Valeo: a leap in taking orders for technologies designed to transport goods and people – 09/19/2022 at 08:47

(AOF) — From September 20 to 25, 2022, Valeo will present its technologies for the transport of goods and people at the IAA Transportation in Hannover. Together they resulted in a 50% increase in bookings for Valeo compared to what was recorded four years earlier during the previous European professional meeting. These orders are worth billions of euros, according to Valeo, as the group’s technology offering for commercial vehicles also increased by 50%.

First of all, the automotive supplier adds, these technologies are precisely responsive to changes in the industry.

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Key points

– Tier 1 vehicle supplier, world leader in electrification and driving assistance;

– Activities worth 17.4 billion euros, divided into 4 areas: visibility, movement, thermal load, comfort and driving assistance, activity 1.

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bindings bring 84% of sales;

– Strong presence in Asia (34% of sales 1

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growth, including China, the leading market with 16%, behind Europe and Africa (45%), but ahead of America (21%);

– Business model leveraging automotive market trends: electrification, ADAS acceleration and redefining life on board (comfort and driving assistance) and lighting;

– Open capital with strong shareholders (5.13% for bpi and 5.16% for Harris fund), Jacques Aschenbroich leads the board of directors of 14 members, Christophe Perilla is the managing director;

– Net balance – 3.3 billion euros of net debt, i.e. 89% equity – and financial visibility – 4.9 billion euros in cash.

Problems

– Move Up Strategy 2022-2025: Over 5 bps CAGR of original equipment sales / 14.5% operating margin / $800bn to $8bn free cash flow generation / Disposal of non-strategic assets of 500 million euros. during the term of the plan;

– Innovative strategy in two axes, organizing production and offering environmentally friendly and safe solutions, innovations that ensure 65% of orders received:

– dynamic R&D policy for 3

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French patent attorney and 1

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French worldwide (9.9% of sales), with a portfolio of nearly 35,000 patents and 5,000 software engineers, including 200 in AI,

– global open innovation with start-up incubation, equity investments and industrial partnerships, as in the case of Safran, and pure research for Valeo.ai;

– Environmental strategy “CAP 50” aimed at carbon neutrality by 2050:

– A CAP 50 plan for carbon neutrality by 2050, with by 2030: – 75% for operations-related emissions, – 15% for supply-related emissions, and – 15% for emissions related to with the end use of the product;

– 2/3 of sales 1

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assembly including products that limit their impact, a circular economy integrated into production, the launch of green loans;

– Strong ambitions of Valeo Siemens eAutomotive, specializing in high-voltage electrification and now integrated into the group (operating margin of 8%, then 12% in 2022 and 2024 and 2.9 billion euros on orders);

– Subsidiaries of a joint venture with the Korean Kapec, which is destined to become the world leader in the production of torque converters (gearboxes) with 21% of the market.

– Order volume at the end of June was 13.1 billion euros, 1.7 times the volume of original equipment sales, thanks to ADAS and electrification.

Problems

– 4 main issues – weak market growth, inflation of raw materials, shortages of electronic components and wiring harnesses, and the indirect impact of the Russian-Ukrainian conflict on car manufacturers and, as a result, on equipment suppliers – led to net losses at level 1

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semester;

– Difficulties in the Visibility Systems division caused by an unfavorable product mix in China and Europe and lower profitability in the Thermal Systems division despite increased sales;

– Following a 5% increase, 3 points above market growth, confirmation of 2022 targets of €19.2bn to €20bn in sales, operating margins of 3.2% to 3.7% and negative free cash flow at 320 million euros.

Negotiations with builders

On average, OEMs account for 60 to 85% of the cost of producing a car. According to the Federation of Automotive Equipment Manufacturers (Fiev), negotiations with manufacturers to carry over the increased costs are very intense. The price increase applies to both electronic components and raw materials such as steel, nickel, lithium or palladium, energy and transport. Equipment manufacturers are mainly negotiating with Stellantis and Renault to set indexes for the increase. They also focus on innovation, differentiation, modernization and internationalization.

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