Faurecia : 2016 Annual results - Strong profitability increase in 2016, exceeding guidance and objectives set in 2013

Press release

Nanterre (France), February 9, 2017

• 2016 total sales of €18.71 billion; organic*1 growth of 2.6%

• Value-added2 sales of €15.61 billion; organic growth of 4.3%
• Operating income of €970 million, up 17%, representing 5.2% of total sales or 6.2% of value-added2 sales up 80 bp
• Net income of €638 million, up 72%
• Net cash flow of €459 million, up 52%
• Order intake3 (2014-2016) at €53bn, up €6bn

• Proposed dividend of €90 cents up 38% versus €65 cents paid in 2016

The fiscal 2016 accounts have been approved by the Board of Directors at its meeting held on February 08, 2017, under the Chairmanship of Yann Delabrière. The consolidated accounts for fiscal 2016 have been audited and the auditor's report is about to be issued.

Patrick Koller, CEO of Faurecia declared: "Faurecia's robust profitability in 2016 of 6.2%2, an increase of 80 bp, was driven by a strong industrial performance in all regions and an impressive contribution from Asia. Our order intake3 of €53 billion is up €6 billion, showing solid future growth which allows us to fully confirm our 2018 targets. After the disposal of Automotive Exteriors, the Group is now fully focused on its two strategic priorities: Sustainable mobility and Smart life on board. I would like to take this opportunity to thank all Faurecians for their 2016 contribution. "

*All definitions explained at end of press release

*2014 restated IFRS 5; **Calculated on 2016 recurring figures

The results described below are after application of IFRS 5 for both 2016 and 2015

Faurecia's 2016 consolidated (total) sales reached €18,710.5 million, compared to €18,770.4 million in 2015. Consolidated sales contracted by 0.3% on a reported basis but on an organic basis, sales increased 2.6% compared to 2015.

Value-added sales (total sales less monolith4 sales) which represent best the Group's activity were

€15,613.6 million in 2016 compared to €15,466.0 million in 2015, showing an increase of 1.0%. On an organic basis, value-added sales were up 4.3% compared to 2015.

According to our analysis, Faurecia should have the quality of "IFRS 15 agent" for monolith. From January 1, 2017, Faurecia will report value-added sales only, giving the reconciliation with total sales in appendix.

The most remarkable developments involved Renault-Nissan +16% (organic) comforting its position of Faurecia's third largest client and Ford +9% (organic). Sales to Cummins for commercial vehicles were up 6% (organic). Commercial vehicles represent 9% of sales for Faurecia Clean Mobility (formerly Faurecia Emissions Control Technologies). Sales to Chinese OEMs soared 48% (organic) and now account for 13% of sales (14.5% in H2) in China.

Total sales reached €9,643.2 million in 2016 (€9,507.4 million in 2015), up 1.4% on a reported basis and up 2.4% on an organic basis.

Value-added sales totaled €7,906.6 million in 2016, compared to €7,734.1 million in 2015. Value-added sales were up 2.2% on a reported basis (3.3% organic) when compared to 2015.

In this same period, car manufacturers increased production in Europe by 2.8%*** (including Russia).

***Source IHS Automotive January 2017

Total sales were €5,219.4 million in 2016 (€5,427.2 million in 2015) a decrease of 3.8% on a reported basis and a decrease of 1.8% on an organic basis.

Value-added sales at €4,432.7 million in 2016, compared to €4,584.0 million in 2015.

Value-added sales declined 3.3% on a reported basis and reduced by 0.9% on an organic basis, which has to be compared to an increase in production of 2.0%***.

FCA's decision to drastically cut production of the Chrysler 200 has negatively impacted our sales by 360 bp (€166m). Sales to Renault-Nissan and Daimler increased sharply.

Total sales were €3,067.7 million (€3,100.1 million in 2015) showing 1.0% decrease on a reported basis but an increase of 5.6% on an organic basis.

Value-added sales at €2,557.2 million in 2016, compared to €2,507.8 million in 2015, rose 2.0% on a reported basis and 9.1% on an organic basis above light vehicle production growth of +7.2%***.

Value-added sales in China (€1,951.6 million in 2016) showed a fall of 4.1% on a reported basis, and increased by 3.8% on an organic basis.

Sales to Chinese automakers were up 48% (organic), representing 13% of Chinese sales (14.5% in H2). Sales to international joint ventures were affected by a negative client mix. In China, production rose 14.0%***.

Value-added sales (equal to total sales) totaled €6,607.4 million compared to €6,188.5 million in 2015, an increase of 6.8% on a reported basis and an increase of 9.0% organic; 430 bp above light vehicle production growth (+4.7%***) meaning a clear market share gain. This growth was driven by a number of launches for Nissan, Ford, BMW and Daimler.

Value-added sales (equal to total sales) totaled €4,810.9 million versus €5,091.6 million in 2015, a decrease of -5.5% on a reported basis and -0.2% organic. Sales were negatively impacted by FCA's decision to discontinue the Chrysler 200 at the end of 2016. On the other hand, sales grew with Renault-Nissan (double digit) and BMW. Growth was particularly impressive in Asia, driven by China.

Despite lower sales, Interiors sharply improved its operating income to €247.9 million (€193.7 million in 2015) or 5.2% of value-added sales, +140 bp (3.8% of value-added sales in 2015). In 2014, operating margin on value-added sales was 2.7%;

***Source IHS Automotive January 2017

Total sales reached €7,292.2 million (€7,490.3 million in 2015) in 2016. This is a decrease of 2.7% on a reported basis and a decline of 0.8% on an organic basis.

Value-added sales reached €4,195.3 million in 2016 (€4,185.8 million in 2015), an increase of 0.2% on a reported basis but an increase of 2.6% organic.

Sales to Renault-Nissan increased (double digit) and those to Cummins rose significantly.

• Restructuring costs, which stood at €86.3 million (compared with €57.3 million in 2015) to optimize the European industrial organization of Clean Mobility and in North America for Interiors;

• Net financing costs totaled €162.4 million versus €206.7 million in 2015. Since the second half of 2016, Faurecia is fully benefiting from its fully refinanced debt. Net financing costs will continue to reduce in 2017;

• Net result from discontinued operations was €188.3 million including the capital gain from the Automotive Exteriors' disposal on July 29, 2016. In 2015 it amounted to €60.8 million.

Net cash flow6 stood at €459 million up 52%. Normalized8 net cash flow is estimated at €333 million.

At the end of December 2016, the Group's net financial debt7 stood at €341.5 million, down €604.3 million when compared with €945.8 million at the end of December 2015.

The Board of Directors will propose at the next annual shareholder meeting (May 30, 2017) the payment of a dividend of €90 cents per share vs €35 cents paid in 2015 and €65 cents in 2016. This increase reflects the strong improvement in earnings per share and Faurecia's commitment to create shareholder value.