Auto parts group Faurecia lowers 2021 forecast for the second time


The logo of French automotive supplier Faurecia is seen during the company’s investor day in Paris, France, April 19, 2016. REUTERS / Charles Platiau / File Photo

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  • Reduces sales outlook for 2021 to 15-15.5 billion euros
  • Issues a significant reduction in the net cash flow target

PARIS, Nov. 29 (Reuters) – French automotive supplier Faurecia (EPED.PA) lowered its full-year forecast for the second time on Monday, citing a drop in European auto production, the impact of bottlenecks in supply throttling and COVID restrictions on operations and an off-fee in the United States.

Faurecia shares were down 6.6% at 09:07 GMT after the outlook revised.

The downgrade came after the research institute IHS Markit, on which Faurecia bases its own sales forecasts, said this month that global demand for cars in the second half of 2021 will decline 13% to 6.8 million. of vehicles produced, down from its previous forecast of 7.8 million. Vehicles.

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Faurecia has also taken into account an increased risk of a drop in production linked to COVID-19 as Europe faces a new wave of infections and a new variant of the virus has been detected.

“We had a positive trend in November,” CFO Michel Favre said on a conference call shortly after the statement, “but on the other hand (…) we have no idea that we don’t will not have early closures in the first week of December. ”

Favre said new risks from COVID-19 were added to an already tense situation due to component inflation, mostly affecting semiconductors and continued operational issues at a plant in Michigan, States. United, which had forced the company to slow down its production currently to 80% of capacity.

The company now forecasts 2021 sales of between 15 billion and 15.5 billion euros (16.92 to 17.49 billion euros) and an operating profit margin of 5.5%, against a previous target sales of 15.5 billion euros and a margin of 6 to 6.2%.

The downward revision of its sales forecasts would also strongly affect the company’s net cash objective, which Faurecia now forecasts at “more than 300 million euros”, down from a target of 500 million euros. euros previously communicated.

Faurecia’s revised outlook also affected other French automotive stocks, with Renault (RENA.PA), down 0.9%, and Michelin (MICP.PA), down 0.7%, the biggest losers on the CAC40 (.FCHI), which was up 1%. .

Faurecia’s announcement comes after the French group agreed earlier this year to acquire a majority stake in German automotive lighting group Hella (HLE.DE) in a 6.7 billion transaction euros.

The company said on Monday that the Hella acquisition is expected to be finalized by the end of February, when Faurecia plans to release its 2022 financial outlook, and CFO Favre said the latest earnings warning had failed. no impact on the integration of the new unit.

Asked about the outlook for next year, Favre said he was optimistic about the market’s supply difficulties as there were signs that semiconductors will be back in storage and automakers will become more efficient in the market. their usage.

The CFO acknowledged that the company’s first cut from its 2021 forecast in September may not have been cautious enough and promised the new forecast was “as conservative as it gets.” Read more

Faurecia, in its statement, said the guidance was based on the assumption that no major new lockdowns, impacting production or retail sales in any region of the world, would be put in place.

($ 1 = € 0.8864)

(This story removes references to 2022 quarterly and half-year performance expectations after paragraph 12 as they were not for the group as a whole, as suggested, but for a specific US business unit)

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Reporting by Tassilo Hummel; Editing by Sudip Kar-Gupta, Susan Fenton and David Goodman

Our standards: Thomson Reuters Trust Principles.


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