Faurecia Raises Dividend After Profit Growth AcceleratesMathieu Rosemain and Elisabeth Behrmann
Faurecia SA, Europe’s largest maker of car interiors, raised its annual dividend after second-half profit jumped 29 percent on delivery growth in Asia and Europe.
Operating income increased to 363 million euros ($410 million) from 282 million euros a year earlier, Nanterre, France-based Faurecia said in a statement. Earnings beat the 348 million-euro average of five analyst estimates compiled by Bloomberg. The company plans a dividend of 35 cents a share, 17 percent more than a year ago.
Faurecia, 51 percent-owned by French carmaker PSA Peugeot Citroen, is expanding outside Europe to reduce reliance on its home region, where industrywide auto sales are slowly reviving from a two-decade low reached in 2013. The manufacturer outlined a target in November to double its revenue in China, the world’s largest car market, to more than 4 billion euros in the four years through 2018.
Spending on expansion in Asia “is mainly in China, with some Korea, some southeast Asia,” Chief Financial Officer Michel Favre said on a conference call with reporters. “China is by far our favored zone. We’re opening an average of seven plants per year.”
Faurecia gained as much as 3.3 percent and was up 2.5 percent at 37.95 euros as of 10:23 a.m. in Paris. The stock, trading this month at about the highest price since December 2007, has increased 23 percent so far in 2015, valuing the company at 4.7 billion euros.
Second-half revenue rose 7.1 percent to 9.5 billion euros, with operating income, or earnings excluding interest, taxes, one-time items and some financial instruments, amounting to 3.6 percent of sales.
Full-year profit surged 25 percent to 673 million euros as sales rose more than 20 percent in China and 7 percent in Europe. Demand was lifted by initial orders for new technology in emissions control, energy recovery and composite tailgates, Chief Executive Officer Yann Delabriere said.
The manufacturer is targeting a sales increase of 5 percent this year and an operating margin of at least 4 percent, with profitability set to widen to 4.5 percent to 5 percent of revenue in 2016.
“Faurecia is well on the way to meeting its targets” for next year, Delabriere said.