Valeo (VLOF.PA) 1H26 London Roadshow: Feedback from our CEO and CFO investor group meeting

Research evidence excerpt

Valeo (VLOF.PA) 1H26 London Roadshow: Feedback from our CEO and CFO investor group meeting

Valeo (VLOF.PA)

27 July 2026 Citi Research

China are with local manufacturers. Chinese OEMs represented roughly 25% of global orders in 1H26, broadly in line with their

market share. Valeo operates without JVs in China and believes business is won on technological competence. Capacity

planning is based on S&P Global forecasts rather than customer volume ambitions, with production flexibility supported

through standardised manufacturing lines.

Local Content Rules / IAA: Management believes Chinese OEMs will increasingly need to establish manufacturing operations

in Europe. Discussion around IAA and local content rules reinforces Valeo's view that localisation will become more important

as Chinese brands expand internationally, creating opportunities for suppliers with established regional production

footprints.

Non-Auto Activities (Defence and Data Centres): Valeo sees data centres as a more attractive opportunity than defence and

has been developing liquid-cooling products for ~3 years. The portfolio includes rear-door cooling systems, CDUs and direct-

to-chip solutions. Management believes Valeo offers advantages in cost, weight and thermal efficiency and that customers

increasingly value reliable suppliers that can scale. No contribution from data centres is included in the 2028 plan, making any

wins upside. Production would typically start 12-15 months after an award, with limited incremental capex required. Valeo

sees aluminium as a key differentiator versus copper for rear-door cooling, citing lower cost (~$3k/t vs ~$13k/t), lower weight

and superior thermal performance. Defence activities remain focused on motors, propellers and PCBs, while the company also