The company also benefited from increasing production in the automotive industry. The group confirmed its annual targets. The stock rose late in the morning.
In the first quarter, sales climbed by 29 percent year-on-year to a good 6.6 billion euros, as the HELLA parent announced on Monday in Nanterre. That was more than analysts expected. Under our own steam – i.e. excluding currency and takeover effects – sales rose by 17.6 percent. Faurecia did not name earnings figures – as is usual in France for the first quarter.
“The first quarter of 2023 was a good start to the year for Forvia,” said company boss Patrick Koller. The organic increase in sales was significantly higher than the growth in global automobile production. The company benefited from its geographic positioning and an additional month of HELLA consolidation.
The French group completed the takeover of the German headlight specialist at the end of January 2022. HELLA’s sales have therefore only been included in Faurecia’s income statement since February last year. HELLA’s contribution was therefore missing for one month in the sales published for the first quarter of 2022.
After the multi-billion takeover, HELLA and French Faurecia now operate under the Forvia umbrella brand, but continue to operate as two legally independent companies. The French recently held almost 82 percent of the Lippstadt company.
For 2023, the HELLA parent is still aiming for sales of 25.2 to 26.2 billion euros. Analysts expect something more. The operating margin should improve from 4.4 percent in the previous year to 5 to 6 percent.
On the stock exchange, Faurecia shares have been able to continue their recovery since October, with intermittent setbacks. The course increased in the morning by 0.85 percent to 21.42 euros. This means that the stock market value has almost doubled since the beginning of October, after falling significantly in the previous years.
The price level is still almost 70 percent below the record from spring 2018. The rival of Continental and the French Valeo currently only has a market value of 4.2 billion euros and thus significantly less than the German subsidiary HELLA, which is almost nine billion euros. At around EUR 80, the HELLA share price is currently only slightly below the record high of EUR 83.55 from the beginning of March and well above the price of EUR 60 that Faurecia paid for the takeover.
The HELLA price had also benefited from speculation on a higher price in a possible forced settlement procedure (squeeze-out), within which Faurecia could take over HELLA completely. However, Faurecia would need more than 90 percent of HELLA shares for this. The activist investor Paul E. Singer, who has directly and indirectly secured around 13 percent of the shares through his hedge fund Elliot Management, is currently standing in the way.
Singer is betting that the French will eventually want complete control and then put more on the table than he paid for. He used this method to earn a lot of money, for example, when Vodafone took over Kabel Deutschland or the US company Terex took over crane builder Demag Cranes.
Faurecia shares temporarily lost 0.19 percent on the EURONEXT to EUR 21.20.
/mne/zb/mis
NANTERRE (dpa-AFX)
Leverage must be between 2 and 20
No data
More news about Faurecia SE
Image sources: Michael Vi / Shutterstock.com