Compagnie Plastic Omnium SE Business Report FY ended Dec. 2019
|(in million EUR)|
|FY ended Dec. 31, 2019||FY ended Dec. 31, 2018||Rate of change (%)||Factors|
|-Plastic Omnium Industries||6,367.7||6,287.8||1.3||-|
|-Plastic Omnium Modules||2,125.8||956.9||122.2||-|
1) Net Sales
-In the fiscal year ended December 31, 2019, the Company’s consolidated net sales was EUR 8,493.6 million, an increase of 17.2% over the previous year. The Company’s sales benefited from both positive currency exchange effects adding EUR 119 million as well as a positive change in scope of EUR 1,015 million from the full consolidation of HBPO as of July 1, 2018. At constant currency and scope, the Company’s sales increased by 1.4% over the previous year.
-The Company’s sales in Europe benefited from the HBPO consolidation. While production in the region declined, specifically in Germany and the UK, increased revenue from diesel vehicle emission reduction systems combined with strong performances in France and Eastern Europe partially offset these losses.
-In North America, sales increased due to the production ramp-up of its recently commissioned plants in the U.S. and Mexico combined with the Company’s exposure of products in the SUV and light trucks segment.
-Sales increased in Asia primarily due to market share gains in China and further development of the Company’s HBPO business.
-The Company announced that it signed an agreement with the German group Mahle to acquire its 33.33% shareholding in the HBPO joint venture, up to then held equally by Plastic Omnium, Hella and Mahle-Behr. This acquisition was made at an enterprise value of EUR 350 million and will be financed by the group's own resources. After this transaction, Plastic Omnium will hold 66.66% of HBPO and Hella 33.33%. The transaction should be finalized during 2018. HBPO is the worldwide leader in the development, assembly and logistics of automotive front-end modules with almost 20% of worldwide market shares. With close to 6 million front-end modules delivered each year, HBPO generated revenue of EUR 2 billion in 2017 across 26 plants on the 3 American, European and Asian continents and should grow by 50% to reach EUR 3 billion in 2021. (From a press release on March 1, 2018)
-The Company and HELLA entered into a strategic cooperation. The focus of the non-exclusive cooperation will be on accelerating the holistic integration of lighting technologies into the vehicle exterior, especially for the front and rear areas. HELLA contributes its competence in automotive lighting technology to the collaboration, while the Company brings in the expertise in plastics processing for exterior body parts. In this context, the collaboration will also bundle corresponding development resources together at one site in Germany. This new partnership between the Company and HELLA will provide the market with combined technologies and solutions, bringing together the best of both companies on new styling and advanced functionalities for the body exterior. This will enhance offerings in the fields of smart bumpers and tailgates, enriched with communication and lighting features. (From a press release on January 21, 2019)
-The Company’s operations were strong over the first nine months of 2019. Economic revenue amounted to EUR 6,852 million, up 17.0%. At the same time, the Company experienced significant operating difficulties in the ramp-up of its plant in Greer, South Carolina. The impact of these difficulties has led the Group to review its operating margin outlook for 2019, which is now expected to be around 6% of revenue. It confirms outperformance of at least five points compared to worldwide automotive production, which is estimated to be down by more than 5%. (From a press release on October 8, 2019)
-The Company announced that it has become a co-sponsor and member of the advisory board committee of the AP Ventures fund, a venture capital firm headquartered in London and specializing in hydrogen and fuel cells. The Company’s commitment amounts to USD 30 million over the fund's lifetime. The Company thus confirms hydrogen as a strategic development axis, contributing additional resources to AP Ventures for its continued investments, on a global scope, in innovative companies in the upcoming fields of hydrogen, fuel cells and electric mobility. This investment by Plastic Omnium comes shortly after the opening of two new R&D centers in July 2019. AP Ventures’ existing sponsors include Mirai Creation Fund, in which Toyota and Sumitomo Mitsui Banking Corporation (SMBC) are seed LPs, Mitsubishi Corporation, Anglo American Platinum and the South African investment fund PIC. (From a press release on September 4, 2019)
-In the fiscal year ended December 31, 2019, the Company had 243 successful program launches. The Company expects to have 207 program launches in the fiscal year ending December 31, 2020.
-The Company has recently won a significant order from a German manufacturer for the development of 350-bar hydrogen tanks. The contract signed for bus equipment is currently the largest project in Europe for buses. Concurrently, the Company has obtained its first certification R134 for a 700-bar hydrogen storage tank designed to equip passenger cars. Other certifications are underway for 350-bar hydrogen tanks and for CNG tanks. In 2020, the Company will install a dedicated production line of hydrogen tanks at its Herentals plant in Belgium, which currently produces fuel tanks. At the same time, its investment in AP Ventures, a venture capital fund based in London and dedicated solely to hydrogen, provides the Company with opportunities for the future. (From a press release on November 21, 2019)
|(in million EUR)|
|FY ended Dec. 31, 2019||FY ended Dec. 31, 2018||FY ended Dec. 31, 2017|
-As of December 31, 2019, the Company has approximately 2,700 engineers working in 26 research and development centers across the world.
-As of December 31, 2019, the Company’s 26 research and development centers are distributed as follows:
- Europe and Africa: 12 centers
- Asia: 8 centers
- North America: 4 centers
- South America: 2 centers
-The Company announced that it has just opened two new research and development centers. Both centers are part of the Clean Energy Systems business line and focus on emissions control, fuel systems and new energies. The ω-Omegatech and Δ-Deltatech centers represent a global investment of EUR 100 million. The ω-Omegatech center opened in Wuhan, China on June 18, 2019 and currently houses 150 engineers and technicians. The number of employees is expected to be close to 200 by the end of 2019. Specializing in development, testing, prototyping and mechanical testing of fuel systems, it will also conduct testing and development for high-pressure hydrogen tanks. This new R&D center, with already 57 projects in development, provides the Company with the resources to support its Asian customers in their quest for clean mobility. Δ-Deltatech enters service on July 1, and is located close to Brussels Airport in Belgium. Δ-Deltatech is a research and innovation center, focusing on emissions reduction and fuel systems. It is also the spearhead for research and development into new energies, fuel cells and hydrogen storage. By the end of 2019, it is expected to house 150 engineers and technicians. (From a press release on July 4, 2019)
Front of the Car concept development in collaboration with Hella
-HELLA announced that it will present a new "Front of the Car" concept for vehicle exteriors, developed with the Company, at IAA 2019. The concept includes comprehensive lighting solutions that are integrated into the front area of the vehicle. The front of the car is an important integration location for numerous sensors, relevant lighting modules and further elements. Together with the Company, HELLA is working on an intelligent system approach for the vehicle front that opens up new design possibilities for the customer. The "Front of the Car" concept has a multi-level setup. At the beginning, development activities focus on efficiently integrating certain lighting modules into the vehicle front, such as direction indicators or contour lighting. First development projects are also in progress for higher integration levels. This includes the integration of various electronic components, such as radar or lidar sensors or a front camera. Large displays which enable communication between the vehicle and its surroundings and headlamps can also be integrated at more sophisticated development stages. (From a press release on September 11, 2019)
|(in million EUR)|
|FY ended Dec. 31, 2019||FY ended Dec. 31, 2018|
|Plastic Omnium Industries||304.3||414.0|
|Plastic Omnium Modules||26.5||17.6|
Investments in the fiscal year 2019
-In the fiscal year ended December 31, 2019, the Company opened six new plants located in the following locations:
- Kenitra, Morocco (Intelligent Exterior Systems), supplying PSA
- Bhamboli, India (Intelligent Exterior Systems), supplying Chevrolet
- Hlohovec, Slovakia (Intelligent Exterior Systems), supplying Jaguar and Land Rover
- Greer, South Carolina, U.S. (Intelligent Exterior Systems) supplying BMW
- Vaihingen, Germany (HBPO) supplying Porsche
- Satillo, Mexico (HBPO) supplying Dodge
-In the first half of 2019, in the Company invested EUR 308 million, equivalent to 7.2% of consolidated revenue. These investments included four plants for the Intelligent Exterior Systems business in the U.S., Slovakia, India and Morocco and three R&D centers, including two for the Clean Energy Systems business (Belgium and China) and the extension and digitization of Σ-Sigmatech for Intelligent Exterior Systems, which opened in June 2019. In the second half of 2019, the Company will not commission any significant plants or finance any additional R&D centers; investments will thus be sharply reduced. Its investments will represent approximately 6% of consolidated revenue for the whole of 2019. (From a press release on July 19, 2019)
Previous and Future Investments
-The Company it has been engaged in a program of sustained investments since 2016, investing EUR 561.6 million, i.e. 7.8% of consolidated sales in 2018. These investments included the commissioning of two plants under the Intelligent Exterior Systems business line in the U.S. and China, in Greer and Shenyang, respectively. Both plants will supply BMW. It has also commissioned two clean energy systems plants. In India, the Hansalpur plant supplies Suzuki while the Smyrna plant in the U.S. supplies Nissan. Another investment includes a site for the assembly of front-end modules in Mexico for Daimler. Currently, construction is ongoing for five plants in India, Morocco, Slovakia, China and Malaysia as well as four assembly sites for modules in Mexico, China, and Germany. The Company is also building and expanding three R&D centers. One is an advanced research center for new energies, Δ-Deltatech, due to open in Brussels mid-2019. The second center is a new development and testing center for clean energy systems in Wuhan, China which will open in 2019. The other investment focuses on the digitalization and extension of the global R&D center for intelligent exterior systems in Lyon by 2020. (From a press release on February 14, 2019)
-During the 2019-2021 period, Plastic Omnium plans to invest about 6% of its consolidated revenue (compared to 7 to 8% of its consolidated revenue over the 2016-2018 period). These investments will be in new capacities, the ongoing optimization of the manufacturing base (industry 4.0 and operational excellence), the development of new programs, and the launch of new research projects.
Investments outside France
-HBPO announced that it will start series production in Kleinblittersdorf, Saarland in September 2020. The 15,000-square-meter plant will supply front-end modules for a Daimler SUV, which will be followed by front-end modules for an electric vehicle. In addition, various exterior parts for these models will be assembled for the Company in the new factory. The factory in Kleinblittersdorf near Saarbruecken is currently still under construction. The foundation stone is expected to be laid in September. Pre-series production already started in May at the interim site in Saarbruecken. In the future there will be lines for different products. The plant will have 100 employees by the end of 2020. (From a press release on July 15, 2019)
-The Company’s HBPO business line announced its new plant in Saltillo, Coahuila is completed and ready to support a new program from FCA. While HBPO did not disclose the date the new plant will start operations or which FCA program it will support, it is very likely to be the 2019 Ram 2500/3500 Heavy Duty pickup, which recently debuted at the NAIAS in Detroit and is built at FCA’s Saltillo Truck plant, with first units scheduled to arrive at U.S. dealerships in March. With the addition of the Saltillo site, HBPO now operates five just-in-sequence plants in Mexico. Two facilities in Puebla support operations of Volkswagen and Audi respectively, while a production site in Toluca also supplies modules for FCA. In 2018, HBPO opened its fourth plant in Aguascalientes to support production of the new Mercedes-Benz A-Class sedan. (From Mexico-Now article on January 21, 2019)