In the third quarter of 2004, Valeo’s sales were €2,179 million, an
increase of 4.5% compared with third quarter 2003.

It is estimated that light vehicle production increased slightly in Western Europe and fell slightly in North America. In South America volumes increased by more than 30%. The increase of production in Asia remained at around 6% thanks to the rebound in Korea, but this trend hides a strong slowdown in growth in China.

Gross margin for the quarter rose 3.3% over the previous year to €376 million euros to reach 17.3% of sales. This was achieved despite the negative impact of the pressure on raw material prices that the group estimates at 1% of margin for the period. Offsetting measures enabled the net impact on the margin to be reduced to 0.5% during the period.

The group’s operating income remained stable at €90 million or 4.1% of sales versus 4.3% in the comparable period for 2003. A slight increase in R&D expenditure as a percentage of sales was offset by a reduction in sales and administrative expenses.

Operating income less financial charges progressed by 3.8% in the quarter and by 6% for the first nine months. In this same period net income increased by 5.5%.