FORVIA H1 RESULTS
NANTERRE (FRANCE)JULY 27,
2023
H1 2023 RESULTS ON TRACK WITH PRIORITIES
& POWER25 PLAN
·SUSTAINABLE PROFITABLE GROWTH AND SOLID
CASH GENERATION
o Robust organic growth of all
Business Groups; outperformance of +740bps
o Operating margin up 150bps
year-on-year, at 5.0% of sales and EBITDA margin up 50bps, at 11.8%
of sales
o Solid net cash-flow of
€172m
o Strong order intake of €15bn, with
average profitability above POWER25 objectives
·COMBINATION WITH HELLA GAINING MOMENTUM
o Synergies at year-end expected to
exceed initial target of €120m (40% of €300m)
·DELEVERAGING ON TRACK
o Net debt/Adj. EBITDA reduced to
2.4x(1) at June 30, 2023 vs. 3.1x at June 30, 2022
o Expected completion of the
disposal program will accelerate deleveraging in H2, with Net
debt/Adj. EBITDA between 2.0x and 2.2x at December 31, 2023
·FY 2023 GUIDANCE ADJUSTED UPWARD ON HIGHER
ANNUAL PRODUCTION
ASSUMPTION
- ratio calculated before IFRS 5 impact and fully comparable to
3.1x at June 30, 2022; see details in page 15
|
In €m |
H1 2022* |
H1 2023 |
YoY change |
|
Worldwide automotive production** (in m units) |
38,933 |
43,300 |
+11.2% |
|
Sales |
11,233 |
13,621 |
+21.3% |
|
of which: Organic growth (at constant
scope & currencies)
HELLA scope effect (1 month) |
|
2,093 617 |
+18.6%+5.5% |
| Adj.
EBITDAAs % of sales |
1,26611.3% |
1,60711.8% |
+26.9%+50bps |
|
Operating income |
398 |
675 |
+69.6% |
|
As % of sales |
3.5% |
5.0% |
+150bps |
|
Net cash flowAs % of sales |
1551.4% |
1721.3% |
+11.0%-10bps |
* Restated for SAS (part of the “Interiors” Business Group),
presented as Discontinued operations as from January 1, 2022**
Source: S&P Global Mobility (ex-IHS Markit) dated July 2023
FY 2023 NEW GUIDANCE
Based on actual worldwide automotive production
growth in the first half and expected evolution in the second half,
FORVIA is revising upward its worldwide automotive production
assumption in 2023 to around 86 million LVs, from 82 million
estimated in February.
As a consequence, the Group is adjusting
upward its 2023 guidance as follows:
- Sales between €26.5 billion and €27.5 billion
(vs. between €25.2bn and 26.2bn)
- Operating margin between 5.2% and 6.2% of
sales (vs. between 5.0% and 6.0%), confirming
sequential improvement in H2 over H1
- Net cash flow > 1.5% of sales
(unchanged)
- Net debt/Adj. EBITDA ratio between 2.0x and 2.2x at
December 31, 2023 (vs. between 2.0x and 2.4x)
- The first-half 2023 consolidated financial statements
have been approved by the Board of Directors at its meeting held on
July 26, under the chairmanship of Michel de ROSEN.
- These financial statements have been subject to a
limited review and the external auditors have issued their
report.
- All financial terms used in this press release are
explained at the end of this document, under the section
“Definitions of terms used in this document”.
- IFRS 5 – Discontinued operations
Faurecia’s SAS Cockpit Modules division
(assembly and logistics services), that was part of the “Interiors”
Business Group and whose contemplated disposal was announced on
February 19, 2023, is now presented as Discontinued operations.
Impacts on the Group’s 2022 consolidated figures are presented in
Appendix, at the end of this document.
- All figures related to worldwide or regional automotive
production refer to the S&P Global Mobility forecast dated July
2023.
H1 2023 KEY
ACHIEVEMENTS
- Robust order intake > €15 billion in H1 2023 with
high average profitability, reinforcing Group exposure to
fast-growing segments
In H1, FORVIA recorded order intake above €15
billion, a high level reflecting strong momentum of both Faurecia
and HELLA.
Received awards reinforce the Group’s
development on its key activities and geographies:
- €3.8bn in China, representing 25% of the
Group’s total order intake, reflect the strengthening of the
partnership with BYD, and healthy prospects with other Chinese OEMs
and international OEMs,
- €3.2bn in Electronics, representing 21% of the
Group’s total order intake, highlight the strength of HELLA’s
portfolio of technologies,
- €7.5bn in Electric Vehicles (Evs + FCEVs),
representing 50% of the Group’s total order intake, benefit from a
key commercial success with a major US EV car maker and a promising
award with a Tier-1 OEM in hydrogen storage system,
- €8bn in Premium & SUVs, representing more
than 54 % of the Group’s total order intake, included major
conquests across the regions.
It is worth mentioning:
- A major Lighting award with a large US EV OEM (SOP: Q4
2024),
- A new award for luxury complete seats for BYD in China (SOP: Q4
2024),
- A major Seating award with a German OEM in Europe (SOP: Q2
2026),
- And a key Electronics award for Clarion Cockpit Electronics
with a Japanese OEM (SOP: Q2 2027).
The order intake recorded in H1 2023 has an
average operating margin above the Group’s Power25 objectives.
- Combination with HELLA gaining momentum and delivering
accelerated synergies
The pace of the combination with HELLA
accelerated in H1, allowing FORVIA to make further progress on
revenue and cost synergies
- On revenue synergies, Faurecia and HELLA made joint
presentation for the first time at the Consumer Electronics Show in
Las Vegas and at the Shanghai Auto Show. They will also will
jointly showcase their technology offerings at the next IAA
Mobility 2023 fair in Munich. At June 30, 2023, cumulated joint
order intake amounted to €1.9 billion.
- Leveraging on numerous projects in key areas, including
procurements, freight and SG&A, Faurecia and HELLA delivered
accelerated cost synergies in H1. Total cost synergies rose to €64
million at the end of H1 2023 (vs. €11 million at the end of H1
2022) and expected total synergies at year-end 2023 should exceed
the initial target of €120 million (40% of the total €300 million
cost synergies to be generated by 2025).
- Early July was created FH Services S.A.S., a joint venture
co-owned and co-managed by HELLA and Faurecia and designed to
leverage the combined strengths of a shared organization, that will
serve as the global provider of leading IT and Indirect Purchasing
solutions to FORVIA’s collective 150,000 internal business users
worldwide.
- Amicable resolution of the Jeep Grand Wagoneer Seating
program in Michigan confirming the end of loss-making JIT
operations by the end of Q3
In H1, FORVIA and Stellantis amicably resolved
claims between the parties allowing FORVIA to exit from the
Just-in-time part of the Jeep Grand Wagoneer seating program in
Michigan. The following actions will allow the program to break
even by the end of Q3 2023:
- Termination of the Just-in-time business as from September 30,
2023,
- Continuation of the Seat Frame activity, relocated in Monterrey
(Mexico).
- Ongoing negotiations with customers to enhance
inflation pass-through in H2
In H1, operating margin continued to be impacted
by cost inflation. Compared to 2022, when cost increases were
predominantly caused by raw material prices, inflation in 2023 is
mainly related to energy, labor and, to a lesser extent, raw
material prices.
In H1, FORVIA has decided not to accept
insufficient compensation offered by some OEMs for around €30
million and will continue negotiations, in order to reach more
acceptable agreements in H2.
At the end of 2022, the cumulated inflation
pass-through represented 87% of total gross inflation. Based on the
carry-over effect of past agreements and expected positive impacts
of ongoing negotiations, the Group expects to recover a higher
percentage of inflation in H2 and reach at year-end at least the
same level of 87% as reached at the end of 2022.
- All three transactions finalizing the €1 billion asset
disposal have received clearance: two of them closing shortly and
the third one expected to close by the end of Q3
In H1, FORVIA signed three agreements finalizing
its €1 billion asset disposal program that started in 2022:
- The sale of a 16.66% stake in Symbio to Stellantis for a total
consideration of €150 million. All regulatory approvals required
have now been obtained and parties are expecting to close this
transaction shortly. Upon of this transaction, FORVIA, Michelin and
Stellantis will be equal partners in Symbio at 33 1/3% each,
- The sale of SAS Cockpit Modules division (assembly and
logistics services) to the Motherson Group, for an enterprise value
of €540 million. The transaction has now been cleared by merger
control authorities in all relevant jurisdictions and parties are
expecting to close the transaction within the coming days,
- The sale of part of commercial vehicle exhaust gas
aftertreatment business in Europe and in the United-States to
Cummins for an enterprise value of €142 million. The transaction
has been cleared by merger control authorities and parties are
expecting to close the transaction by the end of Q3.
The related cash proceeds will contribute to the
accelerated deleveraging of the Group, with an objective to reduce
Net debt/Adj. EBITDA ratio to between 2.0x and 2.2x by
year-end.
- New ESG achievements with MSCI rating upgraded to ‘A’
from ‘BBB’ and new step forward on decarbonization
MSCI leading ESG rating agency upgraded FORVIA’s
rating from ‘BBB’ to ‘A’. The agency welcomes positive evolution in
the governance, specifically the alignment of the Board structure
with investor’s interests. MSCI also highlights the entry in the
Lighting business which has intrinsically lower exposure to product
liability risks than other products in the auto supplier sector.
After the previous upgrade from ‘BB’ to ‘BBB’ obtained in July
2022, this new step underlines the Group’s constant progress on ESG
topics and now ranks FORVIA within the first quartile of the MSCI
32 auto components manufacturers universe.
Building on its 2045 SBTi-validated Net zero
carbon emissions roadmap, FORVIA made a new step forward in
decarbonization by signing a ten-year Power Purchase Agreement
(PPA) with Renewable Capital. This deal is securing almost all the
output from the 417 GWh, 24 wind turbines, Klevberget onshore farm
in Sweden and will generate the equivalent of more than 40% of all
FORVIA’s European yearly electric consumption, taking its renewable
energy capacity to up to 70% across Europe.
H1 2023 KEY
FIGURES
- The automotive market grew by 11.2% in H1, driven by a
sharp rebound in Europe
The worldwide automotive production showed
strong dynamics in H1 with a global production of 43.3 million
light vehicles, corresponding to an 11.2% growth year on year. The
market was supported by a very robust global demand and the
progressive normalization of semi-conductor’s supply.
In our main regions, trends were as follows:
- Europe (47% of Group sales):
production was up 16.1% at 9.2 million LVs, on a
low base of H1 2022 impacted by the start of the war in
Ukraine,
- North America (24% of Group sales):
production was up 12.2% at 8 million LVs, the
highest first semester level since 2019,
- China (20% of Group sales): production
was up 7.1% at 12.6 million LVs, representing close to 30%
of worldwide production.
- H1 2023 Group consolidated sales and operating
income
H1 2022 consolidated sales of €13,621
million: +21.3% on a reported basis and +18.6% on an organic basis,
representing an outperformance of +740bps
- Organic growth of €2,092 million or +18.6% of last year’s
sales, representing a strong outperformance of +740bps compared to
worldwide automotive production that was up 11.2% during the
period. Out of the 740bps, +430bps came from volumes, +110bps from
inflation pass-through and +200bps from a favorable regional
mix.
- Positive scope effect of €617 million or + 5.5% of last year’s
sales, corresponding to the consolidation of one additional month
of HELLA (consolidation started on February 1, 2022).
- Negative currency effect of €322 million or 2.9% of last year’s
sales, mainly due to the depreciation of the Chinese yuan,
Argentinian peso and Turkish lira vs. the euro, mitigated by the
appreciation of the US dollar vs. the euro.
All Business Groups recorded a strong
organic outperformance.
H1 2023 consolidated operating income of €675 million,
up 150bps at 5.0% of sales
The €277 million year-on-year increase reflected:
-
- Volume/mix effect for an estimated positive impact of €260
million,
- A negative currency impact of €45 million,
- Net inflation cost for an estimated year-on-year negative
impact of €50 million,
- Acceleration in cost synergies related to the integration of
HELLA for a year-on-year positive impact of €53 million (€64
million in H1 2023 vs. €11 million in H1 2022),
- Sequential year-on-year reduction of extra-costs from the
Seating program in Michigan, leading to a net positive impact of
€20 million (€25 million extra-costs in H1 2023 vs. €45 million in
H1 2022),
- And the accretive contribution of one additional month of
consolidation of HELLA for €38 million.
It is worth reminding that commercial actions to
mitigate inflation have a dilutive impact on operating margin, as
they are at zero margin.
H1 2023 SALES
AND PROFITABILITY BY BUSINESS GROUP
- SEATING (31% of Group consolidated sales in the
period)
Sales
- Strong organic sales outperformance of 1,200bps driven
by:
- Strong organic sales growth of +43% in China, driven by buoyant
activity with BYD, and a major US EV car maker,
- Outperformance in Europe, with an organic growth of +19%,
mainly related to German OEMs.
Operating income
- Operating margin of 3.3%, up 150bps vs. H1
2022:
- This improvement included the positive year-on-year impact from
the reduction by €20 million of the extra-costs related to the
Michigan program (€25 million extra-costs in H1 2023 vs. €45
million in H1 2022). As already indicated on page 4, the agreement
signed with the OEM allows FORVIA to exit by the end of Q3 from the
JIT part of this program, that was loss-making,
- It also included a positive regional mix impact, as activity in
China grew strongly and is accretive to operating margin,
- Conversely, operating margin was impacted by the dilutive
effect of inflation pass-through.
On July 20, FORVIA and BYD announced
that will reinforce their partnership with the construction of new
seat assembly plant in Thailand.
FORVIA and BYD will launch the construction of a
new state-of-the-art seat-assembly plant in the Rayong province of
Thailand. This new facility will produce complete seat sets under
Shenzhen Faurecia Automotive Parts Co., Ltd, a joint venture
created by BYD and Faurecia in 2017, majority owned by FORVIA.
This strengthens the partnership developed with
BYD, already active through seven cutting-edge factories
established in China, including four within the past 18 months.
FORVIA’s entry into Thailand’s market for its
Seating activities marks a powerful milestone, complementing the
Group’s existing industrial presence in the country across its
Interior, Electronics, and Clean Mobility businesses.
- INTERIORS (18% of Group consolidated sales in the
period)
Sales
- Solid organic sales outperformance of 440bps, driven by
double digit sales growth in all major regions, notably:
- Europe at +22%, driven by Ford, JLR and BMW,
- China at +24% supported by a sharp acceleration with a major US
EV maker, Volvo and new entrants.
Operating income
- Operating margin of 3.8%, up 90bps vs. H1 2022. This
improvement is the net result of:
- Positive contribution from volume/mix evolution,
- Negative contribution from the investment in Materi’Act, the
newly created division for sustainable materials, the dilutive
impact of inflation pass-through and costs generated by a high
number of simultaneous starts of production.
- CLEAN MOBILITY (18% of Group consolidated sales in the
period)
Sales
- Organic sales outperformance of 50bps, driven
by:
- Robust dynamics in Asia (+20%), supported by high level of
activity with Volkswagen in China and major sales improvement with
HKMC in the rest of Asia,
- Strong organic sales growth of +14% in Europe, mainly
driven by Stellantis and Ford,
- And strong double-digit organic growth of +30% in South
America, reflecting strong activity with Ford and Toyota.
Operating income
- Operating margin of 7.7%, up 110bps vs. H1 2022. This
improvement is the net result of:
- Positive contribution from volume/mix evolution and gradual
resolution of some operational extra-costs that impacted
profitability in 2022,
- Negative contribution from the development of zero-emission
sales, which are not profitable yet, and the dilutive impact of
inflation pass-through.
- ELECTRONICS (15% of Group consolidated sales in the
period)
Sales
- Strong organic sales outperformance of 750bps
- Double-digit organic growth across the Group’s Electronics
activities,
- HELLA Electronics (c. three quarters of total FORVIA’s
Electronics activities) was driven high demand for automated
driving and energy management products, such as radar sensors and
high-voltage battery management systems.
Operating income
- Operating margin of +4.3%, up 20bps vs. H1 2022, was
the net effect of:
- An improved operating margin for HELLA Electronics reflecting
the net effect of improved operational performance and recovery
from previous year’s difficulties in China, on one side, and
increase in R&D expenses to develop order book and prepare for
ongoing projects, on the other side,
- An operating loss for Clarion Electronics, mainly reflecting
high increase in freight costs to maintain supply of
semiconductors, unfavorable geographic mix and delay in inflation
compensation with two Japanese OEMs.
- LIGHTING (14% of Group consolidated sales in the
period)
Sales
- Strong organic sales outperformance of
1,370bps
- Organic sales growth of c. 25% reflected market leadership
position and favorable regional mix with strong demand from premium
OEMs for sophisticated lighting solutions.
Operating income
- Strong improvement in operating margin to +4.9%, up
410bps vs. H1 2022, confirmed turnaround underway and
reflected:
- Positive operating leverage with improved business
development,
- Improved performance in China that was impacted in H1 2022 by
Covid-19 lockdown.
- LIFECYCLE SOLUTIONS (4% of Group consolidated sales in
the period)
Sales
- Strong organic sales outperformance of 290bps, driven
by:
- Successful spare parts business with high growth notably in
Mexico, Poland and Brazil,
- Strong activity with commercial vehicles.
Operating income
- Operating margin of +13.2%, up 230bps year-on-year,
reflected:
- Higher business volumes and SG&A savings,
- Strong inflation pass-through.
H1 2023 SALES
AND PROFITABILITY BY REGION
Sales
- Strong sales momentum in
Europe (47% of Group sales) and China
(20% of Group sales), with outperformance of 270bps and
2,210bps respectively:
- Europe (within EMEA) recorded organic growth of +19%, driven by
strong performance in Seating, Electronics and Lighting,
- China (within Asia) recorded organic growth of +29%, sustained
by Seating, Lighting, and Interiors.
- Organic sales growth of +10.3% in Americas was driven
by South America that grew in strong double-digits while North
America grew in high-single digits.
Operating income
- Operating margin improved in all regions:
- Operating margin in EMEA started to recover, from 2.0% in H1
2022 to 2.6% in H1 2023, despite inflation,
- Operating margin in Americas also improved from 1.3% in H1 2022
to 4.0% in H1 2023, mainly driven by improved profitability of
North American operations,
- Operating margin in Asia improved from 9.0% in H1 2022 to 10.4%
in H1 2023, demonstrating robustness of double-digit operating
margin in China.
H1 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
As detailed above by Business Groups and
regions, operating income (before amortization of acquired
intangible assets) rose by 69.6% from €398 million in H1
2022 to €675 million in H1 2023, an improvement of 150bps as a
percentage of sales, from 3.5% in H1 2022 to 5.0% in H1
2023.
- Amortization of intangibles assets acquired in business
combinations: net charge of €98 million vs. a net charge
of €81 million in H1 2022, mostly reflecting the additional month
of consolidation of HELLA, that started as from February 2022.
- Restructuring expenses: net charge of €72
million vs. a net charge of €154 million in H1 2022, that included
a net charge of €45 million for restructuring actions in
Russia.
- Other non-recurring operating income and
expense: net income of €1 million vs. a net charge of €74
million in H1 2022, that included costs related to the acquisition
of HELLA for €41 million and other costs related to operations in
Russia for €29 million.
- Net financial result: net charge of €306
million vs. a net charge of €271 million in H1 2022 mainly
reflected higher interest rates and higher average net debt over
the period.
Income before tax of fully consolidated
companies was a profit of €200 million vs. a loss of €182 million
in H1 2022.
- After a net charge of €116 million from income tax vs. a net
charge of €44 million in H1 2022, net income from fully
consolidated companies was a profit of €85 million vs. a loss of
227 million in H1 2022.
After deduction of the share of net
income of associates (only €0.1 million in H1 2023 vs. €12
million in H1 2022), the impact of
discontinued operations (a profit of €18 million in H1
2023 vs. a loss of €6 million in H1 2022) and deduction of
minority interest (€74 million in H1 2023 vs. €52 million
in H1 2022), the consolidated net income
Group share was back to profit at €28 million in H1 2023 vs. a loss
of €296 million in H1 2022.
H1 2023
CONSOLIDATED CASH FLOW STATEMENT
Adjusted EBITDA increased by 26.9% to
€1,607 million representing 11.8% of sales (vs. €1,266 million and
11.3% of sales in H1 2022).
- Capex amounted to €454 million or 3.3% of
sales (vs. €508 million in H1 2022 or 4.5% of sales).
- Capitalized R&D amounted to €500 million or 3.7% of
sales (vs. €465 million in H1 2022 or 4.1% of sales).
- Change in working capital was an inflow of €16
million (vs. an inflow of €90 million in H1 2022): strict
WCR control, mostly through inventories, despite strong increase in
sales.
- Change in factoring was an inflow of €149
million (vs. an inflow of €234 million in H1 2022 that
reflected the extension of factoring program to HELLA): this inflow
mostly reflected the redistribution of SAS outstanding factoring to
the rest of the Group and included a €35 million temporary impact
at the end of the semester as a consequence of a new payment system
implemented by a customer (with no impact on net cash flow); at
June 30, 2023 total factoring amounted to €1,339 million, and
should decrease to around €1.3 billion at year-end.
- Restructuring cash-out amounted to €91 million
(vs. €88 million in H1 2022), financial expenses cash-out
amounted to €234 million (vs. €170 million in H1 2022),
mainly reflecting the increase in net debt related to the
acquisition of HELLA. Cash-out from taxes amounted to €306
million (vs. €218 million in H1 2022) that included a
withholding tax of €69 million related to the extraordinary
dividend received from HELLA with respect to the sale of its stake
in HBPO.
Net cash flow increased by 11.0% to €172
million (vs. €155 million in H1 2022).
- Dividends paid to minorities amounted to €75 million (vs. €4
million in H1 2022) and included the extraordinary dividend paid to
HELLA’s minority shareholders.
- Net financial investment and other amounted to €89 million (vs.
€4.9 billion in H1 2022 that reflected the cash payment of the
acquisition of a majority stake in HELLA).
- Discontinued operations amounted to €57 million (vs. €53
million in H1 2022),
- IFRS16 impact amounted to €76 million (vs. €162 million in H1
2022).
As a result, net financial debt at June
30, 2023 stood at €8.1 billion (including an IFRS 16 impact of €76
million), representing a Net debt/Adj. EBITDA ratio of 2.4x (before
IFRS 5 impact) and 2.5x (after IFRS 5 impact), significantly
reduced vs. 3.1x one year ago.At June 30, 2023 due to IFRS
5 implementation, Adj. EBITDA excludes the contribution from SAS
considered as “Discontinued operations”, while debt is not yet
reduced from proceeds to be received from the disposal. To better
reflect performance, net debt/Adj. EBITDA ratio before
IFRS
5 impact stood at 2.4x at June 30, 2023, fully comparable to 3.1x
one year ago.
Net debt/Adj. EBITDA ratio will
significantly decrease at December 31, 2023 to between 2.0x and
2.2x, thanks to (i) the collection, by the end of Q3, of all
proceeds related to the finalization of the disposal program
launched in 2022 and (ii) the net cash flow generated in
H2.
At December 31, 2023, FORVIA will
already be more than half-way of its trajectory to reduce its Net
debt/Adj. EBITDA ratio from 3.1x at June 30, 2022 (first
semi-annual ratio after the payment of the majority stake in HELLA)
to below 1.5x at December 31, 2025, its objective included
in the POWER25 plan presented in November 2022.
AVAILABLE CASH
OF €3.5 BILLION AT JUNE 30, 2023
As of June 30, 2023, Group liquidity amounted to
€5.5 billion, of which €3.5 billion of available cash, €1.5 billion
from the fully undrawn FORVIA Senior Credit Facility and €500
million from the fully undrawn HELLA Senior Credit Facility.
As part of its ongoing proactive debt management
policy, FORVIA has recently extended the maturity of almost all of
its €1.5 billion Senior Credit Facility by one year to May 2027
(with options up to 2028), has successfully refinanced its €500
million line now maturing June 2026 (with two possible extensions
by one year each) and has extended a term loan of €200 million by
two years until June 2025.
FULL-YEAR 2023
NEW GUIDANCE
Based on actual worldwide automotive production
growth in the first half and expected evolution in the second half,
FORVIA is revising upward its worldwide automotive production
assumption in 2023 to around 86 million LVs (vs. 82 million
estimated in February and S&P Global Mobility’s latest forecast
dated July 2023 of 86.7 million LVs).
As a consequence, the Group is adjusting
upward its 2023 guidance as follows:
- Sales between €26.5 billion and €27.5 billion
(vs. between €25.2 billion and 26.2 billion),
- Operating margin between 5.2% and 6.2% of
sales (vs. between 5.0% and 6.0%), confirming
sequential improvement in H2 over H1,
- Net cash flow > 1.5% of sales
(unchanged),
- Net debt/Adj. EBITDA ratio between 2.0x and 2.2x at
December 31, 2023 (vs. between 2.0x and 2.4x).
This guidance reflects the expected sequential
improvement of operating margin in H2 vs. H1, led by:
- Acceleration in synergies, with the full impact of synergies
implemented in the first half and the ramp-up of new projects
identified,
- Enhanced compensation for cost inflation through continued
negotiations,
- Sequential reduction in operating losses from the Seating
program in Michigan (JIT loss-making operations to terminate at the
end of Q3).
This guidance is based on full-year average
currency rates of 1.08 for €/USD and of 7.54 for €/CNY and assumes
no major lockdown impacting production or retail sales in any
automotive region in H2 and takes into account the Group’s latest
update of net impact from cost inflation.
ON TRACK TO
ACHIEVE POWER25 OBJECTIVES
The Group also confirms its FY 2025 objectives,
as presented at the Capital Markets Day held on November 3,
2022:
- Sales of c. €30bn
- Operating margin > 7% of sales
- Net cash flow > 4% of sales
- Net debt/Adjusted EBITDA ratio < 1.5x at December
31, 2025
These financial objectives are based on the
following main assumptions:
- Worldwide automotive production of 88 million vehicles in 2025,
more conservative than S&P’s latest forecast of 90 million
- 2025 currency rates of USD/€ @ 1.05 and CNY/€ @ 7.00
They assume no major lockdown impacting
production or retail sales in any major automotive region over the
period.
FINANCIAL
CALENDAR
- September 4-8, 2023: Presence at the IAA
Mobility 2023 in Munich
- October 20, 2023: Q3 2023 sales (before market
hours)FORVIA's financial report will be available at 8:30am today
(CET) and the financial presentation at 10:15am (Paris time) on the
FORVIA’s website: www.forvia.com
A webcasted conference call will be held today
at 10:30am (CET).
If you wish to follow the presentation using the
webcast, please access the following link:
https://www.sideup.fr/webcast-forvia-h1-2023-results/signin/en
A replay will be available as soon as possible.
You may also follow the presentation via conference call:
-
France
+33 1 8699 5831
- United
Kingdom
+44 203 901 7895
- United
States
+1 564 217 2000
Confirmation code: 816 8525 3171#
|
PRESS |
ANALYSTS/INVESTORS |
|
Christophe MALBRANQUEGroup Media Relations
Director+33 (0) 6 21 69 23 53christophe.malbranque@forvia.com |
Marc MAILLETGroup Head of Investor Relations+33
(0) 1 72 36 75 70marc.maillet@forvia.com |
|
Iria MONTOUTOGroup Media
Relations Officer+33 (0) 6 01 03 19 89iria.montouto@forvia.com |
Sébastien LEROYDeputy Head
of Investor Relations +33 (0) 6 26 89 33
69sebastien.leroy@forvia.com |
About FORVIA, whose mission is: “We
pioneer technology for mobility experiences that matter to
people”.
FORVIA, 7th global automotive technology
supplier, comprises the complementary technology and industrial
strengths of Faurecia and HELLA. With over 290 industrial sites and
76 R&D centers, 157,000 people, including more than 15,000
R&D engineers across 40+ countries, FORVIA provides a unique
and comprehensive approach to the automotive challenges of today
and tomorrow. Composed of 6 business groups and a strong IP
portfolio of over 14,000 patents, FORVIA is focused on becoming the
preferred innovation and integration partner for OEMS worldwide. In
2022, the Group achieved a consolidated revenue of 25.5 billion
euros. FORVIA SE is listed on the Euronext Paris market under the
FRVIA mnemonic code and is a component of the CAC Next 20, CAC 40
ESG, and CAC SBT 1.5° indices. FORVIA aims to be a change maker
committed to foreseeing and making the mobility transformation
happen. www.forvia.com
DISCLAIMER
This presentation contains certain
forward-looking statements concerning FORVIA. Such forward-looking
statements represent trends or objectives and cannot be construed
as constituting forecasts regarding the future FORVIA’s results or
any other performance indicator. In some cases, you can identify
these forward-looking statements by forward-looking words, such as
"estimate," "expect," "anticipate," "project," "plan," "intend,"
"objective", "believe," "forecast," "foresee," "likely," "may,"
"should," "goal," "target," "might," "would,", “will”, "could,",
"predict," "continue," "convinced," and "confident," the negative
or plural of these words and other comparable terminology. Forward
looking statements in this document include, but are not limited
to, financial projections and estimates and their underlying
assumptions including, without limitation, assumptions regarding
present and future business strategies (including the successful
integration of HELLA within the FORVIA Group), expectations and
statements regarding FORVIA's operation of its business, and the
future operation, direction and success of FORVIA's business.
Although FORVIA believes its expectations are based on reasonable
assumptions, investors are cautioned that these forward-looking
statements are subject to numerous various risks, whether known or
unknown, and uncertainties and other factors, all of which may be
beyond the control of FORVIA and could cause actual results to
differ materially from those anticipated in these forward-looking
statements. For a detailed description of these risks and
uncertainties and other factors, please refer to public filings
made with the Autorité des Marchés Financiers (“AMF”), press
releases, presentations and, in particular, to those described in
the section 2."Risk factors & Risk management” of Faurecia's
2022 Universal Registration Document filed by Faurecia with the AMF
on February 28, 2023 under number D. 23-0064 (a version of which is
available on www.faurecia.com). Subject to regulatory requirements,
FORVIA does not undertake to publicly update or revise any of these
forward-looking statements whether as a result of new information,
future events, or otherwise. Any information relating to past
performance contained herein is not a guarantee of future
performance. Nothing herein should be construed as an investment
recommendation or as legal, tax, investment or accounting advice.
The historical figures related to HELLA included in this
presentation have been provided to FORVIA by HELLA within the
context of the acquisition process. These historical figures have
not been audited or subject to a limited review by the auditors of
FORVIA. HELLA remains a listed company. For more information on
HELLA, more information is available on www.hella.com. This
presentation does not constitute and should not be construed as an
offer to sell or a solicitation of an offer to buy FORVIA
securities.
DEFINITIONS OF TERMS USED IN THIS
DOCUMENT
Sales growth
Faurecia’s year-on-year sales evolution is made
of three components:
-
- A “Currency effect”, calculated by applying average currency
rates for the period to the sales of the prior year,
- A “Scope effect” (acquisition/divestment),
- And “Growth at constant currencies”.
As “Scope effect”, Faurecia presents all
acquisitions/divestments, whose sales on an annual basis amount to
more than €250 million.
Other acquisitions below this threshold are
considered as “bolt-on acquisitions” and are included in “Growth at
constant currencies”.
In 2021, there was no effect from “bolt-on
acquisitions”; as a result, “Growth at constant currencies” is
equivalent to sales growth at constant scope and currencies also
presented as organic growth.
Operating income
Operating income is the Faurecia group’s
principal performance indicator. It corresponds to net income of
fully consolidated companies before:
-
- Amortization of intangible assets acquired in business
combinations;
- Other non-recurring operating income and expense, corresponding
to material, unusual and non-recurring items including
reorganization expenses and early retirement costs, the impact of
exceptional events such as the discontinuation of a business, the
closure or sale of an industrial site, disposals of non-operating
buildings, impairment losses recorded for property, plant and
equipment or intangible assets, as well as other material and
unusual losses;
- Income on loans, cash investments and marketable securities;
Finance costs;
- Other financial income and expense, which include the impact of
discounting the pension benefit obligation and the return on
related plan assets, the ineffective portion of interest rate and
currency hedges, changes in value of interest rate and currency
instruments for which the hedging relationship does not satisfy the
criteria set forth in relationship cannot be demonstrated under
IFRS 9, and gains and losses on sales of shares in
subsidiaries;
- Taxes.
Adjusted EBITDA
Adjusted EBITDA is Operating income as defined
above + depreciation and amortization of assets; to be fully
compliant with the ESMA (European Securities and Markets Authority)
regulation, this term of “Adjusted EBITDA” will be used by the
Group as of January 1, 2022 instead of the term “EBITDA” that was
previously used (this means that “EBITDA” aggregates until 2021 are
comparable with ‘Adjusted EBITDA” aggregates as from 2022).
Net cash-flow
Net cash-flow is defined as follow: Net cash
from (used in) operating and investing activities less
(acquisitions)/disposal of equity interests and businesses (net of
cash and cash equivalents), other changes and proceeds from
disposal of financial assets. Repayment of IFRS 16 debt is not
included.
Net financial debt
Net financial debt is defined as follow: Gross
financial debt less cash and cash equivalents and derivatives
classified under non-current and current assets. It includes the
lease liabilities (IFRS 16 debt).
APPENDIX
|
IFRS 5 RESTATEMENT ON 2022 SALES & OPERATING INCOME BY
SEMESTER Faurecia’s SAS Cockpit
Modules division (assembly and logistics services), that was part
of the “Interiors” Business Group and whose contemplated disposal
was announced on February 19, 2023, has been presented as
“Discontinued operations” since the start of 2023 and impacts on
the Group’s 2022 consolidated figures are presented in the
following table. |
|
| |
|
|
|
|
|
|
|
|
GROUP (in €m) |
H1 2022 |
H2 2022 |
FY 2022 |
|
|
|
as released |
restated |
as released |
restated |
as released |
restated |
|
|
|
in July 2022 |
for IFRS 5 |
in Feb. 2023 |
for IFRS 5 |
in Feb. 2023 |
for IFRS 5 |
|
Sales |
|
11,623 |
11,233 |
13,835 |
13,341 |
25,458 |
24,574 |
|
Operating income |
426 |
398 |
689 |
663 |
1,115 |
1,061 |
|
|
% of sales |
3.7% |
3.5% |
5.0% |
5.0% |
4.4% |
4.3% |
- FORVIA H1 2023 RESULTS_EN
Grafico Azioni Faurecia (BIT:EO)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Faurecia (BIT:EO)
Storico
Da Mag 2023 a Mag 2024
