Third-quarter 2019 sales: strong sales outperformance of 290bps for the first nine months of 2019, Q3 sales slightly below wordlwide automotive production, 2019 guidance fully confirmed

Donnerstag, 17.10.2019 07:00 von

Nanterre (France), October 17, 2019

THIRD-QUARTER 2019 SALES

STRONG SALES OUTPERFORMANCE OF 290bps FOR THE FIRST NINE MONTHS OF 2019

Q3 SALES SLIGHTLY BELOW WORLDWIDE AUTOMOTIVE PRODUCTION

2019 GUIDANCE FULLY CONFIRMED

In €mQ3 2018Q3 2019YoY change9m 20189m 2019YoY change
Group sales4,0144,1854.3%13,00513,1571.2%
At constant currencies and excl. Clarion  -3.7%  -3.1%

9-MONTH SALES AT €13,157m, REPRESENTING A STRONG OUTPERFORMANCE OF 290bps

Q3 SALES AT €4,185m, SLIGHTLY BELOW WORLDWIDE AUTOMOTIVE PRODUCTION

2019 GUIDANCE FULLY CONFIRMED

Patrick KOLLER, CEO of Faurecia, declared:

« Since the beginning of the year, our sales posted a solid outperformance versus automotive production of close to 300 basis points. Despite the market degradation throughout the year, our resilience and agility allow us to fully confirm our guidance for the year.  In addition, we are on track for a record year of order intake in 2019.

Despite current market conditions, we maintain the pace of our strategic transformation. A few days ago, we announced our project to acquire the remaining 50% stake of the SAS joint venture. This acquisition would expand our systems integration offer to cover all interior modules and strengthen our Just in Time plant network. During the quarter, we have also announced a significant cost reduction plan for Clarion, in line with our profitable growth roadmap for our new Business Group, Faurecia Clarion Electronics.

We look forward to sharing our strategy update and medium-term perspectives at our Capital Markets Day to be held in Paris on November 26.”


The Board of Directors, under the chairmanship of Michel de Rosen, met on October 16, 2019 and reviewed the present Press Release.

Q3 GROUP SALES AT €4,185m:



9-MONTH GROUP SALES AT €13,157m:



       

       

SALES BY BUSINESS GROUP


Seating (40% of Group sales)

Sales in the quarter were penalized by the temporary negative impact from EoPs for a combined effect of €179 million (representing -10.3% of last year’s sales) and the negative impact from the strike at GM plants in the US for €8 million (representing -0.5% of last year’s sales). Sales drop was broadly in line with the previous quarter, excluding the positive impact from bolt-on contribution that favored Q2 but no longer favored Q3.

Nevertheless, over two years, sales ex-currencies and excl. Clarion scope effect were broadly stable (Q3 2018 posted strong growth of +10.3%), outperforming worldwide automotive production by c. 600bps.

The Volkswagen Chattanooga (USA) Seating business, which was transferred to Faurecia at the beginning of the year and represents €1.3 billion of lifetime sales, is not included in the above-mentioned consolidated sales figures; as a minority business, it is accounted for by the equity method (sales for this business amounted to €40 million in the quarter).

Growth at constant currencies included a bolt-on contribution of €106 million from the JV with BYD in Asia (in H1).

Sales in the 9 months were impacted, as expected, by the end of production of complete seat programs, for a combined negative amount of €397 million (representing 7.2% of last year’s sales).

Strong order book recorded in recent years, with a positive product mix (including two major frame programs), confirms market gain and solid growth prospects for Seating, starting late 2020 and strongly accelerating as from 2021.

Interiors (30% of Group sales)

Sales in the quarter posted growth with PSA in Europe, FCA and Tesla in North America as well as Hyundai and Chinese OEMs in Asia. This growth did not fully offset challenging market conditions faced by other OEMs.

Growth at constant currencies included a bolt-on contribution of €21 million from the JV with Wuling in Asia (in H1).

Clean Mobility (26% of Group sales)

Sales growth in the quarter reflected outperformance in all regions: +80bps in Europe, +1,080bps in North America, +90bps in Asia and +580bps in South America. It was mainly driven by sales growth with VW, Ford, GM and Hyundai.

Growth at constant currencies included a bolt-on contribution of €14 million from Hug Engineering in Europe (in H1).

Faurecia Clarion Electronics (4% of Group sales)


SALES BY REGION


Europe (49% of Group sales)

Sales in the quarter were penalized by the negative impact from Seating EoPs for €30 million (representing  -1.6% of last year’s sales). Sales growth with PSA and VW, as well as the contribution from Parrot Automotive (for €12 million in the quarter), did not fully offset drop with other OEMs.

Growth at constant currencies included a bolt-on contribution of €43 million (see detail in appendix).

Sales in the nine months were penalized by a significant negative impact from Seating EoPs for €113 million (representing -1.7 of last year’s sales)

North America (26% of Group sales)

Sales in the quarter were penalized by a significant negative impact from Seating EoPs for €91 million (representing -8.2% of last year’s sales) and by the negative impact from the strike at GM plants for €23 million (or -2.1% of last year’s sales), as well a negative customer mix effect.

Conversely, Clean Mobility posted a solid outperformance, with double-digit sales growth at constant currencies.

Sales in the nine months were penalized by a significant negative impact from Seating EoPs for €226 million (representing -6.8% of last year’s sales)

Asia (20% of Group sales)

Growth in the quarter has almost not benefited from bolt-on contribution (only €2 million from Parrot Automotive), compared to the €133 million bolt-on contribution in the first-half.

Sales in the quarter were penalized by the negative impact from Seating EoP in China for €58 million (representing -7.2% of last year’s sales) and by the negative impact from BYD in China, whose sales dropped by €25 million (representing -3.1% of last year’s sales).

In China, sales amounted to €598 million, down 4.9% on a reported basis and down 9.8% at constant currencies and excl. Clarion scope effect. They were impacted by the two above-mentioned effects for €83 million (representing -13.2% of last year’s sales).

Sales to Chinese OEMs reached €186 million and represented 31% of sales in the country.

Growth at constant currencies benefited from bolt-on contribution of €135 million (see detail in appendix).

South America (4% of Group sales)

All Business Groups contributed to sales outperformance in the quarter.

             


PROJECT TO ACQUIRE REMAINING 50% OF SAS TO EXPAND SYSTEMS INTEGRATION OFFER AND COVER ALL INTERIOR MODULES


On October 14, Faurecia announced that it has signed a Memorandum of Understanding to acquire the remaining 50% of its SAS joint venture from Continental.

This joint venture was established in 1996 and has become a key player in complex interior module assembly. It employs 4, 490 people in 19 facilities in Europe, North America and South America. 

With the addition of SAS core competences in systems integration and complexity management this project will strengthen Faurecia’s Just-In-Time plants network. It will also expand Faurecia’s systems integration offer to cover all interior modules as well as Faurecia’s new product lines such as displays, electronics, sensors and thermal management.

Sales (IFRS15) are expected to reach c. €700 million in 2019, vs. €663 million in 2018.

With an order book showing strong growth potential, sales should exceed €1 billion in 2024 (representing a CAGR of c. 9%). Growth will be accelerated through regional and customer diversification based on Faurecia’s global customer intimacy particularly in China.

Faurecia would acquire the 50% share of the joint venture from Continental for €225 million (excluding cash).

This project is immediately accretive to Faurecia in operating margin, net income and ROCE.

It is subject to employee consultations and to the appropriate regulatory approvals.

Closing is expected in early 2020 and SAS will be consolidated into the Interiors Business Group.


2019 GUIDANCE FULLY CONFIRMED, DEMONSTRATING GROUP STRONG RESILIENCE
IN A TOUGHER THAN EXPECTED ENVIRONMENT


Faurecia confirms all its full-year 2019 financial targets.

These targets are confirmed under the updated assumption that worldwide automotive production is now expected to be down by close to 6% in 2019 vs. 2018.

This represents a drop of c. 4.5 million vehicles, compared with the initial assumption (early 2019) that worldwide automotive production should be down c. 1% in 2019 vs. 2018.

Based on this updated assumption and including the impact of IFRS16 implementation as of January 1, 2019, Faurecia’s full-year 2019 financial targets remain unchanged:

This confirmation of full-year 2019 financial targets, despite a worsening environment since the beginning of the year, demonstrates the strong resilience of Faurecia’s business model and financial performance.

Main currency assumptions: USD/€ @ 1.14 on average and CNY/€ @ 7.71 on average


A conference call for financial analysts and media will be held today at 8:00 am (Paris time).
Dial-in numbers:

No access code needed. A replay will be available as soon as possible after the call.

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/dhdqvg6f

Calendar

November 26, 2019:                        Capital Markets Day (Paris)

December 5, 2019:                         Goldman Sachs Global Automobile Conference (London)

January 2020:                                    Presence at the Consumer Electronics Show (Las Vegas)

February 17, 2020:                            FY 2019 results announcement (before market hours)

About Faurecia
Founded in 1997, Faurecia has grown to become a major player in the global automotive industry. With around 300 sites including 46 R&D centers and 122,000 employees in 37 countries, Faurecia is now 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 “Cockpit of the Future” and “Sustainable Mobility”. In 2018, the Group posted sales of €17.5 billion. Faurecia is listed on the Euronext Paris stock exchange and is a component of the CAC Next 20 index. For more information, please visit www.faurecia.com

Contacts

 

Press
Eric FOHLEN-WEILL
Head of Corporate Communications
Tel: +33 (0)1 72 36 72 58
eric.fohlen-weill@faurecia.com		   


Analysts/Investors
Marc MAILLET
Head of Investor Relations
Tel: +33 (0)1 72 36 75 70
marc.maillet@faurecia.com		 

Anne-Sophie JUGEAN
Deputy Head of Investor Relations
Tel: +33 (0)1 72 36 71 31
annesophie.jugean@faurecia.com


Appendices

Q3 2019 Sales by Business Group

SalesReportedCurrency effectGrowth ex-currencies*Clarion scope effect**Reported
(in €m)Q3 2018value%value%value%Q3 2019%
Seating1,743120.7%-184-10.5%  1,571-9.9%
of which bolt-ons   00.0%    
Interiors1,185312.6%-17-1.5%  1,1981.1%
of which bolt-ons   00.0%    
Clean Mobility1,061212.0%333.1%  1,1145.1%
of which bolt-ons   00.0%    
Faurecia Clarion Electronics2612.0%20 256 302 
of which bolt-ons   14     
Group4,014641.6%-148-3.7%2566.4%4,1854.3%
of which bolt-ons   140.3%    

* Consistent with previous quarters, growth ex-currencies included bolt-ons (detailed in Appendix)
** In Q3 2019, four months of Clarion sales were consolidated (June catch-up + July to September)

Q3 2019 Sales by region

SalesReportedCurrency effectGrowth ex-currencies*Clarion scope effect**Reported
(in €m)Q3 2018value%value%value%Q3 2018%
Europe1,85890.5%-13-0.7%211.1%1,8750.9%
of which bolt-ons   120.6%    
North America1,115484.3%-82-7.4%544.9%1,1341.8%
Asia807131.6%-57-7.0%17922.2%94216.8%
of which China62991.4%-61-9.8%223.5%598-4.9%
of which bolt-ons   20.3%    
South America185-7-3.5%52.7%21.0%1860.2%
RoW4900.8%-2-3.8%  47-3.0%
Group4,014641.6%-148-3.7%2566.4%4,1854.3%
of which bolt-ons   140.3%    

* Consistent with previous quarters, growth ex-currencies included bolt-ons (detailed in Appendix)
** In Q3 2019, four months of Clarion sales were consolidated (June catch-up + July to September)

9m 2019 Sales by Business Group

SalesReportedCurrency effectGrowth ex-currencies*Clarion scope effectReported
(in €m)9m 2018value%value%value%9m 2019%
Seating5,524400.7%-354-6.4%  5,210-5.7%
of which bolt-ons   1061.9%    
Interiors3,981451.1%-86-2.2%  3,939-1.0%
of which bolt-ons   210.5%    
Clean Mobility3,421601.7%-15-0.4%  3,4651.3%
of which bolt-ons   140.4%    
Faurecia Clarion Electronics8011.5%54 407 542 
of which bolt-ons   37     
Group13,0051461.1%-400-3.1%4073.1%13,1571.2%
of which bolt-ons   1781.4%    

* Consistent with previous quarters, growth ex-currencies included bolt-ons (detailed in Appendix)

9m 2019 Sales by region

SalesReportedCurrency effectGrowth ex-currencies*Clarion scope effectReported
(in €m)9m 2018value%value%value%9m 2018%
Europe6,588-22-0.3%-194-2.9%340.5%6,406-2.8%
of which bolt-ons   430.6%    
North America3,3471985.9%-222-6.6%1013.0%3,4232.3%
Asia2,350291.2%110.5%26911.4%2,65913.1%
of which China1,798150.9%-44-2.5%372.1%1,8060.4%
of which bolt-ons   1355.7%    
South America549-52-9.5%315.7%30.5%530-3.3%
RoW172-7-3.9%-26-15.4%  139-19.3%
Group13,0051461.1%-400-3.1%4073.1%13,1571.2%
of which bolt-ons   1781.4%    

* Consistent with previous quarters, growth ex-currencies included bolt-ons (detailed in Appendix)

Q3 and 9m 2019 Detailed contribution from bolt-ons to sales

Sales (in €m)Business GroupRegionConso as fromQ1 2019Q2 2019H1 2019Q3 20199M 2019
Hug EngineeringClean MobilityEuropeQ2 201814014014
JV with WulingInteriorsAsiaQ2 201821021021
BYDSeatingAsiaQ3 201859481060106
Parrot AutomotiveClarion ElectronicsEurope/AsiaQ1 20191212231437
TOTAL   1056016414178
Total Group sales 20184,3154,6778,9914,01413,005
% of 2019 ex-currency sales growth due to bolt-on contribution2.4%1.3%1.8%0.3%1.4%

2018 Sales by quarter and Business Group, presenting Coagent separately

Sales (in €m)Q1 2018Q2 2018Q3 2018Q4 2018FY 2018
Seating1,8171,9641,7431,9147,438
Interiors (restated for Coagent)1,3581,4381,1851,3825,363
Clean Mobility1,1061,2541,0611,1944,615
Coagent
(incl. into Faurecia Clarion Electronics)		34202630109
Group4,3154,6774,0144,52017,525

Definition of Sales growth

Faurecia’s year-on-year sales evolution is made of three components:

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”.

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