Downward revisions to global auto industry output forecasts – due to the greater than expected impact of the chips crisis – have forced Faurecia to revise its 2021 guidance down.
Faurecia said the latest industry forecasts for H2 output have been significantly cut due ‘to a higher than expected impact from semiconductor shortage that creates high volatility in OEM programs’.
Worldwide automotive production for H2 2021 is now estimated by forecaster IHS Markit at 34.5 million vehicles for H2 2021 vs. 39.3 million vehicles in the previous forecast for August.
That means 2021 worldwide automotive production now estimated by IHS at 72.0 million vehicles versus 76.8 million vehicles in the previous forecast.
Faurecia said its latest financial guidance for 2021 was explicitly based on the assumption of 76.6 million vehicles produced in the full year, i.e. 39.1 million vehicles produced in H2 2021.
It said that due to current high volatility and, consequently, low reliability of OEM programs (collected through EDI) and taking into account the sharp reduction by 4.8 million vehicles to be produced in H2 according to the latest IHS forecast, Faurecia revises its financial guidance for the full year 2021.
Based on the assumption of 72 million vehicles produced in the full year 2021, Faurecia now targets:
- Sales of c. €15.5bn with strong organic sales outperformance > +600bps (vs. previous guidance of ≥ €16.5bn with strong organic sales outperformance > +600bps)
- Operating margin between 6.0% and 6.2% of sales (vs. previous guidance of c. 7% of sales)
- Net cash flow of c. €500m and net debt-to-EBITDA ratio ≤ 1.5x at year-end (vs. previous guidance of net cash flow > €500m and net debt-to-EBITDA ratio < 1.5x at year-end)
In 2020, with worldwide automotive production at similar level (71 million vehicles) and sales of €14.5bn, Faurecia generated an operating margin of 2.9% of sales and net cash flow of €13 million.