---

Valeo: Third Quarter Results

18 October 2000

Valeo: Third Quarter Results

    PARIS--October 17, 2000--

    The Valeo Board met on October 17th and closed the Group's third quarter 2000 accounts.

(in millions of euros)      Q3 2000     Q3 1999    % change 2000/99

Sales                        2,012       1,790          + 12%

Gross margin                   367         343           + 7%

% sales                      18.2%       19.2%

Operating income               107         104           + 3%

% sales                       5.3%        5.8%

Ordinary income                109          97          + 12%

% sales                       5.4%        5.4%

Other income and charges - net  55         (3)

Taxes                         (19)        (27)

Net income from consolidated   145          67         + 116%
companies

% sales                       7.2%        3.7%

Associated companies           (1)          18

Goodwill                      (20)        (20)

Minority interests             (4)         (1)

Net income                     120          64           +88%

% sales                       6.0%        3.6%

Net E.P.S (in euro)           1.45        0.77          + 88%

    Sales increased by 12.4% compared with the same period in 1999, driven by dynamic operations in Europe, South America and Asia, and more specifically in Japan.
    Gross margin stood at 18.2% of sales: it was impacted by the North American market, rises in raw materials prices and the aftermarket. Given this situation, Valeo is reinforcing and accelerating its actions, in three particular areas:

--	Reorganization of its supplier base,
--	Industrial redeployment in Europe and North America,
--	Reorganization of its aftermarket activities.

    Operating income stood at 5.3% of sales due to strict control of non-production costs.
    Ordinary income before tax rose by 12% due to an improvement of the financial result of 9 million euro.
    Net income after tax and minority interests increased by 88% to 120 million euro, that is 6.0 % of sales. It includes an extraordinary capital gain generated by the disposal of 7% of the stock of Valeo Climate Control within the framework of the Zexel operation.
    Net earnings per share totaled 1.45 euro, up by 88% over the same period in 1999.
    The third quarter was also marked by an excellent level of order intake. Major contracts were signed with, in particular, General Motors, DaimlerChrysler and Volkswagen, in wiper systems, top column modules and air conditioning systems.
    In North America, an 8-year agreement was signed with the union of the Rochester site, leading to enhanced flexibility and productivity at this industrial facility.

Valeo accelerated its external growth strategy in the third quarter:

-- The final agreement signed with Zexel covering two joint ventures
    has given birth to a world leader in climate control and enables
    the deployment of the engine cooling activity in Japan.

-- Valeo has taken a stake in Ichikoh, a leader in lighting systems
    in Japan, to develop a commercial, technical and industrial
    partnership.

-- Valeo has also set up a twelfth branch, Valeo Connective Systems,
    to integrate the automotive activities acquired from Labinal.

-- The Group signed a memorandum of understanding with Textron to set
    up a joint venture in cockpits, with the aim of becoming world
    leader in this business.