PARIS -- Valeo profit fell 24 percent in the second half of 2017 as the supplier faced adverse exchange rates and raw material prices, invested more in future vehicle technologies and took a one-off charge related to U.S. tax cuts.
Valeo has positioned itself to benefit from a widespread regulatory emissions crackdown, thanks to its push into electrification and other fuel-saving vehicle technologies. It has also become a major supplier of autonomous driving systems.
Net income dropped to 380 million euros ($468 million) in July-December, the company said, on an 8 percent increase in group revenue to 9.09 billion.
The results reflected "a more complex economic environment," including a stronger euro and volatile raw material costs, CEO Jacques Aschenbroich said in a statement.
Second-half operating income rose 5 percent to 723 million euros, for an 8 percent operating margin -- down from 8.2 percent a year earlier. Tax cuts reduced the value of Valeo's deferred tax assets, wiping 117 million euros from its bottom line.
R&D spending rose 16 percent to 548 million euros as Valeo expanded its electric and autonomous vehicle technology program. But Aschenbroich stressed the r&d outlay was stable as a share of rising order intake.
The company said it was targeting 8 percent revenue growth this year, with an operating margin close to its 2017 level of 7.8 percent before equity contributions. It proposed an unchanged 1.25-euro dividend on 2017 earnings.
Valeo Siemens eAutomotive, a joint venture created in 2016 to develop competitive electric and hybrid vehicle systems, booked 6.1 billion euros in orders last year and 10 billion euros to date -- of which more than half in China.
The venture's sales are expected to exceed 2 billion euros by 2022, Valeo said on Wednesday.
Valeo ranks No. 10 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $17.4 billion in 2016.