Forvia Se · EURONEXT:FRVIA
Forvia — Faurecia — H1 2020 Earnings Presentation
39 slides from Forvia's earnings presentation, Jul 27, 2020
Slide 1: H1 2020 Results
H1 2020 RESULTS Agility & Resilience July 27, 2020 The 2020 half-year consolidated financial statements have been approved by the Board of Directors at its meeting held on July 24, 2020, under the chairmanship of February Michel de Rosen. These financial statements have been subject to a limited rev
Slide 2: Key messages
Key messages Agility & Resilience > In H1, Faurecia quickly reacted to the Covid-19 crisis whilst continuing to deploy strategy • Focus on 3 priorities: safe restart, liquidity and resilience • Increased customer satisfaction with strong order intake and customer awards • Successful integration of S
Slide 3: Agenda
Agenda QUICK REACTION TO THE CRISIS IN H1 WHILST CONTINUING 1 TO DEPLOY STRATEGY 2 H2 TURNAROUND MEASURES AND GUIDANCE STRUCTURAL INITIATIVES TO CONSOLIDATE MEDIUM-TERM AMBITION 3 IN A NEW ENVIRONMENT 3 H1 2020 Results - July 27, 2020
Slide 4: Safe restart of production with strong governance and vigilance
Safe restart of production with strong governance and vigilance Safety protocol adapted to country Covid risk level > All sites successfully restarted with strong protocol for protection of employees > Preparing for return from summer break with increased protection for 14 days > All sites capable o
Slide 5: Strongest impact of the Covid-19 crisis in Q2 with ongoing recovery
Strongest impact of the Covid-19 crisis in Q2 with ongoing recovery Q1 sales: -19.7%* (vs. IHS @ -21.8%**) Q2 sales: -50.0%* (vs. IHS @ -47.4%**) • Mostly impacted by China (13% of H1 2019 Group sales) • Mostly impacted by Europe and North America • Group outperformance of 210bps (76% of H1 2019 Gro
Slide 6: Sales outperformance of 250bps in H1, excluding unfavorable geographic mix impact
Sales outperformance of 250bps in H1, excluding unfavorable geographic mix impact €8,972m €(43)m €(3,176)m -0.5% -35.4% €417m €6,170m Currency effect Organic +4.6% Scope effect vs. automotive production growth* of -34.4% H1 2019 H1 2020 WW auto prod. 43.3m* WW auto prod. 28.4m* Unfavorable geographi
Slide 7: Quick resilience actions generated €536m savings, resulting in solid operating leverage of 23%
Quick resilience actions generated €536m savings, resulting in solid operating leverage* of 23% €645m €(1,284)m H1 2020 Resilience actions = €536m before Covid-related one-offs H1 2020 €90m H1 2019 €112m €9m €(94)m €(20)m €334m €(114)m Scope & other Covid-related Net R&D Manufacturing + SG&A one-off
Slide 8: Europe 49% of Group sales; North America 24% of Group sales
Europe 49% of Group sales North America 24% of Group sales Low point in April and continuous volume recovery Low point in April and continuous volume recovery since May, but at a lower pace than in other regions since May Sales Sales €4,531m €(12)m €(1,634)m €2,289m €34m €(954)m -0.3% +1.5% -36.1% C
Slide 9: Asia 24% of Group sales; South America 2% of Group sales
Asia 24% of Group sales South America 2% of Group sales First region to be impacted with low point in February; Low point in April/May and slow recovery since then China above 2019 level since May Sales Sales €1,716m €(12)m €(399)m €345m €(47)m €165m €1,470m -13.7% €(145)m -0.7% -23.2% Currency +9.6
Slide 10: H1 2020 performance by Business Group reflected the Covid-19 impact
H1 2020 performance by Business Group reflected the Covid-19 impact Seating Interiors Clean Mobility Clarion Electronics H1 2019 sales €3,640m €2,746m €2,351m €235m Currency effect €(15)m €(19)m €(11)m €2m -0.4% -0.7% -0.5% +0.9% Organic €(1,355)m €(1,012)m €(693)m €(116)m -37.2% -36.9% -29.5% -49.4
Slide 11: Operating margin contained to (1.8)% of sales through resilience actions
Operating margin contained to (1.8)% of sales through resilience actions in €m H1 2019 H1 2020 Change Sales 8,972 6,170 -31.2% ex-currency growth* -35.4% Cost of sales (7,747) (5,740) -25.9% > Cost of sales down 25.9% vs. sales down 31.2% % of sales (86.3%) (93.0%) • Savings of €446m generated throu
Slide 12: Net income mostly reflected the drop in operating income
Net income mostly reflected the drop in operating income in €m H1 2019 H1 2020 Change > Amortization of intangible assets in H1 2020 mainly included €(31)m for Clarion Electronics and €(12)m for SAS Operating income 645 (114) -759 (before amort. of acquired intangible assets) > Restructuring expense
Slide 13: EBITDA of €509m at 8.3% of sales; net cash flow reflected operating income drop
EBITDA of €509m at 8.3% of sales Net cash flow reflected operating income drop and WCR temporary impact in €m H1 2019 H1 2020 Change > EBITDA at 8.3% of sales, down €(662) mostly reflecting the Operating income 645 (114) drop in operating income, partly mitigated by higher Depreciation and amortizat
Slide 14: Tight management of liquidity and protection of a sound financial structure
Tight management of liquidity and protection of a sound financial structure > Sound financial structure at the end of 2019 Long-term debt* maturities (€m) as of June 30, 2020 1 000 > Actions to manage liquidity in H1 900 • €600m drawn out of the €1.2bn Syndicated 800 Credit Facility (March) 700 • €8
Slide 15: Focus investment on product lines with strong profitable growth potential
Focus investment on 14 product lines with strong profitable growth potential SUSTAINABLE MOBILITY COCKPIT OF THE FUTURE LOW EMISSION ZERO EMISSION COVERS AND FOAM COMPLETE SEATS SEAT STRUCTURE SYSTEMS SOLUTIONS SOLUTIONS SOLUTIONS COMMERCIAL VEHICLES SUSTAINABLE SMART SURFACES & INSTRUMENT PANELS DO
Slide 16: Strong order intake and improved customer satisfaction
Strong order intake and improved customer satisfaction > Strong order intake of €12bn in H1 2020 • €1.4bn for Clarion Electronics: - Including major displays award in North America - On track to achieve FY 2020 target of €2.1bn • €2.7bn complete seats for two German OEMs • €0.7bn for Tesla in China
Slide 17: Continued deployment of strategy with successful integration of SAS, IRYStec and Schneider partnership
Continued deployment of strategy with successful integration of SAS, acquisition of IRYStec and partnership with Schneider Electric DIGITAL TRANSFORMATION SUSTAINABLE MOBILITY COCKPIT OF THE FUTURE & CARBON NEUTRALITY ACQUISITIONS 2018 2019 - 2020 PARTNERSHIPS 2018 2019 - 2020 2018 START-UPS 2019 -
Slide 18: Resilient performance in H1 whilst further enhancing customer relationships
Resilient performance in H1 whilst further enhancing customer relationships SALES PROFITABILITY CASH AND LIQUIDITY ORDER INTAKE Outperformance Operating €3.1bn available leverage of 23% €12bn of 250bps at June 30, 2020 through resilience actions 18 H1 2020 Results - July 27, 2020
Slide 19: Agenda
Agenda QUICK REACTION TO THE CRISIS IN H1 WHILST CONTINUING 1 TO DEPLOY STRATEGY 2 H2 TURNAROUND MEASURES AND GUIDANCE STRUCTURAL INITIATIVES TO CONSOLIDATE MEDIUM-TERM AMBITION 3 IN A NEW ENVIRONMENT 19 H1 2020 Results - July 27, 2020
Slide 20: Conservative assumptions in an environment with low visibility
H2 2020 Conservative assumptions in an environment with low visibility FAURECIA ASSUMPTIONS FOR AUTOMOTIVE PRODUCTION H2 2020 vs. H2 2019 Faurecia’s conservative assumptions reflect current low visibility for Q4 > Europe NORTH AM. EUROPE ASIA -10% to -15% around -15% -5% to -10% • Uncertainty about
Slide 21: Specific measures implemented for resilience, cash and financial structure
H2 2020 Specific measures implemented for resilience, cash and financial structure > Strengthening resilience actions • Continued optimization of industrial footprint with increased restructuring budget of c. €230m in FY 2020 • Maintain flexibilization of labor, manufacturing and R&D costs and stric
Slide 22: Return to solid profitability and cash generation
H2 2020 guidance Return to solid profitability and cash generation > With the assumption of worldwide automotive production down c. 15% in H2 2020 vs. H2 2019, our guidance is as follows: SALES PROFITABILITY CASH GENERATION H2 sales H2 operating margin H2 net cash flow around €7.6bn around 4.5% of s
Slide 23: Agenda
Agenda QUICK REACTION TO THE CRISIS IN H1 WHILST CONTINUING 1 TO DEPLOY STRATEGY 2 H2 TURNAROUND MEASURES AND GUIDANCE STRUCTURAL INITIATIVES TO CONSOLIDATE MEDIUM-TERM AMBITION 3 IN A NEW ENVIRONMENT 23 H1 2020 Results - July 27, 2020
Slide 24: New market volume assumptions anticipate return to 2019 level between 2022 and 2024
New market volume assumptions anticipate return to 2019 level between 2022 and 2024 Global automotive production, in million vehicles 95 91 91 90 85 85 85 85 80 82 75 69 76 70 65 64 60 55 55 50 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 > For 2022, our base
Slide 25: Three trends emerging from the crisis
Three trends emerging from the crisis > Acceleration of electrification, driven by CO2 emission regulation, incentives and increasing environment concerns, leads to increased focus on hydrogen solutions > Strong momentum for CO2 neutrality > Reduced investment in autonomous driving with focus on L2
Slide 26: Accelerated momentum for FCEV through improved cost competitivity
Accelerated momentum for FCEV through improved cost competitivity and higher range & refueling speed FCEV TCO ON PAR WITH BEV FROM 2027 A FAST-GROWING MARKET Total cost of ownership (€k) Assumptions Total market size (€bn) 120 19.0 > Light-duty vehicles ICE > EU region Stacks 60 > Max range 500 km B
Slide 27: Building a leadership position in hydrogen technologies
Building a leadership position in hydrogen technologies through innovation and commercial relationships COMPETITIVE ADVANTAGE IN TANKS COMPETITIVE ADVANTAGE IN STACKS > Partnership with Michelin > H2 weight efficiency > Power density > System design and packaging capabilities > Full system competenc
Slide 28: Ambitious roadmap for CO2 neutrality with strong action plan in three stages
Ambitious roadmap for CO2 neutrality with strong action plan in three stages Faurecia FY 19 Emissions (in kilo tons CO2 equivalent) 2050 OBJECTIVE TOTAL EMISSIONS (23,500 ktCO2) 2030 OBJECTIVE CONTROLLED EMISSIONS (7,500 ktCO2) 16 000 2025 OBJECTIVE INTERNAL EMISSIONS 4 780 (750 ktCO2) 673 620 360 2
Slide 29: Partnership with Schneider Electric to accelerate reduction of internal emissions
Partnership with Schneider Electric to accelerate reduction of internal emissions (scopes 1 & 2) Reduction Monitoring Energy in plants with alerting 3% Using Predictive AI for optimal setpoints (all sites) 2% Increasing efficiency in Heat utilities (heating destratification, 5 to 15% heat recovery f
Slide 30: Confirm medium-term profitable growth drivers by Business Group
Confirm medium-term profitable growth drivers by Business Group SEATING > Start of major new programs in 2021, representing lifetime sales of c. €7bn, will contribute to strong market outperformance of c. 700bps INTERIORS > Strong potential from SAS, leveraging JIT capabilities > Management review o
Slide 31: Maintain 2022 ambition despite lower sales prospects
Maintain 2022 ambition despite lower sales prospects through resilience and structural initiatives > Breakeven point reduced by 10% vs. initial 2022 roadmap • > €200m recurrent fixed cost savings generated in 2020 BREAKEVEN • > €200m additional recurrent fixed cost savings generated by 2022 from €15
Slide 32: Confirm 2022 profitability and cash generation ambition in a new environment
Confirm 2022 profitability and cash generation ambition in a new environment SALES > €18.5bn OPERATING NET in a global market MARGIN CASH FLOW estimated at 8% of sales 4% of sales c. 82m vehicles vs. initial ambition* of sales > €20.5bn unchanged unchanged in a global market estimated at 87m vehicle
Slide 33: Appendices
H1 2020 RESULTS Appendices February 17, 2020 H1 2020 Results - July 27, 2020
Slide 34: Definitions of terms used in this document
Definitions of terms used in this document > Sales growth Faurecia’s year-on-year sales evolution is made of three components: • A “Currency effect”, calculated by applying average currency rates for the period to the sales of the prior year, • A “Scope effect” (acquisition/divestment), • And “Growt
Slide 35: Operating leverage calculation
Operating leverage calculation Sales (in €m) Operating income (in €m) H1 2019 8,972 H1 2019 645 Currency effect -43(a) Volume impact -1,284(c) Organic -3,176(b) Resilience actions 536(d) Scope effect 417 Scope & other 9 H1 2020 6,170 H1 2020 before Covid-related one-offs -94 Covid-related one-offs -
Slide 36: Financial calendar
Financial calendar > October 23, 2020 Q3 2020 sales announcement 36 H1 2020 Results - July 27, 2020
Slide 37: Contact & share data
Contact & share data Investor Relations Share Data Bloomberg Ticker: EO:FP Marc MAILLET Reuters Ticker: EPED.PA Tel: +33 1 72 36 75 70 Datastream: F:BERT E-mail: marc.maillet@faurecia.com ISIN Code: FR0000121147 Anne-Sophie JUGEAN Tel: +33 1 72 36 71 31 E-mail: annesophie.jugean@faurecia.com Bonds I
Slide 38: Disclaimer
Disclaimer Important information concerning forward looking statements This presentation contains certain forward-looking statements concerning Faurecia. Such forward-looking statements represent trends or objectives and cannot be construed as constituting forecasts regarding the future Faurecia’s r
Slide 39: H1 2020 Results - July 27, 2020
H1 2020 Results - July 27, 2020