Valeo has announced its financial results for the first half of 2026 (H1 2026), reporting improved profitability, stronger cash generation and continued commercial momentum despite challenging global market conditions. The automotive technology supplier also reaffirmed its full-year 2026 guidance while highlighting steady progress under its Elevate 2028 strategic plan.
During the first six months of 2026, Valeo generated sales of €10.4 billion, representing a 0.7% increase on a like-for-like basis. The company’s BRAIN and LIGHT divisions outperformed global automotive production, with original equipment sales totaling €8.5 billion, declining just 0.6% like for like against a global automotive production market that contracted by 1.0%.
Profitability and cash flow continue to improve
Valeo reported an operating margin of €514 million, equivalent to 5.0% of sales, marking an 8% increase compared to the first half of 2025. The company said the result reflects the steady improvement in profitability achieved since 2022 through disciplined cost management and operational execution.
Free cash flow rose significantly to €242 million, compared with €100 million in the same period last year, highlighting the group’s stronger structural ability to generate cash.
The improved cash generation also supported balance sheet strengthening, with net financial debt declining to €3.83 billion from €4.02 billion at the end of 2025. As a result, Valeo reduced its leverage ratio to 1.2x, down from 1.3x at December 31, 2025.
Order intake supports Elevate 2028 strategy
Valeo recorded order intake of €12.1 billion during the period, in line with the objectives of its Elevate 2028 roadmap.
The company also continued expanding beyond the automotive sector, securing its first contract to manufacture drone motors, demonstrating the potential of leveraging its existing technologies for adjacent industries without significant additional development costs.
Valeo confirms 2026 outlook
Based on current market conditions, Valeo reaffirmed all of its financial targets for 2026, including:
- Sales of €20-21 billion
- Operating margin between 4.7% and 5.3%
- Free cash flow exceeding €400 million after net financial interest
The company also expects second-half operating margin and free cash flow to be at least in line with first-half performance, assuming stable macroeconomic conditions, automotive demand and supply chain operations.
Commenting on the results, Christophe Périllat, Chief Executive Officer of Valeo, said the company remains firmly on track with its long-term transformation strategy.
“The results for the first half of 2026 demonstrate that Valeo continues to move forward with rigor and consistency. Execution of the Elevate 2028 plan is well underway: our profitability continues to improve, 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, and we are actively preparing our return to growth in 2027.”
He added that despite geopolitical and macroeconomic uncertainties, the company has maintained strong operational discipline while sustaining healthy commercial momentum.
“Our commercial momentum remains strong, supported by order intake in line with the trajectory of the Elevate 2028 plan. We are also continuing to capitalize on opportunities beyond the automotive industry where our technologies can be deployed without additional development costs. Bolstered by this operational strength and the quality of our order book, we confirm all of our 2026 objectives and remain firmly on track to deliver our strategic roadmap,” Périllat said.
With improving profitability, stronger free cash flow, reduced debt and continued investment in both automotive and adjacent technology markets, Valeo says it remains well positioned to execute its Elevate 2028 strategy and prepare for a return to sustainable growth in 2027.
