Gasgoo Munich- Valeo has released its first-half 2026 results, highlighting a significant boost in profit quality and cash generation. The company confirmed its full-year targets remain unchanged: sales between 20 billion and 21 billion euros, and an operating margin of 4.7% to 5.3%.
Sales climbed to 10.4 billion euros in the first half, up 0.7% year-on-year. Despite a 1.0% headwind in the broader market, original equipment sales slipped just 0.6% to 8.5 billion euros, with the Smart Systems and Vision Systems divisions outperforming the industry average. Operating profit reached 514 million euros, a 5% margin representing an 8% annual increase, extending a trend of rising profitability that began in 2022.
Image Source: Valeo
Even more striking is the shift in cash flow quality. Free cash flow jumped to 242 million euros in the first half — a figure Valeo attributes to a structural improvement in its cash generation capabilities. Consequently, net financial debt fell from 4.02 billion euros at the end of 2025 to 3.83 billion euros, optimizing the leverage ratio from 1.3 times to 1.2 times.
On the order front, new bookings totaled 12.1 billion euros, aligning with the trajectory set by the "Move Up 2028" strategy. Crucially, Valeo secured a landmark breakthrough in adjacent markets by winning its first contract to manufacture drone motors. This signals that its core technologies can cross over without additional R&D spending, opening new avenues for medium- to long-term growth.
Chief Executive Officer Christophe Périllat said the first-half performance demonstrates the group is advancing with rigor and pragmatism. The "Move Up 2028" strategic plan is proceeding smoothly, he noted, with profitability steadily rising and cash generation achieving structural optimization — strong enough to allow the group to meet its debt reduction targets by the first half alone.
Against a backdrop of geopolitical and macroeconomic uncertainty, the team remains resolute, maintaining strict discipline over cost controls. Périllat also pointed to robust business momentum, noting that the order book fits perfectly with the strategic roadmap. Early progress in applying its technology to markets outside the automotive sector — without extra development costs — has been particularly encouraging.
