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February 21, 2019

Valeo 2018 net attributable income down 38% to EUR546m

Valeo has posted 2018 net attributable income down 38% to EUR546m, with sales up 6% to EUR19.3bn in line with its guidance last year.

By Rhodri Morgan

Valeo has posted 2018 net attributable income down 38% to EUR546m, with sales up 6% to EUR19.3bn in line with its guidance last year.

“2018 was a challenging year, characterised by a particularly volatile economic and geopolitical environment,” said Valeo chairman and chief executive, Jacques Aschenbroich.

“Our sales were impacted by WLTP in Europe and by the sharp slowdown in the Chinese market. We responded to this situation as early as July, implementing a vigorous action plan aimed at reducing our capital expenditure and our costs. This plan will be reinforced in 2019.

“In terms of growth, operating margin and free cash flow generation, we achieved our objectives for full-year 2018 as revised in October. Valeo is strongly positioned in the electric, autonomous and connected vehicle segment on a deeply changing automotive market. This is thanks to our capacity for innovation grounded in the synergies between our different Business Groups and in our portfolio of technologies.

“Our order intake, including that of Valeo Siemens eAutomotive, represents 1.7x our original equipment sales and has grown 10% each year on average over the past five years, guaranteeing sustained growth in the next few years.

“Despite a difficult environment continuing into the first half of 2019, this innovation strategy will allow us to improve our like-for-like growth and our outperformance relative to the automotive market during the year, driven mainly by the start of production on numerous projects in the ADAS segment with new-generation cameras, and in the electric vehicle segment, for example with new 48V systems.”

2019 outlook:

In a context of:

  • Volatile global automotive production (estimated growth of between 0% and -1% during the year compared with 2018) with a decline in the first half due to the economic environment in China and an improvement in the second half
  • Uncertainty regarding the price of raw materials and electronic components.

The Valeo Group has set the following objectives:

  • A stronger market outperformance than in second-half 2018, increasing gradually during the year thanks to the start of production on new contracts, particularly in the camera, electrical and transmission systems, and lighting segments; ?
  • Roll-out of a new programme to reduce costs by more than 100 million euros and capital expenditure by more than EUR100m euros; ? EBITDA growth (in value terms)
  • Higher free cash flow generation than in 2018
  • Operating margin excluding share in net earnings of equity-accounted companies (as a % of sales) of between 5.8% and 6.5%, depending on the trends in automotive production and in the price of raw materials and electronic components
  • A “share in net earnings of equity-accounted companies” line which, as announced, is expected to have a similar impact on Valeo’s 2019 statement of income as it did in 2018

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