Half Year 2024 Valeo SE Earnings Call Transcript
Key Points
- Valeo SA (VLEEF) improved its profitability and cash generation, with H1 margins and free cash flow aligning with full-year guidance.
- Sales reached EUR11.1 billion, marking a 1% increase on a like-for-like basis compared to H1 2023.
- EBITDA margin improved by 0.8 points to 12.4%, and operating margin increased by 0.8 points to 4.0%.
- The company successfully completed the sale of its thermal commercial vehicle business as part of its asset disposal program.
- Valeo SA (VLEEF) achieved a significant reduction in costs and improved cash management, contributing to a gross margin increase of 1.4 points to 18.5%.
- OEM sales were down 1% like-for-like, largely impacted by low activity in high-voltage powertrain sales.
- The company experienced a negative impact of minus 4 points from lower sales in high-voltage powertrain.
- Performance in China was down 7 points due to an unfavorable customer mix, with Chinese OEMs representing a lower share of sales.
- High-voltage powertrain sales recorded a significant decline of 43% compared to H1 2023.
- The company adjusted its sales objectives downward due to expected continued softness in high-voltage powertrain sales.
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Good evening, everyone. Thank you for attending Valeo's 2024 first semester results video conference. We'll spend one hour together, around 20 minutes of joint presentation with Valeo's CFO, Edouard de Pirey, followed by a Q&A session.
In H1, we continue to improve profitability and cash generation. Our H1 margins and free cash flow are aligned with our full-year guidance. We achieved this, thanks to a strict control of our cost and our cash in a low-market context.
Our sales reached EUR11.1 billion, up 1% compared to H1 '23 on a like-for-like basis. Our EBITDA reached 12.4%, which is up 0.8 points. And our operating margin is at 4.0%, also up 0.8 points compared to H1 '23. And last but not least, our free cash flow has already reached EUR121 million after one-off exceptional costs of our self-help measures. This represents EUR277 million more of cash generation on H1 '23.
I would like now to share with you five important highlights from our first semester, well in line with what we presented last
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