Press Releases

 2002 third quarter results: Confirmation of recovery in a contrasted market

Paris, October 17, 2002 - Following today's meeting of the Supervisory Board, Valeo presented its consolidated accounts for the third quarter 2002.

Group results for the third quarter 2002

In the third quarter 2002, Valeo's sales totaled 2,241 million euros, down by 4% compared with the third quarter 2001. This fall is related to changes in the reporting entity (-3 %) in the context of the selective divestment program, as well as to exchange rate variations (-3.1%) due to the weakness of the dollar.

At constant exchange rates and reporting entity, sales progressed by 2.1% in the third quarter. This performance reflects the evolution in automotive output: on a comparable period basis, output was stable in Europe, declined by 10% in South America and increased by 9% in North America and by 1% in Asia.

Gross margin rate, driven by the pursuit of the industrial reorganization and supplier integration actions, improved by 0.3 points to 17.3% versus the same period in 2001:

the number of suppliers to the Group now stands at 3,200 compared with 3,600 at December 31st 2001;

during the course of the third quarter, Valeo closed two sites in the USA (Decatur and Grand Prairie) and sold its plant at Meung-sur-Loire, France. At September 30th 2002, the Group had 139 sites;

in North America, Valeo's subsidiary VESI announced on September 25th that it had been cleared to emerge from the Chapter 11 process. In 2004, this site will employ around 800 people. It will operate in satisfactory economic conditions and its activity will be specialized in wiper systems.

Sustained productivity efforts relating to research and development costs and the control of selling and administrative expenses also contributed to improving Valeo's operating income, which rose by 0.5 points to 4.7%.

Cash flow increased to 176 million euros versus 157 million euros in the third quarter 2001. It largely covers capital expenditure requirements (127 million euros in the third quarter versus 175 million euros in 2001).

Net income is positive amounting to 31 million euros compared with 11 million euros for the third quarter 2001.

Prospects

Valeo's organic growth prospects are ensured by its commercial successes which reinforced the Group's order book during the course of the third quarter: over the first 9 months of the year order intake was 1.25 times sales, compared with 1.1 times sales in 2001.


The Group continues to strengthen its innovation capability:

Valeo signed new contracts with two European automakers in the area of detection systems, that is ultrasonic park assist and parking slot measurement systems.

its new intelligent lighting system (Bending Light) won the second prize in the "auto parts" category on the occasion of the prestigious Automechanika 2002 Automotive Innovation Awards.


Cancellation of self-held shares and structure of balance sheet

By virtue of the powers delegated to the Management Board by the Annual General Meeting of Shareholders, the former decided to cancel 1.2 million self-held shares. This cancellation will have a relutive effect on earnings per share, while the debt-to-equity ratio remains unchanged at 25% - the same level as at June 30th 2002. Following this operation, Valeo holds about 300,000 of its own shares to date.

Commenting on Valeo's perspectives, Thierry Morin, Chairman of the Management Board, said, "The Group's third quarter confirms the recovery in its operating profitability. Valeo's innovative technologies are generating an increase in orders which is a guarantee of the Group's profitable growth. The Group will thus continue to improve its performance."


Valeo is an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for cars and trucks. Valeo ranks among the world's top automotive suppliers. The Group has 139 plants, 53 R&D centers, 10 distribution centers and employs nearly 71,000 people in 24 countries worldwide (end September 2002).


For any additional information, please contact:

Kate Philipps,
Corporate Communications Director,
Tel.: 01.40.55.20.65

Bruno-Roland Bernard,
Investor Relations Director,
Tel.: 01.40.55.37.86

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