The path to “restoring profitability” continues at Valeo. The French automotive supplier published its half-year results on Thursday, July 25 “in line with its annual objectives”. The multinational recorded a net profit of 141 million euros, up 18% year-on-year. It also improved its operating margin, which stood at 4% (445 million euros, up 0.8 points) despite a turnover down 1%, at 11.11 billion euros, in a market environment “difficult and uncertain”.
In question : “low electrification volumes in Europe with many delays in the launch of new vehicles” by wait-and-see manufacturers, some of whom are encountering “difficulties in developing vehicles in terms of electronic and software architecture”, detailed Christophe Périllat, the general manager, during a conference with journalists.
An improving second half
In this context, Valeo recorded low order intake over the first six months of the year, amounting to 9.1 billion euros (-52%), “due to project postponements to the second half of the year”. While it is revising its sales targets downwards for the next 18 months for the second time “in a market that is not very buoyant, to say the least”, The head of the automotive subcontractor promises an improvement in the margin in the second half of the year.
“Since the beginning of 2022, we have been implementing a policy of selectivity in our order intake” on future-oriented technological products that enable solid profitability, the manager said. This is particularly the case in the “Brain” division (driving aids and software), whose EBITDA (earnings before interest, taxes, depreciation and amortization) stands at 15.9%, up 2.2 points year-on-year.
Focus on cost reduction
“Committed in an extremely resolute, determined and courageous manner to a trajectory of restoring profitability”, Christophe Périllat particularly insists on the company’s cost reduction objectives, at the request of its customers in a context of increased competition and electrification which increases the price of vehicles. In this dynamic, the group finalized in April the merger of its thermal and propulsion activities at the heart of a new “Power” division. This reorganization should make it possible to generate “from the second half of the year, savings of around 50 million euros, then 100 million euros in a full year”, specifies a press release.
“We are lowering Valeo’s break-even point but we are also improving its industrial flexibility,” commented Christophe Périllat, praising this strategy in a period marked by “uncertainties about the volumes (of production) and about the volumes of each engine (thermal, light hybrid, rechargeable hybrid and pure electric).”
Three French sites in the hot seat
In mid-July, the group announced its intention to sell two factories and an R&D center in France. The sites of L’Isle-d’Abeau (Isère), La Suze-sur-Sarthe (Sarthe) and La Verrière (Yvelines), where around 1,100 people work, are awaiting a buyer. The consulting firm Alixio has been appointed to find a solution for the three industrial sites by mid-October.
Source: www.usinenouvelle.com
