Faurecia Notches Up Sturdy Revenue Growth, Helped by Weak Euro

By Jason Chow

PARIS--French car parts maker Faurecia SA (EO.FR) reported a 14% increase in sales to EUR5.1 billion in the first quarter of this year, boosted by a lower euro as well as a rebounding European car market.

The favorable exchange rate was the biggest factor to turbocharging the Nanterre-based company's revenues. Faurecia, which makes car parts including seats, transmissions and cockpit interior systems, said in a statement the lower euro jumpstarted revenues by 8.3% alone in the first quarter. Stripping out the effects of currency, sales increased 5.5%, it said.

Similar to many of Europe's industrial companies, the lower euro is helping revenue growth as sales abroad count more when translated back into euros. In addition, the long-dormant car market in the region is showing signs of life as more confident European consumers have begun to buy cars again.

In Europe, which makes up over 40% of total revenues, Faurecia, which is majority-owned by France's largest car maker PSA Peugeot Citroën (UG.FR), said car parts sales increased 6.2% to EUR2.2 billion. Shipments to the Renault-Nissan Alliance increased 19%, while sales to Ford Motor Co. (F) and Peugeot increased 10% and 7%, respectively. The company now expects car production in Europe, excluding Russia, to grow within the range of 3% to 5%, a slight increase from its previous forecast of 2% to 4%.

In China, the world's largest car market, Faurecia said product sales grew 8.2% but didn't disclose revenue figures. Revenues in Asia, of which China comprises over 80% of Faurecia's sales, grew 7.5% to EUR563.9 million. Last month, Faurecia and Chinese car maker Dongfeng Motor Group signed a joint venture to manufacture components for Dongfeng vehicles to capture more business with the local brand of China's second-largest car maker.

Faurecia confirmed on Wednesday its 2015 target for overall sales growth of 5%, not including the effect of exchange rate, and an operating profit margin of 4%.

Write to Jason Chow at [e-mail]

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