Q3 2017 Sales
- Continued momentum in sales; value-added sales of €3.790 billion in Q3
- Up 10.7% on an organic* basis and 870 bps above worldwide automotive production growth (+2.0%**), both figures improving vs. H1
- Up 7.3% on a reported basis, reflecting a negative effect of 3.3 percentage points due to currencies
- Strong organic* growth in all three Business Groups
- Seating up 9.5%, Clean Mobility up 10.1% and Interiors up 13.0%
- Strong organic* performance in all regions
- Europe up +8.7%, Asia up +25.1% and South America up +47.5%
- Stability in North America despite a significant drop in North American automotive production (-8.1%**)
- The full-year 2017 guidance, as recently upgraded on July 21, is confirmed
|
Value-added sales (in €m) |
Q3 2016 |
Q3 2017 |
YoY organic* |
YoY reported |
|---|---|---|---|---|
|
Seating |
1 515,6 |
1 613,2 |
9,5% |
6,4% |
|
Clean Mobility |
959,5 |
1 017,7 |
10,1% |
6,1% |
|
Interiors |
1 056,1 |
1 159,4 |
13,0% |
9,8% |
|
Europe |
1 694,6 |
1 830,2 |
8,7% |
8,0% |
|
North America |
1 050,7 |
986,4 |
-0,1% |
-6,1% |
|
Asia |
587,5 |
700,8 |
25,1% |
19,3% |
|
of which China |
448,0 |
535,1 |
25,7% |
19,4% |
|
South America |
142,7 |
201,2 |
47,5% |
41,0% |
|
Rest of World |
55,7 |
71,6 |
27,0% |
28,7% |
|
GROUP |
3 531,2 |
3 790,3 |
10,7% |
7,3% |
Continued sales momentum in Q3
In Q3 2017, value-added sales amounted to €3.790 billion, up 7.3% on a reported basis (vs. €3.531 billion in Q3 2016).
They included a negative currency effect of €117.5 million, i.e. 3.3 percentage points. Out of this effect, €62.9 million was attributable to the USD vs. the euro and 28.2 million was attributable to the CNY vs. the euro.
On an organic* basis, value-added sales were up 10.7%, reflecting continued strong growth (after the 8.5% recorded during the first six months of the year).
Organic* growth included the positive effect of the consolidation since January 1, 2017 of two joint ventures that were previously accounted for by the equity method:
- Chang’An (China, Interiors) for €66.8 million during the quarter (€192.2 million since the beginning of the year),
- FCA-Pernambuco (Brazil, Interiors) for €51.7 million during the quarter (€127.1 million since the beginning of the year).
This organic* growth reflected a strong market outperformance of 870 basis points (vs. worldwide automotive production growth of +2.0%**), even stronger than the one recorded in the first six months of the year (reminder: in H1 2017, Faurecia’s organic growth stood at +8.5% vs. worldwide automotive production growth of +3.0%, source: IHS dated June 2017, i.e. an outperformance of 550 basis points).
Strong growth in all three business groups
- Seating (42% of Q3 value-added sales): VA sales totaled €1,613.2 million in Q3 2017, compared to €1,515.6 million in Q3 2016. They were up 6.4% on a reported basis and up 9.5% on an organic* basis, significantly outperforming worldwide automotive production growth (+2.0%**).
- Clean Mobility (27% of Q3 value-added sales): VA sales totaled €1,017.7 million in Q3 2017, compared to €959.5 million in Q3 2016. They were up 6.1% on a reported basis and up 10.1% on an organic* basis, significantly outperforming worldwide automotive production growth (+2.0%**). Sales to Cummins continued to be a significant growth driver; commercial vehicle sales rose 48%*, now representing 11% of the Clean Mobility Business Group’s value-added sales.
- Interiors (31% of Q3 value-added sales): VA sales totaled €1,159.4 million in Q3 2017, compared to €1,056.1 million in Q3 2016. They were up 9.8% on a reported basis and up 13.0% on an organic* basis, significantly outperforming worldwide automotive production growth (+2.0%**). Organic growth included €118.4 million from the consolidation of two joint ventures (JV with Chang’An in China and JV with FCA in Brazil).
Strong growth in all regions
- Europe (48% of Q3 value-added sales): Sales momentum in a solid market
VA sales in the region totaled €1,830.2 million, compared to €1,694.6 million in Q3 2016. They were up 8.0% on a reported basis and up 8.7% on an organic* basis, significantly outperforming automotive production in Europe (incl. Russia) (+5.4%**).
- North America (26% of Q3 value-added sales): Stable organic sales despite market decrease, thanks to commercial vehicles, SUVs and Light truck sales
VA sales in the region totaled €986.4 million, compared to €1,050.7 million in Q3 2016. They were down 6.1% on a reported basis, impacted by a negative currency effect of €62.9 million, and broadly stable (-0.1%) on an organic* basis, significantly outperforming automotive production in North America (-8.1%**). Organic sales were resilient thanks to commercial vehicles, SUVs and light trucks.
- Asia (18% of Q3 value-added sales): Continued strong growth in China, driven by market share gains and sales to Chinese OEMs
VA sales in the region totaled €700.8 million, compared to €587.5 million in Q3 2016. They were up 19.3% on a reported basis and up 25.1% on an organic* basis, significantly outperforming automotive production in Asia (+2.9%**).
Organic growth in the region included €66.8 million from the consolidation of the joint venture with Chang’An in China.
VA sales in China totaled €535.1 million, compared to €448.0 million in Q3 2016. They were up 19.4% on a reported basis and up 25.7% on an organic* basis, significantly outperforming automotive production in China (-1.4%**). Out of these sales in China, sales to Chinese OEMs totaled €76.3 million, compared to €51.0 million in Q3 2016, up 58% on an organic* basis.
- South America (5% of Q3 value-added sales): Continued sales turnaround supported by a gradual market recovery
VA sales in the region totaled €201.2 million, compared to €142.7 million in Q3 2016. They were up 41.0% on a reported basis and up 47.5% on an organic* basis, significantly outperforming automotive production in South America (+25.0%**).
Organic growth in the region included €51.7 million from the consolidation of the joint venture with FCA (production for the Pernambuco plant).
Full-year 2017 guidance confirmed
On July 21, 2017, Faurecia upgraded its full-year 2017 guidance as follows:
- FY 2017 value-added sales growth: +7% (at constant currencies), around 500bps above worldwide automotive production growth,
- FY 2017 operating margin between 6.6% and 7.0% of value-added sales,
- FY 2017 net cash flow above €350m,
- FY 2017 earnings per share above €4.00.
This full-year 2017 guidance was based on the assumption that worldwide automotive production should grow by around 2% in 2017 vs. 2016; the latest forecast from IHS (dated September 18, 2017) confirms this assumption.
The continued momentum in Q3 sales and the expected performance in Q4 allow Faurecia to confirm its full-year 2017 financial targets.
As regards full-year 2018 financial targets, they will be announced on February 16, 2018, when Faurecia will release its full-year 2017 results. Faurecia remains strongly committed to its profitable growth trajectory.
A conference call for financial analysts and media will be held today at 6:30 pm (Paris time).
Dial in numbers for the conference call:
- France +33(0)1 76 77 22 28
- UK +44(0)20 3427 0503
- USA +1 646 254 3367
Access code: 9333749
*Organic: At constant exchange rates & scope, including JVs consolidation
** Source: IHS forecast as released on September 18, 2017