Car parts group Faurecia cuts 2021 financial guidance

French car parts supplier Faurecia’s logo is seen during the company’s investor day in Paris, France, April 19, 2016. REUTERS/Charles Platiau/File Photo

PARIS, Nov 29 (Reuters) – French automotive supplier Faurecia (EPED.PA) cut its guidance for the 2021 financial year, citing a drop in European automotive production, difficulties to adapt to stop-and-go generated costs, and one-off costs in the United States.

The company now forecast 2021 sales of between 15-15.5 billion euros ($16.92 to $17.49 billion) and an operating profit margin of 5.5%, compared to a previous target of sales at 15.5 billion euros and a 6-6.2 percent margin.

The cut also heavily impacted its net cash flow target, which Faurecia now forecast at “more than 300 million euros”, down from a previously communicated 500 million euros target.

The announcement came after the French group earlier this year agreed to acquire a majority stake in German automotive lighting group Hella (HLE.DE) in a 6.7 billion euros deal.

The Hella acquisition should be completed by end February when Faurecia plans to release its 2022 financial outlook, added the company.

The 2021 cut was made after research institute IHS Markit, on which Faurecia bases its own sales projection, in November said that worldwide car demand in the second half of 2021 would shrink by 13% to 6.8 million produced vehicles from 7.8 million.

Faurecia added that its new guidance was made on the assumption that no new major lockdown, impacting production or retail sales in any world region, would be put in place.

($1 = 0.8864 euros)

Reporting by Tassilo Hummel;
Editing by Sudip Kar-Gupta

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