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H1 2023 results on track with priorities & POWER25 plan
![trafic by night](/sites/default/files/styles/553x310rc/public/media/image/MicrosoftTeams-image.png?h=d51f288d&itok=ZhV0anAV)
Sustainable profitable growth and solid cash generation
- Robust organic growth of all Business Groups; outperformance of +740bps
- Operating margin up 150bps year-on-year, at 5.0% of sales and EBITDA margin up 50bps, at 11.8% of sales
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![H1](/sites/default/files/styles/xxl/public/media/image/H12023.png?itok=OpeBHUYW)
Solid net cash-flow of €172m
- Strong order intake of €15bn, with average profitability above POWER25 objectives
Combination with Hella gaining momentum
- Synergies at year-end expected to exceed initial target of €120m (40% of €300m)
Deleveraging on track
- Net debt/Adj. EBITDA reduced to 2.4x(1) at June 30, 2023 vs. 3.1x at June 30, 2022
- Expected completion of the disposal program will accelerate deleveraging in H2, with Net debt/Adj. EBITDA between 2.0x and 2.2x at December 31, 2023
FY 2023 guidance adjusted upward on higher annual production assumption
(1) ratio calculated before IFRS 5 impact and fully comparable to 3.1x at June 30, 2022; see details in page 15
“In the first half of the year, worldwide automotive production grew by more than 10%, driven by sustained demand and gradual improvement in semiconductors supply. In this context and in a persistent inflationary environment, we posted strong organic growth and outperformance, improved our profitability, and generated solid cash flow.
Our deleveraging trajectory is reflected in a continued reduction of our net-debt-to-adjusted-EBITDA ratio at June 30. Deleveraging remains our top priority.
Our first-half performance is enhanced by HELLA’s contribution and good progress on synergies, ahead of our plans, confirming the strong rationale of combining our forces.
We recorded in the first half a healthy order intake of 15 billion euros with an average profitability above our POWER25 objectives, reflecting the compelling appeal of the Group’s technology offerings and adequation with the megatrends in the automotive industry while being selective in the programs we acquire.
FORVIA is in line with its priorities and on track to achieve its POWER25 objectives. I would like to thank the FORVIA teams around the world for their strong determination and commitment.
The Group should post further performance improvement in the second half of the year. Operating margin should improve over the first half, mainly driven by ramp-up of synergies, increased benefit from inflation pass-through and confirmed resolution by the end of the third quarter of the challenges related to a Seating program in Michigan. Deleveraging will also be accelerated through the effective closing in Q3 of the transactions already announced under our disposal program, and cash generation.
Lastly, taking into account the market’s evolution since the beginning of the year, our latest estimate for worldwide automotive production is now revised to around 86 million light vehicles vs. our initial estimate of 82 million in February and this leads us to adjust upward our full-year 2023 guidance.”
Our deleveraging trajectory is reflected in a continued reduction of our net-debt-to-adjusted-EBITDA ratio at June 30. Deleveraging remains our top priority.
Our first-half performance is enhanced by HELLA’s contribution and good progress on synergies, ahead of our plans, confirming the strong rationale of combining our forces.
We recorded in the first half a healthy order intake of 15 billion euros with an average profitability above our POWER25 objectives, reflecting the compelling appeal of the Group’s technology offerings and adequation with the megatrends in the automotive industry while being selective in the programs we acquire.
FORVIA is in line with its priorities and on track to achieve its POWER25 objectives. I would like to thank the FORVIA teams around the world for their strong determination and commitment.
The Group should post further performance improvement in the second half of the year. Operating margin should improve over the first half, mainly driven by ramp-up of synergies, increased benefit from inflation pass-through and confirmed resolution by the end of the third quarter of the challenges related to a Seating program in Michigan. Deleveraging will also be accelerated through the effective closing in Q3 of the transactions already announced under our disposal program, and cash generation.
Lastly, taking into account the market’s evolution since the beginning of the year, our latest estimate for worldwide automotive production is now revised to around 86 million light vehicles vs. our initial estimate of 82 million in February and this leads us to adjust upward our full-year 2023 guidance.”
Patrick KOLLER
Chief Executive Officer of FORVIA
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