cash and cash equivalents (Note21). The Group does not use the IAS39 categories of Held-tomaturity investments or Financial assets held for trading. The Groups financial liabilities fall within the IAS39 categories of (i) financial liabilities at fair value through profit or loss, and (ii) other financial liabilities measured at amortized cost. They are recorded on the following balance sheet items: current financial liabilities and non current financial liabilities (Note26), Accrued taxes and payroll costs (Note27) and Other payables (Note28). Financial assets and liabilities are broken down into current and non-current components for maturities at the balance sheet date: under or over ayear. Inventories of raw materials and supplies are stated at cost, determined by the FIFO method (First-In, First-Out). Finished and semi-finished products, as well as work-inprogress, are stated at production cost, determined by the FIFO method. Production cost includes the cost of materials and supplies as well as direct and indirect production costs, excluding overhead not linked to production and borrowing costs. Work-in-progress includes the costs of internally-manufactured specific tooling or development work which is sold to customers, i.e. where the related risks and rewards are transferred. These costs are recognized in the income statement over the period in which the corresponding sales are made, as each technical stage is validated by the customer, or when the tooling is delivered if the contract does not provide for specific technical stages. Provisions are booked for inventories for which the probable realizable value is lower than cost.
116
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
1.9 Derivatives
Faurecia uses derivative instruments traded on organized markets or purchased over-the-counter from first-rate counterparties to hedge currency and interest rate risks. They are recorded at fair value in the balance sheet.
CURRENCY HEDGES
The effective portion of changes in the fair value of instruments used to hedge future revenues is recorded in equity and taken to operating income when the hedged revenues are received. Changes in the fair value of instruments used to hedge trade receivables and payables are recorded as operating income or expense. The portion of the change in fair value of these hedges that is ineffective (time value of the hedges) is recorded under Other financial income and expense together with changes in the fair value of instruments used to hedge other receivables and payables.
Faurecia
117
Consolidated statement
Notesto the consolidated nancial statements
c finance costs; c other financial income and expense, which includes the impact of discounting the pension benefit obligation and the return on related plan assets, the ineffective portion of interest rate and currency hedges, changes in value of interest rate and currency instruments for which the hedging relationship does not satisfy the criteria set forth in relationship cannot be demonstrated under IAS39, and gains and losses on sales of shares in subsidiaries; c taxes.
NOTE2
equity method for the first four, as well as Changchun Huaxiang Faurecia automotive plastic components, in the Automotive Exteriors business, following the equity method.
118
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
On March 31, 2010 and September 30, 2010, respectively, Faurecia acquired the German and Spanish operations of Plastal, a leading supplier of plastic exterior parts for the automotive industry. They were consolidated as of the acquisition date. Faurecia also acquired, as part of the Interior Systems business, part of the operations of the Rennes Visteon France plant on December17, 2010 and the company Incalplas in August2010; and, as part of the Automotive Seating business, the seating comfort operations of Hoerbiger Automotive Komfortsysteme on December23, 2010. In addition, Faurecia consolidated the following companies as from January1, 2010: South Korea-based Faurecia Shin Sung, established in 2007, as part of the Interior Systems business, Russia-based Faurecia Metalloprodukcia and France-based Faurecia Metalloprodukcia Holding, as part of the Emissions
Control Technologies business, and Faurecia Informatique Tunisie, established in 2009. The Turkey- based company Orcia, which was acquired in 2008, is consolidated by the equity method as from January1, 2010. Faurecia sold 40% of Faurecia ADP Holding during the first half of 2010.
NOTE3
NOTE4
For internal reporting purposes the Group is structured into the following four business units based on the type of products and services provided: c Automotive Seating (design of vehicle seats, manufacture of seating frames and adjustment mechanisms, and assembly of complete seating units); c Emissions Control Technologies (design and manufacture of exhaust systems); c Interior Systems (design and manufacture of instrument panels, door panels and modules, and acoustic components); c Automotive Exteriors (design and manufacture of front ends and safety modules). These business units are managed on an independent basis in terms of reviewing their individual performance and allocating
resources. The tables below show reconciliation between the indicators used to measure the performance of each segment notably operating income and the consolidated financial statements. Borrowings, other operating income and expense, financial income and expense, and taxes are monitored at Group level and are not allocated to the various segments. In accordance with the option available under IFRS 8, the Automotive Seating and Interior Systems business units have been aggregated into the Interior Modules segment and the Emissions Control Technologies and Automotive Exteriors units have been aggregated into the Other Modules segment. These business units have similar long term economic characteristics, notably in terms of earnings outlook, type of customer and manufacturing processes.
Faurecia
119
Consolidated statement
Notesto the consolidated nancial statements
Interior Modules
8,677.0 (50.3) 8,626.7 421.6 (14.1) 407.5
Other Modules
7,583.6 (20.1) 7,563.5 251.6 (8.3) 243.4
Other
319.6 (319.6) 0.0 (22.4) 22.4 0.0
Total
16,580.3 (390.1) 16,190.2 650.9 0.0 650.9 0.3 (58.2) (98.5) (19.0) (95.9) 33.7 413.3
Sales Inter-segment eliminations Consolidated sales Operating income (loss) before allocationof costs Allocation of costs Operating income Other non-operating income Other non-operating expense Finance costs, net Other nancial income and expense Corporate income tax Share of net income in associates NET INCOME (LOSS) Segment assets Net Property, plant and equipment, net Other segment assets Total segment assets Investments in associates Equity interests Short and long-term nancial assets Tax assets (current and deferred) TOTAL ASSETS Segment liabilities Borrowings Tax liabilities (current and deferred) Equity and minority interests TOTAL LIABILITIES Capital expenditure Depreciation of items of property, plant and equipment Impairment of property, plant and equipment Headcounts
2,352.1
1,638.2
100.8
13.3 0.5
1,586
84,179
120
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
2010
(in millions)
Interior Modules
7,708.0 (44.2) 7,663.8 284.2 (29.1) 255.1
Other Modules
6,153.7 (21.6) 6,132.1 216.7 (16.2) 200.5
Other
239.0 (239.0) 0.0 (45.3) 45.3 0.0
Total
14,100.7 (304.8) 13,795.9 455.6 0.0 455.6 87.2 (123.2) (90.6) (25.6) (89.8) 18.8 232.4
Sales Inter-segment eliminations Consolidated sales Operating income (loss) before allocation of costs Allocation of costs Operating income Other non-operating income Other non-operating expense Finance costs, net Other nancial income and expense Corporate income tax Share of net income in associates NET INCOME Segment assets Property, plant and equipment, net Other Total segment assets Investments in associates Other equity interests Short and long-term nancial assets Tax assets (current and deferred) TOTAL ASSETS Segment liabilities Borrowings Tax liabilities (current and deferred) Equity and minority interests TOTAL LIABILITIES Capital expenditure Depreciation of property, plant and equipment Impairment in value of property, plant and equipment Headcounts
2,153.7
1,464.3
100.5
7.4 (3.3)
1,423
75,676
Faurecia
121
Consolidated statement
Notesto the consolidated nancial statements
2009
(in millions)
Interior Modules
6,649.3 (46.7) 6,602.6 (91.6) (38.7) (130.3)
Other Modules
2,712.4 (22.8) 2,689.6 50.0 (11.4) 38.6
Other
205.4 (205.4) 0.0 (50.1) 50.1 0.0
Total
9,567.1 (274.9) 9,292.2 (91.7) 0.0 (91.7) 6.9 (141.0) (123.0) (43.9) (35.9) 11.3 (417.3)
Sales Inter-segment eliminations Consolidated sales Operating income (loss) before allocation of costs Allocation of costs Operating income Other non-operating income Other non-operating expense Finance costs, net Other nancial income and expense Corporate income tax Share of net income in associates NET INCOME Segment assets Property, plant and equipment, net Other Total segment assets Investments in associates Other equity interests Short and long-term nancial assets Tax assets (current and deferred) TOTAL ASSETS Segment liabilities Borrowings Tax liabilities (current and deferred) Equity and minority interests TOTAL LIABILITIES Capital expenditure Depreciation of property, plant andequipment Impairment in value of property, plant and equipment Headcounts
2,039.4
667.0
89.3
8.6 (3.4)
1,130
58,414
122
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
2011
2010
2009
INTERIOR MODULES
c Automotive Seating c Interior Systems
31 23 53
33 23 56
43 28 71
OTHER MODULES
c Emissions Control
Technologies
c Automotive Exteriors
36 11 47
34 10 44
20 9 29
TOTAL
16,190.2
100
13,795.9
100
9,292.2
100
2011
3,418.0 2,433.9 1,652.2 1,555.2 1,277.5 1,092.6 4,760.8
%
21 15 10 10 8 7 29
2010
2,767.7 2,300.9 1,487.7 1,442.1 1,231.9 1,037.0 3,528.6
%
20 17 11 10 9 8 25
2009
1,824.7 2,049.4 875.1 1,164.3 506.1 857.8 2,014.8
%
20 22 9 13 5 9 22
TOTAL
* Invoiced sales.
16,190.2
100
13,795.9
100
9,292.2
100
Sales invoiced may differ from sales by end customer when products are transferred to intermediary assembly companies.
Faurecia
123
Consolidated statement
Notesto the consolidated nancial statements
2011
Other European countries
3,828.3 502.4 106.8 24,204
(in millions)
France
2,281.6 325.8 85.2 14,237
Germany
3,939.4 254.0 49.2 13,261
North America
3,359.7 317.5 76.1 15,973
South America
729.6 93.8 43.9 5,180
Asia
1,772.2 175.5 65.3 8,952
Other countries
279.5 64.4 24.9 2,372
Total
16,190.2 1,733.4 451.4 84,179
Sales Net property, plant andequipment Capital expenditure Number of employees asofDecember31
2010
Other European countries
3,426.8 488.3 52.6 24,021
(in millions)
France
2,214.5 322.9 63.2 14,663
Germany
3,294.1 233.5 27.1 11,283
North America
2,496.9 284.8 72.4 12,571
South America
636.6 67.5 23.2 4,770
Asia
1,407.7 125.4 42.6 6,598
Other countries
319.3 53.0 23.3 1,770
Total
13,795.9 1,575.4 304.4 75,676
Sales Net property, plant andequipment Capital expenditure Number of employees asofDecember31
2009
Other European countries
2,413.1 443.8 43.4 18,613
(in millions)
France
2,059.0 359.6 68.7 15,530
Germany
2,334.4 104.6 18.0 7,410
North America
1,077.7 173.2 23.2 7,488
South America
335.1 43.4 10.0 2,969
Asia
827.0 73.5 15.6 4,185
Other countries
245.9 26.5 11.2 2,219
Total
9,292.2 1,224.6 190.1 58,414
Sales Net property, plant andequipment Capital expenditure Number of employees asofDecember31
124
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE5
Full-year 2011
(14,806.4) (222.3) (510.6)
Full-year 2010
(12,593.3) (303.2) (443.8)
Full-year 2009
(8,840.1) (207.9) (335.9)
Cost of sales Research and development costs Selling and administrative expenses
TOTAL
(15,539.3)
(13,340.3)
(9,383.9)
Full-year 2011
(11,048.9) (1,420.7) (2,883.2) (56.5) 257.1 (453.6) 66.5
Full-year 2010
(9,339.0) (1,212.6) (2,467.7) (46.0) 171.1 (485.6) 39.5
Full-year 2009
(6,049.0) (834.5) (1,922.3) (48.7) 10.6 (487.0) (53.1)
Puchases consumed External costs Personnel costs Taxes and other than on income Other income and expenses* Depreciation, amortization and provisions for impairment invalue of non-current assets Charges to and reversals of provisions
TOTAL
* Including production taken into inventory or capitalized
(15,539.3) 298.4
(13,340.3) 208.9
(9,383.9) 78.7
Full-year 2011
(2,260.8) (622.4)
Full-year 2010
(1,952.8) (514.9)
Full-year 2009
(1,496.5) (425.8)
TOTAL
* Of which temporary employee costs
(2,883.2) (250.5)
(2,467.7) (164.4)
(1,922.3) (89.5)
Details of expenses relating to the Groups stock option plans and pension costs are provided in Notes22.2 and 25, respectively.
Faurecia
125
Consolidated statement
Notesto the consolidated nancial statements
Full-year 2011
(759.6) 498.0 178.9 (141.7) 2.1
Full-year 2010
(689.1) 393.5 154.3 (175.5) 13.6
Full-year 2009
(493.2) 361.6 104.4 (161.1) (19.6)
NET EXPENSE
(222.3)
(303.2)
(207.9)
5.5 Depreciation, amortization and provisions for impairment in value of non-current assets
(in millions)
Full-year 2011
(141.7) (20.9) 3.2 (296.3) 2.1
Full-year 2010
(175.5) (19.5) (11.5) (292.7) 13.6
Full-year 2009
(161.1) (12.1) (12.9) (281.3) (19.6)
Amortization of capitalized development costs Amortization of items of property, plant and equipement Depreciation of specic tooling Depreciation and impairment of other items of property, plantand equipment Provisions for impairment of capitalized development costs
TOTAL
(453.6)
(485.6)
(487.0)
NOTE6
Full-year 2011
0.3 0.0 0.0 0.0
Full-year 2010
0.4 84.3 2.5 0.0
Full-year 2009
0.0 0.0 6.9 0.0
Provision for contingencies Badwill from the acquisition of Plastal Germany& Plastal Spain Losses on disposals of assets Other operating income
TOTAL
0.3
87.2
6.9
126
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
Full-year 2011
(55.8) 0.0 (2.4)
Full-year 2010
(117.0) 0.0 (6.2)
Full-year 2009
(129.5) 0.0 (11.5)
TOTAL
*
(58.2)
(123.2)
(141.0)
As of December31, 2011, this item includes restructuring costs in the amount of 48,7million and provisions for impairment in value of non-current assets in the amount of 7,1million, versus respectively, 104.7million and 12.3million in 2010 and 119.8million and 9.7million in 2009. ** This item includes the cost of acquisition of Emcon and Plastal principally in the amount of 7.6million in 2009 and 5.3million in 2010.
RESTRUCTURING
Reorganization costs (55,8million) include redundancy and site relocation payments for 1,338 people and breakdown by country as follows:
In millions
France Germany USA Other 20.4 14.3 6.8 14.3
Employees
120 205 776 237
TOTAL
55.8
1,338
NOTE7
(in millions)
Full-year 2011
(8.2) (2.3) 0.0 (0.3) 3.3 (0.2) (11.3)
Full-year 2010
(9.6) (0.4) 0.0 3.6 (4.0) 0.0 (15.2)
Full-year 2009
(10.5) (2.9) (1.7) (6.0) (14.8) 0.0 (8.0)
Impact of discounting pension benet obligations Changes in the ineffective portion of currency hedges Changes in fair value of currency hedged relating to debt Changes in fair value of interest rate hedges Translation differences on borrowings Gains on sales of securities Other
TOTAL
(19.0)
(25.6)
(43.9)
Faurecia
127
Consolidated statement
Notesto the consolidated nancial statements
NOTE8
Full-year 2011
Full-year 2010
Full-year 2009
Current taxes
c Current corporate income tax
(97.7)
(85.9)
(42.2)
Deferred taxes
c Deferred taxes for the period c Impairment of deferred tax assets previously recorded
1.8
(3.9)
6.3
Deferred taxes
1.8
(3.9)
6.3
TOTAL
(95.9)
(89.8)
(35.9)
The 2011 tax charge includes for some countries the recognition of deferred income tax assets made possible by more favorable economic perspectives. The income tax rate change in France has not had any impact on the 2011 Group income tax.
Full-year 2011
475.4 (171.6) (2.3) 45.1 17.5 79.5 (61.5) 0.0 (2.6) (95.9)
Full-year 2010
303.4 (104.5) 0.0 31.5 20.4 26.2 (103.7) 0.0 40.3 (89.8)
Full-year 2009
(392.7) 135.2 (2.0) (1.4) 10.1 6.6 (183.9) 0.0 (0.5) (35.9)
Pre-tax income of consolidated companies Tax at 36.1% (34.43% in 2009 and 2010) Effect of rate changes on deferred taxes recognized onthebalance sheet Effect of local rate differences Tax credits Use of non-capitalized loss carryforwards Non-capitalized tax losses Impairment of tax carryforwards Permanent differences and others CORPORATE TAX RECOGNIZED
128
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
Current taxes
c Assets c Liabilities
Deferred taxes
c Assets* c Liabilities
35.7
Changes in deferred taxes recorded on the balance sheet break down as follows:
(in millions)
2011
57.0 1.8 0.0 4.0 0.0 62.8
2010
64.9 (3.9) 0.0 (4.0) 0.0 57.0
2009
53.2 6.3 0.0 5.4 0.0 64.9
Net amount at the beginning of theyear Deferred taxes for the period carried to income Deferred taxes recognized directly in equity Effect of currency uctuations and other movements Impairment of tax assets carryforwards Net amount at the end of theyear
TOTAL
794.0
803.3
698.3
These deferred income tax assets on loss carry forwards are originated mainly from France and the USA.
Faurecia
129
Consolidated statement
Notesto the consolidated nancial statements
NOTE9
(in millions)
Full-year 2011
110,368,345
Full-year 2010
110,366,728
Full-year 2009
89,448,504
Weighted average number of shares before dilution Weighted impact of dilutive instruments:
c stock options(2) c free shares attributed c bonds with conversion option
(3)
0 0 11,306,058 74,640,594
(1) Changes in the number of shares outstanding as of December31 are analysed as follows: As of December31, 2009: Number of Faurecia shares outstanding 89,448,504. Capital increase 20,918,224. As of December31, 2010: Number of Faurecia shares outstanding 110,366,728. Capital increase (bonds converted) 1,617. As of December31,20 11: Number of Faurecia shares outstanding 110,368,345. (2) As of December31, 2011: 1,475,348 stock options were outstanding and exercisable, compared with 1,523,998 as of December31, 2010 and 1,594,223 as of December31, 2009. Taking into account the average Faurecia share price for 2011, none of the stock options have a dilutive impact. (3) Bonds with conversion option have a dilutive effect when the net interest per share deriving from the conversion is less than the basic earnings pershare.
The dilutive impact of the bonds was calculated using the treasury stock method. In relation to stock options, this method consists of comparing the number of shares that would have been issued if all outstanding stock options had been exercised to the number of shares that could have been acquired at fair value (in this case the average Faurecia share price for theyear was 22.89 in 2011).
Year 2011
371.3 3.37 3.11
Year 2010
201.7 1.87 1.79
Year 2009
(433.6) (6.85) (6.85)
Net income (Loss) Basic earnings (loss) per share After dilution
130
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE10
GOODWILL
(in millions)
Gross
1,550.8 1.6 0.0 (1.8) 1,550.6 178.7 12.6 1,741.9 25.5 3.8 1,771.2
Impairment
(510.6) 0.0 0.0 (0.1) (510.7) 0.0 (0.4) (511.1) 0.0 0.5 (510.6)
Net
1,040.2 1.6 0.0 (1.9) 1,039.9 178.7 12.2 1,230.8 25.5 4.3 1,260.6
Net carrying amount as of December31, 2008 Acquisitions and minority interest buyouts Impairment of goodwill Translation adjustments and other movements Net carrying amount as of December31, 2009 Acquisitions and minority interest buyouts Translation adjustments and other movements Net carrying amount as of December31, 2010 Acquisitions Translation adjustments and other movements Net carrying amount as of December31, 2011 Breakdown of the net amount of goodwill by operating segment:
(in millions)
TOTAL
1,260.6
1,230.8
1,039.9
In accordance with the accounting policies described in Notes1.2 and 1.5, the carrying amount of each CGU to which goodwill has been allocated has been compared to the higher of the CGUs value in use and its market value net of selling costs. Value in use corresponds to the present value of net future cash flows expected to be derived from the CGUs in question. The cash flow forecasts used to calculate value in use were based on the Groups 2012-201 5medium-term Business Plan which was drafted in mid-2011 and adjusted at the end of theyear based on the latest assumptions in the 2012 budget. The volume assumptions used in the 2012-201 5 medium-term plan are based on external information sources. The main assumption affecting value in use is the level of operating income used to calculate future cash flows and particularly the terminal value. The operating margin assumption for 2015 is 5.6% for the Group as a whole. Projected cash flows for the lastyear of the medium-term Business Plan (2015) have been projected to infinity by applying a growth rate determined based on analysts trend forecasts for the automotive market. The growth rate applied for theyear-end 201 1, 201 0 and 2009 tests was 1.5%.
Faurecia called on an independent expert to calculate the weighted average cost of capital used to discount future cash flows. The market parameters used in the experts calculation were based on a sample of 10 companies operating in the automotive supplier sector (seven in Europe and three in the United States). Taking into account these parameters and a market risk premium of 5.5% to 6%, the weighted average cost of capital used to discount future cash flows was set at 9.5% (on the basis of a range of values provided by the independent expert) in 2011 (9% in 2010). This rate was applied for the impairment tests carried out on all of the Groups CGUs. They all bear the same specific risks relating to the automotive supplier sector and the CGUS multinational operation does not justify using geographically different discount rates. The tests performed at year-end 2011 did not show any indication of further impairment in goodwill. The projected discounted cash flows are significantly above the valuation based on the stock value on the market. However, the book value of the capital employed remains below this same value.
Faurecia
131
Consolidated statement
Notesto the consolidated nancial statements
The table below shows the sensitivity of the impairment test results to changes in the assumptions used as of December31, 2011 to determine the value in use of the CGUs to which the Groups goodwill is allocated:
Combination of the3factors
(513) (399) (357) (146)
NOTE11
INTANGIBLE ASSETS
in millions
Development costs
449.5 104.2 (161.1) (19.6) (3.6) 369.4 154.6 (175.5) 13.6 15.1 377.2 180.2 (148.3) 8.7 (2.7) 415.1
Software andother
20.3 2.6 (12.1) 0.0 16.7 27.5 4.8 (19.5) 0.0 45.2 58.0 6.9 (20.9) 0.0 5.1 49.1
Total
469.8 106.8 (173.2) (19.6) 13.1 396.9 159.4 (195.0) 13.6 60.3 435.2 187.1 (169.2) 8.7 2.4 464.2
NET AS OF JANUARY1, 2009 Additions Funding of amortization provisions Funding of provisions Translation adjustments and other NET AS OF DECEMBER31, 2009 Additions Funding of amortization provisions Funding of provisions Translation adjustments and other NET AS OF DECEMBER31, 2010 Additions Funding of amortization provisions Funding of provisions Translation adjustments and other NET AS OF DECEMBER31, 2011
The carrying amount of development costs allocated to a customer contract as well as the associated specific tooling is compared to the present value of the expected net future cash flows to be derived from the contract based on the best possible
estimate of future sales. The volumes taken into account in Faurecias Business Plans are the best estimates by the Groups Marketing department based on automakers forecasts when available.
132
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE12
(in millions)
Land
58.1 1.0 (1.7) (0.5) (1.2) 0.3 0.4 1.1 57.5 4.3 (2.6)
Buildings
343.1 20.8 (45.2) (49.4) (2.3) 41.9 4.4 52.5 365.8 21.0 (22.5)
Specic tooling
23.9 15.4 (1.9) (13.0) (0.2) 1.3 0.2 (1.0) 24.7 8.0 (6.4)
Other property, plant and equipment and property, plant and equipment inprogress
232.7 74.8 (23.4) (16.2) (0.4) 21.5 1.4 (167.1) 123.3 153.9 (22.1)
Total
1,360.8 190.1 (243.9) (295.7) (11.0) 231.6 11.6 (18.9) 1,224.6 304.3 (164.3)
NET AS OF JANUARY1, 2009 Additions (including own work capital)(1) Disposals Funding of depreciation, amortization and impairment provisions Non-recurring impairment losses Depreciation written off on disposals Currency translation adjustments Entry into scope of consolidation& other movements NET AS OF DECEMBER31, 2009 Additions (including own work capital)(1) Disposals Funding of depreciation, amortization and impairment provisions Non-recurring impairment losses Depreciation written off on disposals Currency translation adjustments Entry into scope of consolidation& other movements NET AS OF DECEMBER31, 2010 Additions (including own work capital)(1) Disposals Funding of depreciation, amortization and impairment provisions Non-recurring impairment losses Depreciation written off on disposals Currency translation adjustments Entry into scope of consolidation& other movements NET AS OF DECEMBER31, 2011
(1) Including assets held under finance leases In 2009 21.3 In 2010 4.0 In 2011 5.4
Faurecia
133
Consolidated statement
Notesto the consolidated nancial statements
Gross
95.2 1,051.1 3,127.3 141.1
Depreciation
(10.2) (626.1) (2,261.0) (110.3)
Gross
95.7 1,018.5 3,123.1 129.4
Net
57.5 365.8 653.3 24.7
Land Buildings Plant, tooling and technical equipment Specic tooling Other property, plant and equipment and property, plant and equipment in progress
603.7
(277.4)
326.3
499.0
205.0
123.3
5,018.4 122.7
(3,285.0) (60.6)
1,733.4 62.1
4,865.7 135.4
1,575.5 68.2
1,224.6 44.8
Property, plant and equipment are often specific and dedicated to client programs. Their utilization rates are primarily dependent on the level of activity, with very few exceptions. The utilization rates for equipment are not monitored centrally or systematically.
NOTE13
INVESTMENTS IN ASSOCIATES
AS OF DECEMBER31, 2011
Dividends received by the Group
0.0 0.0 (1.0) 0.0 0.0 0.0 0.0 (1.0) (20.0)
(in millions)
% interest**
50 50 50 50 50 50 50
Teknik Malzeme* Copo IbericaSA Componentes de Vehiculos de GaliciaSA Zhejiang Faurecia Limin Interior& Exterior Systems Company Limited Changchun Huaxiang Faurecia Automotive Plastic ComponentsCoLtd Jinan Faurecia Limin Interior& Exterior Systems Company Limited Others*** TOTAL SAS Group
TOTAL
71.0
(21.0)
2,612.9
523.4
* The company Orcia has been consolidated in Teknik Malzeme. ** Percent interest held by the Company that owns the shares. *** As the Groups share of some companys net equity is negative it is recorded under liabilities as a provision or contingencies and charges.
134
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
SAS is a joint venture with Continental Automotive GmbH which manufactures full cockpit modules with electronics and circuitry built into the instrument panels.
In 2011, the consolidated financial statements were prepared usingSAS Groups accounts as of December31st, whereas for the years 2010 and 2009 SAS Groups accounts as of September30, were considered in order to meet the Faurecia Groups publication deadlines.
2011
43.6 (21.0) 33.7 13.8 0.0 0.8 71.0
2010
31.0 (15.0) 18.8 4.8 0.9 3.1 43.6
2009
40.1 (25.0) 11.3 3.9 0.7 0.0 31.0
Group share of equity at beginning of period Dividends Share of net income of associates Change in scope of consolidation Capital increase Currency translation adjustments Group share of equity at end of period
TOTAL ASSETS Equity Borrowings Other non-current liabilities Non-current nancial liabilities
523.4
470.6
396.1
Faurecia
135
Consolidated statement
Notesto the consolidated nancial statements
NOTE14
(in millions)
% of share capital
19 21 40
Net
11.0
Changchun Xuyang Industrial Group Amminex Changchun Xuyang Faurecia Acoustics &Soft TrimCo.,Ltd. Faurecia Technology Center IndiaLtd** Faurecia Shin Sung* Faurecia Metalloprodukcia* Other
4.4
1.8
0.7
0.9
TOTAL
* Companies consolidated as of 1/1/2010. ** Companies consolidated as of 1/1/2011.
41.4
38.8
15.3
11.2
NOTE15
Gross
30.8 0.0 13.7
Provisions
(8.2) 0.0 (0.9)
Net
19.4 0.0 8.4
Loans with maturity longer than oneyear Interest rate derivatives Other
TOTAL
44.5
(9.1)
35.4
27.8
23.4
NOTE16
TOTAL
16.9
14.5
18.9
136
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE17
Gross
359.0 368.8 42.3 210.4
Provisions
(39.7) (23.3) (2.5) (29.6)
Net
277.4 253.5 38.6 164.5
Raw materials and supplies Engineering, tooling and prototypes Work-in-progress for production Semi-nished and nished products
TOTAL
980.5
(95.1)
885.4
734.0
438.6
NOTE18
Under trade receivables sale programs, the Group can sell a portion of the receivables of a number of its French and other European subsidiaries to a group of financial institutions, transferring substantially all of the risks and rewards relating to the receivables sold to the financial institutions concerned.
The following table shows the amount of receivables sold with maturities beyond December31, 2011, for which substantially all the risks and rewards have been transferred, and which have therefore been derecognized:
(In millions)
Receivables sold and derecognized Individually impaired trade receivables are as follows:
(In millions)
Gross total trade receivables Provision for impairment of receivables TOTAL TRADE ACCOUNTS RECEIVABLE, NET
Given the high quality of Group counterparties, late payments do not represent a material risk. They generally arise from administrative issues. Late payments as of December31, 2011 were 83.9million, breaking down as follows: c 45.6million less than onemonth past due; c 10.6million one to twomonths past due; c 6.9million two to threemonths past due; c 8.8million three to sixmonths past due; c 12.0million more than sixmonths past due.
Faurecia
137
Consolidated statement
Notesto the consolidated nancial statements
NOTE19
(In millions)
181.3
TOTAL
(1) Including the following amounts for VAT and other tax receivables
297.6 174.8
223.3 154.9
171.0 127.0
NOTE20
OTHER RECEIVABLES
(In millions)
Short-term portion of loans Prepaid expenses Current taxes Other sundry payables
TOTAL
131.2
100.7
79.9
NOTE21
As of December31, 2011, cash and cash equivalents included current account balances in the amount of 564.3million (versus 532.5million as of December31, 2010 and 292.2million as of December31, 2009) and short-term investments in the amount
of 65.8million (versus 73.3million as of December31, 2010 and 65.6million as of December31, 2009). The carrying amount of marketable securities is almost identical to market value as they are held on a very short term basis.
138
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE22
SHAREHOLDERS EQUITY
22.1 Capital
As of December 31, 2011, Faurecias capital stock totaled 772,578,415 divided into 1 10,368,345 fully paid-in shares with a par value of 7 each. The Groups capital is not subject to any external restrictions. Shares which have been registered in the name of the same holder for at least twoyears carry double voting rights. As of December31, 2011, PeugeotSA held 57.43% of Faurecias capital and 72.87% of the voting rights.
Details of the stock subscription option plans as of December31, 2011 are set out in the table below:
Date of Board meeting Date of Shareholders Meeting Adjusted exercise price (in )
June26, 1997 May31, 1994 June5, 1997 June 1, 2001 June1,2001 May 14, 2002 34.40 February22, 2002 47.01 November28, 2002 35.65 April14, 2004 May14, 2002 49.73 April19, 2005 May25, 2004 54.45 April13, 2006 May23, 2005 45.20 April16, 2007 May23, 2005 44.69 April10, 2008 May29, 2007 28.38
Options exercised
63,180
17,550
36,855
19,305
7,020
411,489
32,994
135,369
243,126
315,315
106,583
134,105
74,627
313,560
127,530
149,760
163,800
321,750
142,740
1 25,775
195,975
340,800
168,000
135,600
205,200
346,200
172,800
85,200
261,000
357,000
174,000
April10, 2016
32,400
324,600
TOTAL
1,475,348
Faurecia
139
Consolidated statement
Notesto the consolidated nancial statements
Movements in the aggregate number of options under all of the plans in force were as follows:
(in millions)
2011
1,523,998 0 0 0 (48,650)
2010
1,594,223 0 0 0 (70,225)
2009
1,435,183 256,093 0 0 (97,053)
Total at beginning of the period Adjustment related to the capital increase Options granted Options exercised Options cancelled and expired
TOTAL
1,475,348
1,523,998
1,594,223
In accordance with IFRS2, the six plans issued since November7, 2002 have been measured at fair value as of the grant date. The measurement was performed using the Black& Scholes option pricing model based on the following assumptions:
11/28/2002 plan
Option exercise price (asofthegrant date) in euros* Share price (asofthegrantdate) in euros Option vesting period Expected share dividend Zero coupon rate Expected share price volatility
* Adjusted following the capital increase.
04/14/2004 plan
49.73 58.45 4years 2% 3.33% 40%
04/19/2005 plan
54.45 62.05 4years 2% 2.93% 40%
04/13/2005 plan
45.20 53.15 4years 1.5% 3.50% 30%
04/16/2007 plan
44.69 56.15 4years 0.00% 4.41% 30%
04/10/2008 plan
28.38 33.10 4years 0.00% 3.86% 30%
The fair value of the option is amortized over the vesting period, with a corresponding adjustment to equity. The related expense in 2011 totaled 1.5million, compared with 2million in 2010.
140
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
Details of the share grant plans as of December31, 2011 are set out in the table below:
Maximum number of free shares that can be granted for Date of Shareholders Meeting Date of Board meeting
June23, 2010 February8, 2010 May26, 2011 July21, 2010 July25, 2011
Performance condition
2011 pretax income target as stated in mid term plan when granted 2012 pretax income target as stated in mid term plan when granted 2013 pretax income target as stated in mid term plan when granted
NOTE23
MINORITY INTERESTS
2011
87.7 1.2 2.9 42.0 (26.7) 6.4 113.5
2010
45.8 4.2 9.1 30.7 (6.0) 3.9 87.7
2009
40.6 0.0 0.0 16.3 (9.3) (1.8) 45.8
Balance as of January1 Increase in minority shareholder interests Other changes in scope of consolidation Minority interests in net income for theyear Dividends paid to minority interests Translation adjustments BALANCE AS OF DECEMBER31
Faurecia
141
Consolidated statement
Notesto the consolidated nancial statements
NOTE24
Provisions for pensions and other employee obligations Pension obligations Long-service awards Healthcare costs 162.4 20.6 32.8 215.8 Provisions for early retirement costs 3.0 157.3 20.9 33.1 211.3 3.2 143.2 19.2 26.3 188.7 5.2
218.8
214.5
193.9
Balance of provisions at beginning ofyear Changes in scope of consolidation Other movements Funding (or reversal) of provision Expenses charged to the provision Payments to external funds BALANCE OF PROVISIONS AT END OFYEAR
142
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
322.3
416.6
320.3
(in millions)
Additions
46.9 6.7 10.5 12.4
Expenses charged
(89.1) (56.7) (15.7) (24.4)
Reversals*
(2.4) (1.2) 0.0 (1.5)
sub-total changes
(44.6) (51.2) (5.2) (13.5)
TOTAL
* Surplus provisions.
416.6
76.5
(185.9)
(5.1)
(114.5)
20.2
322.3
LITIGATION
In the normal course of business, the Group may be involved in disputes with its customers, suppliers, tax authorities in France or abroad, or other third parties. Faurecia Systmes dchappement is subject to a claim concerning electrostatic filtration which has been brought before the courts following its unsuccessful cooperation with a service provider. On June24, 201 1, the Paris Tribunal de Grande Instance (district court of first instance) rendered a judgment favourable to Faurecia. The opposing party has served notice of its decision to appeal the judgment. No date has yet been settled by the Cour
dAppel (court of appeal). Suzuki has initiated a procedure of international arbitration against Faurecia Innenraum Systeme alleging delivery of defective products. The Group has filed its arguments in defence with the arbitral tribunal. A first hearing is scheduled for February10, 2012. This claim had already been provisioned for the amount below franchise and for associated uninsured costs. The Group considers that the residual risks and impact of these proceedings are not material. There are no other claims or litigation in progress or pending that are likely to have a material impact on the Groups consolidated financial position.
Faurecia
143
Consolidated statement
Notesto the consolidated nancial statements
NOTE25
TOTAL
(1) Pension plan surpluses are included in Other non-current assets.
362.1
339.6
278.6
B - ASSUMPTIONS USED
The Groups obligations under these plans are determined on an actuarial basis, using the following assumptions: c retirement age between 62 and 65 for employees in France; c staff turnover assumptions based on the economic conditions specific to each country and/or Group company; c mortality assumptions specific to each country; c estimated future salary levels until retirement age, based on inflation assumptions and forecasts of individual salary increases for each country; c the expected long-term return on external funds; c discount and inflation rates (or differential) based on local conditions.
144
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
The main actuarial assumptions used in the past threeyears to measure the pension liability are as follows:
(in %)
Euro Zone
United Kingdom
United States
DISCOUNT RATE 2011 2010 2009 INFLATION RATE 2011 2010 2009 EXPECTED RETURN ON PLAN ASSETS 2011 2010 2009 3.17% 3.09% 3.20% 6.82% 6.85% 7.76% 7.50% 7.50% 7.50% 2.00% 2.00% 2.00% 2.69% 3.45% 3.50% 2.00% 1.50% 2.70% 4.50% 4.15% 5.00% 5.00% 5.54% 5.83% 4.99% 5.35% 5.75%
2011
(in %)
2010 Bonds
86% 39% 41%
2009 Bonds
85% 38% 36%
Equities
14% 61% 59%
Equities
15% 62% 64%
Equities
11% 69% 63%
Bonds
89% 31% 37%
2010 Total
157.1
2009 Total
143.2
France
76.7
Abroad*
80.4
France
77.0
Abroad
66.2
France
71.0
Abroad
68.6
Total
139.6
BALANCE OF PROVISIONS ATBEGINNING OFYEAR Effect of changes in scope of consolidation (provision net of plan surpluses) Additions Expenses charged totheprovision Payments to external funds Other movements BALANCE OF PROVISIONS AT END OFYEAR
*
The provision for 81,5million on December31, 2011 relates mainly to Germany (71,6million).
Faurecia
145
Consolidated statement
Notesto the consolidated nancial statements
France
Abroad
PROJECTED BENEFIT OBLIGATION At beginning of the period Service costs Annual restatement Benets paid Restatement differences Other movements (including translation adjustment) Curtailments and settlements Effect of closures and plan amendments AT THE END OF THE PERIOD VALUE OF PLANT ASSETS At beginning of the period Expected return on plan assets Restatement differences Other movements (including translation adjustment) Employer contributions Benets paid Curtailments and settlements Effect of closures and plan amendments AT THE END OF THE PERIOD DEFERRED ITEMS At beginning of the period New deferred items Amortization of deferred items Other movements (including translation adjustment) Curtailments and settlements Effect of closures and plan amendments AT THE END OF THE PERIOD BALANCE OF PROVISIONS ATTHE END OF THEYEAR
* Of which 78,9million for Germany.
146
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
2011 France
Service costs Restatement of projected benets Change in top-up scheme Expected return on plan assets Curtailment and settlements Amortization of deferred differences (4.8) (3.9) 0.0 0.4 0.9 (0.1)
2010 Total
(9.4) (11.9) 0.0 5.9 0.7 (1.5)
2009 Total
(8.5) (12.7) 0.0 5.4 1.2 (1.8)
Abroad
(4.6) (8.0) 0.0 5.5 (0.2) (1.4)
France
(4.5) (4.2) 0.0 0.3 1.1 (0.4)
Abroad
(4.0) (8.5) 0.0 5.1 0.1 (1.4)
France
(6.7) (5.7) 0.0 0.6 2.2 (0.2)
Abroad
(2.2) (7.5) 0.0 3.9 0.0 (0.1)
Total
(8.9) (13.2) 0.0 4.5 2.2 (0.3)
TOTAL
(7.5)
(8.7)
(16.2)
(7.7)
(8.7)
(16.4)
(9.8)
(5.9)
(15.7)
a) The supplementary pension scheme for all managerial employees in France comprises: c a defined contribution plan financed entirely by Faurecia whose contribution rate varies depending on salary tranches A or B applies; c a defined benefit plan relating to salary tranche C. b) In France, when calculating its pension liability as of December31, 2011, the Group has used only voluntary retirement assumptions beginning at 62years of age for non-management employees and at 65years of age for management. c) In France, pension liability increased by 13.9million atyearend compared to 2010. This increase breaks down as follows: c +8.7million relating to service cost and interest cost for 2011; c -4.0million relating to lump-sum retirement bonuses and rights to capital for supplementary pension schemes; c -0.3million relating to headcount reduction plans in 2011; c +1.9million relating to increased lump-sum retirement bonuses according to the rates in the metallurgical collective labor agreement;
c +7.6million resulting from actuarial gains and losses, including -3.9million relating to the discount rate, +9.9million relating to experience and +1.6million for other assumptions.
G - RETIREMENT PENSION LIABILITIES: SENSITIVITY TO CHANGES IN THE DISCOUNT RATE IN MAIN PERIMETERS
The impact of a 0.25 percentage point increase in the discount rate for: c total service cost for the period would be for France a 3.26% decrease and for Germany a 5.18% decrease; c the projected benefit obligation would be for France a 2.63% decrease and for Germany a 3.92% decrease.
(in millions)
TOTAL
20.6
20.9
19.2
Faurecia
147
Consolidated statement
Notesto the consolidated nancial statements
Foreign companies
TOTAL
32.8
33.1
26.3
The impact of a one percentage point increase in healthcare cost trend rates would be: c a 11% rise in total service cost for the period and financial expenses; c a 10% rise in the projected benefit obligation.
The impact of a one percentage point decrease in medical cost trend rates would be: c a 9% decrease in total service cost for the period and financial expenses; c a 9% decrease in the projected benefit obligation. Expenses recognized in connection with this liability break down as follows:
EXPENSES RECOGNIZED
(in millions)
TOTAL
* Interest cost is recorded under Other financial income and expenses.
(6.3)
(6.5)
(4.4)
148
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE26
NET DEBT
Bonds Bank borrowings PSA loan Other borrowings Obligations under nance lease Non-current derivatives SUB-TOTAL NON-CURRENT FINANCIAL LIABILITIES Current portion of long term debt Short-term borrowings Payments issued (a) Current derivatives SUB-TOTAL CURRENT FINANCIAL LIABILITIES
(2) (1)
TOTAL Derivatives classied under non-current and current assets Cash and cash equivalents (b) NET DEBT Net cash and cash equivalent (b)-(a)
(1) Including bank overdrafts.
(2) Payments awaiting clearance by the bank as they fall due on a non-banking day The contra-entry is an increase in cash and equivalents under assets.
2013
0.0 52.0 0.0 2.5 7.9
2014
0.0 531.3 0.0 1.3 2.3
2015
195.4 3.3 0.0 0.7 2.4
2016
348.2 41.3 0.0 0.3 2.1
Total
543.6 655.8 0.0 5.0 29.8
Bonds Bank borrowings PSA loan Other borrowings Obligation under nance leases
62.4
534.9
201.8
391.9
43.2
1,234.2
Faurecia
149
Consolidated statement
Notesto the consolidated nancial statements
26.3 Financing
Faurecia has implemented a new long term financing plan through a 350million bond issue and the anticipated renewal of its syndicated bank loan for 1,150million. Finally, a private placement has been issued in Germany for 58 million in October2011. Taking advantage of this refinancing, the current amount of the 250million loan granted by PSA Peugeot Citron, correlated to the previous syndicated bank loan, has been fully reimbursed for 121million. This loan has been simultaneously cancelled. The syndicated bank loan implemented on December20, 201 1 is divided into a 690million tranche expiring in November2014, benefiting from two options to extend the expiration to November 2015 and November 2016, and a 460 million tranche expiring in November2016. As of December31, 2011 the undrawn portion of this credit facility was 660million. The contracts relating to this credit facility include covenants, concerning compliance with consolidated financial ratios. The compliance with these ratios is a condition to the availability of this credit facility. As of December31, 2011, the Group complied with all of these ratios, of which the amounts are presented below: c net debt*/EBITDA** <2.50; c EBITDA**/net interests >4,50. Furthermore, this credit facility includes some restrictive clauses on asset disposals (any disposal representing over 15% of the Groups total consolidated assets requires the prior approval of banks representing two-thirds of the syndicate) and on the debt level of some subsidiaries. On November9, 2011 Faurecia issued 350million worth of bonds, due December15, 2016. The bonds bear annual interest
of 9.375% payable on June15 and December15 eachyear, as from June15, 2012; they have been issued at 99.479% of the nominal value and are listed on the Luxemburg stock exchange. They also include a covenant restricting the additional indebtness if the EBITDA after some adjustments is lower than 2.5 times the gross interest costs, and restrictions on the debt similar to the ones of the syndicated credit loan. The costs related to the bond issue are expensed in P&L on the life time of the bonds. The syndicated bank loan as well as the bond benefit from guarantees from some group affiliates. On November26, 2009 Faurecia issued 211.3million worth of OCEANE bonds convertible into or exchangeable for new or existing shares, due January1, 2015. The bonds mature on January1, 2015 and bear annual interest of 4.50% payable on January1 eachyear, as from January1, 2011. Each bond has a nominal value of 18.69. Subject to certain conditions, Faurecia may redeem the bonds early, at any time beginning on January15, 2013, at a price equal to their par value plus accrued interest, provided that all of the outstanding bonds are redeemed. The bonds can be converted by their holders at any time as from their date of issue. The criteria relating to their compulsory early redemption include a change of control clause relating to PSA. In conformity with IAS39, the fair value of OCEANE bonds is calculated based on two components, a liability component, calculated based on prevailing market interest rates for similar bonds with no conversion option, and a conversion option component, calculated based on the difference between the fair value of the OCEANE bonds and the liability component. Upon issue these two components were 184.3million and 23.3million, respectively. As of December31, 2011 the liability component was 194.1million, before hedging.
(*) Adjusted net debt = consolidated net debt + adjustments for certain obligations undertaken, based on definitions provided in the credit facility agreement (e.g.mortgages or collateralized liabilities). (**) Operating income plus depreciation, amortization and funding of provisions for impairment of property, plant and equipment and intangible assets, corresponding to the past twelve months.
150
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
The Groups global contractual maturity schedule as of December31, 2011 breaks down as follows:
Carrying Amount
(in millions)
Assets Liabilities
35.4 16.9 1.5 1,620.2 630.1
0-3 months
3-6 months
6-12 months
1-5 years
35.4 16.9
>5 years
Other non-current nancial assets Loans and receivables Other current nancial assets Trade accounts receivables Cash and non cash equivalents Interests on other long term borrowings Syndicated credit facility Bonds 2011 2009 OCEANE Other Obligations under nance leases (ST portion) Other current nancial liabilities Trade accounts payable Bonds (excluding interest) 2009 OCEANE Bonds 2011 Bank borrowings Syndicated credit Facility Other PSA loan Other borrowings Obligations under nance leases (LTportion) Interest rate derivatives
c o/w cash ow hedges c o/w derivatives not qualifying for
(0.4) (4.7)
(4.3)
(4.3) (16.6)
(195.4) (348.2)
(211.3) (350.0)
(211.3) (350.0)
(490.0) (165.8) 0.0 (5.0) (29.8) 0.0 (6.9) (5.5) (1.4) 1.5 1.5 (18.4) (5.0) (13.5) 0.1
(490.0) (165.8) 0.0 (5.0) (29.7) (5.4) (4.1) (1.3) (17.1) (3.6) (13.5) 0.1 (1.0) (0.7) (0.3) (9.8) (3.6) (6.2) (5.5) (1.8) 0.1 (1.0) (0.7) (0.3) (5.5) (2.1) (1.4) (0.7) (1.8)
(490.0) (165.8)
0.0
0.0
TOTAL
(61.7)
(64.8) (1,378.6)
(15.1)
Faurecia
151
Consolidated statement
Notesto the consolidated nancial statements
Financing Guarantee reserve deducted from borrowings Cash received as consideration for receivables sold Receivables sold and derecognized
TOTAL
1,855.7
100.0
Borrowings, taking into account exchange rate swaps, break down by repayment currency as follows:
(in millions)
TOTAL
1,855.7
100,0%
1,802.6
100,0%
1,691.6
100,0%
In 2011, the weighted average interest rate on gross outstanding borrowings was 4.42%.
152
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE27
(in millions)
Accrued payroll costs Payroll taxes Employee prot-sharing Other accrued taxes and payroll costs
TOTAL
507.6
452.8
371.7
NOTE28
SUNDRY PAYABLES
(in millions)
Due to suppliers of non-current assets Prepaid income Current taxes Other Currenciy derivatives for operations
TOTAL
175.3
157.5
123.2
Faurecia
153
Consolidated statement
Notesto the consolidated nancial statements
NOTE29
FINANCIAL INSTRUMENTS
(in millions)
Carrying amount
38.8 35.4 1,620.2 297.6 131.2 1.5
Fair value
38.8 35.4 1,620.2 297.6 131.2 1.5 0.0
Other equity interests Other non-current nancial assets Trade accounts receivables Other operating receivables Other receivables and prepaid expenses Currency derivatives Interest rate derivatives Cash and cash equivalent FINANCIAL ASSETS Long-term debt* Short-term debt Prepayments from customers Trade payables Accrued taxes and payroll costs Sundry payables Currency derivatives Interest rate derivatives FINANCIAL LIABILITIES
1.5 0.0 630.1 631.6 0.0 38.8 2,084.4 0.0 1,234.2 615.6 138.5 2,762.0 507.6 175.3 5.0 2.9 7.9 13.4 4.0 17.4 0.0 3,583.4 1,849.8
630.1 2,754.8 1,234.2 615.6 138.5 2,762.0 507.6 175.3 18.4 6.9 5,458.5
630.1 2,754.8 1,270.0 615.6 138.5 2,762.0 507.6 175.3 18.4 6.9 5,494.3
(1) No financial instruments were transferred between categories in 2011. (2) All of the instruments in this category are financial assets or liabilities designated as measured at fair value through profit or loss on initial recognition, in accordance with the criteria set out in Note1.6. * The market value of OCEANE was established on the base of the end of year valuation (December31, 2011) of 20.1, at 227.2million. In the balance sheet, OCEANE is recorded, on the one hand, as an amount of the component for bonds with no conversion option and, on the other, as a registered component of shareholders equity that represents the value of the conversion option.
154
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
(in millions)
Carrying amount
15.3 27.8 1,387.7 223.3 100.7 0.0 0.0 605.8 2,360.6 1,102.5 687.1 87.8 2,419.9 452.8 155.7 1.9 12.8 4,920.5
Fair value
15.3 27.8 1,387.7 223.3 100.7 0.0 0.0 605.8 2,360.6 1,102.5 687.1 87.8 2,419.9 452.8 155.7 1.9 12.8 4,920.5
Availablefor-sale assets
15.3
Other equity interests Other non-current nancial assets Trade accounts receivables Other operating receivables Other receivables and prepaid expenses Currency derivatives Interest rate derivatives Cash and cash equivalent FINANCIAL ASSETS Long-term debt* Short-term debt Prepayments from customers Trade payables Accrued taxes and payroll costs Sundry payables Currency derivatives Interest rate derivatives FINANCIAL LIABILITIES
27.8 1,387.7 223.3 100.7 0.0 0.0 605.8 605.8 0.0 15.3 1,739.5 0.0 1,102.5 687.1 87.8 2419.9 452.8 155.7 1.3 3.3 3.3 9.5 10.8 0.0 3,116.2 1,790.2 0.6
(1) No financial instruments were transferred between categories in 2010 or 2009. (2) All of the instruments in this category are financial assets or liabilities designated as measured at fair value through profit or loss on initial recognition, in accordance with the criteria set out in Note1.6. * The market value of OCEANE was established on the base of the end ofyear valuation (December31, 2010) of 24.2, at 273.6million. In the balance sheet, OCEANE is recorded, on the one hand, as an amount of the component for bonds with no conversion option and, on the other, as a registered component of shareholders equity that represents the value of the conversion option.
Faurecia
155
Consolidated statement
Notesto the consolidated nancial statements
(in millions)
Carrying amount
11.2 23.3 1,025.9 171.0 79.9 1.7 0.2 357.8 1,671.0 1,216.5 528.7 80.8 1,730.6 371.7 123.2 0.0 17.7 4,069.2
Fair value
11.2 23.3 1,025.9 171.0 79.9 1.7 0.2 357.8 1,671.0 1,216.5 528.7 80.8 1,730.6 371.7 123.2 0.0 17.7 4,069.2
Availablefor-sale assets
11.2
Other equity interests Other non-current nancial assets Trade accounts receivables Other operating receivables Other receivables and prepaid expenses Currency derivatives Interest rate derivatives Cash and cash equivalents FINANCIAL ASSETS Long-term debt* Short-term debt Prepayments from customers Trade payables Accrued taxes and payroll costs Sundry payables Currency derivatives Interest rate derivatives FINANCIAL LIABILITIES
23.3 1,025.9 171.0 79.9 1.2 0.2 357.8 359.2 0.5 11.2 1,300.1 0.0 1,216.5 528.7 80.8 1730.6 371.7 123.2 0.0 7.6 7.6 10.1 10.1 0.0 2,306.3 1,745.2 0.0 0.5 0.0 0.0
(1) No financial instruments were transferred between categories in 2010 or 2009. (2) All of the instruments in this category are financial assets or liabilities designated as measured at fair value through profit or loss on initial recognition, in accordance with the criteria set out in Note1.6. * The market value of Oceane was established on the base of the end ofyear valuation (December31, 2009) of 18.95, at 214.25million. In the balance sheet, Oceane is recorded, on the one hand, as an amount of the component for bonds with no conversion option and, on the other, as a registered component of shareholders equity that represents the value of the conversion option.
The main measurement methods applied are as follows: c items accounted for at fair value through profit or loss, as well as hedging instruments, are measured using a valuation technique based on rates quoted on the interbank market, such as Euribor and exchange rates set daily by the European Central Bank;
c financial assets are primarily recognized at amortized cost calculated using the effective interest rate method; c the fair value of trade receivables and payables related to manufacturing and sales operations corresponds to their carrying value in view of their very short maturities.
156
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
(in millions)
Impact Income
(0.2)
Instruments derivatives
(0.2)
Translation differences on commercial transactions Income on loans, cash investments and marketable securities Finance costs Other nancial income and expenses Net income (expense)
2010
Breakdown by category of instrument Financial assets available for sale Payables at cost amortized
(in millions)
Impact Income
0.3
Instruments derivatives
0.4
Translation differences on commercial transactions Income on loans, cash investments and marketable securities Finance costs Other nancial income and expenses Net income (expense)
2009
Breakdown by category of instrument Financial assets available for sale Payables at cost amortized
(in millions)
Impact Income
0.1
Instruments derivatives
(2.3)
Translation differences on commercial transactions Income on loans, cash investments and marketable securities Finance costs Other nancial income and expenses Net income (expense)
Faurecia
157
Consolidated statement
Notesto the consolidated nancial statements
As of December31, 2011, movements in provisions for impairment break down as follows by category of financial asset:
(in millions)
Balance as of Dec.31,2010
(21.9) (2.6) (8.0) (1.5)
Additions
(8.4) 0.0 (0.1) 0.0
Utilizations
10.2 0.0 0.6 0.3
Balance as of Dec.31,2011
(20.0) (2.6) (9.1) (1.2)
Doubtful accounts Shares in non-consolidated companies Non-current nancial assets Other receivables
TOTAL
(34.0)
(8.5)
11.1
0.0
(1.5)
(32.9)
Level 1 (prices quoted in active markets) for short-term cash investments and Level 2 (measured using a valuation technique based on rates quoted on the interbank market, such as Euribor and exchange rates set daily by the European Central Bank) for currency and interest rate instruments.
NOTE30
Currency risks on forecast transactions are hedged on the basis of estimated cash flows determined in forecasts validated by General Management; these forecasts are updated on a regular basis. The related derivatives are classified as cash flow hedges when there is a hedging relationship that satisfies the IAS39 criteria. Subsidiaries with a functional currency different from the euro are granted inter-company loans in their operating currencies. Although these loans are refinanced in euros and eliminated in consolidation, they contribute to the Groups currency risk exposure and are therefore hedged through swaps.
AS OF DECEMBER31, 2011
Currency exposure (in millions)
Trade receivables (net of payables) Financial assets (net of liabilities)* Forecast transactions** Net position before hedging Currency hedges Net position after hedging
USD
(0.1) 290.1 145.6 435.6 (408.9) 26.7
CZK
65.8 (0.7) (118.2) (53.1) 22.2 (30.8)
CAD
0.0 59.7 (24.5) 35.2 (41.0) (5.9)
MXN
0.0 18.8 (71.3) (52.5) 41.7 (10.7)
GBP
1.7 (36.4) (5.2) (39.9) 43.2 3.2
PLN
(9.6) 0.0 (114.0) (123.6) 89.0 (34.6)
ZAR
(7.0) 64.7 (70.1) (12.4) (66.9) (79.3)
* Including inter-company financing. ** Commercial exposure anticipated over the next 6months.
158
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
AS OF DECEMBER31, 2010
Currency exposure (in millions)
Trade receivables (net of payables) Financial assets (net of liabilities)* Forecast transactions** Net position before hedging Currency hedges Net position after hedging
USD
0.0 279.6 28.1 307.7 (311.9) (4.2)
CZK
0.0 1.0 (39.0) (38.0) 27.0 (11.0)
CAD
0.0 35.2 (8.2) 27.0 (24.4) 2.6
MXN
16.2 17.5 (25.5) 8.2 (40.4) (32.2)
GBP
1.4 (39.8) (9.6) (48.0) 42.0 (6.0)
PLN
(10.3) 0.0 (72.1) (82.4) 66.3 (16.1)
ZAR
18.3 36.3 (42.6) 12.0 (39.1) (27.1)
* Including inter-company financing. ** Commercial exposure anticipated over the next 6months.
AS OF DECEMBER31, 2009
Currency exposure (in millions)
Trade receivables (net of payables) Financial assets (net of liabilities)* Forecast transactions** Net position before hedging Currency hedges Net position after hedging
USD
13.4 242.6 6.9 262.9 (256.1) 6.8
CZK
(3.4) 89.0 (14.6) 71.0 (78.4) (7.4)
CAD
(8.4) 22.2 (11.6) 2.2 (11.9) (9.7)
MXN
(2.3) 17.2 (14.9) 0.0 5.4 5.4
GBP
5.4 58.1 (23.7) 39.8 (43.3) (3.5)
PLN
(4.1) 0.0 (63.9) (68.0) 45.7 (22.3)
ZAR
(3.2) 14.8 3.6 15.2 (15.7) (0.5)
* Including inter-company financing. ** Commercial exposure anticipated over the next 6months.
Hedging instruments are recognized in the balance sheet at fair value. Said value is determined based on measurements confirmed by banking counterparties.
Maturities
Notional amount* <1years 1 to 5years >5years
Assets
Liabilities
0.0
0.0
4.5
4.5
0.0
1.5
(5.0)
678.1
678.1
0.0
333.7 25.8
333.7 25.8
0.0 0.0
Faurecia
159
Consolidated statement
Notesto the consolidated nancial statements
Assets
Liabilities
0.0
(0.1)
3.0
3.0
0.0
0.0
3.7
(3.7)
727.8
727.8
0.0
0.0
217.2 8.9
217.2 8.9
0.0
0.0
Assets
Liabilities
0.1 0.0
(0.1) 0.0
4.0 0.0
4.0 0.0
0.0 0.0
2.2
(1.0)
523.7
523.7
0.0 0.0
The sensitivity of Group income and equity as of December31, 2011 to a fluctuation in exchange rates against the euro is as follows for the main currencies to which the Group is exposed: Currency (in millions) as of December31, 2011 Currency uctuation scenario (depreciation of currency/EUR) Exchange rate after currency depreciation Impact on pre-tax income Impact on equity USD 1.29 5.0% 1.36 0.85 4.11 CZK 25.79 5.0% 27.08 (3.29) (1.02) CAD 1.32 5.0% 1.39 (2.99) 0.00 MXN 18.05 5.0% 18.95 (0.15) 0.12 GBP 0.84 5.0% 0.88 0.01 (0.32) PLN 4.46 5.0% 4.68 0.34 (4.79) ZAR 10.48 5.0% 11.01 0.28 0.00
These impacts reflect (i) the effect on the income statement of currency fluctuations on theyear-end valuation of assets and liabilities recognized on the balance sheet, net of the impact of the change in the intrinsic value of hedging instruments (both
those qualifying and not qualifying as fair value hedges) and (ii) the effect on equity of the change in the intrinsic value of hedging instruments for derivatives qualifying as cash flow hedges.
160
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
The table below shows the Groups interest rate position, with assets, liabilities and derivatives broken down into fixed or variable rates. Financial assets include cash and cash equivalents and interest rate hedges include interest rate swaps as well as in-the-money options.
Under 1year
(in millions)
Fixed rate
0.0 0.0 0.0 (158.0) (158.0)
Variable Rate
630.1 (623.3) 6.8 158.0 164.8
Variable Rate
0.0 0.0 0.0 223.6 223.6
Variable Rate
0.0 (632.5) (632.5) 0.0 (632.5)
Variable Rate
0.0 0.0 0.0 0.0 0.0
Variable Rate
630.1
Under 1year
(in millions)
Fixed rate
0.0 0.0 0.0 (157.2) (157.2)
Variable Rate
606.0 (656.6) (50.6) 157.2 106.6
Variable Rate
606.0
Under 1year
(in millions)
Fixed Rate
Variable Rate
286.0
Variable Rate
286.0
The aim of the Groups interest rate hedging policy is to reduce the impact on earnings of changes in short-term rates as the majority of its borrowings are at variable rates. The hedges arranged comprise euro- and dollar-denominated interest rate
swaps, caps and other option based structures. These hedges cover some of the borrowings due in 201 1, 2012 and to a lesser extent in 2013, against a significant rise in rates.
Faurecia
161
Consolidated statement
Notesto the consolidated nancial statements
Interest rate hedging instruments are recognized in the balance sheet at fair value. Said value is determined based on measurements confirmed by banking counterparties. The notional amounts of the Groups interest rate hedges break down as follows:
(in millions)
Liabilities
1 to 5years
>5years
0.0
(6.9)
308
224
(in millions)
Liabilities
1 to 5years
150 279 0
>5years
-
0.0
(12.8)
1,757
429
(in millions)
Liabilities
1 to 5years
150 843
>5years
-
0.2
(21.2)
2,170
993
In view of the short-term rates in 2011, despite a continuous increase until the last quarter of theyear, a number of the Groups option-based interest rate hedges are out of the money. A rise in short-term rates would therefore have an impact on financial expense. The sensitivity tests performed, assuming a 100bp increase or decrease in average interest rates compared to the rate curve as of December31, 2011 show that the negative effect on financial
expense can be estimated at 8,7million, taking into account the profile of the Groups borrowings and derivatives in place as of December31, 2011. Counterparty risk in connection to its derivatives: Faurecias counterparty risk connection with its derivatives is not significant as the majority of its derivatives are arranged with banks with strong ratings that form part of its banking pool.
162
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE 31
Other debt guarantees Firm orders for property, plant and equipment and intangible assets Other
TOTAL Future minimum lease payments under operating leases break down as follows:
(in millions)
394.4
384.3
228.5
235.1
232.6
104.6
TOTAL
52.4
In 2011, the average utilization rate of this entitlement was 1.1%. The number of unused training hours accumulated atyear-end totaled 1,176,825. No provision was recorded in the financial statements for these individual training entitlements as the Group does not have sufficiently reliable historical data to accurately estimate the related contingent liability. The potential impact is not, however, considered to be material.
Faurecia
163
Consolidated statement
Notesto the consolidated nancial statements
NOTE32
including directors fees of 245,000, compared with theyearearlier figures of 6,293,092 and 212,500 respectively. No Faurecia stock subscription options were awarded to management in 2011.
164
Faurecia
Consolidated statement
Notesto the consolidated nancial statements
NOTE33
Ernst& Young Amount (excl. VAT) 2010 2011 2010 2011 % 2010
% 2011
2011
2010
AUDIT Statutory and contractual audits Issuer Fully consolidated companies Other services relating directly to the auditors duties Issuer Fully consolidated companies SUB-TOTAL Other services provided by the network to fully consolidated companies Legal and tax advisory services Fully consolidated companies Other (disclosure required where >10% of audit fees) SUB-TOTAL 0.0 0.0 0.0 0.0 0.0 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0 0.0 0.0 0.0 0.0 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2.8 0.5 2.3 0.1 0.1 0.0 2.9 2.7 0.6 2.1 0.0 0.0 0.0 2.7 96.6% 17.2% 79.3% 3.4% 3.4% 0.0% 100.0% 100.0% 22.2% 77.8% 0.0% 0.0% 0.0% 100.0% 4.2 0.5 3.7 0.1 0.1 0.0 4.3 3.6 0.3 3.3 0.2 0.0 0.2 3.8 97.7% 11.6% 86.0% 2.3% 2.3% 0.0% 100.0% 94.7% 7.9% 86.8% 5.3% 0.0% 5.3% 100.0%
0.0
0.0
0.0%
0.0%
0.0
0.0
0.0%
0.0%
TOTAL
2.9
2.7
100.0%
100.0%
4.3
3.8
100.0%
100.0%
NOTE34
The consolidated accounts of the Faurecia Group are included in the consolidated financial statements of its parent, the PSA Peugeot Citron group, 75,avenue de la Grande-Arme, 75116 Paris, France.
As at December31, 2011, Peugeot SA held 57.43% of the capital and 72.87% of the voting rights of FaureciaSA.
NOTE35
DIVIDENDS
The Board of Directors has decided to submit a proposal at the next Shareolders Meeting for a dividend of 0.35 per share.
Faurecia
165
Consolidated statement
Consolidated companies asofDecember31, 2011
Stake (%)l1)
Belgium China France France France France France France Netherlands Tunisia USA
100 100 Parent Company 100 100 100 100 100 100 100 100
100 100 Parent Company 100 100 100 100 100 100 100 100
Argentina Brazil Belgium Canada China China China China China China China China China China China China China China China Czech Republic Czech Republic Czech Republic Germany
100 100 100 100 60 51 100 100 100 100 100 100 100 60 50 51 100 100 100 100 100 100 100
100 100 100 100 60 51 100 100 100 100 100 100 100 60 50 51 100 100 100 100 100 100 100
166
Faurecia
Consolidated statement
Consolidated companies asofDecember31, 2011
Country
Faurecia Angell-Demmel GmbH Faurecia Automotive GmbH Faurecia Innenraum Systeme GmbH Asientos de Castilla Leon, SA Asientos del Norte, SA Faurecia Asientos Para Automovil Espana, SA Industrias Cousin Freres,SL Tecnoconfort Asientos D Galicia,SL Faurecia Automotive Espana,SL Faurecia Interior System Espana, SA Faurecia Interior SystemSALC Espana,SL Valencia Modulos de Puertas,SL Incalplas,SL Faurecia Sieges dautomobile Faurecia Industries ECSA tudes et Construction de Sieges pour lAutomobile Siebret Siedoubs Sielest Siemar Sienor Sotexo Sieto Trecia Faurecia Automotive Holdings Faurecia Intrieur Industrie Automotive Sandouville Faurecia ADP Holding Faurecia JIT Plastique (ex-Flamant JauneSAS) Faurecia Automotive Seating UK Limited Faurecia Midlands Limited SAI Automotive FradleyLtd SAI Automotive Washington Limited Faurecia Automotive Seating India Private Limited Faurecia Interior Systems India Private Limited Faurecia Azin Pars Company Faurecia Japan KK Faurecia Trim KoreaLtd Faurecia Shin Sung Co.Ltd
(1) Total interest of fullly-consolidated companies.
Stake (%)l1)
100 100 100 100 100 100 50 50 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 60 100 100 100 100 100 100 100 51 100 100 100
Germany Germany Germany Spain Spain Spain Spain Spain Spain Spain Spain Spain Spain Spain France France France France France France France France France France France France France France France France United Kingdom United Kingdom United Kingdom United Kingdom India India Iran Japan South Korea South Korea
Faurecia
167
Consolidated statement
Consolidated companies asofDecember31, 2011
Country
Faurecia Automotive Systems Korea Limited Faurecia AST Luxembourg SA (ex-SAI Automotive SILUX SA) Faurecia quipements Automobiles Maroc Faurecia Sistemas Automotrices de Mexico, SAdeCV(ex-FaureciaDuroplast Mexico, SA de E CV) Servicios Corporativos de Personal Especializado, SA de CV Faurecia Interor Systems Mexico, SA de CV Faurecia Automotive Seating BV Faurecia Automotive Polska Spolka Akcyjna Faurecia Walbrzych Spolka Akcyjna Faurecia Grojec R&D Center Spolka Akcyjna Faurecia Legnica Spolka Akcyjna Faurecia Gorzow Spolka Akcyjna. Faurecia Assentos de Automovel, Limitada SASAL EDA Estofagem de Assentos, Lda, Faurecia Sistemas de Interior de Portugal. ComponentesParaAutomoveis SA (Ex-SAI Portugal ) Faurecia Seating Talmaciu SRL Euro Auto Plastic Systems SRL OOO Faurecia ADP Faurecia Interior Systems Sweden AB Faurecia Slovakia sro Faurecia Interior Systems Thailand Socit Tunisienne dquipements dAutomobile Faurecia Polieks Otomotiv Sanayi Ve Ticaret Anonim Sirketi Faurecia Automotive Seating, LLC Faurecia Interior Systems,Inc. Faurecia Madison Automotive Seating,Inc. Faurecia Interiors Louisville, LLC Faurecia Automotive del Uruguay Faurecia Interior Systems South Africa (PTY)Ltd Faurecia Interior Systems Pretoria (Proprietary) Limited OTHER MODULES Faurecia Sistemas de Escape Argentina SA Faurecia Emissions Control Technologies Cordoba Faurecia Exterior Argentina ET (Barbados) Holdings SRL Faurecia Sistemas de Escapamento do BrasilLtda Faurecia Emissions Control Technologies, Limeira Emcon Technologies Canada ULC
(1) Total interest of fullly-consolidated companies.
Stake (%)l1)
100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 50 60 100 100 100 100 100 100 100 100 100 100 100 100
South Korea Luxembourg Morocco Mexico Mexico Mexico Netherlands Poland Poland Poland Poland Poland Portugal Portugal Portugal Portugal Romania Romania Russia Sweden Slovakia Thailand Tunisia Turkey USA USA USA USA Uruguay South Africa South Africa
168
Faurecia
Consolidated statement
Consolidated companies asofDecember31, 2011
Country
Faurecia Exhaust Systems Changchun Co.,Ltd (ex-CLEC) Faurecia Tongda Exhaust System (Wuhan Co.,Ltd (ex-TEEC) Faurecia HONGHU Exhaust Systems Shanghai, Co.Ltd (ex-SHEESC) Faurecia Emissions Control Technologies Development (Shanghai)CompanyLtd Faurecia (Qingdao) Exhaust Systems Co,Ltd Faurecia (Wuhu) Exhaust Systems Co,Ltd Faurecia Emissions Control Technologies consulting (Shanghai)Co.,Ltd Faurecia Emissions Control Technologies (Shanghai) Co.,Ltd Faurecia Emissions Control Technologies (Chongqing) Co.,Ltd Faurecia Emissions Control Technologies (Yantai) Co.,Ltd. Faurecia (Chengdu) Emission Control Technologies Co.,Ltd Faurecia Exhaust Systems sro Faurecia Automotive Czech Rebublic, sro Faurecia Emissions Control Technologies, Mlada Boleslav, sro(previously Emcon Technologies Czech Republic, sro) Faurecia Kunststoffe Automobilsysteme GmbH Faurecia Abgastechnik GmbH Faurecia Emissions Control Technologies, Germany GmbH Faurecia Emissions Control Technologies, Novaferra GmbH Faurecia Emissions Control Technologies, Finnentrop GmbH Faurecia Exteriors GmbH Faurecia Sistemas de Escape Espana, SA Faurecia Emissions Control Technologies, Pamplona,SL Faurecia Automotive Exteriors Espana, SA (ex-Plastal Spain SA) EAK Composants pour lAutomobile (EAKSAS) EAK Composants pour lAutomobile (EAK SNC) Faurecia Automotive Industrie Faurecia Systmes dchappement Faurecia Bloc Avant Faurecia-Metalloprodukcia Holding Emcon Technologies FranceSAS Faurecia Emissions Control Technologies UK Limited Faurecia Magyarorszag Kipufogo-rendszer Kft Faurecia Emissions Control Technologies, Hungary Kft Faurecia Emissions Control Technologies India Private Limited Yutaka Autoparts Pune Ptivate Limited Faurecia Emissions Control Technologies, Italy SRL Faurecia Emissions Control Systems Korea Faurecia Jit and Sequencing Korea
(1) Total interest of fullly-consolidated companies.
Stake (%)l1)
51 50 51 100 100 100 100 100 72,5 100 100 100 100 100 100 100 100 100 100 100 100 100 100 51 51 100 100 100 60 100 100 100 100 74 74 100 100 100
China China China China China China China China China China China Czech Republic Czech Republic Czech Republic Germany Germany Germany Germany Germany Germany Spain Spain Spain France France France France France France France United Kingdom Hungary Hungary India India Italy South Korea South Korea
Faurecia
169
Consolidated statement
Consolidated companies asofDecember31, 2011
Country
Faurecia Exhaust Mexicana, SA de CV Exhaust Services Mexicana, SA de CV ET Mexico Holdings I, S de RLde CV ET Mexico Holdings II, S de RLde CV ET Dutch Holdings Cooperatie UA ET Dutch Holdings BV ET Dutch Holdings II BV Faurecia Emissions Control Technologies Netherlands BV Faurecia Sistemas de Escape Portugal, LDA OOO Faurecia Metalloprodukcia Exhaust Systems OOO Faurecia Automotive Development Faurecia Exhaust Systems AB United Parts Exhaust Systems AB Faurecia Emissions Control Technologies, Thailand Co.Ltd Faurecia Exhaust Systems,Inc. Faurecia Emissions Control Technologies, USA, LLC Faurecia Exhaust Systems South AfricaLtd Emission Control Technologies Holdings SA (Pty)Ltd Emission Control Technologies SA (Ga-Rankuwa) (Pty)Ltd Faurecia Emission Control Technologies SA (CapeTown) (Pty)Ltd II - COMPANIES ACCOUNTED FOR BY THE EQUITY METHOD INTERIOR MODULES Zhejiang Faurecia Limin Interior& Exterior Systems Company Limited Lanzhou Faurecia Limin Interior& Exterior Systems Company Limited Xiangtan Faurecia Limin Interior& Exterior Systems Company Limited Jinan Faurecia Limin Interior& Exterior Systems Company Limited Componentes de Vehiculos de Galicia, SA Copo Iberica, SA Faurecia-NHK Co.,Ltd Kwang Jin Faurecia Co. Limited Vanpro Assentos Limitada Teknik Malzame Ticaret Ve Sanayi AS Orcia Otomotiv Yan Sanayi Ve Ticaret Anonim Sirketi Arsed, Podjetje Za Proizvodnjo In Trzenje Kovinske Opreme (Arsed Doo)
(1) Total interest of fullly-consolidated companies.
Stake (%)l1)
100 100 100 100 100 100 100 100 100 60 100 100 100 100 100 100 100 100 100 100
Mexico Mexico Mexico Mexico Netherlands Netherlands Netherlands Netherlands Portugal Russia Russia Sweden Sweden Thailand USA USA South Africa South Africa South Africa South Africa
China China China China Spain Spain Japan South Korea Portugal Turkey Turkey Slovenia
50 50 50 50 50 50 50 50 50 50 50 50
50 50 50 50 50 50 50 50 50 50 50 50
170
Faurecia
Consolidated statement
Consolidated companies asofDecember31, 2011
Country
SAS GROUP SAS Automotriz Argentina SA (dormant Company) SAS Automotive N.V SAS Automotive do BrasilLtda SAS (Wuhu) Automotive Systems Co.Ltd SAS AutoSystemtechnik sro SAS Autosystemtechnik Verwaltungs GmbH SAS Autosystemtechnik GmbH und Co. KG SAS Autosystemtechnick Zwickau Verwaltungs GmbH SAS Autosystemtechnick Zwickau GmbH& Co. KG SAS AutomotiveLtd SAS Autosystemstechnick, SA SAS Automotive France Cockpit Automotive Systems Douai SNC SAS Automotive Systems SA de CV SAS Automotive Systems& Services SA de CV SAS AutoSystemtechnik de Portugal, Unipessoal, Lda. SAS Automotive sro SAS Otosistem Teknik Ticaret ve Limited Sirketi SAS Automotive USAInc. SAS Automotive RSA (Pty)Ltd OTHER MODULES Changchun Huaxiang Faurecia Automotive Plastic Components Co.,Ltd AD Tech CoLtd
(1) Total interest of fullly-consolidated companies.
Stake (%)l1)
Argentina Belgium Brazil China Czech Republic Germany Germany Germany Germany Great Britain Spain France France Mexico Mexico Portugal Slovakia Turkey USA South Africa
50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50
50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50
50 50
50 50
Faurecia
171
Consolidated statement
Statutory Auditors report ontheconsolidated nancial statements
172
Faurecia
Consolidated statement
Statutory Auditors report ontheconsolidated nancial statements
III.Specic verication
As required by law and in accordance with professional standards applicable in France, we have also verified the information presented in the Groups management report. We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
Neuilly-sur-Seine and Paris-La Dfense, February8, 2012 The Statutory Auditors PricewaterhouseCoopers Audit Dominique Mnard Ernst& Young Audit Denis Thibon
Faurecia
173
174
Faurecia
1 0
Legal and nancial information
CONTENTS
10.1.2. Parent Company Financial Statements 181 10.1.3. Appropriation of 2011 net income 10.1.4. Securities portfolio asofDecember31, 2011 10.1.5. Faurecia subsidiaries and affiliates at December31, 2011 200 201 202
210
210
204
Faurecia
175
10
Results of operations
The Company ended 2011 with an operating profit of 4.9million, compared with an operating profit of 3.6million in 2010. The improvement in earnings derived largely from the increase in royalties collected. The Company reported net financial income of 301.8million versus net financial expense of 548.3million in 2010. This change is primarily attributable to movements in provisions for impairment of investments. It includes: c a 299.1million net reversal of provisions for impairment of and liabilities from investments in subsidiaries compared with a net 537.8million reversal of these provisions in 2010. The relevant provision reversals were recognized following the revaluation of certain subsidiaries based on their continued improved forecasts in the 2011-2015 medium-term Business Plan and the Companys most recent budget assumptions. These primarily involved the US holding company, Faurecia USA Holdings Inc, on whose stock a provision reversal of 165.0 million was recognized. In addition, the internal reclassification of shares in Faurecia Industrie and Trecia led to a reversal of provisions on the securities of these two subsidiaries totaling 138.2million, which was offset in net non-recurring income; c dividends received from subsidiaries amounting to 30.4million, down 10.1million from 2010. The largest dividends received came from Financire Faurecia in the amount of 12.8million and Faurecia Tongda Exhaust System (Wuhan) in China in the amount of 9.8million;
176
Faurecia
10
As of December31, 2011, all such conditions had been met. The figures are presented below: c net debt*/EBITDA** <2.50; c EBITDA**/net interest >4.50. In addition, this credit includes certain restrictive clauses as to the disposal of assets, whereby all disposal representing over 15% of total consolidated assets would need the authorization of the banks representing two-thirds of the syndicated loan, and as to borrowings of certain subsidiaries; c bonds issued on November 9, 2011 in the amount of 350million maturing December15, 2016. These bonds bear interest of 9.375% payable on June15 and December15 of eachyear, beginning June15, 2012. They were issued at 99.479% of par and are listed on the Luxembourg stock exchange. They also carry a clause restricting additional debt in the event that EBITDA after certain adjustments is lower than 2.5 times gross interest expense, as well as restrictions on borrowing similar in nature to those on the syndicated bank loan. The issuance costs are recognized on the income statement, spread over the lifetime of the bonds. Both the syndicated loan and the bonds are guaranteed by certain Group subsidiaries; c 211.3million of January1, 2015 OCEANE bonds convertible into new shares and/or exchangeable for existing shares, issued November26, 2009. These bonds bear annual interest of 4.50% payable on January1 of eachyear, starting January1, 2011. Each bond has a face value of 18.69; c a commercial paper program issued on the French domestic market for a total amount of 850million, the liquidity of this program being guaranteed by the syndicated bank loan. The total of this outstanding at the close of 2011 was269million. Further details of the Companys debt are provided in Note16 to the parent company financial statements. Trade accounts payable equaling 13.0million do not include invoices past due; these break down as follows:
(in millions)
Cashflow in the period generated 99.2million of net cash, deriving mainly from the internal reclassification of shares in Faurecia Industrie and Trecia. Equity financings by certain subsidiaries of the Company in 2011 represented a total of 7.8million. The carrying amount of investments in subsidiaries and affiliates recognized in the balance sheet at December31, 2011 came to 2,702.2million, compared with 2,599.1million oneyear earlier.
Provision for invoices notyet received Invoices not yet due Invoices between 1 and30days past due Invoices between 31 and60days past due Invoices between 61 and90days past due Invoices more than90dayspast due
0.1
TOTAL
13.0
17.8
* Consolidated net debt. ** Operating income plus depreciation, amortization and funding of provisions for impairment of property, plant and equipment and intangible assets, corresponding to the past 12months.
Faurecia
177
10
A list of the directorships and other positions held in 2011 by each member of the Board of Directors is provided in section8.1.2.1. Details of the stock options and restricted stock granted by the Company during theyear, the principal beneficiaries thereof and the number of shares purchased on exercise of options during theyear, are provided in a special report. This information is provided and, in certain cases, supplemented in Note22.2 to the consolidated financial statements and in paragraph 10.4.2.2 of the Registration Document. The operating procedures of the Board of Directors and its committees, as well as key data concerning the Groups internal control system, are described in the report of the Chairman of the Board of Directors on internal control. The draft resolutions presented in Chapter 11, including the disclosure of the amount of dividends paid over the last threeyears, are an integral part of this report and supplement the information provided to shareholders.
1.1 Approval of the nancial statements and appropriation of net income (1st to 3rd resolutions)
Approval of the 2011 statutory nancial statements (1stresolution)
We are seeking your approval of the 2011 statutory financial statements, showing a net income of 250,171,225.50.
178
Faurecia
10
2-EXTRAORDINARY BUSINESS
The extraordinary resolutions concern financial delegations of authority and authorizations to be granted to the Board of Directors. At the Annual Shareholders Meeting of May26, 2010, various extraordinary resolutions were passed granting the Board of Directors delegations of authority and authorizations designed to meet Groups financing needs, which expire during 2012. As required by ArticleL.225-100 para.7 of the French Commercial Code, the Board of Directors has reported on its use of these delegated authorities and authorizations in 2011 in its management report. Under the 11th to 15th resolutions, you are asked to renew these delegated authorities and authorizations for identical amounts and limits as in the existing authorizations. The Board of Directors is seeking authorization to issue ordinary shares and/or securities conferring an immediate or deferred entitlement to shares of the Company, with or without preemptive subscription rights. This will enable the Company to make financial transactions as and when market conditions permit and quickly raise the capital needed to implement the Groups expansion and consolidation strategy. The 16 th resolution involves employee share ownership, particularly through share offerings reserved for employees. The 17th resolution will enable the Board to reduce the share capital by cancelling treasury shares held. The next resolution involves amendments to the Companys Articles of Association.
Capital increases made pursuant to this delegated authority may not exceed an aggregate par value of one hundred and tenmillion euros (110,000,000). Issues of debt securities may not exceed an aggregate par value of one billion euros (1,000,000,000). These limits also cover issues made pursuant to the 13th resolution and will be charged against the respective aggregate ceilings set in the 11th resolution described above. The subscription price of new shares issued pursuant to this delegation of authority will be at least equal to the weighted average price of the Companys shares on Euronext Paris during the three trading days immediately preceding the issue pricing date, with a potential discount of up to 5percent. This delegation of authority is sought for a period of 26months.
Delegation of authority to increase the share capital, without pre-emptive subscription rights, through private placements governed by ArticleL.411-2II of the French Monetary and Financial Code (13th resolution)
This resolution is in addition to the 12th resolution to enable shareholders to vote separately on this matter as recommended by the Autorit des marchs financiers. It concerns private placements of shares and securities with persons providing a portfolio management service for third parties, qualified investors or a restricted circle of investors acting on their own account. The issues may comprise ordinary shares and/or securities conferring an immediate or deferred entitlement to shares of the Company and/or debt securities. Capital increases made pursuant to this delegated authority may not exceed an aggregate par value of one hundred and tenmillion euros (110,000,000). Issues of debt securities may not exceed an aggregate par value of one billion euros (1,000,000,000). These limits also cover issues made pursuant to the 12th resolution and will be charged against the respective aggregate ceilings set in the 11th resolution. In addition, these issues may not exceed the limits set out in the regulations applicable on the date of issue, which at present is 20% of the Companys share capital in any oneyear. Like the 12th resolution, the subscription price of new shares issued pursuant to this delegation of authority will be at least equal to the weighted average price of the Companys shares on Euronext Paris during the three trading days immediately preceding the issue pricing date, with a potential discount of up to 5 percent. This delegation of authority is sought for a period of 26months.
Delegation of authority to increase the share capital, without pre-emptive subscription rights, through public offerings (12th resolution)
Issues made pursuant this resolution will be open to the public. They may comprise ordinary shares and/or securities conferring an immediate or deferred entitlement to shares of the Company.
Faurecia
179
10
The specific limit for this authorization will be charged against (i) the limit set in the 12th or 13th resolutions as applicable, and (ii) the aggregate ceiling set in the 11th resolution. This delegation of authority is sought for a period of 26months.
Delegation of authority to increase the number of shares to be issued, with or without pre-emptive subscription rights, in the event of oversubscription (15th resolution)
This delegation of authority will enable the Company to satisfy excess demand for rights issues made to existing shareholders (11th resolution), public offerings (12th resolution) or private placements (13th resolution). Transactions made pursuant to this resolution may not exceed 15% of the initial issue and will be charged against the maximum limit applicable to the initial issue and the aggregate ceiling set in the 11th resolution. The price of ordinary shares or securities issued must be the same as the initial issue price set pursuant to the 11th, 12th or 13th resolutions described above. The Board of Directors may use this facility for a period of 30days after the close of the subscription period for the initial issue. This delegation of authority is sought for a period of 26months.
180
Faurecia
10
Notes
2011
171,389 171,389 0 (186,553) (3,914) (9,243) (4,799)
2010
140,575 140,575 0 (142,941) (1,711) (10,215) (4,234) (6,616) 28,731 (136,986) 3,589 638,449 (90,142) 548,307 551,896 1,812 (5,157) (3,345)
2009
63,260 63,260 0 (71,989) (1,950) (8,500) (3,286) 4,314 12,611 (68,800) (5,540) 315,543 (138,597) 176,946 171,406 44,141 (3,334) 40,807
Services sold Sales Capitalized production (long-term inventory) Outside services Taxes other than on income Salaries and wages Social security charges Depreciation and provisions for impairment (net of reversals) and expense transfers Other income and expenses, net Total operating expenses NET OPERATING INCOME Financial income Financial expenses NET FINANCIAL INCOME OPERATING INCOME (LOSS) AFTER NET FINANCIAL INCOME (EXPENSE) Extraordinary income Extraordinary expenses EXTRAORDINARY NET INCOME Employee prot-sharing Corporate income tax NET INCOME 6 5 5 5 4 4 4 3
15,521 22,523 (166,465) 4,924 373,196 (71,388) 301,808 306,732 113,750 (202,510) (88,760)
32,199 250,171
7,988 556,539
20,950 233,163
Faurecia
181
10
Notes
7 8 9
Amounts Gross
9,459 10,567 2,801,546 2,821,572 1,736
Amounts Net
189 491 2,702,219 2,702,899 1,736 926,987 683 30,607 960,013 1,252 16 1,762 25,903
Amounts Net
154 1,223 2,600,261 2,601,638 1,186 747,480 5,881 12,748 767,295 1,781 5
Amounts Net
195 2,068 1,720,641 1,722,904 1,850 825,022 4,263 23,215 854,350 5,512 14
Intangible assets Property, plant and equipment Financial investments TOTAL FIXED ASSETS Trade receivables Other receivables Marketable securities and equivalent receivables Cash and cash equivalents Total current assets Prepaid expenses Conversion losses Bond redemption premiums Deferred charges
10 11
12
1,252 16 1,762
13
25,903
11,137
17,875
TOTAL ASSETS
3,812,420
120,575
3,691,845
3,381,856
2,600,655
LIABILITIES& EQUITY
(in thousands)
Notes
Share capital New-issue, merger and contribution premiums Legal reserves Untaxed reserves Other reserves Retained earnings Net income foryear Regulated provisions TOTAL SHAREHOLDERS EQUITY Provisions for liabilities and charges TOTAL DEBT Operating payables Sundry payables TOTAL PAYABLES Prepaid income Unrealized foreign exchange gains 14 15 16 17 17
722,632 250,171
TOTAL LIABILITIES
3,691,845
3,381,856
2,600,655
182
Faurecia
10
I OPERATING ACTIVITIES Net income Depreciation and amortization expense Increase (decrease) in provisions and other long-term liabilities Capital (gains) losses on disposals of xed assets Free cash ow (internally generated funds from operations) (Increase) decrease in working capital requirements CASH FLOW PROVIDED BY OPERATING ACTIVITIES II INVESTING ACTIVITIES Acquisitions of intangible assets and property, plant andequipment Acquisitions of investments in subsidiaries and affiliates Acquisitions of other investments Disposals of intangible assets and property, plant and equipment Disposals of investments Disposals of other nancial assets Other reductions in property, plant and equipment CASH FLOW PROVIDED BY INVESTING ACTIVITIES SURPLUS/(USED) FROM OPERATING ANDINVESTINGACTIVITIES (I)+(II) III FINANCING ACTIVITIES Cash proceeds of new equity Charges posted to additional paid-in capital Dividends paid Issuance of debt securities and increase in borrowings Repayments of borrowings Changes in inter-company borrowings CASH FLOW PROVIDED (USED) BY FINANCING ACTIVITIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OFYEAR CASH AND CASH EQUIVALENTS AT END OFYEAR (27.6) 915.6 (812.2) (157.1) (81.3) 17.9 12.7 30.6 139.1 (213.6) 62.8 (20.7) (10.5) 23.2 12.7 469.9 (667.0) (216.9) 32.1 20.0 3.2 23.2 0.0 (9.0) 455.4 (9.3) 112.8 99.2 (38.3) 10.2 (39.4) (12.1) 112.1 9.0 1.1 (0.2) (7.8) (0.3) (39.4) (0.2) (84.3) (0.1) 1.3 42.8 1.1 250.1 10.2 (299.8) 88.2 48.7 (62.3) (13.6) 556.5 9.3 (538.7) (1.1) 26.0 22.5 48.5 233.2 6.9 (181.2) (41.7) 17.2 10.1 27.3
Faurecia
183
10
NOTE1
The parent company financial statements have been prepared in accordance with French generally accepted accounting principles (ArticleCRC 99-03, amended by the regulations of the Comit de la Rglementation Comptable et de lAutorit des Normes Comptables). The main policies applied are as follows:
1.2 Investments
Gross value is equal to contribution value or cost. A provision is made if the value in use of a security is lower than its entry value. Value in use is based on the subsidiarys revalued net assets, profitability and future outlook. For investments intended to be sold, value-in-use estimates also take into account prices at which prior transactions were carried out, if any.
184
Faurecia
10
NOTE2
SUBSEQUENT EVENTS
No significant post-balance sheet events have occurred since the end of theyear.
NOTE3
(in thousands)
2011
2,250 24,077 (10,184)
2010
1,674 1,695 (9,310)
2009
341 13,801 (6,894)
Depreciation and amortization expense Provisions for impairment of current assets Provisions for contingencies and charges
(622)
(675)
(2,934)
TOTAL
(1) Including: Transfer of fees included in External services relating to:
15,521
(6,616)
4,314
24,077
1,695
11,597
Faurecia
185
10
NOTE4
2011
2010
2009
Financial income Income from investments in subsidiaries and affiliates(1) Other interest and related income Net proceeds from sales of marketable securities Provision reversals(2) TOTAL Financing costs Interest expense Charges to provisions for impairment of investments
(3)
30,414 36,118
40,531 32,827
43,712 64,798
306,664 373,196
565,091 638,449
207,033 315,543
301,808
548,307
176,946
(1) This item corresponds to dividends received from subsidiaries and affiliates: It includes: c in 2011: dividends received from Faurecia Financire of 12,760 thousand; from Faurecia Tongda Exhaust System (Wuhan) of 9,762 thousand; from Faurecia Automotive Espana of 4,520 thousand and from Faurecia Honghu Exhaust Systems Shanghai of 3,283 thousand; c in 2010: dividends received from Faurecia Systme dchappement of 10,168 thousand and from Financire Faurecia of 24,816 thousand; c in 2009: dividends received from Faurecia Systmes dchappement of 20,053 thousand and from Faurecia Automotive GmbH of 12,906 thousand. (2) Including:
c reversals of provisions for Faurecia Industrie shares c reversals of provisions for Faurecia USA Holdings Inc shares c reversals of provisions for impairment of Trecia shares c reversals of provisions for Faurecia Automotive Holdings shares c reversals of provisions for Faurecia Automotive GmbH shares c reversals of provisions for financial contingencies and charges
138,152 165,000 1,956 469,200 82,234 3,512 7,561 11,701 7,328 2,420 785 20,000 10,000 121,800 73,300 11,933
(3) Including:
c Faurecia Sistemas de Escape Argentina shares c EAKSAS shares c EAK SNC shares c St Internationale de Participation (SIP) shares
The net charges to provisions for impairment of investments recorded in the parent company financial statements do not correspond to the asset impairment losses recorded in the
186
Faurecia
10
NOTE5
2011
2010
2009
Non-recurring income From operating activities(1) Proceeds from disposals of xed assets Provision reversals TOTAL Extraordinary expenses On management transactions(3) Carrying amount of xed and nancial assets sold
(4) (2)
1,624 112,126
667 1,145
0 44,141
113,750
1,812
44,141
12 202,498
5,071 86
34 3,300
(88,760)
(3,345)
40,807
1,333
667
1,145
42,772
Africa
c Shares of Faurecia Exhaust Systems South Africa sold to Faurecia
1,121 42,772
Interior Systems South Africa (3) Including Compensation for contract termination
c Tax arrears other than corp. inc. tax
4,741 276
Faurecia
187
10
NOTE6
Faurecia has elected to file a consolidated tax return. The resulting tax group includes the parent company and its main French subsidiaries. This system allows Faurecia to obtain group
(in thousands)
relief by offsetting any tax losses recorded by the Company and certain of its subsidiaries against the taxable income of other subsidiaries in the tax group.
2011
32,199
2010
7,988
2009
18,100 2,850 0
Tax benet arising from group relief Repayment of a carry back credit Other tax income (expense) tax audit
TOTAL
32,199
7,988
20,950
NOTE7
INTANGIBLE ASSETS
(in thousands)
Total
1,967 205 (7,602) (694) 6,319
AS OF JANUARY1, 2009 Additions (including own work capitalized) Disposals Funding of depreciation, amortization and impairment provisions Depreciation written off on disposals Other changes NET AS OF DECEMBER31, 2009 Additions (including own work capitalized) Disposals Funding of depreciation, amortization and impairment provisions Depreciation written off on disposals Other changes NET AS OF DECEMBER31, 2010 Additions (including own work capitalized) Disposals Funding of depreciation, amortization and impairment provisions Depreciation written off on disposals Other changes NET AS OF DECEMBER31, 2011
80
115 22
195 22 0
(63)
(63) 0
80
74 102
154 102 0
(67)
(67) 0
80
109
189
188
Faurecia
10
NOTE 8
Gross
53 271 10,243
Net
53 0 1,170
TOTAL
10,567
491
1,223
2,068
(in thousands)
Land
53
Buildings
0
Total
2,994 22 (339) (906) 297
AS OF JANUARY1, 2009 Additions (including own work capitalized) Disposals Funding of depreciation, amortization and impairment provisions Depreciation written off on disposals NET AS OF DECEMBER31, 2009 Additions (including own work capitalized) Disposals Funding of depreciation, amortization and impairment provisions Depreciation written off on disposals NET AS OF DECEMBER31, 2010 Additions (including own work capitalized) Disposals Funding of depreciation, amortization and impairment provisions Depreciation written off on disposals NET AS OF DECEMBER31, 2011
(3)
(336) (906)
3 53 0
53
1,170 75
1,223 75 0
(807)
(807) 0
53
438
491
Faurecia
189
10
NOTE9
FINANCIAL INVESTMENTS
Gross
2,801,430 0 116
Provisions
99,327 0 0
Net
2,599,078 1,149 34
Equity investments Receivable from associates andnon-consolidated companies Other non-current securities
TOTAL
2,801,546
99,327
2,702,219
2,600,261
1,720,641
Gross value
2,557,369 84,324
Provisions
1,102,875
Carrying amount
1,454,494 84,324
NET AS OF JANUARY1, 2009 Capital increases Charges to and reversals of provisions Sale of shares NET AS OF DECEMBER31, 2009 Acquisitions Capital increases Charges to and reversals of provisions Sale of shares NET AS OF DECEMBER31, 2010 Acquisitions Capital increases Charges to and reversals of provisions Sale of shares NET AS OF DECEMBER31, 2011 Loans to subsidiaries and affiliates are due in more than oneyear.
(181,895) (1,163) 2,640,530 330,000 23,507 (526,062) (41) 2,993,996 164 7,623 (157,439) (200,353) 2,801,430 (138,152) 99,327 394,918 920,980
181,895 (1,163) 1,719,550 330,000 23,507 526,062 (41) 2,599,078 164 7,623 157,439 (62,201) 2,702,103
190
Faurecia
10
NOTE10
RECEIVABLES
(in thousands)
Cash advances Provisions against cash advances Tax due by subsidiaries in the tax group Prepaid and recoverable corporate income tax Recoverable VAT Sundry receivables Other
926,987
747,480
825,022
NOTE11
MARKETABLE SECURITIES
As of December31, 2011, marketable securities corresponded mainly to 46,872Faurecia shares (including 21,122 shares under a liquidity contract) with a carrying amount of 0.7million, compared with 270,814 shares with a carrying amount of 5.9million as of December31, 2010.
The carrying amount of this item as of December31, 2011 is presented net of a provision for impairment amounting to 1million (versus 4.5million as of December31, 2010.)
NOTE12
PREPAID EXPENSES
Premiums on currency and interest-rate instruments Commissions and bank charges Interest on commercial paper Rent Other
TOTAL
1,252
1,781
5,512
Faurecia
191
10
NOTE13
DEFERRED CHARGES
NOTE14
SHAREHOLDERS EQUITY
(in thousands)
Increase in of stock
11 19
Share capital New-issue, merger and contribution premiums Legal reserves Untaxed reserves Other reserves Retained earnings Net income foryear Untaxed provisions
TOTAL
1,877,040
(27,584)
30
250,171
2,099,657
The exercise of all the stock options granted to executives and other employees that were outstanding as of December31, 2011, i.e. 1,475,348 options exercisable at an average price of 42.90, would result in: c capital stock being increased by 10.3million, corresponding to 1,475,348 shares with a par value of 7 each; c additional paid-in capital being increased by 53.0million.
192
Faurecia
10
NOTE15
(in thousands)
Provisions for contingencies Foreign exchange losses Other SUB-TOTAL Provisions for charges Provisions for pensions andother post-employment benets(1) Other provisions for charges SUB-TOTAL 3,942 4 3,946 3,321 3 3,324 2,757 110 2,867 846 0 846 5 2,251 2,256 14 13,646 13,660
TOTAL
4,792
5,580
16,527
(1) Provisions for pensions and other post-employment benefits cover the following costs payable by the Company on retirement of employees: c statutory lump-sum bonuses; c supplementary pension benefits for certain employees. For the latter, it is freed of its commitments by a capital deduction that covers the annuity for the insurance company, which is responsible for theservice; the deduction is made from a fund established to cover pension benefits which are not yet fully acquired. Consequently, the Company hasno further pension commitments towards former employees. The benefit obligation has been estimated by independent actuaries, using a discount rate of 4.50% and an inflation rate of 2%.
(in thousands)
2011
7,988 (1,385) (2,661)
2010
5,611 (1,395) (895)
2009
5,500 (1,715) (1,028)
PROVISION
3,942
3,321
2,757
(in thousands)
2011
(347) (247) 52
2010
(335) (292) 64
2009
(402) (366) 74
Service cost Restatement of projected benets Return on plan assets Curtailments and settlements Amortization of deferred differences Other changes
(79)
(62)
(794)
TOTAL
(621)
(625)
(1,488)
Faurecia
193
10
(in thousands)
Increases
845 621 1
Expenses charged
Reversals
(2,255)
Provisions for contingencies Provisions for pension and other post-employment obligations Other provisions for charges
TOTAL
5,580
1,467
(2,255)
4,792
NOTE16
DEBT
(in thousands)
Bonds Convertible bonds Other bonds Borrowings from banks Borrowings from PSA Other 211,280 350,000 819,343 0 5,940 917,037 142,000 11,043 211,310
211,310
TOTAL
1,386,563
1,281,390
1,355,878
As of December31, 2010, 58.3% of the Companys debt was at floating rates. This debt is hedged through caps as described in Note20.1. The breakdown of the Companys debt by maturity is as follows:
(in thousands)
Maturing in 2012 Maturing in 2013 Maturing in 2014 Maturing in 2015 Maturing in 2016
TOTAL
1,386,563
194
Faurecia
10
Faurecia put in place a new long-term financing plan by issuing 350million of bonds and subscribing a new syndicated bank loan of 1,150million. Also, a private placement was effected with German investors for 58 million in October 2011. Simultaneously with this financial plan, the 121million balance on the 250million line of credit from our majority shareholder, PSA Peugeot Citron, and linked to the preceding syndicated bank loan, was repaid in full. The line of credit was canceled at the same time. The syndicated bank loan created on December20, 2011 and divided into a 690million tranche maturing November2014, with two options to extend to November2015 and November2016, and a 460million tranche maturing November2016. As of 12/31/2011, the undrawn portion of this credit facility was 660million. This credit facility contains restrictive clauses as to consolidated financial ratios; meeting these ratios is a condition of the loan. As of 12/31/2011, the Group complied with all of these ratios. c net debt*/EBITDA** <2.50; c EBITDA**/net interest >4.50. In addition, this credit includes certain restrictive clauses as to the disposal of assets, whereby all disposal representing over 15% of total consolidated assets would need the authorization of the banks representing two-thirds of the syndicated loan, and as to borrowings of certain subsidiaries.
On November9, 2011, Faurecia issued bonds amounting to 350million and maturing December15, 2016. These bonds bear 9.375% interest; the coupon is paid on June 15 and December15 of eachyear, with the first payment on June15, 2012. They were issued at 99.479% of par and are listed on the Luxembourg stock exchange. They also have a restriction as to gross interest coverage by EBITDA and restrictions on total borrowing similar to those of the syndicated bank loan. The issuance costs are recognized on the income statement, spread over the lifetime of the bonds. Both the syndicated loan and the bonds are guaranteed by certain Group subsidiaries. On November26, 2009, Faurecia issued 211.3million worth of OCEANE bonds convertible into new shares and/or exchangeable for existing shares and maturing on January1, 2015. These bonds bear interest of 4.50% payable on January1 of eachyear, beginning January1, 2011. Each bond has a face value of 18.69. Subject to certain conditions, Faurecia may redeem the bonds early, at any time beginning on January15, 2013, at a price equal to their par value plus accrued interest, provided that all of theoutstanding bonds are redeemed. The bonds can be converted by their holders at any time as from their date of issue. The criteria relating to their compulsory early redemption include a standard change of control clause.
NOTE17
(in thousands)
Trade payables and related accounts Other operating payables SUB-TOTAL OPERATING PAYABLES Cash advances from subsidiaries Other SUB-TOTAL OTHER PAYABLES
TOTAL
200,731
217,707
212,651
* Consolidated net debt. ** Operating income plus depreciation, amortization and funding of provisions for impairment of property, plant and equipment and intangible assets, corresponding to the past 12months.
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NOTE18
DEFERRED TAXES
Deferred taxes relate to: c temporary differences between the recognition of income and expenses for financial reporting and tax purposes; c tax loss carry forwards of the tax group; Deferred taxes can be analyzed as follows:
(in thousands)
c tax savings arising from the use of tax losses of subsidiaries in the tax group which will have to be restored to them if and when they return to profit. Deferred taxes are computed based on the tax rate for theyear in which they are expected to reverse (i.e.36.10% for 2011 and beyond).
Deferred tax liabilities on temporary differences Deferred tax liabilities corresponding to tax savings arising fromthe use of the tax losses of companies in the tax group SUB-TOTAL DEFERRED TAX LIABILITIES Tax paid on taxable income that is not yet recognized Charges recognized that are deductible for tax purposes infutureyears Future tax savings on tax loss carry forwards of the tax group SUB-TOTAL DEFERRED TAX ASSETS (520,912) (520,912) 1,447 1,380 440,831 443,658 (481,653) (481,653) 1,212 2,203 402,740 406,155 (449,212) (449,212) 1,018 3,286 365,064 369,368
(77,254)
(75,498)
(79,844)
NOTE19
FINANCIAL COMMITMENTS
As of December31, 2011, this item included 18.5million in guarantees given on behalf of direct and indirect subsidiaries and affiliates (versus 21.6million in 2010, and 13.7million at December31, 2009.)
196
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10
NOTE20
<1year
150 158
1to 5years
>5years
224
TOTAL
308
224
Premiums reported under assets as of December31, 2011 amounted to 9,000 and will be paid in installments in 2012.
NOTE21
2011
Management Staff 40 2
2010
40 1
2009
42 1
TOTAL
42
41
43
NOTE22
DIRECTORS COMPENSATION
In 2011, total attendance fees paid to directors amounted to 245,000 compared with 212,510 in 2010.
Faurecia
197
10
NOTE23
RELATED-PARTY TRANSACTIONS
(in thousands)
0 893,844 187,073
Related companies: Related companies are companies that are fully consolidated in the Faurecia Group consolidated financial statements.
NOTE24
198
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10
2010 (in )
2009 (in )
2008 (in )
2007 (in )
171,388,534
140,574,549
63,259,930
75,141,626
73,123,665
(71,657,003) 32,198,556 0
19,110,764 (7,988,370) 0
37,896,293 (20,949,860) 0
28,051,012 (26,683,576) 0
81,680,821 (24,197,058) 0
d) Employee prot-sharing b) Income after tax, employee protsharing and depreciation, amortization and provisions for impairment f) Total dividend
(2)(3)
250,171,226 38,628,921
556,538,732 27,591,682
233,163,289
(136,508,655)
77,154,196
3 Per-share data b) ncome after tax and employee protsharing but before depreciation, amortization and provisions for impairment b) Income after tax, employee protsharing and depreciation, amortization and provisions for impairment c) Net dividend per share 4 Employee data a) Average number of employees b) Total payroll c) Total benets paid during theyear (socialsecurity,etc.) 42 9,242,938 4,799,326 41 10,214,816 4,234,177 43 8,500,376 3,285,738 45 11,504,857 5,444,637 45 13,553,151 7,356,994
(0.36)
0.25
0.66
2.24
4.34
2.27 0.35
5.04 0.25
2.61
(5.60)
3.16
(1) The amounts in brackets represent tax benefits arising from group relief. (2) The 2011 net dividend is pending approval by the AGM of profit distribution for theyear. (3) The part of the 2011 dividend corresponding to shares that the Company holds on its own behalf at the payment date will be allocated to Retained earnings.
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199
10
Net income for theyear Recommended appropriation: 1 Source Retained earnings carried forward from prioryears Net income foryear
250,171,226
Financial Year
2008 2009 2010 Recommended for 2011
Number of shares
24,395,048 89,448,504 110,366,728 110,368,345
Dividend paidout(in )
0.250 0.350
200
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10
(in thousands)
Quantity
1 Main securities a) Investments in subsidiaries and affiliates Faurecia Systmes dchappements Faurecia Investments Faurecia USA HoldingsInc. Faurecia Emissions Control Technologies, USA, LLC St Internationale de Participations (SIP) Faurecia Automotive EspaaSL SFEA Socit Foncire pour lquipement Automobile Financire Faurecia Faurecia Exhaust Systems sro Faurecia Magyarorszag Kipufogo-Rendszer Kft Faurecia Sistemas de Escape Argentina SA EAK Composants pour lIndustrie AutomobileSAS Faurecia Tongda Exhaust System (Wuhan) Co,Ltd EAK Composants pour lIndustrie Automobile SNC Faurecia Honghu Exhaust Systems Shanghai Co,Ltd Faurecia Automotive Holdings Faurecia Automotive GmbH (formerlySAI Automotive AG) Faurecia Services Groupe Faurecia Exhaust International Faurecia Sistemas de Escape Portugal Lda Toucan investissementsSA ET Dutch Holdings Cooperatie UA Hennape UnSA Hennape DeuxSAS Hennape TroisSAS SUB-TOTAL 2 Marketable securities and similar Faurecia 46,872 Shares 7 683 3,694 100 100 5,648,700 5,044,004 3,600 1 9,999,999 126,859 642,499 2,200,000 1 24,900,000 1,802,149 158,722 1 51,510 1 23,422,557 1 2,500 1,932,750 1 2,494 Shares 15 Shares 15 Shares USD 0.001 Equities Shares Shares 6 Shares 15 Shares 15 Equities Shares HUF 1 Shares Peso 1 Shares 15 Equities Shares 15 Equities Shares 1 Equities Shares 16 Shares 15 Equities Shares 16 Contribution of 204,600thousand Shares 16 Shares 16 Shares 16 110,316 452,488 475,299 125,400 0 76,449 9,947 53,841 19,759 0 0 0 2,217 0 1,212 918,260 225,184 0 27,051 1 40 204,600 37 1 1 2,702,103
TOTAL
2,702,786
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10
(in thousands)
Capital
I. Detailed information A. Subsidiaries (at least 50% of capital owned by the Company) Faurecia investments (ex Bertrand Faure SP) Faurecia Emissions Control Technologies, USA, LLC Financire Faurecia St Internationale de Participations "SIP" Faurecia USA Holdings Inc. EAK SAS ET Dutch Holdings Cooperatie UA Faurecia Sistemas de Escape Argentina Faurecia Systmes d'chappements SFEA Socit Foncire pour l'quipement Automobile Faurecia Exhaust Systems SRO Faurecia Automotive Holdings Faurecia Exhaust International B. Affiliates (10% to 50% of capital owned by the Company) Faurecia Automotive Espana SL Faurecia Automotive GmbH (ex SAI Automotive AG) FaureciaTongda Exhaust System (WUHAN) Co,Ltd (ex TEEC) II. Overall information about other companies Subsidiaries and affiliates not included in sectionA 2,215 7,138 196,420 5,589 529,327 296,202 39,514 11 26 50 76,449 225,184 2,217 75,660 5,256 33,000 10,000 16 4,668 89,616 7,884 84,731 9,638 20,572 23,423 28,991 79,394 (2,930) 43,156 3,877 491,773 (4,046) (7,591) 940 53,974 709 (3,327) 308,158 (1,730) 100 100 100 100 83 51 100 98 100 100 100 100 100 452,488 125,400 53,841 60,196 475,299 2,420 204,600 33,536 110,316 9,947 19,759 918,260 29,302
TOTAL
2,801,429
202
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10
Outstanding loans and advances granted by the Company and not yet paid
475,299
264,855
87,338 301
204,600 46 110,316 9,947 19,759 918,260 27,052 162,645 139,730 35,555 529,975
4,520
9,762
1,290
796
3,283
2,702,102
647,644
30,395
Faurecia
203
10
204
Faurecia
10
Neuilly-sur-Seine and Paris-La Dfense, April19, 2012 The Statutory Auditors French original signed by PricewaterhouseCoopers Audit Dominique Mnard Ernst& Young Audit Denis Thibon
Faurecia
205
10
206
Faurecia
10
with AMF Recommendation of December10, 2009, voting rights are those which are actually exercisable at the Shareholders Meeting and do not include shares without voting rights such as treasury shares:
Shareholders
PeugeotSA Faurecia Actionnariat corporate mutual fund Treasury stock o/w liquidity contract Board members Other
Securities Services
63,380,509 208,246 46,872 21,122 35,601 46,697,117
(%)
57.43 0.19 0.04 0.02 0.03 42.31
Double votingrights
63,380,509 127,689 0 7,371 80,622
Single votingrights
0 80,557 0 28,230 46,616,495
Total
126,761,018 335,935 0 42,972 46,777,739
(%)
72.89 0.19 0 0.02 26.90
TOTAL
110,368,345
100
63,596,191
46,725,282
173,917,664
100
During the 2011 financialyear, declarations were made that legal thresholds or thresholds in the bylaws were crossed as follows:
Threshold crossed
February8, 2010 June2, 2011
Threshold crossed
2/3 of share capital and voting rights 2/3 of exercise of voting rights
control direction
decrease increase
Peugeot Peugeot
Name of shareholder
ALLIANCE BERNSTEIN L.P.
Threshold crossed
2% of the capital 64%, 66%, 68%, 70% of voting rights 72% of voting rights 2% of the capital
Changes in ownership structure over the last threeyears are presented in section10.4.2.2. According to the information disclosed to the Company and/or the market, as of December31, 2011: c no other shareholder held over 5% of the Companys capital or voting rights; c 4,595,000registered shares held by PeugeotSA, i.e.4.25% of Faurecias capital, were pledged with Socit Financire de Banque (SOFIB).
Peugeot SA is the only holder of registered shares which reported pledges on the Companys shares. The Company has not been notified of any shareholders agreements. The Companys directors hold approximately 0.03% of the Companys capital and voting rights.
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10
High
Average
High
Average
16,516,284 15,748,774 11,854,733 12,004,108 9,554,418 11,956,706 11,149,080 18,500,819 14,190,788 16,101,912 13,548,338 9,771,205
405,470 433,660 308,710 311,100 270,630 340,050 323,530 375,390 245,070 282,190 221,130 141,250
208
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1,616.9
10.3.3.3. Dividends
FAURECIA SHARES
Number of shares carrying dividend rights
24,395,048 89,448,504 110,366,728 110,368,345
Financial Year
Dividends paid
0.25 cents per share 0.35 cents per share
The method used to calculate the weighted average number of shares after dilution to determine per share data is explained in Note9 to the consolidated financial statements.
Faurecia
209
10
210
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10
2001. The Sommer Allibert acquisition is finalized through a public offer to buy out Sommer Alliberts minority shareholders. The resulting Group posts sales of 9.6billion. Faurecia then buys out the remaining minority shares held by external shareholders in Sommer Alliberts German subsidiarySAI Automotive AG. 2002. The Faurecia Group acquires 49% of the South Korean catalytic converter maker Daeki Industrial, number two in its market. The sameyear, Faurecia forms a joint venture with the Taiwanese automotive equipment company GSK, with a view to making seats at Wuhan, in China. 2003. Faurecia follows up these acquisitions by buying the South Korean exhaust systems company Chang Heung Prcision, which holds market share of over 20%. This gives Faurecias Exhaust Systems business a manufacturing presence in all continents. In Europe, the Group finalizes an agreement with Siemens-VDO on strengthening and extending their joint venture (SAS), assembling cockpits for BMW, Daimler Chrysler, the Ford group, Renault-Nissan and the Volkswagen group. 2005. To step up Korean operations, Faurecia raises its stake in Daeki (specializing in exhaust systems for Hyundai) to 100%, and sets up a joint venture with the South Korean company Kwang Jin Sang Gong, to produce door modules for Hyundai Motors and Kia Motors. 2007. Faurecia takes over the bumper operations of Cadence Innovation France, enabling the Group to strengthen its market positioning in this sector in France. 2009. Faurecia acquires Emcon Technologies (formerly Arvin Industries), becoming the world leader in the exhaust systems market. This business combination strengthens Faurecias position with automakers in Germany (as Arvin Industries acquired Zeuna Strker in 1998), the USA (particularly Ford), South America, India and Thailand. It also enables Faurecia to enter the commercial vehicles market (trucks and off road). Withthis all-equity acquisition, One Equity Partners, (JP Morgan Chase& Cos private equity arm) holds a 17.3% stake in Faurecia and PSA Peugeot Citrons interest is reduced to 57.4%. Faurecia buys out joint venture partner Tata to become the sole owner of Taco Faurecia Design Center. The Company is renamed Faurecia Automotive Engineering India and becomes Faurecias development center in India. 2010. Faurecia becomes the European leader in automotive exterior parts by acquiring the German activities of Plastal, and
subsequently Plastal EspagneSA. Through these acquisitions, Faurecia Extrieurs dAutomobiles enlarges its client base, in particular with Ford and the four main German brands, upgrades its product offering and reinforces its industrial foothold and its R&D capacity. Its international development is extended though the formation of a joint company in China with Huaxiang, supplier of exterior parts to Fax-Volkswagen. Acquiring an 18.75% stake in Xuyang group in China enables the Faurecia Group to widen the range of products and services it provides in the following strategic segments: complete seat units, vehicle interior systems, acoustic modules and interior upholstery. A strategic alliance with the Geely and Limin groups marks a significant new development stage for Faurecia Systmes dIntrieur and Faurecia Extrieurs dAutomobile in China. To diversify its technological offer in seating systems, Faurecia Automotive Seating acquired the seat comfort technology of the German company Hoerbiger Automotive Komfortsysteme GmbH in the fourth quarter of 2010. Finally, to strengthen the technological prowess of Faurecia Interior Systems, the Faurecia Group acquired Angell-Demmel Europe GmbH, the world leader in decorative metal parts for automobile interiors. 2011. In January, Faurecia took a 21.2% stake in the Danish company, Amminex A/S, thus strengthening its technology towards diesel-emission control. Faurecia also reinforced its presence in China by signing, in January, a new joint venture agreement with Ningbo Huazhong Plastic Products CoLtd to make exterior automobile parts and, in June, by enlarging its scope of cooperation with Changchun Xuyang group, which allows it to develop locally, specifically with the FAW group. In July, an agreement was signed with the Economic and Technological Development Zone of Yancheng for an investment project to allow Faurecia to develop its seat mechanism activity. In addition, in October, Faurecia launched a bond issue in the amount of 350 million, maturing in December 2016 (issue completed with an additional issue of 140million in February2012 with identical maturity) and subscribed another syndicated credit loan for 1,150 billion, in two tranches A (690million) and B (460million), maturing in November2014 and November2016 respectively.
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CONTACT
Faurecia Philippe McAllister Director of Legal Affairs 2, rue Hennape 92000 Nanterre Or The above documents can also be viewed on the Companys website at www.faurecia.fr.
LEGAL FORM
Faurecia is a socit anonyme (joint-stock corporation) listed on NYSE Euronext Paris governed by the French Commercial Code and the related implementing regulations. It complies with generally accepted corporate governance principles for companies in France, notably the AFEP-MEDEF Corporate Governance Code of Listed Corporations. Faurecia abides by the legal and regulatory provisions that apply to the governing bodies of listed companies and reports in this Registration Document on the application of the recommendations made in relation to said Code.
CORPORATE PURPOSE
The Companys purpose, as set out in Article3 of the bylaws, is summarized below: c to establish, acquire, operate directly or indirectly or invest in any and all industrial, trading or service companies in France or abroad; c to provide administrative, financial and technical assistance to subsidiaries and affiliates; c to manufacture and sell any and all products, accessories or equipment for the automotive and other industries, and generally to conduct any and all related commercial, industrial, real estate and other transactions.
STATUTORY AUDITORS
The Companys accounts are audited by two Statutory Auditors, appointed in accordance with ArticleL.225-228 of the French Commercial Code.
INCORPORATION DETAILS
The Company is registered with the Nanterre Trade and Companies Registry under number: 542,005,376. APE (Business Identifier code) is: 7010Z.
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FISCALYEAR
The Companys fiscalyear covers the 12-month period from January1 to December31.
Holders of registered shares are notified by mail; the other shareholders are notified via the relevant banks and brokers through the financial notices provided for by the applicable regulations. A continually updated schedule of all of the Groups financial events, including the date of the Shareholders Meeting, is available on Faurecias website at www.faurecia.fr. To be entitled to attend Shareholders Meetings in person or to be represented by proxy, holders of registered shares must have their shares recorded in the registered share account kept by the Company and holders of bearer shares must have their shares recorded in a share account kept by their bank or broker at least three(3)days prior to the date of the Meeting. The person who issues the notice of meeting may, however, reduce this period if he or she sees fit. The rights of shareholders, which may only be amended in accordance with the conditions laid down by French law, are not affected by any other provision of the bylaws.
INCOME APPROPRIATION
Income available for distribution corresponds to net income for theyear, less any losses carried forward from prioryears and any amounts appropriated to reserves in compliance with the law or the bylaws, plus any retained earnings. Out of this income, the Shareholders Meeting determines theportion attributed to shareholders in the form of dividends and deducts the amounts it considers appropriate to allocate to any reserve funds or to carry forward. However, except in the case of a capital reduction, no distributions may be made to shareholders if the Companys shareholders equity represents or would represent after the planned distribution less than its capital stock plus any reserves which, according to the law or the bylaws, are not available for distribution. The Shareholders Meeting may also decide to distribute amounts deducted from optional reserves in order to pay or increase a dividend or pay a special dividend. The Companys bylaws provide that the Ordinary Shareholders Meeting approving the financial statements for theyear may also decide to offer each shareholder the option between thepayment of the dividend or the interim dividend in cash or in shares.
VOTING RIGHTS
The Companys bylaws do not provide for any restrictions on voting rights. Voting rights at Ordinary, Extraordinary and Special Shareholders Meetings are exercisable by the beneficial owner of the shares.
SHAREHOLDERS MEETINGS
The particular rules governing the participation of shareholders in the General Meetings are described in Articles17 and 18 of the Companys current bylaws, and may be consulted on website (www.faurecia.fr). Shareholders Meetings are held at the Companys headquarters or at any other venue specified in the notice of meeting.
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10
The shareholder must also inform the Autorit des marchs financiers within the same timeframe, so that the latter can disclose this information to the public, in accordance with its General Regulations. In the case of failure to comply with these disclosure rules, at the request of one or several shareholders present or represented at the Meeting with combined holdings representing at least 2% of the capital or voting rights, the undisclosed shares will be stripped of voting rights. Said request must be recorded in the minutes of the Shareholders Meeting. This procedure is in addition to the legal requirements concerning disclosure thresholds set out in ArticleL.233-7 of the French Commercial Code. The rights of shareholders, which may only be amended in accordance with the conditions laid down by French law, are not affected by any other provision of the bylaws.
MAJOR CONTRACTS
To date, Faurecia has not entered into any major contracts that would entail a significant obligation or commitment for the Group, other than those that fall within the ordinary course of business.
DEPENDENCE
Faurecia is not currently dependent on any patents or manufacturing processes owned by third parties or on any specific supply contracts to conduct its business. In the automotive industry sector in which Faurecia operates subcontractors do not generally define the technical specifications for subcontracted parts. When on rare occasions subcontractors are in a position to do this, the Groups policy is to contractually arrange for the subcontractor concerned to transfer the relevant design work in order for it to be used in conjunction with other services.
ARRANGEMENTS WHOSE OPERATION COULD RESULT INA CHANGE IN CONTROL OF THE COMPANY OR WHICH COULD POSTPONE OR PREVENT A CHANGE IN CONTROL
To the best of the Companys knowledge there are no arrangements in place whose operation could result in a change in control of the Company at a future date. There are currently no deeds, bylaws, charters, regulations or contractual provisions in place that could postpone or prevent a change in control of the Company.
ARRANGEMENTS ENTERED INTO BY THE COMPANY WHICH WOULD BE AMENDED OR TERMINATED IN THEEVENT OF A CHANGE IN CONTROL OF THE COMPANY
The syndicated loan agreement entered into by the Company on December20, 2011 includes an acceleration clause under which subject to certain conditions each bank may require immediate payment of outstanding sums in the event of a change in control of the Company. Furthermore, the bond issue carried out on November26,2009 stipulates that bondholders may request the early redemption of all or part of their bonds, under the conditions of the memorandum issued on November 18, 2009 having been approved by the AMF under no.09-337. The bond issue of November9, 2011 has a similar clause.
MEASURES TAKEN BY THE COMPANY TO ENSURE THATCONTROL IS NOT EXERCISED IN AN ABUSIVE MANNER
The measures taken by the Company to ensure that control is not exercised in an abusive manner are described in the following sections of this Registration Document: c section8: report by the Chairman of the Board of Directors on internal control; c section8.1.1: relating to the presence of independent directors on the Board of Directors and Board committees; c section8.1.2: paragraph on conflicts of interest.
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AUTHORIZED CAPITAL
The table below outlines the financial authorizations in force and the amounts used throughout 2011
Term
Liquidation in 2011.
26months
No
26months
No
Maximum amount of 23,117,000 Up to a limit of 15% of the initial issue and at the same price as that for the initial issue
26months
No
26months
No
Up to the legal ceiling of10% ofthe share capital 110million 1,000million in debt securities Up to the legal ceiling of20% ofthe share capital Up to a maximum limit of 2million shares on the day the Board takes its decision
26months
No
26months
29months
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215
10
c it is recalled that according to the terms and the exercise of authority given by the Shareholders Meeting of April23, 2009 to the Board of Directors to issue shares and/or securities giving right to shares, either with or without pre-emptive subscription rights for existing shareholders, in case of over-allocation of options, the Board of Directors meeting of October15, 2009 decided to set up a public issue, without pre-emptive subscription rights for existing shareholders or a priority subscription period, of OCEANEs convertible/ exchangeable bonds for a maximum normal amount of 265million (including any additional bonds issued on the exercise of a greenshoe option by the financial institutions underwriting the issue) and the maximum amount of any capital increases arising on conversion of the OCEANEs bonds was set at 150million. On November24, 2009, the amount of the OCEANE issue was increased to 211.3million, representing 11,306,058bonds. At December31, 2011, 1,615 bonds had been converted into shares.
Acquisition date
July25, 2014 for French tax residents/ July25, 2015 for non-French tax residents
Vesting date
July25, 2016 for French tax residents/ July25, 2015 for non-French tax residents
Performance requirements
Pretax net income ofthe Group at December31, 2013 before gains on asset disposals and change in the scope ofconsolidation
933,400
216
Faurecia
10
During 2011, in connection with the liquidity agreement the Company purchased a total of 551,073shares, representing 0.5% of the Faurecia capital for 12,663,565.27 and sold an aggregate 530,716 shares for 12,239,691.69. As of December31, 2011, the following amounts figured in the liquidity account: 21,122 shares with a value of 309,437.30, and 86,212.90 cash equivalents. In 2011, losses recorded in relating to the liquidity agreement totaled 128,478.91, and cash remuneration totaled 2,578.94 Management fees came to 40,000 (excluding VAT).
LIQUIDITY CONTRACT
Since April27, 2009, Faurecia has set up a liquidity agreement that complies with the AMAFI Code of Ethics. This agreement is valid for oneyear and is automatically renewable. Share buybacks are used for a number of reasons, including to maintain a liquid market for the Companys shares and to purchase shares for allocation to employees or corporate officers, notably under stock option or share grant plans. The maximum amount that may be invested by the Company in a share buyback program may not exceed 10% of the Companys capital. The maximum authorized may not exceed 10% of the Companys share capital and the per-share purchase price may not exceed 40. In accordance with the law, when treasury shares are purchased in order to maintain a liquid market, the calculation of the above-mentioned 10% ceiling is based on the number of shares purchased less the number of shares sold during the term of the buyback program. In compliance with ArticleL.225-210 of the French Commercial Code, the value of all of the treasury shares owned by the Company does not exceed the amount of available reserves, other than the legal reserve, as recorded in the parent company financial statements for theyear ended December31, 2010.
BONDS CONVERTIBLE INTO NEW SHARES AND/OR EXCHANGEABLE FOR NEW OR EXISTING SHARES
It is recalled that on November 24, 2009, Faurecia issued 11,306,058 bonds totaling 211.3million gross, payable on January1, 2015. Each bond has a nominal value of 18.69. The bonds bear annual interest of 4.50% (i.e. 0.841 per bond) payable on January1 eachyear, as from January1, 2011. The bonds will be reimbursed in full on January1, 2015. They are convertible into and/or exchangeable for new or existing Faurecia shares on a one-for-one basis, subject to future modifications. Faurecia may redeem the bonds in advance, provided certain conditions are met. At December31, 2011, 1,615 bonds had been converted into shares.
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10
Nominal amount
Premium
45,500
187,600
169,519,357
736,129,579.57
24,217,051
41,650
151,144
169,561,007
736,280,723.57
24,233,001
53,200
328,210
169,614,207
736,608,933.57
24,230,601
21,000
51,620
169,635,207
736,660,553.57
24,233,601
7,000
35,380
169,642,207
736,712,173.57
24,234,601
172,445
852,981.30
169,814,652
737,565,154.87
24,259,236
240,800 1,191,084.50
170,055,452
738,756,239.37
24,293,636
693,224 3,231,303.27
170,748,676
741,987,542.64
24,392,668
16,660
82,609.80
170,765,336
742,070,152.44
24,395,048
455,374,192
626,139,528
742,080,152.44
89,448,504
146,427,568
772,567,096
742,080,152.44
110,366,728
483
806.61
772,567,579
742,080,959.10
110,366,797
7,042
11,760.14
772,574,621
742,092,719.20
110,367,803
2,100
3,507
772,576,721
742,096,226.20
110,368,103
1,694
2,828.98
772,578,415
742,099,055.18
110,368,345
218
Faurecia
10
Number ofshares
63,380,509
% capital
70.86
% voting rights
75.69
0.19 0 26.92
0.19 0 36.55
0.18 24.13
TOTAL
110,368,345
100
100 110,366,728
100
100
89,448,504
100
100
MAJORITY SHAREHOLDER
At December31, 2011, PeugeotSA holds 57.43% of Faurecias share capital. PeugeotSA is a company that forms part of an international automotive group present in 150countries and which has three main sub-groups: Banque PSA Finance, dedicated to automobile financing; Faurecia, an automotive equipment supplier; and Gefco, a transport and logistics business.
exchangeable or otherwise exercisable for shares with voting rights, as well as the number of securities held by each such person or entity and details of any restrictions applicable to the securities. Such information requests may be made at any time.
STOCK OPTIONS
Following the rights issue carried out in April/May2009, the exercise price and number of shares under option were adjusted for the Companys stock option plans set up between October20, 1994 and April10, 2008 in order to preserve the rights of the option holders. These adjustments were calculated in accordance with ArticlesL.228-99 and R.228-91 of the French Commercial Code.
IDENTIFICATION OF SHAREHOLDERS
The Company is entitled to obtain from the organization responsible for clearing securities transactions the names of holders of shares carrying voting rights at Shareholders Meetings and of securities convertible, redeemable,
Faurecia
219
10
Details of outstanding options exercisable for newly-issued shares (stock subscription options) are set out in the table below: As of December31, 2011:
Options exercised
97,905 36,855 32,994 106,583 0 0 0 0 0
Options forfeited
35,845 19,305 135,369 134,105 149,760 125,775 135,600 85,200 32,400
9/12/1996 22.92 6/26/1997 34.40 2/22/2002 47.01 11/28/2002 35.65 4/14/2004 49.73 4/19/2005 54.45 4/13/2006 45.20 4/16/2007 44.69 4/10/2008 28.38
1,475,348
220
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10
Details of outstanding options to purchase existing shares (stock purchase options) are listed in the table below: As of December31, 2011:
Options exercised
19,305
Options forfeited
31,590
4/26/2001 46.59
TOTAL
Faurecia
221
10
SFEA (France)
Tecnoconfort (Spain)
17.45%
25.81% 55.02%
Faurecia Emissions Control Faurecia Emissions Control Technologies, Cordoba S.A. Technologies, Mlada Boleslav, (Argentina) s.r.o (Czech Republic)
1,98% 100% 1% 100%
Emission Control Emission Control Technologies Faurecia Emissions Control Technologies Holdings S.A. S.A. (Ga-Rankuwa) (Pty) Ltd Technologies (Cape Town) (Pty) Ltd (South Africa) (South Africa) (Pty) Ltd (South Africa)
100% 100% 100% 100% 100%
Ecsa (France)
100%
Siebret (France)
100%
Siedoubs (France)
100%
Sielest (France)
100%
Siemar (France)
100% 100%
Sienor (France)
Sieto (France)
100%
Sotexo (France)
100%
SASAL (Portugal)
51%
BFTC (Turkey)
100%
Faurecia (Shenyang) Faurecia (Yancheng) Automotive SystemsCo., Automotive Systems Co., Ltd (China) Ltd (China)
50% 50%
Faurecia (Guangzhou) Faurecia Emissions Control Automotive Systems Co., Technologies (Chongqing) Ltd (China) Co., Ltd (China)
50% 50%
Zhejiang Faurecia Limin Interior & Exterior Systems Company Limited (China)
Xiantan Faurecia Limin Interior & Exterior Systems Co., Ltd (China)
Lanzhou Liimn Changchun Huaxiang Jinan Jidao Auto Parts Faurecia Automotive Plastic Automotive Parts Company Limited (China) Company Limited (China) Components Co. Ltd (China)
Changchun Xuyang Faurecia Acoustic & Soft Trim Co. Ltd (China)
222
Faurecia
10
Faurecia Intrieur Faurecia Automotive Faurecia JIT Plastique Industrie Industrie (France) (France) (France)
100% 100% 100%
TRECIA (France)
100%
Faurecia Interior Systems Faurecia Interior South Africa (Pty) Ltd Systems Pretoria (South Africa) (Pty) Ltd (South Africa)
100%
63.88%
25.46%
50,77%
Faurecia Emissions Control Technologies, Finnentrop GmbH (Germany) Faurecia Exhaust Systems Changchun Co Ltd (China)
100% 50%
100%
100%
100%
Europe
Asia
North America
Faurecia
223
10
Ernst& Young Audit were first nominated by the Shareholders Meeting of June17, 1983. Their term of office ends at the 2013 Shareholders Meeting. PricewaterhouseCoopers Audit were first nominated by the Shareholders Meeting of May27, 2003. Their term of office ends at the 2013 Shareholders Meeting. In 2011, Ernst& Young Audit and PricewaterhouseCoopers received 4.3million and 2.9million respectively for their audit assignments. A breakdown of the total fees paid in 2011 by Faurecia and its fully consolidated subsidiaries to its Statutory Auditors is provided in Note33 to the consolidated financial statements.
B.
STATUTORY AUDITORS
Date of rst appointment Expiry ofcurrentterm
AUDITORS Ernst& Young Audit represented by Denis Thibon member of the Compagnie Rgionale de Versailles Tour First TSA 14444 92037 Paris La Dfense Cedex, France France PricewaterhouseCoopers Audit represented by Dominique Mnard member of the Compagnie Rgionale de Versailles 63, rue de Villiers 92208 Neuilly sur Seine France ALTERNATES Auditex tienne Boris May27, 2003 May23, 2005 2013 AGM 2013 AGM
June17, 1983
2013 AGM
May27, 2003
2013 AGM
The terms of office of the Statutory and Alternate Auditors were renewed for a period of sixyears at the Shareholders Meeting of May29, 2007.
224
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Annual Shareholders Meeting May23, 2012
CONTENTS
226
11.3. DRAFT RESOLUTIONS 11.4. DETAILS CONCERNING DIRECTORS WHOARE PROPOSED FOR RE-ELECTION ANDCANDIDATES WHOSE APPOINTMENT ISPUTTOTHEVOTE
11.4.1. Details concerning directors who are proposed forre-election 11.4.2. Details of candidates whose appointment is put to the vote
232
244
244 247
11.2. AGENDA
Resolutions presented to the Ordinary Shareholders Meeting Resolutions presented to the Extraordinary Shareholders Meeting
231
231 231
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(ORDINARY AND EXTRAORDINARY SHAREHOLDERS MEETING OF MAY23, 2012 11TH, 12TH, 13TH, 14TH AND 15THRESOLUTIONS)
To the Shareholders In our capacity as Statutory Auditors of your Company and in compliance with ArticlesL.228-92 and L.225-135 et seq. of the French Commercial Code (Code de commerce), we hereby report on the proposals to authorize the Board of Directors to issue shares and/or securities, transactions for which your approval is required. On the basis of its report, your Board of Directors proposes: c that it should be authorized, with the option of sub-delegation, for a period of 26months, to decide on the following transactions and set the definitive terms and conditions of such issues and proposes, where appropriate, to remove existing shareholders preemptive rights: c the issue of ordinary shares and securities carrying rights to Company shares or in accordance with Article L.228.93 of the French Commercial Code (Code de commerce) to the shares of any company in which it directly, or indirectly, owns more than half the capital stock and/or carrying rights to the allocation of debt securities, with pre-emptive rights for existing shareholders (11thresolution), c the public issue of ordinary shares and securities carrying rights to Company shares or in accordance with Article L.228.93 of the French Commercial Code (Code de commerce) to the shares of any company in which it directly, or indirectly, owns more than half the capital stock and/or carrying rights to the allocation of debt securities, with no pre-emptive rights for existing shareholders (12thresolution), c the issue, by private placement (offer referred to in ArticleL.411-2II of the French Monetary and Financial Code (Code montaire et financier) of ordinary shares and securities carrying rights to Company shares or in accordance with Article L.228.93 of the French Commercial Code (Code de commerce) to the shares of any company in which it directly, or indirectly, owns more than half the capital stock and/or carrying rights to the allocation of debt securities, with no pre-emptive rights for existing shareholders (13thresolution), up to an annual ceiling of 20% of the capital stock; c that it should be authorized, by the 14thresolution and as part of the authorization referred to in the 12th and 13thresolutions, to set the issue price within the legal annual ceiling of 10% of the capital stock. The overall nominal value of capital increases likely to be implemented immediately, or in the future, may not exceed: c 300million under the 11thresolution, given that the overall nominal value of the capital increases likely to be implemented under the 11thresolution andresolutions 12 to 15 will count towards this ceiling; c 110million under the 12thresolution, given that the overall nominal value of the capital increases likely to be implemented under the 13thresolution will count towards this ceiling; c 110million under the 13thresolution, given that this amount falls under the common ceiling set under the 12thresolution and will count towards this ceiling. The overall nominal value of debt securities likely to be issued may not exceed 1billion for the 11thresolution and 1billion for the 12th and 13thresolutions, give that this amount will count towards the overall ceiling of 1 billion for the issue of debt securities set under point 5) of the 11thresolution. These ceilings take account of the additional number of securities to be created as part of the implementation of the authorizations referred to in the 11th, 12th and 13thresolutions, in accordance with ArticleL.225-135-1 of the French Commercial Code (Code de commerce), should you choose to adopt the 15thresolution.
226
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Your Board of Directors is responsible for drafting a report pursuant to ArticlesR.225-113 et seq. of the French Commercial Code. Our responsibility is to give our opinion on the accuracy of the figures taken from the accounts, on the proposal to withdraw pre-emptive subscription rights from existing shareholders and on certain other items of information relating to these transactions and appearing in this report. We performed those procedures which we considered necessary to comply with professional guidance issued by the national auditing body (Compagnie nationale des Commissaires aux Comptes) relating to this type of engagement. These procedures consist mainly in verifying the content of the Board of Directors report on these transactions and procedures for calculating the issue price of the equity securities to be issued. Subject to further examination of the terms and conditions of any issues that may be decided upon, we have no observations to make on the means of calculating the issue price of the equity securities to be issued, as shown in the Board of Directors report in relation to the 12th, 13th and 14thresolutions. Furthermore, since this report does not specify the means of calculating the issue price of the equity securities to be issued by virtue of implementation of the 11thresolution, we cannot give our opinion on the choice of criteria used to calculate the issue price. Since the final terms and conditions of such issues have not been set, we are unable to express an opinion on them and, consequently, on the proposal to remove pre-emptive subscription rights from existing shareholders made in the 12th, 13th and 14thresolutions. Pursuant to ArticleR.225-116 of the French Commercial Code, we will compile an additional report, where appropriate, when these authorizations are exercised by your Board of Directors in the event of issues with no pre-emptive subscription rights for existing shareholders and issues of securities carrying rights to capital stock and/or carrying rights to the allocation of debt securities.
Neuilly-sur-Seine and Paris-La Dfense, April19, 2012 The Statutory Auditors PricewaterhouseCoopers Audit Dominique Mnard Ernst& Young Audit Denis Thibon
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11
11.1.2. STATUTORY AUDITORS REPORT ON THE ISSUE OF ORDINARY SHARES AND/OR SECURITIES CARRYING RIGHTS TO CAPITAL STOCK AND RESERVED FOR MEMBERS OF ONE, OR MORE, COMPANY SAVINGS SCHEMES
This is a free translation into English of a report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with and construed in accordance with French law and professional auditing standards applicable in France.
Neuilly-sur-Seine and Paris-La Dfense, April19, 2012 The Statutory Auditors PricewaterhouseCoopers Audit Dominique Mnard Ernst& Young Audit Denis Thibon
228
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Neuilly-sur-Seine and Paris-La Dfense, April19, 2012 The Statutory Auditors PricewaterhouseCoopers Audit Dominique Mnard Ernst& Young Audit Denis Thibon
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11
Agreements and commitments submitted for approval by the General Meeting of Shareholders
We hereby inform you that we have not been advised of any agreements or commitments authorized in the course of theyear to be submitted to the General Meeting of Shareholders for approval in accordance with ArticleR.225-38 of the French Commercial Code (Code de commerce).
Neuilly-sur-Seine and Paris-La Dfense, April19, 2012 The Statutory Auditors French original signed by PricewaterhouseCoopers Audit Dominique Mnard Ernst& Young Audit Denis Thibon
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11.2. Agenda
RESOLUTIONS PRESENTED TO THE ORDINARY SHAREHOLDERS MEETING
First resolution Approval of the statutory financial statements for theyear ended December31, 2011 Secondresolution Approval of the consolidated financial statements for theyear ended December31, 2011 Thirdresolution Appropriation of net income for theyear ended December31, 2011 Fourth resolution Re-election of Mr. Yann Delabrire as director Fifth resolution Re-election of Mr.Jean-Pierre Clamadieu as director Sixthresolution Re-election of Mr.Robert Peugeot as director Seventhresolution Re-election of Mr.Ross McInnes as director Eighthresolution Record of the end of Mr.Frdric Saint Geourss mandate and election of Mr.Jean-Baptiste Chasseloup de Chatillon Ninthresolution Election of Mrs Amparo Moraleda as a new director Tenthresolution Authorization to purchase shares of the Company
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11
c resolve to transfer the sum of 12508561, 28 from theyears net income of 250171225, 50 to the statutory reserve, bringing it up to the amount of 69070195, 92; c notethat the amount available for distribution, after the transfer of 12508561, 28 to the statutory reserve and taking account of retained earnings of 722 631675, 19, amounts to 960294339, 41; c resolve to pay a dividend of 0,35 per share, making a total payout of 38628920, 75, on the basis of a global number of shares entitled to dividends at December31,2011 equal to 110368345 and to transfer the balance of the amount available for distribution to the Retained Earnings account; c formally acknowledge that the amount of Retained Earnings account will thus be increased from 722,631,675.19 to 921,665,418.66. The shares will go traded ex-dividend on May31, 2012 and the dividend will be paid on June5,2012. Shares held by the Company on the date of this Meeting are not entitled to the dividend payment and the corresponding amount will be transferred to the Retained Earnings account on the payment date. In accordance with Article8.1 (b) of the OCEANE bond issue contract (ISIN code FR0010827055), the new shares issued upon conversion of the bonds will be entitled to dividends as of the first day of the fiscalyear in which the conversion took place. Accordingly, any shares issued upon conversion of the bonds after December31, 2011 will not be entitled to the dividend paid in respect of 2011. The new shares arising from the exercise of stock options by their beneficiaries will be entitled to dividend payments under the terms and conditions provided for in the stock option plans. The total dividend payout will be adjusted for the number of treasury shares held by the Company on the dividend payment date and, where applicable, for the number of new shares issued upon the exercise of stock options prior to this Meeting. The dividend is fully eligible for the 40-percent tax relief referred to in Paragraph 2, section3 of Article158 of the French General Tax Code.
SECONDRESOLUTION
Approval of the consolidated financial statements for theyear ended December31, 2011 The shareholders, having met the conditions required for ordinary meetings as to quorum and majority, and having considered the Board of Directors management report and the Statutory Auditors general report, approve the consolidated financial statements for theyear ended December31, 2011 as presented, showing a net income (group share) of 371.3million, as well as the transactions reflected or summarized therein.
THIRDRESOLUTION
Appropriation of net income for theyear ended December31, 2011 The shareholders, having met the conditions required for ordinary meetings as to quorum and majority and having noted that the financial statements for theyear ended December31, 2011 show a net income of 250171225, 50, on the recommendation of the Board of Directors:
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As required by Article243 bis of the French General Tax Code, the shareholders note that net dividends paid in the previous three fiscalyears were as follows:
Year ended
Total dividend payout (in ) Dividend per share (in ) Dividends eligible for tax relief (in )
* Adjusted for the unpaid dividends on treasury shares
December31, 2008
-
December31, 2009
-
December31, 2010
27,591,699.25 0.25 27,591,699.25
FOURTHRESOLUTION
Re-election of Mr.Yann Delabrire as director The shareholders, having met the conditions required for ordinary meetings as to quorum and majority and having considered the Board of Directors management report, resolve to re-elect outgoing director Mr.Yann Delabrire for a further term of five years ending at the conclusion of the Annual Shareholders Meeting held in 2017 to approve the financial statements for theyear ending December31, 2016. Mr.Delabrire has already indicated that he is willing to stand for re-election and is not barred from taking up and exercising these duties by any conflict of interest.
SEVENTHRESOLUTION
Re-election of Mr.Ross McInnes as director The shareholders, having met the conditions required for ordinary meetings as to quorum and majority and having considered the Board of Directors management report, resolve to re-elect outgoing director Mr.Ross McInnes for a further term of fiveyears ending at the conclusion of the Annual Shareholders Meeting held in 2017 to approve the financial statements for theyear ending December31, 2016. Mr.McInnes has already indicated that he is willing to stand for re-election and is not barred from taking up and exercising these duties by any conflict of interest.
FIFTHRESOLUTION
Re-election of Mr.Jean-Pierre Clamadieu as director The shareholders, having met the conditions required for ordinary meetings as to quorum and majority and having considered the Board of Directors management report, resolve to re-elect outgoing director Mr.Jean-Pierre Clamadieu for a further term of fiveyears ending at the conclusion of the Annual Shareholders Meeting held in 2017 to approve the financial statements for theyear ending December31, 2016. Mr.Clamadieu has already indicated that he is willing to stand for re-election and is not barred from taking up and exercising these duties by any conflict of interest.
EIGHTHRESOLUTION
Record of the end of Mr.Frdric Saint Geourss mandate and election of Mr.Jean-Baptiste Chasseloupde Chatillon The shareholders, having met the conditions required for ordinary meetings as to quorum and majority and having considered the Board of Directors management report, hereby record the end of Mr.Frdric Saint-Geourss mandate at the end of the present Annual Shareholders Meeting and decide to appoint Mr.Jean-Baptiste Chasseloup de Chatillon for a term of fiveyears ending at the conclusion of the Annual Shareholders Meeting held in 2017 to approve the financial statements for theyear ending December31, 2016. Mr.Jean-Baptiste Chasseloup de Chatillon has already indicated that he is willing to stand for election and is not barred from taking up and exercising these duties by any conflict of interest.
SIXTHRESOLUTION
Re-election of Mr.Robert Peugeot as director The shareholders, having met the conditions required for ordinary meetings as to quorum and majority and having considered the Board of Directors management report, resolve to re-elect outgoing director Mr.Robert Peugeot for a further term of five years ending at the conclusion of the Annual Shareholders Meeting held in 2017 to approve the financial statements for theyear ending December31, 2016. Mr.Peugeot has already indicated that he is willing to stand for re-election and is not barred from taking up and exercising these duties by any conflict of interest.
NINTH RESOLUTION
Election of Mrs Amparo Moraleda as a new director The shareholders, having met the conditions required for ordinary meetings as to quorum and majority and having considered the Board of Directors management report, resolve to elect Mrs Amparo Moraleda as a new director for a term of fiveyears ending at the conclusion of the Annual Shareholders Meeting held in 2017 to approve the financial statements for theyear ending December31, 2016. Mrs Amparo Moraleda has already indicated that she is willing to stand for election and is not barred from taking up and exercising these duties by any conflict of interest.
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TENTH RESOLUTION
Authorization to purchase shares of the Company The shareholders, having met the conditions required for ordinary meetings as to quorum and majority and having considered the Board of Directors management report, authorize the Board of Directors, in accordance with ArticlesL.225-209 et seq. of the French Commercial Code, Articles241-1 to 241-6 of the General Regulations of the Autorit des marchs financiers, European Commission Regulation no.2273/2003 of December22, 2003 and the market practices authorized by the Autorit des marchs financiers, to purchase shares of the Company by any means, on one or more occasions, up to the following maximum limits: c 10 percent of the total number of shares comprising the share capital at any time on the purchase date; or c 5 percent of the total number of shares comprising the share capital if the shares are purchased by the Company for the purpose of holding them and tendering them at a later date in exchange or as consideration for a merger, demerger or contribution transaction. The total number of shares that may be purchased shall take account of any shares re-sold during the life of the buyback program for liquidity purposes, to the extent that purchases made may under no circumstances result in the Company directly or indirectly holding more than 10 percent of its total share capital. By way of indication, on the basis of the share capital at December31, 2011 (comprising 110,368,345 shares) and taking account of the 46,872 treasury shares already held on that date, the Company would be authorized to purchase up to a maximum of 10,989,962 shares. The purpose of this authorization is to enable the Company to: c keep the shares for tendering at a later date in exchange or as consideration for external growth transactions, in accordance with current laws and regulations and with recognized market practices; c allot shares upon the exercise of rights attached to securities conferring an immediate or deferred entitlement to shares of the Company by way of conversion, exercise, redemption, exchange, presentation of warrants or by any other means, and carry out any transactions required to hedge the Companys obligations in connection with said securities, in accordance with stock market regulations and at the times the Board of Directors or any person to whom the Board has delegated its powers may act; c allot shares to employees, notably under (i) stock option plans granted in accordance with ArticlesL.225-177 et seq. of the French Commercial Code, (ii) free share plans in accordance with ArticleL.225-197-1 et seq. of the French Commercial Code, (iii) free share awards to employees and corporate officers as part of their compensation or in respect of their profit sharing entitlement, or (iv) Company or Group employee shareholding or savings plans, and carry out any transactions required to hedge such plans, in accordance with stock market regulations and at the times the Board of Directors or any person to whom the Board has delegated its powers may act;
c maintain a liquid market for the Companys shares through an independent investment services provider acting under a liquidity contract that complies with a Code of Conduct approved by the Autorit des marchs financiers; c reduce the share capital by canceling all or some of the shares purchased pursuant to and subject to the approval of the seventeenth resolution of this Meeting; c more generally, carry out any transaction that may be authorized by law and engage in any market practices that may be accepted by the stock market authorities, provided that in such event the Company shall advise its shareholders thereof by means of a news release. The shares may be purchased on or off the market by any means permitted by current stock market regulations and market practices accepted by the Autorit des marchs financiers, including the use of derivatives and options traded on a regulated or over-the-counter market, provided that such use does not significantly increase share price volatility. The Company reserves the right to make block purchases of shares or purchase shares through a multilateral trading facility or a systematic internalizer. There is no limit on the proportion of the share buyback program that may be carried out through block trades. The Company also reserves the right to continue the share buyback program in the event of public cash or share exchange offers involving its shares or in the event of a public offer initiated by the Company, in accordance with stock market regulations. The purchase price may not exceed 40 per share. Accordingly, based on the number of shares outstanding on December31, 2011, less the shares held in treasury on that date, the maximum amount that could be invested in the share buyback program would be 439598 480 at the maximum purchase price of 40. In the event of a capital increase carried out through capitalization of reserves and allotment of free shares, or in the event of a stock split or reverse split, a capital redemption or reduction or any other transaction affecting the shareholders equity, the price per share indicated above shall be adjusted by a multiplier equal to the ratio between the number of shares comprising the share capital before the transaction and the number of shares after the transaction. The Board of Directors shall have full powers, which may be sub-delegated, to implement this authorization, and in particular to decide whether and when to implement a share buyback program, determine its terms and conditions, draft and issue a public statement announcing the program, place any stock market orders, enter into any sale or transfer agreements, make all agreements for the keeping of records of share purchases and sales, make any filings with the Autorit des marchs financiers or any other body, carry out any other formalities, including allocating or re-allocating the shares purchased to the various permitted purposes, and more generally do whatever is necessary. As required by ArticleL.225-100 of the French Commercial Code, the Board of Directors shall report to the shareholders on the implementation of this program.
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This authorization is granted for a period of eighteenmonths from the date of this Meeting and cancels and supersedes the authorization granted for the same purpose pursuant to the twelfth resolution of the Annual Shareholders Meeting of May26, 2011.
4) desolve that the aggregate par value of any immediate and/ or future capital increases to be carried out pursuant to this delegation of authority may not exceed: c the aggregate ceiling of three hundred thousandmillions euros (300,000,000), which covers all capital increases made pursuant to this resolution and the twelfth to fifteenthresolutions, c this limit does not include the aggregate par value of any additional ordinary shares to be issued to protect the rights of holders of securities conferring an entitlement to shares of the Company in accordance with the law or any contractual provisions stipulating other adjustment events; 5) resolve that the aggregate par value of debt securities issued pursuant to this delegation of authority may not exceed one billion euros (1,000,000,000) or its equivalent value in any other currency on the issue decision date, provided that: c is maximum limit does not include any redemption premiums above par, c this amount is an aggregate ceiling that applies to all debt securities issued pursuant to this resolution and the twelfth and thirteenthresolutions submitted to this Meeting, and c this aggregate ceiling does not include any debt securities issued on the decision or by authorization of the Board of Directors in accordance with ArticleL.228-40 of the French Commercial Code; 6) resolve that, as provided for by law and on the terms and conditions set by the Board of Directors, the shareholders shall have a pre-emptive right to subscribe the new ordinary shares and securities conferring an entitlement to shares issued pursuant to this delegation of authority in proportion to the number of shares they hold. The Board of Directors may also grant the shareholders a pre-emptive right to subscribe for any excess shares or securities in proportion to their subscription rights and in any case within the limit of their application. If the total amount of subscriptions as of right and for excess shares or securities, if applicable, does not take up the entire issue carried out pursuant to this resolution, the Board of Directors may opt for one or more of the following alternatives available under ArticleL.225-134 of the French Commercial Code in the order it deems appropriate: c limit the size of the issue to the amount of subscriptions received, provided that at least three quarters of the original amount of the issue has been taken up, c freely allocate all or some of the unsubscribed securities as it deems appropriate, or c offer all or some of the unsubscribed securities to the public;
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7) formally acknowledge that this delegation of authority automatically entails the waiver by the shareholders of their pre-emptive rights to subscribe the ordinary shares to which any securities issued pursuant to this delegation of authority entitle their holders; 8) resolve that issues of share warrants may be made either for cash consideration, in accordance with the terms set out above, or for no consideration by way of free allotment to existing shareholders; If stand-alone share warrants are issued for no consideration, the Board of Directors may decide that any fractional entitlements shall not be negotiable and that the corresponding securities shall be sold; 9) resolve that in the event of capital increases carried out by way of capitalization of reserves, earnings and share premiums, the fractional rights shall not be negotiable and the corresponding shares shall be sold and the sale proceeds allocated among the rights holders within 30 days of the date when the whole number of shares allotted to them is recorded in their securities account; 10) give the Board of Directors full powers, which may be sub-delegated as provided for by law, to implement this delegation of authority and, in particular, to: c decide to issue securities, c set the characteristics, amounts and terms and conditions of any issue and of any securities to be issued. In particular, the Board of Directors shall determine the form and characteristics of the securities, set the price and terms of the issue, its subscription and payment, the dividend entitlement date (which may be retroactive), the terms and conditions on which the securities shall confer an entitlement to ordinary shares of the Company and, where applicable, any measures required to protect the rights of holders of securities in accordance with the provisions of the law and any contractual provisions stipulating adjustments other than those required by laws and regulations, c determine any conversion, exchange or redemption rights, including by way of a distribution of the Companys assets such as securities already issued by it, to be attached to the shares or securities conferring an entitlement to shares of the Company to be issued. If the securities to be issued are debt securities or attached to debt securities, the Board of Directors shall determine their maturity, whether dated or undated, the interest payable and, where applicable, any circumstances in which interest payments may or must be suspended or cancelled, whether the Company may grant guarantees or collateral or issue debt securities (fungible or not) in lieu of interest payments that have been suspended by the Company, and the ability to provide for any other repayment and interest payment terms and to attach any other right such as indexation or option clauses,
c set the terms on which the Company may repurchase securities issued immediately or in the future whether for cancelation or not, either on or off the market and at any time or during pre-set periods, and its ability to suspend the exercise of rights attached to the securities, in accordance with the provisions of the law, c amend the terms and conditions of issue or redemption during the life of the securities concerned, including the ability to reduce or increase the par value of the securities and the guarantees or collateral granted, in compliance with the provisions of the laws and regulations, including where necessary obtaining approval by the General Meeting of the holders of each class of securities conferring an entitlement to shares issued pursuant to this resolution, c deduct, at its sole discretion, all issue-related expenses from the corresponding share premium as well as the sums required to bring the statutory reserve up to the minimum level, c more generally, do everything necessary and enter into any agreements required to ensure the successful completion of the proposed issues, duly place the capital increase on record and amend the Articles of Association accordingly, carry out any formalities and filings required for the issuance, listing and financial servicing of the securities issued pursuant to this delegation of authority and the exercise of any rights attached thereto, and request any authorizations required to ensure the successful completion of the issues; 11) resolve that this delegation of authority is granted for a period of twenty-sixmonths as of the date of this Meeting; 12) resolve that this delegation of authority shall cancel the delegation of authority granted for the same purpose pursuant to the seventh resolution of the Annual Shareholders Meeting of May26, 2010.
TWELFTH RESOLUTION
Delegation of authority to the Board of Directors to issue ordinary shares and/or securities conferring an immediate or deferred entitlement to shares of the Company through a public offering, without pre-emptive subscription rights The shareholders, having met the conditions required for extraordinary meetings as to quorum and majority, having considered the Board of Directors management report and the Statutory Auditors special report, having duly noted that the share capital is fully paid and voting in accordance with the provisions of Articles L. 225-129 et seq., in particular Articles L. 225-129-2, L. 225-135 and L. 225-136, and ArticlesL.228-91 et seq. of the French Commercial Code: 1) delegate authority to the Board of Directors, with the ability to sub-delegate as provided for by law, to issue without pre-emptive subscription rights, by way of a public offering,
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shares and/or securities conferring any kind of immediate or deferred entitlement, including via share warrants, to existing or new shares of the Company or any company in which it directly or indirectly holds more than half of the share capital (a Subsidiary), subject to authorization by extraordinary resolution of the shareholders of that Subsidiary, in accordance with ArticlesL.228-91 et seq. of the French Commercial Code. Such issues may be carried out on one or more occasions in the proportions and at the times the Board deems appropriate, in France and/or abroad, and in euros, other currencies or monetary units based on a basket of currencies. The subscription price may be paid in cash, including by way of set off against valid claims on the Company. Public offerings carried out pursuant to this resolution may be joined, within the context of a sole issue or several simultaneous issues, to one or more private placements governed by ArticleL.411-2II of the French Monetary and Financial Code to be carried out pursuant to the thirteenthresolution; 2) resolve expressly to waive the pre-emptive rights of existing shareholders to subscribe the securities to be issued pursuant to this delegation of authority in accordance with the provisions of ArticleL.225-135 of the French Commercial Code. However, the Board of Directors may grant the shareholders a priority subscription option for all or part of the public offering for a period and on the terms and conditions it deems appropriate, in accordance with the applicable laws and regulations. This priority subscription option may be exercised as of right and, if applicable, on an oversubscription for excess shares or securities, in proportion to the number of shares held by each shareholder; 3) resolve that no preferred shares or securities conferring any kind of immediate or deferred entitlement to preferred shares may be issued under this delegation of authority; 4) resolve that securities conferring an entitlement to ordinary shares of the Company issued pursuant to this delegation of authority may be debt securities or warrants or be attached to such securities or permit the issue of debt securities as intermediate securities. Debt securities may be subordinated (in which case the Board of Directors shall determine their rank) or unsubordinated, dated or undated, denominated in euros, other currencies or monetary units based on a basket of currencies; 5) formally acknowledge that this delegation of authority automatically entails the waiver by the shareholders of their pre-emptive rights to subscribe the ordinary shares to which the securities issued pursuant to this delegation of authority entitle their holders; 6) resolve that the aggregate par value of immediate and future capital increases to be carried out pursuant to this delegation of authority may not exceed the sum of one hundred and tenmillions euros (110,000,000), provided that:
c this limit shall include the aggregate par value of any immediate or future capital increases made pursuant to the thirteenth resolution below, c independently of this limit, the aggregate par value of any capital increases that may be carried out pursuant to this resolution, the eleventh and the thirteenth to fifteenthresolutions shall be included in the aggregate ceiling of three hundred thousand millions euros (300,000,000) set in paragraph 4) of the eleventh resolution above, c these limits do not include the aggregate par value of any additional ordinary shares issued to protect the rights of holders of securities conferring an entitlement to shares of the Company in accordance with the law or any contractual provisions stipulating other adjustment events; 7) resolve that the aggregate par value of debt securities issued pursuant to this delegation of authority may not exceed one billion euros (1,000,000,000) or its equivalent value in any other currency on the issue decision date, provided that: c this maximum limit does not include any redemption premiums above par, c this amount shall be included in the aggregate ceiling of one billion euros (1,000,000,000) for issues of debt securities as stipulated in paragraph5) of the eleventh resolution above, and c this aggregate ceiling does not include any debt securities issued on the decision or by authorization of the Board of Directors in accordance with ArticleL.228-40 of the French Commercial Code; 8) resolve that, subject to implementation of the fourteenth resolution below: c the issue price of the new shares shall be set in accordance with the legal requirements on the issue date (which currently stipulate that the price must be at least equal to the weighted average price of the Companys shares on Euronext Paris during the three trading days immediately preceding the issue pricing date, possibly with a discount of up to 5 percent, in accordance with ArticleL.225-136-1, paragraph1, and ArticleR.225-119 of the French Commercial Code), c the issue price of securities conferring an entitlement to shares of the Company shall be set such that the sum received immediately by the Company, plus any sums that might subsequently be received, shall, for each share arising from the issuance of such securities, be at least equal to the issue price defined in the preceding paragraph; 9) resolve that if the total amount of subscriptions by shareholders and the public does not take up the entire issue of shares or securities conferring an entitlement to shares of the Company as defined above, the Board of Directors may opt for one or more of the following alternatives available under ArticleL.225-134 of the French Commercial Code in the order it deems appropriate:
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c limit the size of the issue to the amount of subscriptions received, provided that at least three quarters of the original amount of the issue has been taken up, c freely allocate all or some of the unsubscribed securities as it deems appropriate, or c offer all or some of the unsubscribed securities to the public; 10) give the Board of Directors full powers, which may be sub-delegated as provided for by law, to implement this delegation of authority and, in particular, to: c decide to issue securities, c set the characteristics, amounts and terms and conditions of any issue and of any securities to be issued. In particular, the Board of Directors shall determine the form and characteristics of the securities, set the price and terms of the issue, its subscription and payment, the dividend entitlement date (which may be retroactive), the terms and conditions on which the securities shall confer an entitlement to ordinary shares of the Company and, where applicable, any measures required to protect the rights of holders of securities in accordance with the provisions of the law and any contractual provisions stipulating adjustments other than those required by laws and regulations, c determine any conversion, exchange or redemption rights, including by way of a distribution of the Companys assets such as securities already issued by it, to be attached to the shares or securities conferring an entitlement to shares of the Company to be issued. If the securities to be issued are debt securities or attached to debt securities, the Board of Directors shall determine their maturity, whether dated or undated, the interest payable and, where applicable, any circumstances in which interest payments may or must be suspended or cancelled, whether the Company may grant guarantees or collateral or issue debt securities (fungible or not) in lieu of interest payments that have been suspended by the Company, and the ability to provide for any other repayment and interest payment terms and to attach any other right such as indexation or option clauses, c set the terms on which the Company may repurchase securities issued immediately or in the future whether for cancelation or not, either on or off the market and at any time or during pre-set periods, and its ability to suspend the exercise of rights attached to the securities, in accordance with the provisions of the law, c amend the terms and conditions of issue or redemption during the life of the securities concerned, including the ability to reduce or increase the par value of the securities and the guarantees or collateral granted, in compliance with the provisions of the laws and regulations, including where necessary obtaining approval by the General Meeting of the holders of each class of securities conferring an entitlement to shares issued pursuant to this resolution,
c deduct, at its sole discretion, all issue-related expenses from the corresponding share premium as well as the sums required to bring the statutory reserve up to the minimum level, c more generally, do everything necessary and enter into any agreements required to ensure the successful completion of the proposed issues, duly place the capital increase on record and amend the Articles of Association accordingly, carry out any formalities and filings required for the issuance, listing and financial servicing of the securities issue pursuant to this delegation of authority and the exercise of any rights attached thereto, and request any authorizations required to ensure the successful completion of the issues; 11) resolve that this delegation of authority is granted for a period of twenty-sixmonths as of the date of this Meeting; 12) resolve that this delegation of authority shall cancel the delegation of authority granted for the same purpose pursuant to the eighth resolution of the Annual Shareholders Meeting of May26, 2010.
THIRTEENTH RESOLUTION
Delegation of authority to the Board of Directors to issue ordinary shares and/or securities conferring an immediate or deferred entitlement to shares of the Company through a private placement governed by ArticleL.411-2II of the French Monetary and Financial Code, without pre-emptive subscription rights The shareholders, having met the conditions required for extraordinary meetings as to quorum and majority, having considered the Board of Directors management report and the Statutory Auditors special report, having duly noted that the share capital is fully paid and voting in accordance with the provisions of Articles L. 225-129 et seq., in particular Articles L. 225-129-2, L. 225-135 and L. 225-136, and ArticlesL.228-91 et seq. of the French Commercial Code: 1) delegate authority to the Board of Directors, with the ability to sub-delegate as provided for by law, to issue without preemptive subscription rights, through a private placement governed by ArticleL.411-2II of the French Monetary and Financial Code (i.e. an offering to (i) persons providing a portfolio management service for third parties or (ii) qualified investors or a restricted circle of investors acting on their own account), shares and/or securities conferring any kind of immediate or deferred entitlement, including via share warrants, to existing or new shares of the Company or any company in which it directly or indirectly holds more than half of the share capital (a Subsidiary), subject to authorization by extraordinary resolution of the shareholders of that Subsidiary, in accordance with ArticlesL.228-91 et seq. of the French Commercial Code. Such issues may be carried out on one or more occasions in the proportions and at the times the Board deems appropriate, in France and/or abroad and in euros, other currencies or monetary units based on a basket of currencies. The subscription price may be paid in cash, including by way of set off against valid claims on the Company.
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private placements governed by ArticleL.411-2II of the French Monetary and Financial Code carried out pursuant to this resolution may be joined, within the context of a sole issue or several simultaneous issues, to one or more public offerings to be carried out pursuant to the twelfthresolution; 2) resolve expressly to waive the pre-emptive rights of existing shareholders to subscribe the securities to be issued pursuant to this delegation of authority; 3) resolve that no preferred shares or securities conferring any kind of immediate or deferred entitlement to preferred shares may be issued under this delegation of authority; 4) resolve that securities conferring an entitlement to ordinary shares of the Company issued pursuant to this delegation of authority may be debt securities or warrants or be attached to such securities or permit the issue of debt securities as intermediate securities. Debt securities may be subordinated (in which case the Board of Directors shall determine their rank) or unsubordinated, dated or undated, denominated in euros, other currencies or monetary units based on a basket of currencies; 5) formally acknowledge that this delegation of authority automatically entails the waiver by the shareholders of their pre-emptive rights to subscribe the ordinary shares to which the securities issued pursuant to this delegation of authority entitle their holders; 6) resolve that the aggregate par value of immediate and future capital increases to be carried out pursuant to this delegation of authority may not exceed the sum of one hundred and tenmillions euros (110,000,000), provided that: This amount is included in the maximum limit set in paragraph6) of the twelfth resolution above; c issues of equity instruments made pursuant to this delegation of authority through a private placement governed by ArticleL.411-2II of the French Monetary and Financial Code may not exceed the maximum limit provided for by law on the issue date (for example, on the date of this Meeting, the maximum permitted is 20 percent of the Companys share capital per twelvemonth period). This limit shall be determined on the date of the Boards decision to use this delegation of authority, c furthermore, independently of the limits referred to in the two preceding paragraphs, the aggregate par value of capital increases that may be carried out pursuant to this resolution, the eleventh and twelfthresolutions and the fourteenth to fifteenthresolutions shall be included in the aggregate ceiling of three hundred thousandmillions euros (300,000,000) set in paragraph4) of the eleventh resolution above, c these limits do not include the aggregate par value of any additional ordinary shares issued to protect the rights of holders of securities conferring an entitlement to shares of the Company in accordance with the law or any contractual provisions stipulating other adjustment events;
7) resolve that the aggregate par value of debt securities issued pursuant to this delegation of authority may not exceed one billion euros (1,000,000,000) or its equivalent value in any other currency on the date of issue, provided that: c this maximum limit does not include any redemption premiums above par, c this amount shall be included in the aggregate ceiling of one billion euros (1,000,000,000) for issues of debt securities as stipulated in paragraph5) of the eleventh resolution above, and c this aggregate ceiling does not include any debt securities issued on the decision or by authorization of the Board of Directors in accordance with ArticleL.228-40 of the French Commercial Code; 8) resolve that if the total amount of subscriptions does not take up the entire issue of shares or securities conferring an entitlement to shares of the Company as defined above, the Board of Directors may opt for one or more of the following alternatives available under ArticleL.225-134 of the French Commercial Code in the order it deems appropriate: c limit the size of the issue to the amount of subscriptions received, provided that at least three quarters of the original amount of the issue has been taken up, c freely allocate all or some of the unsubscribed securities as it deems appropriate; 9) resolve that, subject to implementation of the fourteenth resolution below: c the issue price of the new shares shall be set in accordance with the legal requirements on the issue date (which currently stipulate that the price must be at least equal to the weighted average price of the Companys shares on Euronext Paris during the three trading days immediately preceding the issue pricing date, with a discount of up to 5 percent, in accordance with ArticleL.225-136-1, paragraph1, and ArticleR.225-119 of the French Commercial Code), c the issue price of securities conferring an entitlement to shares of the Company shall be set such that the sum received immediately by the Company, plus any sums that might subsequently be received, shall, for each share arising from the issuance of such securities, be at least equal to the issue price defined in the preceding paragraph; 10) give the Board of Directors full powers, which may be sub-delegated as provided for by law, to implement this delegation of authority and, in particular, to: c decide to issue securities, c set the characteristics, amounts and terms and conditions of any issue and of any securities to be issued. In particular, the Board of Directors shall determine the form and characteristics of the securities, set the price and terms of the issue, its subscription and payment, the dividend entitlement date (which may be retroactive), the terms and conditions on which the securities shall confer an entitlement to ordinary shares of the Company
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and, where applicable, any measures required to protect the rights of holders of securities in accordance with the provisions of the law and any contractual provisions stipulating adjustments other than those required by laws and regulations, c determine any conversion, exchange or redemption rights, including by way of a distribution of the Companys assets such as securities already issued by it, to be attached to the shares or securities conferring an entitlement to shares of the Company to be issued. If the securities to be issued are debt securities or attached to debt securities, the Board of Directors shall determine their maturity, whether dated or undated, the interest payable and, where applicable, any circumstances in which interest payments may or must be suspended or cancelled, whether the Company may grant guarantees or collateral or issue debt securities (fungible or not) in lieu of interest payments that have been suspended by the Company, and the ability to provide for any other repayment and interest payment terms and to attach any other right such as indexation or option clauses, c set the terms on which the Company may repurchase securities issued immediately or in the future whether for cancelation or not, either on or off the market and at any time or during pre-set periods, and its ability to suspend the exercise of rights attached to the securities, in accordance with the provisions of the law, c amend the terms and conditions of issue or redemption during the life of the securities concerned, including the ability to reduce or increase the par value of the securities and the guarantees or collateral granted, in compliance with the provisions of the laws and regulations, including where necessary obtaining approval by the General Meeting of the holders of each class of securities conferring an entitlement to shares issued pursuant to this resolution, c deduct, at its sole discretion, all issue-related expenses from the corresponding share premium as well as the sums required to bring the statutory reserve up to the minimum level, c more generally, do everything necessary and enter into any agreements required to ensure the successful completion of the proposed issues, duly place the capital increase on record and amend the Articles of Association accordingly, carry out any formalities and filings required for the issuance, listing and financial servicing of the securities issue pursuant to this delegation of authority and the exercise of any rights attached thereto, and request any authorizations required to ensure the successful completion of the issues; 11) resolve that this delegation of authority is granted for a period of twenty-sixmonths as of the date of this Meeting; 12) resolve that this delegation of authority shall cancel the delegation of authority granted for the same purpose pursuant to the twelfth resolution of the Annual Shareholders Meeting of May26, 2010.
FOURTEENTH RESOLUTION
Delegation of authority to the Board of Directors to set the issue price of ordinary shares and/or securities of the Company, in the event of issuance through a public offering or through a private placement governed by ArticleL.411-2II of the French Monetary and Financial Code, without pre-emptive subscription rights, up to a maximum limit of 10 percent of the share capital per annum The shareholders, having met the conditions required for extraordinary meetings as to quorum and majority, having considered the Board of Directors management report and the Statutory Auditors special report, and in accordance with ArticleL.225-136 of the French Commercial Code: 1) authorize the Board of Directors, with the ability to subdelegate as provided for by law, in the event of issuance, without pre-emptive subscription rights, of ordinary shares and/or securities conferring an immediate or deferred entitlement to shares of the Company pursuant to the twelfth and thirteenthresolutions submitted to this Meeting, to derogate from the conditions for setting the price provided for in the twelfth and thirteenthresolutions, in accordance with Article L. 225-136 1, paragraph 2, of the French Commercial Code, and to determine the price under the following conditions: c the issue price may not be less than the closing price on the trading day immediately before the price is set, possibly with a discount of up to 10 percent, c the issue price of securities conferring an entitlement to shares of the Company capital shall be set such that the sum received immediately by the Company, plus any sums that might subsequently be received, shall, for each share arising from the issue of such securities, be at least equal to the issue price defined above; 2) resolve that the aggregate par value of the capital increases carried out pursuant to this delegation of authority may not exceed 10 percent of the share capital in any twelve-month period (based on the share capital on the date of the Board decision setting the issue price). This limit shall be charged against (i) the limit set in the twelfth or thirteen resolution, as applicable, and (ii) the aggregate ceiling set in paragraph4) of the eleventhresolution; 3) give the Board of Directors full powers, which may be subdelegated as provided for by law, to implement this delegation of authority and, in particular, to enter into any agreements required to ensure the successful implementation of the proposed issues, duly place the capital increase on record and amend the Articles of Association accordingly, carry out any necessary formalities and filings and request any authorizations required to ensure the successful completion of the issues; 4) resolve that this authorization is granted for a period of twenty-sixmonths from the date of this Meeting; 5) resolve that this delegation of authority shall cancel the delegation of authority granted for the same purpose pursuant to the eleventh resolution of the Annual Shareholders Meeting of May26, 2010.
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FIFTEENTH RESOLUTION
Delegation of authority to the Board of Directors to increase the number of shares to be issued, with or without pre-emptive subscription rights, in the event of oversubscription The shareholders, having met the conditions required for extraordinary meetings as to quorum and majority, having considered the Board of Directors management report and the Statutory Auditors special report, and voting in accordance with ArticleL.225-135-1 of the French Commercial Code: 1) delegate authority to the Board of Directors, with the ability to sub-delegate as provided for by law, to increase the number of shares or securities to be issued in the event of oversubscription to an issue carried out pursuant to the eleventh, twelfth or thirteenthresolutions above, in particular by granting a greenshoe option in accordance with market practices, at the same price as the initial issue price and within the time periods and the limits provided for by the regulations applicable on the issue date (currently within thirty days of the subscription period closing date and up to a maximum of 15 percent of the initial issue); 2) resolve that the aggregate par value of capital increases carried out pursuant to this delegation of authority shall be charged against (i) the maximum limit applicable to the initial issue and (ii) the aggregate ceiling set in paragraph4) of the eleventhresolution; 3) resolve that this delegation of authority is granted for a period of twenty-sixmonths as of the date of this Meeting; 4) resolve that this delegation of authority shall cancel and the delegation of authority granted for the same purpose pursuant to the tenth resolution of the Annual Shareholders Meeting of May26, 2010.
2) resolve to waive the shareholders pre-emptive rights to subscribe the securities to be issued pursuant to this authorization, which may be issued without consideration, in favor of the beneficiaries defined in the preceding paragraph; 3) resolve that the issue price of the new shares or securities conferring an entitlement to shares of the Company shall be determined in accordance with ArticlesL.3332-19 et seq. of the French Labor Code and may not be (i) higher than the average of the opening share prices quoted on the twenty trading days preceding the date of the Boards decision setting the opening date of the subscription period or (ii) more than 20 percent lower than that average or 30 percent lower if the lock-up period provided for by the plan in accordance with ArticlesL.3332-25 and L.3332-26 of the French Labor Code is equal to or more than tenyears. However, the Board of Directors is expressly authorized to reduce the discount or not to grant one, particularly in order to comply with local regulations in the countries where the offer is being made; 4) resolve that the aggregate par value of the capital increases to be carried out pursuant to this authorization may not exceed 3% of the share capital, and will be determined on the date of the Boards decision to use this authorization, provided that: c this amount shall not be charged against the aggregate ceiling set in paragraph4) of the eleventhresolution, c this amount does not include the aggregate par value of any additional ordinary shares issued to protect the rights of holders of securities conferring an entitlement to shares of the Company in accordance with the law or any contractual provisions stipulating other adjustment events; 5) resolve that, in accordance with ArticleL.3332-21 of the French Labor Code, the Board of Directors may decide to award, without consideration, new or existing shares or other securities conferring an entitlement to new or existing shares of the Company to the beneficiaries defined in the first paragraphabove in respect of (i) matching contributions made pursuant to the regulations of Company or Group employee savings plans and/or (ii) the discount, where applicable; 6) resolve that should beneficiaries defined in the first paragraphabove fail to take up the entire issue within the subscription period, the number of shares issued shall be limited to the number of subscriptions received; 7) give the Board of Directors full powers, which may be sub-delegated as provided for by law, to implement this delegation of authority and, in particular, to: c decide whether to carry out the issues directly in favor of the beneficiaries or through a collective investment scheme (OPCVM), c determine, where applicable, the companies whose employees may benefit from the offers, which may not necessarily include all the companies eligible for the Company employee savings plan,
SIXTEENTH RESOLUTION
Delegation of authority to the Board of Directors to issue ordinary shares and/or securities conferring an entitlement to shares of the Company to employees of the Company in accordance with the provisions of ArticleL.3332-19 of the French Labor Code The shareholders, having met the conditions required for extraordinary meetings as to quorum and majority, having considered the Board of Directors management report and the Statutory Auditors special report and voting in accordance with the provisions of ArticlesL.225-129-2, L.225-129-6, L.225-138 and L.225-138-1 of the French Commercial Code and the provisions of ArticlesL.3332-18 et seq. of the French Labor Code: 1) authorize the Board of Directors, with the ability to subdelegate as provided for by law, to increase the Companys share capital, on one or more occasions and in the proportions and at the times it deems appropriate, by issuing shares or securities conferring an entitlement to shares of the Company to members of one or more Company employee savings plans or Group plans established jointly by the Company and French or foreign companies related to it, in accordance with ArticleL.225-180 of the French Commercial Code and ArticleL.3344-1 of the French Labor Code;
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c set the terms and conditions of the offers, the characteristics of the shares and, where applicable, other securities to be issued, the issue price calculated on the basis defined in this resolution, the opening and closing dates of the subscription period, the dividend entitlement dates, and the dates terms and conditions for the subscription of the shares, c do everything necessary to obtain admission of the newly issued shares to trading on the stock markets of the Boards choosing, c deduct any issue-related expenses from the Share premium account and, if deemed appropriate, the amount required to raise the statutory reserve to one tenth of the new capital after each issue, amend the Articles of Association accordingly and more generally carry out all transactions and formalities in connection with the capital increases carried out pursuant to this authorization either directly or by an agent; 8) resolve that this authority is granted for a period of twentysixmonths as of the date of this Meeting; 9) resolve that this delegation of authority shall cancel the delegation of authority granted for the same purpose pursuant to the ninth resolution of the Annual Shareholders Meeting of May26, 2010.
c transfer the difference between the carrying amount and par value of the shares canceled to any share premium or available reserve accounts; c more generally, do everything necessary to implement this authorization; c amend the Articles of Association accordingly and carry out any necessary formalities. This authorization is granted for a period of eighteenmonths as of the date of this Meeting and cancels and supersedes any previous delegation of authority granted for the same purpose.
EIGHTEENTH RESOLUTION
Harmonization of the Companys Articles of Association The shareholders, having met the conditions required for extraordinary meetings as to quorum and majority and having considered the Board of Directors management report, resolve to: 1) renumber the articles of the Companys Articles of Association by deleting articles bis and ter and amending any cross-references between articles accordingly; 2) delete in Article1 the reference to the law of July24, 1966 and the decree of March23, 1967 and replace it with a reference to the applicable legal and regulatory provisions of the French Commercial Code; 3) as regards Directors attendance at Board meetings by means of electronic communication: c refer expressly to the Board of Directors Charter in force within the Company which defines the practical modes of such attendance, c add a corresponding fourth paragraphto Article12 (now Article13) as follows, the remainder of the article remaining unchanged: The Board of Directors Charter may provide that Directors attending meetings by videoconference or other forms of electronic communication shall be deemed present for quorum and majority purposes, in accordance with the limitations and terms and conditions set out in the applicable laws and regulations; 4) as regards the right to attend Shareholders Meetings: c harmonize Article 17 (now Article 22) with ArticleR.225-85 of the French Commercial Code as regards the conditions for attending Shareholders Meetings, c accordingly delete existing paragraphs 3 and 4 and replace them with the following paragraph, the remainder of the article remaining unchanged: All shareholders of record at zero (0) hours Paris time on the 3rd business day preceding the date of the Meeting, as evidenced by their registration either on the shareholders register kept by the Company in the case of registered shares or in a securities account held by an authorized intermediary in the case of bearer shares, are entitled to take part in Shareholders Meetings;
SEVENTEENTH RESOLUTION
Delegation of authority to the Board of Directors to reduce the share capital by cancelling treasury shares The shareholders, having met the conditions required for extraordinary meetings as to quorum and majority and having considered the Board of Directors management report and the Statutory Auditors report, authorize the Board of Directors, with the ability to sub-delegate as provided for by law, to: c cancel at any time and on one or more occasions shares of the Company purchased under ArticleL.225-209 of the French Commercial Code pursuant to the tenth resolution submitted to this Meeting or under previously authorized share buyback programs, up to a maximum of 10 percent of the share capital per twenty-fourmonth period, this limit being adjusted, where applicable, to take account of any capital transactions that may occur after the date of this Meeting; c reduce the share capital accordingly and transfer the difference between the purchase value and par value of the shares canceled to share premiums and reserves available for distribution; c amend the Articles of Association accordingly and carried out any necessary formalities. The Board of Directors shall have full powers, which may be sub-delegated as provided for by law, to: c cancel the shares and reduce the share capital accordingly; c determine the final amount of the capital reduction; c set the terms and conditions of the capital reduction and place them on record;
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5) as regards thresholds provided for by the Articles of Association: c reduce the period for notifying to the Company thresholds provided for by the Articles of Association from 5 to 4 trading days (before close) to bring it into line with the period defined for legal thresholds in ArticleR.233-1 of the French Commercial Code, c delete the requirements, not provided for in the laws and regulations, for notifying to the Autorit des marchs financiers thresholds provided for by the Articles of Association, c accordingly replace the first and second paragraphs of Article24 (now Article29) as follows, the remainder of the article remaining unchanged: In addition to the thresholds for notifying thresholds provided for by law, any person or legal entity acting alone or in concert within the meaning of ArticleL.233-10 of the French Commercial Code who comes to own a number of shares representing two percent of more of the share capital or voting rights or any further multiple thereof, including over and above the legal thresholds, is required to notify the Company by recorded delivery mail of the total number of shares and voting rights held no later than four business days after occurrence.
NINETEENTH RESOLUTION
Powers to carry out formalities The shareholders, having met the conditions required for extraordinary meetings as to quorum and majority, grant full powers to the bearer of an original, excerpts or a copy of the minutes of this Meeting to carry out any publication, filing or other necessary formalities.
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11.4. Details concerning directors whoare proposed for re-election andcandidates whose appointment isputtothevote
11.4.1. DETAILS CONCERNING DIRECTORS WHO ARE PROPOSED FORRE-ELECTION
Mr.Yann Delabrire
Aged 61, Mr.Yann Delabrire has held various positions within the Finance departments of major manufacturing groups. He joined the PSA Peugeot Citron group in 1990 where he held the position ofChief Financial Officer andmember of theExecutive Committee from1998to 2007. He has been a director of Faurecia since November18, 1996 and has been the Chairman and Chief Executive Officer since February16, 2007. c Chairman of the Supervisory Board of Peugeot Finance International (Netherlands) c Vice-Chairman and Director of PSA International SA (Switzerland) As of December31, 2011, Mr.Yann Delabrire held 6,294Faurecia shares
Mr.Jean-Pierre Clamadieu
Aged 53, Mr.Jean-Pierre Clamadieu wasChief Executive Officer of Rhodia fromOctober2003 until March2008 and was then Chairman andChief Executive Officer until October2011, having previously held various divisional executive positions. He has been Deputy Chief Executive Officer of Solvay since September8, 2011.
DIRECTORSHIPS AND POSITIONS HELD IN THE LAST FIVEYEARS AND NOW EXPIRED
c Chief Financial Officer of PeugeotSA c Chairman and Chief Executive Officer of Banque PSA Finance c Chairman and Chief Executive Officer of Compagnie Gnrale de Crdit auxParticuliers Credipar c Director of Peugeot Citron AutomobilesSA c Director of Automobiles Citron c Director of Gefco c Chairman of Pergolese Investissements c Chief Executive Officer of Grande Arme Participations c Chairman of the Supervisory Board of SIT c Permanent representative of PeugeotSA on the Board of Directors ofAutomobiles Peugeot c Manager of PSA Services SrL (Italy) c Chairman of the Board of Directors of Peugeot Citron ArgentinaSA (Argentina)
DIRECTORSHIPS AND POSITIONS HELD IN THE LAST FIVEYEARS AND NOW EXPIRED
c Chief Executive of Rhodia until March2008 c Chairman and Chief Executive of Rhodia until October27, 2011 As of December31, 2011, Mr.Jean-Pierre Clamadieu held 364 Faurecia shares
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Mr.Ross McInnes
Aged 58, Mr.Ross McInnes held the position ofChief Financial Officer of Eridania Beghin-Say from 1991 to 2000. He became a director in 1999. He joined Thomson-CSF (Thales) in 2000 as Senior Vice-President and Chief Financial Officer before joining the PPR group in 2005 as Senior Vice-President Finance and Strategy. From 2007 to 2009 he held the position of Vice-Chairman of Macquarie Capital Europe. In March 2009, Mr Ross McInnes joined the Safran group as Advisor to the Chairman of the Management Board. In June 2009 he then became Chief Operating Officer responsible for Economic and Financial Affairs. He was a member of the Management Board from July 2009 to April 2011. On April 21, 2011 he was appointed Deputy Managing Director responsible for Economic and Financial Affairs by Safrans Board of Directors.
c Director of Messier-DowtySA c Permanent representative on the Board of Directors of Messier-DowtySA (company represented: Safran) c Chairman of the Management Board of Gnrale de SantSA c Director of SantSA (Luxembourg) c Chairman of Chartreuse& Mont-BlancSAS c Vice-Chairman of Macquarie Capital EuropeLtd (UK) c Director of Macquarie Autoroutes de FranceSAS c Director of EiffarieSAS c Director of Autoroutes Paris-Rhin-Rhne c Director of AREA and AdelacSAS c Director of Chartreuse & Mont-Blanc Global Holdings SCA (Luxembourg), Chartreuse & Mont-Blanc GP SARL (Luxembourg) and Chartreuse& Mont-Blanc Holdings Sarl (Luxembourg) c Director of Bienfaisance Holding c Director of Electro Banque
c Member of the Supervisory Board of Gnrale de SantSA c Member of the Supervisory Board of PistoSAS c Permanent representative on the Board of Directors of La Financire de Brienne (company represented: tablissements Vallaroche) c Permanent representative of SantSARL on the Supervisory Board of Gnrale de SantSA c Censor at the Board of Gnrale de SantSA As of December31, 2011, Mr.Ross McInnes held 100 Faurecia shares
DIRECTORSHIPS AND POSITIONS HELD IN THE LAST FIVEYEARS AND NOW EXPIRED
c Member of the Executive Board of Safran c Director of SME
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c Member of the Supervisory Board of IDI Emerging MarketsSA c Permanent representative of FPP on the Supervisory Board ofZodiacAerospace c Director of Sanef c Director of Imerys c Director of Holding Reinier c Director of tablissements Peugeot Frres c Director of Sofina c Director of DKSH AG c Permanent representative of FFP, Chairman of Financire GuiraudSAS c Manager of SCI Rodom c Manager of SCI CHP Gestion
c Member of the Supervisory Board of Aviva France c Director of GIE de recherche et dtudes PSA Renault c Director of Immeubles et Participations de lEst c Director of Alpine Holding c Director of WRG GroupLtd c Director of B-1998,SL c Director of FCC ConstructionSA c Member of the Supervisory Board of Citron Deutschland AG c Director of Citron Denmark A/S c Director of Citron UKLtd As of December31, 2011, Mr.Robert Peugeot held 100 Faurecia shares
DIRECTORSHIPS AND POSITIONS HELD IN THE LAST FIVEYEARS AND NOW EXPIRED
c Chairman and Chief Executive Officer of SimanteSL c Director of Fomento de Construcciones y ContratasSA (FCC) c Director of LFPF (La Franaise de Participations Financires) c Director of Aviva Participations
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DIRECTORSHIPS AND POSITIONS HELD IN THE LAST FIVEYEARS AND NOW EXPIRED
None To date, Mr.Jean-Baptiste Chasseloup de Chatillon does not hold any Faurecia shares
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CONTENTS
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Statement by the person responsible
INFORMATION OFFICER
Mr.Frank Imbert Chief Financial Officer Faurecia 2, rue Hennape 92000 Nanterre France Tel.: +33(1) 72367000 Fax: +33(1) 72367007
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Cross-reference table with theinformation contained intheannual nancial report
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Cross-reference table
Cross-reference table
This cross-reference table, prepared on the basis of appendix I of European Commission Regulation 809/2004 of April29, 2004 (Appendix I of the Regulation) shows the pages of the 2011 Registration Document in which the information corresponding to each of the headings of said Appendix I of the Regulation appears.
118-119, 210-211 212 212 212 212 5, 18, 61, 119-122, 124, 132-134, 177-178, 188-189
5.2. 6. 6.1. 6.2. 6.3. 6.4. 6.5. 7. 7.1. 7.2. 8. 8.1. 8.2. 9. 9.1. 9.2.
Investments BUSINESS OVERVIEW Principal activities Principal markets Exceptional factors Possible dependency of the issuer as regards patents, licenses, and industrial, commercial ornancial contracts The basis for any statements made by the issuer regarding its competitive position ORGANIZATIONAL STRUCTURE Brief description of the Group List of signicant subsidiaries PROPERTY, PLANT AND EQUIPMENT Existing or planned material tangible xed assets A description of any environmental issues that may affect the issuers utilization oftangible xed assets OPERATING AND FINANCIAL REVIEW Financial position Operating income (loss)
8-14 8-14, 119-124 118-119 21-23, 214 10-14 222-223 8-14, 93, 210-212, 166-171, 202-203, 222-223
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Cross-reference table
139-141, 206-209, 215-221 18-19, 110 23-25, 149-153, 176-177 24-25, 149-153, 176-177 18-19, 176-177 56-62 20, 53, 56 N/A
4, 74-86 87
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Cross-reference table
5, 107-171, 181-203 N/A 107-171, 181-203 172-173, 204-205 31/12/2011 9 165, 200, 213, 232-233 25, 143 18, 24-25, 119, 149-153, 176-177
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