Pre-Q3 2026 Sales Communication Memo

September 29, 2026, Valeo has compiled the following items for consideration ahead of Q3 2026 sales, due for publication on October 22, 2026 after market. This document is not intended to provide additional information beyond existing disclosures.

Please refer to Valeo's Investor Relations website for Group's Financial Information: https://www.valeo.com/en/investors-shareholders-at-a-glance/

Following the publication of H1 2026 results, Valeo reaffirmed its 2026 guidance for sales, operating margin and free cash flow.

*:according to the definition introduced at the CMD of 20 November 2025, i.e. after net financial expenses.

Assuming stable market conditions, macroeconomic projections and supply chain, the Group targets an operating margin (as a % of sales) and free cash flow in the second half of the year at least equivalent to those of the first half.

Continuing to trade according to plan

• Market environment

  Global market conditions remain consistent with expectations, confirming regional trends experienced in H1: stable to slightly positive conditions in Europe and North America, weakness and volatility in China.

  Management comment from the H1 2026 results call on the Chinese market

  "China, as you know, is a highly volatile market, but thanks to several new large contracts with leading Chinese OEMs, we see a return to growth in H2 with Chinese automakers. Note that our orders are now largely skewed towards Chinese OEMs, more than 80% of the order intake in the country and the remarkable five times order intake ratio with Chinese OEMs that will support growth in China."

• Raw materials costs

  Two waves of inflation are ongoing

  • Inflation related to the Middle East crisis

    Indirect consequences on costs (energy, transportation, materials) are managed via a combination of long-term contracts (energy), indexation clauses (most commodities

    including aluminium, copper, steel and some resins) and pass through discussions with customers. The overall impact remains limited.

  • AI-driven inflation

In 2025, memory procurement accounted for around $150m of Valeo's purchasing volume (out of a total of €11.5bn of raw materials consumed).

For 2026, volumes needed to cover supply requirements and prices are secured. Constructive discussions are engaged with customers regarding the extra-cost pass through with the objective of being fully compensated.

For 2027: work is ongoing to secure required volumes at the lowest possible gross cost.

Management comment from the H1 2026 Results call on inflation

"There are two waves of inflation going on. One is linked to the Middle East and the price of oil, and it drives up copper, steel, aluminium, resin, basically raw material. And there's another wave, which is driven by the AI expansion, and that's about memories and some electronic components. So, the first one is something that we are very familiar with. There are indexes. When there's no index, we are used to working with our customers. I think it was more or less business as usual when it comes to this wave of inflation. Relative to the second one, that's more specific because we have never seen that before. The price of memories is going up. The price of electronic components is likely to go up for some specific electronic components. So we had to educate our customers. And we had to book memories and components in quantities that are high enough to make sure that we deliver all our customers. And by doing so, by booking these volumes, you talk to your customers on a daily basis. It's quantity, it's price, it's commitment. We had these discussions in H1. I think we made some outstanding progress when it comes to memory inflation. H1 was a very important semester of progress in these discussions and we will continue at the same pace in the second half of the year."

Currency

Main currency variations are detailed in the table below.

‌*Q3 & 9M 2026 average as of September 23, 2026.‌‌

Perimeter impact

A perimeter impact is expected in Q3, mainly linked to the sale of the automotive powertrain system sensor business (POWER Division) completed on November, 30 2025. The business represented sales of €133m in 2025 (11 months of operations). The other transactions completed during 2025 (sale of the subsidiary Gestigon, the Malaysian decorated parts business and the minority interest in Faw-Valeo Climate Control Systems joint-venture) represented a minor amount of consolidated sales.

Sales

FY 2026 sales guidance of €20bn to €21bn takes into account:

• Flat organic growth in OEM sales (FY 2025 OEM sales of €17,301m)

• Forex and perimeter impacts of -€0.4bn

• While not included in the formal guidance, both the Brain Division and sales in China with Chinese OEMs are expected to return to growth in H2 2026

Management comment regarding BRAIN (reminder from the Q1 2026 sales call)

"The underlying growth of Brain will come. I hinted that I would be disappointed if Brain would not grow in H2 this year."

Operating margin

• IFRS impact expected at <1.0 pt in 2026 and <1.5 pts in H2 2026.

  For the record, IFRS impact in 2025 was 0.4 pts, after €234m impairment losses for contract cancellations (~1.1 pts).

  Management comment on H2 operating margin

  "We said that H2 margin would be at least equivalent to H1. And where does it come from? We do see stability in the call offs from our customers for H2. As usual, we build step-by-step the efficiency during the year with our suppliers, with our own activities while we give our efficiencies to our customers usually at the very beginning of the year. This is why we consider that H2 should be okay. And finally, inflation is at that stage very well managed by our teams. They are doing a fantastic job to secure that. On the one hand, we get lower pressure or we counter the pressure from our suppliers. And on the other hand, what has to be passed through the customers is passed through at the end. This is why we could say or explain our ambition of H2 being at least equivalent to H1."

  Free Cash Flow Investments

• Intangible capex: as stated at the CMD and reiterated since then, gross R&D will no longer grow

  from the €2.4bn reached in 2025

• Industrial capex (PP&E): strict control will continue in H2 2026, potentially achieving again a level below the long-term objective of 4.5%-5.0% of sales (FY 2025: 3.8%, H1 2026: 3.6%)

  Management comment from the H1 2026 Sales call on capex

  "We expect to sustain this [achieving a level of capex below the long-term objective] for the full year '26. We confirm our potential to again keep the CapEx intensity below the long-term objectives of 4.5% to 5% of sales."

  "We buy better, we reuse better, we standardize better. And at the end of the day, that's less investment for the same amount of sales. [...] Despite the high order intake, despite the fact that we are going to grow, we need less CapEx and less R&D for the business model of the group."

  Change in Working Capital

• For the record, the change in Working Capital in 2025 was -€301m (-€26m in H1 2026), impacted by customer compensation agreed during 2025 and not yet collected on December 31st. These compensations will be cashed in over the subsequent years.

  Cash Tax

• In 2026, an extra-charge should be recorded of the same order of magnitude as 2025 (€41m) related to the process of repatriating cash from outside Europe.

  Management comment on tax rate

  "As far as the tax rate is concerned, 48% is definitely very high. It is clearly impacted by the repatriation of dividend policy. It will take some time to do it. Remember I said last year it would take something like three years. So you can count on a quite high level of tax rate for the years '26 and '27. Nevertheless, it does not prevent us from continuing to work and try to improve as much as we can. So I'm not promising any miracle here, but clearly the objective is to take this tax rate down in the future."

  Restructuring costs and savings

• Restructuring benefits: incremental savings of €100m expected in 2026 bringing the total annual savings to €300m.

• Restructuring costs: P&L and cash costs recapped in the below chart.

  
  
  Financing

• Valeo announced on May 27, 2026, a new bond issue for 600 million euros, maturing on February 3, 2033, with a coupon of 4.875%.

• Following the €600m bond issuance in May 2026, Valeo completed the early make-whole redemption of its €750m 5.375% bond due May 2027 on August 24, 2026, extending its debt maturity profile with the next major repayment now set for August 2028.

Statements contained in this document which, when they are not historical fact, constitute "forward-looking statements". These statements include projections and estimates and their underlying assumptions, statements regarding projects, objectives, intentions and expectations with respect to future financial results, events, operations, services, and product development and potential and future performance. Even though Valeo's Management feels that the forward-looking statements are reasonable as at the date of this document, investors are put on notice that the forward-looking statements are subject to numerous factors, risks and uncertainties that are difficult to predict and generally beyond Valeo's control, which could cause actual results and events to differ materially from those expressed or projected in the forward-looking statements. Such factors include, among others, the Company's ability to generate cost savings or

manufacturing efficiencies to offset negotiated or imposed price reductions. The risks and uncertainties to which Valeo is exposed mainly comprise the risks related to the automotive equipment industry and to the development and launch of new products and risks due to certain global and regional economic and geopolitical conditions, environmental and industrial risks as well as risks and uncertainties described or identified in the public documents submitted by Valeo to the French financial markets authority (Autorité des marchés financiers - AMF), including those set out in the "Risk Factors" section of the 2025 Universal Registration Document registered with the AMF on March 31, 2026 (under number D.26-0184).

In addition, other risks which are currently unidentified or considered to be non-material by the Group, could have the same adverse impact and investors could lose all or part of their investment. Forward-looking statements are given only as at the date of this document and Valeo does not undertake to update the forward-looking statements to reflect events or circumstances which occur subsequent to the publication of this document. Valeo assumes no responsibility for any analyses issued by analysts and any other information prepared by third parties which may be used in this document. Valeo neither intends to review, nor will it confirm, any estimates issued by analysts.

‌Valeo is a leading global technology company creating innovative solutions and systems for automotive and technology partners worldwide. Valeo is structured around its POWER, BRAIN and LIGHT Divisions, and Valeo Service, the augmented service partner, for the aftermarket and new forms of mobility.

Valeo is committed to making mobility safer, more sustainable and affordable to all. The Group is playing a vital role in shaping the Car of Tomorrow: which will be electrified, safer and software-defined. Valeo is leveraging its global industrial footprint and its technological leadership in electrification, advanced driver assistance systems, lighting and software to capture an increasing share of value per vehicle.

Valeo is listed on the Paris Stock Exchange.

‌Valeo in brief: €20.9 billion in sales in 2025 | 100,000 employees worldwide | 29 countries | 149 production plants | 59 R&D centers | 19 distribution platforms (as of February 26, 2026).

Learn more at https://www.valeo.com

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