Valeo Reports First Quarter 2011 Organic Sales Growth of 15.6% (+19.2% in Original Equipment Sales), With all Business Groups and all Production Regions Outperforming the Market

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Apr 21, 2011, 12:31 ET

PARIS, April 21, 2011 /PRNewswire-FirstCall/ --

- Consolidated Sales up 15.6% (+14.3% like-for-like)

- Original Equipment Sales up 19.2% (+17.4% like-for-like), Despite a 22% Decline in Original Equipment Sales in Japan

- Another Quarter of Outperformance of Original Equipment Sales Versus the Market

Following the meeting of its Board of Directors today, Valeo released its sales figures for the first quarter 2011:

    In million euros      Q1 2010*     Q1 2011*       % change    % change
                                                     2011/2010 2011/2010**
    Original equipment       1,898        2,263         +19.2%      +17.4%
    Aftermarket                351          361          +2.8%       +4.5%
    Other                       60           45         -25.0%      -26.5%
    Total sales              2,309        2,669        + 15.6%      +14.3%

    * Unaudited ** On a like-for-like basis

Jacques Aschenbroich, Valeo's Chief Executive Officer, said: "Our strategic focus on developing products that reduce CO2 emissions and on increasing sales in Asia and emerging markets continued to pay off well in the first quarter of 2011. Our performance for the period once again demonstrated our ability to grow significantly faster than the market in all of our businesses and production regions. I'm confident that we will continue to outperform the market throughout the rest of the year."

In the first quarter 2011, global automotive production remained high in all production regions except Japan where output fell 29%. Global passenger car production was up 4.5% compared with the year-earlier period.

In this environment, original equipment sales rose 19.2% (+17.4% like-for-like) to EUR2,263 million, despite a 22% drop in Japan, outperforming market growth by 12 points. Aftermarket sales were up 4.5%, at EUR361 million.

Total consolidated sales amounted to EUR2,669 million, up 15.6% compared with the first quarter 2010. The like-for-like increase was 14.3%.

    Above-market growth in original equipment sales in all production regions

    Original                      1st quarter*
    equipment
    (in million
    euros)
                         2010    2011 % change    % change
                                         Valeo  automotive
                                       sales**  production
    Europe              1,170   1 365     +17%         +8%
    Asia excl. Japan      258     310     +17%         +9%
    of which China        140     161     +14%         +7%
    Japan                 117     101     -22%        -29%
    North America         212     317     +46%        +15%
    South America         143     170     +10%         +9%

    *Unaudited ** Like-for-like

Automotive production rose 8% in Europe and 15% in North America compared with the first quarter 2010. In Asia, production declined by 1% due to the consequences of the earthquake in Japan which led to a 29% drop in the country's output for the quarter.

Against this backdrop, the Group's original equipment sales outperformed the market in all production regions:

- In Europe, Valeo sales growth of 17% thanks to its favorable customer positioning and product mix, and the ramp-up of certain technologies, particularly in the Powertrain Systems and Comfort & Driving Assistance Systems Business Groups;

- In Asia, excluding Japan, Valeo sales growth of 17% thanks to increased market shares;

- In North America, Valeo sales growth of 46% thanks to its favorable customer positioning, improved product mix and market share gains.

These dynamic performances in all regions, combined with a positive geographic mix, enabled the Group to outperform global original equipment market growth by 12 points in the first quarter.

Europe accounted for 60% of original equipment sales in the first quarter compared with 63% in the same period of 2010. North America accounted for 14% versus 11% in the same period of 2010, and Asia was down by 1 point versus the same period of 2010, at 18%.

All Business Groups contributed to the increase in sales and outperformed the growth in global automotive production

    Total sales                      1st quarter*
    In million euros
                             2010 2011       %   % change
                                        change OE sales**
                                         Valeo
                                       sales**
    Comfort & Driving         408  481    +17%       +19%
    Assistance Systems
    Powertrain Systems        636  767    +21%       +25%
    Thermal Systems           693  783    +10%       +11%
    Visibility Systems        591  664    +12%       +17%

    *Unaudited ** Like-for-like

The Business Groups all delivered dynamic performances, with original equipment sales rising faster than global automotive production, which was up 5% in the first quarter.

The Group also achieved excellent results with its German customers, which now account for 29% of total original equipment sales compared with 27% in the first quarter 2010.

Situation following the earthquake in Japan

Valeo does not expect global automotive production (except in Japan) to be seriously affected up until the end of May. Nevertheless, beyond that date, possible problems in the supply chain for electronic and other components cannot be ruled out, and automotive production may also be disturbed.

Highlights

Valeo announced on February 23, 2011 the signing of an agreement with RHJ International SA and Nissan to acquire Niles, a Japanese automotive supplier which would reinforce Valeo's Comfort and Driving Assistance Systems Business Group. The transaction amounts to 320 million euros (enterprise value). With this acquisition, Valeo would strengthen its position in Asia (Japan, China, Thailand) and with Japanese automakers, particularly Nissan. The Group would thus become world leader in the automotive Human-Machine Interface market. This external growth project is within the framework of the strategy presented to the Group's shareholders in 2011, aiming to reinforce Valeo's presence in Asia. The agreement is subject to various preconditions, such as approval of the anti-trust authorities, before it can enter into effect.

On March 9, 2011 Valeo organized an investor day to present its new medium-term financial objectives.

On April 1, 2011 two new facilities were opened in China - an Electronics Expertise Center in Shenzhen that will develop electronic hardware and services for all Group entities and a wiper systems plant in Wenling that will significantly increase wiper and washing system production capacity for both Chinese and international customers.

Financial calendar

Annual Shareholders' Meeting, June 8, 2011.

The Board of Directors decided to propose to the 2011 Annual Shareholders' Meeting the appointment of Mr. Thierry Moulonguet as a new Member of the Board. Mr. Thierry Moulonguet spent the majority of his career with the Renault-Nissan group, where he was notably Executive Vice-President and Chief Financial Officer and Member of the Executive Committee then Special Adviser to the CEO of Renault up until his departure on March 31.

Valeo is an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for the automotive industry, mainly for CO2 emissions reduction. Valeo ranks among the world's top automotive suppliers. The Group has 109 plants, 20 research centers, 38 development centers, 10 distribution platforms and employs 60,900 people in 27 countries worldwide.

For more information about the Valeo Group and its businesses, please visit http://www.valeo.com

Safe Harbor Statement

Statements contained in this report, which are not historical fact, constitute "Forward-Looking Statements". Actual results may differ materially due to numerous important factors. Such factors include, among others, the cost and timing of implementing restructuring actions, the company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions, conditions in the automotive industry, and certain global and regional economic conditions. The company assumes no responsibility for any analysts' estimates and any other information prepared by third parties which we may reference in this report. Valeo does not intend or assume any obligation to review or confirm analysts' estimates or to update any forward-looking statement to reflect events or circumstances after the date of this report.

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