Valeo (OTCPK:VLEE.F) 2025 Earnings Call Presentation

Financial Performance & Targets - Valeo confirms its 2025 guidance with sales of approximately €20.5 billion[206], an operating margin between 4.5% and 5.5%[206], and free cash flow above €550 million after one-off restructuring costs[20, 206] - The company aims for a 2028 sales target between €22 billion and €24 billion[10, 213, 236], with an operating margin between 6% and 7%[10, 28, 213, 236] and free cash flow exceeding €500 million after interest[10, 41, 48, 213, 236] - Valeo targets a leverage ratio of less than 1.0x adjusted EBITDA by 2028, aligning financial KPIs with investment-grade ratings[10, 60, 236] Strategic Initiatives & Market Dynamics - Valeo is adapting to a changing market environment, including lower global production at 90.6 million vehicles (-3% versus S&P forecast)[10], a higher share of Chinese OEMs at 28% of total[10], and new energy vehicles accounting for 37% of the market[10] - The company is focused on three divisions: Power, Brain, and Light, each pursuing excellence in their respective domains[12, 89, 125, 126] - Valeo is implementing self-help measures to reduce its breakeven point, targeting €300 million in savings per year as of 2026, resulting in a +1.1 percentage point impact on operating margin (2028 vs 2024)[38] Growth Drivers & Regional Focus - Valeo anticipates returning to sales growth from 2027, supported by a strong order intake from 2022-2025[61, 62, 63, 65] - The company is focused on seizing opportunities in China, India, and North America[95] - In India, Valeo expects sales to triple from €220 million in 2024 to approximately €700 million in 2028[107]