Valeo sees more growth from car electrification and automation as orders hit record
Reuters
Published Feb 23, 2023 01:40PM ET
Updated Feb 23, 2023 04:23PM ET
By Olivier Sorgho
(Reuters) -French car parts maker Valeo (EPA:VLOF) on Thursday forecast strong sales growth this year, as record 2022 orders helped by demand for car electrification and driving assistance technology helped it navigate a challenging year for the automotive sector.
The group is targeting sales between 22 billion and 23 billion euros this year, against the 20.04 billion posted for 2022. The 2022 performance was in line with its guidance from October.
Valeo is betting on car electrification and the adoption of advanced driving assistance systems (ADAS), as governments and companies shift towards a low-carbon economy while consumers warm to the idea of automated driving.
Its record order intake of 32.6 billion euros in 2022 included many orders for electric vehicle components and ADAS technology, Chief Executive Christophe Périllat told reporters in a call.
The company's core profit (EBITDA) for 2022 came in at 2.40 billion euros, above the 2.34 billion expected by analysts in a company-provided poll.
But Périllat still flagged macroeconomic pressures including inflation, chip shortages, COVID-19 in China and Russia's invasion of Ukraine contributing to "relatively weak" global car production in 2022.
Valeo said the net impact of higher costs of raw materials, energy and transportation in 2022 was roughly 200 million euros, and about 60 million for wages.
It will aim to curb inflationary impacts this year through productivity, cost reduction and price increases, the CEO said in a statement, adding in the call that the company has "passed onto clients a significant chunk of our costs."
The group expects to record an improved operating margin between 3.2%-4% in 2023, against the 3.2% recorded in 2022.
It said it will propose a dividend of 0.38 euro per share.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.