Forvia Se · EURONEXT:FRVIA
Forvia — Faurecia — Non-Deal Roadshow (February 2020)
67 slides from Forvia's roadshow presentation, Feb 17, 2020
Slide 1: Non-deal roadshow post-FY 2019 results
Non-deal roadshow post-FY 2019 results Strong and resilient performance in 2019 Record order intake February February-March, 2020 17, 2020 The full-year 2019 consolidated financial statements have been approved by the Board of Directors at its meeting held Non-deal on roadshow February 14, 2020, und
Slide 2: Agenda
Agenda 1 FAURECIA AT A GLANCE 2 INVESTMENT CASE 3 FY 2019 RESULTS 4 STRATEGY AND 2022 FINANCIAL TARGETS 5 ESG APPROACH 2 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 3: Agenda
Agenda 1 FAURECIA AT A GLANCE 2 INVESTMENT CASE 3 FY 2019 RESULTS 4 STRATEGY AND 2022 FINANCIAL TARGETS 5 ESG APPROACH 3 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 4: A leading automotive technology company
A leading automotive technology company TOP TEN 4 ACTIVITIES automotive company, > Seating €17.8 billion of sales > Interiors > Clarion Electronics > Clean Mobility A TRUSTED PARTNER 115,000 employees for all automakers, in over 300 sites commercial vehicles and high horsepower 8,500 engineers 1 IN
Slide 5: Four Business Groups to drive profitable growth
Four Business Groups to drive profitable growth SEATING INTERIORS CLARION ELECTRONICS CLEAN MOBILITY 39% of 2019 group sales 30% of 2019 group sales 5% of 2019 group sales 26% of 2019 group sales > Advanced safety systems: > Instrument panels, door panels, > IVI, intuitive HMI and full digital > Lig
Slide 6: A well balanced customer and geographic portfolio
A well balanced customer and geographic portfolio 2019 SALES BY CUSTOMER 2019 SALES BY REGION Others Chinese OEMs Amérique du Sud & reste du monde Commercial Vehicles 4% 19% Asie 21 % 5% €17.8 bn 14% €17.8 bn 49 % Europe 7% Amérique du 25 % 13% 14% Nord 6 Non-deal roadshow post-FY 2019 results – Feb
Slide 7: Increasingly diverse customer base
Increasingly diverse customer base COMMERCIAL VEHICLES MASS MARKET OEMS PREMIUM OEMS CHINESE OEMS NEW ENTRANTS & HIGH HORSE POWER 7 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 8: Continued improvement in performance over the past five years
Continued improvement in performance over the past five years SALES OPERATING INCOME €17,525m €17,768m €1,274m €1,283m €1,158m €16,962m €970m €15,466m €15,614m €830m FY 2015* FY 2016* FY 2017 FY 2018 FY 2019 FY 2015* FY 2016* FY 2017 FY 2018 FY 2019 NET CASH FLOW DIVIDEND €587m €1.25 €1.30** €528m €
Slide 9: Agenda
Agenda 1 FAURECIA AT A GLANCE 2 INVESTMENT CASE 3 FY 2019 RESULTS 4 STRATEGY AND 2022 FINANCIAL TARGETS 5 ESG APPROACH 9 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 10: Faurecia's Investment Case (1/2)
Faurecia’s Investment Case (1/2) > One of the leading worldwide automotive suppliers • One of the top three global players in Seating, Interiors and Clean Mobility • A key partner for a broad and diversified base of OEMs around the globe > Clear and focused strategy with medium-term ambitions well d
Slide 11: Faurecia's Investment Case (2/2)
Faurecia’s Investment Case (2/2) > Sound financial structure and high flexibility • Strict financial discipline • Secured debt financing at low cost with long maturity and high flexibility • Cash allocation strategy focused on fair shareholder remuneration and bolt-on acquisitions > Strong governanc
Slide 12: Agenda
Agenda 1 FAURECIA AT A GLANCE 2 INVESTMENT CASE 3 FY 2019 RESULTS 4 STRATEGY AND 2022 FINANCIAL TARGETS 5 ESG APPROACH 12 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 13: 2019 Highlights
2019 Highlights > Strong and resilient performance in 2019 • All financial targets achieved in a tough environment • Strong cash generation • Record order intake in 2019 resulting in €68bn over the last three years > Accelerated transformation for Cockpit of the Future and Sustainable Mobility • Cre
Slide 14: All targets achieved in a challenging environment
All targets achieved in a challenging environment > 2019 financial targets maintained throughout the year despite worsening worldwide automotive production from an estimated -1% in February 2019 to a final figure of -5.8%* (miss of 4.3m vehicles, of which 1.6m in China) SALES PROFITABILITY NET CASH
Slide 15: Robust profitable growth roadmap for Faurecia Clarion Electronics
Robust profitable growth roadmap for Faurecia Clarion Electronics > Creation of our fourth Business Group with the successful integration of Clarion, Parrot and Coagent > Accelerated cost competitiveness program to generate at least €80m annual savings by end 2020 • Reduction of 14% of headcount at
Slide 16: Record order intake securing future profitable growth
Record order intake securing future profitable growth 3-YEAR ROLLING ORDER INTAKE (lifetime sales) > Record order intake in 2019 resulting in €68bn over the last three years: €68bn €62bn €63bn • Reflecting continuous market share gains €53bn • With high profitability 2014-2016 2015-2017 2016-2018 20
Slide 17: Anticipating the next disruption and targeting CO2 neutrality by 2030
Anticipating the next disruption and targeting CO2 neutrality by 2030 ACCOUNTING ACTIONS STARTING POINT Faurecia 2019 “controlled” USE Carbon Footprint (Deloitte) LESS 8 7 Scope 1 & 2 DESIGN 6 FOR PLANET 5 Logistics 4 Other 3 BUY > Scope 1 Heat use in Plants GREEN 2 Purchased > Scope 2 Electricity u
Slide 18: Strong financial performance and increased proposed dividend
Strong financial performance and increased proposed dividend Sales Up 1.4% on a reported basis and down 3.0% at constant currencies and excl. Clarion scope effect €17,768m vs. €17,525m in 2018 Outperformance of 280bps, in line with guidance of between 150bps and 350bps Operating income €1,283m In li
Slide 19: Sales outperformance of 300bps despite significant impact from Seating EoPs
Sales outperformance of 300bps despite significant impact from Seating EoPs €(529)m €586m €17,768m €187m €17,525m +1.1% -3.0% +3.3% Currency effect Growth ex-currencies* Clarion scope effect** Vs. automotive production growth*** of -5.8% FY 2018 FY 2019 WW auto prod. 90.5m WW auto prod. 85.3m H1 201
Slide 20: Confirmed resilient performance thanks to strong action plans
Confirmed resilient performance thanks to strong action plans 7.3% 7.4% 7.2% Other €(188)m €175m Clarion consolidation Volume/mix Resilience FY 2018 FY 2019 FY 2019 excluding Clarion including Clarion > The negative impact from volume/mix was broadly offset by cost savings generated by: • Our three
Slide 21: Successful resilience action plans
Successful resilience action plans > Operational flexibility through direct and indirect headcount management • Total headcount reduction of c. 6% year-on-year (at constant perimeter) • Additional flexibility through temporary headcount, still representing an estimated share of c.19% of total headco
Slide 22: Seating 39% of Group sales
Seating 39% of Group sales Improved profitability despite lower sales SALES OPERATING INCOME €7,438m €52m €(517)m €453.1m +0.7% -6.9% €6,973m €448.5m Currency effect Growth ex-currencies* Vs. automotive production growth** of -5.8% 6.0% +1.0% 6.5% of sales or +50bps of sales FY 2018 FY 2019 FY 2018
Slide 23: Interiors 30% of Group sales
Interiors 30% of Group sales Strong sales outperformance of 490bps; profitability temporarily impacted by the Decoration activity SALES OPERATING INCOME €58m €(51)m €5,363 +1.1% -0.9% €5,370m Growth Currency ex-currencies* €325.3m effect €293.7m Vs. automotive production growth** of -5.8% 6.1% -9.7%
Slide 24: Clean Mobility 26% of Group sales
Clean Mobility 26% of Group sales Strong sales outperformance of 500bps and improved profitability SALES OPERATING INCOME €75m €(36)m -0.8% €4,654m €4,615m +1.6% Growth €524.6m Currency ex-currencies* effect €499.8m Vs. automotive production growth** of -5.8% 10.8% +5.0% 11.3% of sales or +50bps of
Slide 25: Clarion Electronics 5% of Group sales
Clarion Electronics 5% of Group sales Successful integration of Clarion and improved profitability in H2 thanks to accelerated cost-cutting plans SALES OPERATING INCOME €771m Clarion €586m €11.9m €109m Parrot Automotive €49m 1.5% of sales Coagent Coagent €136m €0.3m FY 2018 FY 2019 FY 2018 FY 2019 >
Slide 26: Europe 49% of Group sales, North America 25% of Group sales
Europe 49% of Group sales North America 25% of Group sales Sales outperformance in a challenging environment Sales impacted by significant Seating EoP and improved profitability and resilient profitability SALES SALES €8,858m €(16)m €(250)m €227m €(364)m -0.2% +5.1% €4,474m €146m €4,483m Currency -2
Slide 27: Asia 21% of Group sales, South America 4% of Group sales
Asia 21% of Group sales South America 4% of Group sales Sales outperformance of 910bps in a tough Strong sales outperformance of 970bps environment; resilient double-digit profitability in China and improved profitability driven by Brazil SALES SALES €386m €3,766m €714m €(60)m €37m €5m €696m +11.9%
Slide 28: Operating income up to €1,283m
Operating income up to €1,283m Resilient operating margin and dilutive impact from Clarion in €m FY 2018 FY 2019 Change Sales 17,525 17,768 +1.4% > Gross margin improved by 100bps, reflecting resilience ex-currency growth* -3.0% actions Cost of sales (15,249) (15,287) +0.2% % of sales (87.0%) (86.0%
Slide 29: Net income impacted by higher restructuring and Clarion-related costs
Net income impacted by higher restructuring and Clarion-related costs > Amortization of intangible assets in 2019 mainly in €m FY 2018 FY 2019 Change included €(50)m for FCE (of which €33m for 9 months Operating income 1,274 1,283 +0.7% of Clarion) (before amort. of acquired intangible assets) Amort
Slide 30: Net cash flow up 11%, to €587m
Net cash flow up 11%, to €587m in €m FY 2018 FY 2019 Change > EBITDA up €263m or +12.3%, mostly due to Operating income 1,274 1,283 +0.7% the application of IFRS16 as of January 1, 2019 Depreciation and amortization, of which: 867 1,121 > Strict control of capex, broadly stable year-on-year . Amorti
Slide 31: Strong financial discipline and secured financing
Strong financial discipline and secured financing NET DEBT VARIATION (€m) LONG-TERM DEBT MATURITY PROFILE (€m) Opening net debt Closing net debt 900 Dec. 31, 2018 Dec. 31, 2019 800 Schuldschein IFRS 16 700 and other bank loans Senior Notes 600 1st application (726) 500 impact Clarion Impact (180) ac
Slide 32: Increase in proposed dividend to €1.30 per share
Increase in proposed dividend to €1.30 per share DIVIDEND PER SHARE > Faurecia will propose to shareholders a dividend of €1.30 per share €1.30* €1.25 €1.10 > It will be payable in cash early June 2020, subject to approval at the Annual Shareholders’ €0.90 Meeting to be held on May 29, 2020 €0.65 >
Slide 33: 2020 market assumptions in an environment with low visibility
2020 market assumptions in an environment with low visibility AUTOMOTIVE PRODUCTION GROWTH > Europe, impacted by: 2020 vs. 2019 • New CO2 rules • Economic challenges (Brexit, weakening macro in countries such as Italy and Spain) • Contraction in Russia NORTH > North America, impacted by: EUROPE AMER
Slide 34: Update on China situation
Update on China situation > Faurecia in China • €2.6bn of sales in 2019 • 58 plants (o/w 4 in Wuhan and 2 in XiangYang in Hubei province) and 19,700 people at Dec. 31, 2019 > Health and safety of our people and families is Nr. 1 priority • No employee infected to date • Start-up of production and of
Slide 35: FY 2020 guidance
FY 2020 guidance > With the assumption of worldwide automotive production down c. 3% in 2020 vs. 2019, our FY 2020 guidance* is as follows: SOLID GROWTH IMPROVEMENT STRONG IN REPORTED SALES IN PROFITABILITY CASH GENERATION including: Scope effect of c. 500bps Operating margin Net cash flow (3 months
Slide 36: Update on PSA/FCA merger process
Update on PSA/FCA merger process > On December 18th, 2019, PSA and FCA signed an agreement to merge > PSA confirmed it will distribute to its shareholders its 46% stake in Faurecia before completion of the deal, which is expected to take place 12 to 15 months after the signature of the agreement > F
Slide 37: Key takeaways
Key takeaways > 2019 confirmed the Group’s resilience and agility, with all financial targets achieved, and secured future profitable growth through record order intake > Despite tough environment, the Group continued its transformation with the creation of a fourth Business Group, Faurecia Clarion
Slide 38: Agenda
Agenda 1 FAURECIA AT A GLANCE 2 INVESTMENT CASE 3 FY 2019 RESULTS 4 STRATEGY AND 2022 FINANCIAL TARGETS 5 ESG APPROACH 38 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 39: Mobility industry at the heart of major transformations
Mobility industry at the heart of major transformations TECHNOLOGY DISRUPTIONS Digitalization Human New energy sources Connected objects & data science & bio-inspired science Environmental issues Women empowerment GLOBAL DEVELOPMENT EVOLVING STRUCTURE CHALLENGES OF SOCIETY Growing urbanization Aging
Slide 40: Transformation strategy aligned with megatrends giving significant market opportunity
Transformation strategy aligned with megatrends giving significant market opportunity Sustainable Mobility Cockpit of the Future Solutions for fuel efficiency, Solutions for a connected, versatile air quality and zero emissions and predictive cockpit Addressable Addressable market market €46bn €73bn
Slide 41: Sustained investment in innovation and development of a broad ecosystem
Sustained investment in innovation and development of a broad ecosystem > Sustainable Mobility Sustainable Mobility Cockpit of the Future Group • Partnership with Michelin for fuel cell systems • Acquisition of Ullit for high-pressure tanks Acquisitions > Cockpit of the Future • Acquisitions of Clar
Slide 42: Faurecia now offers an extended range of product lines
Faurecia now offers an extended range of product lines for Sustainable Mobility and Cockpit of the Future SUSTAINABLE MOBILITY COCKPIT OF THE FUTURE COMFORT PASSENGER DUAL POWER ELECTRIC SEAT STRUCTURE COVERS COMPLETE SEATS & WELLNESS VEHICLES VEHICLES SYSTEMS & FOAM SOLUTIONS SOLUTIONS FUEL CELL EL
Slide 43: Total Customer Satisfaction improvement in performance and perception
Total Customer Satisfaction improvement in performance and perception PERFORMANCE PERCEPTION Customer Claims App Feedbacks 16X -31% Listen Quality 2018 2019 2018 2019 Delivery Red Alerts % of Positive Feedbacks Delivery -20% +40% Improve 2018 2019 2018 2019 TOTAL CUSTOMER SATISFACTION: EVERYONE, EVE
Slide 44: Our resilience is based on 3 pillars
Our resilience is based on 3 pillars STRUCTURAL ACTIONS GOVERNANCE GLOBAL INITIATIVES & COST FLEXIBILIZATION & MANAGEMENT FOCUS > Total Customer Satisfaction > Rationalization/Optimization > Monthly Operations Reviews of industrial footprint with Business Groups > Three Global cost optimization prog
Slide 45: Our Convert2Cash (C2C) program is delivering on targets
Our Convert2Cash (C2C) program is delivering on targets PROGRAM OBJECTIVES PROGRESS TO DATE NEXT STEPS presented in May 2018 > Accelerate overdue collection > Overdues down 25% vs. end 2017 > Integration of FCE and SAS (< 0.5% of sales) > Inventories adjusted to volume > Just Needed Inventory (JNI)
Slide 46: Cash allocation strategy: bolt-on acquisitions and fair shareholder remuneration
Cash allocation strategy remains focused on bolt-on acquisitions and fair shareholder remuneration NET CASH FLOW ALLOCATION STRATEGY > Self-financed bolt-on strategy • In line with strategic priority of accelerating NVS and increasing presence in Asian markets Dividends • Consistent with net debt re
Slide 47: Faurecia's market assumptions with low visibility for 2020
Faurecia’s market assumptions with low visibility for 2020 AUTOMOTIVE PRODUCTION GROWTH AUTOMOTIVE PRODUCTION GROWTH 2020 vs. 2019 2020-2022 CAGR North America Europe China North America Europe China Slightly down Slightly down c. -5% Flat Flat c. +3% (-1 to -2%) (-3 to -4%) WORLDWIDE WORLDWIDE c. -
Slide 48: Sales growth and improved operating margin in all Business Groups
Sales growth and improved operating margin in all Business Groups CAGR > €20.5bn of sales OM = 8% of sales ≥ +5% ˂ 10% of Group sales OM ≥ 6% of sales > €17.8bn of sales OM = 7.2% of sales x2 OM = 1.5% of sales 5% of Group sales c. 25% of Group sales CAGR c. +4% OM ≥ 12% of sales 26% of Group sales
Slide 49: FY 2020 guidance puts us on track to achieve our mid-term targets
FY 2020 guidance puts us on track to achieve our mid-term targets > Faurecia is committed to generate profitable growth and create value for all stakeholders > Our mid-term financial targets presented at our Capital Markets Day on November 26, 2019 are as follows: 2022 FINANCIAL TARGETS OPERATING NE
Slide 50: Agenda
Agenda 1 FAURECIA AT A GLANCE 2 INVESTMENT CASE 3 FY 2019 RESULTS 4 STRATEGY AND 2022 FINANCIAL TARGETS 5 ESG APPROACH 50 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 51: Strong Convictions are the basis of our CSR approach
Strong Convictions are the basis of our CSR approach "As a company, we believe that acting WE ARE CONVINCED THAT responsibly is key to ensure the sustainable development of our Environmental The world is in a Diversity ecosystem for the future generations. issues pose a state of permanent is a stren
Slide 52: Six transversal initiatives to respond to our Convictions
Six transversal initiatives to respond to our Convictions and to anticipate the next disruption Short-term Environmental Companies The world Power thinking issues pose a must have is in a state Diversity must have a jeopardizes serious challenge a positive impact of permanent is a strength counterba
Slide 53: Faurecia CSR Roadmap 2019-2022 for PLANET
Faurecia CSR Roadmap 2019-2022 for PLANET TARGET 2022 KEY INDICATOR CONTENT PLANET RESULTS 2019 CO2 tons equivalent/ -20% by 2022 GHG emissions Million euros of sales (42 in 2019, vs 41 in 2018) scope 1 & 2 -10% by 2022 MWh per Million euros Energy efficiency (117,5 in 2019 vs 116 in 2018) CO2 of sa
Slide 54: Faurecia CSR Roadmap 2019-2022 for BUSINESS
Faurecia CSR Roadmap 2019-2022 for BUSINESS TARGET 2022 KEY INDICATOR CONTENT BUSINESS RESULTS 2019 500 / year Patents Number of new patents filled (610 in 2019 incl 134 for FCE) STRATEGIC Plant risk assessment Number of plant at risks, (based on internal 5% in 2022 (5,8% in 2019, 15 sites at risk I
Slide 55: Faurecia CSR Roadmap 2019-2022 for PEOPLE
Faurecia CSR Roadmap 2019-2022 for PEOPLE TARGET 2022 PEOPLE KEY INDICATOR CONTENT RESULTS 2019 31% in 2022 % women managers in M&Ps (24,4% in 2019) 21% in 2022 Diversity & inclusion % women managers in top leaders (15% in 2019) 39% in 2022 % non European in top leaders (34% in 2019) INCLUSIVE AND E
Slide 56: Two governance bodies driving strategy and execution
Two governance bodies driving strategy and execution > Decides the strategy Board of Directors > Oversees the implementation > Proposes the strategy Executive Committee > Pilots the execution 56 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 57: A diverse, multidisciplinary and committed Board of Directors
A diverse, multidisciplinary and committed Board of Directors EXPERIENCE & EXPERTISE > Automotive technologies > Industry > Banking, Finance and Risk Management > Artificial intelligence & digital technologies > Governance & CSR > Geographic markets > Automotive industry > Leadership and crisis mana
Slide 58: Main activities of the Board of Directors in 2019
Main activities of the Board of Directors in 2019 COMPENSATION AND STRATEGY FINANCES GOVERNANCE HUMAN RESOURCES Annual review Examination and approval Determination of the Review of draft resolutions of the Group's strategy of the accounts remuneration of the and convening of the AGM Corporate Offic
Slide 59: Three committees in support of the Board
Three committees in support of the Board AUDIT GOVERNANCE AND COMPENSATION COMMITTEE NOMINATIONS COMMITTEE COMMITTEE Chair Odile Michel Linda Desforges de Rosen Hasenfratz Meetings 5 5 5 Attendance rate 100% 95% 90% Members Valérie Landon Penelope Herscher Daniel Bernardino Olivia Larmaraud Denis Me
Slide 60: An active and dedicated Executive Committee
An active and dedicated Executive Committee 6 business and region EVPs 7 support functions EVPs 50% 14% 53 years 10 years non-French female average age average group seniority 60 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 61: Faurecia Risk governance model
Faurecia Risk governance model BOARD OF DIRECTORS MANAGEMENT Board of Directors Executive Committee Yearly review of Risk Management process Monthly Committee with review and top risks of specific risks Audit Committee Risk Committee Yearly presentation of Risk Management process Quarterly Committee
Slide 62: Faurecia Risk Management program
Faurecia Risk Management program 51 risks identified of which 15 “top risks” Risk Identification Probability & impact More than 50 key Risk Monitoring Risk Assessment assessment performed risk indicators with risk owners Risk Control More than 100 existing controls identified / More than 20 actions
Slide 63: Non-deal roadshow post-FY 2019 results
Non-deal roadshow post-FY 2019 results – February March 2020
Slide 64: Financial calendar
Financial calendar > April 20, 2020 Q1 2020 sales announcement > May, 29, 2020 Annual Shareholders’ Meeting > July 27, 2020 H1 2020 results announcement > October 23, 2020 Q3 2020 sales announcement 64 Non-deal roadshow post-FY 2019 results – February March 2020
Slide 65: 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 66: 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 67: Non-deal roadshow post-FY 2019 results – February March 2020
Non-deal roadshow post-FY 2019 results – February March 2020