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Valeo has reported third-quarter sales down 10% to EUR3.96bn (US$4.6bn).
“I’d like to thank all of the Valeo teams who worked hard to supply all of our customers without the slightest interruption, despite the semiconductor shortage and to continuously adapt our production facilities to the extreme volatility of automaker programmes,” said Valeo chairman and CEO, Jacques Aschenbroich.
“In addition, the strict management of our costs, price adjustments obtained from our customers, and the excellent performance of the aftermarket business enable us to tighten, to the upper end of the range, our 2021 EBITDA margin objective, which now stands at between 13.0% and 13.4% of sales, an improved margin compared to 2019 despite the 16% decline in automotive production in the year to September.
“We also confirm our free cash flow generation objective of between EUR330m and EUR550m. We are also confident in our ability to achieve our 2021 CO2 emissions reduction objective and therefore confirm our long-term sustainable development commitments.”
Business in the third quarter of the year was particularly impacted by the shortage of electronic components, penalising the supply chain and customer production schedules.
During the period, automotive production was down 18% compared to third-quarter 2020.
In an environment marked by Covid-19 and the electronic component shortage, assuming global automotive production of 71m vehicles, Valeo has set the following objectives:
- continued out-performance
- tightening of 2021 EBITDA margin objective to the upper end of the range (13% to 13.4%)
- confirmation of the free cash flow generation objective of between EUR330m and 550m
Valeo Siemens eAutomotive:
Valeo Siemens eAutomotive’s sales are expected to come out at around EUR750m, representing a year-on-year increase of around 45%, with growth slower than initially projected in the second half due to the semiconductor shortage
The joint venture’s negative contribution to ‘Share in net earnings of equity-accounted companies’ is now expected to be in line with that recorded in 2020 (versus a previously announced ‘reduction’ in the joint venture’s negative contribution).