The impacts of retrospectively applying IFRS 15 – “Revenue from Contracts with Customers” on 2017 comparative information, as it will be presented in the consolidated financial statements for the six months ended June 30, 2018, are as follows:
- the external cost of components imposed by customers, which was previously accounted for in original equipment sales, is now presented as a deduction from “Raw materials consumed”. This reclassification results in a 425 million euro reduction in sales for 2017 and mainly concerns the Thermal Systems Business Group’s front-end module operations;
- customer contributions to Research and Development (including prototypes), which were previously presented as a deduction from “Research and Development expenditure”, are now presented in sales under “Miscellaneous”. This reclassification to sales represents an amount of 364 million euros for 2017, resulting in a 2.0 percentage point rise in Research and Development expenditure as a percentage of sales (from 6.1% to 8.1%);
- Product Development is usually considered to be related to the production process. Accordingly, customer contributions are recognized in sales over the series production period, although the accounting treatment applied may vary based on projects’ specific contractual or operational features. The application of IFRS 15 results in the deferred recognition of sales, thereby reducing the Group’s operating margin for 2017, including share in net earnings of equity-accounted companies, by 7 million euros (excluding the tax impact).
The retrospective application of IFRS 9 – “Financial Instruments” results in a 12 million euro reduction in net debt at January 1, 2017 and a 2 million euro increase in financial expenses for 2017 relating to the debt renegotiation that took place in 2014 (see Valeo’s 2017 Registration Document, page 294, for a detailed explanation of the application of this standard).
| IFRS 15 | IFRS 9 | |||||
| (in millions of euros) | 2017 – Published | Reclassification of components imposed by customers | Reclassification of customer contributions to R&D | Customer contributions to Product Development | Debt renegotiation that took place in 2014 | 2017 – Restated |
| Total sales | 18,550 | -425 | +364 | -5 | – | 18,484 |
| Cost of sales | (15,076) | +425 | – | – | – | (14,651) |
| Research and Development expenditure | (1,130) | – | -364 | – | – | (1,494) |
| As a % of sales | 6.1% | 8.1% | ||||
| Operating marginexcluding share in net earnings of equity accounted companies | 1,455 | – | – | -5 | – | 1,450 |
| As a % of sales | 7.8% | 7.8% | ||||
| Share in net earnings of equity accounted companies | 22 | – | – | -2 | – | 20 |
| Operating marginincluding share in net earnings ofequity-accounted companies | 1,477 | – | – | -7 | – | 1,470 |
| As a % of sales | 8.0% | 8.0% | ||||
| Cost of net debt | (73) | – | – | – | -2 | (75) |
| Income tax expense | (325) | – | – | +1 | – | (324) |
| Net attributable income | 886 | – | – | -6 | -2 | 878 |
| As a % of sales | 4.8% | 4.8% | ||||
2017 data differ from the amounts presented in the 2017 consolidated financial statements published in February 2018 since they have been adjusted to reflect the impact of retrospectively applying these standards. The data are presented in the pro forma tables below:
Sales by type
| Published (before application of IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Original Equipment | 4,174 | 4,061 | 8,235 | 3,751 | 4,134 | 7,885 | 16,120 |
| Aftermarket | 487 | 476 | 963 | 446 | 478 | 924 | 1,887 |
| Miscellaneous | 106 | 160 | 266 | 104 | 173 | 277 | 543 |
| TOTAL | 4,767 | 4,697 | 9,464 | 4,301 | 4,785 | 9,086 | 18,550 |
| Pro forma (restated under IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Original Equipment | 4,067 | 3,960 | 8,027 | 3,648 | 4,020 | 7,668 | 15,695 |
| Aftermarket | 487 | 476 | 963 | 446 | 478 | 924 | 1,887 |
| Miscellaneous | 189 | 254 | 443 | 175 | 284 | 459 | 902 |
| TOTAL | 4,743 | 4,690 | 9,433 | 4,269 | 4,782 | 9,051 | 18,484 |
| Adjustment (restatement under IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Original Equipment | -107 | -101 | -208 | -103 | -114 | -217 | -425 |
| Aftermarket | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Miscellaneous | +83 | +94 | +177 | +71 | +111 | +182 | +359 |
| TOTAL | -24 | -7 | -31 | -32 | -3 | -35 | -66 |
Original equipment sales by destination region
| Published (before application of IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Europe & Africa | 2,001 | 1,919 | 3,920 | 1,726 | 1,904 | 3,630 | 7,550 |
| Asia, Middle East & Oceania | 1,189 | 1,192 | 2,381 | 1,200 | 1,384 | 2,584 | 4,965 |
| of which China | 564 | 548 | 1,112 | 557 | 702 | 1,259 | 2,371 |
| excluding China | 625 | 644 | 1,269 | 643 | 682 | 1,325 | 2,594 |
| North America | 895 | 857 | 1,752 | 732 | 751 | 1,483 | 3,235 |
| South America | 89 | 93 | 182 | 93 | 95 | 188 | 370 |
| TOTAL | 4,174 | 4,061 | 8,235 | 3,751 | 4,134 | 7,885 | 16,120 |
| Pro forma (restated under IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Europe & Africa | 1,990 | 1,910 | 3,900 | 1,716 | 1,898 | 3,614 | 7,514 |
| Asia, Middle East & Oceania | 1,167 | 1,171 | 2,338 | 1,167 | 1,344 | 2,511 | 4,849 |
| of which China | 545 | 529 | 1,074 | 526 | 668 | 1,194 | 2,268 |
| excluding China | 622 | 642 | 1,264 | 641 | 676 | 1,317 | 2,581 |
| North America | 821 | 786 | 1,607 | 672 | 683 | 1,355 | 2,962 |
| South America | 89 | 93 | 182 | 93 | 95 | 188 | 370 |
| TOTAL | 4,067 | 3,960 | 8,027 | 3,648 | 4,020 | 7,668 | 15,695 |
| Adjustment (restatement under IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Europe & Africa | -11 | -9 | -20 | -10 | -6 | -16 | -36 |
| Asia, Middle East & Oceania | -22 | -21 | -43 | -33 | -40 | -73 | -116 |
| of which China | -19 | -19 | -38 | -31 | -34 | -65 | -103 |
| excluding China | -3 | -2 | -5 | -2 | -6 | -8 | -13 |
| North America | -74 | -71 | -145 | -60 | -68 | -128 | -273 |
| South America | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| TOTAL | -107 | -101 | -208 | -103 | -114 | -217 | -425 |
Sales by Business Group (including intersegment sales)
| Published (before application of IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Comfort & Driving Assistance Systems | 938 | 899 | 1,837 | 859 | 894 | 1,753 | 3,590 |
| Powertrain Systems | 1,105 | 1,058 | 2,163 | 963 | 1,174 | 2,137 | 4,300 |
| Thermal Systems | 1,312 | 1,282 | 2,594 | 1,157 | 1,252 | 2,409 | 5,003 |
| Visibility Systems | 1,458 | 1,495 | 2,953 | 1,355 | 1,500 | 2,855 | 5,808 |
| TOTAL | 4,767 | 4,697 | 9,464 | 4,301 | 4,785 | 9,086 | 18,550 |
| Pro forma (restated under IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Comfort & Driving Assistance Systems | 962 | 927 | 1,889 | 878 | 932 | 1,810 | 3,699 |
| Powertrain Systems | 1,117 | 1,071 | 2,188 | 973 | 1,193 | 2,166 | 4,354 |
| Thermal Systems | 1,224 | 1,201 | 2,425 | 1,070 | 1,166 | 2,236 | 4,661 |
| Visibility Systems | 1,485 | 1,529 | 3,014 | 1,381 | 1,526 | 2,907 | 5,921 |
| TOTAL | 4,743 | 4,690 | 9,433 | 4,269 | 4,782 | 9,051 | 18,484 |
| Adjustment (restatement under IFRS 15) | |||||||
| (in millions of euros) | Q1 2017 | Q2 2017 | H1 2017 | Q3 2017 | Q4 2017 | H2 2017 | Full-year 2017 |
| Comfort & Driving Assistance Systems | +24 | +28 | +52 | +19 | +38 | +57 | +109 |
| Powertrain Systems | +12 | +13 | +25 | +10 | +19 | +29 | +54 |
| Thermal Systems | -88 | -81 | -169 | -87 | -86 | -173 | -342 |
| Visibility Systems | +27 | +34 | +61 | +26 | +26 | +52 | +113 |
| TOTAL | -24 | -7 | -31 | -32 | -3 | -35 | -66 |
EBITDA* by Business Group
| Published (before application of IFRS 15) |
Pro forma (restated under IFRS 15) |
Adjustment (restatement under IFRS 15) |
||||||||||
| (in millions of euros)(as a % of sales) | H1 2017 | H2 2017 | Full-year 2017 | H1 2017 | H2 2017 | Full-year 2017 | H1 2017 | H2 2017 | Full-year 2017 | |||
| Comfort & Driving Assistance Systems | 266 | 256 | 522 | 267 | 258 | 525 | +1 | +2 | +3 | |||
| 14.5% | 14.6% | 14.5% | 14.1% | 14.3% | 14.2% | -0.4 pts | -0.3 pts | -0.3 pts | ||||
| Powertrain Systems | 276 | 290 | 566 | 275 | 289 | 564 | -1 | -1 | -2 | |||
| 12.8% | 13.6% | 13.2% | 12.6% | 13.3% | 13.0% | -0.2 pts | -0.3 pts | -0.2 pts | ||||
| Thermal Systems | 267 | 272 | 539 | 266 | 270 | 536 | -1 | -2 | -3 | |||
| 10.3% | 11.3% | 10.8% | 11.0% | 12.1% | 11.5% | +0.7 pts | +0.8 pts | +0.7 pts | ||||
| Visibility Systems | 392 | 375 | 767 | 391 | 373 | 764 | -1 | -2 | -3 | |||
| 13.3% | 13.1% | 13.2% | 13.0% | 12.8% | 12.9% | -0.3 pts | -0.3 pts | -0.3 pts | ||||
| TOTAL | 1,215 | 1,221 | 2,436 | 1,213 | 1,218 | 2,431 | -2 | -3 | -5 | |||
| 12.8% | 13.4% | 13.1% | 12.9% | 13.5% | 13.2% | +0.1 pts | +0.1 pts | +0.1 pts | ||||
* See Financial Glossary, page 6.
Earnings and net debt
| Published (before application of IFRS 15 and IFRS 9) | Pro forma (restated under IFRS 15 and IFRS 9) | Adjustment (restatement under IFRS 15 and IFRS 9) | ||||||||||
| (in millions of euros)(as a % of sales) | H1 2017 | H2 2017 | Full-year 2017 | H1 2017 | H2 2017 | Full-year 2017 | H1 2017 | H2 2017 | Full-year 2017 | |||
| Sales | 9,464 | 9,086 | 18,550 | 9,433 | 9,051 | 18,484 | -31 | -35 | -66 | |||
| Cost of sales | (7,703) | (7,373) | (15,076) | (7,495) | (7,156) | (14,651) | +208 | +217 | +425 | |||
| -81.4% | -81.1% | -81.3% | -79.5% | -79.1% | -79.3% | +1.9 pts | +2.0 pts | +2.0 pts | ||||
| R&D expenditure | (582) | (548) | (1,130) | (761) | (733) | (1,494) | -179 | -185 | -364 | |||
| -6.1% | -6.0% | -6.1% | -8.1% | -8.1% | -8.1% | -2.0 pts | -2.1 pts | -2.0 pts | ||||
| Selling and | (454) | (435) | (889) | (454) | (435) | (889) | 0 | 0 | 0 | |||
| administrative expenses | -4.8% | -4.8% | -4.8% | -4.8% | -4.8% | -4.8% | 0.0 pts | 0.0 pts | 0.0 pts | |||
| Operating marginexcluding share in net earnings of equity-accounted companies | 725 | 730 | 1,455 | 723 | 727 | 1,450 | -2 | -3 | -5 | |||
| 7.7% | 8.0% | 7.8% | 7.7% | 8.0% | 7.8% | 0.0 pts | 0.0 pts | 0.0 pts | ||||
| Share in netearnings of equity-accounted companies | 29 | (7) | 22 | 29 | (9) | 20 | 0 | -2 | -2 | |||
| Operating marginincluding share in net earnings of equity-accounted companies* | 754 | 723 | 1,477 | 752 | 718 | 1,470 | -2 | -5 | -7 | |||
| 8.0% | 8.0% | 8.0% | 8.0% | 7.9% | 8.0% | 0.0 pts | -0.1 pts | 0.0 pts | ||||
| Net attributable income | 506 | 380 | 886 | 504 | 374 | 878 | -2 | -6 | -8 | |||
| 5.3% | 4.2% | 4.8% | 5.3% | 4.1% | 4.8% | 0.0 pts | -0.1 pts | 0.0 pts | ||||
| Net debt* | 1,118 | 1,852 | 1,852 | 1,107 | 1,842 | 1,842 | -11 | -10 | -10 | |||
* See Financial Glossary, page 6.
