Faurecia - Sharp Rise of Half Year Results, Upward Revision of 2010 Targets

NANTERRE, FRANCE – July 23, 2010: Faurecia's consolidated sales for the first half of 2010 stood at 6,825.9 million euros, including figures for Emcon Technologies, consolidated since January 1, 2010 (1,153 million euros), and Plastal Germany, since April 1 (121.1 million euros).

At constant exchange rates and scope—with 2009 figures adjusted to include Emcon Technologies sales and 2010 figures excluding Plastal Germany—sales were up 26.9% compared with the first half of 2009.

Sales of monoliths totaled 1,054.9 million euros, up 30.4% at constant exchange rates and scope compared with the first half of 2009.

Excluding sales of monoliths included in Emissions Control Technologies, sales stood at 5,771 million euros, an increase of 26.3% at constant exchange rates and scope.

Tooling, R&D and prototype sales dropped by 30.1% in the first half of 2010, at constant exchange rates and on a comparable basis, totaling 345.3 million euros. This figure should be taken in context, however, set against a cyclical high in the first half of 2009 as a result of extensive billing to US automakers before they entered Chapter 11 bankruptcy protection.

Product sales (deliveries of parts and components to automakers) in the first half totaled 5,354.4 million euros, up 53.7% (or +33.2% at constant exchange rates and scope).

Operating income was a profit of 216.5 million euros in the first half of 2010, compared with a loss of 187.3 million euros in the first half of 2009 caused by the sharp drop in business. Operating margin represented 3.2% of total Faurecia sales, reflecting significant improvement since the first half of 2009 and the second half of 2009, when it represented 1.9% of sales (95.6 million euros).

Gross R&D expenditure totaled 339.9 million euros and 5% of sales compared with 265.1 million euros and 6.1% of sales in the first half of 2009. Net of amounts billed to customers, gross R&D expenditure totaled 149.6 million euros, compared with 103.1 million euros in the first half of 2009. Business contribution from Emcon Technologies and Plastal Germany represented 22.8 million euros of additional net expenditure. Excluding this input, expenditure was up 23.7 million euros.

Administrative and commercial expenses totaled 214.4 million euros, compared with 167.8 million euros in the first half of 2009. The integration of Emcon Technologies and Plastal Germany represented 30.9 million euros of additional expenditure. Excluding expenses related to consolidating the two companies, administrative and commercial expenses decreased from 3.8% to 3.3% of overall sales.

Other operating income of 60.6 million euros essentially represented, in the amount of 60 million euros, by a profit generated by the bargain purchase (badwill) of Plastal Germany.

Capital expenditure totaled 123.9 million euros, representing 1.8% of sales, compared with 87.8 million euros (2% of sales) in the first half of 2009.

Net cash flow, not including changes from the sale of receivables, led to a balance of 137 million euros in the first half of 2010.

Net financial debt at June 30, 2010, stood at 1,349 million euros, compared with 1,401 million euros at December 31, 2009.

The company forecasts an 8% drop in light-vehicle production in Europe in the second half of 2010, caused by the phasing out of tax incentives. Production is expected to grow by around 11% in North America.

Faurecia expects a change in product sales of between -2% and +2% in the second half of 2010, versus the same period of 2009.