Valeo H1 Sales Down 4.1% YoY, Lowers 2025 Financial Outlook

On July 24, French auto parts supplier Valeo announced that in the first half of this year, its sales fell by 4.1% year-on-year to 10.66 billion euros; EBITDA increased by 6% year-on-year to 1.472 billion euros; net profit plummeted by 26% year-on-year to 104 million euros. In the second quarter of this year, Valeo's sales fell by 6% year-on-year to 5.347 billion euros, in line with the analyst expectations provided by the company.

Image source: Valeo

At the same time, Valeo has revised down its financial forecast for 2025, primarily due to the negative impact of a weak dollar, which cost the company 750 million euros. This makes Valeo the latest company to highlight foreign exchange risks in its financial report, following market turbulence triggered by U.S. President Trump's tariff policy announcement on April 2, which led to a significant decline in the safe-haven currency, the dollar.

Valeo currently expects its sales for this year to be around 20.5 billion euros, lower than the previous forecast of "21.5 billion euros to 22.5 billion euros." Valeo CEO Christophe Périllat told analysts that this expectation also includes an impact of approximately 250 million euros due to reduced market demand from its customers.

Auto parts suppliers have admitted that in recent years, the shift toward electric vehicles—which require fewer parts—has already put them under pressure, leaving them unable to bear any additional tariff costs. However, auto parts suppliers have managed to pass on the costs related to U.S. import tariffs on automobiles to car manufacturers. Nevertheless, analysts still warn that the impact of declining demand may be even harder to bear, as U.S. tariff policies are expected to drive up car prices in the country by several thousand dollars. Higher car prices mean a reduction in the number of people who can afford to buy new cars.

However, Christophe Périllat told reporters that most of the products Valeo sells in the United States are produced in North America and are hardly affected by tariffs. In April this year, Valeo stated that 90% of its products shipped from Mexico to the United States comply with the free trade provisions of the United States-Mexico-Canada Agreement (USMCA). It is reported that Valeo is a supplier of driving assistance systems and lighting systems, and has 13 factories in Mexico.

Additionally, Valeo has accelerated the implementation of its business restructuring and cost reduction plans, which are expected to achieve an overall cost optimization of €150 million by 2025.