Valeo: 2007 Results - Bankkaufmann

Paris (ots/PRNewswire) -

- Accelerated Growth (Volumes +6.2%)

- Improved Margins (Operating Income +17.7%)

- Strong Debt Reduction (-17.5%)

- The Group Confirms its Commitments for 2010

Following today's meeting of its Board of Directors, Valeo
presented its fourth quarter 2007 results and its audited
consolidated accounts for 2007.

Simplified accounts for the fourth quarter
(in EUR million) Q4 2007(b) Change(b) Reminder Change(b)
vs. Q4 2006 Q3 2007(b) vs. Q3 2006
Total operating
revenues(a) 2,438 +2.6% 2,245 +4.3%
Gross margin(a) 386 +10.0% 340 +5.6%
% of sales 16.1% +1.1 pt 15.4% +0.2 pt
Operating margin(1)(a) 96 +45.5% 73 +12.3%
% of total operating
revenues 3.9% +1.1 pt 3.3% +0.3 pt
Operating income(a) 88 +72.5% 64 +28.0%
% of total operating
revenues 3.6% +1.5 pt 2.9% +0.6 pt
Net income 50 -16.7% -40 7
Basic earnings per share
from continued operations
(EUR) 0.68 +183.3% 0.16 +33.3%

(a) These aggregates do not include amounts related to the wiring
harness activity, which was divested on Dec. 31, 2007, in line with
IFRS 5 norms

(b) non audited

The fourth quarter 2007 saw a further improvement in the Group's
performance, following the significant progress recorded in the third
quarter. Sales rose by 3.8% at constant reporting entity and exchange
rates, reflecting the enhanced competitiveness of the Group and its
increasingly attractive technologies. The results (operating income
+72.5%) benefited not only from the implementation of the operational
excellence strategy (cost, quality and industrial footprint) but also
from the growth in sales.

Simplified full-year accounts
(in EUR million) 2007 2006 Change
Total operating revenues(c) 9,689 9,550 +1.5%
Gross margin(2)(c) 1,497 1,463 +2.3%
% of sales 15.7% 15.5% +0.2 pt
Operating margin(3)(c) 346 320 +8.1%
% of total operating
revenues 3.6% 3.4% +0.2 pt
Operating income(c) 319 271 +17.7%
% of total operating
revenues 3.3% 2.8% +0.5 pt
Income before taxes(c) 230 211 +9.0%
Net income excluding impact
from divestitures(4) 132 120 +10%
Net income attributable to
the company's shareholders 81 161 -49.7%
Basic earnings per share
from continued operations
(EUR) 1.82 1.81 +0.6%
Net financial debt 799 968 -17.5%

(c) These aggregates do not include amounts related to the wiring
harness activity, which was divested on Dec. 31, 2007, in line with
IFRS 5 norms

2007 was a turnaround year for Valeo marked by a rise in sales
(+6.2% in volume) related to the growth in emerging countries where
Valeo is increasingly present (12 sites in China, 13 in Central
Europe and 3 in India) and to customers' growing appetite for new
products developed by Valeo. The second half results enabled a marked
improvement in the Group's performance in 2007 versus 2006.

Valeo pursued the rationalisation of its business portfolio,
divesting its Wiring Harness activity and acquiring the Irish company
Connaught Electronics in order to strengthen its technological
position in the field of image processing.

The operational excellence strategy was pursued with success.
Quality indicators progressed once again, reaching the record level
of 10 ppm(5) for the Group as a whole. The rationalisation of
purchasing also continued, with competitive cost countries now
accounting for 37% of total purchases. The Group's geographical
expansion proceeded, notably with the creation of two new joint
ventures in India.

The technological innovation strategy based on the three Domains
of Driving Assistance, Powertrain Efficiency and Comfort Enhancement
enabled Valeo to develop a growing number of highly differentiating
products for its customers, as witnessed by the commercial successes
of the Park4U(TM) automatic parking system, blind spot detection
system and StARS(TM) micro-hybrid system. Given automakers'
increasing needs to acquire systems enabling cleaner and safer
vehicles, Valeo is increasing its content per vehicle. Overall,
innovative products account for 3.2 billion euros of order intake, or
32% of the total, versus 2.2 billion euros and 22% of order intake in
2006.

Full-year results

Total operating revenues amounted to 9,689 million euros, up by
1.5% versus 2006. At constant reporting entity and exchange rates,
total operating revenues were up by 3.2%. After taking into account a
deflation of 3% at identical functions, the increase in volumes is
6.2%.

Gross margin rose by 2.3% to 1,497 million euros, representing
15.7% of sales, versus 15.5% in 2006. The Group estimates the
residual impact of raw material prices to be 0.3 points.

Operating margin increased by 8.1% to 346 million euros, thanks
in particular to the efforts to continuously improve quality and the
deployment of the re-engineering program. It represents 3.6% of total
operating revenues, up by 0.2 points versus 2006. In relation to
total operating revenues, the operating margin increased by 0.7
points in the second half (of which 1.1 points in the fourth quarter)
after having dropped by 0.3 points in the first half.

Operating income progressed faster (+17.7%) to reach 319 million
euros in 2007, or 3.3% of total operating revenues (2.8% in 2006).

Net income attributable to the company's shareholders totalled 81
million euros versus 161 million euros in 2006. It includes a
contribution of non-strategic activities of -59 million euros, of
which a 51 million euro capital loss from the sale of the Wiring
Harness activity on December 31, 2007. In 2006, the contribution of
non-strategic activities of 22 million euros included a net capital
gain of 41 million euros from the sale of the Motors and Actuators
activity. Excluding these operations, net income rose by 10%.

Cash flow and debt level

Net debt stood at 799 million euros on December 31, 2007, a
decrease of 169 million euros versus the beginning of the year. This
change notably reflects the sale of the wiring harness product line
(impact of 237 million euros) and payouts to company shareholders (85
million euros), with free cash flow(6) amounting to 66 million euros
(versus 26 million euros in 2006). The net debt-to-equity ratio
dropped by 10 points to 45% versus the beginning of the year.

Proposed dividend

Taking into account the level of results and the action plan that
will enable it to achieve its 2010 objectives, the Board of Directors
will propose to the Annual General Meeting of Shareholders to
increase the dividend from 1.10 euro to 1.20 euro per share.

Outlook

For 2008, Valeo aims to further increase profitability in an
environment of uncertain automotive markets and stabilised raw
material prices. The reengineering plan for the Group's support
functions will deployed on a wider scale. The rationalisation of the
business portfolio will be pursued with discernment. The Group
reaffirms its objectives for 2010 of an operating margin of 6% and a
doubling of the return on capital employed compared with 2006.

Valeo is an independent industrial group dedicated to the design,
production and sale of components, integrated systems and modules for
cars and trucks. It is one of the world's leading automotive
suppliers. The Group has 125 production sites, 62 R&D centres, 9
distribution platforms, and employs 61,200 people in 28 countries.

(1) Operating income before other income and expenses

(2) Net sales less cost of sales

(3) Non GAAP measure: operating income before other income and
expenses

(4) Excluding capital gains and losses from the sale of
non-strategic activities

(5) Number of defective parts per million parts delivered

(6) Non GAAP measure: cash flow less taxes less change in working
capital requirements less financial expenses plus subsidies less
gross tangible and intangible investments.

For all additional information, please contact:
Kate Philipps,
Group Communications Director,
Tel: +33-1-40-55-20-65
Rémy Dumoulin,
Investor Relations Director,
Tel: +33-1-40-55-29-30

ots Originaltext: Valeo Management Services
Im Internet recherchierbar: http://www.presseportal.de

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For all additional information, please contact: Kate Philipps, Group
Communications Director, Tel: +33-1-40-55-20-65. Rémy Dumoulin,
Investor Relations Director, Tel: +33-1-40-55-29-30