In the first half of 2024, Valeo continued to improve its profitability, with an operating margin of 4.0 percent and free cash flow of 121 million euros, in line with its full-year 2024 objectives.
The Group’s results for first-half 2024 are as follows:
- Sales of 11,117 million euros, up 1 percent on a like-for-like basis
- Operating margin up 23 percent to 445 million euros, representing 4.0 percent of sales (up 0.8 percentage points year on year)
- EBITDA margin at 12.4 percent of sales (up 0.8 percentage points year on year)
- Free cash flow of 121 million euros, up 277 million euros on first-half 2023, notably thanks to a sustained 290-million-euro reduction in inventories, particularly of semiconductors
- Net debt at 4,010 million euros and leverage ratio at 1.5x EBITDA
- Order intake at 9.1 billion euros, due to projects being postponed to the second half of the year
- Full-year 2024 and 2025 objectives: sales objectives revised to consider current market conditions; margin and free cash flow objectives reaffirmed, supported by cost reduction measures
“Thanks to the remarkable commitment of Valeo’s teams in rigorously managing our activities and implementing cost reduction measures, we are continuing to improve our financial performance in line with the margin and cash generation objectives we set ourselves for the year. In the first half of 2024, our operating margin was 4.0 percent and we generated free cash flow of 121 million euros. In an environment marked in particular by automakers postponing production launches, the slowdown in high-voltage electrification and a lackluster market in Europe and China, we have revised our sales objectives for full-year 2024 and 2025. However, in view of the measures we have taken to reduce costs and improve our operating efficiency, we are reaffirming our 2024 and 2025 objectives for margins and free cash flow.
During the first half, we finalized the reorganization and merger of our Thermal Systems and Powertrain Systems activities, effective from April 22, 2024. The synergies unlocked as a result of this move mean that we can now offer our customers a broader, more comprehensive and more competitive range of products in traditional businesses and in electrification. Thanks to this reorganization, we will also be able to lower our break-even point and generate savings of around 50 million euros as from the second half of the year, rising to 100 million euros on a full-year basis. This effort is part of a set of one-off, exceptional cost reduction measures aimed at achieving cumulative full-year savings of 200 million euros.
As announced, we are continuing to implement our 500-million-euro asset divestment plan and, as part of this process, have completed the sale of our Thermal Commercial Vehicles activity.
Lastly, a Corporate Social Responsibility agreement took effect on July 1 at all our plants worldwide. We are therefore continuing to proactively deploy our sustainable development strategy in terms of the environment, innovation, human capital and society as a whole,”- Christophe Périllat, Valeo’s Chief Executive Officer.
