Valeo sees more growth from car electrification and automation as orders hit record
By Olivier Sorgho
(Reuters) -French car parts maker Valeo on Thursday forecast strong sales growth this year, as record 2022 orders helped by demand for car electrification and driving assistance technology helped it navigate a challenging year for the automotive sector.
The group is targeting sales between 22 billion and 23 billion euros this year, against the 20.04 billion posted for 2022. The 2022 performance was in line with its guidance from October.
Valeo is betting on car electrification and the adoption of advanced driving assistance systems (ADAS), as governments and companies shift towards a low-carbon economy while consumers warm to the idea of automated driving.
Its record order intake of 32.6 billion euros in 2022 included many orders for electric vehicle components and ADAS technology, Chief Executive Christophe Périllat told reporters in a call.
The company's core profit (EBITDA) for 2022 came in at 2.40 billion euros, above the 2.34 billion expected by analysts in a company-provided poll.
But Périllat still flagged macroeconomic pressures including inflation, chip shortages, COVID-19 in China and Russia's invasion of Ukraine contributing to "relatively weak" global car production in 2022.
Valeo said the net impact of higher costs of raw materials, energy and transportation in 2022 was roughly 200 million euros, and about 60 million for wages.
It will aim to curb inflationary impacts this year through productivity, cost reduction and price increases, the CEO said in a statement, adding in the call that the company has "passed onto clients a significant chunk of our costs."
The group expects to record an improved operating margin between 3.2%-4% in 2023, against the 3.2% recorded in 2022.
It said it will propose a dividend of 0.38 euro per share.
(Reporting by Olivier Sorgho in Gdansk;Editing by John Stonestreet, Will Dunham and Matthew Lewis)