Forvia drives cautiously into 2022 as China, Ukraine cloud auto outlook – Reuters
- Cautious 2022 guidance for combined group
- Faurecia suspends dividend
- Demand hit by Chinese lockdowns, Ukraine
- Shares down slightly after early boost
April 26 (Reuters) – Forvia, the European car parts maker created by Faurecia’s (EPED.PA) takeover of German rival Hella (HLE.DE), is cautious about the outlook for 2022, based on lower global automotive production estimates linked to China lockdowns and the Ukraine conflict.
In its first financial guidance for the combined group since its sealed the deal in January, Forvia predicted sales of around 23 billion to 24 billion euros ($25 billion-$26 billion) this year with a profit margin of 4%-5%.
Analysts polled by Visible Alpha had on average predicted combined sales of 24 billion euros for 2022 – a 54% jump from Faurecia’s revenues last year – with a profit margin of 6%.
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“We are very cautious on both Europe and China, which are two major markets for us,” Michel Favre, Faurecia’s finance chief and Hella’s incoming chief executive, told analysts.
Faurecia said it had protectively renegotiated its debt covenant, suspended this year’s dividend payment and doubled its divestments target to proceeds of 1 billion euros.
“We are building a very powerful group, so we need to focus on the key business,” Favre said, ruling out any plans to sell the group’s clean mobility business.
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