Valeo: "Move Up" aims to secure further growth

The new CEO can look back on a solid business development of Valeo and plans optimistically ahead:

“Today we present our Move Up plan, which covers the period from 2022 to 2025. Move Up means building a technologically stronger and optimally positioned Valeo Group and accelerating developments in electrification – through the integration of Valeo Siemens eAutomotive –, in ADAS, in interior – by reinventing the interior space – and in lighting.”

With that, he has also named the four core pillars of growth at Valeo. Because with Move Up, he wants to further accelerate growth and outperform the development in the automotive market by more than 5 percentage points. Périllat added:

“Move Up also means value creation through a program of synergies and efficiency enhancements, improved profitability, cash generation between 800 million and 1 billion euros in 2025, and the disposal of non-strategic assets worth 500 million euros.”

He expects that they are at the beginning of a phase in which the transformation of mobility can drive hypergrowth in the markets for electrification and ADAS for 15 to 20 years – although Périllat could not be entirely sure about the medium-term impacts of the war in Ukraine on business in the EU. Nonetheless, he expressed optimism for Valeo:

“With Move Up, we are now creating value, and we are creating a stronger Valeo Group that will be able to leverage the hypergrowth that will occur in its markets tomorrow.”

 Optimistic outlook for the year 2035

By 2035, the world should be electric and connected. The Move Up plan from Valeo is part of this long-term vision for cleaner and safer mobility. After 2025, the markets for electrification and ADAS are expected to experience substantial growth and reach a value of 200 billion euros and 120 billion euros respectively by 2035, according to Valeo’s forecast. Thanks to Move Up, Valeo is in a very favorable position to capitalize on this growth with cutting-edge technologies, solid financial performance, and cash generation that guarantees strong value creation for all stakeholders of the group, including its shareholders.

 The growth model of Valeo is expected to rest on four major trends:

1. The acceleration of electrification, which is covered by the Powertrain Systems and Thermal Systems divisions.
2. Acceleration of ADAS, for which there are the Comfort & Driving Assistance Systems
3. The reinvention of the interior experience, also located within Comfort & Driving Assistance
4. Lighting everywhere, which is handled by the Visibility Systems division

For this, Valeo stands on a solid foundation with several roughly equally strong divisions. Add to this a diversified customer portfolio. But Valeo also expects declines: For instance, they anticipate a reduction in engagement with internal combustion engines to 4% of revenue by 2030. On the other hand, they are strengthening their expertise in the fields of electronics and software, where almost 40 percent of Valeo’s engineers are now working. The resilient and profitable spare parts market remains an important pillar.

What does this mean?

Despite the pandemic and the Ukraine crisis, Valeo looks optimistically into the future: Also, because the company started the transformation into new areas years ago, continues to open up new product groups, and has four roughly equally strong pillars, which ensures balance in the portfolio. So, one can expect numerous news from Valeo in the future as well.