By Andrea Figueras
Valeo downgraded its expectations for 2025 while it continues to work on reducing costs and on improving both profitability and free cash flow generation.
The French automotive supplier said that it now expects sales between 24.5 billion euros and 25.5 billion euros ($26.56 billion-$27.64 billion), down from a prior forecast of around EUR27.5 billion.
The company also cut its operating margin outlook to a range from 5.5% to 6.5%, while it previously anticipated it around 6.5%.
“With the automotive industry undergoing transformation, we have decided to set new objectives for 2025 consistent with conservative automotive production assumptions,” Chief Executive Christophe Perillat said.
As for 2024, it aims to book revenue in a range of EUR22.5 billion and EUR23.5 billion and anticipates and operating margin from 4% to 5%.
The company said it continues to implement cost-cutting measures including the loss of 1,150 jobs worldwide. It plans to have merged its management, administrative and support activities by the end of the first half this year.
The restructuring plan was reported in January by Agefi-Dow Jones agency, confirming information from French newspaper Les Echos.
According to its half-year report, the company employs 112,100 people in 29 countries around the world.
Cost-reduction measures should provide structural savings of EUR200 million over a full year, the benefits of which will begin to filter through as from the second half of 2024, Valeo said.
For 2023 as a whole, the company booked sales of EUR22.04 billion, up from EUR20.04 billion in the prior year, while net profit fell to EUR221 million from EUR230 million in 2022.
Valeo proposed a dividend of EUR0.40 per share for 2023, a 5% increase on 2022.
Write to Andrea Figueras at andrea.figueras@wsj.com
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