Valeo Shares Plummet After Sales Forecast Revision

Shares of Valeo (EPA:VLOF) fell over 10% on Friday following a reduction in its 2024 sales forecast, now anticipating €21.3 billion instead of the previous estimate of €22 billion.

This adjustment comes after a challenging third quarter characterized by lower demand for high-voltage electric components and overall market declines, resulting in a 5% year-over-year drop in quarterly sales to €4.97 billion.

The company's original equipment sales for the quarter also declined by 2% on a like-for-like basis, although they outperformed overall automotive production by 3 percentage points.

Regionally, Valeo's performance exhibited significant differences. In Europe and Africa, original equipment sales surpassed regional automotive production by 6 points, bolstered by advances in traditional powertrain products and the BRAIN division’s advanced driver-assistance systems and display technologies.

Conversely, sales in North America lagged behind, trailing production by 1 percentage point despite robust performance in the LIGHT division’s new electrification contracts.

Additionally, Valeo’s market in China experienced a notable decline, underperforming by 9 points amid a strategic portfolio shift.

Christophe Périllat, chief executive at Valeo, stated, "Given the worsening economic environment and the significant uncertainty surrounding automotive production volumes, we will publish new 2025 guidance adapted to these new market conditions when we publish our 2024 results."