'While China has effectively and safely restarted, we expect the second quarter to be tougher in Europe and North America. The second half of the year should show sequential improvement,' he said.
The company makes 52% of its group sales in Europe, and here Faurecia gained EUR1.9 bn sales in the first quarter of 2020 compared to EUR2.2 bn in the same period in 2020. Although this is down 16.4%, once again it is about 4.1% above regional automotive production levels, the company said citing IHS Markit. Those consultants put automotive production in Europe down at 20.5% in the period. Faurecia's sales in France were hit by 40% in March 2020 compared to March 2019 following customer plant shutdowns.
In North America, which accounts for 27% of group sales, the company recorded revenue of EUR 1 bn in the first quarter of this year compared to EUR 1.1 bn in the same period in 2019. Sales in March for the company were down 35% this year impaired to the previous year.
In Asia, Q1 2020 sales were EUR635m compared to EUR798m in the first quarter of 2019. The numbers in this region were worse than the other two, the company said. This is because Faurecia's sales in China in the first quarter represented 56% of its sales in the region. China sales were down 42% at EUR357m compared with EUR604m in the first quarter of last year.
Faurecia said that about 90% of its workforce are under temporary unemployment in Europe and North America. The company has made drastic cuts to its sales, general and administrative budget; hiring has been frozen since the start of the year and, the company expects to reduce capex 30% from the EUR 685m spent in 2019.
The company says it will 'carefully manage our R&D programmes.' Faurecia stresses that it has enough liquidity to overcome its use of cash in the first half of the year and should start generating cash in the second half of the year.
Its production restart strategy is based on its 'safer together programme' developed in China. The company also held web conferences on 9 April 2020 to explain its priorities and underline its collaborative approach with over 1000 suppliers.
Koller added 'our top priority is the protection of employees and preparing for a safe restart of our activity. I am confident in our ability to get through this period which I believe will lead to new economic paradigms based on resilience and stronger collaboration and support across the whole supply chain.'
Company has withdrawn financial guidance for the remainder of the year.
