-
Valeo Q3 2024 Sales
Источник: Nasdaq GlobeNewswire / 24 окт 2024 11:00:00 America/Chicago
PARIS
October 24, 2024In a worsening automotive market in the second half, Valeo is confirming its margin and free cash flow guidance for full-year 2024.
Valeo records third-quarter sales of 5.0 billion euros. Original equipment sales outperform automotive production by 3 percentage points.
- Sales of 5.0 billion euros, down 2% on a like-for-like basis (LFL)
- Original equipment sales outperform automotive production by 3 percentage points (down 2% LFL). Outperformance across all Divisions versus automotive production
- Aftermarket sales up 3% LFL
- 2024 objectives: Valeo is maintaining its margin and free cash flow guidance with margins significantly higher in the second half of the year versus the first half thanks to the rigorous management of its activities and the implementation of cost adjustment measures amid adverse market conditions. Valeo is adjusting its sales objective to around 21.3 billion euros
- 2025 objectives: given the worsening economic environment and the significant uncertainty surrounding automotive production volumes, Valeo will publish guidance adapted to these new market conditions when it publishes its 2024 results. For 2025, Valeo remains fully focused on generating free cash flow and reducing its debt. The year 2025 therefore represents a further step in which Valeo aims to deliver an original equipment sales outperformance versus automotive production and significantly improve its profitability and cash generation (in absolute terms) compared with 2024
“In the third quarter, Valeo outperformed automotive production by 3 percentage points, representing an improvement on the first half of 2024. The BRAIN Division outperformed the market (5 percentage points), thanks in particular to the strong momentum of its Interior Experience (displays, Phone-as-a-Key and telematics) business. In the LIGHT Division, a significant number of production launches in the Division's main regions across the world contributed to this improved outperformance (4 percentage points). The POWER Division continues to contend with an unfavorable environment, in particular due to much lower than expected volumes in high-voltage electrification. Thanks to the sound performance of its traditional activities, the Division outperformed automotive production by 1 percentage point over the quarter.
Given the worsening market environment, we are adjusting our sales objectives for full-year 2024 to around 21.3 billion euros1. We remain fully focused on continuing to improve our financial performance in line with the margin and cash generation objectives we set ourselves for 2024. The significant improvement in our earnings in the second half of the year compared with the first half will enable us to achieve these objectives. This performance is driven by the remarkable commitment of Valeo’s teams in rigorously managing our activities and implementing significant cost adjustment measures.
Given the worsening economic environment and the significant uncertainty surrounding automotive production volumes, we will publish new 2025 guidance adapted to these new market conditions when we publish our 2024 results. We remain focused on cash generation and confirm our aim of taking a further step in significantly improving our profitability and reducing our debt in 2025.”
Christophe Périllat, Valeo’s Chief Executive Officer
Sales of 4,967 million euros in third-quarter 2024, down 2% like for like
Sales
(in millions of euros)As a % of sales Q3 2024 Q3 2023 Change FX Scope LFL* change Original equipment 84% 4,197 4,433 -5% -1% -2% -2% Aftermarket 11% 538 569 -5% -4% -4% +3% Miscellaneous 5% 232 222 +5% —% +2% +2% Total 100% 4,967 5,224 -5% -2% -2% -2% * Like for like (2).
S&P Global Mobility automotive production estimates are down 5% on the third quarter of 2023. This decrease reflects both the postponement of production launches by customers and the impact on demand of uncertainty surrounding the adoption of electric vehicles.
Total sales for third-quarter 2024 came in at 4,967 million euros, down 5% compared with the same period in 2023.
Changes in Group structure had a negative 1.6% impact, mainly linked to the sale of the Thermal Commercial Vehicles activity towards the end of the first half of the year.
Changes in exchange rates had a negative 1.8% impact, primarily due to the appreciation of the euro against the Japanese yen and the South Korean won.
On a like-for-like basis, sales fell by 2%.
Original equipment sales were down by 2% like for like, outperforming automotive production by 3 percentage points.
Aftermarket sales rose by 3% 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 an increasingly attractive offering of value-added products.
“Miscellaneous” sales (tooling and customer contributions to R&D) increased by 2% like for like.
Original equipment sales deliver 3 percentage point outperformance in the third quarter
Original equipment sales***
(in millions of euros)As a % of sales Q3 2024 Q3 2023 Change LFL* change Perf. ** Europe & Africa 46% 1,916 1,966 -3% —% +6 pts Asia, Middle East & Oceania 32% 1,349 1,446 -7% -4% +1 pt o/w Asia (excluding China) 17% 717 724 -1% +3% +10 pts o/w China 15% 632 722 -12% -12% -9 pts North America 20% 844 918 -8% -6% -1 pt South America 2% 88 103 -15% +14% +5 pts Total 100% 4,197 4,433 -5% -2% +3 pts * Like for like.
** Based on S&P Global Mobility automotive production estimates released on October 15, 2024.*** Original equipment sales by destination region.
In the third quarter of 2024, original equipment sales fell by 2% like for like, outperforming automotive production by 3 percentage points.
In Europe and Africa, the Group outperformed automotive production by 6 percentage points: the POWER Division benefited from growth in its activities, excluding the high-voltage electric powertrain business (thermal systems, transmission systems and 48V), thanks to the ramp-up of production for European automakers. This momentum more than offset the impact of the sharp drop in activity on certain electric vehicle platforms. The BRAIN division reported robust growth in its ADAS business (particularly for front cameras and computer-vision cameras) and its Interior Experience business (particularly displays, Phone-as-a-Key and telematics), while the LIGHT division was lifted by a significant number of production launches for several European automakers.
In Asia, the Group outperformed automotive production by 1 percentage point:
- in China, the Group underperformed automotive production by 9 percentage points. It continued the repositioning of its customer portfolio (around 50% of original equipment sales and 60% of order intake recorded with automakers (excluding joint ventures) in China since the beginning of 2024). The LIGHT Division is fully benefiting from recent production launches for a North American automaker and several Chinese automakers, particularly in the area of electrification;
- in Asia excluding China, Valeo outperformed automotive production by 10 percentage points, thanks to good momentum for the BRAIN Division in ADAS. The LIGHT Division was penalized by production stoppages at several Japanese automakers, linked in part to the typhoon at the end of August.
In North America, Valeo underperformed automotive production by 1 percentage point, despite the LIGHT Division enjoying 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 5 percentage points.
Segment reporting
In the third quarter of 2024, all three Divisions outperformed automotive production, POWER impacted by weak high-voltage activity
Sales by Division
(in millions of euros)Q3 2024 Q3 2023 Change in sales Change in OE sales* Perf. ** POWER 2,470 2,694 -8 % -4% +1 pt High-voltage electrification 189 220 -14 % -15% -10 pts Traditional activities 2,281 2,474 -8 % -3% +2 pts BRAIN*** 1,214 1,210 — % —% +5 pts ADAS 776 793 -2 % -3% +2 pts Interior Experience 438 404 +9 % +7% +12 pts LIGHT 1,270 1,280 -1 % -1% +4 pts Other 13 40 N/A N/A N/A Group 4,967 5,224 -9 % -2% +3 pts * Like for like.
** Based on S&P Global Mobility automotive production estimates released on October 15, 2024. (Q3 2024 global production growth: -5%).
*** 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 third quarter, the POWER division posted a 1 percentage point outperformance (excluding the high-voltage electrification business, the POWER Division's outperformance was 2 percentage points). The POWER Division's traditional activities (thermal systems, transmission systems and 48V) outperformed automotive production by 2 percentage points. This more than offset the decline in the high-voltage electric powertrain activity (189 million euros in the third quarter of 2024 versus 220 million euros in the same period in 2023, i.e., an underperformance of 10 percentage points compared with automotive production), which was heavily penalized by the decline in activity on certain electric vehicle platforms in Europe.
The BRAIN Division posted an outperformance of 5 percentage points, thanks to the outperformance of its Interior Experience (in particular displays, Phone-as-a-Key and telematics) and ADAS (front cameras and computer-vision cameras) activities, particularly in Europe and Asia excluding China. The Interior Experience and ADAS activities' original equipment sales delivered a 12 percentage point and 2 percentage point outperformance, respectively.
The LIGHT Division outperformed automotive production by 4 percentage points, driven by a significant number of production launches in Europe, and China, including for several Chinese automakers in electrification. The Division's performance was also fueled by recent production launches for a North American automaker in the field of electrification. In Japan, the Division's activity was penalized by production stoppages at several Japanese automakers, linked in part to the typhoon at the end of August.
2024 and 2025 objectives
2024 objectives:
Valeo is maintaining its margin and free cash flow guidance with margins significantly higher in the second half of the year versus the first half thanks to the rigorous management of its activities and the implementation of cost adjustment measures amid adverse market conditions. Valeo is adjusting its sales objective to around 21.3 billion euros.
2024 guidance (a) (b) Previous 2024 guidance (a) (b) Sales (in billions of euros) ~21.3 ~22.0 EBITDA (as a % of sales) 12.1% to 13.1% 12.1% to 13.1% Operating margin (as a % of sales) 4.0% to 5.0% 4.0% to 5.0% Free cash flow
before one-off exceptional cost adjustment measures (c) (in millions of euros)~500 ~500 Free cash flow
after one-off exceptional cost adjustment measures (c) (in millions of euros)~350 ~350 (a) Second-half 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 0.85 billion euros in 2024.(c) Includes, but is not limited to, potential restructuring measures.
2025 objectives:
The outlook for 2025 currently shows a worsening economic environment and significant uncertainty surrounding production volumes at Valeo’s customers, due in particular to a slowdown in the Chinese economy, the application of new or potential environmental standards in Europe, China and North America, as well as to delays in customer programs and inventory management impacts.
Valeo will publish its 2025 guidance adapted to these new market conditions when it publishes its 2024 results. For 2025, Valeo remains fully focused on generating free cash flow and reducing its debt: the year 2025 therefore represents a further step in which Valeo aims to deliver an original equipment sales outperformance versus automotive production and significantly improve its profitability and cash generation (in absolute terms) compared with 2024.
Upcoming events
2024 annual results: February 27, 2025
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
On October 14, Valeo and MAHLE announced the extension of their range of magnet free electric motors to upper segment applications through a Joint Development of iBEE (Inner Brushless Electrical Excitation). Click here
On October 14, Valeo and HERE Technologies presented Valeo Smart Safety 360 with Navigation on Pilot at the Paris Motor Show 2024. Click here
On October 18, Valeo and TotalEnergies announced the strengthening of their partnership for the next generation of EVs. 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
On September 9, Valeo showcased its technologies dedicated to commercial vehicles at IAA Transportation 2024. Click here
From October 14 to 20, Valeo took part in the Paris Motor Show 2024. Click here
On October 16, Valeo leveled up the expertise of its mechanics thanks to the launch of Valeo Tech Academy. 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
On September 26, Moody’s Ratings (Moody’s) agency revised its long-term issuer rating of Valeo from “Baa3” to “Ba1” and its short-term commercial paper rating from “Prime-3” to “Non-Prime”. The outlook is negative. Click here
Financial glossary
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.
Appendices
Year-to-date figures
Sales
YTD sales
(in millions of euros)As a % of sales YTD 2024 YTD 2023 Change LFL* change FX Scope Original equipment 84% 13,492 13,977 -3% -1% -1% -1% Aftermarket 11% 1,728 1,736 —% +4% -3% -2% Miscellaneous 5% 864 723 +20% +21% -1% -1% Total 100% 16,084 16,436 -2% —% -1% -1% * Like for like.
Sales by destination region
Original equipment sales
(in millions of euros)As a % of sales YTD 2024 YTD 2023 LFL* change Perf.** Europe & Africa 48% 6,517 6,657 -2 % +1 pt Asia, Middle East & Oceania 30% 4,036 4,331 -2% -1 pt o/w Asia (excluding China) 16% 2,138 2,254 +2% +7 pts o/w China 14% 1,898 2,077 -5% -7 pts North America 20% 2,678 2,702 —% +1 pt South America 2% 261 287 —% +2 pts Total 100% 13,492 13,977 -1% +1 pt * Like for like.
** Based on S&P Global Mobility automotive production estimates released on October 15, 2024.
Sales by Division
Sales by Division
(in millions of euros)YTD 2024 YTD 2023 Change in sales Change in OE
sales*Perf.** POWER 8,162 8,645 -6% -5% -3 pts High-voltage electrification 702 1,067 -34% -37% -35 pts Traditional activities 7,460 7,578 -2% —% +2 pts BRAIN*** 3,783 3,658 +3% +4% +6 pts ADAS 2,436 2,356 +3% +3% +5 pts Interior Experience 1,349 1,284 +5% +5% +7 pts LIGHT 4,123 4,096 +1% +1% +3 pts Other 16 37 N/A N/A N/A Group 16,084 16,436 -2% -1% +1 pt * Like for like.
** Based on S&P Global Mobility automotive production estimates released on October 15, 2024. (YTD global production growth: -2%).
*** Including the Top Column Module business.2023 segment information
Segment information POWER BRAIN* LIGHT Other* Group Sales 11,571 4,878 5,541 54 22,044 EBITDA 1,171 690 736 50 2,647 Net R&D expenditure (895) (728) (396) (10) (2,029) Investments in property, plant & equipment & intangible assets 715 869 563 66 2,213 Segment assets 6,948 3,519 2,967 275 13,709 *In line with the Group’s new organizational structure effective as from June 30, 2024, the Top Column Module activity is presented as part of the BRAIN Division.
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 Previous guidance for full-year 2024 sales of around 22 billion euros.
(2) See financial glossary, page 9.Attachment
