Forvia Se · EURONEXT:FRVIA
Forvia — H1 2024 Earnings Presentation
45 slides from Forvia's earnings presentation, Jul 24, 2024
Slide 1: 2024 Half-Year Results
2024 HALF-YEAR RESULTS CONTINUOUS IMPROVEMENT IN PERFORMANCE Patrick KOLLER, Chief Executive Officer Olivier DURAND, Chief Financial Officer July 24, 2024
Slide 2: Agenda
01 H1 2024 Key Highlights 02 H1 2024 Financial Performance AGENDA 03 Outlook 04 Takeaways P.2 | H1 2024 RESULTS - July 24, 2024
Slide 3: Key Highlights
01 KEY HIGHLIGHTS Patrick Koller CEO P.3 | H1 2024 RESULTS - July 24, 2024
Slide 4: Automotive Market Stabilization
AUTOMOTIVE MARKET STABILIZATION and temporary slowdown of electrification in Europe BROADLY STABLE LVP IN H1 2024 TEMPORARY SLOWDOWN OF ELECTRIFICATION MORE VOLUMES IN CHINA, LESS IN EUROPE GLOBAL EV PENETRATION DRIVEN BY CHINA 43.6 43.6 22.8% 23.2% 14.2% 13.9% 11.8% 12.3% 12.5 13.2 6.4% 6.8% 8 8.1
Slide 5: Steady Progress: A Look at H1 2024 Key Figures
STEADY PROGRESS: A LOOK AT H1 2024 KEY FIGURES SOLID OPERATING MARGIN NET CASH FLOW SUCCESSFUL REFINANCINGS OUTPERFORMANCE UP 20bps YoY UP 16% YoY EXTENDING MATURITIES €201m 290bps 5.2% c. €2bn + ASSET DISPOSALS 460bps EXCLUDING UNFAVORABLE GEOGRAPHIC 5.5% EXCLUDING 30BPS ONE-OFF IMPACT €227m NEW IS
Slide 6: Strong Progress in Group's Refinancing
STRONG PROGRESS IN GROUP’S REFINANCING EXTENDED AVERAGE MATURITIES TO 3.6 YEARS 2bn FROM 2.9 YEARS c.€ 2024 & 2025 NEW ISSUANCES MATURITIES MOSTLY CONTAINED AVERAGE IN H1 2024 CLEARED COST OF DEBT AT 4.6% UP ONLY 30bps P.6 | H1 2024 RESULTS - July 24, 2024
Slide 7: Second €1bn Disposal Program on Track
SECOND €1BN DISPOSAL PROGRAM ON TRACK AND TO BE FINALIZED BY END-2025 ALREADY CLOSED ONGOING PROJECTS 25% of the second program already Progress underway gives achieved, of which €227m was the Group strong confidence to cashed-in in H1 2024 finalize the rest of the program by the end of 2025 > Sales
Slide 8: Robust Order Intake of €15 Billion
ROBUST ORDER INTAKE OF €15 BILLION Driven by Asia and backed by Electronics and innovation ASIA ELECTRONICS INNOVATION & H2 PREMIUM OEM c.€6bn c.€4.3bn c.€4bn c.€3.5bn CHINA REPRESENTING c. €4.9bn, KEY AWARDS €700M IN H2 STORAGE VIRTUAL MAINLY DRIVEN BY MORE THAN 60% OF WHICH FROM CHERY AND KEY FOR
Slide 9: Strengthening Partnerships with Chinese OEMs
STRENGTHENING PARTNERSHIPS WITH CHINESE OEMs In China and beyond their domestic market GOING GLOBAL WITH DEVELOPING WITH ACCELERATING WITH BYD CHERY LEADING PLAYERS BYD GLOBAL CHERY STRATEGIC COLLABORATION: EXPANDING WITH PARTNERSHIP: › Joint venture for smart and sustainable OTHER CHINESE OEMS: › O
Slide 10: Strategic Initiatives Aligned with Automotive Megatrends
STRATEGIC INITIATIVES ALIGNED WITH AUTOMOTIVE MEGATRENDS Connected cars: Strengthening our position as Automotive Apps market leader › FORVIA acquired 100% in Faurecia Aptoide Automotive in May 2024 › This acquisition positions FORVIA as a leading player in automotive applications distribution, trus
Slide 11: Further Progress on ESG Ratings
FURTHER PROGRESS ON ESG RATINGS AGENCIES SCORE CCC B BB BBB A AA AAA AVERAGE WATER CLIMATE SUPPLY CHAIN MEMBER 65 ADVANCED 9.3 Severe High Medium Low Negligible 100 80 60 40 20 10 0 P.11 |H1 2024 RESULTS - July 24, 2024 2023 rating 2024 RATING
Slide 12: Effective Start of the EU-FORWARD Project
EFFECTIVE START OF THE EU-FORWARD PROJECT The 5-year initiative aims at reinforcing the competitiveness of our European operations MAIN TARGETS Adapt the Group’s a significantly higher regional mix with EMEA European manufacturing profitability in EMEA, representing c. 35% of and R&D set-up to the e
Slide 13: Financial Performance
02 FINANCIAL PERFORMANCE Oliver Durand CFO P.13 | H1 2024 RESULTS - July 24, 2024
Slide 14: Sales of €13.5 Billion, Up 2.7% Organically
SALES OF €13.5 BILLION, UP 2.7% ON AN ORGANIC BASIS Outperformance of 290bps including unfavorable geomix €373m €(101)m €(359)m Reported sales down by 0.6% €13,621m -0.7% €13,534m Organic growth of 2.7% driven by Interiors, Electronics and Clean Mobility +2.7% -2.6% Outperformance of 290bps ▪ 460bps
Slide 15: Operating Margin Up 20bps to 5.2% of Sales
OPERATING MARGIN UP 20bps TO 5.2 % OF SALES Improved operating margin in most activities partly offset by one-off impact from Interiors in North America €29m €(34)m €25m €747m €(47)m €52m €700m €675m 5.5% of sales 5.2% 5.0% of sales of sales P.15 | H1 2024 RESULTS - July 24, 2024
Slide 16: Seating, Clean Mobility and Electronics Driving Margin Expansion
SEATING, CLEAN MOBILITY AND ELECTRONICS DRIVING MARGIN EXPANSION SEATING INTERIORS CLEAN ELECTRO- LIGHTING LIFECYCLE GROUP SEATING MOBILITY NICS SOL. Profitability improvement driven by exit from Highland % of Group Park, improved execution and pricing consolidated sales 31% 19% 16% 15% 15% 4% H1 20
Slide 17: Margin Improvement in EMEA and Americas
MARGIN IMPROVEMENT IN EMEA AND AMERICAS MAINTAINED DOUBLE-DIGIT MARGIN IN ASIA DESPITE SALES DROP EMEA Americas Asia GROUP EMEA: margin improved by 50bps to 3.1% of sales Regional auto. prod. YoY* -0.2% Strong sales outperformance of 470bps, driven by Interiors and Lighting H1 2023 sales (€m) 13,621
Slide 18: Net Income at Breakeven
NET INCOME AT BREAKEVEN Increase in European restructuring costs largely offset by capital gains and reduced tax charges H1 2023 H1 2024 Change Sales 13,621 13,534 -0.6% Operating income H1 2024 net income stood at €5m vs. €28m in before amort. of acquired intangible assets 675 700 +3.8% H1 2023 Amo
Slide 19: Solid Net Cash Flow of €201m
SOLID NET CASH FLOW OF €201M, UP 16% VS. H1 2023 Significant increase in NCF excluding WCR and Factoring H1 2023 H1 2024 Change Effectiveness of the “Manage by Cash” program: ▪ Capex reduced by €36m Operating income 675 700 +3.8% Depreciation and amortization, of which: ▪ Inventories decreased by €1
Slide 20: Net Debt/Adj. EBITDA Ratio of 2.0x at End of June 2024
NET DEBT/ADJ. EBITDA RATIO OF 2.0X AT THE END OF JUNE 2024 vs. 2.5x one year ago and 2.1x at end of December 2023 H1 2023 H1 2024 Net Cash Flow 172 201 Dividends paid incl. minorities (75) (125) Net debt at end of June 30, 2024 was reduced by €122m, to €6,865m, reflecting the net impact of: Asset di
Slide 21: Extended Group Average Maturity Through Active Debt Management
EXTENDED GROUP AVERAGE MATURITY THROUGH ACTIVE DEBT MANAGEMENT 2024 & 2025 maturities almost fully cleared DEBT MATURITY PROFILE* €1,940m of new financing issued in 2024 to date 31 Dec 2023 30 June 2024 pro forma July ▪ €1,200m senior bond (2029 & 2031) ▪ €200m Hella Schuldschein (2027, 2029 & 2031)
Slide 22: Outlook
03 OUTLOOK Oliver Durand CFO P.22 | H1 2024 RESULTS - July 24, 2024
Slide 23: Upswing in Operating Margin in H2 2024 vs. H1 2024
UPSWING IN OPERATING MARGIN IN H2 2024 VS. H1 2024 >+20bps End of one-off extra-costs at Interiors in North America ≥+30bps Additional synergies with FORVIA HELLA and ramp up of EU- ≥ +30bps ≥6.0% FORWARD program of sales Magnitude of accelerated 5.2% contribution from China of sales and from FORVIA
Slide 24: FY 2024 Guidance Confirmed
FY 2024 GUIDANCE CONFIRMED WITH SALES AND OPERATING MARGIN IN THE LOWER END OF THE RANGE NET CASH FLOW AND NET DEBT/ADJUSTED EBITDA CONFIRMED SALES OPERATING MARGIN NET CASH FLOW NET DEBT/ADJ. EBITDA BETWEEN BETWEEN CONFIRMED CONFIRMED €27.5bn AND 5.6% AND ≥2023 LEVEL ≤ 1.9x €28.5bn 6.4% IN VALUE at
Slide 25: 2025 Sales Ambition Revised Mainly for Currencies
2025 SALES AMBITION REVISED MAINLY FOR CURRENCIES c. €(1.0)bn c. €(500)m UP TO €(500)m c.€30bn BETWEEN €28bn AND €28.5bn P.25 | H1 2024 RESULTS - July 24, 2024
Slide 26: Strong Improvement in Operating Margin and Net Cash Flow in 2025
STRONG IMPROVEMENT IN OPERATING MARGIN AND NET CASH FLOW GENERATION IN 2025 VS 2024 2025 DRIVERS FOR: OPERATING MARGIN NET CASH FLOW NET DEBT REDUCTION ▪ Ongoing improvement in ▪ Additional benefits related to ▪ Enhanced Net Cash Flow Business Groups’ profitability the “Manage by Cash” program gener
Slide 27: Confirmed POWER25 Key Leverage Ratio
CONFIRMED POWER25 KEY LEVERAGE RATIO Taking into consideration: ▪ Latest 2024 expectation, ▪ Impact on sales and operating margin of new Through Net Cash Flow generation and expected assumptions for 2025 currency rates ▪ 1.10 for €/USD and of 7.50 for €/CNY finalization of the 2nd €1 billion disposa
Slide 28: Continuous Deleveraging as Top Priority
CONTINUOUS DELEVERAGING AS TOP PRIORITY since the acquisition of a majority stake in HELLA MORE THAN €3bn REDUCTION Net Debt in 8.4 8.1 > Sales outperformance, cost €bn 7.9 synergies and margin expansion 7.0 6.9 > “Manage by Cash” program driving improved EBITDA conversion Net Debt / Adj. EBITDA 3.1
Slide 29: Takeaways
04 TAKEAWAYS Patrick Koller CEO P.29 | H1 2024 RESULTS - July 24, 2024
Slide 30: Steady, Focused and Determined
STEADY, FOCUSED AND DETERMINED Organic sales growth of 2.7%, outperforming +290 bps Ongoing improvement in Business Groups profitability Operating margin improvements Good progress of EU-FORWARD High order intake of €15 billion Confirmation of the additional synergies fueling profitable growth with
Slide 31: Q&A Session
Q&A SESSION P.31 |H1 2024 RESULTS - July 24, 2024
Slide 32: FORVIA - Inspiring mobility
-ORVIA Inspiring mobility
Slide 33: Appendices
APPENDICES P.33 | H1 2024 RESULTS - July 24, 2024
Slide 34: Interiors: Profitability Hit by Temporary Extra Costs in North America
INTERIORS PROFITABILITY HIT BY TEMPORARY EXTRA COSTS IN NORTH AMERICA 19% of Group consolidated sales in the period Sales up 6.6% organically, outperformance of 680bps H1 2023 H1 2024 High growth in North America, boosted by doubling sales with GM and numerous other SOPs Sales (€m) 2,438 2,557 Mid-s
Slide 35: Seating: Continued Improvement in Profitability
S E AT I N G CONTINUED IMPROVEMENT IN PROFITABILITY 31% of Group consolidated sales in the period Organic sales up 1.5%, outperformance of 170bps H1 2023 H1 2024 High single digit organic growth in North America mostly driven by Ford, as well as VW, Nissan-Mitsubishi and GM Sales (€m) 4,248 4,197 Sa
Slide 36: Clean Mobility: Sales Growth and Sustained Margin Improvement
CLEAN MOBILITY SALES GROWTH AND SUSTAINED MARGIN IMPROVEMENT 16% of Group consolidated sales in the period Organic sales up 3.1%, outperformance of 330bps H1 2023 H1 2024 Growth in North America broadly in line Sales (€m) 2,467 2,191 with market, driven by Ford and heavy trucks YoY reported Outperfo
Slide 37: Electronics: Solid Outperformance and Margin Expansion
ELECTRONICS SOLID OUTPERFORMANCE & MARGIN EXPANSION DESPITE SLOWDOWN IN ELECTRIFICATION 15% of Group consolidated sales in the period Organic sales up 4.5%, mostly led by Faurecia Clarion H1 2023 H1 2024 Electronics. Outperformance of 470bps Sales (€m) 2,047 2,091 Small growth in Europe, driven by V
Slide 38: Lighting: Broadly Stable Sales and Solid Results
LIGHTING BROADLY STABLE SALES AND SOLID RESULTS 15% of Group consolidated sales in the period H1 2023 H1 2024 Sales up 5% thanks to scope effect and broadly flat organically Sales (€m) 1,874 1,968 Mid-single digit growth in Europe driven by VW and Nissan-Mitsubishi YoY reported Light growth in North
Slide 39: Lifecycle Solutions: Lower Demand, High Profitability
LIFECYCLE SOLUTIONS LOWER DEMAND, HIGH PROFITABILITY 4% of Group consolidated sales in the period H1 2023 H1 2024 Organic sales down by 2.0% Sales (€m) 546 530 Continuous growth on the spare parts business was more than offset by lower demand in the commercial vehicle segment such as agriculture, Yo
Slide 40: Trade Payables: DPO and Reverse Factoring
TRADE PAYABLES: DPO AND REVERSE FACTORING The Days Outstanding Payables (DPO) at the end of H1 2024 increased by 4 days compared to H1 2023 Positively impacted by the increase of payment term conditions with H1 2024 H1 2023 suppliers mainly in Asia The calculation of FORVIA’s DPO must be carried out
Slide 41: FORVIA - Inspiring mobility
-ORVIA Inspiring mobility
Slide 42: Definitions of Terms Used in This Document
DEFINITIONS OF TERMS USED IN THIS DOCUMENT SALES GROWTH OPERATING INCOME OPERATING INCOME IS THE FORVIA GROUP’S PRINCIPAL PERFORMANCE INDICATOR. IT CORRESPONDS TO NET INCOME OF • FORVIA’s year-on-year sales evolution is made of three FULLY CONSOLIDATED COMPANIES BEFORE: components: • Amortization of
Slide 43: Investor Relations
INVESTOR RELATIONS Marc MAILLET Share tickers & ISIN code Tel: +33 1 72 36 75 70 Bloomberg Ticker: FRVIA.FP Reuters Ticker: FRVIA.PA Sébastien LEROY ISIN: FR0000121147 Tel: +33 1 72 36 75 70 BONDS Isin codes E-mail: ir@forvia.com 2024 bonds: XS1611167856 Adresse: 2025 bonds: XS1785467751 23-27, Aven
Slide 44: Important Information Concerning Forward Looking Statements
INVESTOR RELATIONS IMPORTANT INFORMATION CONCERNING FORWARD LOOKING STATEMENTS This presentation/document contains certain forward-looking statements concerning FORVIA. Such forward-looking statements represent trends or objectives and cannot be construed as constituting forecasts regarding the futu
Slide 45: FORVIA - Inspiring mobility
-ORVIA Inspiring mobility