Valeo sees new contracts lifting sales after weak 2018

PARIS (Reuters) - French auto parts maker Valeo said 2018 profit fell in a 'challenging year' marked by emissions-test bottlenecks that hit European car production and a slowdown in China. But the maker of vehicle lighting, self-driving, electrification and fuel-saving systems said 2019 sales will outperform auto production by a wider margin, citing contracts with clients including VW and Toyota. The past year was 'characterized by a particularly volatile economic and geopolitical environment', Chief Executive Jacques Aschenbroich said.

Reuters February 22, 2019 01:05:45 IST
Valeo sees new contracts lifting sales after weak 2018

Valeo sees new contracts lifting sales after weak 2018

PARIS (Reuters) - French auto parts maker Valeo said 2018 profit fell in a "challenging year" marked by emissions-test bottlenecks that hit European car production and a slowdown in China.

But the maker of vehicle lighting, self-driving, electrification and fuel-saving systems said 2019 sales will outperform auto production by a wider margin, citing contracts with clients including VW and Toyota.

The past year was "characterized by a particularly volatile economic and geopolitical environment", Chief Executive Jacques Aschenbroich said.

Valeo has 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 that strategy to pay off, however, the company has been buffeted by an auto-market slowdown and European car production hitches that last year prompted it to issue two profit warnings in three months.

The new Worldwide Harmonised Light Vehicle Test (WLTP) became mandatory in Europe last September, forcing Valeo customers including Volkswagen and Renault to halt deliveries of some models for months pending re-certification.

Valeo's 2018 order intake fell 15 percent to 28.6 billion euros including its electric-car parts venture with Siemens - still 1.7 times its total sales to carmakers - while net debt increased 22 percent to 2.25 billion euros as of Dec. 31.

Operating profit fell 26 percent to 1.09 billion euros (947.33 million pounds) paring Valeo's operating margin to 5.7 percent of sales from 7.9 percent a year earlier.

Net income dropped 38 percent to 546 million euros even as revenue increased 4 percent to 19.26 billion euros, helped by a series of recent acquisitions. Global auto production fell an estimated 1 percent last year, Valeo said.

Analysts had expected operating profit of 1.11 billion euros on sales of 19.26 billion, based on the median of 10 estimates polled by Infront Data for Reuters.

Valeo said its sales performance would pick up gradually throughout 2019 thanks to new supply contracts for cameras, lighting and electrified transmissions.

Earnings before interest, tax, depreciation and amortisation (EBITDA) will also show growth, it said, predicting a 5.8-6.5 percent operating margin for the year.

Valeo announced a proposed dividend of 1.25 euros, unchanged from its 2018 payout. The company also said it will revise mid-term goals to reflect 2018 market and raw-material price trends as well as projections for this year.

(Reporting by Laurence Frost; Editing by Inti Landauro and Alexandra Hudson)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Oil rises 2% as OPEC complies with production cuts
Business

Oil rises 2% as OPEC complies with production cuts

By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000
Business

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000

By Tina Bellon and C Nivedita (Reuters) - Tesla Inc will further cut the price of its Model S "Long Range" sedan in the United States to $69,420, the electric carmaker's chief executive, Elon Musk, announced in a tweet https://bit.ly/2H0JCP0 on Wednesday. The anticipated drop marks the second time this week Tesla has cut the price for the high-end sedan, following a 4% cut of the Model S's price in the United States on Tuesday to $71,990.

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen
World

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen

By Jeff Mason DES MOINES, Iowa (Reuters) - Under siege over his handling of the novel coronavirus pandemic, President Donald Trump on Wednesday cited what he said was his son's mild bout of the virus as a reason why American schools should reopen as soon as possible. Trump made the comment about his son, Barron, as the president swept into Iowa on a mission to shore up support in battleground states that he won in 2016 but is in danger of losing to Democrat Joe Biden barely three weeks before the election. First lady Melania Trump announced in a statement earlier in the day that the virus that struck both her and her husband had also infected their 14-year-old son