In This Article:
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Revenue: EUR21.5 billion.
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Gross Margin: 19%, improved by 1.1 points.
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EBITDA Margin: 13.3% of sales.
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Operating Margin: 4.3% of sales.
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Net Debt: Reduced by EUR215 million to EUR3.8 billion.
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Free Cash Flow: EUR481 million after restructuring costs.
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Net Attributable Income: EUR162 million, 0.8% of sales.
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New Orders: EUR17.8 billion.
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R&D Expenses: Reduced by EUR177 million in H2.
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Administrative Expenses: Reduced by EUR49 million year on year.
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Dividend Proposal: EUR0.42 per share.
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Valeo SA (VLEEF) achieved its margin and cash guidance despite a challenging environment, marking the third consecutive year of financial improvement.
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The company reported a gross margin improvement to 19%, up by 1.1 points, supported by cost-reduction measures and operational control.
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Valeo SA (VLEEF) reduced its net debt by EUR215 million, leading to a leverage ratio of 1.3 times EBITDA, down from 1.5 times the previous year.
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The company recorded EUR17.8 billion in new orders, indicating strong competitive positioning and customer trust.
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Valeo SA (VLEEF) achieved its CO2 emissions guidance and received an A rating from the Carbon Disclosure Project, highlighting its commitment to sustainability.
Negative Points
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Original equipment sales were down 2% on a like-for-like basis, notably affected by the high-voltage electric powertrain business.
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China posted an underperformance of 10 points due to a challenging customer mix, impacting overall sales performance.
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The high-voltage powertrain business negatively impacted group performance by 3 points, underperforming the market.
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EUR7.3 billion of orders were canceled due to changes in OEM product strategies, particularly in electrification and North America.
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The net attributable income was EUR162 million, representing only 0.8% of sales, indicating room for profitability improvement.
Q & A Highlights
Q: Can you clarify the net debt target for the end of 2025 and the impact of the EUR7.3 billion order cancellations? A: Edouard de Pirey, CFO, confirmed the net debt reduction of EUR215 million and the plan to continue decreasing net debt in 2025, even with a EUR0.42 per share dividend. Christophe Perillat, CEO, explained that the EUR7.3 billion order cancellations were due to changes in customer strategies, particularly in North America. Valeo is seeking compensation for these cancellations, and the order book remains strong despite these changes.