Valeo has now acquired Siemens’ 50% stake in Valeo Siemens eAutomotive, as provided for in the agreement signed with Siemens on 9 February.
Valeo now holds 100% of Valeo Siemens eAutomotive, the self-proclaimed “leader in high voltage electrification”, which has been integrated into its Powertrain Systems business.
“This strategic transaction strengthens Valeo’s position as a major player in electrification with a full range of low and high voltage electric powertrain [products] covering all uses and needs,” the supplier said.
CEO Christophe Perillat said: “Valeo is accelerating in electrification, as announced at the presentation of our Move Up plan. Thanks to this transaction, Valeo has positioned itself better than ever before as a leader in electric mobility, with a unique advantage in this fast-accelerating market and a range of technologies that covers absolutely all needs and uses.
“We will benefit from the unique expertise in high voltage electrification developed by Valeo Siemens. In return, the business will benefit from Valeo’s unique ability to innovate and standardise cutting edge technology as well as from our operational excellence in mass production.”
With Valeo Siemens eAutomotive, Valeo is adding “a recognised technological and industrial leader” with 4,000 employees, including 1,600 engineers, seven production sites in four countries (China, Germany, Hungary and Poland) as well as R&D (laboratories, test benches, simulation tools) and production capacity.
Its electric powertrain systems, motors, inverters and onboard chargers are used on the main platforms of 20 automakers and will equip 90 electric and plug-in hybrid car models by the end of 2022.
Valeo Siemens eAutomotive announced early in June it had already exceeded its target of EUR4 billion in orders for the 2021–2022 period, more than seven months ahead of plan.
The value of the high voltage electrification market is set to increase significantly in the coming years and will represent EUR92 billion in 2030 (annual growth of 17.5% over the 2021–2030 period). 40% of this market will be outsourced to automotive suppliers. By 2030, the market for vehicles equipped with high voltage electric powertrain systems (BEVs and PHEVs) will account for 35% of automotive production worldwide.
Valoe expects the integration of Valeo Siemens eAutomotive to accelerate its growth, enable it to offer increasingly high performance products (new 800V silicon carbide based technology, co-development and co-production of a rare-earth-free electric motor with Renault and new bidirectional onboard chargers) and unlock major synergies worth EUR120 million by 2025. This will be achieved progressively, with the full benefit delivered in 2025 (50% in 2023, 75% in 2024 and 100% in 2025).
The suppler aims to achieve annual sales growth of 12% for its powertrain systems business over the 2021–2025 period and to reach sales of EUR8.5 billion in 2025 (compared to EUR5.4 billion in 2021), including roughly EUR7.5 billion in OEM sales. 80% of the sales target for 2025 has already been booked.
The EBITDA margin for the powertrain systems business will increase rapidly from 5.8% in 2021 to 8% in 2022 and around 13% in 2026. Free cash flow for this business will break even from 2022, reaching around EUR350 million in 2025 and enabling the new entity to self-finance growth.
The transaction resulted in a net cash outflow of EUR277 million from Valeo, representing the acquisition of Siemens’ stake on a debt-free basis, financed by the group’s available cash. Net debt increased by around EUR700 million without substantially modifying the overall financial position. Valeo expects to reduce its debt from 2023.