Valeo’s Sales, Earnings Drop
Parts supplier Valeo SA reports its revenue, operating income and net profit fell in the first half of 2019 because of declining vehicle production, especially in China.
Global sales by the Paris-based maker of electronics, lighting and driver-aid systems slipped 1% to €9.8 billion ($10.9 billion). Operating income plunged 47% to €377 million ($420 million), and net income attributable to shareholder skidded 64% to €162 million ($181 million).
The company’s operating margin dropped to 5.3% of sales from 7.7% in the first half of 2019.
Valeo launched a plan in January to lower its annual costs and capital investments by €100 million ($111 million) each. The company says that effort—coupled with falling raw material prices and the launch of new product programs—leaves its previous guidance unchanged.
The supplier predicts a gradual gain in performance through the second half of 2019, marked by an unspecified gain in earnings before interest, taxes, depreciation and amortization and continued positive free cash flow.
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