PARIS, April 25 /PRNewswire/ --
- Third consecutive Quarter of Improved Margins
- Continued Refocusing of the Product Portfolio
Following the meeting of its Board of Directors, Valeo presented its first quarter 2008 results.
(in EUR million) 1 January - 31 March 2008* 2007** change Total operating revenues 2,473 2,499 - 1.0% Gross margin 392 377 + 4.0% % of sales 16.1% 15.3% + 0.8 pt Operating margin(1) 90 74 + 21.6% % of total operating revenues 3.6% 3.0% +0.6 pt Net income (attributable to the 43 33 + 30.3% company's shareholders) % of total operating revenues 1.7% 1.3% +0.4 pt Basic earnings per share from 0.57 0.42 +35.7% continued operations (EUR)
* The first quarter 2008 results were not audited by the statutory auditors, nor were they the object of a limited review by these auditors.
** These figures do not include amounts related to the wiring harness activity, which was divested on 31 December 2007, in line with IFRS 5 norms.
The Group's strategy is confirmed by the continued improvement of its performance. Despite a market slowdown, Valeo's results have progressed, thanks to its strategy of operational excellence (cost and quality). The Group continued the alignment of its product portfolio around its three Domains of Innovation, with the planned divestiture of its truck engine cooling activity.
First quarter 2008 results
In the first quarter of 2008, total operating revenues stood at 2,473 million euros, stable at constant reporting entity and exchange rates. Volumes increased by 3.7%. At the same time, world automotive production rose by only 1.5%, a marked slowdown compared with the second half of 2007 (+8%).
Gross margin totaled 392 million euros or 16.1% of sales. The 0.8 point increase in the margin rate reflects productivity gains and a slight drop in raw material costs.
Operating margin rose by 21.6% to 90 million euros, compared with 74 million euros in 2007. Despite the marked automotive market slowdown and an unfavorable calendar impact for the first quarter, the operating margin rate was up by 0.6 points, in line with progress made during the second half of 2007.
Net financial debt amounted to 786 million euros, down by 19%, versus 966 million euros at 31 March 2007. This was due in part to the sale of the wiring harness business on 31 December 2007. The Group's net debt-to-equity ratio is 44%, down 10 points versus the end of the first quarter 2007.
On 3 April 2008, Valeo announced a project to sell its truck engine cooling division to the Swedish company EQT. This operation, which aims to focus the Group's engine cooling activity on the passenger car segment, is part of the program to divest non-strategic activities.
Valeo received several awards from its automaker customers recognizing the Group's quality performance, including an Excellent Quality Performance Award from Toyota in Nagoya, Japan. The Group also received awards from Toyota Europe, TPCA (Toyota Peugeot Citroën Automobile) and Renault. For the fourth year in a row, Valeo improved its quality performance, recording its lowest ever level of customer returns in 2007, with a rate of 10 ppm (defective parts per million delivered) versus 185 ppm four years earlier.
On 10 April 2008, the German insurance company Allianz gave Valeo's Park4UTM system the 2008 Genius Safety Award, recognizing innovations that contribute to better road safety. Park4UTM also won the automotive industry's prestigious 2008 PACE Award. This is the Group's fourth consecutive PACE Award, following the blind spot detection system in 2007, the StARS micro-hybrid system in 2006 and the Lane VueTM system in 2005.
In the context of an automotive market slowdown, with new tensions impacting raw material prices, Valeo confirms an improvement of its operating margin in 2008, thanks to the pursuit of its strategy based on operational excellence and innovation.
2008 Annual General Meeting of Shareholders
The Valeo Board of Directors has called the Combined Annual General Meeting of Shareholders (AGM) to be held on 20 June 2008 at 2:30 pm at the Palais Brongniart, Place de la Bourse, 75002 Paris.
The AGM will be asked to approve the Group's annual accounts and the payment of a dividend of 1.2 euros per share. Payment is planned for 1 July. The detachment of the dividend will occur prior to the opening of trading on 26 June 2008.
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 125 production sites, 62 R&D centers, 9 distribution platforms, and employs 61,300 people in 28 countries.
For all additional information, please contact:
Kate Philipps, Group Communications Director, Tel: +33-1-40-55-20-65
Rémy Dumoulin, Investor Relations Director, Tel: +33-1-40-55-29-30
For more information about the Group and its activities, please visit our web site http://www.valeo.com
(1) Operating income before other income and expenses
For all additional information, please contact: Kate Philipps, Group Communications Director, Tel: +33-1-40-55-20-65; Rémy Dumoulin, Investor Relations Director, Tel: +33-1-40-55-29-30