PARIS (Agefi-Dow Jones)–Forvia, the automotive supplier born at the start of the year from the merger between Faurecia and the German group Hella, presented its “Power25” strategic plan on Thursday aimed at achieving profitable growth, strengthening cash generation and accelerate deleveraging.
According to Patrick Koller, CEO of Forvia quoted in a press release, the “Power25” plan defines the group’s three strategic priorities for the next three years: “sales growth driven by innovation and sustainable development; a drop in break-even point; as well as strong cash conversion and active portfolio management to accelerate deleveraging.”
According to this new roadmap, Forvia expects to reach in 2025 a turnover of approximately 30 billion euros, an operating margin above 7% and a net cash flow representing 4% of sales. In addition, the manufacturer expects to post an adjusted net debt to gross operating surplus (Ebitda) ratio of less than 1.5 as of December 31, 2025.
These medium-term ambitions are based on the assumption of global automotive production of 88 million vehicles in 2025, compared to 89 million in 2019, and take into account the asset disposal program amounting to €1 billion. euros due to end by the end of 2023.
On a like-for-like basis, Forvia achieved in 2021 a turnover of 22 billion euros and an operating margin of 5.6%, while its net cash flow represented 1% of its sales. As of June 30, 2022, the net debt of the automotive industry subcontractor amounted to 8.4 billion euros and represented 3.1 times its adjusted Ebitda. For this reason, Forvia has decided that no dividend will be paid in 2023 for the 2022 financial year.
Forvia will provide details on its strategy for 2025 during a “Capital Markets Day” to start at 11:00 a.m.
-Dimitri Delmond, Agefi-Dow Jones; +33 (0)1 41 27 47 31; [email protected] ed: VLV
FORVIA FINANCIAL RELEASES:
https://www.faurecia.com/investors/investors-analysts/financial-results
Agefi-Dow Jones The financial newswire
Dow Jones Newswires
November 03, 2022 02:30 ET (06:30 GMT)