The auto parts market is ready to go.
Text/Shanshan Xu
In the past year, the world's leading auto parts manufacturers have basically handed over a bright financial report. Companies including Bosch, Magna, Hyundai Mobis and others have achieved two-digit growth, while Valeo has followed with an annual growth rate of 5%.
Taking the opportunity to acquire 50% of Siemens' stake in Valeo Siemens' new energy vehicle joint venture, Valeo recently announced the launch of the "Move Up" plan to create higher positioning and value in the transformation of the automotive industry.
Valeo expects that between 2021 and 2025, OEM supporting sales will exceed the market level by an average of more than 5% per year. Sales in 2022 will reach EUR 19.2 billion to EUR 20 billion, up 15.6% from EUR 17.3 billion the previous year.
By 2025, its global revenue is expected to reach 27.5 billion euros, and its EBITDA margin is about 14.5%, and by 2030, it will eventually achieve sales of 40 billion euros.
Bet on electrification change
At present, valeo Group has four major divisions of comfort and driver assistance systems, powertrain systems, thermal systems and vision systems, and the four divisions have strong voices in the corresponding fields.
According to the "Move Up" program, Valeo High Voltage Solutions will grow at a compound growth rate of 17.5% between 2021 and 2030, with an annual growth rate of 22% over the period of 48V high voltage products.
According to IHS Markit, the market value of automotive powertrains will reach 92 billion euros by 2030, of which 40% will be outsourced. This means that Valeo's target market size is almost 40 billion euros.
At the same time, Valeo is also accelerating its pace, planning to increase the number of bicycle equipment safety products in the next four years, exceeding the market by 8 percentage points.
With the overall acceleration of vehicle electrification, powertrain systems have become the main value growth points such as the automotive supply chain. Huachuang Securities Research Report also pointed out that the upgrading of automobile electrification will drive the incremental market of thermal management components.
The main reason is that the automotive heating system coordinates the regulation of vehicle heat and ambient heat, including heating and cooling management of power batteries, motors, electronic controls and cockpits, which can effectively extend the mileage of electric vehicles.
Valeo expects that through its Thermal Systems division, it will further increase the number of bicycle equipment products, exceeding global automobile production by more than 4%.
Expand advanced driver assistance systems
In particular, in the field of advanced driver assistance systems (ADAS), Valeo plans to double the sales data of related businesses in 2021 by 2025, exceeding global automobile production by 12 percentage points.
As Valeo CEO Christophe Périllat said, ADAS is a business that grows both profitably and very quickly.
For example, in the lidar market, Valeo has long occupied the first place. Currently, one in every three new cars is equipped with ADAS with Valeo technology.
Valeo is one of the few suppliers in the world to achieve mass production of vehicle-grade lidar. In November last year, Valeo officially released its third-generation lidar, which is expected to be officially launched on the market in 2024.
Over the past 30 years, Valeo has sold more than 1.5 billion sensors for advanced driver assistance systems, and over the next 5 years, it plans to sell more than 3 billion sensors.
After July 1 this year, Valeo Siemens New Energy Vehicle Joint Venture will be fully integrated into Valeo Powertrain, which will further increase its sales target of 40 billion euros by 2030.
Financial outlook
As the impact of core loss gradually improves, the next few years will be a key node for electric vehicle manufacturers to accelerate their layout, and it is also an important period for automotive component suppliers to challenge the market pattern.
Looking ahead, Valeo plans to increase OEM sales by about 13% by 2025, more than 5% more than the market. Total sales in 2025 will be approximately EUR 27.5 billion, of which OEMs will sell approximately EUR 24 billion.
Although the automotive industry has been affected by rising raw material and energy prices, Valeo expects EBITDA margins and operating margins to increase to around 14.5% and 6.5% of sales by 2025. In terms of cash flow, Valeo aims to reach between 800 million and 1 billion euros by 2025.