Valeo Unveils its Strategic Plan Elevate 2028
Valeo has announced its Elevate 2028 plan, aiming to enhance profitability, increase cash flow generation, and achieve revenue growth, according to the group.
Financial Targets and Projections
According to Valeo's press release, the group aims to achieve a revenue between 22 and 24 billion euros by 2028, with an operating margin of 6 to 7%. The free cash flow after net financial expenses is expected to be at least 500 million euros, which would reduce the debt ratio below 1.0x adjusted EBITDA. The targets for 2025 concerning adjusted EBITDA and operating margin have been confirmed despite challenging market conditions, with anticipated free cash flow slightly above the initial target, more than 550 million euros.
Strategic Initiatives and Efficiency Measures
Valeo is pursuing several strategic initiatives as part of its Elevate 2028 plan, including an increase in profitability started in 2022 and enhanced cash generation from 2025. In terms of research and development, the group plans to reduce gross expenditures by 200 million euros in 2025 compared to 2024, while increasing productivity through artificial intelligence. Valeo does not anticipate any acquisitions or divestitures in its current trajectory, but any opportunity will be evaluated based on value creation and balance sheet strength.
Positioning for Future Technologies and Market Expansion
Valeo is positioning itself to capitalize on the growth of future vehicle technologies, with a particular focus on electrification and centralized software architectures. According to Valeo, sales growth is expected to restart in 2027, supported by a strong order book. The company also plans to expand its presence in key markets such as China, India, and North America. In terms of sustainability, Valeo maintains its position among the leaders recognized by ESG rating agencies, aiming for a Net Zero trajectory by 2050.
