Solid organic sales outperformance of 780bps in a market that
continued to be severely impacted by semiconductor shortage
Nanterre (France), October 26, 2021
THIRD-QUARTER 2021 SALES
SOLID ORGANIC
SALES OUTPERFORMANCE OF
780bps,
IN A MARKET THAT CONTINUED TO BE
SEVERELY IMPACTED BY SEMICONDUCTOR
SHORTAGE
|
Q3 2020* |
Q3 2021 |
Change |
9m 2020* |
9m 2021 |
Change |
Group sales (€m) |
3,823 |
3,426 |
-10.4% |
9,907 |
11,208 |
+13.1% |
At constant scope and currencies |
|
|
-11.4% |
|
|
+15.1% |
Worldwide automotive production** (000 vehicles) |
19,510 |
15,762 |
-19.2% |
48,283 |
53,203 |
+10.2% |
* 2020 sales figures restated for IFRS 5 (see in Appendix)** IHS
Markit forecast dated October 2021, as usually restated i.e.
vehicles segment in line with CAAM for China
Q3 SALES AT
€3.4bn WITH STRONG
OUTPERFORMANCE OF
780bps,
IN A MARKET THAT CONTINUED TO BE
SEVERELY IMPACTED BY SEMICONDUCTOR
SHORTAGE AND CONSEQUENT STOP-AND-GOs
- All Business Groups
and Regions posted
significant outperformance
- Clarion
Electronics and Asia posted organic growth of 7.3%
and 6.5% respectively
CONFIRMED FY 2021
GUIDANCE, AS RECENTLY UPDATEDOn September
23, Faurecia adjusted its FY 2021 guidance to reflect the strong
reset released by IHS Markit of worldwide automotive production
forecast from 77 million to 72 million units for the full-year
2021. Based on this forecast, Faurecia confirms its 2021 financial
targets as recently adjusted:
- Sales of
c. €15.5bn and
strong organic sales outperformance > +600bps
- Operating margin
of 6.0% to 6.2% of
sales
- Net cash flow of c. €500m
and net-debt-to-EBITDA ratio ≤
1.5x at year-end
HELLA ACQUISITION
PROCESS ON TRACK
- Takeover
Offer launched on Sept. 27
to end on Nov.
11
- Antitrust
clearances underway, expected closing early
2022 confirmed
- Faurecia and Hella
launched the project “One” to be ready
at closing
Patrick
KOLLER, CEO of
Faurecia, declared:
“Market conditions
remained tough in the past quarter, impacted by adverse supply
chain conditions, primarily semiconductors, that impacted
automotive production and generated high volatility in OEM
programs. In these challenging conditions, Faurecia nevertheless
reached a solid sales outperformance and confirms its capability to
achieve a strong operating leverage in 2021.
On top of tightly
managing the short-term performance, we are also focusing on
successfully closing the acquisition process of Hella and prepare
our companies to combine their strengths and create strong value
for all stakeholders.”
- The
Board of Directors, under the chairmanship of Michel de
Rosen, met on October
25, 2021. During this
meeting, the Board of Directors 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
2021, as
usually restated i.e. vehicles segment in line with CAAM for
China
GROUP
SALES
IFRS 5 - Discontinued
Operations
- On February 18, Faurecia announced
that it had signed a Memorandum of Understanding for the sale of
its AST (Acoustics and Soft Trim) division and all conditions are
met to qualify this activity as discontinued, in compliance with
IFRS 5.
- Therefore, since the start of the
year, Group financial statements for 2021 have excluded the AST
figures and 2020 financial statements have been restated and
presented accordingly.
- A table in appendix presents 2020
restated quarterly figures; only Interiors, as regards Business
Groups, and Europe, as regards regions, are impacted by this
restatement.
|
Third quarter |
9 months |
|
Faurecia |
WW auto prod |
Faurecia |
WW auto prod |
|
sales in €m |
in 000
vehicles* |
sales in €m |
in 000
vehicles* |
2020 as released in 2020 |
3,874 |
19,510 |
10,044 |
48,283 |
2020 restated for IFRS
5 |
3,823 |
9,907 |
Currency
effect |
39 |
|
-257 |
|
% of sales |
1.0% |
|
-2.6% |
|
Scope
effect |
0 |
|
60 |
|
% of sales |
0.0% |
|
0.6% |
|
Organic
growth |
-436 |
|
1,499 |
|
% of sales |
-11.4% |
-19.2% |
15.1% |
10.2% |
2021 |
3,426 |
15,762 |
11,208 |
53,203 |
reported change |
-10.4% |
13.1% |
*
IHS Markit dated October 2021 (vehicles segment in line with CAAM
for China) |
|
In the past quarter, sales continued to
be severely impacted by semiconductor shortage.
This was reflected in the drastic cut, released on September
16, by IHS
Markit of its worldwide automotive production forecast
for 2021 by 6% or 5 million units
(of which c. 2 million impacting Q3 and c. 3 million impacting
Q4)
Q3
2021 sales amounted to
€3,426
million, down 10.4% on a
reported basis
- They included a positive currency
effect of €39 million or +1.0% of sales, mainly attributable to the
Chinese yuan vs. the euro, and there was no scope effect during the
period.
Q3
2021 sales were down 11.4%
on an organic basis, but
they posted significant
outperformance in all Business Groups
and Regions
- At Group level,
the outperformance stood at
780bps; it included an
unfavorable geographic mix
effect estimated at c.
450bps, i.e. underlying
outperformance before unfavorable geographic mix effect stood
at c.
1,230bps.
- All Business Groups posted
strong outperformance close to or
exceeding
500bps, with
Clarion Electronics posting
an organic growth of 7.3% in the quarter.
- All
Regions posted strong outperformance
between 790bps and
over
2,000bps,
with Asia posting an organic growth of 6.5% in the
quarter.
9 months sales 2021
sales amounted to
€11,208
million, up 13.1% on a
reported basis, including:
- A negative currency effect of
€(257) million or -2.6% of sales, mainly attributable to the US
dollar, the Brazilian real and the Turkish lira.
- A positive scope effect of €60
million or +0.6% of sales, due to one month of consolidation of SAS
(January), whose consolidation started in February 2020.
On an organic basis, sales over the nine
months were up 15.1%, representing an
outperformance of
490bps.SALES
BY BUSINESS GROUP
in €m |
Seating |
Interiors |
Clean Mobility |
Clarion
Electr. |
Group |
Q3 2020 as released in October 2020 |
1,500 |
1,117 |
1,023 |
181 |
185 |
Q3 2020 restated for IFRS
5 |
1,500 |
1,119 |
1,023 |
181 |
185 |
Currency
effect |
19 |
5 |
13 |
1 |
39 |
% of sales |
1.3% |
0.5% |
1.3% |
0.6% |
1.0% |
Organic
growth |
-214 |
-127 |
-108 |
13 |
-436 |
% of sales |
-14.3% |
-11.3% |
-10.5% |
7.3% |
-11.4% |
Q3
2021 |
1,305 |
997 |
928 |
195 |
3,426 |
reported change |
-13.0% |
-10.9% |
-9.2% |
7.9% |
-10.4% |
Seating
(38% of Group sales)
- Organic sales were down
14.3% in Q3,
an outperformance of
490 bps vs. worldwide automotive
production (-19.2%, source: IHS Markit dated October
2021)
- Organic sales were down by
double-digits in Europe and North America due to the tough market
conditions driven by semiconductor shortage
- They were up 16.3% in Asia, driven
by sales with Chinese and international OEMs, including new
entrants in the Chinese market
- After €44m in H1, SOPs (Start of
Production) contributed to sales for €57m in Q3 and should
contribute to c. €140m in Q4, below initial expectations. This
lower contribution to sales was attributable to the current
disrupted environment and reduced customer volumes but also to
operational challenges faced in the launching phase of a greenfield
operation in Michigan. These operational difficulties, mainly due
to headcount instability, will have an impact on Seating
profitability in H2 (now expected below that of H1) and will be
fixed before the end of the year
Interiors (29% of
Group sales)
- Organic sales were down
11.3% in Q3, a
strong outperformance of
790bps vs. worldwide automotive
production (-19.2%, source: IHS Markit dated October
2021)
- As for Seating and for the same
reason, organic sales were down by double-digits in Europe and
North America
- They were up 10.2% in Asia, driven
by sales to Ford, a major American EV carmaker and new entrants in
the Chinese market
Clean Mobility (27% of
Group sales)
- Organic sales were down
10.5% in Q3, a strong outperformance of
870bps vs. worldwide automotive
production (-19.2%, source: IHS Markit dated October
2021)
- Organic sales were down by high
single-digits in Europe and Asia, and in double-digits in North
America
- Nevertheless, in all three regions,
sales outperformed regional automotive production by at least
500bps
Faurecia Clarion Electronics
(6% of Group
sales)
- Organic sales were up 7.3%
in Q3, a strong outperformance of
2,650bps
vs. worldwide automotive production (-19.2%, source: IHS
Markit dated October 2021)
- Despite the semiconductor shortage
that impacted significantly Clarion Electronics vs. initial
expectations for sales in the period, this organic growth reflected
the sales momentum of Clarion Electronics; it is worth mentioning
that Clarion Electronics succeeded in avoiding any stoppage of
production at its customers’ plants during the period
- All regions posted organic growth,
in particular Asia thanks to strong sales growth with Chinese
OEMs
SALES BY REGION
in €m |
Europe |
North Am. |
Asia |
o/w China |
Rest of the World |
Group |
Q3 2020 as released in October 2020 |
1,728 |
1,097 |
903 |
679 |
147 |
3,874 |
Q3 2020 restated for IFRS
5 |
1,677 |
1,097 |
903 |
679 |
147 |
3,823 |
Currency
effect |
-4 |
-4 |
38 |
41 |
8 |
39 |
% of sales |
-0.2% |
-0.3% |
4.2% |
6.1% |
5.5% |
1.0% |
Organic
growth |
-334 |
-190 |
59 |
34 |
29 |
-436 |
% of sales |
-19.9% |
-17.3% |
6.5% |
5.0% |
19.9% |
11.4% |
Q3
2021 |
1,339 |
903 |
1,000 |
755 |
184 |
3,426 |
reported change |
-20.1% |
-17.5% |
10.7% |
11.1% |
25.5% |
-10.4% |
Europe
(39% of Group sales)
- Organic sales were down
19.9% in Q3, a
strong outperformance of
970bps vs. regional automotive
production (-29.6%, source: IHS Markit dated October
2021)
- This reflected the strong impact of
semiconductor shortage on almost all OEMs, with the exception of
Daimler and Commercial vehicles, that both grew year-on -year
North America
(26% of Group
sales)
- Organic sales were down
17.3% in Q3, a strong outperformance of
790bps vs. regional automotive
production (-25.2%, source: IHS Markit dated October
2021)
- As in Europe, this reflected the
strong impact of semiconductor shortage on almost all OEMs, with
the exception of a major American EV carmaker and Commercial
vehicles, that both grew year-on -year
Europe and North America were the two
regions that were the most impacted by semiconductor
shortage, as reflected in the combined
reduction by 400k units of IHS Markit production estimate for Q3
2021, between September and October.
Asia
(29% of Group
sales)
- Organic sales were
up 6.5% in Q3, a
very strong outperformance of
2,030bps vs. regional
automotive production (-13.8%, source: IHS Markit dated
October 2021)
- This growth was driven by Seating,
Interiors and Clarion Electronics and by most OEMs (Chinese and
international), except the VW and GM groups
- In China, within Asia, sales were
up 5.0% in Q3, also a very strong outperformance of 1,950bps vs.
regional automotive production (-14.5%, source: IHS Markit dated
October 2021)
- Both in
Asia and China, sales
significantly exceeded pre-Covid
sales of Q3
2019
Rest of the
World
(6% of Group
sales)
- Organic sales were up 19.9%
in Q3
- In South America, which represented
c. 2/3 of the total, organic sales were up 28.0% in Q3, a very
strong outperformance of 3,900bps vs. regional automotive
production (-11.0%, source: IHS Markit dated October 2021)
-
This growth in South America was mostly driven by sales to the
Stellantis group
HELLA ACQUISITION PROCESS ON TRACK
The Takeover Offer to all
shareholders of Hella was launched, as planned, on September 27 and
will end on November 11 (midnight CET). The final results of the
takeover offer are to be released on November 16 at 10am (CET).
As a reminder, Faurecia has already secured the
acquisition of 60% of Hella from the Family Pool. Faurecia will not
be dependent on the final results of the Takeover Offer and intends
to start implementation of synergies from Day 1.
The Offer Document and all other information
about the Takeover Offer are published on the dedicated website:
www.faurecia-offer.com
Regulatory clearances from relevant authorities
are underway and the closing remains expected
early 2022, as anticipated on August 14 when the deal was
announced.
In September, Faurecia and Hella launched
project “One” to be ready at closing. The two main
objectives are:
- Ensure the
combined Group is ready to operate efficiently from Day 1
post-closing: Governance and
organization post-closing are prepared in detail and agreed to
ensure a quick start, supported by the right systems and
processes,
- Prepare synergy plans in
details to be ready to kick off implementation from Day 1:
Synergy objectives are converted into very specific action plans to
ensure swift execution from Day 1 and quick P&L impact.
CONFIRMED FULL-YEAR
2021 GUIDANCE, AS RECENTLY UPDATED
On September 23, Faurecia adjusted its
FY 2021 guidance to reflect the strong reset released by IHS Markit
of worldwide automotive production forecast from
77 million to 72 million units for the full-year
2021. This major revision by IHS Markit was primarily
attributable to a higher than expected impact from semiconductor
shortage that creates high volatility in OEM programs.
Based on this forecast, Faurecia confirms its
2021 financial targets as adjusted on September 23:
- Sales of
c. €15.5bn and strong organic sales outperformance
> +600bps
- Operating margin of 6.0% to
6.2% of sales
- Net cash flow of c. €500m
and net-debt-to-EBITDA ratio ≤ 1.5x at year-end
This guidance confirms Faurecia’s
strong operating leverage and
effectiveness of resilience actions.
Faurecia’s assumption of 2021 worldwide
automotive production assumes no major lockdown impacting
production or retail sales in any automotive region in the last
quarter of the year.
All financial targets are based on 2021 average
currency rates of 1.20 for USD/€ and 7.73 for CNY/€.
A conference call for financial analysts and media will be held
today at 8:00am (Paris time).
Dial-in numbers:
- France:
+33 (0)1 76 70 07 94
- UK:
+44
(0) 207 192 8000
- USA:
+1 631 510 74 95
No access code needed. The financial presentation accompanying
the conference call will be available at 7:30 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/x9kyi4u7
A replay will be available as soon as possible
after the call.
CalendarFebruary
21,
2022: FY
2021 results (before market
hours)
ContactsPressVictoria CHANIALEVP
Group CommunicationsTel: +33 (0)1 72 36 72
58victoria.chanial@faurecia.com |
|
|
|
|
Eric 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 |
Matthieu
FERNANDEZDeputy Head of Investor RelationsTel: +33 (0)6 22 02 11
54matthieu.fernandez@faurecia.com |
|
About FaureciaFounded in 1997,
Faurecia has grown to become a major player in the global
automotive industry. With 266 industrial sites, 39 R&D centers
and 114,500 employees in 35 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 2020, the Group posted sales of €14.7
billion. Faurecia is listed on the Euronext Paris stock exchange
and included in the CAC® Next 20 Index. For more information,
please visit www.faurecia.com
DISCLAIMERThis presentation
contains certain forward-looking statements concerning Faurecia.
Such forward-looking statements represent trends or objectives and
cannot be construed as constituting forecasts regarding the future
Faurecia’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, expectations and
statements regarding Faurecia's operation of its business, and the
future operation, direction and success of Faurecia's
business.Although Faurecia 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 Faurecia 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 and management” of
Faurecia's 2020 Universal Registration Document filed by Faurecia
with the AMF on March 11th, 2021 under number D. 21-0112 (a version
of which is available on www.faurecia.com).Subject to regulatory
requirements, Faurecia 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.This presentation does not constitute and should
not be construed as an offer to sell or a solicitation of an offer
to buy Faurecia securities.
APPENDICES
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 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”.
IFRS 5 DISCONTINUED
OPERATIONS
On February 18, Faurecia announced that it had
signed a Memorandum of Understanding for the sale of its AST
(Acoustics and Soft Trim) division and all conditions are met to
qualify this activity as discontinued, in compliance with IFRS
5.
Therefore, Group sales in 2021 exclude the AST
sales and previous periods are restated and presented
accordingly.
This restatement impacts only Interiors, as
regards Business Groups, and Europe, as regards regions.
Sales
(in
€ millions) |
Q1 2020 |
Q2 2020 |
H1 2020 |
Q3 2020 |
Q4 2020 |
H2 2020 |
FY 2020 |
as previously
released |
3,739 |
2,431 |
6,170 |
3,874 |
4,610 |
8,484 |
14,654 |
restated for
IFRS 5 |
3,678 |
2,406 |
6,084 |
3,823 |
4,538 |
8,361 |
14,445 |
- Faurecia Q3 2021 Sales def
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