Valeo: Results for Third Quarter 2005
Paris, France (ots/PRNewswire)
- Increase in Sales and Reduced Debt
Following today's meeting of its Board of Directors, Valeo presented its consolidated accounts for the third quarter 2005.
In millions of euros (IFRS) 3rd quarter 9 months
(unaudited)
2005 2004 change 2005 2004 change
Net sales 2,356 2,126 + 10.8% 7,402 6,943 +6.6%
Total operating revenues 2,381 2,139 + 11.3% 7,476 6,987 + 7.0%
Gross margin 370 359 + 3.1% 1,195 1,207 - 1.0%
% of sales 15.7% 16.9% -1.2 pt 16.1% 17.4% - 1.3 pt
Operating margin(1) 79 81 -2.5% 280 328 -14.6%
% of total revenues 3.3% 3.8% -0.5 pt 3.7% 4.7% -1.0 pt
Operating income 77 74 + 4.1% 230 296 - 22.3%
% of total revenues 3.2% 3.5% -0.3 pt 3.1% 4.2% -1.1 pt
Income before tax 48 55 -12.7% 154 242 -36.4%
% of total revenues 2.0% 2.6% - 0.6 pt 2.1% 3.5% -1.4 pt
Net income 30 38 -21.1% 103 221(2) - 53.4%
% of total revenues 1.3% 1.8% - 0.5 pt 1.4% 3.2% - 1.8 pt
Number of employees 72,400 69,000 +4.9%1) operating income before other income/expense
2) including a non-recurrent tax gain of 83 million euros in the first quarter
2005 third quarter Group results
In the third quarter 2005, Valeo's total operating revenues were 2,381 million euros, up 11.3% as compared with the third quarter 2004. Changes in the reporting entity accounted for +8.7%. Excluding the impact of exchange rates and changes in the reporting entity the Group's quarterly total operating revenues increased by 0.5%. Automobile production is estimated to have fallen by 4% in Europe and increased by 3% in North America (-1% for the Big 3), 9% in South America and 8% in Asia.
The gross margin for the quarter rose by 3.1% to 370 million euros or 15.7% of sales despite the negative impact of the extreme tension in raw materials prices, which the Group estimates to have had a gross impact of 1 margin point in the quarter. Actions undertaken enabled this negative margin impact to be reduced to 0.6 points.
Operating income was 77 million euros or 3.2% of total operating revenues as compared to 74 million euros and 3.5% of total operating revenues for the corresponding period in 2004. This amount includes "other net expenses" of 2 million euros as compared to 7 million euros in 2004. Research and Development expenses and Sales and Administrative expenses as a percentage of total operating revenues both fell by 0.2 points.
Net income was 30 million euros as compared with 38 million euros in 2004, due to interest expenses doubling to 16 million euros and taking into account a stable tax level as compared with the third quarter 2004 of 16 million euros.
In the first nine months of the year, the free cash flow reached 222 million euros, an increase of 6.7% compared to the equivalent period in 2004, despite industrial investments of 340 million euros as compared to 319 million euros in the equivalent period of 2004.
At end September 2005 Valeo's net debt was 1,141 million euros, down 122 million euros as compared with the level at end June 2005, which reflected the implementation of the share buy back program and the acquisitions made by the Group during the first half. The debt-to-equity ratio was 67%, down 6 points as compared with end June 2005.
Outlook
For the fourth quarter the Group anticipates a slight increase in automobile production in Europe, driven by production ramp-up in Eastern Europe, and a fall in production levels of the Big 3 in North America of around 2%. Valeo aims to strengthen its market share in an environment of ongoing raw material price inflation.
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 131 plants, 68 R&D centers, 9 distribution centers and employs 72,400 people in 27 countries worldwide.
Contact:
For further information, please contact : Bruno-Roland Bernard, Group
Communications Director, Tél.: +33(0)1-40-55-37-86 Rémy Dumoulin,
Investor Relations Director, Tél.: +33(0)1-40-55-29-30