Valeo’s net sales reached €5,046 million in first half 2005, an increase of 4.8% year on year.

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After adjusting for exchange rates (+0.6%) and changes in the reporting entity (+5.4% reflecting the acquisitions of the engine electronics division of Johnson Controls and the balance of the shareholding in Zexel Valeo Climate Control), sales were down 1.2% in line with the automobile production in Valeo’s key markets.


The gross margin for the half year fell by 2.7% to €825 million, representing 16.3% of sales as compared to €848 million and 17.6% of sales for the first half 2004. The group estimates that the increase in raw material prices reduced the gross margin was 1.5 points before corrective actions.


Operating income was €153 million or 3.0% of total operating revenues compared to €222 million and 4.6% of total operating revenues. The operating income includes a charge of €48 million under “other income/expense” as compared to a €25 million in 2004.


Income before tax for the period was €106 million as compared with €187 million in 2004. It includes a cost of financial debt of €24 million, an increase of €7 million compared to the first half 2004 as a result in particular of the acquisitions completed during the period.


The tax charge was €35 million as compared to €1 million in the first half 2004. The first half 2004 tax charge included a rebate of €83 million corresponding to the outstanding balance for the tax paid in 2001 on the gain from the sale of the Group’s 50% shareholding in LuK.


Net income was €73 million for the period compared to €183 million for the first half 2004. The comparison between the two years was impacted by the tax rebate of €83 million in 2004.


For the second half of the year, the group foresees a drop of between 1% and 2% in light vehicle production in Europe and a slight increase in North America boosted by the growth of the transplants. Valeo intends to continue to increase its market share and benefit from growth opportunities following its recent acquisitions.