Third quarter 2006 operating revenues at Valeo were off 3% to EUR2,263m year on year with exchange rates having a negative impact of 0.8%.
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World automotive production dropped 4% in western Europe and 9% in North America, and gained 11% in Asia and 3% in South America.
Gross margin for the quarter was off 8.2% to EUR335m for the quarter, due in particular to the rise in raw material prices, assessed at 0.8 margin points.
Operating income was EUR45m (2.0% of total revenues) compared to EUR81m (3.5% of total revenues) a year previously. This included “other net expenses” of EUR21m, compared to EUR2m in 2005. Total R&D expenses (net of customer funding) and administrative and selling expenses was EUR269m, down 4.6% compared to the third quarter 2005.
Net income was EUR7m compared to EUR29m in 2005, after income tax of EUR23m (EUR15m in 2005).
At 30 September 2006, Valeo’s net debt was EUR1,077m, compared to EUR1,080m at 1 January 2006. The debt-to-equity ratio was 64%, compared to 63% at year-end 2005.
Valeo expects automotive production in Europe to stabilise in the fourth quarter, reflecting sustained levels of production in eastern Europe and a fall in western Europe.
Production should drop by 5% in North America (-11% for the Big 3). In this context, Valeo intends to improve its market share as raw material prices stabilise also.
