Valeo Results 2000: 18% Rise in Sales and Operating Income
PARIS--Feb. 1, 2001--Valeo (Paris: FR; OTC: VLEEY) today announced that Valeo's Board of Directors, meeting on January 31st 2001, deliberated on the business of the day and closed the Group's accounts for 2000.
Results 2000
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in millions of euro 2000 1999 % change
2000/99
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Sales 9,120 7,717 + 18%
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Gross margin 1,708 1,512 + 13%
% sales 18.7 % 19.6 %
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Operating income 573 487 + 18%
% sales 6.3% 6.3 %
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Ordinary income 569 460 + 24%
% sales 6.2 % 6.0 %
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Other income and expenses - 39 427
net
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Taxes (142) (235)
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Net income from consolidated 466 652 - 29%
companies
% sales 5.1 % 8.4 %
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Associated companies 2 -
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Goodwill (87) (83)
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Minority interests (13) (6)
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Net income 368 563 - 35%
% sales 4.0 % 7.3 %
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Net E.P.S. (in euro) 4.44 6.81
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Valeo's consolidated sales were up 18% to 9.1 billion euro. They rose by 17% in Europe, 10% in North America and 85% in Asia. The Group experienced renewed growth in South America where sales increased by 41%.
The geographical spread of the Group's sales reflects the globalization of its business. Valeo generated 61% of its sales in Europe, 29% in North America, 3% in South America and recorded significant growth in Asia which now accounts for 7% of its activities.
The increase in sales is related for 8.5% to external growth and for 5.5% to exchange rate variations. At constant reporting entity and exchange rates, sales grew by 4%.
Group gross margin rose by 13% in 2000, to 1,708 million euro, that is 18.7% of sales. Improvements in the performance of Valeo's industrial Branches were offset by a slowdown in the North American market, rising raw material costs, new acquisitions with still weak margins and the aftermarket.
Valeo's Research and Development effort grew significantly but the rise in spending was limited to 10%, that is 573 million euro, due to strong improvements in productivity and to a widening of its scope of activity. R&D spending accounted for 6.3% of sales compared with 6.8% in 1999.
Selling and administrative expenses amounted to 562 million euro, accounting for 6.2% of Group sales in 2000, versus 6.5% the previous year.
Operating income rose by 18% to 573 million euro, that is 6.3% of sales. The Group maintained an operating margin equivalent to that of 1999 despite a deterioration in the market in the last quarter of 2000.
The Group's ordinary income amounted to 569 million euro, that is 6.2% of sales compared with 460 million euro in 1999, or 6% of sales, due to a considerable reduction in non-production costs and Group financial charges.
Net income, after minority interests, totaled 368 million euro, that is 4.0% of Group sales.
The Group's financial structure at the end of the year was sound. Shareholders' equity amounted to 2,919 million euro versus 2,652 million euro at the end of 1999. Provisions totaled 1,292 million euro at end December 2000, compared with 1,420 million euro at the end of 1999. The Group's net indebtedness stood at 426 million euro, related principally to the acquisition of Labinal's automotive activities and to external growth operations in Asia. The debt-to-equity ratio stood at 15%.
The Group's capital expenditures reached 661 million euro in 2000, up by 20%, and accounted for 7% of sales.
Net earnings per share for the year amounted to 4.44 euro compared with 6.81 euro in 1999. The latter included the extraordinary capital gain generated by the disposal of LuK.
The year 2000 was also marked by a very high order intake level (+56%), 1.7 times the year's sales. Valeo reinforced its global offering through external growth operations and alliances in Asia, Europe and America.
Dividend
A dividend of 1.35 euro, excluding tax credit, and 2.03 euro, including tax credit, will be proposed to the next Annual General Meeting of Shareholders. This dividend will represent a pay-out ratio of 30% of net income.
Outlook 2001
Forecasts for the automotive sector in 2001 anticipate a slowdown in the European market, a drop in volumes in North America, especially during the first two quarters, and a falling Asian market. Growth in the South American market will be moderate. Raw materials prices will remain high in the first half of 2000.
| - | Given this environment, Valeo intends to resolutely pursue the adaptation of its production capacities with planned workforce reductions, principally in the United States. The Group is also speeding up |
| - | its industrial redeployment in Europe and North America to strengthen the competitiveness of its industrial base. |
| - | At the same time the Group is reinforcing its actions in terms of procurement by considerably reducing the number of its suppliers and widely deploying "bidding-on-line" and "Web catalog" solutions. |
| - | Valeo is growing in high technology domains through new products, systems and modules and is deploying its service activities to anticipate and satisfy the expectations of both its OEM and aftermarket customers. |
Commenting these results, Andre Navarri, Chairman & CEO of Valeo, said, "The Group's performance in 2000 and the actions undertaken in 2001 demonstrate Valeo's capacity to adapt to short-term market conditions, while continuing to deploy its profitable growth strategy. Valeo is positioned on attractive high growth markets. The competitive advantages of the Group and its resources will enable Valeo to seize opportunities and succeed in its strategy for the greater satisfaction of its customers and shareholders."
Valeo is an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for cars and trucks. Valeo ranks amongst the world's top automotive suppliers. The Group has 175 production sites, 41 R&D centers and 10 distribution centers and employs 75,000 people in 25 countries worldwide.
For more information on the Group and its businesses, please consult our Web site: www.valeo.com