Despite a difficult year, affected in particular by the semiconductor crisis, Valeo managed to post a 6% growth in sales last year, for a gross operating surplus (Ebitda) in line with its objectives. The designer, manufacturer and distributor of automotive equipment saw its billings rise to 17.3 billion euros and its Ebitda exceed 2 billion, ” in line with the announced objectives “, made a point of specifying the chairman and managing director of the group Christophe Périllat. The dividend is up 17%, at 0.35 euro per share.
The company is now working on its development by 2025, in particular with the implementation of the “Move Up” strategic plan. The equipment manufacturer is targeting 27.5 billion billings at the end of four years, an increase of 13% per year, as well as an Ebitda of around 14.5% of its sales. The group also aims to free cash flow between 800 million and 1 billion euros.
” Technologically strong »
To achieve these objectives, Valeo intends to rely on four major pillars: acceleration of electrification, accelerated development of the ADAS (driving assistance system), reinventing the inner experience » with in particular the enabled connectivity and the improvement of visibility systems. ADAS is, together with electrification, the spearhead of the manufacturer’s new strategy by 2025.
Regarding electrification, the company intends to work as much on powertrains as on heat management, two markets which will represent respectively 93 billion and 25 billion euros. With the implementation of its plan, Valeo expects to reach 12.5 billion euros in billings in this segment, of which 60% for powertrains alone.
Regarding ADAS, the manufacturer expects sales to grow by 19% per year between 2021 and 2025, to 4 billion euros, as well as an Ebitda of around 21% on this activity alone at the end of its “Move Up”. This profitability will be guaranteed by better cost management and operational leverage on volumes. The full recovery of inflation and the improvement in margins on new products will further boost profitability.
Full Vsea integration
Valeo estimates the sales generated by its interior experience and visibility systems activities at 8 billion euros, split 25% and 75% respectively. Christope Périllat qualifies these two segments ” of fundamental and profitable activities “.
The joint venture developed with Siemens, Valeo Siemens eAutomotive, will be fully integrated by Valeo by next July. This integration will enable the group to improve its profitability from 2022, with a fixed EBITDA margin estimate of around 10%.
But for this year, the group expects a “difficult” 2022, with an Ebitda margin of between 11.8% and 12.3%, down from 13.4% in 2021, due the inflationary context and the cost of integrating electric motors from the former joint venture with Siemens.
Last point put forward by the Chairman and CEO: the group’s debt reduction. Christophe Périllat wants Valeo to complete its plan with a net debt to Ebitda ratio of less than 0.7. The idea is to be ready and nimble when the car market accelerations take place.
The forecasts for 2022 take precedence, this Friday, on the stock market, over Valeo’s ambitious plan for 2025. The action lost more than 10% at the start of the afternoon.
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