Faurecia Business Report FY2008

Business Highlights

Financial Overview (in million euros)
FY2008 FY2007 Rate of
change (%)
Consolidated figures
Sales 12,010.7 12,660.7 (5.1) -
Operating income 91.2 121.1 (24.7) -
Sales by business segment breakdown
Automotive Seating 5,004.3 5.175.4 (3.3) 1)
Vehicle Interiors 3,304.7 3,545.8 (6.8) 2)
Exhaust Systems 2,755.4 2,994.4 (8.0) 3)
Exteriors Systems 946.3 945.1 (0.2) 4)

Automotive Seating
-Automotive Seating generated sales of 5,004.3 million euros in 2008, down 3.3% year-on-year on a reported basis and 2.6% at constant exchange rates.

-In Europe, Automotive Seating sales totaled 3,971.8 million euros.

-The first half of 2008 saw growth in business with BMW and the Volkswagen Group, reflecting the Company's increased market share with these automakers - mainly thanks to the launch of the Mini Clubman and Audi A4.

-These positive effects were, however, partially offset by a dip in sales with French customers, primarily due to the Renault Megane platform coming to the end of its life cycle.

<North America>
-Business was brisk in North America during the first six months of 2008, with growth coming in at 28.6% fueled by the success of the Chevrolet Malibu.

-The second half saw a 5.7% fall following the plunge in Chrysler's sales volumes.

<Asia and South America>
-Automotive Seating sales growth was robust in China (with Asia reporting a 10.9% increase) and in South America where the figure was 15.3%.

Programs Launched during 2008
i) Supplies complete seat units for all of these vehicles:
-Citroen C5
-Audi A4
-Peugeot 308
-The BMW Mini
-The new Renault Megane platform.

ii) Front seating frame platforms for:
-Volkswagen Group.
*These new generation seating frames are designed to equip more than 50 different vehicle models.

-Over the full twelve months, the Company managed more than 50 complete seat and seating frame programs in total and delivered over 150 million seating components and sub-assemblies, including mechanisms, front and rear frames, covers, foam components and headrests, integrated into over five million complete seat units.

Vehicle Interiors
-Vehicle Interiors sales totaled 3,304.4 million euros in 2008, representing a year-on-year decrease of 5.5% at constant exchange rates (stripping out the negative 1.3% currency effect).

-In Europe, sales retreated 8.5% to 2,557.1 million euros. The fourth quarter of the year saw a particularly steep decline of 19.0% on a like-for-like basis, which led to an overall 11.7% contraction for the second half overall.

<North America>
-North America reported Vehicle Interiors sales of 487.6 million euros, up 4.3% at constant exchange rates.

-North America's sales growth of 4.3% was spurred by the rampup of the new BMW X6, Chevrolet Malibu and Cadillac CTS which partially offset the slump in output of the Chrysler Sebring and PT Cruiser.

<South America and Asia>
-South America posted growth of 9.1% at constant exchange rates.

-In China, the Company's Vehicle Interiors business continued to perform well, with sales up 2.9% at constant exchange rates, powered by the launch of the Ford Focus and Ford Fiesta.

Performance by Business within Vehicle Interiors
<Cockpits, Instrument Panels, and Door Modules and Panels Business>
-Sales generated by this business decreased 6.1%, or 2.3% like-for-like. They declined 8.0% in Europe on a like-for-like basis - marked by lower output from French automakers and a dip in business with other European players - but climbed 4.3% in North America and remained stable in Asia.

<Acoustic & Soft Trim Business>
-Acoustic & Soft Trim business generated 240.4 million euros in product sales, down 17% on 2007. The fall was partly due to the fact that the Hameln and Neckarsulm sites were sold to Stankiewicz in the first half of the year.

Programs Launched during 2008
Overall, the this business launched 26 production programs in 2008, including:
i) Instrument panels for the Opel Insigna, the new Renault Megane and the new Dacia Logan in Europe
ii) Door panels for the new Ford Ka and instrument panels for the Volkswagen Gol in South America.
iii) International Ford Fiesta and Focus platforms were launched, with a joint start-up in Asia, South America and Europe.

Programs Launched during 2008
i) Carpeting and acoustic components for the new version of the Ford Fiesta and the Peugeot 3008
ii) Floor acoustics for the new Toyota Avensis.

Exhaust Systems
-Exhaust Systems sales for 2008 totaled 2,755.4 million euros, down 8.0%, or 3.7% excluding the 4.3% negative currency impact. Without catalytic converters, the sales figure was 1,279.5 million euros, representing a decrease of 6.1% excluding the negative 3.1% currency impact.

-In 2008 Exhaust Systems supplied components and full exhaust systems to all major automakers.

-In all, 14 million vehicles were fitted with the Company's exhaust system products during the year.

Programs Launched during 2008
i) In Europe, Exhaust Systems participated in the launch of :
-Mercedes C-Class
-Mercedes E-Class
-Ford Kuga

ii) Particle filters for the six-cylinder diesel version of the BMW Series 7.

iii) In Asia, Exhaust Systems continued to partner the expansion of its traditional customers with the launch of operations for:
-The Peugeot 207
-Hyundai Getz
-Kia Soul
-The BF Sedan for DongFeng Motors.

Exterior Systems
-Exterior Systems - which comprises the Front End Modules division (front end modules and module architecture) and the Exterior Equipment division (bumpers, front end carriers and engine cooling systems) - sales edged up 0.2% to 946.3 million euros in 2008.

-Business in the Front End Modules division was particularly buoyant during the year - including in the second half - led by very high sales volumes with Audi, notably for the Audi A4. This strong showing helped offset the 32.6% slump in sales to Chrysler.

-Front End Modules division won significant programs with Volkswagen in Russia.

Programs Launched during 2008
i) Front End Modules division carried out several new product launches in 2008, including for
-The Audi A3
-The Coupe model of the BMW 3 Series.

ii) Business for the Exterior Equipment division launched several new programs for:
-The new Renault Kangoo
-The new versions of the Dacia Logan and Dacia Sandero
-The station wagon and coupe-cabriolet versions of the Peugeot 308
-The restyled Peugeot 407

-During 2008, the Company announced a number of downsizing plans involving some 30 sites and approximately 5,100 jobs.

-The measures primarily concerned Western Europe - chiefly France, Spain and Germany - but also Central European countries such as the Czech Republic where two plants that were not sufficiently competitive were shut down, as well as Slovakia and the USA which also experienced two plant closures.

-In Automotive Seating, six European facilities were closed and sold in 2008.


R&D Expenditure (in million euros)
FY2008 FY2007 FY2006

Gross Costs

613.0 613.1 630.5

R&D Structure
The Company holds 3,500 engineers and technicians and 28 Research & Development and Design & Development centers.

-Gross research and development costs were stable compared with 2007 in value terms, coming in at 613.0 million euros, but as a percentage of sales they rose to 5.1% from 4.8%.

R&D Facility
-The Company has launched a major capital expenditure programs to create a worldwide excellence center for seating mechanisms at Flers in France, which is backed by the region's local authorities.

-Exhaust Systems of the Company enlarged the Bavans research and development center in France which is dedicated to anticipating future technological developments in the automotive industry.

Research and Development Activities
Joint Project for Pre-crash Sensor System and Safety System
-In Mar. 2008, the Company announced that APROSYS (Advanced PROtection SYStems) project has been launched in order for vehicle users to be safer in the event of a side-on collision. The project team included the Company, Daimler, Continental, Fraunhofer Gesellschaft, the CIDAUT Foundation, TNO Science and Industry and the universities of Warsaw and Lisbon. The system developed for the APROSYS project involves two main parts; a pre-crash sensor system integrated into the vehicle body and the safety system itself. (From a press release on Mar. 13, 2008)

-Based on a new metal-plastic hybrid injection procedure, B-Fixx reduces the weight of components, while increasing modular capacity at the front of the vehicle and complying with energy absorption requirements. This leading-edge system has already been taken up by Renault for the front end carrier for the Kangoo.

Investment Activities

Capital expenditure by business segment (in million euros)
FY2008 FY2007 FY2006
Interior modules 253.7 249.6 234.3
Other modules 63.1 45.5 69.2
Holding companies 11.9 11.7 2.7
Total 328.7 306.8 306.2

Capital expenditure by geographic area (in million euros)
FY2008 FY2007 FY2006
France 102.9 113.8 88
Germany 15.7 15.3 13.2
Other European Countries 97.3 96.8 113.6
North America 32.0 26.4 61.9
South America 32.4 29.1 11.2
Asia 39.5 19.4 16.1
Other countries 10.4 6.0 2.2
Total 330.2 306.8 306.2

Overseas Investments by Segment
Exhaust Systems
<Czech Republic>
-In May, 2008, the Company announced that the new plant in Karvina, Czech Republic, which will specialize in the production of exhaust systems, is expected to be operational in the first quarter of 2009. The new plant will employ 300 people. The Pisek industrial site, which produces exhaust systems, interior systems and seat structures and currently employs over 1,000 people, is due to the ramp-up of production and add a further 700 jobs by the end of 2009. The closure of Lecotex, which manufactures seat covers from its two sites in Tabor and Pocatky, has been decided. (From a press release on May 6, 2008)

-In 2008, the Company established Faurecia (WUHU) Exhaust Systems in China to develop, produce and sell exhaust systems.

-In 2008, the Company set up Faurecia Exhaust System Rayong in Thailand

-In North America, Exhaust Systems of the Company partnered its customers' expansion by opening a new site at Silao in Mexico to produce exhaust systems for GM, Chrysler and Hyundai.

Automotive Seating
-In Mar. 2008, the Company announced that it is to open an automotive seating trim cover production plant in Kenitra (Morocco). The site represents an investment of 10 million euros. The new plant (Faurecia Equipements Automobiles Maroc) will supply Renault-Nissan and Volkswagen Group production sites in Europe. The new cut-and-sew factory will consist of an 8,300-square meter building on a 27,000-square meter plot. (From a press release on Mar. 17, 2008)

-A component plant was opened in Mexico for automotive seating.

Vehicle Interiors
<Korea, Argentina and South Africa>
-In Vehicle Interiors, two new manufacturing facilities opened during the year - one in Korea and one in Argentina . and an additional facility was purchased in Pretoria, South Africa.