Valeo - 2003 Results For First Nine Months, Progress Over 2002 Despite More Challenging Third Quarter
PARIS, Oct. 20, 2003 -- Following today's meeting of the Board of Directors, Valeo presented its consolidated accounts for the third quarter 2003.
In millions of euros 9 months 3rd quarter
2003 2002 change 2003 2002 change
Sales 6,932 7,425 -6.6% 2,086 2,241 -6.9%
Gross margin 1,227 1,275 -- 364 387 --
%sales 17.7% 17.2% +0.5 pt 17.4% 17.3% +0.1 pt
Operating income 330 345 -- 90 105 --
%sales 4.8% 4.6% +0.2 pt 4.3% 4.7% -0.4 pt
Operating income less 302 297 -- 79 90 --
financial charges
%sales 4.4% 4.0% +0.4 pt 3.8% 4.0% -0.2 pt
Net income from 201 182 -- 50 57 --
consolidated companies
%sales 2.9% 2.5% +0.4 pt 2.4% 2.5% -0.1 pt
Net income 127 99 25 31
%sales 1.8% 1.3% +0.5 pt 1.2% 1.4% -0.2 pt
NB: unaudited quarterly figures
Year to date, despite the reduction in sales due to the fall of the dollar and the weakness of the automotive market, the gross, operating and net margins have improved as a result of the ongoing restructuring.
Group results for the third quarter 2003
In the third quarter 2003, Valeo's sales totaled 2,086 million euros, down 7% compared with the third quarter 2002. This fall is particularly related to exchange rate variations (-3%) due to the weakness of the dollar and Asian currencies.
At constant exchange rates and reporting entity, sales declined by 4% in the third quarter. This performance reflects the evolution in automotive production: on a comparable period basis, output declined by 5% in Europe and in North America while it increased marginally in Asia and South America.
Anticipating further market softening into 2004, the Group has stepped up its restructuring plan. During the course of the third quarter, Valeo finalized the closure of four sites of the Electronics & Connective Systems Branch including three in France (Sissonne, Dreux and Labastide) and one in Spain (Abrera). The site of Saint-Aubin, France (Switches & Detection Systems Branch) was sold. To date, the Group has 125 sites. Groupwide, compared with end June 2003, headcount was reduced by 2,100 to 67,000 employees.
For the quarter, the gross margin improved by 0.1 points to 17.4% of sales compared with the same period in 2002. The operating margin declined by 0.4 points to 4.3% of sales, as non-production costs reflected Valeo's commitment to R&D and the marketing and sales efforts.
The free cashflow before dividend and equalization tax reached 49 million euros. It incorporates the impact of the reduction in inventory and capital expenditures resulting from the rationalization of the industrial base.
At end September 2003, the net debt to shareholder equity ratio is 23%. Order intake and growth prospects
The order intake over the first nine months of 2003 reached 1.3 time sales versus 1.2 in 2002. In particular, during the third quarter, Valeo was awarded a first order for its Lane Departure Warning System and contracts from Volkswagen Group for power closure systems, two of its latest innovations.
Commenting on Valeo's perspectives, Thierry Morin, CEO and Chairman of the Board said, "Despite a more difficult third quarter, Valeo has maintained its improvement over 2002. The new contracts that we have won and the reduction in the cost base will allow the Group to leverage the sales growth in 2004."
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 among the world's top automotive suppliers. The Group has 125 plants, 55 R&D centers, 10 distribution centers and employs 67,000 people in 25 countries worldwide.
For more information on the Group and its businesses, consult our website: www.valeo.com.