Valeo has posted third-quarter sales down 8% year-on-year to EUR4.4bn (US$5.2bn).
"First of all, I would like to thank our teams following the strong recovery we have seen since April,"said Valeo chairman and CEO, Jacques Aschenbroich.
"As well as strictly adhering to the health protocol, they have continued efforts to variabilise costs and achieved excellent operating performances following the resumption of operations in all our plants, in a health environment that remains complex.
"The measures implemented have enabled the Group to reduce structural costs in all our host countries and across all our businesses. Thanks to our rigorous management of overheads and inventories, our cash generation has improved and we can therefore continue our investments with a focus on our technology platforms, particularly for 48V systems in France and for front cameras in Germany and in China.
"In view of the action taken by the Group and the upturn in business, we are raising our second-half 2020 outlook, as announced in July, and are confident in our ability to achieve the revised objectives, unless of course the market deteriorates significantly amid a resurgence in Covid-19."
The Valeo Group adds it has put in place a health protocol to allow all sites to operate as normal, while ensuring maximum protection for all employees.
The protocol is audited, mandatory and applicable systematically and consistently at all Valeo sites worldwide, whether in plants, R&D centres or head offices.
For full-year 2020, the Group confirms its objective of outperforming automotive production by around five percentage points.
For the second half of 2020, Valeo has based its guidance on production volume estimates published by IHS. These estimates do not factor in any significant adverse impact on production, supply chain and market evolution of a second wave of Covid-19.
Based on this scenario, that is, a fall of 3% in automotive production during the second half of the year, the Group has set itself the following objectives:
- Outperformance of around five percentage points during the full year
- Confirmed reduction in losses for the Valeo Siemens eAutomotive joint venture compared with the second half of 2019 (in line with the Group's expectations of a slight reduction in losses in 2020)
For the second half, the financial outlook is being revised upwards:
- EBITDA margin representing more than 12% of sales (up from "representing around 10% of sales")
- Free cash flow exceeding EUR600m (up from "exceeding EUR400m")