Lower annual sales for Faurecia’s Seating business

Worldwide
Published:  18 February, 2020

Sales for the French automotive parts and seating manufacturer totalled €17.8 billion in 2019, up 1.4% on a reported basis, down 3% at constant currencies, at a time when the global automotive production recorded a 5.8% decline according to IHS Markit February 2020.

Faurecia, which aims to become CO2 neutral by 2030, posted an increase in operating income to €1,283 million for full year 2019, with an operating margin at 7.2%. The French Group said there was a record order intake in the year, which resulted in cumulative three-year rolling order intake of €68 billion. Net cash flow was €587 million, up 11.2% year-on-year, and above the guidance of at least €500 million.

Sales in Seating, which represents 39% of Group sales, were down 6.2% on a reported basis and down 6.9% at constant currencies. According to Faurecia, the ex-currency sales drop of €517 million was mostly driven by the temporary negative impact from EoPs (End of Production) representing €511 million or 6.8% of sales in 2019. “Because of this impact, Seating underperformed worldwide automotive production by 110bps”, said Faurecia, highlighting that the negative impact from EoPs will gradually decrease to about €100 million in the first quarter and approximately €40 million in the second quarter of 2020. Conversely, the positive impact from SoPs (Start of Production) is expected to gradually contribute to sales growth as from the fourth quarter of the year, to accelerate in 2021.

“In 2019, we further demonstrated our resilience in a very challenging environment whilst continuing to deploy our transformation strategy. We achieved all our financial targets thanks to our agility to adapt to market conditions that worsened during the year. At the same time, we actively implemented our strategy focused on the Cockpit of the Future and Sustainable Mobility”, said Patrick Koller, CEO, Faurecia. “2020 should be another challenging year in terms of market conditions. We expect, at this stage, a drop of about 3% in worldwide automotive production, and we have the appropriate plans in place to improve our performance”, he added.

Faurecia said it is fully aligned with the medium-term 2022 ambitions presented in November. For 2020 the Group expects sales to exceed €20.5 billion, with an operating margin of 8% of sales and a net cash flow of 4% of sales.

Credit: Faurecia