Valeo H1 2024 Results
PARIS
July 25, 2024
In first-half 2024, Valeo continued to
improve its profitability, with an operating margin of 4.0% and
free cash flow of 121 million euros, in line with its full-year
2024 objectives
In the first half of 2024, Valeo reaffirmed its margin
and free cash flow objectives thanks to rigorous management of its
activities, in particular through cost reduction measures. The
Group's results for first-half 2024 are as follows:
- Sales of
11,117 million euros, up 1 % on a like-for-like basis
- Operating
margin up 23% to 445 million euros, representing 4.0% of sales (up
0.8 percentage points year on year)
- EBITDA
margin at 12.4% of sales (up 0.8 percentage points year on
year)
-
Free cash flow of 121 million euros, up 277
million euros on first-half 2023, notably thanks to a
sustained 290 million euro reduction in inventories, particularly
of semiconductors
- Net debt at
4,010 million euros and leverage
ratio at 1.5x EBITDA
-
Order intake at 9.1 billion euros, due to projects being
postponed to the second half of the year
-
Full-year 2024 and 2025 objectives: sales objectives
revised to take into account current market conditions; margin and
free cash flow objectives reaffirmed, supported by cost reduction
measures
“Thanks to the remarkable commitment of
Valeo’s teams in rigorously managing our activities and
implementing cost reduction measures, we are continuing to improve
our financial performance in line with the margin and cash
generation objectives we set ourselves for the year. In the first
half of 2024, our operating margin was 4.0% and we
generated free cash flow of 121 million euros. In an environment
marked in particular by automakers postponing production launches,
the slowdown in high-voltage electrification and a lackluster
market in Europe and China, we have revised our sales objectives
for full-year 2024 and 2025. However, in view of the measures we
have taken to reduce costs and improve our operating efficiency, we
are reaffirming our 2024 and 2025 objectives for margins and free
cash flow.
During the first half, we finalized the
reorganization and merger of our Thermal Systems and Powertrain
Systems activities, effective from April 22, 2024. The synergies
unlocked as a result of this move mean that we can now offer our
customers a broader, more comprehensive and more competitive range
of products in traditional businesses and in electrification.
Thanks to this reorganization, we will also be able to lower our
break-even point and generate savings of around 50 million euros as
from the second half of the year, rising to 100 million euros on a
full-year basis. This effort is part of a set of one-off,
exceptional cost reduction measures aimed at achieving cumulative
full-year savings of 200 million euros.
As announced, we are continuing to implement
our 500 million euro asset divestment plan and, as part of this
process, have completed the sale of our Thermal Commercial Vehicles
activity.
Lastly, a Corporate Social Responsibility
agreement took effect on July 1 at all our plants worldwide. We are
therefore continuing to proactively deploy our sustainable
development strategy in terms of the environment, innovation, human
capital and society as a whole.”
Christophe Périllat, Valeo’s Chief Executive
Officer
Key figures
The financial statements for the six months
ended June 30, 2024 were authorized for issue by the Board of
Directors on July 25, 2024.
|
Order intake |
|
H1 2024 |
|
H1 2023 |
Change |
| Order
intake * |
(in €bn) |
|
9.1 |
|
18.8 |
-52
% |
| |
|
|
|
|
|
|
|
Income statement |
|
H1 2024 |
|
H1 2023 |
Change |
|
Sales |
(in €m) |
|
11,117 |
|
11,212 |
-1
% |
R&D expenditure**
|
(in €m) |
|
(1,079) |
|
(1,000) |
+8
% |
|
(as a % of sales) |
|
(9.7)
% |
|
(8.9)
% |
-0.8 pts |
Administrative and selling expenses
|
(in €m) |
|
(531) |
|
(549) |
-3
% |
|
(as a % of sales) |
|
(4.8)
% |
|
(4.9)
% |
+0.1 pts |
Operating margin
|
(in €m) |
|
445 |
|
363 |
+23
% |
|
(as a % of sales) |
|
4.0
% |
|
3.2
% |
+0.8 pts |
Share in net earnings of equity-accounted companies
|
(in €m) |
|
4 |
|
4 |
N/A |
|
(as a % of sales) |
|
—
% |
|
—
% |
N/A |
|
Other income and expenses |
(in €m) |
|
(50) |
|
(18) |
N/A |
|
Cost of debt |
(in €m) |
|
(123) |
|
(108) |
+14
% |
Net attributable income
|
(in €m) |
|
141 |
|
119 |
+18
% |
|
(as a % of sales) |
|
1.3% |
|
1.1% |
+0.2 pt |
| |
|
|
|
|
|
|
|
Statement of cash flows |
|
H1 2024 |
|
H1 2023 |
Change |
EBITDA*
|
(in €m) |
|
1,383 |
|
1,302 |
+6
% |
|
(as a % of sales) |
|
12.4% |
|
11.6% |
+0.8 pts |
|
Investments in property, plant and equipment |
(in €m) |
|
(600) |
|
(456) |
+32 % |
|
Investments in intangible assets |
(in €m) |
|
(592) |
|
(480) |
+23
% |
|
including capitalized development expenditure |
(in €m) |
|
(565) |
|
(461) |
+23
% |
|
Change in working capital |
(in €m) |
|
233 |
|
(237) |
N/A |
|
Restructuring costs |
(in €m) |
|
(44) |
|
(118) |
-63
% |
|
including one-off restructuring costs |
(in €m) |
|
(25) |
|
0 |
N/A |
|
Free cash flow* before one-off restructuring
costs |
(in €m) |
|
146 |
|
(156) |
N/A |
|
Free cash flow* after one-off restructuring
costs |
(in €m) |
|
121 |
|
(156) |
N/A |
| |
|
|
|
|
|
|
|
Financial structure and dividend |
|
H1 2024 |
|
Dec. 31, 2023 |
Change |
|
Net debt* |
(in €m) |
|
4,010 |
|
4,028 |
-18 |
|
Leverage ratio (net debt to EBITDA) |
N/A |
|
1.5 |
|
1.5 |
N/A |
* See financial glossary, page
16.
** For a comprehensive view of R&D expenditure, see page 10
of the press release.
New segment reporting based on three
Divisions POWER, BRAIN and LIGHT
The POWER Division accounts for
51% of the Group's total sales. It caters to all types of
powertrains (internal combustion engines, 48V mild hybrids, PHEVs
and BEVs). Valeo leverages both its strong position in the
electrification market and its portfolio of high-margin,
cash-generative traditional products (transmission systems, 48V and
thermal systems for internal combustion engine vehicles). Valeo
POWER is the result of the reorganization and merger of Valeo’s
Powertrain Systems and Thermal Systems activities, designed to give
the Group a consistent, comprehensive and competitive technology
offering catering to both electric powertrains and internal
combustion engines, with a high level of flexibility.
The BRAIN Division is leading
the way in the acceleration and intends to leverage all the
opportunities offered in the area of driving assistance (ADAS) and
the new centralized electrical/electronic architectures inherent in
software-defined vehicles (SDVs). By 2030, 90% of new vehicles will
carry these systems, half of which could reach autonomy levels 2
and 2+. Valeo intends to take advantage of the increase in its
content per vehicle for sensors, high-performance computing units,
the new centralized electronic architecture of the software-defined
vehicle and more generally, the increasingly important role that
software plays in mobility.
The LIGHT Division designs and
produces innovative, high-performance, smart exterior and interior
lighting and signaling systems. In a market shaped by the
development of LED technology and the need for high-definition
light beams, lighting remains a powerful tool for improving road
safety and the design of new vehicles commercialized by automakers.
The growing take-up of electric vehicles and the concurrent
phase-out of front radiator grilles has given designers the freedom
to completely rethink the front end of the electric vehicle,
enabling brands to assert their identity with more lighting – not
only on the front end, but also all around and inside the
vehicle.
Sales of 11,117 million euros in first-half 2024, up 1%
like for like
Sales
(in millions of euros) |
As a % of sales |
|
H1 2024 |
|
H1 2023 |
Change |
FX |
Scope |
LFL* change |
|
Original equipment |
84% |
|
9,295 |
|
9,544 |
-3% |
-1% |
-1% |
-1% |
|
Aftermarket |
11% |
|
1,190 |
|
1,167 |
+2% |
-2% |
-1% |
+5% |
|
Miscellaneous |
5% |
|
632 |
|
501 |
+26% |
-1% |
-2% |
+30% |
|
Total |
100% |
|
11,117 |
|
11,212 |
-1% |
-1% |
-1% |
+1% |
* Like for like
(1).
Automotive production, which remained on a par
with the same period in 2023, varied from one region to the
next:
-
production rose by 5% in China, led mainly by growth in new-energy
vehicles and exports;
-
production fell 3% in Europe, due to an unfavorable basis for
comparison linked to automakers building up inventories in
first-half 2023.
Total sales for first-half 2024
came in at 11,117 million euros, down 1% compared with the same
period in 2023.
Changes in exchange rates had a negative 1.2%
impact, primarily due to the appreciation of the euro against the
Chinese yuan, the Japanese yen and the South Korean won.
Changes in Group structure had a negative 0.6%
impact, mainly linked to the sale of the Ichikoh Mirror business in
Japan on August 1, 2023.
On a like-for-like basis, sales rose by 1%.
Original equipment sales were down by 1% like
for like, buoyed by the Group's other activities but penalized by
the high-voltage electric powertrain activity:
-
+6% from the BRAIN Division (of which ADAS: +7%);
-
+2% from the LIGHT Division;
-
-5% from the POWER Division, of which -43% from the high-voltage
electric powertrain business.
Aftermarket sales rose by 5% on
a like-for-like basis compared with the prior-year period, fueled
by the increased number and age of vehicles on the road, and a more
attractive offering of value-added products.
“Miscellaneous” sales (tooling and customer
contributions to R&D) increased by 30% like for like, notably
confirming the very large number of future new production launches
in the lighting segment.
Original equipment sales down 1% like
for like in first-half 2024
Original equipment sales***
(in millions of euros)
|
As a % of sales |
|
H1 2024 |
|
H1 2023 |
Change |
LFL* change |
Perf. ** |
|
Europe & Africa |
49% |
|
4,601 |
|
4,691 |
-2% |
-3% |
0 pt |
|
Asia, Middle East & Oceania |
29% |
|
2,687 |
|
2,885 |
-7% |
—% |
-1 pt |
| o/w Asia
(excluding China) |
15% |
|
1,421 |
|
1,530 |
-7% |
+2% |
+6 pts |
|
o/w China |
14% |
|
1,266 |
|
1,355 |
-7% |
-2% |
-7 pts |
|
North America |
20% |
|
1,834 |
|
1,784 |
+3% |
+3% |
+1 pt |
|
South America |
2% |
|
173 |
|
184 |
-6% |
-6% |
+2 pts |
|
Total |
100% |
|
9,295 |
|
9,544 |
-3% |
-1% |
-1 pt |
* Like for like .
** Based on S&P Global Mobility automotive production
estimates released on July 17, 2024.
*** Original equipment sales by destination region.
In first-half 2024, original equipment sales
fell by 1% like for like, underperforming automotive production by
1 percentage point. This takes into account a negative 4
percentage point impact from the decline in the high-voltage
electric powertrain activity and a negative 1 percentage point
impact from the unfavorable geographical mix.
Europe and Africa’s performance
came out in line with automotive production: The POWER Division was
impacted by a decrease in activity on certain electric vehicle
platforms. The decline in high-voltage electric powertrain activity
was partially offset by growth in the POWER Division’s other
activities (thermal systems, transmission systems and 48V) owing to
the ramp-up of production for European automakers. The BRAIN
Division reported robust growth in ADAS (particularly for front
cameras and computer-vision cameras).
In Asia, the Group
underperformed automotive production by 1 percentage point:
- in China, the
Group continued the repositioning of its customer portfolio (70% of
order intake recorded in first-half 2024 was with automakers in
China, excluding JVs). It underperformed automotive production by 7
percentage points. The POWER Division excluding high-voltage
electrification was fueled by the ramp-up in production of electric
vehicles for Chinese automakers, while the LIGHT Division is fully
benefiting from recent production launches for a North American
automaker and several Chinese automakers for electrification
projects;
- in Asia
excluding China, Valeo outperformed automotive production by 6
percentage points thanks to good momentum for the POWER Division in
traditional powertrain technologies for a South Korean automaker,
and for the BRAIN Division in ADAS. The LIGHT Division was hampered
by sluggish business levels caused by production stoppages at
several Japanese
automakers.
In North America, Valeo
outperformed automotive production by 1 percentage point. The POWER
Division was lifted by the ramp-up in production. The LIGHT
Division enjoyed the full effects of the ramp-up in production of a
new contract in electrification for a North American automaker.
In South America, the Group
outperformed automotive production by 2 percentage points.
Segment reporting
Robust growth in BRAIN Division activities in first-half
2024
Sales by Division
(in millions of euros) |
H1 2024 |
|
H1 2023 |
Change in sales |
Change in OE sales* |
Perf. ** |
|
POWER |
5,692 |
|
5,951 |
-4 % |
-5 % |
-5 pts |
|
BRAIN*** |
2,569 |
|
2,448 |
+5 % |
+6 % |
+6 pts |
|
LIGHT |
2,853 |
|
2,816 |
+1 % |
+2 % |
+2 pts |
|
Other |
3 |
|
(3) |
N/A |
na |
na |
|
Group |
11,117 |
|
11,212 |
-1 % |
+1 % |
+1 pt |
* Like for like.
** Based on S&P Global Mobility automotive production
estimates released on July 17, 2024. (H1 2024 global
production growth: 0%)
*** Including the Top Column Module business.
The sales performance for the Divisions reflects
the specific product, geographic and customer mix and the relative
weighting of the aftermarket in their activity as a whole.
In the first half, the POWER Division
underperformed automotive production by 5 percentage points, of
which a negative 7 percentage points related to the decrease in
high-voltage electric powertrain activity.
The POWER Division excluding
the high-voltage electric powertrain business (thermal systems,
transmission systems and 48V) delivered 2% like-for-like growth,
outperforming automotive production by 2 percentage points thanks
to the ramp-up in production (a) in Europe for European automakers,
(b) in Asia (excluding China) for a South Korean automaker, and (c)
in China for several Chinese automakers (electric vehicles).
This helped to mitigate the impact of the
decline in high-voltage electric powertrain sales (513 million
euros in the first half of 2024, compared with 847 million euros in
the same period of 2023), penalized by the decline in activity on
certain electric vehicle platforms, notably in Europe, and by the
unfavorable basis for comparison linked to excess production and to
automakers building up inventories on these platforms in first-half
2023 (when there was a 108% increase in original equipment sales
compared with first-half 2022). As announced, the high-voltage
electric powertrain business saw a sequential improvement in sales
in the second quarter (314 million euros versus 199 million euros
in first-quarter 2024).
The BRAIN Division outperformed
automotive production by 6 percentage points, buoyed by strong
growth in ADAS, particularly in front and computer-vision cameras,
notably in Europe, South Korea and Japan. Like-for-like original
equipment sales were up by 7% for ADAS and by 4% for the
Reinvention of the Interior Experience segment.
The LIGHT Division outperformed
automotive production by 2 percentage points. In China and North
America, the Division's sales were driven by the recent production
launch for a North American automaker in the field of
electrification. In Japan, they were affected by a low level of
activity due to production stoppages at several Japanese
automakers.
Improved profitability for the POWER Division (up 0.7
percentage points) and the BRAIN Division (up 2.2 percentage
points)
EBITDA
(in millions of euros and as a % of Division
sales) |
H1 2024 |
|
H1 2023 |
|
Change |
POWER
|
585 |
|
571 |
|
+2 % |
|
10.3% |
|
9.6% |
|
+0.7 pt |
BRAIN*
|
408 |
|
336 |
|
+21 % |
|
15.9% |
|
13.7% |
|
+2.2 pts |
LIGHT
|
362 |
|
376 |
|
-4 % |
|
12.7% |
|
13.4% |
|
-0.7 pt |
|
Other |
28 |
|
19 |
|
+47 % |
Group
|
1,383 |
|
1,302 |
|
+6 % |
|
12.4% |
|
11.6% |
|
+0.8 pt |
* Including the Top Column Module business.
The POWER Division saw its
EBITDA margin increase by 0.7 percentage points to 10.3% in
first-half 2024, thanks to (a) the progress made in implementing
the synergy plan following the integration of the high-voltage
electrification business (pooling of R&D expenditure and
industrial organization costs for the low- and high-voltage
electrification activities) and (b) growth in the Division’s
profitable and cash-generating activities, i.e., excluding the
high-voltage electric powertrain business (thermal systems,
transmission systems and 48V). It therefore benefited from the
improved profitability of the Thermal Systems activity, whose
EBITDA margin came out at 9%, up 2.4 percentage points on the same
period in 2023.
The BRAIN Division recorded an
EBITDA margin of 15.9% in the first half of 2024, up 2.2 percentage
points, lifted by growth in ADAS and Interior Experience, which
posted margins of 16.6% (up 0.6 percentage points) and 13.9% (up
4.9 percentage points), respectively.
The LIGHT Division’s EBITDA
margin held firm during the period at 12.7%, in a context of (a)
high costs involved in preparing for numerous production launches,
(b) low business levels due to production stoppages at several
Japanese automakers, and (c) the negative impact on the Division’s
profitability of the yen’s depreciation against the euro.
Valeo recorded an operating margin of
4.0% and generated cash flow of 121 million euros in first-half
2024, in line with its full-year objectives
EBITDA and operating margins stood at 12.4% and
4.0% of sales, respectively, an improvement of 0.8 percentage
points compared with first-half 2023, despite production volumes
below their pre-crisis levels in the Group's two main regions
(Europe and North America), lower production volumes for electric
vehicles, especially in Europe, and continued wage growth.
|
|
|
|
H1 2024 |
|
H1 2023 |
Change |
|
Sales |
(in €m) |
|
11,117 |
|
11,212 |
-1
% |
EBITDA*
|
(in €m) |
|
1,383 |
|
1,302 |
+6
% |
|
(as a % of sales) |
|
12.4% |
|
11.6% |
+0.8 pt |
Operating margin**
|
(in €m) |
|
445 |
|
363 |
+23
% |
|
(as a % of sales) |
|
4.0% |
|
3.2% |
+0.8 pt |
Net attributable income
|
(in €m) |
|
141 |
|
119 |
+18
% |
|
(as a % of sales) |
|
1.3% |
|
1.1% |
+0.2 pt |
* See financial glossary, page
16.
** Excluding share in net earnings of equity-accounted
companies.
EBITDA(2) came in
at 1,383 million euros, or 12.4% of sales, up 0.8 percentage points
year on year, in line with 2024 guidance (EBITDA margin of between
12.1% and 13.1% of sales).
Operating margin excluding
share in net earnings of equity-accounted companies came out at 445
million euros, or 4.0% of sales, up 0.8 percentage points compared
with first-half 2023, and in line with 2024 guidance (between 4.0%
and 5.0% of sales).
The increase mainly reflects:
- +1.4 percentage points
corresponding to an improved gross margin resulting from good
control over operations, the initial effects of cost reduction
measures, improved profitability of existing contracts, the start
of production on new contracts with higher profitability and a
slightly negative volume effect on the operating margin;
- +0.2 percentage points relating to
the decrease in administrative and selling expenses (down 18
million euros), driven by strict cost control and the initial
effects of cost reduction measures;
-
-0.8 percentage points relating to R&D expenditure incurred to
fulfill the sharp increase in order intake recorded over the past
two years, the impact of which was minimized by improved R&D
efficiency (synergies from the creation of the POWER Division,
standardization of “project” developments and upskilling, mainly in
cost-competitive countries).
The Group continued its R&D efforts in first-half 2024 in
order to fulfill the sharp increase in order intake recorded over
the past two years.
|
|
|
|
H1 2024 |
|
H1 2023 |
Change |
|
Sales |
(in €m) |
|
11,117 |
|
11,212 |
-1
% |
Capitalized development expenditure
|
(in €m) |
|
565 |
|
461 |
+23
% |
|
(as a % of sales) |
|
5.1% |
|
4.1% |
+1.0 pt |
Amortization and impairment of capitalized development
expenditure*
|
(in €m) |
|
(302) |
|
(272) |
+11
% |
|
(as a % of sales) |
|
(2.7) % |
|
(2.4) % |
-0.3 pt |
IFRS impact
|
(in €m) |
|
263 |
|
189 |
+39
% |
|
(as a % of sales) |
|
2.4% |
|
1.7% |
+0.7 pt |
| |
|
|
|
|
|
|
|
|
|
|
H1 2024 |
|
H1 2023 |
Change |
Gross Research and Development expenditure
|
(in €m) |
|
(1,405) |
|
(1,245) |
+13
% |
|
(as a % of sales) |
|
(12.6) % |
|
(11.1) % |
-1.5 pt |
IFRS impact
|
(in €m) |
|
263 |
|
189 |
+39
% |
|
(as a % of sales) |
|
2.4% |
|
1.7% |
+0.7 pt |
|
Subsidies and grants, and other income |
(in €m) |
|
63 |
|
56 |
+13
% |
Research and Development expenditure
|
(in €m) |
|
(1,079) |
|
(1,000) |
+8
% |
|
(as a % of sales) |
|
(9.7) % |
|
(8.9) % |
-0.8 pt |
|
Customer contributions to R&D |
(in €m) |
|
301 |
|
268 |
+12
% |
Net
R&D expenditure
|
(in €m) |
|
(778) |
|
(732) |
+6
% |
|
(as a % of sales) |
|
(7.0) % |
|
(6.5) % |
-0.5 pt |
* Impairment losses recorded in operating
margin only.
The IFRS impact (the difference, in percentage
points, between “capitalized development expenditure” and
“amortization and impairment of capitalized development
expenditure”) stood at 2.4 percentage points (1.7 percentage points
in 2023). The greater IFRS impact results from the sharp rise in
order intake in 2022 and 2023, and from the significant improvement
in the margins embedded in these new orders. The IFRS impact was
lower than expected (2.8 percentage points), as capitalized
development expenditure was lower than forecast thanks to improved
R&D efficiency.
In the statement of income, R&D expenditure
represented 9.7% of sales, up 0.8 percentage points compared to the
same period in 2023.
The share in net earnings of equity-accounted
companies represented income of 4 million euros.
Operating margin including share in net earnings
of equity-accounted companies(3)
came out at 449 million euros, or 4.0% of sales, up 0.7
percentage points compared with first-half 2023.
Operating income came to 399
million euros and includes other expenses for a total amount of 50
million euros, or 0.4% of sales. This caption includes:
- one-off restructuring costs, in
particular relating to the plans to reorganize and merge the
Powertrain Systems and Thermal Systems activities. These plans led
to the recognition of 119 million euros in restructuring costs in
the first half of 2024. Total restructuring costs represented 134
million euros;
- a 94 million euro capital gain on
the sale of the Thermal Commercial Vehicles activity, completed on
June 30, 2024.
Amid a sharp rise in interest rates, the
refinancing of Valeo's debt (see the debt section on page 12)
resulted in a cost of debt in first-half 2024 of 123 million
euros.
Other financial items represented a net expense
of 14 million euros.
The effective tax rate came out at 34%.
The Group recorded net attributable
income of 141 million euros for the period, or 1.3% of
sales, after deducting non-controlling interests in an amount of 32
million euros.
Return on capital employed
(ROCE(4)) and return on assets
(ROA(4)) stood at 15% and 7%, respectively.
The Group generated free cash
flow(4)
of 121 million euros in the first half of 2024, in line
with the full-year objective of 350 million euros
|
(in millions of euros) |
H1 2024 |
|
H1 2023 |
|
EBITDA(4) |
1,383 |
|
1,302 |
| Investment in
property, plant and equipment |
(600) |
|
(456) |
| Investment in
intangible assets |
(592) |
|
(480) |
|
including capitalized development expenditure |
(565) |
|
(461) |
| Change in working
capital* |
233 |
|
(237) |
| Restructuring
costs |
(44) |
|
(118) |
|
including one-off restructuring costs |
(25) |
|
0 |
| Income tax |
(123) |
|
(97) |
|
Other* |
(136) |
|
(188) |
|
Free cash flow(4)
before one-off restructuring costs |
146 |
|
(156) |
| Free cash
flow after one-off restructuring costs |
121 |
|
(156) |
| Net financial
expenses |
(149) |
|
(119) |
| Dividends |
(118) |
|
(114) |
|
Other financial items** |
103 |
|
(18) |
|
Net cash flow(4) |
(43) |
|
(407) |
* Of which a 62 million euro
provision reversal, offset by accrued income recorded in change in
working capital.
** Of which disposals of investments with loss of control, net
of cash transferred (positive 212 million euro impact), offset by
share buybacks and a decrease in non-recurring sales of trade
receivables.
In first-half 2024, the Group generated 121 million
euros in free cash flow, mainly reflecting:
-
the contribution of EBITDA(4) in an amount of 1,383
million euros, up 81 million euros compared with the same period in
2023;
- strictly controlled investments in
property, plant and equipment, which amounted to 600 million euros
in light of a cumulative order intake of nearly 70 billion euros
over the period 2022-2023;
- 592 million euros in investments in
intangible assets (including 565 million euros in capitalized
development expenditure) following a sharp increase in order intake
in 2022 and 2023 with significantly higher profitability;
- a positive change in operating
working capital of 233 million euros, thanks notably to a sustained
290 million euro reduction in inventories – particularly of
semiconductors – as supply chains return to normal;
-
tax payments for 123 million euros.
Net cash flow(5)
represented an outflow of 43 million euros, reflecting:
-
149 million euros in net interest paid in first-half 2024;
-
118 million euros in dividends paid to Valeo shareholders and
non-controlling shareholders of Group subsidiaries;
-
the 212 million euros in cash proceeds from the sale of the Thermal
Commercial Vehicles business.
Stable net
debt(5)
and leverage ratio of 1.5x at June 30, 2024
Net debt stood at 4,010 million euros at
end-June 2024, stable versus December 31, 2023. The June 30, 2024
figure includes the proceeds from the sale of the Thermal
Commercial Vehicles business.
At June 30, 2024, the leverage
ratio (net debt/EBITDA) came out at 1.5x EBITDA and the
gearing ratio (net debt/stockholders' equity)
stood at 110% of equity.
Valeo’s balanced debt profile and solid
liquidity position give it a robust financial structure:
- on January 22, Valeo redeemed its
3.25% bonds for 700 million euros;
- on April 4, Valeo issued 850
million euros’ worth of 6-year green bonds with a coupon of 4.50%.
This represented the Valeo's second issue in accordance with the
Green and Sustainability-Linked Financing Framework, with the funds
raised intended to finance projects and investments relating to the
technology portfolio that contribute to low-carbon mobility,
particularly for vehicle electrification;
- on April 19, Valeo repaid a bank
loan for 50 million euros and took out a new bilateral bank loan
for 100 million euros, due April 2025;
- on June 18, Valeo repaid 50 million
euros of the loan granted by the European Investment Bank, due June
2029;
- at June 30, 2024, the Group had
drawn down 4.1 billion euros (150 million euros more than at
December 31, 2023) under its Euro Medium Term Note (EMTN) financing
program capped at 5 billion euros;
- the average maturity of gross
long-term debt stood at 3 years at June 30, 2024;
- Valeo has available cash of 3
billion euros and a total of 1.6 billion euros in undrawn credit
lines.
Divestiture of non-strategic assets
Valeo aims to dispose of non-strategic assets.
On June 30, 2024, the Group sold its Thermal
Commercial Vehicles business. The impacts of the transaction on
Valeo's consolidated financial statements for the six months ended
June 30, 2024 are as follows:
-
recognition of a 94 million euro capital gain in other income and
expenses;
-
a 247 million euro reduction in net debt;
This business represented sales of 159 million
euros in first-half 2024 (six months of operations) and 303 million
euros in 2023 (12 months of operations).
The Group continues to pursue its strategy of
divesting assets in an orderly, timely fashion, ensuring that they
are valued appropriately. Advanced talks are underway for further
disposals representing 100 million euros.
Order intake of 9.1 billion euros in
first-half 2024, reflecting the postponement of
projects by automakers
First-half order
intake(6) represented 9.1 billion
euros.
Order intake was down year on year, owing
to:
- the exceptional
level recorded in the first half of 2023 (18.8 billion euros) as a
result of significant opportunities in the ADAS and
software-defined vehicle (SDV) businesses;
- projects being
postponed pending key choices by automakers in terms of electronic
architecture;
- a more selective
order intake in line with the policy of continuous improvement in
profitability and cash generation.
In China, orders with Chinese automakers
accounted for 70% of the Group’s order intake in the first
half.
Achieved through strict financial discipline,
the order intake built up since 2022 was recorded at a level of
profitability significantly above Valeo’s Move Up plan objectives,
leading to continued improvement in the Group's margins beyond
2025.
Full-year 2024 and 2025 objectives:
sales objectives revised to take into account current market
conditions; margin and free cash flow objectives reaffirmed,
supported by cost reduction measures
|
|
2024 guidance (a) (b) |
2025 objectives (b) |
|
Sales (in billions of euros) |
~22.0
previously 22.5 to 23.5 |
23.5 to 24.5
previously 24.5 to 25.5 |
|
EBITDA (as a % of sales) |
12.1% to 13.1% |
13.5% to 14.5% |
|
Operating margin (as a % of sales) |
4.0% to 5.0% |
5.5% to 6.5% |
|
Free cash flow before one-off exceptional cost
reduction measures (c)
(in millions of euros) |
~500 |
~800 |
|
Free cash flow after one-off exceptional cost
reduction measures (c)
(in millions of euros) |
~350 |
~650 |
(a) Second-half margins and free
cash flow generation higher than in the first half.
(b) For greater comfort, figures are based on (i) light vehicle
production 3% below the S&P Global Mobility scenario released
on February 16, 2024, and (ii) sales in high-voltage
electrification of around 1 billion euros in 2024.
(c) Includes, but is not limited to, potential restructuring
measures.
Upcoming events
Third-quarter 2024 sales: October 24, 2024
Highlights
ESG
On January 2, Christophe Perillat, CEO of
Valeo, nominated Édouard de Pirey as Chief Financial Officer. He
takes over from Robert Charvier who, after 24 years with the Group,
has retired. Click here
On March 27, Valeo informed its shareholders
that its Combined (ordinary and extraordinary) General
Shareholders' Meeting would be held on May 23, 2024. Click here
On April 3, Valeo announced that it had
published its 2023 Universal Registration Document. Click here
On April 22, Valeo took a new step towards
electric mobility and announced the creation of its new Valeo POWER
division. Click here
On May 23, Valeo announced that its 2024
Shareholders' Meeting had taken place. Click here
Industrial partnerships
Valeo took part in CES 2024 from January
8 to 12, during which it announced several
partnerships:
- On January 4, Valeo
and Teledyne FLIR announced that they had signed an agreement and
first contract for thermal imaging for automotive safety systems.
Click here
- On January 4, Valeo
and Sennheiser presented ImagIn: an immersive sound and light
experience in your car. Click here
- On January 4, Valeo
and Applied Intuition announced their partnership to provide
digital twin technology for ADAS simulation. Click here
- On January 8,
ZutaCore® and Valeo announced their first contract for innovative
data center cooling. Click here
On February 8, Dawex, Schneider Electric,
Valeo, CEA and Prosyst joined forces to create Data4Industry-X, the
trusted data exchange solution for industry. Click here
On May 7, Valeo and ICAP GROUP, the owner of
Tecnobus, announced they had signed an agreement to prepare the
future of mobility in Ferentino. Click here
On May 23, Valeo and Smovengo committed to
circular maintenance of Vélib’ electric bike motors and batteries.
Click here
On June 11, Valeo partnered with Dassault
Systèmes to accelerate the digitalization of its R&D. Click
here
On July 8, Valeo and Seeing Machines announced
a strategic collaboration to offer advanced driver and occupant
monitoring solutions. Click here
Products/technologies and patents
On January 4, Valeo announced expanded software
capabilities in North America to support increased demand. Click
here
On January 8, Valeo announced its acceleration
in artificial intelligence thanks to Google Cloud tools. Click
here
From January 8 to 12, Valeo took part in CES
2024, where it presented groundbreaking innovations from its booth
and from its live demonstration area paving the way for affordable,
greener, safer and more connected mobility:
- On January 4, Valeo
presented the latest update of its Valeo Cyclee™ Mid-Drive Unit
solution with a new HMI and reduced noise and vibration at CES
2024. Click here
- On January 4, Valeo presented Ineez™ Air
Charging, its solution for wireless charging for electric vehicles.
Click here
On January 10, Valeo’s Vsevolod
Vovkushevsky announced that he had been named a MotorTrend Software
Defined Vehicle Innovator Awards Winner. Click here
On January 18, Mister-Auto integrated the Valeo
Canopy low-carbon-footprint wiper blade range. Click here
On January 23, Valeo announced that it had once
again ranked first among French patent applicants worldwide. Click
here
On January 25, Smart #3 equipped with Valeo
Smart Safety 360 received 5 stars at Euro NCAP. Click here
On February 1, Valeo was certified
ISO/SAE21434, the benchmark for automotive cybersecurity, by UTAC.
Click here
On February 21, Valeo announced its
participation in SXSW 2024. Click here
On February 26, Valeo announced its
participation at the Taipei Cycle Show 2024. Click here
On March 4, Valeo presented Valeo Racer, a new
extended reality in-car gaming experience developed with Unity, at
South by Southwest 2024. Click here
On March 6, Valeo announced that it is Launch
Partner for SDVerse, a new Automotive Software Marketplace Click
here
On March 28, Valeo announced that it is taking
the driver's seat on generative AI with Google Cloud. Click
here
On March 29, Valeo announced the opening of a
new plant in Daegu (South Korea) for the production of Advanced
Driver Assistance Systems. Click here
On April 17, Valeo announced it was celebrating
30 years in China and showcased its latest technologies at Auto
China – Beijing 2024. Click here
On April 25, Valeo was named the number 1
French patent filer in Europe and the number 3 patent filer in
France. Click here
On April 30, Valeo won an automotive News PACE
award for its SCALA™ 3 LiDAR. Click here
On May 16, Valeo announced that its Valeo
eAccess solution would power the Toyota APM electric shuttles for a
major summer 2024 sporting event. Click here
On June 24, Valeo received the Frost &
Sullivan 2024 Global Company of the Year award for its
market-leading position on software-defined vehicles. Click
here
On June 26, Valeo announced it
would be taking part in the Eurobike 2024 trade show, held from
July 3 to 7, 2024. Click here
Financing activities and financial ratings
On March 11, Valeo announced the implementation
of its share buyback program. Click here
On March 22, Moody's affirmed Valeo’s “Baa3”
long-term issuer rating, negative outlook, and “P3” short-term
issuer rating. Click here
On April 3, Standard & Poor’s affirmed
Valeo’s “BB+” long-term issuer rating, revising its outlook from
“stable” to “negative”. Click here
On April 4, Valeo announced a green bond issue
for an amount of 850 million euros with maturity April 2030. Click
here
On May 15, Valeo announced the completion of
its share buyback program. Click here
Financial glossary
Order intake corresponds to
business awarded by automakers during the period to Valeo, and to
joint ventures and associates based on Valeo’s share in net equity,
less any cancellations, based on Valeo’s best reasonable estimates
in terms of volumes, selling prices and project lifespans.
Unaudited indicator.
Like for like (or LFL): the
currency impact is calculated by multiplying sales for the current
period by the exchange rate for the previous period. The Group
structure impact is calculated by adjusting sales by elimination
(or by addition in the event of a change in consolidation method)
to ensure that the prior period is comparable with the current
period.
Operating margin corresponds to
operating income before other income and expenses before share in
net earnings of equity-accounted companies.
EBITDA corresponds to (i)
operating margin before depreciation, amortization and impairment
losses (included in the operating margin) and the impact of
government subsidies and grants on non-current assets, and (ii) net
dividends from equity-accounted companies.
Free cash flow corresponds to
net cash from operating activities (excluding changes in
non-recurring sales of receivables and net payments for the
principal portion of lease liabilities) after taking into account
acquisitions and disposals of property, plant and equipment and
intangible assets.
Net cash flow corresponds to
free cash flow less (i) cash flows in respect of investing
activities, relating to acquisitions and disposals of investments
and to changes in certain items shown in non-current financial
assets, (ii) cash flows in respect of financing activities,
relating to dividends paid, treasury share purchases and sales,
interest paid and received, and acquisitions of equity interests
without a change in control, and (iii) changes in non-recurring
sales of receivables.
Net debt comprises all
long-term debt, liabilities associated with put options granted to
holders of non-controlling interests, short-term debt and bank
overdrafts, less loans and other long-term financial assets, cash
and cash equivalents and the fair value of derivative instruments
hedging the foreign currency and interest rate risks associated
with these items.
ROCE, or return on capital
employed, corresponds to operating margin (including share in net
earnings of equity-accounted companies) divided by capital employed
(including investments in equity-accounted companies), excluding
goodwill.
ROA, or return on assets,
corresponds to operating income divided by capital employed
(including investments in equity-accounted companies), including
goodwill.
Appendices
Second-quarter figures
Sales
Q2 sales
(in millions of euros) |
As a % of sales |
|
Q2 2024 |
|
Q2 2023 |
Change |
LFL* change |
|
FX |
Scope |
|
Original equipment |
83% |
|
4,741 |
|
4,907 |
-3% |
-2% |
|
-1% |
—% |
|
Aftermarket |
11% |
|
593 |
|
552 |
+7% |
+8% |
|
-1% |
+1% |
|
Miscellaneous |
6% |
|
356 |
|
271 |
+31% |
+28% |
|
+5% |
-2% |
|
Total |
100% |
|
5,690 |
|
5,730 |
-1% |
—% |
|
—% |
—% |
* Like for like.
Sales by destination region
Original equipment sales
(in millions of euros) |
As a % of sales |
|
Q2 2024 |
|
Q2 2023 |
LFL* change |
Perf.** |
|
Europe & Africa |
50% |
|
2,386 |
|
2,398 |
-1% |
+5 pts |
|
Asia, Middle East & Oceania |
28% |
|
1,344 |
|
1,476 |
-4% |
-5 pts |
| o/w Asia
(excluding China) |
15% |
|
704 |
|
753 |
+1% |
+3 pts |
|
o/w China |
13% |
|
640 |
|
723 |
-9% |
-13 pts |
|
North America |
20% |
|
922 |
|
937 |
-3% |
-5 pts |
|
South America |
2% |
|
89 |
|
96 |
-6% |
+3 pts |
|
Total |
100% |
|
4,741 |
|
4,907 |
-2% |
-2 pts |
* Like for like.
** Based on S&P Global Mobility automotive production
estimates released on July 17, 2024..
Sales by Division
Sales by Division
(in millions of euros) |
Q2 2024 |
|
Q2 2023 |
Change in sales |
Change in OE
sales* |
Perf.** |
|
POWER |
2,909 |
|
3,069 |
-5 % |
-7 % |
-7 pts*** |
|
BRAIN |
1,340 |
|
1,227 |
+9 % |
+7 % |
+7 pts |
|
LIGHT |
1,438 |
|
1,440 |
— % |
-1 % |
-1 pt |
|
Other |
3 |
|
(254) |
na |
N/A |
N/A |
|
Group |
5,690 |
|
5,482 |
+4 % |
-2 % |
-2 pts |
* Like for like.
** Based on S&P Global Mobility automotive production
estimates released on July 17, 2024. (Q2 2024 global production
growth: 0%)
*** Negative 7% impact from the high-voltage electrification
business.
H1 2024 income statement
|
|
|
H1 2024 |
|
H1 2023 |
Change |
|
Sales |
(in €m) |
|
11,117 |
|
11,212 |
+10
% |
Gross margin
|
(in €m) |
|
2,055 |
|
1,912 |
+7
% |
|
(as a % of sales) |
|
18.5
% |
|
17.1
% |
+1.4 pt |
R&D expenditure
|
(in €m) |
|
(1,079) |
|
(1,000) |
+8
% |
|
(as a % of sales) |
|
(9.7)
% |
|
(8.9)
% |
-0.8 pt |
Administrative and selling expenses
|
(in €m) |
|
(531) |
|
(549) |
-3
% |
|
(as a % of sales) |
|
(4.8)
% |
|
(4.9)
% |
+0.1 pt |
Operating margin excluding share in net earnings of
equity-accounted companies
|
(in €m) |
|
445 |
|
363 |
+23
% |
|
(as a % of sales) |
|
4.0
% |
|
3.2
% |
+0.8 pt |
Share in net earnings of equity-accounted companies
|
(in €m) |
|
4 |
|
4 |
na |
|
(as a % of sales) |
|
—
% |
|
—
% |
0.0 pt |
Operating margin including share in net earnings of
equity-accounted companies
|
(in €m) |
|
449 |
|
367 |
+22
% |
|
(as a % of sales) |
|
4.0
% |
|
3.3
% |
+0.7 pt |
Other income and expenses
|
(in €m) |
|
(50) |
|
(18) |
N/A |
|
(as a % of sales) |
|
(0.4)
% |
|
(0.2)
% |
-0.2 pt |
Operating income
|
(in €m) |
|
399 |
|
349 |
+14
% |
|
(as a % of sales) |
|
3.6
% |
|
3.1
% |
+0.5 pt |
|
Cost of debt |
(in €m) |
|
(123) |
|
(108) |
+14
% |
|
Other financial income and expenses |
(in €m) |
|
(14) |
|
(24) |
N/A |
|
Effective tax rate |
(in €m) |
|
34.0
% |
|
30.0
% |
N/A |
|
Non-controlling interests and other |
(in €m) |
|
(32) |
|
(34) |
-6
% |
Net attributable income
|
(in €m) |
|
141 |
|
119 |
+18
% |
|
(as a % of sales) |
|
1.3
% |
|
1.1
% |
+0.2 pt |
Safe Harbor Statement
Statements contained in this document which,
when they are not historical fact, constitute “forward-looking
statements”. These statements include projections and estimates and
their underlying assumptions, statements regarding projects,
objectives, intentions and expectations with respect to future
financial results, events, operations, services, and product
development and potential and future performance. Even though
Valeo’s Management feels that the forward-looking statements are
reasonable as at the date of this document, investors are put on
notice that the forward-looking statements are subject to numerous
factors, risks and uncertainties that are difficult to predict and
generally beyond Valeo’s control, which could cause actual results
and events to differ materially from those expressed or projected
in the forward-looking statements. Such factors include, among
others, the Company’s ability to generate cost savings or
manufacturing efficiencies to offset negotiated or imposed price
reductions. The risks and uncertainties to which Valeo is exposed
mainly comprise the risks resulting from the investigations
currently being carried out by the antitrust authorities as
identified in the Universal Registration Document, risks related to
the automotive equipment industry and to the development and launch
of new products and risks due to certain global and regional
economic conditions, environmental and industrial risks as well as
risks and uncertainties described or identified in the public
documents submitted by Valeo to the French financial markets
authority (Autorité des marchés financiers – AMF),
including those set out in the “Risk Factors” section of the 2023
Universal Registration Document registered with the AMF on March
29, 2024 (under number D.24-0218).
In addition, other risks which are currently
unidentified or considered to be non-material by the Group, could
have the same adverse impact and investors could lose all or part
of their investment. Forward-looking statements are given only as
at the date of this document and Valeo does not undertake to update
the forward-looking statements to reflect events or circumstances
which occur subsequent to the publication of this document. Valeo
assumes no responsibility for any analyses issued by analysts and
any other information prepared by third parties which may be used
in this document. Valeo neither intends to review, nor will it
confirm, any estimates issued by analysts.
About Valeo
As a technology company and partner to all
automakers and new mobility players, Valeo is innovating to make
mobility cleaner, safer and smarter. Valeo enjoys technological and
industrial leadership in electrification, driving assistance
systems, reinvention of the interior experience and lighting
everywhere. These four areas, vital to the transformation of
mobility, are the Group's growth drivers.
Valeo in figures: 22 billion euros in sales in 2023 | 109,600
employees, 28 countries, 159 plants, 64 research and development
centers, 19 distribution platforms at June 30, 2024.
Valeo is listed on the Paris Stock Exchange.
Media Relations
Dora Khosrof | +33 7 61 52 82 75
Caroline De Gezelle | + 33 7 62 44 17 85
press-contact.mailbox@valeo.com
Investor Relations
+33 1 40 55 37 93
valeo.corporateaccess.mailbox@valeo.com
(1)See
financial glossary, page 16.
(2) See
financial glossary, page 16.
(3) See
financial glossary, page 16.
(4) See
financial glossary, page 16.
(5)See financial glossary, page
16.
6 See financial glossary, page
16.
Valeo (EU:FR)
Graphique Historique de l'Action
De Oct 2024 à Nov 2024
Valeo (EU:FR)
Graphique Historique de l'Action
De Nov 2023 à Nov 2024
