Faurecia may be ‘last of the Mohicans’ in pollution control

Faurecia (EPED.PA) does not intend to let go of its pollution control business despite the scheduled end of combustion engine sales, as the business will remain profitable for a long time and help reduce debt, the automotive equipment supplier’s chief executive said.

“We occupy more than 65% of the market share (with our two main competitors), so our probability of being the last of the Mohicans is very strong, and that is very valuable,” CEO Patrick Koller said at the press days of the 89th Paris Motor Show.

“Other companies will have to throw in the towel because they will no longer have the space to operate … and since customers need a supplier, we can regain market share without investing in capacity,” he added.

Although Koller emphasised that the plan to go all-electric by 2035 – meaning no exhaust pipes – is a European plan, not an American or Asian one, depollution is still set to weigh less heavily in its turnover, around 15% in 2025 and less than 10% in 2030.

Yet the cash generation from this business, focused on long-term contracts, will help Faurecia reduce the debt incurred in the acquisition of German equipment maker Hella (HLE.DE) that created the Forvia group.

The new group, whose activity portfolio now includes hydrogen storage, seats, cockpit, lighting, and pollution control, will present its medium-term strategy on Nov. 4.

Koller also confirmed the group’s objective of reaching 250 million euros ($244 million) in synergies and one billion euros in asset disposals, which he announced shortly after the Hella acquisition.

“As for synergies, we are perfectly in line with our business plan. As for asset disposals, we are perfectly confident in our ability to deliver on this billion,” he said.

After the sale of 33.33% of HBPO for 290 million euros, the group is “in the final stages of negotiation” for other divestments and expects to announce the signing of several of these transactions by the end of the year, Koller added.

($1 = 1.0227 euros)