(Updated with analyst teleconference, details, prices)
July 25 (Reuters) – Forvia, the automotive supplier born from the acquisition by Faurecia of its German competitor Hella, said on Monday that it was confident for 2022, its new strategic axes should help it to face the shortage of chips, at the war in Ukraine and the health restrictions in China which weighed on the results of the first half.
“We are confident that the second half will enable us to improve on our performance from the first half and fully confirm our objectives for the year,” Group Chief Executive Patrick Koller said in a statement.
Around 12:30 p.m., Faurecia shares rose 7.83% to 18.87 euros.
The French equipment manufacturer is counting on electrification, autonomous car and connected cockpit technologies to drive its future growth, alongside the historical businesses of seats and depollution.
The disappearance of openwork grilles on electric vehicles also offers new possibilities for integrating the lighting provided by the German specialist Hella, whose takeover was sealed in January.
The group reported consolidated operating profit of 426 million euros for the first six months of 2022, or 3.7% of sales.
Analysts polled by Visible Alpha had on average forecast operating profit of 436 million euros with a margin of 4%.
After two years of disruption due to the coronavirus pandemic, Forvia is facing new supply issues due to health restrictions in China and Russia’s invasion of Ukraine.
“The context is particularly volatile,” Faurecia executive vice president and chief financial officer Olivier Durand told reporters, noting that the market has seen many periods marked by short bursts of activity with regular interruptions.
Olivier Durand also said that Forvia had ceased its activities on most of its sites in Russia and that the group had recognized 87 million euros in exceptional charges related to its activities in the country during the period, in particular inventories and claims that could not be obtained due to international sanctions.
Inflation had a gross impact of around 500 million euros in the first half, added Forvia, which however said it had managed to mitigate some of these charges thanks to contractual pass-through policies on raw materials to the tune of 80% on average and negotiations with customers.
The group expects these policies to continue to mitigate the effects of inflation from the second half of the year.
“In the second half of the year, we expect this ratio to increase from 80% to 90%,” said Olivier Durand.
Forvia achieved a turnover of 11.62 billion euros in the first half, which exceeds analysts’ estimates of 11.02 billion.
In anticipation of possible energy shortages in Europe this winter linked to the conflict in Ukraine, Faurecia has advanced by one year the constitution of a security stock of around 100 million euros “to secure supplies”.
The group, which consumes around 20 million euros of gas and around 100 million euros of electricity each year, also plans to buy solar electricity produced around the world in the countries where it is present, for a value of 7% of its overall electricity needs, in order to reduce its exposure to price variations and advance towards its objective of carbon neutrality. (Report Elena Vardon and Juliette Portala, with Gilles Guillaume, French version Diana Mandiá, edited by Sophie Louet)