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The French automotive tier-1 announced it expects to return to profit and cash generation in the second half of the year, driven by cost control following a first-half operating loss due to the impact of the coronavirus pandemic.
In a statement Faurecia said it targets sales of around €7.6 billion, an operating margin of around 4.5% of sales and net cash flow of about €600 million for the second half of the year, assuming that worldwide automotive production will be down around 15% during the period.
The company reported a first-half operating loss of €114 million, which included a €20 million one-off charge related to the coronavirus crisis. Like-for-like sales fell 35%. Targets for 2022 include an operating margin of 8% of sales and net cash flow of 4% of sales, with sales above €18.5 billion.
Faurecia said it was able to achieve savings of €536 million in the first half through what it calls “resilience actions” such as flexibilisation of direct and indirect labour cost, flexibilisation of manufacturing costs, reduction of R&D net expenses and strict control of SG&A which helped mitigate the €1.3 billion sales decline due to the Covid-19 crisis.
"In the medium term, our focus on key priorities in the new post-Covid-19 market environment gives us confidence in our ability to achieve our profitability and cash generation ambition for 2022”, said Patrick Koller, CEO of Faurecia.
Faurecia also released details on how sales were affected regionally by the coronavirus crisis. European sales fell by 33% in the first half to €3.03 billion; North American sales fell by 36% to €1.48 billion; Asian sales fell by 14% to €1.48 billion.
By business group, seating sales were down 38% to €2.23 billion; interiors fell by 30% to €1.9 billion; and clean mobility, including emissions treatments and fuel systems, were also down 30% to €1.65 billion.
Source: Automotive News Europe