Valeo (FR) investor relations material

Executive summary

• Profitability and cash generation improved in H1 2026, with operating margin up to 5.0% of sales and free cash flow more than doubling year-over-year, supporting a €194 million reduction in net debt and confirming strategic objectives for 2026.

• Order intake reached €12.1 billion, with major milestones and contract wins in North America, China, and India, supporting the Elevate 2028 plan and future growth ambitions.

• Strategic focus on expanding beyond automotive, leveraging core technologies in new verticals such as data centers, humanoids, energy storage, and drone motors.

• All divisions showed resilience and outperformed local markets despite macroeconomic and supply chain challenges.

• Guidance for 2026 was reaffirmed, with confidence in a return to growth from 2027.

Financial highlights

• Sales reached €10,378 million, down 2.6% reported but up 0.7% like-for-like year-over-year.

• Operating margin improved to €514 million (5.0% of sales), up from €476 million (4.5%) in H1 2025.

• Free cash flow after net financial interest was €242 million, more than double H1 2025 and over half the minimum full-year guidance.

• Net attributable income was €105 million (1.0% of sales), stable year-over-year.

• Net debt reduced by €194 million in H1, reaching €3,828 million, with a leverage ratio of 1.2x.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: sales of €20–21 billion, operating margin of 4.7–5.3%, and free cash flow above €400 million.

• H2 2026 operating margin and free cash flow expected to be at least equivalent to H1, assuming stable market and supply chain conditions.

• Confident in return to growth from 2027, driven by robust order intake and new program launches.

• CapEx intensity expected to remain below long-term objectives of 4.5%-5% of sales.