Valeo confirms 2026 targets as first-half profit rises

Investing.com -- Valeo SA (EPA:FR) reported first-half 2026 results that showed improved profitability and cash generation, while the company reaffirmed its full-year guidance on Wednesday.

The French auto parts supplier posted sales of €10.4 billion for the first half, up 0.7% on a like-for-like basis compared to the same period last year. Operating margin reached €514 million, or 5.0% of sales, up 8% from €476 million in the first half of 2025.

The company's BRAIN and LIGHT divisions outperformed global automotive production, which declined 1.0% in the period. Original equipment sales of €8.5 billion fell 0.6% like-for-like, performing slightly better than the overall market.

The company's ADRs fell 1.3% following the announcement.

Free cash flow more than doubled to €242 million from €100 million in the first half of 2025, reflecting improved operational efficiency and strict cost management. Net debt decreased by nearly €200 million to €3,828 million, with the leverage ratio improving to 1.2x from 1.3x at year-end 2025.

"The results for the first half of 2026 demonstrate that Valeo continues to move forward with rigor and consistency," said Christophe Périllat, Chief Executive Officer. "Our profitability continues to progress, we confirm the structural improvement in our ability to generate cash at a level that enables us to reduce our debt as early as the first half."

Valeo reaffirmed its 2026 guidance, targeting sales of €20 billion to €21 billion, operating margin of 4.7% to 5.3% of sales, and free cash flow exceeding €400 million. The midpoint of the sales guidance range of €20.5 billion sits slightly above the analyst consensus of €20.42 billion.

The company expects second-half operating margin and free cash flow to be at least equivalent to first-half levels, assuming stable market conditions.

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