- Continued strong growth outside Europe and net debt reduced by €100 million
- Consolidated sales increased by 5.7% to €9.26 billion;
- Operating income of €256 million, or 2.8% of total sales;
- Net income at €35 million, or €0.32 per share;
- Net debt at €1.71 billion.
Yann Delabrière, Chairman and CEO of Faurecia, stated “In the first half of 2013, Faurecia continued to showstrong growth, particularly in North America and Asia. In Europe, measures have been introduced to reducefixed costs which will positively impact operating income in the second half. In North America, the first half shows a sequential improvement in margins, which will accelerate in the second half of the year. The strategy deployed to reconcile growth and cash flow generation delivered on its promise in the first half of 2013, with a balanced net cash flow and a reduction in net debt of €100 million(1).”
SUSTAINED SALES GROWTH
During the first half of 2013, global automotive production rose slightly by 1.4% compared to the same period in 2012, with moderate growth in North America and Asia, but a further decline in Europe, where automotive production is estimated to be down 3.7% compared to the first half of 2012.
In this context, Faurecia’s total sales reached €9.265,0 million in the first half of 2013, an increase of 5.7% (3.9% like-for-like) compared to the first half of 2012.
Product sales (parts and components supplied to automakers) amounted to €7,137.7 million in the first half of 2013, an increase of 5.7% (3.2% like-for-like). This means that Faurecia has outperformed the automotive market in all regions.
STRONG SALES MOMENTUM OUTSIDE EUROPE
Outside Europe, product sales increased by 18.0% and significantly outperformed automotive production in all regions. Sales outside Europe represent 46% of Group product sales for the first half, compared to 41% in the first half of 2012. As a result, the Group has continued to rebalance its geographical sales split during the first half, with North America accounting for 28% of product sales, Asia 11% and South America 5%.
In Europe, product sales decreased by 2.8% to €3,884.2 million, less than the decline in automotive production in the first half, estimated at 3.7%.
In North America, product sales amounted to €1,995.5 million, up 17.8%, while automotive production increased by 3.5% over the period. This increase was driven by strong growth in Interior Systems and Automotive Seating. Due to its strong growth in this market, Faurecia became the fifth largest automotive
supplier in North America in 2012.
In Asia, product sales posted strong growth of 22.8% to €799.2 million, and a 27.4% increase in China. Over the period, automotive production rose 2.6% in Asia and 12.7% in China. In China, Faurecia is continuing to expand with the launch of a new joint venture with Chang’an for Interior Systems, the growth in its Automotive Seating business, the opening of a new R&D center in Shanghai and the new partnership with FAW Foundry to develop magnesium alloy seat frames. By 2016, Faurecia aims to double its total sales to €3.3 billion.
In South America, product sales increased by 17.0% to €370.7 million, while automotive production increased by 14.9%.
SALES INCREASE ACROSS ALL BUSINESS GROUPS
First half growth was strongest for the Interior Systems business, reflecting the increase in activity with Ford following the acquisition of the plant in Saline (Michigan, USA), and for the Automotive Exteriors business, which benefited from the acquisition of Sora Composites and Plastal in Hambach, France, which supplies Daimler with body parts for the Smart.
Automotive Seating
Product sales totaled €2,591.6 million, up 1.3%. Stronger activity in Asia and North America offset the decline in Europe.
Interior Systems
Product sales reached €1,985.1 million (€203.4 million from newly acquired companies – mainly Saline), an increase of 14.5%, driven by strong momentum in North America, Asia and nearly stable activity in Europe.
Emission Control Technologies
Product sales totaled €1,700.6 million, up 2.5%, of which 66% was generated outside Europe and supported by strong growth in China and South America.
Automotive Exteriors
Product sales reached €860.3 million, up 7.4%. In Europe, which represents 92% of its product sales, it outperformed production which was down 3.7%.
RESULTS
The operating income for the first half of 2013 amounted to €256.2 million, representing 2.8% of total sales, compared to € 304.0 million (3.5%) in the first half of 2012.
This drop is mainly due to a lower contribution from Europe, impacted by the continued decline of European automotive production. The ongoing program to reduce fixed costs will help lower costs over the year by €50 million and by €100 million in 2014. In North America, the operating income improved significantly compared to the second half of 2012 (up €33 million).
Consolidated net income (Group share) totaled €35.3 million, against €120.8 million in the first half of 2012. Net financing costs totaled €97.1 million, while restructuring costs amounted to €39.2 million.
FINANCIAL STRUCTURE & DEBT
Capital expenditure has been contained and reached €243 million, compared to €266 million in the first half of 2012.
Net cash flow is at breakeven point (€1 million), marked mainly by the significant improvement in the working capital requirements with a positive inflow of €86 million.
At the end of June 2013, the Group’s net debt was down €100 million at €1,708 million compared to €1,807 million at end-December 2012.
OUTLOOK FOR 2013
In light of the Group’s performance in the first half of 2013, and with the prospects of European production down 1% in the second half (compared to the second half of 2012), Faurecia confirms its targets for 2013:
- An increase in sales to reach between €17.8 and 18.0 billion;
- Operating income improvement, particularly due to an accelerated recovery in North America, a €50 million reduction in fixed costs in Europe and sustained high profitability in Asia;
- For the year, positive net cash flow before restructuring (estimated at €120 million).
