Valeo, the French automotive supplier, has revised its expectations for 2025 as it focuses on enhancing profitability and free cash flow while reducing costs.

Updated Projections

The company now anticipates sales to fall between 24.5 billion euros and 25.5 billion euros, which is a decrease from the previous estimate of around 27.5 billion euros. Additionally, the operating margin outlook has been adjusted to a range of 5.5% to 6.5%, down from the initial projection of approximately 6.5%.

Chief Executive Christophe Perillat stated, "With the automotive industry experiencing transformation, we have set new objectives for 2025 in line with conservative production assumptions."

Near-term Goals

Looking ahead to 2024, Valeo aims to achieve revenues ranging from EUR22.5 billion to EUR23.5 billion with an operating margin of 4% to 5%. The company is actively implementing cost-cutting strategies which include a reduction of 1,150 jobs globally. By the first half of this year, Valeo plans to consolidate its management, administrative, and support functions.

Structural Savings and Impact

The restructuring efforts are expected to yield structural savings of 200 million euros annually, with benefits starting to materialize in the second half of 2024. In 2023, Valeo reported sales of EUR22.04 billion, showing an increase from EUR20.04 billion in the prior year. However, net profit decreased to EUR221 million from EUR230 million in 2022.

Dividend Proposal

Valeo has put forth a dividend of EUR0.40 per share for 2023, representing a 5% growth from the previous year.

With ongoing adjustments and strategic initiatives, Valeo is positioning itself for sustained growth and resilience in the evolving automotive landscape.

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