2019 Q1 Sales

* Automotive production figures refer to IHS Markit dated April 16, 2019 (vehicle segments in line with CAAM for China)

** In Q1, this new BG only includes sales from Coagent (consolidated since January 1, 2018) and Parrot Automotive (sales consolidated since January 1, 2019); Clarion will be consolidated as from April 1, 2019

RESILIENT SALES IN A CHALLENGING ENVIRONMENT AT €4,325m (UP 0.2% ON A REPORTED BASIS) WITH OUTPERFORMANCE AT CONSTANT CURRENCIES OF 580bps

By region:

• Outperformance in Europe, Asia and South America
• North America, as expected, was impacted by the end of production of a significant Seating program for Daimler in Cottondale

All Business Groups outperformed worldwide automotive production:

• Seating outperformed worldwide automotive production by 700bps (the expected end of production of two programs, one in Europe and one in North America, being partly offset by the bolt-on contribution from BYD Seating activities in Asia)
• Interiors by 140bps
• Clean Mobility by 820bps

CONFIRMED FULL-YEAR GUIDANCE

The Board of Directors, under the chairmanship of Michel de Rosen, met on April 19, 2019 and reviewed Faurecia’s performance in Q1 2019.

RESILIENT SALES IN A CHALLENGING ENVIRONMENT

Reported sales up 0.2%
Sales at constant currencies down 1.1%  outperformance of 580bps vs. automotive production

In Q1 2019, sales amounted to €4,324.6 million, up 0.2% on a reported basis

• Currencies had a positive impact of €56.0 million, representing 1.3% of last year’s sales (positive impact from the US dollar and the Chinese yuan renminbi vs. the euro partly offset by negative impact from the Turkish lira, the Argentine peso and the Brazilian real vs. the euro).
• At constant currencies, sales were down 1.1%, representing an outperformance of 580bps compared to worldwide automotive production that dropped year-on-year by 6.9% (source IHS Markit dated April 16, 2019).

Sales at constant currencies included:

• A positive effect of €104.5 million due to the contribution from bolt-on acquisitions (see detail in appendix), representing 2.4% of last year’s sales,
• A negative effect, as expected and announced on February 18, of €94.9 million due to the end of production of two Seating programs in North America (Cottondale) and Europe (Vigo),
• A negative effect of €9 million from the wind-down of activities in Iran as from June 30, 2018.

SALES BY REGION

Outperformance in all regions except North America, which was impacted by the expected year-on-year effect from the end of production of a Seating program

Europe (51% of Group sales): Sales of €2,216.5 million (vs. €2,278.9 million in Q1 2018)

• Down 2.7% on a reported basis
• Down 1.9% at constant currencies, 300bps above regional automotive production (-4.9%, source: IHS Markit dated April 16, 2019)
• Currencies had a negative impact of €18.1 million (-0.9% of last year’s sales, mainly attributable to the Turkish lira)

As expected, Seating was negatively impacted by the end of production of the Berlingo program in Vigo (Spain) that represented a year-on-year negative impact of €38.9 million.
Conversely, Clean Mobility posted growth at current currency, benefiting from a contribution of €13.6 million from Hug Engineering (whose consolidation started as from Q2 2018). Sales in Europe also benefited from the consolidation of Parrot Automotive since January 1, 2019 that contributed for €10.0 million.

North America (26% of Group sales): Sales of €1,116.7 million (vs. €1,062.8 million in Q1 2018)

• Up 5.1% on a reported basis
• Down 2.9% at constant currencies, 40bps below regional automotive production (-2.5%, source: IHS Markit dated April 16, 2019)
• Currencies had a positive impact of €85.2 million (+8.0% of last year’s sales, mainly attributable to the US dollar)

Sales at constant currencies, as expected, underperformed regional automotive production because of the significant impact from the end of production of the Seating GLE/GLS program for Daimler in Cottondale (Alabama) that represented a year-on-year negative impact of €56.0 million. Clean Mobility posted a robust growth in the quarter.

Asia (18% of Group sales): Sales of €797.8 million (vs. €742.1 million in Q1 2018)

• Up 7.5% on a reported basis
• Up 5.1% at constant currencies, 1,310bps above regional automotive production (-8.0%, source: IHS Markit dated April 16, 2019)
• Currencies had a positive impact of €17.6 million (+2.4% of last year’s sales, mainly attributable to the Chinese yuan renminbi)

Growth at constant currencies benefited from bolt-on contributions of €80.9 million, including €58.5 million from the JV with BYD for Seating (whose consolidation started as from Q3 2018), €20.9 million from the JV with Wuling for Interiors (whose consolidation started as from Q2 2018), and €1.5m for Parrot Automotive (whose sales consolidation started as from Q1 2019).

In China, sales amounted to €603.7 million (vs. €565.4 million in Q1 2018), up 6.8% on a reported basis and up 4.7% at constant currencies, an outperformance of 1,990bps vs. the Chinese automotive production (-15.2%, source: IHS Markit dated April 16, 2019). Sales in China included the above-mentioned contribution of €80.9 million from bolt-ons and, even restated for this contribution, sales in China outperformed the Chinese automotive production.
Sales to Chinese OEMs amounted to €224 million (almost doubled vs. €116 million in Q1 2018) and represented 39% of sales in the country (vs. 20% in Q1 2018).

South America (4% of Group sales): Sales of €150.2 million (vs. €168.3 million in Q1 2018)

• Down 10.8% on a reported basis
• Up 4.2% at constant currencies, 890bps above regional automotive production (-4.7%, source: IHS Markit dated April 16, 2019)
• Currencies had a negative impact of €25.0 million (-14.9% of last year’s sales, attributable to the Argentine peso and the Brazilian real)

Growth at constant currencies was mainly driven by Clean Mobility.

SALES BY BUSINESS GROUP

All Business Groups outperformed worldwide automotive production

Seating (43% of Group sales): Sales of €1,841.5 million (vs. €1,817.3 million in Q1 2018)

• Up 1.3% on a reported basis
• Up 0.1% at constant currencies, 700bps above worldwide automotive production (-6.9%, source: IHS Markit dated April 16, 2019)
• Currencies had a positive impact of €22.2 million (+1.2% of last year’s sales)

Growth at constant currencies included a bolt-on contribution of €58.5 million from the JV with BYD in Asia (consolidated as from Q3 2018).
Conversely, it was penalized, as previously commented, by the negative effect of the end of production of two Seating programs in North America (Cottondale) and Europe (Vigo), representing a combined year-on-year negative impact of €94.9 million.
The Volkswagen Chattanooga (USA) Seating business, which was transferred to Faurecia at the beginning of the year and represents €1.3 billion of lifetime sales, is not included in the above-mentioned consolidated sales figures, as it is accounted for by the equity method (sales for this business amounted to €46 million in Q1 2019).

Interiors (30% of Group sales): Sales of €1,293.5 million (vs. €1,357.7 million in Q1 2018)

• Down 4.7% on a reported basis
• Down 5.5% at constant currencies, 140bps above worldwide automotive production (-6.9%, source: IHS Markit dated April 16, 2019)
• Currencies had a positive impact of €9.9 million (+0.7% of last year’s sales)

Sales at constant currencies included a bolt-on contribution of €20.9 million from the JV with Wuling in Asia (consolidated as from Q2 2018).

Clean Mobility (26% of Group sales): Sales of €1,143.5 million (vs. €1,105.9 million in Q1 2018)

• Up 3.4% on a reported basis
• Up 1.3% at constant currencies, 820bps above worldwide automotive production (-6.9%, source: IHS Markit dated April 16, 2019)
• Currencies had a positive impact of €23.0 million (+2.1% of last year’s sales)

Growth at constant currencies included a bolt-on contribution of €13.6 million from Hug Engineering in Europe (consolidated as from Q2 2018) and was also driven by solid performance in North America and South America.

Faurecia Clarion Electronics (1% of Group sales): Sales of €46.2 million (vs. €33.7 million in Q1 2018)
In Q1 2019, this new Business Group only included sales from Coagent Electronics (consolidated since January 1, 2018) and Parrot Faurecia Automotive (sales consolidated since January 1, 2019).
As from April 1, sales from Clarion operations will also be included in this new Business Group.

ANNUAL SHAREHOLDERS’ MEETING

The Board of Directors met on April 19, 2019 and approved the agenda of the Group’s Annual Shareholders’ Meeting to be held on Tuesday May 28, 2019 at 10:00am (CET) at Pavillon Gabriel in Paris (France).
This agenda includes the proposed payment in cash of a dividend of €1.25 per share, up 14% vs. the dividend of €1.10 paid last year.
The ex-coupon date will be May 31, 2019 and the dividend will be paid on June 4, 2019.

CLARION ACQUISITION FINALIZED AND START OF FAURECIA CLARION ELECTRONICS

Since March 28, 2019, fully in line with the planned acquisition schedule, Clarion has become a wholly-owned company of Faurecia.
On April 1, 2019, an official ceremony in Saitama (Japan) celebrated the entrance of Clarion into the Group perimeter. As from this date, Clarion operations will be consolidated in the new Business Group Faurecia Clarion Electronics, combined with those of Coagen Electronics t and Parrot Faurecia Automotive.
Since April 1, Atsushi Kawabata, former President and Chief Executive Officer of Clarion, has been appointed Executive Vice President of Faurecia Clarion Electronics and has joined Faurecia’s Executive Committee.
In addition, Jean-Paul Michel, former Finance Vice President of Faurecia Interiors, has been appointed Deputy Executive Vice President of Faurecia Clarion Electronics and he is now based in Saitama.
As already announced in February, Faurecia will hold a Capital Markets Day in Paris on November 26 that will focus on the perspectives for the new Business Group Faurecia Clarion Electronics.

CREATION OF “SYMBIO, A FAURECIA MICHELIN HYDROGEN COMPANY”

On March 11, Faurecia and Michelin announced the signature of a Memorandum of Understanding to create a joint venture bringing together all of Michelin’s fuel cell related activities with those of Faurecia.
“SYMBIO, A FAURECIA MICHELIN HYDROGEN COMPANY” will be owned equally by Faurecia and Michelin and will develop, produce and market hydrogen fuel cell systems for light vehicles, utility vehicles, trucks and other applications.
The two companies, convinced of the importance of hydrogen technology in tomorrow's world of zero emissions mobility, aim to create a world leader in hydrogen fuel cell systems.
Through the combination of existing and complementary assets from both partners, the joint venture is able to immediately offer a unique range of hydrogen fuel cell systems for all use cases.

CONFIRMED OUTLOOK

Faurecia fully confirms its full-year 2019 guidance, as announced on February 18, 2019 along with the full-year 2018 results.

This guidance is based on Faurecia’s assumption that worldwide automotive production should be down 1% in 2019 vs. 2018, with a difficult first half and growth resuming in the second half.

Based on this assumption and including the impact of IFRS16 implementation as of January 1, 2019, Faurecia’s full-year 2019 financial targets are:

• Sales growth at constant currencies should outperform worldwide automotive production by 150 to 350bps (excluding Clarion consolidation)

2019 sales outperformance is impacted by the one-off effect of the end of production of two Seating programs in North America and Europe (representing c. 200bps of sales growth). Seating will resume growth in 2020 and further accelerate in 2021 due to the start of production of major global frame programs. This will result in an average yearly sales growth for the Seating activity of 600 to 800bps (at constant currencies) between 2019 and 2021

• Operating income should increase in value and operating margin should be at least 7% (including Clarion consolidation as from April 1)
• Net cash flow should be at least €500m (including Clarion consolidation as from April 1)

Main currency assumptions: USD/€ @ 1.18 average and CNY/€ @ 7.77 average

A conference call for financial analysts and media will be held today at 8:00 am (Paris time).
Dial-in numbers:

• France: +33 (0)1 70 73 27 27
• UK: +44 (0)203 009 5710
• USA: +1 917-720-0178

No access code needed and a replay will be available as soon as possible.

The financial presentation accompanying the conference call will be available at 7:30 am today (Paris time) on the Faurecia website: www.faurecia.com and may also be viewed at the following link: https://edge.media-server.com/m6/p/zbiz83wz