Faurecia posted a 34-percent surge in operating profit in the second half of 2013 to EUR282 million ($384 million) from EUR211 million in the same period in 2012, thanks to its gains in Asia and a recovery in Europe. The supplier also logged a 2-percent rise in revenues to EUR8.76 billion. Faurecia has been expanding in Asia and North America to cut its dependence on Europe.
In November, Faurecia said its operating profit would account for 4.5 percent to 5 percent of sales by 2016, depending on European production levels. For full-year 2013, Faurecia’s margin was 3 percent, with growth being targeted this year. With cash flow beating its own forecasts and debt shrinking, Faurecia has "significantly strengthened its financial position," chief executive Yann Delabriere said in the statement.
"The main positive surprise comes on the cash front, with net debt reduction higher than what consensus had forecast," said Thomas Besson, an analyst at Kepler Cheuvreux.
Faurecia's spending-cut measures were aimed at attaining EUR50 million in trimmed costs in 2013 and EUR100 million in 2014. Charges related to the reorganization reached EUR91 million last year, Faurecia disclosed.
Its net cash flow was EUR144 million in 2013, compared to a negative EUR559 million in 2012. Faurecia’s net debt as of Dec. 31 was EUR1.52 billion, reflecting a 16-percent decline. Faurecia saw its revenues from product sales in the second half surge 26 percent in Asia, 22 percent in South America and 4 percent in Europe. Its Asian operations posted the largest second-half operating margin at 9 percent of total sales.