Valeo SA - Company Strategy & Performance Analysis
Valeo SA is engaged in the design, production and sale of components, integrated systems and modules for the automotive industry. The company’s products and services portfolio includes wiper systems, engine cooling equipment, electrical systems, electrical accessories, brakes, engine management solutions, switches, security systems, climate control compressors, training services, and repair and maintenance services. The company has manufacturing and research facilities in Europe, North America, South America, Asia and Africa. Its main customers include BMW, Chery, DAF, Daimler, Fiat, Ford, General Motors, Volvo, Tata and Honda. Valeo is headquartered in Paris, France.
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Strong performance of innovative products and acquisition of key companies drive the segment revenue
Valeo’s comfort and driving assistance systems segment includes driving assistance products, intuitive interior controls and connected cars. It offers smart sensors and features that focus on intuitive driving, ergonomy, safety and visibility. The segment posted an annual growth rate of 7.7%, rising from US$3.7bn in 2016 to US$4.0bn in 2017. In local currency terms, this represented a growth rate of 6.6%. The company’s focus on autonomous, and connected products was a major contributor to revenue growth. In addition, the adoption of cameras, displays, and sensors supported revenue growth.
Powertrain systems posted an increase in revenue
Powertrain systems includes electrical, electronic, transmission, combustion engine and active hydraulic actuator systems. In FY2017, the segment’s revenue increased at an annual rate of 7.2%, from US$4.4bn in 2016 to US$4.7bn in 2017. In local currency terms, it reported an annual growth rate of 6.2% in 2017. The November 2017 acquisition of FTE automotive (a leading manufacturer of hydraulic actuators) enabled the company to report growth.
Increase in original equipment sales supported the revenue growth
Valeo’s thermal systems segment categorizes its products under the thermal climate control, powertrain, compressors, front-end and bus systems categories. The segment reported revenues of US$5.5bn in 2017, in comparison to US$5.1bn in 2016, a growth of 8.2%. A 9% rise in original equipment sales in 2017 enabled the company to record strong growth. In 2017, the company received new orders from automakers in Europe and China for innovative thermal solutions for electrified vehicles, and in-vehicle air quality management systems.