Sales advanced 16% in the third quarter to 4 billion euros

Jacques Aschenbroich, Valeo’s Chairman and Chief Executive Officer, commented:
“Our sales grew by a vigorous 16% over the third quarter of the year, once again illustrating the strength of our growth strategy. Thanks to our solid growth and especially the outperformance of our original equipment sales on world markets, we are raising our full year 2016 target operating margin to around 8% (as a percentage of sales), despite the increase in net R&D expenditure to fuel the Group’s future growth in CO? emissions reduction and intuitive driving.”

Third-quarter 2016:

• Consolidated sales of 3,994 million euros, up 16% as reported and 12% on a like-for-like basis
• Original equipment sales of 3,472 million euros, up 16% as reported and 12% on a like-for-like basis, outpacing global automotive production by 7 percentage points:
  • Europe: up 9%⁽¹⁾, 10 percentage points higher than automotive production
  • China: up 39%⁽¹⁾, 16 percentage points higher than automotive production
  • Asia excluding China: up 7%⁽¹⁾, 7 percentage points higher than automotive production
  • North America: up 7%⁽¹⁾, 4 percentage points higher than automotive production
  • South America: up 10%⁽¹⁾, 25 percentage points higher than automotive production
• Aftermarket sales up 8% as reported and 5% on a like-for-like basis

First nine months of 2016:

• Consolidated sales of 12,124 million euros, up 13% as reported and 11% on a like-for-like basis
• Original equipment sales of 10,578 million euros, up 14% as reported and 12% on a like-for-like basis, outpacing global automotive production by 9 percentage points
• Aftermarket sales up 5% as reported and 6% on a like-for-like basis

2016 outlook
Based on a revision from 2.5% to 3% of the growth forecast for global automotive production in 2016:
We are raising our full-year 2016 target operating margin² to around 8% (as a percentage of sales), despite the increase in net R&D expenditure to fuel the Group’s future growth, and are also confirming our objective of achieving strong sales growth, outperforming the market in the main production regions, including China.

Automotive production up 5% in third-quarter 2016
Automotive production rose 5% year on year, driven by continued expansion in North America (up 3%) and Asia (up 10%), supported by a favorable comparison basis in China (up 23%).
Automotive production in Europe retreated slightly by 1%. Production in South America continued its sharp decline (down 15%).

Automotive production in 2016 (year-on-year change)

* LMC automotive production estimates

The growth forecast for global automotive production in 2016 has been raised to around 3%.

In the third quarter of 2016, sales came in at 4 billion euros, up 12% like for like (up 16% as reported)

In the third quarter, like-for-like growth in consolidated sales (which came in at 3,994 million euros) remained vigorous at 12% (up 11% in the first half of the year).

Over the first nine months of the year, consolidated sales came in at 12,124 million euros, up 11% on a like-for-like basis (up 13% as reported).

The impact of changes in exchange rates during the period was neutral.

Changes in Group structure had a positive 4% impact in the third quarter (positive 3% impact in the first nine months of the year), with peiker, acquired at the end of February 2016, and Spheros, acquired in late March 2016, contributing 78 million euros and 61 million euros, respectively, to third-quarter sales (total contributions of 192 million euros and 123 million euros, respectively, since their acquisition).

⁽¹⁾ Constant Group structure and exchange rates.
⁽²⁾ Including share in net earnings of equity-accounted companies, see Financial Glossary, page 8.

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