FRANCE: Sales slump hits Faurecia’s earnings target
Faurecia has cut its medium-term earnings target, warning that the slump in European vehicle sales would erode regional profits over the next five years.
The company, which supplies car seats, exhausts and plastic parts to carmakers such as Volkswagen and parent PSA Peugeot Citroen, postponed its 5% operating margin goal from 2014 to 2016.
The company said full-year earnings would suffer a EUR100m (US$127m) charge linked to 1,500 job cuts in Western Europe and forecast that European product sales will edge down to EUR7.6bn in 2016 from 7.7bn last year.
Faurecia plans to push forward with expansion plans in North America, Asia and emerging markets such as Russia to compensate for the slump in Europe, pledging a 65% gain in North American sales to EUR4.3bn over the five years and predicted that Chinese sales would almost triple over the same period to EUR2.6bn.
The group also forecast group revenue of EUR22bn in 2016, of which 55% would come from outside Europe.