Valeo swung back to profit in 2002 following 2001’s deep loss. Restructuring efforts helped to bring about recovery and the company also succeeded in meeting its 6% operating margin target in the fourth quarter.
Market reaction to the 2002 results was positive.
The full year operating margin for 2002 was 5%
Valeo SA posted a net profit of 135 million euros in 2002, up from a net loss of 591 million euros the previous year as one-off costs linked to major restructuring disappeared.
Valeo’s consolidated sales totalled 9.8 billion euros in 2002, down by 4.2% over 2001. The impact of disposals was -2.4%, and currency variations -1.4%
Excluding these effects, Group sales were down by 0.4% versus 2001. In Europe, sales decreased by 2%, reflecting a 2% fall in European automotive output.
In North America, sales grew by 1%, while automotive output increased by 6%. Valeo said that uncertainties related to the subsidiary, Valeo Electrical Systems Inc. up until September, weighed on Valeo’s activity in North America.
In Asia, Valeo reported sales growth of 17% growth in a market which grew by 10%, while in South America, sales were down by 2% in a market off almost 5%.
Valeo chairman Thierry Morin said that Valeo will strive to maintain a 6% margin through 2003 despite an anticipated downturn of the automobile market in North America this year of about 5%, and of between 4-5% in Europe.
Valeo said that in 2002 it pursued a number of programmes aimed at improving its industrial cost base and reinforcing its competitive position. The company highlighted the rationalisation of its industrial base: closure of seven production sites, disposal of one site and the redeployment of capacity to lower production cost areas (five plants opened).
Thierry Morin, Chairman of the Management Board said in a statement: “Thanks to the action plans implemented in the Spring of 2001 and pursued in 2002, the year marked Valeo’s return to profitability. In 2003, despite an expected downturn in the automotive market, our ambition is to continue to progress: on the strength of our technological know-how and an improved cost base, we will help our customers to differentiate their vehicles through an innovative, competitive product offering.”
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