Valeo S.A. Business Report FY ended Dec. 2014

Business Highlights

Financial Overview

 (in million EUR)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 Rate of change (%) Factors
Sales 12,725 1,662 9.1 1)
- Original Equipment (OE) 10,890 9,834 10.7 -
- Aftermarket 1,495 1,487 0.5 -
Operating margin 862 766 12.5 -

1) Sales
-Sales in 2014 increased by 9.1% year-on-year to EUR 12,725 million. Changes in exchange rates had a negative impact, while changes in Group structure had a positive impact. Changes in Group structure chiefly reflect the Company's acquisition (effective January 1, 2014) of Osram's 50% stake in the Sylvania joint venture, which is now fully consolidated (100%) in the Company's financial statements.

-OE sales by region (FY ended Dec. 31, 2014)
  Sales Rate of change (%)
Europe/Africa 5,483 6.2
China 1,370 30.1
Asia (excl. China)/Middle East/Oceania 1,407 5.2
North America 2,267 27.0
South America 363 (26.8)

New Mid-Term Plan (Presented on March 16, 2015)

Financial objectives by 2020
-Sales of more than EUR 20 billion
-Operating margin (as a percentage of sales) between 8% and 9%
-Free cash flow to EBITDA ratio greater than 30%

Growth strategies
1) Products
-Focus on innovative technologies for CO2 emissions reduction and improved vehicle performance as well as intuitive driving
-Major products

  • Stop-Start systems
  • Electric superchargers, which will be available on the market in 2016
  • Thermal management systems, including water cooled charge air cooler system
  • 100% LED lighting systems
  • Driving assistance systems, including detection of obstacles and other vehicles, fully-automated parking, and systems that provide an aerial view around the vehicle

2) Geographic areas
-Focus on Asia and emerging countries
-In 2014, Asia accounted for 28% of original equipment sales, with China accounting for 15%. By 2020, Asia should account for one-third of the Company's original equipment sales, with China accounting for over 20%.


Valeo Sylvania
-The Company confirms the closing of the acquisition of Osram's 50% stake in Valeo Sylvania as of January 21, 2014. Valeo Sylvania is now fully owned by the Company. (From a press release on January 22, 2014)

Ichikoh Industries
-Ichikoh Industries, Ltd. is poised to increase supply to U.S. and European automakers' facilities in Asia. Ichikoh's Thai plant recently received an order through the Company, Ichiko's partner, to supply automotive lighting to Ford Motor Company's facility in the country. Delivery of the products has already started. For Ichikoh Industries, this is the first order from Ford. By further strengthening its partnership with the Company, Ichikoh aims to win more orders from U.S. and European automakers in Asia. (From an article in the Nikkan Jidosha Shimbun on March 12, 2014)

Subsidiary in India

-U-Shin Ltd. announced that it has decided to cancel acquiring stakes in India-based Minda Value Security Systems Private Limited (MVI) from the Company. The planned transaction was part of an agreement to acquire the Company's Access Mechanism Business, which was signed in May 2013. Under this agreement, U-Shin was supposed to obtain from the Company a 50% share in MIV, a 50-50 joint venture between the Company and Minda Capital Limited. U-Shin, however, has cancelled this, considering it would be difficult to conclude the deal given MIV's hostile attitude towards the transaction. In line with this cancellation, U-Shin will pay a settlement of EUR 9 million (approximately JPY 1.26 billion) to the Company. The payment will be recorded as an extraordinary loss. (From an article in the Nikkan Jidosha Shimbun on January 31, 2014)

Major Contracts

Model Valeo Products
BMW "i3" Park Assist (option)
i-Cam (option)
Engine cooling module
Range extender
Headlamps (Halogen/LED)
Citroen "C4 Cactus" Integrated faceplate
Body controller
Alternator (diesel engines)
Clutch and dual mass flywheel
Brazed radiators HT/LT
Fan system
A/C black box
Engine control unit (ECU)
Camshaft, water temp, Tmap sensors
Rear lamps
Front and rear wiper systems
Washer system
Ford "Mustang" Park Assist system
Clutch kit
Dual/single mass flywheel
Heater core
LED Fogstar lamp
Center high mounted stop lamp
Front wiper system
GM Cadillac "Escalade" Top column module
Interior switches
Manual HVAC unit
LED headlamps
Auxiliary lamps
LED rear lamps
Rear wiper system
Volkswagen "Passat" Park4U gen. 3 (including Park Pilot)
360Vue 3D
Steering column switch module
Window lift switches
Air throttle valve (diesel engines)
Start-Stop (diesel engines)
HVAC system
Headlamps (halogen/LED)
Rear wiper motor FlexRM
Humidity sensor
Peugeot "308" Touch screen
Renault "Espace" Touch screen
Renault "Scenic" Front camera
Renault "Twingo" Front camera
Ford "F-150" Park4U
JAC Motors (Anhui Jianghuai Automobile) "S2" Hands-free access and start systems


Innovation rewarded
Presenter Award Award-wining products
Automotive News Premier Automotive Suppliers’ Contribution to
Excellence (PACE) Award
Back-Over Protection
System, which combines ultrasonic park assist sensors with an intelligent rear camera
French Automotive Press Association Technological Breakthrough Award Valet Park4U system
Frost & Sullivan European Advanced Driver Assistance Systems Product Leadership Award -

European customers
Presenter Award Award Winner Award-wining products
Mercedes-Benz do Brasil Quality Operational Excellence Award Valeo's Brazilian plant (Itatiba) (Thermal Systems) -
PSA Best Supplier Plants Valeo's Polish plant (Czechowice-Dziedzice) (Powertrain
Systems), French plant (Athis-de-l’Orne) (Thermal Systems)
Renault Nissan 2014 Quality Award Valeo's Chennai plant in India (Amalgamations Valeo Clutch Pvt Ltd. (AVCL)) -
Volkswagen South Africa Best Supplier Quality Award Valeo's South African plant (Uitenhage) (Thermal Systems) -

 U.S. customers
Presenter Award Award Winner Award-wining products
GM Supplier Quality Excellence Award Valeo's 16 plants in total: Hungary, Japan, Germany, Thailand, Poland, Mexico, Spain, South Korea, China, France -
Ford Gold Award Valeo's Polish plant (Czechowice-Dziedzice) (Powertrain Systems) -
Ford Otosan Bronze Supplier Award Valeo Turkey -

 Asian customers
Presenter Award Award Winner Award-wining products
Nissan (China) Investment Quality Improvement Award Valeo's Chinese plant (Wenling) (Visibility Systems) -
Best Quality Improvement
Award & Best Delivery Improvement Award
Valeo's Chinese plant (Foshan) (Visibility Systems) -
Best Supplier
Performance Award
Valeo's Chinese plant (Changchun) (Thermal Systems) -
Nissan Top Quality Award Valeo's Polish plant (Czechowice-Dziedzice) (Powertrain Systems) -
Volvo Quality Excellence Award Valeo Compressors Europe (Czech Republic) (Thermal Systems) -
Volvo China Best Launch Support Award Valeo Foshan FIV (China) (Visibility Systems) New lighting system for the Volvo XC60
Chery Automobile Best Business Performance Award Valeo Shashi Wuhu Office (China) (Thermal Systems) -
Qoros 2014 Excellent Supplier Award Hubei Valeo Auto Lighting Co. Ltd (China) (Visibility Systems) -
Subaru Production Contribution Award Valeo's Japanese plant (Kohnan) (Thermal Systems) -
Maruti Suzuki Supplier Prize Chennai Amalgamations Valeo Clutch Pvt Ltd. (India) (Powertrain
Yangzhou Jiezin Denso
AC Co.
Quality Assurance Prize Valeo's Chinese plant (Changchun) (Thermal Systems) -

Presenter Award Award Winner Award-wining products
Automobile & Parts magazine Innovation Award Valeo China -

R&D Expenditure

 (in million EUR)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
Comfort and Driving Assistance Systems 201 166 169
Powertrain Systems 146 154 145
Thermal Systems 153 152 147
Visibility Systems 173 132 129
Other 12 10 8
Total 685 614 598

R&D Facilities

-As of Dec. 31, 2014, the Group has 16 research centers and 34 development centers. 10,400 employees were engaged.
-Breakdown of 50 R&D centers by region: Europe/Africa 27, Asia 15, North America 5, South America 3
-The Company's Tuam site in Ireland designs and manufactures a wide range of onboard cameras, including high-definition cameras and smart cameras capable of communicating with infrastructure. In 2014, the Company released its 360Vue 3D camera system, produced by the Tuam site, which further improves the view of the vehicle's environment, a world first in three-dimensional car vision. The intelligent rear-view camera produced by the site is also part of the Company's Back-Over Protection System, which won a PACE Award in 2014.

Joint Development

-The Company announced the signing of a cooperation, development and licensing agreement with LeddarTech, a manufacturer of advanced detection and ranging solutions, based on infrared LED technology using time-of-flight measurements. The agreement will enable the Company to develop a new infrared sensor for volume produced vehicles and cross a new threshold in the development of road obstacle detection and tracking functions. The agreement will allow the Company to offer its carmaker customers new active safety solutions, especially in the area of emergency braking in urban environments. (From a press release on February 10, 2014)

Product Development

-The Company showcased the following innovative technologies at Auto China 2014 held in Beijing:

  • Full LED headlamps: Consumes only one fifth of energy used in halogen lamps. Offers greater design flexibility.
  • eSkin 2 Console: Intuitive car connectivity solutions that provide drivers access to smartphone services and applications via the controls of center consoles.
  • New air conditioner filters: Designed to meet stricter Chinese environmental standard that will become effective in 2016. Filter outs microparticles and superfine particles from the cabin.
  • i-StARS starter-alternator: The Stop-Start system integrated with an alternator provides significant fuel savings. It reduces CO2 emissions by 6% in standard mixed cycle use, and up to 15% in city driving.

(From a press release on April 26, 2014)

-Major R&D projects
Product Description CO2 impact or eco-design Driving assistance for a safer, more connected and more autonomous vehicle
Hybrid4All (including an enhanced Stop-Start system) Hybridization of
powertrains (gasoline and diesel). Energy is recovered when the driver
reduces speed or brakes.
Fuel saving of up to 15% -
Electric supercharger A key element in downsizing and downspeeding (two related techniques to provide maximum
low-end torque and optimize combustion) gasoline and diesel powertrains.
With 12-volt architecture, fuel savings
of 8% to 10%
Dual dry clutch Consumption reduced compared with an automatic transmission.
No hydraulic fluid.
CO2 emissions reduced by 6% to 10%. Improved driving comfort.
Air intake module Improved management of internal combustion engines NOx reduced by 2% to 3% -
Battery thermal management modules Optimization of battery thermal management modules for hybrid
and electric drivetrains
Increased vehicle travel range and battery life -
BiLED headlamps 100% LED headlamp technology with one lens used for both
low- and high-beam headlamps
Reduced electricity consumption Improved visibility
BeamAtic headlamps This system makes it possible to drive with high beams on at all times without blinding other drivers Reduced electricity consumption Automated function
AquaBlade wiper system Improves windshield washing by distributing washer fluid directly on the wiper blade thanks to the perforated distribution edge built along its entire length Halves the amount of windshield wash liquid needed, cutting 2 kg off
the system’s weight. Reduction in CO2 emissions
Improved visibility in rainy conditions, reduced
braking distance
Telematics box Mobile telecommunications box (2G/3G/4G) with integrated GPS to support services - Automatic emergency call
in case of accident, remote localization
and immobilization of a stolen vehicle
Intelligent reversing system (Back-Over Protection System) Rear-view vision and maneuver support system combining ultrasonic parking assistance sensors and a rear view camera - Obstacle detection within
a field of four meters to
the rear of the vehicle to
ensure earlier warning
of obstacles/hazards
Park4U parking assistance system Semi-automatic parking assistance system. - Parking assistance. Detection of obstacles.

-At the 2015 Consumer Electronics Show (CES) in Las Vegas, the Company presented its automated driving prototype Cruise4U. When the system is active, the driver decides whether to drive the vehicle him or herself or to allow Cruise4U to take control. Equipped with its laser scanner, it can detect static or moving obstacles and therefore anticipate events and avoid collisions.

Capital Expenditure 

 (in million EUR)
  FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 FY ended Dec. 31, 2012
Comfort and Driving Assistance Systems 249 232 214
Powertrain Systems 255 239 262
Thermal Systems 178 174 148
Visibility Systems 243 233 234
Other 3 18 21
Total 956 896 879

Investments Outside France

-On May 30, 2014, Shanghai Valeo Automotive Electrical Systems Co., Ltd., which is a subsidiary of the Company, completed a new plant on a 80,000-square-meter-plot. The plant will become one of the largest production bases of automotive electric components in China, with its annual capacity reaching 10 million sets per year. It will also become the Company's largest plant in the global market. (From news releases issued by multiple sources on June 3, 2014)