2007 Reference document (PDF) - Valeo

production (source: J.D. Power). In 2007, North America accounted
for 14% of consolidated sales (unchanged from 2006).
The Group registered sales of 1,245 million euros in Asia and the
Middle East (unchanged from 2006). In Asia, like-for-like sales
were up 12.2% (this figure reflects a 41% surge in China and
growth of approximately 7% in Japan and Korea). Local automotive
production jumped 6.6% on the back of strong growth in China
2. Results
Consolidated gross margin amounted to 1,497 million euros in
2007, up 2.3% on the prior-year figure, and represented 15.7%
of sales, against 15.5% in 2006. The hike in raw material prices
accounted for the equivalent of 0.3% of net sales.
Research and development expenditure came to 668 million
euros (6.9% of total operating revenues) compared to 640 million
euros (6.7%) in 2006. Excluding other operating revenues (mainly
customer contributions to development expenditure), these
expenses represented 5.5% of total operating revenues, in line with
the prior-year figure.
The three Domains (2) absorbed virtually all R&D expenditure, i.e.,
665 million (up 4.9% on 2006), breaking down between Driving
Assistance (193 million euros, up 2.7%), Powertrain Efficiency
(230 million euros, up 7.5%) and Comfort Enhancement (242 million
euros, up 4.3%).
Selling and administrative expenses totaled 193 million euros
(up 1.6% year-on-year) and 424 million euros (down 0.7%),
respectively. Combined total selling and administrative expenses as
a proportion of total operating revenues fell 0.1% year-on-year.
Taking into account other operating revenues, which amounted
to 134 million euros (114 million euros in 2006), operating
margin (3) came in at 346 million euros, up 8.1% on the 2006 figure
(320 million euros). In 2007, operating margin represented 3.6% of
total operating revenues, compared to 3.4% in the previous year.
Other income and expenses amounted to a net expense of
27 million euros (including 63 million euros in restructuring costs
and asset impairments, non-cash income of 22 million euros from
the resolution of litigation with a customer and a 27 million euro
gain on the disposal of real estate assets), compared to net other
expenses of 49 million euros in 2006 (including restructuring costs
and asset impairments totaling 50 million euros and a 14 million
euro gain on the disposal of Logitec).
Management Report
Statement of income
< Contents >
(18.2%). Production levels in Japan and Korea remained stable
year-on-year. As in 2006, Asia and the Middle East accounted for
13% of Group sales.
Sales generated in South America jumped 19.4% year-on-year to
559 million euros. Like-for-like sales were up 17.6% in line with local
automotive production (source: J.D. Power). In 2007, South America
represented 6% of consolidated sales (5% in 2006).
As a result, consolidated operating income for the year came in
at 319 million euros (3.3% of total operating revenues), compared
to 271 million euros (2.8%) in 2006.
The cost of net debt came out at 51 million euros and was virtually
unchanged year-on-year.
Net other financial expenses rose from 8 million euros in 2006,
to 46 million euros, mainly due to a negative foreign exchange
impact (negative impact of 9 million euros) during the year and
the 27 million euros in non-recurring gains on the disposal of Group
financial assets recorded in 2006.
Once the contribution of investments in associates totaling 8 million
euros (2006: a negative amount of 1 million euros) has been taken
into account, income before income taxes came out at 230 million
euros, a rise of 9% on one year ago.
Income tax expense was 83 million euros, representing an
effective Group tax rate of 37.4%, compared to 67 million euros
and 31.6%, respectively, in 2006.
Non-strategic activities made a loss of 59 million euros, including
a post-tax loss on the disposal of the Wiring Harness business
amounting to 51 million euros. These activities generated profits
of 22 million euros in 2006, including a post-tax disposal gain of
41 million euros on the Motors & Actuators business. After taking
account of minority interests (7 million euros in 2007, compared
to 5 million in 2006), net income attributable to equity holders
of the Company came in at 81 million euros, compared to
161 million one year earlier.
Basic earnings per share, computed based on net attributable
income, was 1.06 euro (including a 0.76 euro loss attributable
to non-strategic activities), compared with 2.10 euros in 2006
(including 0.29 euro from non-strategic activities). Diluted earnings
per share for the year amounted to 1.05 euro, compared with
2.09 euros in 2006.
(2) The objective of the Domains of Innovation is to foster and support innovation by bringing together different technologies and product groups in order to
propose comprehensive solutions based on safety (Driving Assistance), the environment (Powertrain Efficiency), and comfort (Comfort Enhancement).
(3) Operating income before other income and expenses.
2007 Reference document - VALEO
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