Valeo’s sales fell 0.8% in the first quarter amid sharper declines in vehicle production in some of their major markets. Revenue fell to €4.84bn in 1Q-2019 as global auto production dropped 7%.
Nevertheless, Valeo say they are on course to outpace auto production by a wider margin in 2019, reiterating full-year goals.
The company have invested heavily to benefit from ever-tightening emissions regulations and increasing vehicle automation, through a push into electrified cars, sensors and camera systems. While waiting for the strategy to pay off, though, they have been roughed up by an auto-market slowdown and weakening order intake that forced a rein-in of capital spending and a pledge of €100m in new savings.
“Our outperformance versus automotive production accelerated in the first quarter, in line with our roadmap, in a challenging automotive market. This outperformance is set to continue to accelerate throughout the year in our four Business Groups and in all our geographic areas, thanks to the start of production on high-tech innovations. In a particularly unstable economic and geopolitical environment, we are pressing ahead with our plan to reduce costs and capital expenditure and we confirm our objectives for 2019” said Jacques Aschenbroich, CEO and President of Valeo Group.
Outlook
Valeo’s 2019 objectives remain unchanged:
– a stronger market outperformance than in second-half 2018, increasing gradually during the year thanks to the start of production on new contracts, particularly in the camera, electrical and transmission systems, and lighting segments;
– roll-out of the program, announced in February, to reduce costs by more than 100 million euros and capital expenditure by more than 100 million euros;
– operating margin between 5.8% and 6.5%, depending on the trends in automotive production and in the price of raw materials and electronic components;
