Valeo Management Services

Valeo: 2006 Results

    Paris (ots/PRNewswire) - Following a meeting of the Board of Directors, Valeo announced its audited results for 2006.

      (in euro millions)                  2006            2005            % change
      Total operating revenues        10,086         9,834(i)              + 2.6%
      Gross margin(1)                        1,539         1,559                    -1.3%
      % of sales                                15.4%         16.0%                 -0.6 pt
      Operating margin(2)                  341              374(i)                -8.8%
      % of total revenues                 3.4%            3.8%                 -0.4 pt
      Net income attributable to        161              142(i)              +13.4%
      the company's shareholders
      Net income per share (EUR)      2.10            1.80(i)/(ii)      +16.7%
      Net debt                                    968          1,080                  -10.4%

    (i) as required by IFRS norms, this data has been restated, mainly relating to non-strategic activities (IFRS 5 criteria).

    (ii) including 0.47 euro and -0.15 euro respectively for non-strategic activities in 2006 and 2005.

    Customer diversification, the recovery of the aftermarket business and rigorous management lessened the impact on margins of the decline in automotive production in the Group's key markets and the increase in raw material prices. Valeo has entered 2007 with reinforced competitiveness in the areas of quality, industrial organization and technological innovation. The sale of the Electric Motors and Actuators business reflects the rationalization of Valeo's portfolio and enhances the Group's financial resources.

    Annual results

    At 10,086 million euros, total operating revenues were up by 2.6% compared to 2005. Changes in perimeter had a positive impact of 1.5%, and currency fluctuations accounted for 0.6% of the increase in sales. On a like-for-like basis, and restated to take into account deflation in sales prices at identical functions, total operating revenues increased by 4.3%.

    (1) Net Sales Less cost of sales

    (2) Operating income before other income and expenses

    The gross margin was down by 1.3% to 1,539 million euros, representing 15.4% of sales, compared to 16.0% in 2005. The rising cost of raw materials reduced the gross margin by 0.7 points.

    Taking into account 70 million euros of other expenses (50 million euros in 2005), operating income was 271 million euros (2.7% of total operating revenues) compared to 324 million euros (3.3%) in 2005.

    Net income attributable to Valeo shareholders was 161 million euros, compared to 142 million euros in 2005. It includes a contribution of 36 million euros from the sale of the Electric Motors and Actuators business on December 27, 2006, and 38 million euros from the sale of the Logitec logistics business and the financial investment in Parrot.

    Cash flow and debt levels

    At December 31, 2006, Valeo's net debt totaled 968 million euros, down by 112 million euros compared to January 1, 2006. This change reflects in particular the sale of the Electric Motors and Actuators business (impact of 122 million euros) and payments to shareholders (89 million euros), with free cash flow(3) remaining positive (26 million euros). At December 31, 2006, the debt-to-equity ratio was 55%, compared to 63% at January 1, 2006.


    Valeo continued to rationalize its business portfolio. The Electric Motors and Actuators business was sold to the Japanese group Nidec at the end of the year, and the Logitec logistics business and the financial investment in Parrot were also sold. At the same time, the potential of the Group's thermal and lighting systems businesses was reinforced, respectively through the acquisition of 50% of the Korean radiator manufacturer Threestar and the creation of a joint venture in China with Ichikoh. Valeo also signed a Memorandum of Understanding with a view to buying a thermal systems plant in North America from Ford.

    The Group's competitiveness was reinforced. Quality indicators improved for the fifth consecutive year, and the Group continued to optimize its industrial footprint. Following the measures taken during the year, 54% of the production workforce was located in leading competitive-cost countries at end 2006, compared to 51% at end 2005 and 38% in 2001. In addition, Valeo continued to successfully promote its innovative technologies, receiving its first order for the Park4UTM semi-automatic park assist system.

    The Group's improved worldwide competitiveness was reflected in the order intake vs. sales ratio, which was 1.3, the highest level since 2001.

    (3) Extra-accounting aggregate: cash flow less taxes less change in working capital requirements less financial expenses plus subsidies less gross tangible and intangible investments.

    Proposed dividend

    Taking into account the level of results and shareholder payments during the year, the Board of Directors will propose to the Annual General Meeting of Shareholders to maintain a dividend of 1.10 euro per share.


    The expected stabilization in automotive production in the Group's key markets is not expected to occur before the second half of 2007. In this context, and assuming a stabilization of raw material prices, Valeo aims to improve its operational profitability by stepping up efforts to increase competitiveness. The Group is launching a re-engineering of its principle functions in order to optimize its resources and processes.

    Valeo is an independent industrial group dedicated to the design, production and sale of components, integrated systems and modules for cars and trucks. It is one of the world's leading automotive suppliers. The Group has 129 production sites, 68 R&D centers, 9 distribution platforms, and employs 69,800 people in 29 countries worldwide.

    For all additional information, please contact:

    Kate Philipps, Group Communications Director, Tel: +33-1-40-55-20-65

    Remy Dumoulin, Investor Relations Director, Tel: +33-1-40-55-29-30

    Simplified accounts for the fourth quarter

      (in EUR million)                      2006(i)        2005(i)         % change
      Total operating revenues         2,514         2,511(ii)          + 0.1%
      Gross margin                                369            390(ii)            -5.4%
      % of sales                                14.9%         15.7%                -0.8 pt
      Operating margin                          74              94(ii)          -21.3%
      % of total revenues                  2.9%          3.7%                -0.8 pt
      Net income attributable to          60              41                 +46.3%
      the company's shareholders
      % of total revenues                  2.4%          1.6%                +0.8 pt

    (i) unaudited

    (ii) as required by IFRS norms, this data has been restated, mainly relating to non-strategic activities (IFRS 5 criteria).

ots Originaltext: Valeo Management Services
Im Internet recherchierbar:

For all additional information, please contact: Kate Philipps, Group
Communications Director, Tel: +33-1-40-55-20-65. Remy Dumoulin,
Investor Relations Director, Tel: +33-1-40-55-29-30

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