Faurecia is organized to get through the global crisis
Faurecia’s customers have or will temporarily shut down most of their production in the countries impacted by the virus. Consequently, Faurecia has also had to shut down a large number of its production sites in Europe and will do the same in North and South America, strictly respecting national recommendations.
Due to the crisis and the subsequent lack of visibility for the automotive industry, the full-year 2020 financial objectives that Faurecia announced on February 17 are no longer relevant. The Group will present its new financial objectives for 2020 as soon as the macro-economic outlook for the rest of the year is sufficiently clear.
In the light of this unprecedented situation, Faurecia has immediately implemented a crisis management plan to adapt, in real time, its response to the impact of the pandemic on the Group’s employees, customers and suppliers. The first priority is the health and safety of employees and their families. The Group has also implemented drastic measures to manage its cash flow as well as a strict control of expenditure and investments during the slowdown of activity.
- In terms of the safety of its employees and their families, and learning from its experience in China, Faurecia has put in place all the necessary measures to ensure their protection and to prevent the propagation of the virus within its sites. The Group has also implemented an immediate and massive use of home working (all of eligible employees are currently working from home).
- In terms of financing strategy and cash management, Faurecia has a very solid balance sheet with no significant short-term repayment and financing at a low cost. For its immediate liquidity needs, Faurecia has a syndicated credit line of €1.2 billion (maturity June 2024) of which it recently drew down €600 million in anticipation of the drop in factoring of receivables. Including the undrawn €600 million euros of this syndicated credit line, Faurecia currently has more than €900 million euros of credit lines available with options to increase liquidity further in the event the pandemic extends beyond the first half of the year.
- Faurecia has taken all the necessary measures to drastically reduce, in the short term, its costs, development expenses and investments, including putting employees in all sites on temporary unemployment, according to the reduction of the activity faced by the site. Over the past few years, Faurecia has significantly improved its operational performance and demonstrated its resilience in difficult circumstances.
Beyond these emergency measures, the Group is preparing the safe restart of production as soon as this is possible, including in an environment where the virus is not completely eradicated. This ramp-up is ongoing in China, where all of the Group’s sites have now restarted production, with an average capacity utilization rate of around 70% today. Based on this experience, Faurecia is confident in its ability to get through the crisis in other regions of the world and to be able to quickly mobilize its teams to accompany its customers as they restart production.
We are going through an unprecedented crisis of an uncertain duration, even if we are seeing positive signs of normalization coming from China. We have immediately put in place all the necessary action plans to get through this period, and we will continue to adapt our response as the pandemic evolves. Faurecia has significantly improved its operational and financial performance in recent years and will be absolutely ready to accompany the recovery in automotive production when it comes and continue with its transformation strategy. In the meantime, all Faurecia teams are focused on the protection of our employees and their families and an efficient management of the crisis in the best interests of Faurecia and all its stakeholders.