Faurecia consolidated sales stood at € 4,749.3 million in the third quarter of 2015, up 4.6% at constant exchange rates and scope. Reported sales were up 8.3%. Over the quarter, exchange rate variations added 5.9% on the business activity.
Sales growth is broken down as follows:
- Product sales (parts and components delivered to automakers) totaled € 3,705.2 million during the third quarter of 2015, up 4.8% organic and up 11.1% on a reported basis. Exchange rate variations added 6.2% on the business activity or € 207.3m;
- Monolith sales² were up 10.5% organic at € 779.9 million and up 3.8% on a reported basis. Accounting harmonization for monoliths sales in Korea had a negative impact of € 96.8 million;
- Development, tooling and prototype sales contracted by 13.3% organic, or down 11.3% on a reported basis, in the third quarter of 2015 to € 264.1 million.
PRODUCT SALES PER REGION
(All variations organic; for reported figures see Appendix.)
- In Europe (including Russia), product sales increased 9.0% to € 1,959.9 million, against € 1,803.7 million during the third quarter of 2014. European light vehicle production increased 5% (Faurecia estimate). This outperformance came mainly from strong sales to Renault-Nissan (+26%), Ford (+19%) and BMW (+14%). For 2015, Faurecia confirms its sales will outperform light vehicle production.
- In North America, product sales reached € 1,087.9 million, up 6.9%, while production grew close to 5% (Faurecia estimate). The positive sales momentum will continue in the fourth quarter of 2015.
- In Asia, product sales contracted by 10.6% to € 506.6m in the third quarter driven mainly by a 16.2% contraction in China (to € 401.9m). Light vehicle production in China contracted by 9% (Faurecia estimate) with production of international joint-ventures decreasing by 13% (Faurecia estimate). Faurecia’s largest customers in China reduced their production more in order to reduce inventories. Sales to Chinese automakers grew very fast (+69%) and now represent 11% of the overall business in China.
- In South America, product sales declined 6.8% to € 112.6 million, while Faurecia estimates that production was down 19%.
- In the rest of the world (mainly South Africa), product sales increased 8.9% to € 38.2 million.
PRODUCT SALES BY BUSINESS GROUP
(All variations organic; for reported figures see Appendix.)
Automotive Seating
Product sales reached €1,347.1 million, up 9.3%. European and North American sales were up respectively 18% and 10%. This very strong performance is driven by the full effect of new programs, mainly for RenaultNissan (+31%), Ford (+89%) and BMW (+30%).
Emissions Control Technologies
Product sales reached € 883.4 million, down 1.4%. Sales in Europe increased 12% but were down 16% in Asia. Sales to Cummins rose 6% with Commercial Vehicle sales now reaching 9% of the Business Group’s sales.
Interior Systems
Product sales totaled € 1,056.0 million, up 5.0%. North American product sales rose 16%, mainly driven by Ford (+31%). In Asia, Interior Systems outperformed the market with a growth rate of 14%.
Automotive Exteriors
Product sales reached € 418.8 million, up 4.4%. Front-End Modules contracted 11%, weighing on the overall rate of growth.
Recent development on diesel engines:
After having received numerous questions concerning the diesel market, Faurecia is disclosing the following information:
- Diesel passenger car related product sales amounted to € 670m in 2014;
- In Europe, diesel passenger car product sales represented € 575m in 2014;
- Diesel light vehicle product sales in North America reached € 24m in 2014;
- Diesel passenger car product sales to the Volkswagen group amounted to € 160m in 2014, of which € 10 million were generated in North America.
It is now widely expected that emissions regulations will be significantly tightened. In this context, Faurecia anticipates:
- An acceleration in the deployment of the most efficient systems to reduce NOx (Nitrogen Oxides), such as SCR (Selective Catalytic Reduction);
- An acceleration of the after-treatment for PM (Particulate Matter), including potentially for gasoline direct injection (GDI) engines;
- An acceleration of the weight reduction effort already deployed by all automakers.
This represents an important potential. Faurecia has solutions ready to support its customers.
OUTLOOK
Overall context for H2-2015:
- Faurecia will continue to benefit from a positive market momentum in Europe and in North America;
- In North America, profitability improvement is gaining momentum and Faurecia is confirming the operating margin improvement target of above 120 basis points for FY 2015;
- In China, Faurecia expects weak sales to continue in Q4-2015. Faurecia has already adjusted its cost base sharply and therefore confirms its operating margin in Asia in H2-2015 to be comfortably above 8.0%.
Faurecia fully confirms its H2-2015 and FY 2015 guidance:
For H2-2015
- Group operating margin already reaching 2016 target of 4.5% – 5.0%
For FY 2015
- Total sales up around 5.0% (organic);
- Operating margin better than 4.0%;
- Net cash flow above € 200m;
- Operating margin improvement in North America over 120 basis points.
Faurecia also fully confirms its 2016 guidance:
- Group total sales > € 21.0 billion;
- Operating margin between 4.5% and 5.0%;
- Net cash flow around € 300 million;
- ROCE³ > 20%.
Faurecia is pleased to announce that its 2016 Investor Day will take place in Paris on Wednesday, March 23, 2016.
¹ Organic: at constant exchange rates & scope
² Monoliths: precious metals and ceramics used in emissions control systems
³ ROCE = Return On Capital Employed, pre-tax & including goodwill
