- Positive net income of 4 million euros, following 3 consecutive
quarters of losses
- Strong improvement in gross margin at 16.2% of sales, highest 3rd
quarter level since 2005
- Operating margin at 3.6% of sales, up by 2.8 points versus 2nd quarter
- Reinforced generation of free cash flow (6 million euros) and
reduction of net financial debt of 24 million euros
- H2 automotive production forecast revised upwards
- Net income near break-even point in H2
- Cash consumption of less than 100 million euros for 2009
Following the meeting of its Board of Directors today, Valeo
presented its results for the 3rd quarter 2009.
Quarterly evolution** 9 months*
in million euros
2008 2009 2008 2009 YOY
Q3 Q1 Q2 Q3 YOY
Sales 2,079 1,624 1,848 1,913 -8% 6,927 5,385 -22%
Gross margin 318 185 268 310 -3% 1,115 763 -32%
% of sales 15.3% 11.4% 14.5% 16.2% +0.9pt 16.1% 14.2% -1.9pt
Operating margin 65 (66) 15 68 +5% 268 17 -94%
% of sales 3.1% -4.1% 0.8% 3.6% +0.5pt 3.9% 0.3% -3.6pts
EBITDA 190 73 156 192 +1% 693 421 -39%
% of sales 9.1% 4.5% 8.4% 10.0% +0.9pt 10.0% 7.8% -2.2pts
Net income attributable 6 (159) (54) 4 -33% 106 (209) na
to company shareholders
* First half data were the object of a limited examination
Consolidated third quarter results
The turnaround of automotive production noted during the 2nd
quarter 2009 (+18% versus the 1st quarter 2009) continued in the 3rd
quarter (+11% versus the 2nd quarter), thanks in particular to the
positive impact of vehicle scrapping programs in Europe (notably in
Germany, France, Italy and Spain) and in North America, as well as an
improvement in automotive output in Asia (China, Korea and India).
In the 3rd quarter, the Group generated sales of 1,913 million
euros, up by 3.5% versus the 2nd quarter 2009 (1,848 million euros).
Sales in Europe totaled 1,206 million euros in the 3rd quarter
(63% of consolidated sales), down by 3% versus the 2nd quarter 2009.
Sales in Asia, the second largest contributing region, were 315
million euros (16% of consolidated sales), up by 15% versus the 2nd
quarter (+10% versus the 3rd quarter 2008). Valeo's performance was
particularly notable in China, the leading contributor country in
Asia, where the Group recorded 7% sales growth during the 3rd quarter
2009 (up by 68% versus the 3rd quarter 2008).
Thanks to its improved sales, the continuation of its cost
reduction plan and the favorable evolution of material costs, Valeo
registered an improvement in gross margin, at 310 million euros
versus 268 million euros in the 2nd quarter 2009. Gross margin, up by
1.7 points, amounted to 16.2% of sales in the 3rd quarter 2009, the
highest 3rd quarter level since 2005.
During the 3rd quarter 2009, Valeo pursued its R&D efforts,
investing 114 million euros (6% of sales). Administrative and selling
expenses were down by 10% versus the previous year.
Confirming the turnaround initiated in the 2nd quarter, operating
margin (less other income and expenses) amounted to 68 million euros
versus 15 million euros in the 2nd quarter 2009. It represented 3.6%
of sales in the 3rd quarter 2009, up by 2.8 points.
After three consecutive quarters of losses, Valeo returned to a
positive net income of 4 million euros in the 3rd quarter 2009,
versus a net loss of 54 million euros in the 2nd quarter.
In the 3rd quarter 2009, the Group generated a free cash flow of
6 million euros. Improved operational performance, including the
rigorous management of working capital requirements (down by 46
million euros versus end June 2009) and investments, enabled the
financing of restructuring expenses.
Net financial debt totaled 817 million euros at 30 September
2009, down by 24 million euros versus the 2nd quarter 2009.
Consolidated results for the first nine months of 2009
For the first nine months of 2009, sales were down by 22%
versus the same period in 2008.
The savings plan launched in the 4th quarter 2008, including the
headcount adjustment plan concerning permanent employees, has already
enabled a cost reduction of 373 million euros during the first nine
months of the year.
Consequently, gross margin totaled 763 million euros or 14.2% of
sales, and operating margin was a positive 17 million euros over nine
During the same period, the Group generated a free cash flow
of 2 million euros.
Net financial debt decreased by 24 million euros, totaling 817
million euros at 30 September 2009. The "gearing" and the
"leverage" ratio were respectively 70% and 1.6x EBITDA.
The Group's liquidity is ensured thanks to a 797 million euro
surplus cash situation, following the granting of 225 million euros
in funding from the European Investment Bank. It also benefits from a
program of confirmed bilateral credit lines worth 1.275 billion euros
which remained undrawn at end September.
At the IAA Frankfurt Auto Show, the Powertrain Systems and
Thermal Systems Business Groups presented their range of solutions to
significantly reduce fuel consumption and CO2 emissions for the
various stages of hybridization, up to the electric vehicle.
The Visibility Systems Business Group also displayed its latest
technological innovations, such as the AquaBlade(R) System, which
offers uniform distribution of washer fluid along the entire length
of the wiper blade, and BeamAtic(R) Premium, which enables the
continuous use of high beams without dazzling other drivers.
BeamAtic(R) Premium recently received the Gold "Grand Prix" for
Automotive Innovation Award at the Equip'Auto show.
The Comfort and Safety Systems Business Group presented the
latest developments relating to its Park4U(R) system, which enables
drivers to automatically enter and leave a tight parking slot (margin
of 40 cm on either end of the vehicle).
Valeo anticipates the continued recovery of automotive production
in the 4th quarter 2009, with an improvement versus the same period
in 2008 in all regions of the world except North America, where
another slight downturn is expected. Overall global automotive output
in the second half should be slightly higher than that of the second
half 2008, thanks in particular to the sustained effect of scrapping
programs through the end of the year and to the vitality of the main
Given this more favorable context, Valeo is revising upwards
its production objectives for the second half 2009.
Continuing on from the 3rd quarter, the Group's operating margin
will benefit from the impact of the cost reduction program while
taking into account the rebound in production.
In the current market conditions, the Group has set as its
objective to achieve a net income close to the break-even point in
the second half.
In terms of cash flow generation, Valeo is working to sustain in
the long-term its negative working capital requirements and to
maintain a high selectivity on investments which will be limited to a
level significantly lower than amortization. Valeo has set as its
objective for 2009 to not exceed 100 million euros in cash
consumption over the year.
Mr Michel de Fabiani, candidate proposed by the FSI, was co-opted
as a Valeo Board Director, replacing Mr. Erich Spitz. On this
occasion, and after having taken into account the special nature of
Valeo's current shareholder structure, the FSI (acting within the
framework of the consolidation perimeter of the CDC, of which it is a
51% subsidiary) agreed not to exceed the threshold of 15% of Valeo's
capital or voting rights without prior approval of the Valeo Board of
For its part, Valeo reaffirmed to the FSI its commitment to
respect stock market best practices and the AFEP-MEDEF
recommendations regarding corporate governance.
In addition, the Chief Executive Officer asked Mr. Erich Spitz
to set up an Advisory Committee that he will preside, comprising
Valeo is an independent industrial Group fully focused on the
design, production and sale of components, integrated systems and
modules for cars and trucks. Valeo ranks among the world's top
automotive suppliers. The Group has 119 plants, 22 Research centers,
38 Development centers, 10 distribution platforms and employs 52,500
people in 27 countries worldwide.
 Net operating cash flow, receipts and disbursements on
acquisitions/divestitures of tangible/intangible assets, subsidies
 As of January 1, 2009, the presentation of the financial
statements has been modified, with customer financing of research and
development previously booked as other operating revenues now being
mainly reclassified as deductible research and development expenses
 Operating income less other income and expenses
 Operating margin less amortization
 Gearing: net financial debt-to-shareholders' equity ratio
 Leverage ratio: financial debt-to-EBITDA (calculated over 12
For more information about the Valeo Group and its activities,
please visit our web site http://www.valeo.com
ots Originaltext: Valeo Management Services
Im Internet recherchierbar: http://www.presseportal.ch
For additional information, please contact: Kate Philipps, Valeo
Group Communications Director, Tel.: +33-1-40-55-20-65, Thierry
Lacorre, Valeo Group Investor Relations Director, Tel.: