15% growth in sales in first quarter, to 5.5 billion euros
PARISAPRIL 25, 2023
Solid start to 2023
15% growth in sales in first quarter,
to 5.5 billion euros
- Sales up 15%
as reported to 5,482 million euros
- Original
equipment sales up 13% like for like on an adjusted
basis(1)
-
Acceleration in the high-voltage electric powertrain
business,
- original
equipment sales up 69% like for like
- new
orders for around 4 billion euros, including for
Valeo 800V SiC
inverter technology
-
Acceleration in the ADAS business, with original equipment
sales up 21% like for like
-
Aftermarket sales up 6% like for like on an adjusted
basis(1)
- 2023
guidance confirmed
"Our first-quarter sales, up 15% to 5.5
billion euros, reflect a solid start to 2023 for
Valeo.
This performance was supported by the
acceleration in our high-voltage electric powertrain and ADAS
businesses, which posted like-for-like growth of 69% and 21%,
respectively, over the period.
Business activity in these two areas is
very strong, lifted by market momentum and by the positioning of
our technology portfolio. In particular, since the beginning of the
year, the high-voltage electric powertrain business has recorded
significant order intake of around 4 billion euros, covering all
regions and technologies, notably the 800V
SiC inverter.
In a year marked by a rise in energy
prices and wages, optimizing our costs and negotiating compensation
with our customers are our main priorities on the road to our 2023
objectives."
Christophe
Périllat,
Valeo’s Chief Executive
Officer
First-quarter 2023 sales: up 15 % to
5,482 million euros, lifted by the acceleration in ADAS and
high-voltage electric powertrain systems
In the first quarter, automotive production was
up 6%(2) compared with the same period in 2022.
This increase was attributable to a low level of
new vehicle inventories and growth in production volumes in Europe
and North America of 17% and 10%, respectively. In China,
automotive production was down by 8%, over the period as a result
of a low level of activity in January (health crisis) and February
(Chinese New Year), which was partly offset by a recovery in
production volumes in March.
Q1 sales(in millions of
euros) |
As a % of sales |
|
Q1 2023 sales |
|
vs. 2022 |
|
|
Q1 2022 |
Reported change |
Scope |
FX |
LFL* change |
Adjusted basis change** |
Original equipment |
85 % |
|
4,637 |
|
3,932 |
+18 % |
+9 % |
— % |
+10 % |
+13 % |
Aftermarket |
11 % |
|
615 |
|
579 |
+6 % |
+1 % |
-2 % |
+6 % |
+6 % |
Miscellaneous |
4 % |
|
230 |
|
242 |
-5 % |
+7 % |
— % |
-12 % |
-6 % |
Total |
100 % |
|
5,482 |
|
4,753 |
+15
% |
+7 % |
—
% |
+8
% |
+11
% |
* Like for like(3)**Adjusted basis change(3)
In this environment, total
sales came in at 5,482 million euros, up 11% on an
adjusted basis compared with first-quarter 2022 (up 8% like for
like).
Changes in exchange rates had a negligeable
impact.
Changes in Group structure had a positive 7%
impact for the period. They result mainly from the integration of
the high-voltage electric powertrain business.
Sales for this business came in at 362 million euros in the first
quarter.
Original equipment sales
climbed 13% like for like on an adjusted basis(3) (up 10% over the
period like for like), lifted by the recovery in global automotive
production, mainly in Europe and North America, and an increase in
content per vehicle, particularly in ADAS
(original equipment sales up 21% like for like) and in high-voltage
electric powertrain (original equipment sales up 69% like for
like).
Aftermarket sales posted solid
growth of 6 % like for like on an adjusted basis(3), despite an
unfavorable basis of comparison linked to strong growth for this
activity during the same period in 2022. This performance was
fueled by the increased number and age of vehicles on the road, a
more attractive offering from Valeo thanks to a shift towards more
value-added products, and the impact of price increases.
"Miscellaneous" sales (tooling
and customer contributions to R&D) contracted by 12 % like for
like.
In first-quarter 2023, outperformance of
7 percentage points worldwide on an adjusted
basis(4)
Original equipment sales***(in millions of
euros) |
As a % of sales |
|
Q1 2023 |
|
vs. 2022 |
|
|
Q1 2022 |
LFL* change |
Perf. ** |
Adjusted basis(4)
perf. |
Europe & Africa |
50 % |
|
2,293 |
|
1,767 |
+15 % |
-2 pts |
+5 pts |
Asia, Middle East & Oceania |
30 % |
|
1,409 |
|
1,301 |
+6 % |
+6 pts |
+6 pts |
o/w China |
14 % |
|
632 |
|
638 |
-9 % |
-2 pts |
-2 pts |
North America |
18 % |
|
847 |
|
790 |
+3 % |
-7 pts |
-7 pts |
South America |
2 % |
|
88 |
|
74 |
+13 % |
-2 pts |
-2 pts |
Total |
100 % |
|
4,637 |
|
3,932 |
+10 % |
+4 pts |
+7 pts |
* Like for like(4)** Based on S&P Global
Mobility production estimates released on April 18, 2023.*** By
destination region.
In the first quarter of 2023, Valeo posted an
outperformance of 7 percentage points including the scope effect
related to the integration of the high-voltage electric powertrain
business (adjusted basis(4)):
- in Europe and
Africa, the Group recorded an outperformance of 5
percentage points on an adjusted basis, driven by growth in the
Comfort & Driving Assistance Systems Business
Group (acceleration in ADAS), the Powertrain Systems
Business Group on an adjusted basis(4) (acceleration in
the high-voltage electric powertrain business) and the
Thermal Systems Business Group, particularly
in the field of high-voltage electrified vehicles
(battery cooling systems, dedicated air conditioning systems for
electric vehicles, heat pumps, etc.);
- in Asia, the Group
recorded a 6 percentage points outperformance, supported by the
momentum of all its Business Groups; in China, the
Group recorded a slight 2 percentage points underperformance,
penalized by an unfavorable vehicle mix in the Visibility
Systems Business Group, as well as the
expiry of a contract with a Japanese automaker for front-end
modules affecting the Thermal Systems
Business Group; meanwhile, the Comfort
& Driving Assistance Systems Business Group posted
strong growth in its camera business;
- in North America,
original equipment sales underperformed automotive production by 7
percentage points on a like-for-like basis, reflecting (i) the
ramp-up of several projects in the Comfort & Driving
Assistance Systems Business Group
(acceleration in ADAS), and, conversely, (ii) a temporarily
unfavorable vehicle mix in the Visibility Systems
Business Group due to production delays (shortage
of components) on certain key platforms for North American
customers, and (iii) the expiry of a contract with a Japanese
automaker for front-end modules affecting the Thermal
Systems Business Group;
- in South America,
which represents 2% of original equipment sales, the Group
underperformed automotive production by 2 percentage points.
Acceleration in the ADAS (CDA) and
high-voltage electric powertrain (PTS) businesses
The sales performance for the Business Groups
reflects the specific product, geographic and customer mix and the
relative weighting of the aftermarket in their activity as a
whole.
Sales by Business Group(in millions of
euros) |
Q1 2023 |
|
vs. 2022 |
|
|
Q1 2022 |
Change in sales |
Change in OE sales* |
Perf. ** |
Adjusted basis perf. |
Comfort & Driving Assistance Systems*** |
1,159 |
|
975 |
+19 % |
+17 % |
+11 pts |
+11 pts |
Powertrain Systems |
1,741 |
|
1,311 |
+33 % |
+10 % |
+4 pts |
+14 pts |
Thermal Systems |
1,145 |
|
1,079 |
+6 % |
+8 % |
+2 pts |
+2 pts |
Visibility Systems |
1,376 |
|
1,356 |
+1 % |
+5.3 % |
0 pt |
0 pt |
* Like for like (5)** Based on S&P Global
Mobility production estimates released on April 18, 2023 (global
automotive production: 6%).*** Excluding the TCM (Top Column
Module) business.
Original equipment sales
The Comfort & Driving Assistance
Systems Business Group outperformed global automotive
production by 11 percentage points, thanks to the start-up of
numerous ADAS projects (particularly for cameras)
in the main production regions (Europe, North America and China),
thereby strengthening its position as a world leader. Like-for-like
original equipment sales were up by 21% for ADAS
and 9% for Reinvention of the interior
experience.
The Powertrain Systems Business
Group recorded an outperformance of 14 percentage points
on an adjusted basis (4 percentage points as reported), after
taking into account the high-voltage electric powertrain business,
whose original equipment sales rose by 69% during the period.
The Business Group has recorded order
intake of around 4 billion euros for high-voltage electric systems
since the beginning of the year, covering all of Valeo's
technologies for electrified vehicles, particularly onboard battery
chargers and 800V SiC inverters, in all world regions.
The Thermal Systems Business
Group delivered an outperformance of 2 percentage points.
In China and North America, the Business Group was impacted by the
expiry of a front-end modules contract with a Japanese automaker.
In Europe, the Business Group's performance was powered by strong
sales of its systems for high-voltage electrified
vehicles (battery cooling systems, dedicated air
conditioning systems for electric vehicles, heat pumps, etc.).
The Visibility Systems Business
Group performed in line with the market, due to an
unfavorable vehicle mix in China and by production delays (shortage
of components) on certain key platforms of North American customers
in North America. The Business Group's performance is expected to
improve in the second half, propelled by the start of production on
a very large number of projects and an improved product mix as
component supplies return to normal
2023 guidance confirmed
We are confirming our objectives for 2023 (see
below), taking into account the uncertainty regarding automotive
production in our main business regions, net inflation and cost
reduction measures.
These objectives lead to:
-
a 0.8 to 1.6 percentage point improvement compared with 2022
adjusted profitability (i.e., operating margin including the
high-voltage electric powertrain business within the Powertrain
Systems Business Group as of January 1, 2022);
-
a significant improvement in free cash flow generation (compared
with 2022 adjusted free cash flow);
with a significant improvement of our financial
performance in second-half 2023 compared to the first half of the
year
|
2022 |
2022 adjusted** |
2023 guidance*** |
Sales (in billions of euros) |
20.0 |
20.4 |
22.0 - 23.0 |
Operating margin* (as a % of sales) |
3.2% |
2.4% |
3.2% - 4.0% |
EBITDA* (as a % of sales) |
12.0% |
11.4% |
11.5% - 12.3% |
Free cash flow* (in millions of
euros) |
388 |
205 |
> 320 |
*See financial glossary, page 7
** 2022 data has been adjusted to include the integration of the
high-voltage business (formerly Valeo Siemens eAutomotive) within
the Powertrain Systems Business Group as of January 1, 2022.
*** Based on the following assumptions:
- growth in global automotive
production of between 0% and 3.3% in 2023 (3.3% = S&P Global
Mobility estimates released on February 16, 2023);
- an acceleration in automotive
production in the second half of the year (in line with the S&P
Global Mobility scenario released on February 16, 2023);
- price increases (in relation to
cost inflation) and internal cost reduction measures.
Upcoming events
2023 Shareholders’ Meeting: May 24, 2023
First-half 2023 results: July 27, 2023
Highlights
ESG
On March 28, 2023, Valeo
announced to its shareholders the date and location of its Ordinary
and Extraordinary Shareholders' Meeting. Click here
On March 31, 2023, Valeo
announced that it had published its 2022 Universal Registration
Document. Click here
Industrial partnership
On January 4, 2023, NTT Data,
Valeo and Embotech announced that they had formed a consortium to
provide automated parking solutions. Click here
On February 14, 2023, BMW and
Valeo announced that they had engaged in a strategic cooperation to
co-develop the next-generation Level 4 automated parking
experience. Click here
Products/technologies and patents
On January 3, 2023, Valeo
announced that it would be taking part in the 2023 Consumer
Electronics Show (CES) in Las Vegas between January 3 and January
8, 2023. Click here
On January 12, 2023, Valeo
announced that it would be taking part in the 16th Auto Expo 2023
Components at Pragati Maidan in New Delhi, India from January 12 to
January 15, 2023. Click here
On March 7, 2023, Valeo
celebrated 100 years of innovating and constantly striving to make
mobility simpler, safer and more sustainable Click here
On March 20, 2023, Valeo
announced that it would be taking part in the 2023 Taipei Cycle
Show in Taiwan between March 22 and March 25, 2023. Click here
On March 23, 2023, Valeo
received an Innovation award in the "Infrastructure and Vehicle
Improvement" category from Sécurité routière – the French national
road safety authority – for its new EverguardTM silicone wiper
blades. Click here
On March 27, 2023, Valeo
announced that it had been named Supplier of the Year in the
Advanced Driver Assistance Systems (ADAS) category by General
Motors at a ceremony held on March 23, 2023. Click here
On March 28, 2023, Valeo
announced that it was the number one French patent filer with the
European Patent Office (EPO), with 588 patent applications filed in
2022. Click here
On March 30, 2023, Valeo
announced it had signed two new major contracts for its
third-generation LiDAR. Click here
On April 11, 2023, Valeo
announced it would be participating for the first time, from April
12 to April 14, 2023, in the Laval Virtual trade show, during which
it presented its innovations in the field, both for accelerating
the design of solutions and for in-vehicle applications. Click
here
On April 14, 2023, Valeo
announced it would be participating in Auto Shanghai 2023, where it
will present its latest technologies for smarter, safer and greener
mobility. Click here
On April 21, 2023, Valeo
announced it would be presenting its composite solutions at JEC
World 2023, from April 25 to 27, for the third consecutive year.
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 (i) eliminating, for the current
and/or for the comparable period, sales of companies acquired
during the period or the comparable period, and (ii) eliminating,
for the current period and/or for the comparable period, sales of
companies sold during the current or comparable period.
Adjusted data: to calculate
year-on-year changes in sales on an adjusted basis, 2022 figures
have been adjusted as though the high-voltage electric powertrain
business had been consolidated in the Group's financial statements
as of January 1, 2022.
Operating margin including share in net
earnings of equity-accounted companies corresponds to
operating income before other income and expenses.
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
Customer portfolio
Customers |
Q1 2023 |
|
Q1 2022 |
German |
33 % |
|
29 % |
Asian |
30 % |
|
32 % |
American |
17 % |
|
20 % |
French |
14 % |
|
14 % |
Other |
6 % |
|
5 % |
Total |
100 % |
|
100 % |
Geographic portfolio
Production regions |
Q1 2023 |
|
Q1 2022 |
Western Europe |
31 % |
|
30 % |
Eastern Europe & Africa |
18 % |
|
15 % |
China |
15 % |
|
18 % |
Asia excluding China |
16 % |
|
15 % |
United States & Canada |
7 % |
|
8 % |
Mexico |
11 % |
|
12 % |
South America |
2 % |
|
2 % |
Total |
100 % |
|
100 % |
Asia
& emerging countries |
62 % |
|
62 % |
Safe Harbor Statement
Statements contained in this document, which 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, product development and potential, and
statements regarding 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 or exceed contractually or competitively
required 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 which relate to being a supplier in the automotive industry
and to the development of new products and risks due to certain
global and regional economic conditions. It is also exposed to
environmental and industrial risks, risks associated with the
Covid-19 epidemic, risks related to the Group’s supply of
electronic components and the rise in raw material prices, risks
related to the Russia-Ukraine conflict, 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 2022 Universal Registration
Document registered with the AMF on March 30, 2023 (under number
D.23-200).
The Company 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 does not
intend or assume any obligation to review or to confirm the
estimates issued by analysts or to update any forward-looking
statements to reflect events or circumstances which occur
subsequent to the date of this document.
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 is the world’s
leading French patent applicant according to the rankings published
in June 2022 by France’s intellectual property institute
(INPI).Valeo in figures: 20 billion euros in sales in 2022; 109,900
employees at December 31, 2022; 29 countries, 183 plants, 21
research centers, 44 development centers, 18 distribution
platforms.Valeo is listed on the Paris Stock Exchange.
VALEO100, rue de
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(1) See financial glossary, page 7(2) Based on S&P Global
Mobility automotive production estimates released on April 18,
2023(3) See financial glossary, page 7(4) See financial glossary,
page 7(5)See financial glossary, page 7
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