Valeo posted a 16-percent surge in earnings before interest, taxes and other expenses in the second half of 2013 to EUR411 million ($563 million), thanks to higher demand for cars in China and North America as well as improvements in the European vehicle market. It exceeded the EUR375 million average of three analyst estimates surveyed by Bloomberg.
Valeo also logged a 3-percent rise in revenue EUR5.94 billion. Valeo is focusing on technology that promotes safety, comfort and pollution reduction to hike its profitability. The supplier was able to match a goal of a "slight increase" in 2013 earnings as a proportion of sales thanks to surging demand from German and Asian customers.
"Our strong cash generation and financial position will help us prepare for the expected sharp growth in sales, particularly in 2015 and 2016," chief executive Jacques Aschenbroich said in the statement. He expressed confidence that Valeo's strategy focused on innovation and on developing its businesses in fast-growing production regions will enable them to continue delivering margin growth that is in line with their medium-term financial objectives.
Valeo expects the European car market to surge between 1 percent and 2 percent this year. On the other hand, car industry association ACEA expects the European auto industry to grow 2 percent this year.