Faurecia’s future after PSA: Less debt, more premium sales and hydrogen tech

PARIS — Faurecia has offered a glimpse of its future outside of PSA Group as an “investment grade” company with more cash and less debt, an increased market share in China and among premium automakers, and a commitment to hydrogen fuel cell technology.

Faurecia began life in 1997 as the product of a friendly takeover of seating specialist Bertrand Faure by Peugeot’s equipment arm, ECIA. Now, Faurecia is preparing for life as a fully independent company after PSA agreed in 2019 to divest its 46 percent controlling stake in the supplier as part of the merger with Fiat Chrysler Automobiles that created Stellantis.

“The upcoming change in Faurecia’s shareholding structure will offer new opportunities for value creation,” CEO Patrick Koller said Monday at Faurecia’s results presentation and capital markets day. 

Among those opportunities are the possibility of additional M&A activity, Koller and CFO Michel Favre said. Faurecia is committing 60 percent of its net cash flow to deleveraging and potential “bolt on” activity, meaning acquisitions or collaborations. 

“Our priority is to deleverage the company to give us back call the resources and means to be ready to seize an opportunity in due time,” Koller said.

The remaining 40 percent will be used for share repurchase and dividend payments. Faurecia is proposing a dividend of 1 euro per share this year, and is targeting an improved credit rating, Favre said.

“Clearly we have the ambition to become investment grade,” he said.

Faurecia, which is based outside Paris, ranks No. 8 on the Automotive News Europe list of the top 100 global suppliers with worldwide sales to automakers of $19.9 billion in 2019.

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