Faurecia Sticks to 2013 Profit Target After Quarterly Sales GainMathieu Rosemain
Faurecia SA, Europe’s largest maker of car interiors, stuck to its 2013 profit target after third-quarter sales rose as growth in Asia and South America offset weaker demand in its home region.
Backed by cost-cutting in Europe, Faurecia plans to improve on last year’s operating profit of 514 million euros ($709 million), the Nanterre, France-based company said late yesterday in an e-mailed statement, reiterating comments from July.
The manufacturer forecast 2013 revenue to rise to between 17.8 billion euros and 18 billion euros from 17.4 billion euros last year. Sales in the third quarter advanced to 4.12 billion euros in the third quarter from 4.09 billion euros a year ago.
Faurecia, 57 percent owned by PSA Peugeot Citroen, is expanding in Asia and North America as car demand in Europe slides to a two-decade low. The company, which also supplies Ford Motor Co. and Volkswagen AG, said that conditions in Europe were starting to pick up with auto production in the region likely to rise 1.5 percent to 2 percent in the fourth quarter.
“The pattern is improving” in Europe, even though a recovery to peak 2007 levels isn’t in sight, Chief Financial Officer Michel Favre said yesterday on a conference call. “Clearly, we will continue to be at a low level.”
With little boost expected from consumer demand in Europe, the parts-maker is looking to boost profit by implementing measures to cut costs in Europe by 50 million euros in 2013 and 100 million euros next year. The moves will lead to 90 million euros in charges this year, including 39 million euros booked in the first half.
Faurecia targets growth of 6 percent to 7 percent annually over the next five years. The French company also has a goal of becoming one of the top five industry suppliers in North America with $7 billion in yearly sales there by 2016.
The Faurecia holding is the largest remaining asset that cash-strapped Peugeot could easily dispose of. Favre said that Faurecia’s management continues to run the company in a way the ensures its independence. Peugeot has repeatedly said in the past that the Faurecia stake is not for sale.