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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Forvia SE | BIT:1FRVIA | Italy | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.185 | -1.53% | 11.89 | 11.805 | 11.89 | 12.095 | 11.77 | 12.035 | 18,685 | 16:35:20 |
NANTERRE (FRANCE)OCTOBER 20, 2023
THIRD-QUARTER 2023 SALES
STRONG OUTPERFORMANCE AND ORGANIC GROWTH, ROBUST ORDER INTAKE
MAINTAINING FOCUS ON CASH GENERATION WHILE ACCELERATING DELEVERAGING THROUGH:
GROUP (in €m) | Q3 2022* | Currency | Organic | Q3 2023 | Reported | ||
effect | growth | change | |||||
Worldwide auto. production (m units)** | 21 513 | 22 318 | 3,7% | ||||
Sales | 6 370 | -524 | 683 | 6 528 | 2,5% | ||
% of last year's sales | -8,2% | +10.7% | |||||
outperformance (bps) | 700bps | ||||||
* Restated for SAS (part of the "Interiors" Business Group), presented as Discontinued operations as from January 1, 2022 | |||||||
** Source: S&P Global Mobility dated October 2023 |
·ORGANIC GROWTH OF +10.7%, REFLECTING ROBUST OUTPERFORMANCE IN ALL BUSINESS GROUPS AND REGIONS
o Global outperformance of 700bps, driven by outperformance in China of 1,210bps
·ROBUST ORDER INTAKE IN Q3
o Nine-month order intake amounted to €22 billion, with average profitability above POWER25 objectives
o Selectivity in order intake allows significant reduction in upfront expenses
·COMPLETION OF THE €1BN DISPOSAL PROGRAM
o All remaining deals to be closed by end 2023 were timely closed, leading to more than €1 billion of cash proceeds, in line with the objective
·LAUNCH OF AN ADDITIONAL €1BN DISPOSAL PROGRAM TO ACCELERATE DELEVERAGING BEYOND THE POWER25 OBJECTIVE
o The recently-announced divestment by HELLA of its 50% stake in BHTC is the first transaction of this new program
·FY 2023 GUIDANCE CONFIRMED
o Sales between €26.5 billion and €27.5 billion,
o Operating margin between 5.2% and 6.2% of sales,
o Net cash flow > 1.5% of sales,
o Net debt/Adj. EBITDA ratio between 2.0x and 2.2x at December 31, 2023.
Patrick KOLLER, Chief Executive Officer of FORVIA, declared:
“The third quarter marked a new step towards FORVIA’s POWER25 objectives.
The Group maintained strong organic growth and outperformed automotive production across all Business Groups and Regions, in an environment that remains volatile and characterized by new risks, such as the evolution of the UAW strike in the US that started in September.
Our order intake is robust and continues to support the Group’s future profitability growth and cash generation.
During the quarter, we have successfully completed our one-billion euros asset disposal program with the closing of the three remaining transactions.
In a context of persistent inflation and high interest rates, we announce today the launch of an additional one-billion euros disposal program to accelerate the reduction of our debt and financial expenses. This new program will further strengthen and simplify our portfolio and, along with continuous improvement in cash flow generation from operations, accelerate the Group’s deleveraging beyond the POWER25 objective.”
Faurecia’s SAS Cockpit Modules division (assembly and logistics services), that was part of the “Interiors” Business Group and whose disposal was announced on February 19, 2023 and now effective, is presented as Discontinued operations. Impacts on the Group’s 2022 consolidated figures are presented in Appendix, at the end of this document.
ACCELERATING DELEVERAGING BEYOND THE POWER25 OBJECTIVE
Completion in Q3 of the €1bn disposal program executed according to plan and with good valuations
On October 2, FORVIA closed the sale of its commercial vehicle aftertreatment business in Europe and North America to Cummins, thus reaching the last step to close in due time the execution of its disposal program announced in April 2022 and targeting €1 billion cash proceeds by end 2023.
This program was designed to reduce the Group’s debt, increased by the acquisition of a majority stake in HELLA, early February 2022.
It was achieved in less than 15 months and comprised of:
These three consolidated non-strategic assets represented combined sales of c. €1.3 billion on an annual basis.
All operations carried out under this program have strengthened the Group’s focus on its strategic priorities and were executed with good valuations. Combined cash proceeds slightly exceeded the €1 billion target, with c. €320 million in 2022 and c. €700 million in 2023.
Launch of an additional €1bn disposal program to accelerate deleveraging
FORVIA announces today the launch of a new disposal program for €1 billion.
This program will further strengthen and simplify the Group’s portfolio, as well as accelerate deleveraging beyond the POWER25 objective.
In a context of interest rates that are expected to remain high for a longer period, this additional disposal program will contribute to significantly reduce debt and financial expense.
The expected impact of this program on the Group’s consolidated sales and EBITDA is limited.
The POWER25 objective of improvement in net cash flow generation to 4% of sales in 2025 will be achieved through operating leverage, synergies, capex and R&D control and inventory reduction.
The first step of this new program is the recently-announced disposal by HELLA of its 50% stake in BHTC, co-owned with MAHLE, for a total enterprise value of €600 million (€300 million for each of the two co-owners). The transaction is subject to approval by the relevant foreign trade and antitrust authorities and closing is expected to take place by mid-2024.
OTHER MAIN RECENT EVENTS
Effective end of the Michigan Seating operations for the Grand Wagoneer at the end of September, as planned
FORVIA and the Chinese carmaker CHERY join forces for smart cockpit development
Inauguration in Allenjoie (France) of the first mass production plant of hydrogen storage tanks early October
NINE-MONTH ORDER INTAKE OF €22 BILLION WITH AVERAGE PROFITABILITY ABOVE POWER25 OBJECTIVES
In Q3, FORVIA continued to record strong order intake, totaling €22 billion since the start of the year.
Order intake further reinforces the Group’s exposure to fast-growing segments and geographies:
Commercial selectivity in order intake will translate into improved financial metrics:
Q3 2023 MARKET ENVIRONMENT
Worldwide automotive production in Q3 was up 3.7% at 22.3 million Light Vehicles (source: S&P dated October 2023)
In FORVIA’s main regions, trends were as follows:
The UAW strike in the US that started in September was of very limited impact on Q3 2023 (c. €6 million of lost sales).
Based on the strike actions decided until today by the workers’ unions and on the measures implemented by its customers, FORVIA’s current best estimate for the impact on Group sales in October 2023 is about €55 million vs. FORVIA’s October 2022 sales in North America of c. €600 million (of which c. €300 million with Ford, GM and Stellantis).
Risks beyond October will depend on the evolution of the strike and cannot be estimated at this stage.
FORVIA has already implemented measures that will allow the Group to quickly react to any eventual intensification of the strike and mitigate as much as possible the impact on the Group’s profitability.
Q3 2023 SALES AT GROUP LEVEL
GROUP (in €m) | Q3 2022* | Currency | Organic | Q3 2023 | Reported | ||
effect | growth | change | |||||
Worldwide auto. production (m units)** | 21 513 | 22 318 | 3,7% | ||||
Sales | 6 370 | -524 | 683 | 6 528 | 2,5% | ||
% of last year's sales | -8,2% | +10.7% | |||||
outperformance (bps) | 700bps | ||||||
* Restated for SAS (part of the "Interiors" Business Group), presented as Discontinued operations as from January 1, 2022 | |||||||
** Source: S&P Global Mobility dated October 2023 |
In Q3 2023, consolidated sales amounted to €6,528 million: +2.5% on a reported basis and +10.7% on an organic basis, representing an outperformance of 700bps
Out of the 700bps:
Although discussions with some OEMs about inflation compensation remain tough, the Group confirms expecting to recover a higher percentage of inflation in H2 vs. H1. It now expects to reach at year-end c. 85% of cumulated inflation.
All Business Groups recorded a strong outperformance of at least c. 500bps.
Q3 2023 SALES BY BUSINESS GROUP
in €m | Seating | Interiors | Clean Mobility | Electronics | Lighting | Lifecycle Sol. | GROUP | |||||
% of Q3 2023 consolidated sales | 31% | 17% | 18% | 16% | 14% | 4% | 100% | |||||
Q3 2022 IFRS 5* | 1 960 | 1 111 | 1 207 | 1 001 | 850 | 240 | 6 370 | |||||
Currency effect | -166 | -105 | -128 | -68 | -43 | -15 | -524 | |||||
% of last year's sales | -8,5% | -9,5% | -10,6% | -6,8% | -5,0% | -6,0% | -8,2% | |||||
Organic growth | 222 | 123 | 103 | 106 | 92 | 39 | 683 | |||||
% of last year's sales | 11,3% | 11,0% | 8,5% | 10,6% | 10,8% | 16,1% | 10,7% | |||||
Outperformance (bps) | 760 | 730 | 480 | 690 | 710 | 1 240 | 700bps | |||||
Q3 2023 | 2 016 | 1 129 | 1 182 | 1 039 | 899 | 264 | 6 528 | |||||
Reported change | 2,8% | 1,6% | -2,1% | 3,9% | 5,8% | 10,0% | 2,5% | |||||
* Restated for SAS (part of the "Interiors" Business Group), presented as Discontinued operations as from January 1, 2022 | ||||||||||||
** Source: S&P Global Mobility dated October 2023 | ||||||||||||
Seating posted organic growth of 11.3% in Q3, an outperformance of 760bps, mainly reflecting strong sales in China and Europe.
Interiors also posted double-digit organic growth of 11,0% in Q3, an outperformance of 730bps, driven by strong performance in Europe and China.
Clean Mobility posted an organic growth of 8.5%, an outperformance of 480bps.
Asia, North America and Europe, all three, recorded mid-single digit organic growth with regional outperformance in Asia, driven by HKMC and Chinese OEMs; organic growth in North America was driven by significant sales development with Stellantis and double-digit growth with Ford.
Electronics posted an organic growth of +10.6%, an outperformance of 690bps, driven by continued success with electrification components like high-voltage battery management systems and radar sensors.
By geography:
Lighting posted an organic growth of +10.8%, an outperformance of 710bps, benefiting from higher production in all regions and increased demand for the latest technologies for electric vehicles.
By geography:
Lifecycle solutions posted an organic growth of +16.1%, an outperformance of 1,240bps, an acceleration driven by increased contribution from the truck and bus segment.
By geography, sales grew by more than 20% in Europe and close to 10% in North America.
Q3 2023 SALES BY REGION
in €m | EMEA | AMERICAS | ASIA | GROUP | |||
% of Q3 2023 consolidated sales | 43% | 28% | 29% | 100% | |||
Q3 2022 IFRS 5* | 2 622 | 1 849 | 1 898 | 6 370 | |||
Currency effect | -93 | -192 | -239 | -524 | |||
% of last year's sales | -3,5% | -10,4% | -12,6% | -8,2% | |||
Organic growth | 282 | 171 | 230 | 683 | |||
% of last year's sales | 10,8% | 9,2% | 12,1% | 10,7% | |||
Regional auto production** (m units) | 5,9% | 7,6% | 1,7% | 3,7% | |||
Outperformance (bps) | 490 | 160 | 1 040 | 700bps | |||
Q3 2023 | 2 811 | 1 828 | 1 889 | 6 528 | |||
Reported change | 7,2% | -1,2% | -0,5% | 2,5% | |||
* Restated for SAS (part of the "Interiors" Business Group), presented as Discontinued operations as from January 1, 2022 | |||||||
** Source: S&P Global Mobility dated October 2023 | |||||||
In Europe (representing over 95% of the region), sales grew organically by 10.3%, while automotive production was up 6.3%. Organic growth was mainly attributable to Seating and Interiors; all Business Groups grew organically year-on-year.
In North America (representing c. 90% of the region), sales grew organically by 5.9%. Organic growth was mainly attributable to Clean Mobility, Electronics and Lighting.
In South America (representing c. 10% of the region), sales grew organically by 36.9%. Organic growth was driven by Clean Mobility and Seating.
In China (representing c. 80% of the region), sales grew organically by 11.8%, while automotive production was broadly stable (-0.3%), i.e. a strong outperformance of c. 1,210bps. Organic growth was mainly attributable to Seating, boosted by sales to Chinese OEMs including BYD.
In the rest of Asia (representing c. 20% of the region), sales grew organically by 13.7%. Organic growth was mainly driven by Electronics.
CONFIRMED FY 2023 GUIDANCE
FORVIA confirms its guidance for the full-year 2023:
This guidance is based on:
It assumes no major lockdown or market event impacting production or retail sales in any major automotive region.
CONFIRMED POWER25 OBJECTIVES
The Group’s FY 2025 objectives, as presented at the Capital Markets Day held on November 3, 2022, do not reflect the positive effects of the additional €1bn disposal program, whose launch is announced today:
These financial objectives were based on the following main assumptions:
They assume no major lockdown or market event impacting production or retail sales in any major automotive region over the period.
CALENDAR (provisional)
*
* *
A webcast will be held today, Friday October 20, 2023 at 8:00am (Paris time).
FORVIA’s Q3 2023 sales presentation will be available before the webcast on FORVIA’s website: www.forvia.com
If you wish to follow the presentation using the webcast, please access the following link:https://edge.media-server.com/mmc/p/rcboppbs
A replay will be available as soon as possible.
You may also follow the presentation via conference call:France: +33 1 70 91 87 04United Kingdom: +44 1 212 818 004United States: +1 718 705 8796
Code: 888652
** *
PRESS | ANALYSTS/INVESTORS |
Christophe MALBRANQUEGroup Media Relations Director+33 (0) 6 21 96 23 53christophe.malbranque@forvia.com | Marc MAILLETGroup Head of Investor Relations+33 (0) 1 72 36 75 70marc.maillet@forvia.com |
Iria MONTOUTOGroup Media Relations Officer+33 (0) 6 01 03 19 89iria.montouto@forvia.com | Sébastien LEROYDeputy Head of Investor Relations +33 (0) 1 72 36 78 74sebastien.leroy@forvia.com |
About FORVIA, whose mission is: “We pioneer technology for mobility experiences that matter to people”.
FORVIA, 7th global automotive technology supplier, comprises the complementary technology and industrial strengths of Faurecia and HELLA. With over 290 industrial sites and 76 R&D centers, 157,000 people, including more than 15,000 R&D engineers across 40+ countries, FORVIA provides a unique and comprehensive approach to the automotive challenges of today and tomorrow. Composed of 6 business groups and a strong IP portfolio of over 14,000 patents, FORVIA is focused on becoming the preferred innovation and integration partner for OEMS worldwide. In 2022, the Group achieved a consolidated revenue of 25.5 billion euros. FORVIA SE is listed on the Euronext Paris market under the FRVIA mnemonic code and is a component of the CAC Next 20 and CAC SBT 1.5° indices. FORVIA aims to be a change maker committed to foreseeing and making the mobility transformation happen. www.forvia.com
DISCLAIMER
This presentation contains certain forward-looking statements concerning FORVIA. Such forward-looking statements represent trends or objectives and cannot be construed as constituting forecasts regarding the future FORVIA’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 including, without limitation, assumptions regarding present and future business strategies (including the successful integration of HELLA within the FORVIA Group), expectations and statements regarding FORVIA's operation of its business, and the future operation, direction and success of FORVIA's business. Although FORVIA 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 FORVIA 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 & Risk management” of FORVIA's 2022 Universal Registration Document filed by FORVIA with the AMF on February 28, 2023 under number D. 23-0064 (a version of which is available on www.forvia.com). Subject to regulatory requirements, FORVIA 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. The historical figures related to HELLA included in this presentation have been provided to FORVIA by HELLA within the context of the acquisition process. These historical figures have not been audited or subject to a limited review by the auditors of FORVIA. HELLA remains a listed company. For more information on HELLA, more information is available on www.hella.com. This presentation does not constitute and should not be construed as an offer to sell or a solicitation of an offer to buy FORVIA securities.
DEFINITIONS OF TERMS USED IN THIS DOCUMENT
Sales growth
FORVIA’s year-on-year sales evolution is made of three components:
As “Scope effect”, FORVIA 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 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.
Operating income
Operating income is the FORVIA group’s principal performance indicator. It corresponds to net income of fully consolidated companies before:
Adjusted EBITDA
Adjusted EBITDA is Operating income as defined above + depreciation and amortization of assets; to be fully compliant with the ESMA (European Securities and Markets Authority) regulation, this term of “Adjusted EBITDA” will be used by the Group as of January 1, 2022 instead of the term “EBITDA” that was previously used (this means that “EBITDA” aggregates until 2021 are comparable with ‘Adjusted EBITDA” aggregates as from 2022).
Net cash flow
Net cash flow is defined as follow: Net cash from (used in) operating and investing activities less (acquisitions)/disposal of equity interests and businesses (net of cash and cash equivalents), other changes and proceeds from disposal of financial assets. Repayment of IFRS 16 debt is not included.
Net financial debt
Net financial debt is defined as follow: Gross financial debt less cash and cash equivalents and derivatives classified under non-current and current assets. It includes the lease liabilities (IFRS 16 debt).
APPENDIX
IFRS 5 RESTATEMENT ON 2022 SALES & OPERATING INCOME BY SEMESTER Faurecia’s SAS Cockpit Modules division (assembly and logistics services), that was part of the “Interiors” Business Group and whose contemplated disposal was announced on February 19, 2023, has been presented as “Discontinued operations” since the start of 2023 and impacts on the Group’s 2022 consolidated figures are presented in the following table. | |||||||
GROUP (in €m) | H1 2022 | H2 2022 | FY 2022 | ||||
as released | restated | as released | restated | as released | restated | ||
in July 2022 | for IFRS 5 | in Feb. 2023 | for IFRS 5 | in Feb. 2023 | for IFRS 5 | ||
Sales | 11,623 | 11,233 | 13,835 | 13,341 | 25,458 | 24,574 | |
Operating income | 426 | 398 | 689 | 663 | 1,115 | 1,061 | |
% of sales | 3.7% | 3.5% | 5.0% | 5.0% | 4.4% | 4.3% |
Attachment
1 Year Forvia Chart |
1 Month Forvia Chart |
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