Valeo SA (FR), France’s second-biggest car-parts maker, said full-year operating profit rose 3 percent as new products and higher demand in Asian markets more than made up for a decline in Europe’s automotive industry.
Earnings before interest, taxes and one-time gains or costs, which Valeo calls the operating margin, increased to 725 million euros ($958 million) from 704 million euros in 2011, the Paris-based company said today in a statement. Earnings beat the 686 million-euro average of nine analyst estimates compiled by Bloomberg. Profit at that level in 2013 will probably match last year’s figure, assuming Europe’s car market starts a recovery in the second half, it said.
“We are confident in our ability to achieve strong and profitable organic growth in the years ahead” following a 6 percent jump in new orders to a record 15.8 billion euros, Chief Executive Officer Jacques Aschenbroich said in the statement.
Valeo, whose products span windshield wipers, headlights, “stop-and-start” ignition systems and automated parking, is tightening its focus on safety, comfort and environmental technologies to increase margins. Aschenbroich pledged last year to double revenue from fuel-saving parts to 1 billion euros by 2013, with a 30 percent return on capital. Valeo set a target in March 2011 of taking in 14 billion euros in yearly revenue by 2015.
Revenue jumped 8.2 percent last year to 11.8 billion euros. Sales of original equipment rose 7.6 percent to 9.91 billion euros, with Asian carmakers increasing their share of original- equipment sales to 28 percent from 25 percent a year earlier, and German manufacturers contributing an unchanged 29 percent, the French company said.
Excluding the effects of acquisitions or disposals, original-equipment revenue rose 8 percent in Asia, led by a 16 percent jump in China, and 15 percent in North America, Valeo said. European revenue on that basis fell 3 percent.
Industrywide European auto registrations fell last month to the least for a January since the start of records in 1990, following a 7.8 percent drop to a 17-year low in 2012, according to the Brussels-based ACEA trade group. The region’s car market may contract to 12.3 million vehicles this year, 23 percent below the pre-2008 global recession peak, according to estimates by IHS Automotive research group.
Growth in emerging markets will offset declines in Europe for Valeo, Aschenbroich said today in a Bloomberg Television interview. The company is forecasting a “difficult” first half, followed by improvement in the second, he said.
“With all the investment we’ve done with new products and in new territories, we’re able to compensate the downturn of Europe,” Aschenbroich said.
Net income fell 11 percent last year to 380 million euros, Valeo said. The company plans to raise the dividend 7 percent to 1.50 euros a share.
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