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Faurecia increases earnings target

Faurecia increases earnings target

French supplier Faurecia raised its 2014 earnings forecast after first-half profit jumped 21 percent on strong demand in Asia and higher market share in its home region.

Operating income rose to €311 million ($418 million) from €256 million a year earlier, Faurecia said in a statement. Revenue increased 0.7 percent to €9.33 billion.

The supplier forecast its full-year operating margin to widen by 30 basis points to 60 basis points, compared with the previous target of expansion of 20 basis points to 50 basis points. The margin in the first half rose to 3.3 percent of sales from 2.8 percent a year ago.

Faurecia, 52 percent owned by PSA/Peugeot-Citroen, is expanding in Asia and North America to lower its reliance on Europe, where industrywide car sales are gradually recovering from a six-year slump.

The manufacturer outlined a target in November for operating profit to amount to 4.5 percent to 5 percent of sales by 2016, depending on the rate of auto production in its home region.

“Faurecia posted a solid sales growth during the first half of 2014, driven in particular by remarkable growth in Asia, where sales jumped more than 20 percent, as well as in Europe, where Faurecia’s growth has outpaced the rise in automotive production,” CEO Yann Delabriere said in the statement.

The company stuck to its goal to increase 2014 sales by 2 percent to 4 percent at constant exchange rates. On that basis, first-half revenue rose 4 percent, the company said.