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Fuelled by China, auto supplier Faurecia sees robust Q2 growth

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Sarah Morland
·1-min read
FILE PHOTO: An illustration shows a car dashboard with a giant screen on the side of the Faurecia booth during the 2019 CES in Las Vegas
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By Sarah Morland

(Reuters) -Faurecia forecast robust current-quarter sales growth on Monday, after surging sales in China helped the French car parts maker beat market expectations in the first three months of the year.

The firm, which supplies car seats, dashboards and fuel systems to automakers, posted double-digit organic sales growth across its major divisions, with an 88% jump in China from the year-earlier period taking sales there to significantly above pre-pandemic levels.

In a call with analysts, finance chief Michel Favre noted that car production was still very low compared to 2019, before the pandemic shut factories, restricted travel and triggered a global shortage in semiconductor chips.

"When semiconductors will be available, I would say that things will restart at a very, very, dynamic pace," he said.

Carmakers are competing for chips with the sprawling consumer electronics industry, amid a pandemic-led surge in demand for phones, TVs and gaming consoles.

The shortage has forced some of Faurecia's customers, such as Stellantis, to cut production.

Faurecia's first quarter sales nevertheless rose 8.9% to 4.01 billion euros ($4.79 billion) on a reported basis, beating analysts' 3.93 billion forecast.

The group confirmed its financial targets and predicted very strong organic sales growth, driven by a production ramp up in its core carseats business.

"Faurecia kickstarted first-quarter earnings season pretty well with an outperformance that sets a high benchmark for peers and bodes well for the full-year targets," said Oddo BHF analyst Michael Foundoukidisanal, while Barclays anticipated a possible guidance upgrade half-way through the year.

($1 = 0.8365 euros)

(Reporting by Sarah Morland and Veronica Snoj in Gdansk; Editing by Muralikumar Anantharaman, Shailesh Kuber, Kirsten Donovan)