Valeo set out new targets for revenue and profitability due to Asian demand

Article by Christian Andrei, on March 11, 2011

Valeo S.A. established new targets for profitability and revenue as it believes that new technology and expansion in Asia would help it outpace automobile production growth in coming years.

The company said it would target revenue of around EUR14 billion ($19.4 billion) in 2015, an operating margin rate above 7 percent and return on capital employed (ROCE) above 30 percent.

Valeo sees sales outside Africa and Europe to account for over 50 percent of the total in 2015, compared with 40 percent in 2010.

Automakers and their suppliers rely on fast-growing emerging markets and new green technologies like electric vehicles and hybrids to boost their sales as mature markets struggle for growth. Natixis analyst Michael Foundoukidis stated that such “ambitious but realistic targets should please the market.”

The targets assume growth in global automobile output of about 5 percent annually in 2011 through 2015, including about 4.4 percent annually in Europe and Africa, 4.7 percent in North America, 5.3 percent in South America and 5.8 percent in Asia.

Based on its record EUR12.5 billion order intake in 2010, Valeo said it was “confident” it could outperform automobile production growth by about 3 percent a year through the next four years. The company also said that in 2011, it could even that record level once more.

Topics: valeo

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