Valeo Group Business Report FY ended Dec. 2017

Financial Overview

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 Rate of change (%) Factors
Net Sales 18,550 16,519 12.3 1)
Operating Income 1,410 1,301 8.4 -
Sales by Business Group
Comfort & Driving Assistance Systems 3,565 3,343 6.6 2)
Powertrain Systems 4,220 3,975 6.2 3)
Thermal Systems 4,953 4,622 7.2 4)
Visibility Systems 5,712 4,545 25.7 5)

1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2017 increased by 12.3% over the previous year to EUR 18,550 million. Given constant exchange rates and no changes in scope, the Company’s sales increased by approximately 7% year-over-year. The acquisitions of Ichikoh and FTE automotive as well as the creation of the Valeo-Kapec joint venture added approximately EUR 1,037 million to net sales.

2) Comfort & Driving Assistance Systems
-The Comfort and Driving Assistance Systems Business Group had sales of EUR 3,565 million in the fiscal year ended December 31, 2017, an increase of 6.6% over the previous year. The increase in sales was driven by increased orders for SCALA laser scanners, front cameras and radars in Europe and Asia. Increased sales of 360-degree cameras in North America also supported the business group’s growth. The Company also won contracts from two major automakers for smartphone-controlled remote parking systems.

3) Powertrain Systems
-In the fiscal year ended December 31, 2017, sales in the Powertrain Systems Business Group increased by 6.2% over the previous year to EUR 4,220 million. Factors contributing to the increase in sales include the growth of battery chargers, specifically in the Chinese market, a large initial order for inverters and high-power electric vehicle motors produced by Valeo Siemens eAutomotive, the acquisition of FTE automotive, and increased demand for powertrain sensors.

4) Thermal Systems
-Sales for the Thermal Systems Business Group in the fiscal year ended December 31, 2017 increased by 7.2% to EUR 4,953 million. The increase in sales was caused by increased sales in Europe and Asia, particularly in the Thermal Climate Control and Thermal Powertrain Product Groups. Additional contracts with major German automakers marked the second consecutive year of record-high order intakes in the Business Group.

5) Visibility Systems
-The Visibility Systems Business Group had sales of EUR 5,712 million in the fiscal year ended December 31, 2017, an increase of 25.7% over the previous year. The increase was primarily attributable to the takeover of Ichikoh, making the Company the global leader in automotive lighting. The launch of the BiLED Access Matrix module, increased sales of Thin Lens lighting modules, and orders of interior lighting systems and lighting system architecture also led to the increase in sales.


-The Company announced the acquisition of FTE automotive, a leading producer of clutch and gear actuators, after having received clearances from the European Commission and the Turkish Competition Authority. The acquisition will enable the Company to expand its offering of active hydraulic actuators, a strategic and fast-growing market that has notably benefited from the rise of hybrid and electric vehicles. In 2016, FTE automotive generated sales of approximately EUR 550 million, with more than 3,800 employees and a diversified manufacturing footprint in eight countries. (From a press release on October 31, 2017)

-The Company acquired all of the outstanding shares of gestigon, a German start-up specialized in developing 3D image processing software for vehicle cabins. Designed to reinforce the Company’s technological leadership in automated driving, this acquisition provides a solution to the need to develop simple, intuitive and effective human-machine interfaces (HMI) in a hyper-connected world. With the acquisition, the Company will be able to develop its cabin comfort and driving assistance operations, particularly in high-growth technologies such as interior cameras and image processing. gestigon's software suite is compatible with all types of in-vehicle gesture and movement recognition sensors. (From a press release on March 13, 2017)

-The Company announced that 32,383,612 Ichikoh shares have been tendered to its offer, which ran from November 24, 2016 to January 12, 2017, at price of JPY 408 per share. On settlement of the transaction, scheduled for January 20, 2017, the Company will hold 55.08% of Ichikoh's capital. Ichikoh will remain listed on the Tokyo Stock Exchange. Ichikoh will be fully consolidated by the Company starting from February 1, 2017. (From a press release on January 13, 2017)


-The Company announced that in the context of its acquisition of FTE automotive, the European Commission has expressed doubts on the passive hydraulic actuator market in light of the European Commission Merger Regulation. Thus, the Company is considering the divestment of its passive hydraulic actuator business with a view to obtain the approval of the FTE automotive acquisition by the European Commission. The Company initiated discussions with Raicam, an Italian supplier specialized in clutch and braking systems for both the original equipment and replacement market. These discussions have led to a solid acquisition project, which is subject to prior consultation with works councils, and which requires approval by European Commission within the framework of its review of the FTE project. If the Company obtains clearance of the FTE automotive transaction, the contemplated divestment could be finalized in the last quarter of 2017. (From a press release on July 12, 2017)

Joint Ventures

-The Company confirmed the creation of a joint venture, Valeo-Kapec, with the South Korean group PHC Group. The Company signed an agreement with PHC on February 6, 2017 to create a joint venture set to become the world leader in torque converters for automatic and continuous variable transmissions. The joint venture will employ approximately 3,150 people and will be controlled and fully consolidated by the Company. It is forecast to generate sales of approximately EUR 1 billion on an annual basis and will be accretive to the Company’s operating margin from its first fiscal year. (From a press release on November 30, 2017)

Recent Developments

-The Company confirmed its investment of EUR 50 million in the Cathay CarTech Fund, Cathay Capital’s first RMB fund, to take a stake in China’s dynamic automotive and mobility ecosystem. Together with another cornerstone investor, Yangtze River Industry Fund, and other investors, Cathay CarTech will focus on China with plans to invest a total of EUR 200 million in innovative companies and start-ups. (From a press release on December 11, 2017)

-Ichikoh Industries will establish a new division in April 2017 that will serve as an intermediary unit between itself and the Company. The two companies are aiming to expand their business in Japan, while creating synergies in the area of product development by sharing business methods and workflows wherever possible. The new team will consist of members of various divisions from both companies. The unit will work out new business strategies towards effective utilization of each company's resources. Their initiatives will include elimination of functional overlap and developing a closer partnership to become more globally competitive. (From an article in the Nikkan Jidosha Shimbun on February 20, 2017)


European customers
Presenter Award Award Winner
Daimler Excellent Supplier Award Plant in Guangzhou, China
Best Supplier Award Plant in Shenzhen, China
PSA Peugeot Citroen 2017 Supplier Awards, Program Management Valeo Lighting Systems
2017 Supplier Awards, Aftermarket Performance Valeo Service
Best Supplier Plant 2017 Plants in Mazamet, France; Issoire, France
Quality System Basics certification Plants in Sable-sur-Sarthe, France; Amiens, France; Issoire, France; Reims, France; Tuam, Ireland; Campinas, Brazil; Cordoba, Argentina
Nissan Europe Top Quality Award Plant in Sainte-Florine, France
Toyota Europe Distinction for delivery quality Plant in Etaples, France
Best Toyota Business Project of Core Group 6 Plant in Chizanow, Poland
Best Toyota Business project in Continental Europe Plant in Chizanow, Poland
Certificates of Recognition for Supply Valeo Electrical Systems, Valeo Lighting Poland, Valeo Lighting Europe
Certificate of Achievement in Value Improvement Plant in Bursa, Turkey

U.S. customers
Presenter Award Award Winner
Ford Q1 Certification Plants in Queretaro, Mexico; Rayong, Thailand; Bursa, Turkey; Wenling, China
GM Supplier Quality Excellence Awards Plants in Foshan, China (2); Wuhan, China; Wenling, China; Queretaro, Mexico, Itatiba, Brazil; Czechowice, Poland
GM Flag Plant in Itatiba, Brazil
Hyundai Brazil Best Supplier for Localization Plant in Campinas, Brazil
Nissan North America Regional Supplier Initial Quality Certificate Plant in Rio Bravo, Mexico
Certificate of Recognition for Supplier Best Practice Plant in Rio Bravo, Mexico
Toyota North America Region Contribution Awards Plants in San Luis Potosi, Mexico; Juarez, Mexico; Queretaro, Mexico; Seymour, U.S.
Excellent Value Improvement Plants in Seymour, U.S.; San Luis Potosi, Mexico
Quality Alliance Gold Plant in Queretaro, Mexico

Asian customers
Presenter Award Award Winner
Dongfeng-Nissan Recognition for excellence in project management and launch Plant in Foshan, China
Dongfeng PSA Quality System Basics certification Plants in Guangzhou, China; Wuhu, China; Shashi, China
Geely Excellent Development Supplier Award Plant in Foshan, China
Excellent Supplier Award Plants in Foshan, China; Changchun, China
Best Supplier Award Plant in Wuhan, China
Chery Excellent Supplier Award Plant in Wuhu, China
Excellent Recognition Plant in Wuhu, China
Bronze at Chery Annual Supplier Quality Competition Plant in Wuhu, China
Chery Jaguar Land Rover Quality Award Plant in Foshan, China
Great Wall Quality Activity Plant in Shenyang, China
Excellent Quality Activity Plant in Shenyang, China
R&D Quality Plant in Foshan, China
Best Reliability Plant in Wenling, China
Nissan Best Cost Reduction Lighting Products Group in India
Toyota India Performance for Quality 0 PPM Award Plant in Pune, India
Best Eco Kaizen Award Plant in Pune, India
Achievement of quality targets Plant in Pune, India
GAC Toyota Quality Collaboration Achievement Plants in Foshan, China; Shanghai, China
FAW-VW Quality Excellence Award Plant in Foshan, China
Quality Improvement Excellent Supplier Letter Plant in Shenzhen, China
Volkswagen Quality Performance Improvement Outstanding Supplier Award Plant in Shenyang, China
Southern China Production Base Supplier Quality Excellence Award Plant in Foshan, China
A-rating Supplier Certificate Plant in Nanjing, China
Volkswagen Quality Performance Award Plant in Pune, India
Jatco Best Quality Award Plant in Guangzhou, China
Commitment and Achievement Award Plant in Atsugi, Japan
Harbin Dongan Best Quality Award Plant in Shanghai, China
FAW Haima Best Quality Award Plant in Shanghai, China
Shanghai Automobile Gear Works Excellent Supplier Award Plant in Nanjing, China
JAC Quality Contribution Award Plants in Wuhu, China; Shanghai, China
Development Collaboration Award Plant in Shanghai, China
Foton Excellent Supplier Award Plant in Shenyang, China
Ashok Leyland Best Genba Award Plant in Pune, India

R&D Expenditure

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Comfort and Driving Assistance Systems 412 334 254
Powertrain Systems 212 183 167
Thermal Systems 204 184 148
Visibility Systems 279 235 216
Other 23 20 12
Total 1,130 956 797

R&D Facilities

-As of December 31, 2017, the Company has a total of 55 research and development centers, divided into 20 research centers and 35 development centers.

-The organization of the Company's 55 research and development centers by region is as follows:

  • Western Europe: 24
  • Central & Eastern Europe: 6
  • North America: 6
  • South America: 3
  • Asia, Middle East, Oceania: 15
  • Africa: 1

-The Company launched, the first global research center in artificial intelligence and deep learning dedicated to automotive applications. will leverage the Company’s leading position in autonomous driving and strong link with the scientific community to become a leader in this field and contribute to the ongoing transformation of transport and mobility models. will employ 100 specialists by the end of 2018 and become a global competence center for algorithm, infrastructure, learning process, validation and simulation in artificial intelligence for automotive applications. (From a press release on June 14, 2017)

-The Michigan Economic Development Corp. announced that the Company’s subsidiary, Valeo North America Inc., will invest USD 5 million for the construction of a low-speed test track and a new building in Auburn Hills as well as improvements to its Troy headquarters. The investment will create 290 jobs. (From a Detroit News article on February 1, 2017)

R&D Structure

-As of December 31, 2017, the Company has 17,900 employees working in research and development.

Technological Alliance

-The Company and Cisco announced that they have signed a cooperation agreement to develop strategic innovations in smart mobility services. Cyber Valet Services, a project resulting from their collaboration, is being unveiled at the 2017 Viva Technology conference in Paris. This unique solution enables vehicles equipped with Company Park4U Auto technology to park safely and autonomously. The driver gets out of their vehicle at the car park entrance and activates the automatic parking system using a smartphone. The vehicle then continues its journey in automatic mode until it has finished parking. Indigo, the provider of parking services and individual mobility solutions, is the first to integrate the new service, which is currently being introduced at the Camille Desmoulins parking garage in Issy-les-Moulineaux, France. (From a press release on June 15, 2017)

-The Company entered into a partnership with Kuantic in 2017, a company which designs integration solutions for onboard telematics for fleet managers.

Product Development

Innovations shown at Busworld
-At the 24th Busworld in Kortrijk, Belgium, the Company presented its latest innovations for buses and coaches. The lineup of HVAC solutions presented is specifically designed for electric and hybrid buses and coaches. The Company will present the REVO-E Global range of electric roof units, a comprehensive solution for electric buses and coaches that optimizes HVAC performance in the cabin, and a battery cooling system which maintains the temperature of the battery cells in hybrid and electric vehicles. The Company will also reveal a reversible, environmentally friendly heat pump that heats, cools and demists electric vehicle cabins without using any chemical refrigerants. (From a press release on October 19, 2017)

Innovations shown at IAA 2017
-The Company announced that it will be showcasing 20 innovative products and services at IAA 2017. Debuting systems include Park4U Home for self-parking, Valeo everView, the first lidar sensor cleaning system, and Valeo MyMobius, a human-machine interface. It will also reveal a chemical-refrigerant-free heat pump that can extend electric vehicle range by nearly 30% in cold weather and a lightweight composite material, the first automotive application of to reduces vehicle-part weight by up to 30%, thereby curbing energy consumption and CO2. The SCALA laser scanner, the first and only mass-produced laser scanner, will also be shown. (From a press release on September 12, 2017)

Lidar sensor cleaning system
-The Company has developed a lidar sensor cleaning system for use in autonomous vehicles and received an order for it from a European OEM. Mass production of the new system is expected to begin in a few years. The new system cleans dirt from lidar sensors by spraying windshield washer fluid on the upper part of the lidar sensors, thus preventing the sensors' detection capability from lowering. The system dispenses a washer fluid in a tank fitted on a vehicle to sensors through hoses or tubes and sprays it on the sensors. (From an article in the Nikkan Jidosha Shimbun on July 14, 2017)

Innovations shown at CES 2017
-The Company will debut five major innovations CES 2017 in Las Vegas:

  • Valeo eCruise4U: A demonstration vehicle which provides attendees with an automated driving experience in electric mode.
  • Valeo XtraVue: A set of connected computer-vision cameras that show drivers what is happening on the road, outside their field of vision.
  • Valeo 360AEB Nearshield: An autonomous emergency braking system that eliminates blind spots, alerts drivers to any potential obstacles and brings the vehicle to an automatic halt to prevent impact if necessary.
  • Valeo C-Stream: A dome module that replaces the central rearview mirror and maps out the vehicle's cabin.
  • Valeo Cockpit: A technology demonstrator that combines a range of products designed to shape the sensory experience associated with new ways of using cars.

(From a press release on January 4, 2017)

Valeo XtraVue vision system

-The Company has developed a vision system that provides drivers with a clear view outside the vehicle through a network of connected sensors. The XtraVue system uses a telematics antenna combined with a laser scanner and a camera system linked to cameras from other connected vehicles and road infrastructure. Existing public 4G and V2V networks help to integrate the data into the XtraVue system. All of the information is combined to provide information of the environment beyond what a driver can normally see in their field of vision.

48 V powertrain system for light electric vehicles
-The Company has designed a full electric vehicle prototype which operates on a 48 V electric system. The prototype is a two-seat vehicle that can be charged at any electric vehicle charging station. The vehicle has a top speed of 100 km/h and a maximum range of 100 kilometers. All of the technologies on the prototype, excluding the battery, are developed by the Company. In addition, the prototype is 20% more economical than a high-voltage small electric vehicle, due to the removal of unnecessary components and systems that are required in high-voltage vehicles.

Kinetic rear light
-The Kinetic rear light provides a means for the vehicle to communicate with the environment by displaying pictograms and messages. For example, an automated car using can display a message on the Kinetic rear light system, informing the vehicle behind it about a hazardous situation in front of the automated vehicle.

Valeo Nebulizer air conditioning system
-The Company presented the Nebulizer air conditioning system for rear passengers at IAA 2017 and CES 2018. The Nebulizer releases a fine mist of water at passengers, reducing cabin temperature by three degrees Celsius in less than three minutes and increasing air humidity by more than 15%. In order to guarantee the air quality level within the vehicle, the Nebulizer uses a microparticle filter that filters out 99.9% of bacteria.

-The table below lists products and technologies developed by the Company within the last three years which contribute to sustainable mobility by either reducing CO2 or other pollutant emissions, or providing driving assistance through connectivity or autonomous functions.

Product Description Environmental impact Driving assistance for a safer, more connected or more autonomous vehicle
48 V belt-driven alternator-starter Hybridization combining traditional gasoline or diesel powertrains with a low-voltage (48 V) electric motor. Energy is recovered when the driver reduces speed or applies brakes. Cost per gram of CO2 saved using system is halved compared to hybrid vehicles currently available Fuel savings between 5% and 10%; Enables all-electric mode over short distances and in urban traffic jams -
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%; Combined with a 48V mild-hybrid system, fuel savings of up to 20% Faster acceleration
Air intake module for internal combustion engines Improved management of internal combustion engines NOx reduced by 2% to 3% Turbo lag reduction of up to 500 ms
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
Remote Clean4U (based on AquaBlade wiper system) Improves windshield washing through a remote-controlled system. Also includes de-icing system and a debugging system. Halves the amount of windshield wash liquid needed, reducing weight by 2 kg Improved visibility in rainy conditions; reduced braking distance; automated functionality
Valeo Mov'InBlue System to lock, unlock, and start the vehicle, and provide remote control of various applications - Remote control of various functions; key sharing
Intelligent reversing system (Back-Over Protection System) Rear-view vision and maneuver support system combining ultrasonic parking assistance sensors and a rear view camera Compact size reduces weight and cost Obstacle detection within a field of four meters to the rear of the vehicle to ensure earlier warning of obstacles/hazards
Remote Park4U parking assistance system Semi-automatic parking assistance system that can be initialized and managed through a smartphone System reduces traffic Parking assistance; Detection of obstacles; Automated parking
High-efficiency filter Filter used for eliminating allergens and fine particles under 2.5 nanometers. Reduces pollutants and allergens in vehicle cabin by removing almost 100% of ultra-fine particles


-In 2017, the Company filed 2,053 patents.

Capital Expenditure

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Comfort and Driving Assistance Systems 537 342 306
Powertrain Systems 390 357 278
Thermal Systems 430 302 244
Visibility Systems 508 330 266
Other 37 30 31
Total 1,902 1,361 1,125

-The Company’s capital expenditure during the fiscal year ended December 31, 2017, was primarily used to increase production capacity and expand existing plants in Mexico, China, Germany and the U.S. The capital investment was earmarked primarily for the Lighting Systems, Thermal Systems, Powertrain Systems and Transmission Systems product groups.

Investments Outside France

-The Hungarian Investment Promotion Agency informed that Valeo Auto-Electric Magyarorszag continues to expand its manufacturing and R&D complex in Veszprem with a greenfield project. More than 200 new jobs will be created in connection with the EUR 60 million investment. As part the development, the existing building will be partially modified, the development laboratory will be expanded by an additional 550 square meters, and a new 4,000-square meter warehouse hall will be constructed. The objective of the project is to set up a high-level automated production environment, which is highly efficient, safe and meets customer expectations. (From a press release on December 13, 2017)

-Ichikoh announced that it will build a manufacturing facility for automotive lamps in Atsugi City, Kanagawa Prefecture, Japan. The new facility, to be called the Morinosato Plant, will be operational from July 2019 and will introduce industrial concepts developed by the Company. The new plant will gradually take over the production of the Isehara Plant. The plant will adopt the Company’s Lean Manufacturing technologies to enhance competitiveness. The plant has also been designed to satisfy the latest regulatory standards for earthquake resistant structures to contribute to the company's business continuity management. Total investment into the Morinosato Plant will be approximately JPY 16.4 billion. (From an article in the Nikkan Jidosha Shimbun on September 13, 2017)

-Officials of the Company’s subsidiary, Valeo North America, announced that it will invest USD 25 million to expand its operations in Smyrna, Tennessee. The Company will be expanding its current facility in Smyrna by adding 130,000 square feet to provide space for new equipment. The Smyrna plant manufactures front-end modules, active grill shutters, and in the future, HVAC products. (Tennessee Department of Economic & Community Development release on June 28, 2017)