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Valeo, one of the world’s biggest suppliers to the car industry, faced one of its heaviest sell-offs on record as slowing growth in the second half of 2017 dented confidence in the company.

Valeo’s shares were down as much as 11 per cent in Paris trade, compared with a 0.13 per cent decline for the benchmark CAC 40 index.

The Paris based auto supplier, which reported full year results after markets closed on Thursday, saw net income fall 4 per cent over the course of the year to €886m, in large part due to the impact of US tax reform.

Significantly, Valeo said that net income fell 25 per cent to $380m in the second half of the year with the US tax reform costing the company €117m

Valeo’s results “fell clearly short of expectations due to weaker-than-expected organic growth (4.2 per cent only in the fourth quarter), continuing the softer momentum seen in the third quarter and lower than both its French peers and Continental for the third quarter in a row,” said Thomas Besson at Kepler Cheuvreux.

“More surprisingly, the company guides for softer organic growth still in 2018, aiming for a modest 3.5 per cent outperformance, with a weaker first half,” added Mr Besson.

Others were impressed by Valeo’s order book of €27.6bn, with the additional €6.1bn of orders from the company’s joint venture with Siemens “particularly encouraging” according to Bernstein’s Max Warburton.

However, Jefferies analyst Ashik Kurian said “faith in Valeo’s order conversion is likely to be tested as the guided organic growth for 2018 is significantly below that implied by the order intake.”

Athough down sharply on Friday, Valeo’s shares are still up nearly 290 per cent over the last 5 years.

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