Nanterre (
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 andClarion 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
- 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
“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
- The Board of Directors, under the chairmanship of
Michel de Rosen , met onOctober 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 forChina ).
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 fromClarion (Q3 2019 sales took into account 4 months - i.e. June toSeptember 2019 - as Q2 2019 sales only took into account April andMay 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 datedOctober 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 andChina . 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 inEurope was attributable to lower content for new models forVW andDaimler 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 inEurope andNorth America , in line with market regional sales evolution for this segment
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
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 datedOctober 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
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 datedOctober 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
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 asJune 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 datedOctober 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 datedOctober 16, 2020 ) - This mainly reflected strong outperformance of Seating and Clean Mobility with sales to international OEMs, new customers and commercial vehicles
- Sales in
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 fromArgentina 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
As PSA and
H2 GUIDANCE UPGRADED
Considering improved market conditions,
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,
- 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
Dial-in numbers:
France : +33 (0)1 70 73 27 27UK : +44 (0)203 009 5710USA : +1 917-720-0178
No access code needed.
The financial presentation accompanying the conference call will be available at
A replay will be available as soon as possible after the call.
Calendar
Contacts Presse Eric FOHLEN-WEILL Corporate communications Director 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 |
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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,
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.
Attachment
Faurecia Q3 2020 Sales Press Release vDEF
© OMX, source