Valeo has unveiled EUR1bn (US$1.1bn) in additional credit lines with its main banking partners, adding its 2020 financial obejctives in connection with its 2019 full-year results are no longer valid.
Based on production shutdowns put in place by each of its carmaker customers and in compliance with regulatory measures taken in each country where the Group has operations, Valeo has adapted its production capacity:
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- In China, where all 34 Valeo plants have gradually begun to resume production since 10 February
- In March, sales reached 60% of their 2019 level and should be back to normal in the coming months
- Since mid-March, European plants have adapted production to customer demand and have also gradually shut down production, except at sites which manufacture goods for export
- In North America, plants have progressively stopped based on customer decisions to shut down production
To address the situation, Valeo has adopted the following measures:
- Variabilizing its costs across all plants, particularly through part-time working arrangements
- Variabilizing its costs for support activities such as R&D and at administrative centres
- Drastically reducing all investments and costs not essential for business continuity
- Strict daily monitoring of its cash position
- A reinforced safety protocol designed to guarantee protection for Group employees will be adopted worldwide across all plants, R&D centres and other Group facilities
In terms of cash flow, Valeo has negotiated EUR1bn (US$1.1bn) in additional credit lines with its main banking partners. The supplier currently has EUR2.3bn in undrawn credit lines, which it says will enable it to withstand a continuation of the current crisis.
Valeo has not requested a guarantee from the French State in respect of its borrowings, nor has it deferred payment of its taxes or social charges.
In addition, in his capacity as executive corporate officer, Jacques Aschenbroich has pledged to relinquish 25% of his compensation for the duration of the shutdown to support Covid-19-related solidarity initiatives. Members of the board and the Operations Committee have unanimously decided to follow the initiative.
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By GlobalData“Lastly, in keeping with the spirit of national solidarity in facing Covid-19, Valeo has provided resources to the consortium comprising Air Liquide, Schneider and Groupe PSA for the manufacture of 10,000 respirators, and has donated 30,000 FFP2/FFP3 masks to hospitals,” said a Valeo statement.
