Nanterre (France), February 22, 2021
FULL-YEAR 2020 RESULTS & 2021 GUIDANCE
STRONG RECOVERY AND OVERACHIEVEMENT OF TARGETS IN H2, NOTABLY CASH GENERATION
in €m | H2 2020 | YoY change | H2 targets* | FY 2020 | YoY Change |
Sales At constant scope and currencies | 8,484 | -3.5% -3.5% | At least €8bn | 14,654 | -17.5% -19.6% |
Operating income As % of sales | 520 6.1% | -18.5% -120bps | At least 5.5% | 406 2.8% | -68.3% -440bps |
Net cash flow | 1,051 | n/s | At least €700m | 6 | n/s |
* as upgraded along with the Q3 2020 sales announcement, released on October 23, 2020
2021 GUIDANCE REFLECTS STRONG SALES OUTPERFORMANCE, SOLID OPERATING LEVERAGE AND CASH GENERATION IN A CONTEXT OF MARKET REBOUND
Based on the prudent assumption that worldwide automotive production should reach 76.6 million vehicles in 2021, up 8% year-on-year, Faurecia ’s full-year 2021 guidance is as follows:
BACK TO DIVIDEND PAYMENT WITH €1 PER SHARE (to be proposed at next shareholders’ meeting)
CAPITAL MARKETS DAY TO BE HELD TODAY WILL PRESENT Faurecia ’S “NEW PERSPECTIVES”, AHEAD OF THE UPCOMING CHANGE IN CAPITAL STRUCTURE (see separate Press Release issued today)
Patrick KOLLER, CEO of Faurecia , declared:
“In the second half of the year, thanks to excellent preparation for production restart as well as resilience actions implemented since the beginning of the crisis, Faurecia overachieved all its financial targets. This was particularly true for cash generation, which offset the consumption of the first half and contributed to significant debt reduction. We are proud, in such a difficult year, to have further strengthened the confidence of our customers as reflected in a new record order intake of 26 billion euros.
I would like to thank all the Faurecia teams, who have done an extraordinary job, for their contribution to this successful performance, whilst strictly respecting our Covid-19 protocol.
In 2021, we will resume strong sales outperformance, be back to profitability close to pre-crisis level and generate solid cash flow that will further contribute to our deleveraging.
Our confidence in Faurecia ’s future prospects, which will be presented today at our Capital Markets Day, allows us to resume dividend payment in 2021, offering a fair remuneration to our shareholders.”
STRONG IMPACT OF COVID-19 IN H1 BUT GRADUAL RECOVERY IN H2
The first half of the year was strongly impacted by the globalization of Covid-19 that heavily impacted the automotive industry and all sectors of the economy.
Temporary shutdown of most of its customers’ production sites forced Faurecia to stop production in a large number of its sites during the period.
In the first quarter of the year, worldwide automotive production fell by 22% to 17.2 million vehicles, mostly impacted by China, and in the second quarter it fell by 46% to 11.5 million vehicles, mostly impacted by Europe and North America, while China was restarting.
In this unprecedented context, Faurecia proved very agile and immediately implemented a strong action plan to react to the crisis with three priorities:
As from the third quarter, worldwide automotive production started to recover and worldwide automotive production in the quarter was only 3.7% down vs. the third quarter of 2019 (19.5 million vehicles), while in the fourth quarter it was even up 2.9% vs. the last quarter of 2019 (22.4 million vehicles).
The graph below shows Faurecia ’s organic sales evolution by quarter: SEE IN THE PDF DOC ATTACHED
Faurecia ’s sales evolution reflected that of worldwide automotive production by quarter. It is worth mentioning that Group product sales (i.e. excluding tooling and prototype sales) were up 2% in Q4 2020 on an organic basis.
NEW RECORD ORDER INTAKE OF €26bn DESPITE THE CONTEXT
Despite the Covid-19 context, Faurecia continued to increase customer satisfaction, thanks to its Total Customer Satisfaction program.
A new record intake of €26 billion in 2020 leads to a combined amount of €72 billion over the last three years (2018-2020), representing continued market share gains and securing future profitable growth prospects.
New business awards, with high profitability, including:
OTHER KEY 2020 ACHIEVEMENTS
In 2020, Faurecia continued to deploy its strategy and among its main achievements of the year were:
Faurecia also accelerated its carbon neutrality program and sustainability initiatives:
Another priority for Faurecia is to enhance gender diversity, targeting 30% female managers and professionals and 24% of females in the top 300 by 2025.
In addition, Faurecia ’s commitment to employee engagement and talent development was strengthened through an increasingly robust learning organization to support its transformation and the decision to maintain 1,000 young graduates/VIEs and apprentices in France, among other initiatives. The latest Employee Engagement Survey showed a significant improvement of 12 points in rating to reach 76%.
Lastly, the Group launched the Faurecia Foundation to support initiatives on education, mobility and environment.
2020 SALES AND PROFITABILITY AT GROUP LEVEL
The following table details sales and operating income in H1 2020, strongly impacted by the Covid-19 crisis and plant closures, and H2 2020, when volume started to recover.
In €m | H1 | H2 | FY |
2019 sales | 8,972 | 8,796 | 17,768 |
Currency effect | (43) | (330) | (373) |
% of sales | (0.5%) | (3.7%) | (2.1%) |
Organic | (3,176) | (307) | (3,483) |
% of sales | (35.4%) | (3.5%) | (19.6%) |
Scope effect | 417 | 324 | 741 |
% of sales | 4.6% | 3.7% | 4.2% |
2020 sales | 6,170 | 8,484 | 14,654 |
Reported change in % | (31.2%) | (3.5%) | (17.5%) |
Reported change in value | (2,802) | (312) | (3,115) |
Operating income 2019 | 645 | 638 | 1,283 |
% of sales | 7.2% | 7.3% | 7.2% |
Operating income 2020 | (114) | 520 | 406 |
% of sales | (1.8%) | 6.1% | 2.8% |
In H2:
In FY:
2020 SALES AND PROFITABILITY BY BUSINESS GROUP
Seating (38% of Group sales)
FY 2019 | H1 2020 | H2 2020 | FY 2020 | |
6,973 | Sales (€m) | 2,270 | 3,289 | 5,560 |
YoY reported | -37.6% | -1.3% | -20.3% | |
YoY organic | -37.2% | 1.2% | -18.9% | |
453 | Operating income (€m) | -23 | 213 | 191 |
6.5% | % of sales | -1.0% | 6.5% | 3.4% |
Sales
Operating income
Interiors (31% of Group sales)
FY 2019 | H1 2020 | H2 2020 | FY 2020 | |
5,370 | Sales (€m) | 1,922 | 2,622 | 4,544 |
YoY reported | -30.0% | -0.1% | -15.4% | |
YoY organic | -36.9% | -9.3% | -23.4% | |
294 | Operating income (€m) | -93 | 112 | 19 |
5.5% | % of sales | -4.8% | 4.3% | 0.4% |
Sales
Operating income
Clean Mobility (26% of Group sales)
FY 2019 | H1 2020 | H2 2020 | FY 2020 | |
4,654 | Sales (€m) | 1,647 | 2,177 | 3,823 |
YoY reported | -30.0% | -5.4% | -17.8% | |
YoY organic | -29.5% | -0.8% | -15.3% | |
525 | Operating income (€m) | 10 | 191 | 201 |
11.3% | % of sales | 0.6% | 8.8% | 5.3% |
Sales
Operating income
Clarion Electronics (5% of Group sales)
FY 2019 (9 months) | H1 2020 | H2 2020 | FY 2020 | |
771 | Sales (€m) | 331 | 396 | 727 |
YoY reported | 41.0% | -26.2% | -5.8% | |
YoY organic | -49.4% | -15.7% | -26.0% | |
12 | Operating income (€m) | -9 | 4 | -5 |
1.5% | % of sales | -2.7% | 1.0% | -0.7% |
Sales
Operating income
2020 SALES AND PROFITABILITY BY REGION
Europe (47% of Group sales)
FY 2019 | H1 2020 | H2 2020 | FY 2020 | |
8,641 | Sales (€m) | 3,027 | 3,945 | 6,972 |
YoY reported | -33.2% | -4.0% | -19.3% | |
YoY organic | -36.1% | -7.5% | -22.5% | |
558 | Operating income (€m) | -113 | 186 | 73 |
6.5% | % of sales | -3.7% | 4.7% | 1.0% |
Sales
Operating income
North America (25% of Group sales)
FY 2019 | H1 2020 | H2 2020 | FY 2020 | |
4,483 | Sales (€m) | 1,475 | 2,157 | 3,632 |
YoY reported | -35.6% | -1.7% | -19.0% | |
YoY organic | -41.7% | -1.8% | -22.2% | |
283 | Operating income (€m) | -84 | 117 | 33 |
6.3% | % of sales | -5.7% | 5.4% | 0.9% |
Sales
Operating income
Asia (24% of Group sales)
FY 2019 | H1 2020 | H2 2020 | FY 2020 | |
3,766 | Sales (€m) | 1,470 | 2,058 | 3,528 |
YoY reported | -14.3% | 0.4% | -6.3% | |
YoY organic | -23.2% | 2.8% | -9.1% | |
374 | Operating income (€m) | 101 | 208 | 308 |
9.9% | % of sales | 6.8% | 10.1% | 8.7% |
Sales
Operating income
South America (3% of Group sales)
FY 2019 | H1 2020 | H2 2020 | FY 2020 | |
696 | Sales (€m) | 157 | 242 | 398 |
YoY reported | -54.6% | -31.3% | -42.8% | |
YoY organic | -42.1% | -6.8% | -24.2% | |
47.9 | Operating income (€m) | -14 | 8 | -6 |
6.9% | % of sales | -8.8% | 3.4% | -1.4% |
Sales
Operating income
BACK TO PROFIT IN H2 AT €54 MILLION, DESPITE INCREASED RESTRUCTURING EXPENSE
FULL-YEAR NET INCOME (Group share) POSTED A LOSS OF €379 MILLION
Group operating income stood at €406 million, vs. €1,283 million in 2019.
Net income before minority interests was a loss of €321 million vs. a profit of €665 million in 2019.
Minority interests amounted to €57 million vs. €75 million in 2019.
Net income (Group share) was a loss of €379 million vs. a profit of €590 million in 2019.
NET CASH FLOW OF €6 MILLION, WITH STRONG CASH GENERATION IN H2 OF €1.1 BILLION THAT OFFSET CASH CONSUMPTION IN H1
SIGNIFICANT DEBT REDUCTION AT DECEMBER 31 VS. JUNE 30 AND DELEVERAGING REFLECTED IN NET-DEBT-TO-EBITDA RATIO IMPROVEMENT
STRONG LIQUIDITY RESTORED ABOVE PRE-CRISIS LEVEL
EBITDA stood at €1,679 million, vs. €2,404 million in 2019 reflected the drop of €877 million in operating income, mitigated by higher depreciation and amortization. In H2 2020, EBITDA margin represented 13.8% of sales compared to an EBITDA margin of 13.5% in the full-year 2019.
Capex reduced by 30.1% and capitalized R&D reduced by 9.1% reflected lower activity and flexibilization actions.
Net cash flow stood at €6 million, vs. €587 million in 2019; strong net cash flow of €1,051 million in H2 offset the cash consumption of €1,045 million in H1.
After a negative impact of €211 million related to IFRS16, the Group’s net financial debt stood at €3,128 million at June 30 (vs. €2,524 million at December 31, 2019).
Net-debt-to-EBITDA ratio stood at 1.9x EBITDA at December 31, 2020 vs. 1.1x at December 31, 2019. The ratio at year-end 2020 reflected a strong deleveraging in the second half of the year: at June 30, 2020, it stood a 2.3x.
At year-end, liquidity amounted to €4.3 billion, of which available cash for €3.1 billion and undrawn Syndicated Credit Facility (SCF) for €1.2 billion.
This compares to €3.5 billion at December 31, 2019 (€2.3 billion available cash and €1.2 billion SCF) and €3.1 billion at June 30, 2020 (€2.5 billion available cash and €0.6 billion SCF).
PROPOSED DIVIDEND OF €1 PER SHARE REFLECTS CONFIDENCE IN PROFITABLE GROWTH PROSPECTS
The Board of Directors will propose at the next Annual Shareholders’ Meeting, to be held in Paris on May 31, the payment of a dividend of €1 per share. It will be paid in cash in June.
The decision to return to paying a dividend in 2021 reflects Faurecia ’s confidence in profitable growth and cash generation prospects, as they will be detailed during today’s Capital Markets Day.
It also reflects Faurecia ’s strategy to resume a sustainable and progressive dividend path, consistent with historical practices, and offer a fair and attractive remuneration to shareholders.
2021 GUIDANCE REFLECTS STRONG OPERATING LEVERAGE AND SOLID CASH FLOW GENERATION
Faurecia expects worldwide automotive production to rebound to 76.6 million vehicles in 2021, up 8% vs. 2020.
This assumption is more conservative than IHS Markit forecast (dated February 2021) of 80.9 million vehicles, as there are uncertainties in H1 2021, mainly related to Covid variants as well as electronic components shortage, even if this could be caught up in H2 2021.
Based on this assumption that worldwide automotive production should reach 76.6 million vehicles in 2021, Faurecia ’s financial targets for the year are:
Faurecia ’s assumption of 2021 worldwide automotive production assumes no major lockdown impacting production or retail sales in any automotive region during the year.
All financial targets are based on 2021 average currency rates of 1.18 for USD/€ and 8.15 for CNY/€.
CAPITAL MARKETS DAY TO BE HELD TODAY OUTLINING Faurecia ’S “NEW PERSPECTIVES”, AHEAD OF THE UPCOMING CHANGE IN CAPITAL STRUCTURE
(see separate Press Release issued today)
Today at 1:30pm (CET), Faurecia will hold a Capital Markets Day (CMD).
This event will be webcasted and the Capital Markets Day can be followed through the following link: https://channel.royalcast.com/faurecia-en/#!/faurecia-en/20210222_2
A specific Press Release was issued this morning that details the main takeaways of the CMD.
It will provide an overview of the strategy and mid-term perspectives for the Group and each of its Business Groups as well as demonstrate the Group’s strong potential for value creation over the medium term.
Financial targets for 2022 are confirmed (based on an assumption of worldwide automotive production of 82.3 million vehicles and at constant 2021 scope and currencies):
Faurecia will also present its 2025 ambition (based on an assumption of worldwide automotive production of 90.9 million vehicles and at constant 2021 scope and currencies):
Over the five-year period (2021 to 2025):
UPDATE ON THE DISTRIBUTION OF Faurecia SHARES BY STELLANTIS
The completion of the FCA and Groupe PSA merger, effective since 16 January 2021, has given rise to the new Stellantis group, which is now Faurecia ’s main shareholder.
As part of the merger process, Stellantis will distribute in kind to its shareholders its Faurecia shares representing c. 39% of the capital of the company.
Stellantis has announced that an extraordinary general meeting will take place on 8 March 2021 to approve the distribution.
This distribution opens a new chapter for Faurecia : it will increase its free float (up to c. 85%), improve its capital market profile and allow it to affirm its business strategy as an independent company.
Faurecia 's financial presentation and financial report will be available at 8:30am today (Paris time) on the Faurecia website: www.faurecia.com
A webcast will be held today at 9:00am (Paris time). If you wish to follow the presentation using the webcast, please access the following link: https://channel.royalcast.com/faurecia-en/#!/faurecia-en/20210222_1
A replay will be available as soon as possible.
You may also follow the presentation via conference call:
Confirmation code: 8109503
Financial calendar
February 22, 2021: Capital Markets Day, at 1:30pm CET
April 19, 2021: Q1 2021 Sales (before market hours)
May 31, 2021: Annual Shareholders’ Meeting
July 26, 2021: H1 2021 Results (before market hours)
October 26, 2021: Q3 2021 sales (before market hours)
About Faurecia
Founded in 1997, Faurecia has grown to become a major player in the global automotive industry. With 266 industrial sites, 39 R&D centers and 114,500 employees in 35 countries, Faurecia is a global leader in its four areas of business: Seating, Interiors, Clarion Electronics and Clean Mobility. Faurecia has focused its technology strategy on providing solutions for the “Cockpit of the Future” and “Sustainable Mobility”. In 2020, the Group posted sales of €14.7 billion. Faurecia is listed on the Euronext Paris stock exchange. For more information, please visit www.faurecia.com
Contacts Press Eric FOHLEN-WEILL Head of Corporate Communications Tel: +33 (0)1 72 36 72 58 eric.fohlen-weill@faurecia.com |
Analysts/Investors Marc MAILLET Head of Investor Relations Tel: +33 (0)1 72 36 75 70 marc.maillet@faurecia.com | Anne-Sophie JUGEAN Deputy Head of Investor Relations Tel: +33 (0)1 72 36 71 31 annesophie.jugean@faurecia.com |
APPENDICES
Definitions of terms used in this document
Faurecia ’s year-on-year sales evolution is made of three components:
As “Scope effect”, Faurecia 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 2020, 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.
Profit and Loss Statement
2019 | in €m | H1 2020 | H2 2020 | 2020 | Change |
17,768 | Sales | 6,170 | 8,484 | 14,654 | -3,114 |
organic change | -35.4% | -3.5% | -19.6% | ||
1,283 | Operating income (before amort. of acquired intangible assets) | (114) | 520 | 406 | -877 |
(56) | Amort. of intangible assets acquired in business combinations | (46) | (46) | (92) | |
1,227 | Operating income (after amort. of acquired intangible assets) | (160) | 474 | 315 | -912 |
(194) | Restructuring | (89) | (197) | (286) | |
(20) | Other non-recurring operating income and expense | 16 | (7) | 9 | |
(219) | Net interest expense & Other financial income and expense | (108) | (115) | (223) | |
794 | Income before tax of fully consolidated companies | (341) | 155 | (185) | |
(167) | Income taxes | (67) | (56) | (123) | |
(21.0%) | as % of pre-tax income | n/a | (36.1%) | n/a | |
627 | Net income of fully consolidated companies | (408) | 99 | (309) | -936 |
38 | Share of net income of associates | (12) | (1) | (13) | |
665 | Consolidated net income before minority interest | (420) | 99 | (321) | |
(75) | Minority interest | (13) | (45) | (57) | |
590 | Consolidated net income, Group share | (433) | 54 | (379) | -969 |
Cash Flow Statement
2019 | in €m | H1 2020 | H2 2020 | 2020 | Change |
1,283 | Operating income | (114) | 520 | 406 | -877 |
1,121 | Depreciation and amortization, of which: | 623 | 650 | 1,273 | |
438 | - Amortization of R&D intangible assets | 243 | 267 | 509 | |
683 | - Other depreciation and amortization | 380 | 383 | 763 | |
2,404 | EBITDA | 509 | 1,170 | 1,679 | -725 |
13.5% | % of sales | 8.3% | 13.8% | 11.5% | |
(685) | Capex | (235) | (244) | (479) | |
(681) | Capitalized R&D | (305) | (315) | (619) | |
166 | Change in WCR | (647) | 552 | (95) | |
(57) | Change in factoring | (96) | 134 | 38 | |
(166) | Restructuring | (54) | (71) | (125) | |
(197) | Financial expenses | (94) | (116) | (210) | |
(296) | Taxes | (109) | (88) | (197) | |
99 | Other (operational) | (14) | 29 | 15 | |
587 | Net cash flow | (1,045) | 1,051 | 6 | -581 |
(212) | Dividends paid (incl. mino.) | (5) | (30) | (35) | |
(29) | Share purchase | 0 | 1 | 1 | |
(1,486) | Net financial investment & Other | (369) | 5 | (364) | |
(906) | IFRS16 impact | (91) | (121) | (211) | |
(2,046) | Change in net debt | (1,510) | 906 | (604) | |
(478) | Net debt at the beginning of the period | (2,524) | (4,034) | (2,524) | |
(2,524) | Net debt at the end of the period | (4,034) | (3,128) | (3,128) | |
1.1x | Net-debt-to-EBITDA ratio | 2.3x | 1.9x | 1.9x |
Net Cash Flow reconciliation
FY 2019 | in €m | H1 2020 | H2 2020 | 2020 | Change |
587 | Net cash flow | (1,045) | 1,051 | 6 | -581 |
(1,130) | Sales/Acquisitions of investments and businesses (net of cash) | (224) | (28) | (252) | |
0 | Proceeds from disposal of financial assets | 0 | 0 | 0 | |
54 | Other changes from continued operations | (3) | (9) | (12) | |
(490) | Cash provided (used) by operating and investing activities | (1,272) | 1,015 | (257) | 233 |
Operating leverage calculation
Sales (in €m) | Operating income (in €m) | ||||
2019 | 17,768 | 2019 | 1,283 | ||
Currency effect | -373 | (a) | Volume impact | -1,476 | (c) |
Organic | -3,483 | (b) | Resilience actions | 661 | (d) |
Scope effect | 741 | Scope & other | 3 | ||
2020 before one-offs | 471 | ||||
One-offs | -65 | ||||
2020 | 14, 654 | 2020 | 406 | ||
Operating leverage in 2020 (c+d)/(a+b) | 21% | ||||
Drop in operating income excl. Scope & other and one-offs | -815 | ||||
Drop in sales excluding Scope effect | -3,856 |
Attachment