Valeo Third-Quarter Sales Rise Helped by Increased China Demand

Valeo SA (FR), France’s second-biggest car-parts maker, said third-quarter sales rose as demand grew in China and North America and the European car market showed signs of stabilizing.

Sales grew 2.2 percent to 2.91 billion euros ($3.98 billion) from 2.84 billion euros a year earlier, the Paris-based company said in an e-mailed statement today. Nine-month revenue amounted to 9.07 billion euros, up 2.6 percent from a year earlier.

The French manufacturer stuck to its full-year target of a “slight increase” in operating margin as a proportion of revenue in 2013, “assuming stabilized market conditions in Europe.” Europe’s car market is set to shrink for a sixth consecutive year following an 18-month recession in the euro region that ended in the second quarter.

“The group recorded excellent figures for the original equipment market, as well as in the aftermarket and demonstrated its capacity for balanced growth,” Chief Executive Officer Jacques Aschenbroich said in the statement. “These results reflect the gradual entry into production of the high order intake recorded by the group over the last three years and the strength of Valeo’s growth model.”

Valeo, whose products span windshield wipers, headlights and stop-start ignition systems, is focusing on technology promoting vehicle safety, comfort and pollution reduction to increase profitability. Aschenbroich pledged in March 2011 to boost annual revenue to 14 billion euros by 2015, propelled by sales of fuel-saving components.

Exchange Rates

The depreciation of South American currencies, including the Argentinian peso and the Brazilian real, may weigh on Valeo’s second-half operating margin, the CEO said in an interview on Sept. 11. Changes in exchange rates and Valeo’s structure had a negative impact on its third-quarter revenue of 5.2 percent and 4.4 percent respectively, it said.

The changes in the company’s structure stem from the sale of Access Mechanisms and the acqusition of a controlling interest in Foshan Ichikoh Valeo.

Exchange-rate effects reduced the first-half operating margin by 0.3 percentage point, Valeo said on July 30. Currencies affecting earnings included the yen, Brazilian real, Indian rupee and Argentinian peso, arising from the need to import parts to South America, Chief Financial Officer Robert Charvier said at the time.

To contact the reporter on this story: Mathieu Rosemain in Paris at mrosemain@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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