Nanterre (France), July 26, 2016
(or 6.2% of value added  sales up 130bp);
(previously 4.6% to 5.0%);
(previously around €300 million).
The interim fiscal 2016 accounts were approved by the Board of Directors under the Chairmanship of Yann Delabrière at its meeting on July 25, 2016. Auditors have reviewed the accounts.
Patrick Koller , CEO of Faurecia : "Faurecia's robust profitability in the first half of 2016 of 5.1% operating margin, an increase of 110bp, was driven by a strong organic growth in Europe, clearly outperforming automotive production, a profitability breakthrough in North America and robust profitability in Asia. Based on an encouraging first half and an effective execution, we are upgrading our 2016 guidance. Our order intake momentum is very significant indicating solid future growth. The expected closing this week of the Exteriors disposal will allow us to further focus on our two strategic priorities: Sustainable mobility and Cockpit of the future. I would like to take this opportunity to thank all Faurecians for their contribution to this excellent performance."
|In € million||
|Value Added 2 sales||7,788||7,922||
|As % of total sales||4.0||5.1||+110 basis points|
|As % of value added 2 sales||4.9||6.2||+130 basis points|
|Net income (Group share)||157||245||+55.7%|
|Net cash flow||312||205||2.2% of sales|
|Net financial debt||946**||941***||-5 million|
* IFRS 5; ** at December 31, 2015; *** at June 30, 2016
2016 FIRST HALF RESULTS: STRONG PROFITABILITY IMPROVEMENT
The results described below are after application of IFRS 5 for both the period H1 2016 and H1 2015 (for more details see below)
Faurecia's first half consolidated (total) sales totaled €9,531.6 million, compared to €9,488.7 million for the first half of 2015. Faurecia's consolidated sales grew by 0.5% on a reported basis between the first half of 2016 and the first half of 2015. On an organic basis, sales increased 3.4% compared to 2015 .
Value added sales (total sales less monoliths 3 sales) were €7,921.7 million in the first half of 2016 compared to €7,788.0 million in the first half of 2015, showing an increase of 1.7% when compared to 2015 first half. On an organic basis, value added sales were up 5.0% compared to the first half of 2015 .
Catalytic converter monolith sales  reached €1,609.9 million in the first half of 2016 versus €1,700.7 million for the first half of 2015. They were down -5.3% on a reported basis and fell by -4.0% on an organic basis, driven by lower precious metal prices.
Product sales (parts and components delivered to manufacturers) were €7,294.7 million compared to €7,231.7 million in the first half of 2015. This represented an increase in product sales of 0.9% on a reported basis and an increase of 4.2% on an organic basis .
SALES BY CUSTOMER: HIGH GROWTH WITH RENAULT-NISSAN, FORD AND CUMMINS
The most remarkable developments involved Renault-Nissan +18% (organic) comforting its position of Faurecia's third largest client and Ford +11% (organic). Sales to Cummins for commercial vehicles were up 5% (organic). Commercial vehicles now represent 9% of sales for Faurecia Emissions Control Technologies. Sales to Chinese OEMs soared 31% (organic) and now account for 12% of sales in China.
SALES BY REGION: FAST GROWTH IN EUROPE, OUTPERFORMING AUTOMOTIVE PRODUCTION BY 260 BASIS POINTS
Product sales by geographic region for the first half of 2016 were as follows:
SALES BY BUSINESS GROUP: STRONG GROWTH FOR AUTOMOTIVE SEATING +9.2% (organic)
Product sales in the first half of 2016 were as follows:
Automotive Seating: Product sales totalled €3,134.9 million compared to €2,938.1 million in the first half of 2015, an increase of 6.7% on a reported basis and an increase of 9.2% organic. This growth was driven by a number of launches for Nissan, Ford (close to +200%), BMW and Daimler.
Emissions Control Technologies: Product sales reached €1,914.9 million in the first half of 2016, a decrease of -2.2% on a reported basis but an increase of 1.2% organic. Sales to Renault-Nissan increased 18% (organic) and those to Cummins 5% (organic).
Sales for Interior Systems includes the sales from the remaining Automotive Exterior business. Product sales totalled €2,244.9 million versus €2,336.0 million for H1 2015, a decrease of -3.9% on a reported basis but stable at +0.4% organic. Product sales grew slightly as a result of the increase in sales with Renault-Nissan (+15% organic) and PSA (+5% organic). Growth was particularly impressive in Asia, where it reached 23% (organic), driven by business in China.
STRONG GROWTH IN OPERATING RESULTS +28%
Operating income (see definition below) stood at €490 million, or 5.1% of total sales (6.2% of value added sales), compared with €384 million and 4.0% of total sales (4.9% of value added sales) in 2015. It benefitted from the sales growth Europe, a significant improvement of the industrial performance in North America and a strong contribution from Asia.
Margin growth by region was particularly impressive in Europe and in North America:
At the end of June, Faurecia disposed of its Fountain Inn facility (Interior Systems, turnover of approx. $95 million in H2 2016) which will be earnings enhancing;
By Business Group , the profitability levels of our three Business Groups are converging:
Consolidated net income (Group share) stood at €245 million, compared with €157 million in H1 2015, an increase of 56%. Key items, excluding operating income, are:
NET CASH FLOW ABOVE €200 MILLION AND NET DEBT ALMOST STABLE
Net cash flow (see definition below) stood at €205 million.
EBITDA grew €136 million to €814 million up 20%. This strong growth came mostly from the sharp increase of €106 m of the operating income.
Capital expenditure and capitalized R&D were up 5% at €417 million, compared to €398 million in H1 2015.
Working capital requirement improved by €75 million while in H1 2015 it improved by €160 million (largely on the back of higher receivables factoring).
At the end of June 2016, the Group's net financial debt (see definition below) stood at €941 million, almost stable when compared with €946 million at the end of December 2015. Faurecia completed its successful refinancing plan in the first half of the year with the issuance in March 2016 of €700 million in bonds maturing in 2023 with a coupon of 3.625%, the early redemption in April 2016 of €490 million in bonds maturing in 2016 with a coupon of 9.375% and with the renewal and extension to 5 years of its €1,200 m syndicated facility.
Based on an encouraging first half and a solid industrial performance, Faurecia has upgraded its outlook, announced in February 2016, as follows:
Previous guidance: Between 4.6% and 5.0%
Previous guidance: Around €300 million
Faurecia is one of the world's largest automotive equipment suppliers, with three key Business Groups: Automotive Seating, Emissions Control Technologies and Interior Systems. In 2015, the Group posted total sales of €20.7 billion. At December 31, 2015, Faurecia employed 103,000 people in 34 countries at 330 sites and 30 R&D centers. Faurecia is listed on the NYSE Euronext Paris stock exchange and trades in the U.S. over-the-counter (OTC) market. For more information, visit www.faurecia.com
Olivier Le Friec
Head of Media Relations
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Director of Financial Communications
Tel: +33 (0)1 72 36 75 70
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Upon application of accounting rule IFRS 5, the assets and financial results corresponding to the business to be sold and the net result of these discontinued activities, have been isolated in distinct lines on the consolidated balance sheet and income statement. The results described below are after application of IFRS 5 for both the period H1 2016 and H1 2015
Definitions of terms used in this document:
Total sales less monoliths sales
Parts and components delivered to manufacturers or value-added sales less R&D, tooling & prototype sales.
Monoliths are components used in catalytic converters for exhaust systems. Monoliths are directly managed by automakers. They are purchased from suppliers designated by them and invoiced to automakers on a pass-through basis. They accordingly generate no industrial value added.
Variation at constant exchange rates and consolidation scope.
Operating income is the Faurecia group's principal performance indicator. It corresponds to net income of fully consolidated companies before:
Net cash-flow is defined as follow: Net cash from (used in) operating and investing activities less (acquisitions)/disposal of equity interests and businesses (net of cash and cash equivalents), other changes and proceeds from disposal of financial assets.
Net financial debt is defined as follow: Gross financial debt less cash and cash equivalents and derivatives classified under non-current and current assets.
 Organic: constant currencies & scope
 Value added sales: Total sales less monoliths sales
 Precious metals and ceramics used in emission control systems.