Automotive, the engine of the Franco-German Forvia is also coughing
The automotive sector beyond the Alps is also preparing for the ongoing transition: Forvia announces a season of tears and blood characterized by layoffs and a stop to new hires
It's not just the engine of the German automotive industry that is coughing. One of the major European manufacturers of car components, the French Forvia, better known by its old name Faurecia once controlled by Stellantis ( and with which it still does excellent business ), has in fact suddenly adopted a "tears and blood" restructuring program ” which involves cutting 10,000 positions in Europe over the next five years out of the 75,500 employees currently divided between France, Germany, Poland, the Czech Republic and Spain.
FORVIA'S NUMBERS
A real bolt from the blue, considering that in 2023 Forvia recorded a profit of 222 million and a turnover of 27.2 billion (+10.9% on year) while for 2024 the group estimates turnover between 27.5 and 28.5 billion with an operating margin between 5.6% and 6.4% of turnover and a financial leverage lower than or equal to 1.9 times (debt/ebitda ratio) at the end of the year.
The 2023 results and the estimates for 2024 are also in line with the analysts' consensus. The 2024 guidance is confirmed with revenues of around 30 billion, an operating margin above 7% and leverage below 1.5 times.
WHAT THE EU FORWARD PROGRAM INCLUDES
From what we learn through the press release, everything revolves around the industrial plan called " EU-Forward " which would be aimed at improving the competitiveness of European activities, increasing profitability stressed by unfavorable production and cost dynamics and adapting the operational perimeter to a rapidly evolving context, as a result of the stop to endothermics expected by the European Union by 2035 and the arrival of new Chinese players.
In short, a season of cuts to cope not only with the difficulties of the last period, but also and above all with the change in conditions expected in the near future, so as to be sufficiently light-weight and competitive also towards non-EU players, with savings on strength work for 500 million euros already in 2028 to be implemented by freezing the natural turnover, as well as with the strict reduction in hiring underway and with the review of all fixed-term contracts. Finally, cuts to Research & Development activities are expected. The shares of the group born from the merger between the French Faurecia and the German Hella fell by 14% on the Paris Stock Exchange the day after the presentation of such a rigorous plan.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/automotive-anche-il-motore-della-franco-tedesca-forvia-tossisce/ on Tue, 20 Feb 2024 14:45:35 +0000.