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Financial Results | 25 October 2018 | 5 min

Press release – Q3 2018 Sales

Sales(1) up 5% at constant exchange rates to 4.5 billion euros in the third quarter of 2018, following the successful integration of three recent acquisitions – Ichikoh in Japan, Valeo-Kapec in South Korea and FTE automotive in Germany. 2 percentage point market outperformance (on a like-for-like basis) in a complex environment, driven mainly by an outperformance of 3 percentage points in North America and Asia excluding China, and 18 percentage points in Brazil. Consolidated growth impacted by WLTP in Europe and market downturn in China in the third quarter, effects of which expected to continue into fourth quarter.

Jacques Aschenbroich, Valeo’s Chairman and Chief Executive Officer, commented:
“On July 25, we made it clear that Valeo’s sales would be impacted in the third quarter, temporarily by WLTP in
Europe and by the market slowdown in China.
In this complex environment, Valeo outperformed the market by 2 percentage points during the period.
The impact of WLTP in Europe is set to continue into the fourth quarter, and market conditions in China will
remain challenging.
The Group responded to these changing market conditions and the continued rise in raw material prices as
early as July, implementing a vigorous action plan aimed at reducing its capital expenditure by 100 million euros
compared with 2017 and cutting costs by around 100 million euros. These measures will be maintained into
2019 as necessary.

In light of this situation, the Group is revising its objectives for full-year 2018:

  • sales growth of around 6% at constant exchange rates, after the successful integration of Ichikoh in
    Japan, Valeo-Kapec in South Korea and FTE automotive in Germany, and an original equipment
    sales outperformance of around 2 percentage points over the second half of the year;
  • operating margin excluding share in net earnings of equity-accounted companies at between 6.2%
    and 6.5% of sales, and free cash flow generation of between 120 and 150 million euros.

We remain very confident in the relevance of our strategy and the solidity of our growth model, driven by our
unique portfolio of technologies and products designed to meet the automotive industry’s major challenges,
namely powertrain electrification and the rise of the autonomous and connected vehicle. Production start-up for
new contracts leveraging these innovations, which include cameras, 48V solutions and LED lighting, will enable
us to achieve a stronger outperformance versus global automotive production throughout 2019.”

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