Valeo expects to outperform the market in the medium term as car production volumes recover, the supplier said after posting a 5 percent rise in 2021 sales despite a hit from the global chip shortage.
"After two years impacted by the COVID-19 crisis and the electronic component shortage, Valeo intends to take full advantage of the recovery in volumes forecast for the 2022-2025 period," the French company said in a statement.
Valeo, the world's 10th largest auto supplier, aims to increase its original equipment sales by around 13 percent to outperform the market by more than 5 percentage points, assuming global car production of around 98.5 million vehicles in 2025.
However, Valeo warned its business continued to be impacted by the chip shortages which have caused disruptions in its customers' production schedules.
Semiconductor suppliers, car parts producers and automakers have said they expect to see some improvement in the chip shortages, which have plagued supply chains across the world, in the second half of the year, as chipmakers boost production capacity to meet the demand.
The group's sales reached 17.26 billion euros ($19.35 billion) in 2021. For this year, it sees sales between 19.2 billion and 20.0 billion euros.
Its core profit margin is expected to come in a range of 11.8 percent to 12.3 percent, below last year's level of 13.4 percent.
The outlook does not include possible negative impacts from the conflict between Ukraine and Russia, which could drag production volumes and hike energy or raw material prices, Valeo said.
The group also plans to divest 500 million euros worth of non-strategic assets in 2022-2025 to bring its leverage ratio down and targets a "gradual recovery" in its dividend.
It proposed a dividend of 35 cents per share for 2021, up 17 percent from a year earlier.
Valeo ranks No.10 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $16.9 billion in 2020.