Valeo announced that it has made progress on boosting profitability, according to CEO Jacques Aschenbroich. This statement was made in response to pressure from Valeo’s activist shareholder Pardus Capital Management to overhaul its strategy to improve its valuation.
Aschenbroich told shareholders that even with higher raw material prices, he is confident that the company will reach its annual targets.
At the group's annual shareholder meeting last Wednesday, he said that while there has been “enormous progress on profitability” and it was able to double its share price after one year, “there is still a shortfall."
Last month, Valeo shareholder Pardus Capital Management had lamented the discount at which Valeo trades compared with rivals. Pardus warned that Valeo should be cautious on acquisitions. But it appears that the investor has softened its tone.
Pardus representative Behdad Alizadeh told shareholders that Pardus has full trust in the board of directors and its chairman to raise Valeo's valuation as it sees that Aschenbroich has this goal as his priority.
He added that Pardus only seeks to ensure that the management and the board are “conscious that valuation has not changed much since 2008-2009."