Valeo Group Business Report FY ended Dec. 2018

Financial Overview

 (in million EUR)
  FY ended Dec. 31, 2018 FY ended Dec. 31, 2017 Rate of change (%) Factors
Net Sales 19,124 18,484 3.5 1)
Operating Income 1,036 1,402 (26.1) -
Sales by Business Group
Comfort & Driving Assistance Systems 3,741 3,674 1.8 2)
Powertrain Systems 5,036  4,274 17.8 3)
Thermal Systems 4,517 4,611 (2.0) 4)
Visibility Systems 5,699 5,825 (2.2) 5)

-These data differ from the data presented in the 2018 consolidated financial statements since they have been adjusted to reflect the application of IFRS 15

1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2018 increased by 3.5% over the previous year to EUR 19,124 million. Excluding foreign currency translation effects, the Company’s sales increased by approximately 6%. At a constant exchange rate, the Company’s organic sales increased by approximately 1%. The Company’s sales in the fiscal year ended December 31, 2018 benefited from the changes in its structure with the acquisition of Ichikoh and FTE automotive and the formation of Valeo-Kapec.

2) Comfort & Driving Assistance Systems
-The Comfort and Driving Assistance Systems Business Group had sales of EUR 3,741 million in the fiscal year ended December 31, 2018, an increase of 1.8% over the previous year. The increase in sales of the Business Group was driven by the Company’s increased market share in China. New orders for autonomous driving sensors, front cameras, automatic parking systems, telematics systems, driver monitoring cameras and gesture recognition systems also contributed to the increase in sales.

3) Powertrain Systems
-In the fiscal year ended December 31, 2018, sales in the Powertrain Systems Business Group increased by 17.8% over the previous year to EUR 5,036 million. The primary factors contributing to the increase in sales were the successful integration of FTE automotive and the formation of Valeo-Kapec. The Company also received its first order for a 48 V system for a four-wheeled urban passenger mobility concept.

4) Thermal Systems
-Sales for the Thermal Systems Business Group in the fiscal year ended December 31, 2018 decreased by 2.0% to EUR 4,517 million. While the Thermal Systems Business Group’s Thermal Front End and Thermal Commercial Vehicles Product Groups had increased sales over the fiscal year, weakening market conditions during the second half of the year caused a decrease in sales.

5) Visibility Systems
-The Visibility Systems Business Group had sales of EUR 5,699 million in the fiscal year ended December 31, 2018, a decrease of 2.2% from the previous year. The Business Group’s sales were negatively affected by WLTP in Europe, negative customer mix in China and production delays. These negative effects were partially offset by the growth of Ichikoh in both Japan and the ASEAN regions.


Recent Development

-The Automotive Information Sharing and Analysis Center (Auto-ISAC) welcomed new members Delphi Technologies and the Company. The inclusion of these two companies exemplifies the Auto-ISAC’s continued efforts to promote collaboration between suppliers, commercial vehicle companies and automobile manufacturers around vehicle cybersecurity. The Auto-ISAC was formed by automakers in August 2015 to establish a global information sharing community to promote vehicle cybersecurity. The Auto-ISAC operates as a central hub to share and analyze intelligence about emerging cybersecurity risks. Its secure intelligence sharing portal allows members to anonymously submit and receive information that helps them more effectively respond to cyber threats. (From a press release on December 6, 2018)

-Seojin System Co., Ltd. announced that it’s going to supply motor cases and some other parts to the Company. It has completed the development of 35 parts including motor cases with the Company, and currently delivers 13 of them to the Company's plants based in France. For the remaining 22 items, the Company completed the inspection between processes and gained approvals, and therefore, they are expected to be delivered to Mexico, Germany, Poland, China, and Thailand in addition to France. The Company and Siemens have established a joint venture to develop electric motors for electric vehicles and hybrid vehicles, and Seojin System has also participated in the development. (From some releases on November 19, 2018)

-WABCO Holdings announced that it has signed a Memorandum of Understanding (MoU) with the Company. Within the scope of this agreement, the parties intend to develop sensor technologies helping pave the way for the Company to supply WABCO with advanced short and mid-range sensors, including 77GHz radar and solid-state LiDAR, to develop and industrialize the next generation of Advanced Driver Assistance Systems (ADAS), among the key building blocks for vehicle autonomy. The first market application using the Company's sensing technologies will be WABCO’s OnCityALERT, an urban turning driver assistance solution. OnCityALERT will utilize the Company’s 77GHz radar technology to constantly monitor blind-spots on the passenger side of the vehicle - even in low visibility conditions. (From a press release on September 19, 2018)

-The Company announced that it has entered into strategic cooperation with Apollo, the open autonomous driving platform created by Baidu. The Company will contribute its expertise in sensors, with the industry’s most comprehensive range of sensors, comprising cameras, radars, ultrasonic sensors and the Valeo SCALA laser scanner. The Company will also contribute its skills in sensor cleaning systems (which are key to optimal sensor functioning), connectivity between autonomous vehicles, and control and optimization of air quality in the vehicle interior. The Company will benefit from the full range of software, hardware and data tools (operating systems, high-precision positioning and HD mapping services, simulation engines, cloud, algorithms, etc.) provided by Apollo to its ecosystem partners through its open, reliable and secure platform. (From a press release on July 4, 2018)

-Fawer Automotive Parts Limited Company announced on July 2, 2018, that it reached an agreement with Valeo Siemens eAutomotive Germany on a plan to set up a new joint venture, Fawer Valeo Siemens eAutomotive Parts (Changshu) Co., Ltd. The two company have signed the contract. The joint company is going to have a registered capital of Chinese yuan (CNY) 250 million. It will be owned 50.5% by Fawer Automotive Parts and 49.5% by Valeo Siemens. The new company primarily makes and sells inverters for new energy vehicles. It also sells imported car components. (From a press release on July 3, 2018)

-Valeo Japan Co., Ltd. announced that it will join the dynamic map demonstration tests of the Japanese government's strategic innovation program automated driving system project. This will be the first time for Valeo Japan to join the government's autonomous driving project. The dynamic map demonstration tests will verify the updating of data, and utilization of dynamic maps that are connected with dynamic data. The project will promote international cooperation through discussions and exchanges of views among organizations in and outside Japan. (From an article in the Nikkan Jidosha Shimbun on May 25, 2018)

-NTT Docomo and the Company have agreed on a partnership to jointly develop and offer next-generation connected-cars and mobility services. The two companies will launch the initiative to develop and deploy services from April 13. Under the agreement, the Company and Docomo will combine their respective expertise and solutions to offer telecommunication services and on-board equipment for connected cars, including next-generation mobility services in the era of 5G/V2X digital services for cars using smart phones, and enhanced controls for on-board equipment. (From a press release on April 12, 2018)


European customers
Presenter Award Award Winner
PSA Peugeot Citroen Best of the Best Supplier Plants of the Year Plant in Issoire, France
Best Supplier Plant Plants in Reims, France; Ben Arous, Tunisia
Nissan Europe Top Quality Award Plant in Nogent-le-Rotrou, France
Daimler Excellent Second Tier Supplier Award Plant in Chonburi, Thailand
Volvo Quality Excellence Award Plant in Rakovnik, Czech Republic

U.S. customers
Presenter Award Award Winner
Toyota Excellent Quality Award Lighting Special Products Product Line in the Visibility Systems Business Group
Excellent Quality Award Plants in Queretaro, Mexico; San Luis Potosi, Mexico; Seymour – U.S.
FCA Commodity Excellence Award Lighting Product Group in the Visibility Systems Business Group
Daimler Trucks North America Master of Quality Valeo Compressors in the Thermal Systems Business Group
Ford Q1 Award Plant in Wenling, China
Q1 Achievement Award Plant in Togliatti, Russia
GM Supplier Quality Excellence Award Plants in Juarez, Mexico; San Luis Potosi, Mexico; Foshan, China; Wenling, China; Itako, Japan.

Asian customers
Presenter Award Award Winner
Nissan Superior Quality Award Plants in Kanda, Japan; Khonan, Japan; Nakatsu, Japan; Oura, Japan.
Toyota Kirloskar Motor Zero PPM Award Plant in Pune, India
Hyundai Best Performer Award Plant in Pune, India
Maruti Suzuki Excellent Performance in Delivery and Human Resources Excellence Plant in Pune, India
Honda Superior Quality Award Plant in Kohnan, Japan
Excellent Supplier Award Plant in Guangzhou, China
Mitsubishi Motors Thailand Quality Award Plant in Chonburi, Thailand
GM China Excellent Supplier Quality Award Plant in Taicang, China
Chery Excellent Development Performance Award Plant in Shashi, China
Great Wall Motors Quality Award Plant in Foshan, China


R&D Expenditure

 (in million EUR)
  FY ended Dec. 31, 2018 FY ended Dec. 31, 2017 FY ended Dec. 31, 2016
Comfort and Driving Assistance Systems 556 518 334
Powertrain Systems 319 272 183
Thermal Systems 285 286 184
Visibility Systems 377 395 235
Other 23 23 20
Total 1,560 1,494 956

-The Company will strengthen its autonomous driving technology development in Japan. The company will set up a new test course for autonomous driving in the country in early 2019 and increase the number of development personnel in the autonomous driving division by 30% to 200. In doing so, Valeo aims to expand business with Japanese automakers advancing autonomous driving technology development. Bosch and other non-Japanese parts makers are expanding their businesses in Japan, and transactions with tier-2 and tier-3 suppliers are expected to increase in the future. The test course will be built near Valeo’s Tsukuba Techno Centre in Tsukuba City, Ibaraki, Japan, and will consist of a 300-meter (longest) straight course, a 600- meter oval course, a 150 m x 100 m test area for the European New Car Assessment Program (NCAP), and other facilities. The course will be used to develop autonomous driving technologies under various conditions such as in medium and high speed range, or in mixed traffic. (From an article in the Nikkan Jidosha Shimbun on October 18, 2018)

R&D Facilities

-As of December 31, 2018, the Company has a total of 59 research and development centers, divided into 21 research centers and 38 development centers.

-R&D centers by region:

  • Western Europe: 26
  • Central & Eastern Europe: 6
  • Africa: 1
  • North America: 6
  • South America: 3
  • Asia, Middle East, Oceania: 17
  • Total: 59

-Investment and Business Development Agency, Czech Republic informed that Valeo opened the new building of its development centre in Prague’s Hostivar district on April 5, 2018. More than 250 people will be employed in the centre’s new 2,300 square meters building, which cost CZK 124 million. Valeo’s Prague development centre has been involved in developing state-of-the-the art systems for the automotive industry since 2002. Since 2017, in a 9,000 square meters facility housing both a well-equipped laboratory and, for example, a testing area for automatic parking systems. (From Investment and Business Development Agency, Czech Republic press release on April 6, 2018)


R&D Structure

-As of December 31, 2018, the Company has 19,800 employees working in research and development.

Technological Alliance

-In 2018, Mov’inBlue, the Company’s joint venture with Capgemini to develop a smart digital mobility solution, formed a partnership with Drivy, Europe’s leading car-sharing platform, to launch a connected shared mobility solution. By integrating the Mov’InBlue solution with Drivy’s platform, vehicles can be shared from any fleet to any of Drivy’s 2.5 million users, thus optimizing vehicle usage while providing an additional source of revenue for vehicle sharers.

Product Development

Drive4U autonomous car concept
-The Drive4U concept vehicle represents the first autonomous car that is capable of autonomous operations through mass-produced sensors developed by the Company. Its sensor suite includes ultrasonic sensors, cameras, radars, and SCALA laser scanners. The sensors provide a full 360-degree view of the vehicle’s surroundings and forms a 3D model of other vehicles and their trajectories, including vehicles not immediately in the driver’s field of vision. The Drive4U system is capable of SAE level 4 autonomous driving, and thus can operate in various situations including: driving along an undivided road with few road markings; navigating intersections, traffic lights and road signs;

Xtravue trailer vision system
-The Xtravue trailer vision system uses video cameras on both the rear of the vehicle and the rear of a trailer to help drivers see the area behind the trailer. The display screen produces a single image in which the trailer appears transparent so that the driver can clearly see the area surrounding the trailer.

Picturebeam Monolithic lighting system
-The Company, in partnership with CREE, the U.S. market leader in LED manufacturing, developed a high-definition lighting system. The system projects an HD beam of light on the road without blinding other road users, and can also project images onto the ground. The pixels of the light beams are formed at the source on the chip, enabling weight and volume savings compared to other HD lighting systems. Each pixel can also be individually adjusted by the Company’s electronic system.

Oxy’Zen cabin air quality vehicle concept
-The Oxy’Zen concept vehicle features air sensors that measure the air quality both outside and inside the vehicle. The Company’s air filter then utilizes this information to adjust the air within the cabin through a high-efficiency filter and high-performance ionizer. The filter removes 98% of ultrafine particles from cabin air, while the ionizer cleans and deodorizes the cabin.

-Valeo S.A. is going to develop a new V2G (vehicle to grid) technology jointly with a Chinese startup Xcharge as a new bidirectional charging solution that enables to re-balance power supply networks. The new smart charging system can store excessive electricity in car batteries and discharge it from the car batteries to the power supply network when necessary. Users can activate the charging and discharging functions using a mobile app. China is expected to prepare a capacity to park 10 million units of electric vehicles (EVs) by 2025. If all 10 million EVs are equipped with this V2G solution, they are going to have 3GW electricity in stock, which is equivalent to the power generated by three nuclear reactors, according to the reports. (From media reports on December 10, 2018)

Vayyar Imaging announced that it will support Valeo with its advanced automotive sensors to enhance infant passenger safety in vehicles. Vayyar’s radar sensors enable Valeo to monitor infants’ breathing and trigger an alert in the case of emergency, including if an infant has been left inside a vehicle alone. After performing a successful proof of concept over the past six months, Vayyar and Valeo will be demonstrating their new capabilities during the Paris Motor Show in October 2018. Vayyar’s sensors consolidate multiple antennas and multi-transceiver radar capabilities to identify the respiration patterns of an infant and alert upon the detection of any anomalies. These sensors work in any light condition and beyond the line of sight to constantly monitor and provide real-time updates on an infant’s health status. (From a press release on October 2, 2018)

-Announced that it is presenting a highly economical low-voltage all-electric solution that can power a small two-seater prototype to a range of 150 km and a top speed of 100 km/h. Developed in partnership with Shanghai’s Jiao Tong University, the solution is ideal for meeting the needs of China’s fast-growing vehicle electrification market. Also on show are Valeo’s battery thermal management solutions, which are essential for optimizing battery life span and travel range. In addition, Valeo is showcasing its connected air purifier, which helps protect passengers from outside pollution and allergens. Valeo is also presenting its automatic LiDAR cleaning system, which enables the key LiDAR sensor to function optimally at all times, regardless of weather conditions. (From a press release on April 25, 2018)

-Announced that its new low-voltage (48V) all-electric vehicle prototype motorization system, 20% more economical than existing high-voltage solutions, will be making its world debut at the show. This solution gives a small two-seater car a range of 100 km and a top speed of 100 km/h, making it ideally suited to urban driving. Valeo technologies are also central to Autonom Cab, the world’s first robo-taxi, to be presented by its French designer Navya at CES. This all-electric, driverless vehicle is fitted with seven Valeo SCALA laser scanners. The SCALA is the first and only mass-produced LiDAR scanner on the market designed specifically for cars. In addition, Valeo will be displaying a new system that allows the interior climate of a vehicle to be adjusted to each passenger's physical condition and sensitivity to temperature, when and where they need it. The system can also detect the driver's mood and release stimulating or soothing fragrances and ions in the event of tiredness or stress. (From a press release on January 8, 2018)



-During the fiscal year ended December 31, 2018, the Company filed 2,144 patents.

Capital Expenditure 

 (in million EUR)
  FY ended Dec. 31, 2018 FY ended Dec. 31, 2017 FY ended Dec. 31, 2016
Comfort and Driving Assistance Systems 582 537 342
Powertrain Systems 458 390 357
Thermal Systems 454 430 302
Visibility Systems 538 508 330
Other 21 37 30
Total 2,053 1,902 1,361

-The Company’s capital expenditure during the fiscal year ended December 31, 2018 increased by 7.9% over the previous year, with increased investments most notably taking place in Western Europe, specifically France, Germany and Ireland and South America. Investments also increased in the Czech Republic and Turkey. In Asia, the Company increased investments in Japan and South Korea while reducing investments in China.

-Excluding acquisitions and divestitures, the Company’s capital expenditure in the fiscal year ended December 31, 2018 decreased from the previous year, having invested less in the Comfort & Driving Assistance Systems Business Group and Thermal Compressors and Transmission Systems Product Groups. The Company invested more in its Electronics and Thermal Powertrain Product Groups due to an increased number of vehicle electrification projects.


Investments outside France

-Valeo Siemens’ new plant in Changshu began its operation on October 18. Valeo Siemens eAutomotive (Changshu) Co., Ltd was established in June 2017 with a total investment of EUR 100 million. It is owned 50-50 by Valeo and Siemens and manufactures motors, inverters and electric drive systems for new energy cars. The land space of its first phase new plant is 27,000 square meters and it has a workforce of 104. For Valeo, it’s the fifth high-pressure solution supplier in China. In the first half of 2018, Valeo Siemens eAutomotive (Changshu) received orders of EUR 4.7 billion in total and has back orders of EUR 10.8 billion as of the end of June 2018. (From media reports on October 22, 2018)

-Announced that it is unveiling its latest innovations at the 67th IAA International Motor Show for commercial vehicles (IAA CV 2018) in Hanover. These innovations are at the epicenter of the three revolutions that are disrupting the world of transportation: vehicle electrification, autonomous cars and digital mobility. Valeo's affordable 48 V electrical systems and air conditioning units for buses and coaches, make it possible to reduce CO2 emissions while also lowering vehicle operating costs. In autonomous driving, it will also display Solid State LiDAR solution, a key enabler for the automation of driving tasks in trucks. Valeo is also unveiling a number of onboard safety systems, including Valeo Driver Monitoring, which can identify the driver, monitor his or her attentiveness. Valeo is exhibiting a unique digital solution based on its virtual smartkey system (Valeo InBlue) to make sharing even easier, with an unprecedented level of security. (From a press release on September 19, 2018)

-The Company has developed the 3D Gesture User Interface, which detects drivers’ hand and finger movements, and operates cockpit switches. The system uses a 3D time-of-flight (ToF) camera to detect the position of hands and fingers. The company aims to commercialize the system as a cockpit interface together with a 3D ToF camera and steering wheel for vehicles that will be launched around 2022 to 2023. Drivers look at switches in order to operate adaptive cruise control, audio, and air-conditioning systems. Use of the 3D Gesture User Interface will allow drivers to operate these systems while looking ahead, and contribute to safe driving. The system also eliminates the need for the switches and codes that are mounted on steering wheels. (From an article in the Nikkan Jidosha Shimbun on June 28, 2018)

-Informed that it is showing its latest innovations and hosting some 40 start-ups at its Lab to compete in challenges in the fields of electric, autonomous and connected vehicles in the Viva Technology conference. The first rechargeable hybrid running at low voltage (48V), making its world premiere at Viva Technology. The new solution, mounted on a 5-seater vehicle, makes it possible to drive in all-electric mode over 30 kilometers, the internal combustion engine taking over for longer trips. Valeo will present Valeo XtraVue, which allows the driver to see what is happening on the road, right through the vehicle in front, thanks to a vehicle-to-vehicle communication system. Valeo Park4U Home, which allows the vehicle to learn to park on its own, without the driver needing to stay nearby to supervise/monitor the maneuver will be displayed in the event. (From a press release on May 22, 2018)

-On April 26, 2018, Longxing Industrial Park, Liangjiang New Area, Chongqing, said that the construction of Valeo's plant in Chongquing is making a smooth progress and that the construction of the steel framework has already begun. The project requires an investment of Chinese yuan (CNY) 210 million. The plant is going to have floor space of 26,247.12 square meters in total and has a facility to produce steel frame and a fire protection station. Its main products are automotive lights. Upon completion, it's expected to generate sales of CNY 600 million. The installation of the concrete body of the attached plant is already completed. The construction of the steel frame main plant is now in the critical stage. Interior works and preparations for the installation of production equipment are also in progress at the same time. The entire facilities is scheduled to complete at the end of 2018 and the official production launch is scheduled in early 2019. (From some releases on April 26, 2018)