Markets freeze Faurecia. The French automotive supply giant has revised its targets for the current year downwards. The slowdown in production in Europe is weighing down the projections. This is the second time in three months that Faurecia has adjusted its estimates. The group now estimates that it will end the year with sales of between 15 and 15.5 billion euros, and a profit margin of 5.5% (against the previous range of 6-6.2%). Something could change in early 2022, when Faurecia is expected to complete its acquisition of a majority stake in German’s Hella.
Markets freeze Faurecia
On Monday November 29, Faurecia announced its new guidance for 2021. The French giant now expects to end the year with sales of between €15bn and €15.5bn. Previously it was certain to settle at the 15.5 billion euros mark. Net cash flow is expected to exceed 300 million euros, whereas Faurecia previously thought net cash flow would be around 500 million euros.
The reasons for the choice
For Faurecia, this is the second revision in three months. The reason for this is the drop in car production in Europe, which is in turn linked to a shortage of components, and more generally in supply slowdowns. “We had a positive trend in November – explains chief financial officer Michel Favre, as reported by milanofinanza.it. – But we have no idea whether we will have to suffer some early closures in the first week of December”.
But production could also be slowed down by a new wave of contagion”. Too many uncertainties, in short. In February, as reported by milanofinanza.it, Faurecia should close the acquisition of the majority of the German Hella and in that context give the forecast for 2022.