Valeo: Third Quarter 2008 Results - Good Resistance in a Difficult Environment

Paris (ots/PRNewswire) - Following the meeting of its
Board of Directors yesterday, Valeo presents its consolidated results
for the third quarter 2008.

In million euros 3rd quarter 9 months
(Non audited)
2008 2007 change 2008 2007 change
Total operating revenues 2,112 2,245 -5.9% 7,026 7,251 -3.1%
Gross margin 315 340 -7.4% 1,106 1,111 -0.5%
% of sales 15.2% 15.4% -0.2 pt 16.0% 15.5% +0.5 pt
Operating margin 65 73 -11.0% 268 250 +7.2%
% of total operating
revenues 3.1% 3.3% -0.2pt 3.8% 3.4% +0.4 pt
Net income attributable to
the company's shareholders 6 (40) ns 106 31 +241.9%
% of total operating
revenues 0.3% -1.8% +2.1pts 1.5% 0.4% +1.1 pt

In a particularly difficult economic and financial environment,
Valeo recorded in the third quarter a slight drop in sales in terms
of value, although volumes were stable, while the reference
automotive production was down by nearly 4%. Despite the decline in
operating margin in the third quarter, sustained management efforts
enabled the operating margin level for the first nine months of the
year to progress by 0.4 points versus 2007.

Third quarter 2008 results

In the third quarter 2008, total operating revenues amounted to
2,112 million euros, down by 5.9% versus the third quarter 2007.
Volumes were at the same level as the previous year in a market that
was down by nearly 4%. Exchange rates (-1.6%), changes in the
reporting entity (-1.6%) and prices (-2.7%) had a negative impact of
5.9%.

Gross margin, at 15.2% of sales, dropped 0.2 points versus the
third quarter 2007 but remained 0.5 points ahead for the first nine
months of the year. The negative gross impact of raw material prices
is estimated at 0.4 points (for a net impact of 0.1 point). The
productivity actions carried out by the Group enabled the effect on
the decline in sales to be limited to 0.1 point.

Operating margin stood at 65 million euros or 3.1% of total
operating revenues, versus 73 million euros and 3.3% for the same
period in 2007. Over nine months, the operating margin rate was up by
0.4 points.

Net income attributable to the company's shareholders totaled 6
million euros, compared with a loss of 40 million euros in the third
quarter 2007 which included a provision of 54 million euros for the
sale of the wiring harness activity.

Over the first nine months of the year, basic earnings per share
from continued operations stood at 1.41 euros, up by 24.8% versus the
same period in 2007.

At 30 September 2008, net financial debt amounted to 735 million
euros, versus 799 million euros at the beginning of the year. The net
debt-to-equity ratio was 41%, versus 45% at 31 December 2007.

Highlights

Industrial rationalization continued with the announcement of a
plan to consolidate the rear lighting product line in Europe. The
reorganization would involve the transfer of production from the
plant in Neuses, Germany, to other sites in France and Poland. This
would affect 200 jobs in Neuses.

The market penetration of new technologies developed by Valeo
continues to rise, particularly in the areas of emissions and safety.
Valeo received the 2008 Automechanika Innovation Award for its StARS
micro-hybrid system. This solution, which provides up to 25% fuel
savings and reduced CO2 emissions in heavy urban traffic, is meeting
with increased commercial success. It equips the Citroen C2 and C3,
Mercedes-Benz A and B Class and Smart models. A contract has been
signed with PSA Peugeot Citroen to equip more than one million
vehicles with StARS by 2011. In the area of safety, Valeo received a
Global Innovation Award from Nissan for its contribution to this
OEM's lane departure prevention system.

Shortly after the end of the quarter, Valeo announced the
creation of a joint venture in India with the Anand Group for the
production of lighting systems. This is Valeo's fifth industrial
operation in India, where the Group has been present since 1997.

Outlook

Valeo anticipates a further deterioration of automotive
production in the fourth quarter. Thanks to the actions undertaken,
the Group confirms, for 2008, an operating margin similar to that of
2007.

Valeo points out that it has no significant debt reimbursement
scheduled before January 2011 and that its cash situation is not
affected by the financial crisis today.

In the medium term, the Group is evaluating the consequences of
this new economic environment on its margin improvement objectives.

Corporate governance

The Board of Directors updated the Company's rules of corporate
governance. It decided to create a Strategy Committee and broaden the
missions of the Nominations and Remunerations Committee, which
becomes the Nominations, Remunerations and Corporate Governance
Committee.

In addition, the Board of Directors confirmed the eventual
compensation to be paid to the Chairman in the event of his
departure, as approved by the Annual General Meeting, the Board
having taken note of a letter from the Chairman dated October 2, 2008
in which he renounced the application of his employment contract
(including the non-competition clause) were he to benefit on his
departure from his compensation as a legal representative.

Valeo is an independent industrial Group fully focused on the
design, production and sale of components, integrated systems and
modules for cars and trucks. Valeo ranks among the world's top
automotive suppliers. The Group has 121 plants, 61 R&D centers, 9
distribution centers and employs 58,400 people in 27 countries
worldwide.

For all additional information, please contact:
Kate Philipps, Group Communications Director, Tel: +33-1-40-55-20-65
Remy Dumoulin, Investor Relations Director, Tel: +33-1-40-55-29-30

ots Originaltext: Valeo Management Services
Im Internet recherchierbar: http://www.presseportal.de

Contact:
For all additional information, please contact: Kate Philipps, Group
Communications Director, Tel: +33-1-40-55-20-65, Remy Dumoulin,
Investor Relations Director, Tel: +33-1-40-55-29-30