In This Article:
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Revenue: EUR11.1 billion, up 1% like-for-like compared to H1 '23.
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EBITDA Margin: 12.4%, up 0.8 points from H1 '23.
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Operating Margin: 4.0%, up 0.8 points from H1 '23.
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Free Cash Flow: EUR121 million, an increase of EUR277 million from H1 '23.
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Gross Margin: Increased by 1.4 points to 18.5%.
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Net Attributable Income: EUR141 million, up 18%.
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R&D Expenditures: Impact reduced due to increased efficiency.
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SG&A Expenses: Decreased by EUR18 million year-on-year.
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High-Voltage Powertrain Sales: Down 43% compared to H1 '23.
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Order Intake: EUR9.1 billion with improved embedded margins.
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Financial Net Debt: EUR4.0 billion, stable compared to December '23.
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Leverage Ratio: Improved to 1.5 times at the end of June '24.
Release Date: July 25, 2024
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) improved its profitability and cash generation, with H1 margins and free cash flow aligning with full-year guidance.
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Sales reached EUR11.1 billion, marking a 1% increase on a like-for-like basis compared to H1 2023.
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EBITDA margin improved by 0.8 points to 12.4%, and operating margin increased by 0.8 points to 4.0%.
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The company successfully completed the sale of its thermal commercial vehicle business as part of its asset disposal program.
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Valeo SA (VLEEF) achieved a significant reduction in costs and improved cash management, contributing to a gross margin increase of 1.4 points to 18.5%.
Negative Points
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OEM sales were down 1% like-for-like, largely impacted by low activity in high-voltage powertrain sales.
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The company experienced a negative impact of minus 4 points from lower sales in high-voltage powertrain.
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Performance in China was down 7 points due to an unfavorable customer mix, with Chinese OEMs representing a lower share of sales.
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High-voltage powertrain sales recorded a significant decline of 43% compared to H1 2023.
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The company adjusted its sales objectives downward due to expected continued softness in high-voltage powertrain sales.
Q & A Highlights
Q: Can you comment on the transition from 2024 to 2025 and the key factors driving earnings into next year? A: Christophe Perillat, CEO, explained that the transition from 2024 to 2025 will involve less volume impact due to reduced sales assumptions. However, they plan to accelerate cost reduction measures. The company expects to benefit from better contracts signed in 2022, which will impact the P&L starting in 2025. Edouard de Pirey, CFO, added that gross R&D is expected to decrease in the second half of 2024, providing a tailwind.