2022 Capital Markets Day: FORVIA unveils Power25 plan
Profitable growth, cash generation & deleveraging
Faurecia and HELLA, operating together as FORVIA, are today hosting their first joint Capital Markets Day from 11:00am CET, during which the Group will present Power25, its new medium-term plan to drive profitable growth, enhance cash generation and accelerate Group deleveraging.
Having embarked upon a profound transformation marked by Faurecia’s independence from Stellantis and its step-change acquisition of HELLA, the combined Group is now well positioned to be a global leader in sustainable mobility tech, in line with its newly unveiled mission statement: “We pioneer technology for mobility experiences that matter to people”.
The ambitions of FORVIA’s Power25 plan are focused on three key strategic priorities:
- Drive sales growth through innovation and sustainability
- Enhance profitability and lower breakeven
- Generate strong cash conversion and actively manage portfolio to accelerate Group deleveraging
These are translated into the following 2025 financial objectives (based on an assumption of worldwide automotive production of 88 million units in 2025, including vehicles between 3.5t and 6t in Asia vs. 89 million in 2019, and after the estimated effect of the €1bn disposal program already announced and to be completed by end-2023):
- 2025 sales: c. €30bn
- 2025 operating margin: above 7% of sales
- 2025 net cash flow: 4% of sales
- Net-debt-to-adjusted-EBITDA at Dec. 31, 2025: below 1.5x
During its Capital Markets Day, FORVIA will also detail Power25 actions to address short-term headwinds in 2023, such as high inflation, rising energy prices and persistent – albeit easing – supply-chain disruptions. The Group confirms the previously announced disposal program of €1 billion by end-2023. This program, combined with targeted net cash flow generation of above 1.5% of sales in 2023, will contribute to significant deleveraging as soon as the end of 2023, moving toward a targeted net-debt-to-adjusted-EBITDA ratio below 1.5 times at end-2025.
Faurecia’s transformative acquisition of HELLA makes FORVIA a new global leader poised for profitable growth and strong value creation, even in current challenging market conditions, thanks to perfect alignment with automotive growth drivers.
Today, we are taking a new step in our journey with the launch of Power25, which defines our three strategic priorities for the coming years: sales growth driven by innovation and sustainability; lower breakeven and enhanced profitability; and strong cash conversion and portfolio management to accelerate Group deleveraging after the HELLA acquisition.
We are also adapting our financial targets to the macroeconomic environment and industry outlook. Our assumption of worldwide automotive production for 2025 is now revised to 88 million units, down 6 million vs. our previous assumption at the Capital Markets Day held in February 2021, a revision that is mainly due to tough macroeconomic conditions between 2021 and 2023. In this regard, our Power2025 also includes actions to face the short-term headwinds of 2023, before worldwide automotive production starts resuming growth supported by pent-up demand.
With this assumption of 88 million units produced in 2025 and including the previously announced €1bn disposal program by end-2023, we are targeting sales of c. 30 billion euros and operating margin above 7% in 2025 with a strengthened balance sheet, reflected in a leverage ratio below 1.5 times EBITDA at end-2025.
FORVIA is already in motion on these objectives, and well on its way to becoming a sustainable mobility tech leader, offering pioneering technology for mobility experiences that matter to people.
CEO of Faurecia