FRANCE: Faurecia reports fall in operating margin
Faurecia has reported a fall in profits in the second half of 2005, which have resulted in a full year operating margin of 2.4%, down from 3.8% in 2004.
The reduction is attributed to the impact of higher raw material prices and a decline in the Vehicle Interiors division.
Turnover for the full year was up 2.4% to €10,978.5m, buoyed by sales to non-French manufacturers, which declined. Faurecia recorded strong growth in sales with Ford (+15.4%), Volkswagen (+6.6%), GM (+6.0%) and DaimlerChrysler (5.2%).
The weak performance in the Vehicle Interiors division resulted in Faurecia booking an impairment of €180m on its balance sheet. The division suffered from a fall in sales in France, an increase in plastics prices and substantial start-up costs. Other divisions - Seating, Exhaust Systems and Front Ends - were all on target.
A full year net loss of €182.5m includes the impairment and other restructuring provisions, put at €75.1m for the full year. These are efforts to improve the company's industrial footprint.
In 2006 Faurecia will open 14 new production facilities, including six in the US, four in central Europe and one in China. It is also aiming to restore its operating margin after the low point hit in the second half of 2005.