(BFM Bourse) – The automotive supplier delivered growth on a comparable basis that was better than expected by analysts and reassuring in the first quarter. The stock is progressing this Thursday afternoon.
Forvia suffered on the stock market at the start of the year. The automotive supplier has seen a drop of 30% since January 1, which constitutes the eleventh largest drop in the SBF 120.
The equipment manufacturer born in 2022 from the takeover of the German Hella by the French Faurecia has suffered from doubts about the quality of its cash generation and its debt reduction. Fears considered, certainly, as unjustified by the Swiss bank UBS, in a recent note.
The significant restructuring in Europe (with the elimination of a maximum of 10,000 positions) also raised fears on the part of the market, when analysts judged for their part that the group had the merit of taking appropriate measures in the face of the gloominess of volumes on the Old Continent.
The company must demonstrate that its results are on the right trajectory to take its stock market revenge. The first quarter activity, delivered by Forvia this Thursday morning, is clearly moving in this (good) direction.
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North America carries the dynamic
The action of the company led by Patrick Koller gained 8.4% around 5:30 p.m. and also marked the largest increase in the SBF 120 this Thursday. Valeo, another flagship equipment manufacturer in Paris, is dragged in its wake, gaining 4.6%.
Over the period from January to March, the group generated revenues of 6.53 billion euros, down 1.7%. But excluding currency and scope effects, sales increased by 3.1%, reflecting a performance of 390 points (3.9 percentage points) compared to the evolution of automobile production measured by S&P on the same period (-0.8%), reference barometer of the sector.
According to a consensus cited by Stifel, the consensus expected 6.46 billion euros in revenue. Above all, analysts were counting on lower organic growth, of only 2.4%.
Growth was mainly driven by the North America region, with a 6.8% increase in revenues on a like-for-like basis, while Europe and China recorded modest declines of 0.3% and 2.0%. 5% respectively.
In China, the group particularly suffered from the drop in sales over one year to the juggernaut BYD which were not fully offset by the increase in volumes with other Chinese groups such as Leap Motor, Li Auto and Chery.
Objectives confirmed
By division, “clean mobility” products (exhaust systems, solutions for fuel cell electric vehicles) and interior equipment (dashboards, door panels) were the main sources of growth, with increases of 6.8% and 4.8% respectively.
At the end of its first quarter, the group confirmed its objectives for 2024, namely revenues of between 27.5 billion and 28.5 billion euros, an operating margin of between 5.6% and 6.4 % and a net cash flow at least equal to that of 2023 (649 million euros). It also intends to reduce its debt leverage, that is to say the ratio of net debt to gross operating profit, to 1.5 at the end of next December compared to 2.1 at the end of 2023.
“The first quarter performance is reassuring in the context of the warning issued yesterday by Continental,” judges UBS. The German equipment manufacturer announced on Tuesday that its sales, operating margin and cash generation would be much lower than consensus expected. The company cited low volumes in Europe as well as price renegotiations with its customers.
Julien Marion – ©2024 BFM Bourse
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