2016 Investor Day : Faurecia to accelerate profitable growth and enhance technology offer to become leader in sustainable mobility and Cockpit of the Future

For the period 2016 – 2018 the Group will see total sales growth of 6% CAGR (400 basis points above automotive production). The operating margin in 2018 will reach 6% of total sales (7% of value added[1] sales). Net Cash Flow will be above €500 million and earnings per share will reach €5.

To expand its technology offer focused on the industry megatrends of environmental protection, connectedness and autonomous driving, the Group will rapidly expand its Value Spaces: those product lines with strong technology content and whose margins and growth rates are significantly above the Group’s average.

Strong organic profitable growth

In 2015 the Group had a record order intake of €21 billion and has an order book of €54 billion making it confident in its growth objective of 400 basis points above automotive production. The Group has three areas of acceleration in its sales:

• Customer partnerships with its four main customers, the growth with an extended “premium” customer portfolio and the strengthening relationship with fast-growing customers including Hyundai-Kia, Chinese automakers and Cummins;
• China, where the Group targets €5 billion of sales in 2020, of which 30% will come from Chinese automakers;
• Value Spaces which have a high technology content and margins 200-400 basis points above the Faurecia average.

Increased profitability will be driven in particular through the geographic and product mix of its order book, manufacturing excellence including new digital productivity opportunities, and fixed cost and R&D efficiency.

Accelerating through Value Spaces

Patrick Koller, who will become CEO on July 1, 2016, commented: “The automotive industry is undergoing a technological revolution in terms of environmental performance, connectivity and autonomous driving and is also embarking on a dramatic change in business model. Faurecia will be a key player in this transformation and enhance its technology offer through strategic opportunities and enlarging its innovation ecosystem. The Group has the ambition to become the leader in sustainable mobility and the cockpit of the future.”

The Group has already established a network of technology scouts across all continents, and is launching a dedicated investment vehicle in startups with an initial €50 million investment. It will strengthen its partnerships with academic research establishments, laboratories and industrial companies. An example of such cooperation is the FORCE project, which has been created to accelerate the development of low cost carbon fiber.

Robust Balance Sheet Management

The Group will continue to show robust balance sheet management allowing flexibility and resilience. It is completing its financing plan at very competitive cost with the issue of two recent seven year bonds, the redemption of around €750 million of bonds and the ongoing renegotiation of its syndicated facility. It has restored a strong Net Debt to EBITDA ratio of 0.6x at the end of 2015. As it implements its strategic plan, any strategic opportunities would be accretive in the short term to EPS and EBITDA and the Net Debt / EBITDA ratio would stay around 1.0x.

All the presentations from the Investor Day are available on the Group’s website (www.faurecia.com) and the replay of the event will be available in the evening of April 19.