(BFM Bourse) – The group’s margins were penalized by inflation last year. And the objectives planned for this year are disappointing.
Automotive equipment manufacturers experienced a very complicated vintage in 2022. Unlike manufacturers, they have less leverage to raise their prices, their prices being contractually defined, which forces them to negotiate with their customers. This results in a reduced capacity to pass on the inflation of their costs.
Valeo was not spared. The former tenant of the CAC 40, which published its annual results on Thursday evening, saw its operating margin (excluding the contribution of equity-accounted companies) contract by 80 basis points (0.8%) for 2022, and fall to 3.2%, slightly less than the 3.3% expected by analysts.
“Inflation cost us a point of margin”, explained the group’s managing director, Christophe Périllat, on BFM Business, this Friday, stressing that the impact of inflation not passed on to customers had amounted to around 200 million euros.
Leap of ADAS systems
On the other lines of the accounts, turnover increased by 16% on a reported basis and by 9% excluding the effect of exchange rates and scope, to reach 20 billion euros, despite volumes still penalized by the shortage of semi -drivers.
The activity was supported by driving and parking assistance systems (ADAS), up 29% on a comparable basis for original equipment, and high-voltage electric propulsion systems, up 34%.
Net profit increased by 31% over one year to 230 million euros. The good news of the publication comes mainly from the generation of cash, which, at 388 million euros, exceeded the consensus of 17%.
For the current financial year, Valeo anticipates growing sales, with an amount expected between 22 billion and 23 billion euros, and an operating margin of between 3.2% and 4% as well as a flow of cash in excess of 320 million euros.
Towards a less buoyant first half than the second
Enough to leave the market hungry. As Stifel points out, analysts have so far expected, for 2023, a cash flow of around 440 million euros and an operating margin of 4%, the top of the group’s range.
And the market was perhaps expecting even more: “the stock had rallied recently, as some optimistic analysts were pushing to explain that the group could achieve an operating margin between 4% and 4.5% this year, and therefore the outlook is disappointing”, explains a financial intermediary.
In addition, the group indicates that it expects its performance to be “significantly” better in the second half than in the first “which constitutes a significant risk given the current uncertainties”, also points out this financial intermediary.
On the Paris Stock Exchange, the market sanctions the copying of Valeo. The title fell by almost 8% this Friday around 2:40 p.m.
Julien Marion – ©2023 BFM Bourse
Are you following this action?
Receive all the information about VALEO in real time: