Earnings Cash Flow Book Value

Sales Ebitda

1

51

101

151

201

Nov 12 Mar 13 Jul 13 Nov 13 Mar 14 Jul 14

Margin of Safety

-30%

-10%

10%

30%

50%

Nov 12 Mar 13 Jul 13 Nov 13 Mar 14 Jul 14

Discount / Premium to FV

Discount/Premium to FV Median DFV

-3%

22%

Sep 13 Jan 14 May 14 Sep 14

0%

25%

50%

75%

100%

Historic D

FV

FV R

ange

58.9

78.9

98.9

118.9

138.9

158.9

Optim

. / Pessim.

Margin of Safety

25

45

65

85

105

Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jul-14

Fair Value

Price Fair Value

SUMMARY: We are becoming increasingly bullish on Autos and Valeo in particular appears compelling as it currently screens with 4 green stars. Apollo Risk at 5 year lows suggests investors have unjustifiably priced in risk at extreme levels and hence we recommend buying now that we have a clear signal from the stars. Long term value at €105 gives an extremely attractive 28% upside to buy into whilst any further downside does appear very limited given the shares are currently pricing Apollo’s most pessimistic longer term valuation.

17 October 2014

Price Targets & Expected Returns

Apollo Value Growth

FV Drivers - History & 3m Change •  Valeo appears extremely cheap in relation to long term value at €105. •  Apollo Risk score at -2.9 is currently being priced in at 5 year lows.

•  The stock’s risk/return profile supports our view to buy whilst also being one of the most attractive in the S600 Autos sector.

ó ó ó ó

STOCK VIEW

€82.22 Price: €103.1 FV: €105.51 IV:

Disc. to FV: -20% Med. PFV: 9% -2.9 Risk:

1 month

2 month

Optimistic

Pessimistic

12 month

€85.86

€87.26

€120.45

€87.55

€105.51

4.4%

6.1%

46.5%

6.5%

28.3%

Valuation Ranges

1m FV:

3m FV:

-3.5%

-4.9%

1m IV:

3m IV: -9.1%

-3.1%

Buy Valeo

Priced as of local market close:

S elected f rom S 600 Autos PriceIm Price Change

FV D/P FVMedian D/P FV

1m FV Change

Intrins ic Value

D/P to IV

3m IV Change

Valeo €82.22 -13% €103.1 -20.2% 9% -3% €105.51 -22% -9%

Daimler €59.35 -7% €63.31 -6.3% 4% -9% €67.88 -13% -9%

BMW €80.57 -9% €91.76 -12.2% 0% -5% €93.83 -14% -2%

Fia t S pA €7.205 -7% €8.12 -11.3% 1% 2% €7.88 -9% -12%

Peugeot €9.275 -11% €10.2 -9.1% 9% 1% €11.84 -22% 12%

Michelin €71.31 -11% €80.59 -11.5% 1% -11% €85.07 -16% -13%

BMW €80.57 -9% €91.76 -12.2% 0% -5% €93.83 -14% -2%-3.8

Ris k Score

-2.9

-0.3

-3.8

-0.9

-3.4

-3.3

0% 20% 40% 60% 80% 100%

Percentile ranking

Peer Investment Profile*

Peer Average Valeo

79

99

119

139

159

179

199

Nov 12 May 13 Nov 13 May 14

T-­‐500d  =100  Relative Chart (vs. Sector)*

Price Relative FV Relative Intrinsic Value Relative

-4%

1%

6%

11%

16%

21%

26%

31%

36%

-35% -15% 5% 25% 45% 65% 85% 105%

Apo

llo V

alue

indi

cato

r

3M change in IV%

Apollo Value/Growth in IV%*

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

-5 -4 -3 -2 -1 0 1 2

2M E

xpec

ted

retu

rn

Apollo Risk Score

Apollo Risk/2m Expected Return*

*A detailed explanation of the underlying calculations can be found at: http://www.libra-is.com/stock_view_explained.html Disclaimer: Libra Investment Services is Authorised and Regulated by the Financial Conduct Authority; for further detail please refer to our online disclaimer: http://www.libra-is.com/general_disclaimers.html

PEER VIEW

Key Peers Summary Table

Key Peers Graphics

3m IV Growth

12m Exp. Return

Value Indicator

Volatility

Jamie Dorricott: jamie.dorricott@libra-is.com