Faurecia: Q3 sales significantly better than previously expected -
H2 guidance upgraded
Nanterre (France), October 23, 2020
THIRD-QUARTER 2020 SALES
Q3 SALES SIGNIFICANTLY BETTER THAN
PREVIOUSLY EXPECTED
H2 GUIDANCE UPGRADED
In €m |
Q3 2019 |
Q3 2020 |
Change |
9m 2019 |
9m 2020 |
Change |
Group sales |
4,185 |
3,874 |
-7.4% |
13,157 |
10,043 |
-23.7% |
At constant scope and currencies |
|
|
-7.0% |
|
|
-26.4% |
Q3 SALES SIGNIFICANTLY BETTER THAN PREVIOUSLY
EXPECTED
- Strong sequential improvement at constant scope and
currencies: -7.0% in Q3, after -19.7% in Q1 and -50.0% in
Q2
- Month-after-month improvement throughout the
quarter, with September up 1.2%
year-on-year
- Strong sales in China, up 15.4% at constant scope and
currencies
- Outperformance of Seating and Clean Mobility
(representing combined 65% of Group sales), while Interiors and
Clarion Electronics underperformed the market
H2 GUIDANCE UPGRADED
With the revised assumption that worldwide automotive production
in H2 should drop in the mid-single digits vs. H2 2019 (vs. “down
around 15%” as announced on July 27), Faurecia is upgrading
its financial targets for the second half of the year:
- Sales of at least €8 billion (vs. “around €7.6
billion” as announced on July 27)
- Operating income of at least 5.5% of sales
(vs. “around 4.5% of sales” as announced on July 27)
- Net cash flow of at least €700m (vs. “around
€600 million” as announced on July 27)
Patrick KOLLER, CEO of
Faurecia, declared:
“Our sales in Q3 were
better than previously expected.
Despite ongoing
uncertainty related to the Covid-19, we are now more confident
about worldwide automotive production in the second half of the
year that should drop only in the mid-single digits vs. the second
half of 2019.
This improved
environment and the confirmed positive effects of our measures to
further increase resilience, enhance cash generation and strengthen
our financial structure allow us to revise upward our guidance for
the second half of the year.
We anticipate a strong
market rebound in the next two years and confirm that Faurecia is
on track to achieve its sales, profitability and cash ambition for
2022.”
- The Board of Directors, under the chairmanship of
Michel de Rosen, met on October 22, 2020 and reviewed the present
Press Release.
- Operating income presented as Faurecia’s main
performance indicator is Operating income before amortization of
intangible assets acquired in business combinations. All other
definitions are explained at the end of this Press Release, under
the section “Definitions of terms used in this
document”.
- All figures related to worldwide or regional automotive
production refer to IHS Markit forecast dated October 16, 2020
(vehicles segment in line with CAAM for China).
GROUP SALES
- Better Q3 sales than previously expected, supported by
improved market conditions
- Strong sequential improvement with Q3 sales down 7.0%
at constant scope and currencies, after -19.7% in Q1 and -50.0% in
Q2
- Q3 sales improved month after month and September even
posted an 1.2% growth at constant scope and
currencies
- Strong sales growth in China in Q3: +15.4% at constant
scope and currencies
- Seating and Clean Mobility (representing combined 65%
of Group sales) outperformed the market
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
4,185 |
|
13,157 |
|
Currency |
-135 |
-3.2% |
-178 |
-1.4% |
Organic |
-293 |
-7.0% |
-3,470 |
-26.4% |
Scope |
117 |
2.8% |
534 |
4.1% |
2020 |
3,874 |
-7.4% |
10,043 |
-23.7% |
Q3 comments
- Higher negative currency effect than in previous quarters of
€(135) million or -3.2%, mainly due to the US dollar, the Chinese
yuan and the Brazilian real vs. the euro
- Scope effect of €117 million or +2.8%, of which a positive
contribution of €160 million from SAS (3 months, since February 1)
and a negative contribution of €(43) million from Clarion (Q3 2019
sales took into account 4 months - i.e. June to September 2019 - as
Q2 2019 sales only took into account April and May 2019)
- At constant scope and currencies, sales were down 7.0%,
vs. worldwide automotive production down 4.9% (source: IHS
Markit dated October 16, 2020); in the quarter, unfavorable
geographic mix represented a negative impact of c. -40bps and lower
tooling sales (mostly Interiors) represented an additional negative
impact of c. -30bps.
- Outperformance of Seating and Clean Mobility (65% of Group
sales),
- Underperformance of Interiors and Clarion Electronics (35% of
Group sales)
SALES BY BUSINESS
GROUP
Seating (39% of Group sales in Q3)
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
1,571 |
|
5,210 |
|
Currency |
-34 |
-2.1% |
-49 |
-0.9% |
Organic |
-37 |
-2.3% |
-1,391 |
-26.7% |
2020 |
1,500 |
-4.5% |
3,771 |
-27.6% |
Q3 comments
- At constant scope and currencies, sales were down 2.3%,
outperforming the market by 260bps (-4.9%, source: IHS
Markit dated October 16, 2020)
- As from Q3 2020, sales are no longer impacted by the EoPs (End
of Production) that had a negative impact in the previous
quarters
- Conversely, significant SoPs (Start of Production) will start
as from Q2 2021 and boost Seating outperformance as from next
year
Interiors (30% of Group sales in Q3)
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
1,198 |
|
3,939 |
|
Currency |
-49 |
-4.1% |
-68 |
-1.7% |
Organic |
-139 |
-11.6% |
-1,146 |
-29.1% |
Scope |
160 |
13.3% |
367 |
9.3% |
2020 |
1,170 |
-2.4% |
3,092 |
-21.5% |
Q3 comments
- At constant scope and currencies, sales were down
11.6% (vs. -4.9%, source: IHS Markit dated October 16,
2020), i.e. an underperformance of 670bps
- Sales in the quarter were strongly penalized by lower tooling
sales, down 45.0% year-on-year, due to delayed programs in Europe,
North America and China. Excluding this impact, Product
sales were down 8.5% year-on-year, i.e. an underperformance of
360bps
- This underperformance was only attributable to Europe, while
Product sales outperformed the market in other regions; the
underperformance in Europe was attributable to lower content for
new models for VW and Daimler and temporary unfavorable product mix
with PSA
- The consolidation of SAS (since February 1) contributed €160
million of additional sales
Clean Mobility (26% of Group sales in Q3)
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
1,114 |
|
3,466 |
|
Currency |
-46 |
-4.1% |
-57 |
-1.7% |
Organic |
-46 |
-4.1% |
-739 |
-21.3% |
2020 |
1,023 |
-8.2% |
2,669 |
-23.0% |
Q3 comments
- At constant scope and currencies, sales were down 4.1%,
outperforming the market by
80bps
(-4.9%, source: IHS Markit dated October 16, 2020).
- This outperformance was driven by double-digit sales growth in
China
- Commercial vehicles evolution was contrasted with double-digit
growth in China and double-digit drop in Europe and North America,
in line with market regional sales evolution for this segment
Faurecia Clarion Electronics (5% of
Group sales in Q3)
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
302 |
|
542 |
|
Currency |
-7 |
-2.3% |
-5 |
-0.9% |
Organic |
-71 |
-23.6% |
-193 |
-35.5% |
Scope |
-43 |
-14.2% |
167 |
30.9% |
2020 |
181 |
-40.1% |
512 |
-5.5% |
Q3 comments
- At constant scope and currencies, sales were down
23.6%, significantly underperforming the market (-4.9%,
source: IHS Markit dated October 16, 2020)
- This underperformance was mostly attributable to the
unfavorable customer mix of Clarion, highly impacted by the sales
decline of its major customer Nissan; this effect will continue to
impact sales in Q4 but will gradually disappear in 2021
- Faurecia Clarion Electronics is on track to overachieve its
order intake target of €2.1 billion in 2020
SALES BY REGION
Europe (45% of Group sales in Q3)
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
1,875 |
|
6,406 |
|
Currency |
-21 |
-1.1% |
-32 |
-0.5% |
Organic |
-215 |
-11.5% |
-1,849 |
-28.9% |
Scope |
88 |
4.7% |
230 |
3.6% |
2020 |
1,728 |
-7.9% |
4,755 |
-25.8% |
Q3 comments
- Negative currency effect of €(21) million or -1.1%, mainly
reflected the Turkish lira and the Russian ruble vs. the euro
- Scope effect of €88 million or +4.7%, mainly reflected the
positive contribution of €91 million from SAS
- At constant scope and currencies, sales were down
11.5%, underperforming the market by 380bps (-7.7%,
source: IHS Markit dated October 16, 2020)
- This underperformance mostly reflected the underperformance of
Interiors (see above) and the double-digit drop in sales for Clean
Mobility Commercial Vehicles during the quarter
North America (28% of Group sales in Q3)
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
1,134 |
|
3,423 |
|
Currency |
-37 |
-3.3% |
-3 |
-0.1% |
Organic |
-37 |
-3.3% |
-991 |
-28.9% |
Scope |
37 |
3.2% |
142 |
4.1% |
2020 |
1,097 |
-3.3% |
2,571 |
-24.9% |
Q3 comments
- Negative currency effect of €(37) million or -3.3%, mostly
reflected the US dollar vs. the euro
- Scope effect of €37 million or +3.2%, mainly reflected the
positive contribution of €50 million from SAS
- At constant scope and currencies, sales were down 3.3%,
underperforming the market by 380bps (+0.5%, source: IHS
Markit dated October 16, 2020)
- This underperformance was attributable to the double-digit drop
in sales for Clean Mobility Commercial Vehicles and, to a lower
extent, to lower sales to Nissan for Clarion Electronics
Asia (23% of Group sales in Q3)
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
942 |
|
2,659 |
|
Currency |
-34 |
-3.6% |
-47 |
-1.8% |
Organic |
4 |
0.4% |
-395 |
-14.9% |
Scope |
-9 |
-1.0% |
156 |
5.9% |
2020 |
903 |
-4.2% |
2,373 |
-10.7% |
Q3 comments
- Negative currency effect of €(34) million or -3.6%, mostly
reflected the Chinese yuan vs. the euro
- Scope effect of €(9) million or -1.0%, reflected the net effect
of the positive contribution of €17 million from SAS and the
negative one of €(26) million from Clarion (reminder: Q3 2019
included four months of sales as June 2019 was not included in Q2
2019)
- At constant scope and currencies, sales in Asia were up
0.4%, strongly outperforming the market by 450bps (-4.1%,
source: IHS Markit dated October 16, 2020)
- This strong outperformance was driven by sales in
China:
- Sales in China were up 15.4% at constant scope and currencies,
strongly outperforming the market by 850bps (+6.9%, source: IHS
Markit dated October 16, 2020)
- This mainly reflected strong outperformance of Seating and
Clean Mobility with sales to international OEMs, new customers and
commercial vehicles
South America (3% of Group sales in Q3)
|
Q3 |
9 months |
|
€m |
change |
€m |
change |
2019 |
186 |
|
530 |
|
Currency |
-36 |
-19.3% |
-83 |
-15.6% |
Organic |
-46 |
-24.7% |
-191 |
-36.0% |
Scope |
2 |
1.1% |
6 |
1.2% |
2020 |
106 |
-42.9% |
263 |
-50.5% |
Q3 comments
- Negative currency effect of €(36) million or -19.3%, mostly
reflected the Brazilian real vs. the euro
- Scope effect of €2 million or +1.1%, reflected the positive
contribution from SAS
- At constant scope and currencies, sales were down
24.7%, underperforming the market (-21.4%, source: IHS
Markit dated October 16, 2020)
- Underperformance mostly reflected sales drop in Brazil, as
gradual exit from Argentina is underway
UPDATE ON EXPECTED SPIN-OFF OF
THE 46% STAKE OF PSA IN FAURECIA
As regards the PSA-FCA merger project to create
Stellantis and according to the amendments announced on September
14, the stake of 46% of Faurecia currently held by PSA is to be
distributed to all Stellantis shareholders after completion of the
merger, following approval by the Stellantis Board and
shareholders.
As PSA and FCA expect merger completion to take
place by the end of Q1 2021 and considering the minimum time period
required for the approval process, the spin-off of Faurecia could
happen at the latest in Q2 2021. It will contribute to
significantly increase the company’s free float and share
liquidity.
H2 GUIDANCE UPGRADED
Considering improved market conditions,
Faurecia now expects worldwide automotive production to
drop in the mid-single digits in the second half of the
year (vs. an assumption of “down around 15%” on July
27).
Based on this updated market assumption
and thanks to the confirmed positive effects of measures deployed
to further increase resilience, enhance cash generation and
strengthen financial structure, Faurecia is
revising upward its financial targets for the second half of the
year:
- Sales of at least €8 billion (vs. “around €7.6
billion” as announced on July 27)
- Operating income of at least 5.5% of sales
(vs. “around 4.5% of sales” as announced on July 27)
- Net cash flow of at least €700m (vs. “around
€600 million” as announced on July 27)
The assumption of worldwide automotive
production underlying these targets assume no major lockdown in any
automotive region during the last quarter of the year (main average
currency rates for H2 estimated at 1.17 for USD/€ and 8.12 for
CNY/€).
A conference call for financial analysts and media will be held
today at 8:45 am (Paris time).
Dial-in numbers:
- France:
+33
(0)1 70 73 27 27
- UK:
+44 (0)203 009 5710
- USA:
+1 917-720-0178
No access code needed.
The financial presentation accompanying the
conference call will be available at 7:15 am today (Paris time) on
the Faurecia website: www.faurecia.com and may also be viewed at
the following link:
https://edge.media-server.com/mmc/p/aspsrjpk
A replay will be available as soon as possible
after the call.
Calendar
February 22,
2021:
FY 2020 results announcement (before market
hours)
ContactsPresseEric
FOHLEN-WEILLCorporate communications DirectorTel: +33 (0)1 72 36 72
58eric.fohlen-weill@faurecia.com |
|
|
|
|
Analysts/InvestorsMarc MAILLETHead of Investor
RelationsTel: +33 (0)1 72 36 75 70marc.maillet@faurecia.com |
Anne-Sophie JUGEANDeputy Head of Investor
RelationsTel: +33 (0)1 72 36 71
31annesophie.jugean@faurecia.com |
About FaureciaFounded in 1997,
Faurecia has grown to become a major player in the global
automotive industry. With 248 industrial sites, 37 R&D centers
and 115,500 employees in 37 countries, Faurecia is a global leader
in its four areas of business: Seating, Interiors, Clarion
Electronics and Clean Mobility. Faurecia has focused its technology
strategy on providing solutions for the “Cockpit of the Future” and
“Sustainable Mobility”. In 2019, the Group posted sales of €17.8
billion. Faurecia is listed on the Euronext Paris stock exchange.
For more information, please visit www.faurecia.com
APPENDIX - 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 Q3 2020, 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.
- Faurecia Q3 2020 Sales Press Release vDEF