Valeo: 30% Increase in Net Income in the First Quarter 2008

25/04/2008 07:01

PR Newswire

PARIS, April 25 /PRNewswire/ --
    - Third consecutive Quarter of Improved Margins

    - Continued Refocusing of the Product Portfolio

    Following the meeting of its Board of Directors, Valeo
presented its first quarter 2008 results.

    (in EUR million)                       1 January - 31 March
                                         2008*      2007**    change

    Total operating revenues             2,473      2,499     - 1.0%
    Gross margin                           392        377     + 4.0%
    % of sales                            16.1%      15.3%    + 0.8 pt
    Operating margin(1)                     90         74    + 21.6%
    % of total operating revenues          3.6%       3.0%     +0.6 pt
    Net income (attributable to the         43         33    + 30.3%
    company's shareholders)
      % of total operating revenues        1.7%       1.3%     +0.4 pt
    Basic earnings per share from         0.57       0.42     +35.7%
    continued operations (EUR)

    * The first quarter 2008 results were not audited by the statutory
auditors, nor were they the object of a limited review by these auditors.

    ** These figures do not include amounts related to the wiring harness
activity, which was divested on 31 December 2007, in line with IFRS 5 norms.

    The Group's strategy is confirmed by the continued improvement of its
performance. Despite a market slowdown, Valeo's results have progressed,
thanks to its strategy of operational excellence (cost and quality). The
Group continued the alignment of its product portfolio around its three
Domains of Innovation, with the planned divestiture of its truck engine
cooling activity.

    First quarter 2008 results

    In the first quarter of 2008, total operating revenues stood
at 2,473 million euros, stable at constant reporting entity and exchange
rates. Volumes increased by 3.7%. At the same time, world automotive
production rose by only 1.5%, a marked slowdown compared with the second half
of 2007 (+8%).

    Gross margin totaled 392 million euros or 16.1% of sales. The 0.8 point
increase in the margin rate reflects productivity gains and a slight drop in
raw material costs.

    Operating margin rose by 21.6% to 90 million euros, compared with 74
million euros in 2007. Despite the marked automotive market slowdown and an
unfavorable calendar impact for the first quarter, the operating margin rate
was up by 0.6 points, in line with progress made during the second half of
2007.

    Net financial debt amounted to 786 million euros, down by 19%,
versus 966 million euros at 31 March 2007. This was due in part to the sale
of the wiring harness business on 31 December 2007. The Group's net
debt-to-equity ratio is 44%, down 10 points versus the end of the first
quarter 2007.

    Highlights

    On 3 April 2008, Valeo announced a project to sell its truck
engine cooling division to the Swedish company EQT. This operation, which
aims to focus the Group's engine cooling activity on the passenger car
segment, is part of the program to divest non-strategic activities.

    Valeo received several awards from its automaker customers
recognizing the Group's quality performance, including an Excellent Quality
Performance Award from Toyota in Nagoya, Japan. The Group also received
awards from Toyota Europe, TPCA (Toyota Peugeot Citroën Automobile) and
Renault. For the fourth year in a row, Valeo improved its quality
performance, recording its lowest ever level of customer returns in 2007,
with a rate of 10 ppm (defective parts per million delivered) versus 185 ppm
four years earlier.

    On 10 April 2008, the German insurance company Allianz gave
Valeo's Park4UTM system the 2008 Genius Safety Award, recognizing innovations
that contribute to better road safety. Park4UTM also won the automotive
industry's prestigious 2008 PACE Award. This is the Group's fourth
consecutive PACE Award, following the blind spot detection system in 2007,
the StARS micro-hybrid system in 2006 and the Lane VueTM system in 2005.

    Outlook

    In the context of an automotive market slowdown, with new
tensions impacting raw material prices, Valeo confirms an improvement of its
operating margin in 2008, thanks to the pursuit of its strategy based on
operational excellence and innovation.

    2008 Annual General Meeting of Shareholders

    The Valeo Board of Directors has called the Combined Annual
General Meeting of Shareholders (AGM) to be held on 20 June 2008 at 2:30 pm
at the Palais Brongniart, Place de la Bourse, 75002 Paris.

    The AGM will be asked to approve the Group's annual accounts
and the payment of a dividend of 1.2 euros per share. Payment is planned for
1 July. The detachment of the dividend will occur prior to the opening of
trading on 26 June 2008.

    Valeo is an independent industrial group dedicated to the
design, production and sale of components, integrated systems and modules for
cars and trucks. It is one of the world's leading automotive suppliers. The
Group has 125 production sites, 62 R? centers, 9 distribution platforms, and
employs 61,300 people in 28 countries.

    For all additional information, please contact:

    Kate Philipps, Group Communications Director, Tel: +33-1-40-55-20-65

    Rémy Dumoulin, Investor Relations Director, Tel: +33-1-40-55-29-30

    For more information about the Group and its activities,
please visit our web site http://www.valeo.com

    (1) Operating income before other income and expenses
For all additional information, please contact: Kate Philipps, Group Communications Director, Tel: +33-1-40-55-20-65; Rémy Dumoulin, Investor Relations Director, Tel: +33-1-40-55-29-30

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vrijdag 25 april 2008