Earnings Release • Jul 22, 2010
Earnings Release
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Nanterre, July 22, 2010
Faurecia achieved a sharp rise in the first half results, driven by a general upturn across all Business Groups:
net cash flow1 of 137 million euros;
net debt reduced to 1,349 million euros;
| In million euros (EUR) | 1st half 2009 |
1st half 2010 |
|---|---|---|
| Sales % like-for-like change yr-on-yr |
4,380.1 -29.9% |
6,825.9 26.9% |
| Product Sales % like-for-like change yr-on-yr |
3,484.0 -32.7% |
5,354.4 33.2% |
| Operating income as % of sales |
(187.3) -4.3% |
216.5 3.2% |
| Net income (Group share) | (364.6) | 101.9 |
| Capital expenditure | 87.8 | 123.9 |
| Net financial debt (at June 30) | 1,467.1 | 1,348.5 |
1 Net cash flow: change in net debt, change from sale of receivables, net debt tied to acquisitions of Emcon Technologies and Plastal Germany & impact of exchange rates on debt
Faurecia's consolidated sales for the first half of 2010 stood at 6,825.9 million euros, including figures for Emcon Technologies, consolidated since January 1, 2010 (1,153 million euros), and Plastal Germany, since April 1 (121.1 million euros).
At constant exchange rates and scope—with 2009 figures adjusted to include Emcon Technologies sales and 2010 figures excluding Plastal Germany—sales were up 26.9% compared with the first half of 2009.
Sales of monoliths totaled 1,054.9 million euros, up 30.4% at constant exchange rates and scope compared with the first half of 2009.
Excluding sales of monoliths included in Emissions Control Technologies, sales stood at 5,771 million euros, an increase of 26.3% at constant exchange rates and scope.
Tooling, R&D and prototype sales dropped by 30.1% in the first half of 2010, at constant exchange rates and on a comparable basis, totaling 345.3 million euros. This figure should be taken in context, however, set against a cyclical high in the first half of 2009 as a result of extensive billing to US automakers before they entered Chapter 11 bankruptcy protection.
Product sales (deliveries of parts and components to automakers) in the first half totaled 5,354.4 million euros, up 53.7% (or +33.2% at constant exchange rates and scope).
First-half sales for 2010 by region:
• In Europe, product sales totaled 3,618 million euros (67.6% of total product sales), up 20.5% at constant exchange rates and scope.
• In North America, amid a market turnaround, product sales totaled 951.5 million euros (17.8% of product sales), an increase of 88.5% at constant exchange rates and scope.
• In South America, product sales totaled 253 million euros (4.7% of total sales), up 29.6% at constant exchange rates and scope.
• In Asia, product sales were up 69.8% at constant exchange rates and scope, totaling 442.3 million euros (8.3% of total sales). At constant exchange rates and scope, this increase stood at 65.2% in China and 79.6% in South Korea.
• In other countries, product sales totaled 89.6 million euros, an increase of 55.9% at constant exchange rates and scope.
Emissions Control Technologies: 1,202.2 million euros, up 43.3% at constant exchange rates and scope. This significant increase was due to this Product Group's important exposure to North America and Asia. Emcon Technologies product sales totaled 588.5 million euros.
Operating income was a profit of 216.5 million euros in the first half of 2010, compared with a loss of 187.3 million euros in the first half of 2009 caused by the sharp drop in business.
Operating margin represented 3.2% of total Faurecia sales, reflecting significant improvement since the first half of 2009 and the second half of 2009, when it represented 1.9% of sales (95.6 million euros).
Growth in operating income stems from:
Gross R&D expenditure totaled 339.9 million euros and 5% of sales compared with 265.1 million euros and 6.1% of sales in the first half of 2009. Net of amounts billed to customers, gross R&D expenditure totaled 149.6 million euros, compared with 103.1 million euros in the first half of 2009. Business contribution from Emcon Technologies and Plastal Germany represented 22.8 million euros of additional net expenditure. Excluding this input, expenditure was up 23.7 million euros.
Administrative and commercial expenses totaled 214.4 million euros, compared with 167.8 million euros in the first half of 2009. The integration of Emcon Technologies and Plastal Germany represented 30.9 million euros of additional expenditure. Excluding expenses related to consolidating the two companies, administrative and commercial expenses decreased from 3.8% to 3.3% of overall sales.
Other operating income of 60.6 million euros essentially represented, in the amount of 60 million euros, by a profit generated by the bargain purchase (badwill) of Plastal Germany.
Capital expenditure totaled 123.9 million euros, representing 1.8% of sales, compared with 87.8 million euros (2% of sales) in the first half of 2009.
Net cash flow², not including changes from the sale of receivables, led to a balance of 137 million euros in the first half of 2010.
Net financial debt at June 30, 2010, stood at 1,349 million euros, compared with 1,401 million euros at December 31, 2009.
The company forecasts an 8% drop in light-vehicle production in Europe in the second half of 2010, caused by the phasing out of tax incentives. Production is expected to grow by around 11% in North America.
Faurecia expects a change in product sales of between -2% and +2% in the second half of 2010, versus the same period of 2009.
At constant exchange rates and scope, the outlook for Faurecia product sales in the second half of the year includes:
Against this backdrop, and based on first half achievements, Faurecia has revised its 2010 targets upward as follows:
2 Net cash flow: change in net debt – change from sale of receivables – net debt linked to acquisitions of Emcon Technologies & Plastal Germany – impact of exchange rates on debt
| 2010 targets | Announced in February |
Revised in July |
|---|---|---|
| Product sales* | 4% | 13-16% |
| Operating income | > €200m | > €340m |
| Net Cash Flow** | Positive | > €100m |
* At constant exchange rates and scope
** Net cash flow: change in net debt – change from sale of receivables – cash/debt linked to acquisitions of Emcon Technologies & Plastal Germany – impact of exchange rates on debt
| Sales (million euros) | st half 2009 1 |
1st half 2010 |
Change* |
|---|---|---|---|
| Automotive Seating | 1,867.5 | 2,313.7 | 22.5% |
| Vehicle Interiors | 1,247.9 | 1,565.5 | 22.8% |
| Vehicle Interior Modules | 3,115.4 | 3,879.2 | 22.6% |
| Emissions Control Technologies | 855.9 | 2,317.7 | 35.7% |
| excluding monoliths | 455.9 | 1,262.8 | 40.4% |
| Exterior Systems | 408.8 | 629.0 | 24.2% |
| Other Modules | 1,264.7 | 2,946.7 | 33.4% |
| Total excluding monoliths |
4,380.1 3,980.1 |
6,825.9 5,771.0 |
26.9% 26.3% |
* At constant exchange rates and scope
Vehicle Interiors achieved operating income of 133.1 million euros, representing 3.4% of total sales.
Other modules posted operating income of 83.5 million euros, representing 2.8% of total sales. As stated above, business contribution from Emcon and Plastal Germany stood at 19 million euros.
Faurecia is one of the world's leading (#6 worldwide) automotive equipment suppliers with four key Business Groups: Automotive Seating, Emissions Control Technologies, Interior Systems and Automotive Exteriors. In 2009, the Group posted pro-forma sales of 11.3 billion euros, including Emcon Technologies and Plastal Germany. It employs 62,000 people in 32 countries at 200 sites and 33 R&D centers. Faurecia is listed on the NYSE Euronext Paris stock exchange. For more information, visit: www.faurecia.com
Contacts: Press
Olivier Le Friec Media Relations Manager Tel: +33 (0)1 72 36 72 58 Mob: +33 (0)6 76 87 30 17 [email protected]
Eric-Alain Michelis Investor Relations Tel: +33 (0)1 72 36 75 70 Mob: +33 (0)6 64 64 61 29 [email protected]
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