Patrick Koller (64) is not a squeamish man. At the beginning of the year, the boss of the French automotive supplier Faurecia in Lippstadt, Westphalia, caused an outcry when he announced that he would have the yellow-blue egg-shaped emblem of the newly acquired subsidiary Hella removed from the headquarters. An unnecessary provocation, grumbled some from the Hella environment. In addition, since there has been a cultural crunch between the two sides so far
. Koller himself told the local local newspaper “The Patriot”
: “You have to take symbols into account, I understand that. The Hella brand remains, the brand has value. But it is very important for our customers that we have a common name. Today they call us Forvia.”
Koller bought that common construct at a high price. Faurecia paid around 5.5 billion euros for the takeover of Hellas in mid-2021. Financed primarily by expensive bridge bonds. A capital increase in June 2022 was successful, but at 705 million euros it was smaller than hoped. Last resort for refinancing: divisional sales.
Here, too, Koller is becoming more and more consistent. At the end of 2022, Hella drew attention with an announcement that they were hoping for 290 million euros from the sale of the shares in Plastic Omnium to be distributed in full to investors as a special dividend
. Main beneficiary with almost 82 percent of the shares: Faurecia.
Koller makes a double strike
Now Koller is even going for a double strike, but this time with Faurecia. First of all, at the end of last week he announced that he wanted to sell parts of Faurecia’s exhaust gas division for commercial vehicles to the US engine manufacturer Cummins for 150 million euros. That deal should not only help Forvia financially, but also with decarbonization. “With this transaction, the group’s commitment in the field of combustion engines would be reduced towards 10 percent in 2025,” said Koller.
On Sunday he went one better: the Faurecia subsidiary SAS Interior Modules is to change hands for 540 million euros. A buyer is ready in the form of the Indian supplier Motherson. However, the employee representatives still have to be informed and consulted. The authorities would then have to approve the deal. Faurecia expects to do so in the third quarter of 2023.
With SAS, a German company would change hands. The Karlsruhe-based specialist for dashboards, center consoles and other components for vehicle interiors has only been fully part of Faurecia since the beginning of 2021. Previously, SAS was a joint venture between Faurecia and Continental. Faurecia Conti bought its 50 percent stake in SAS for 225 million euros. Three years later, Koller and Co. want to get rid of the company with more than 5000 employees and an annual turnover of 896 million euros. SAS cockpit customers include major car manufacturers such as Volkswagen, Mercedes Benz and Porsche.
“I am convinced that this transaction would create additional value for SAS,” said Koller on Sunday. Forvia, in turn, could focus on its core business, “the development of groundbreaking technologies”. So far, however, critics have seen little synergy between Faurecia and Hella. Koller is convinced that together they will be able to achieve sales of 30 billion euros as early as 2025. The supplier is still a long way from that. In 2022, Faurecia and Hella together came to 25.5 billion euros, the French announced on Monday. In the current year, the supplier expects 25.2 to 26.2 billion euros, the operating margin is expected to climb from 4.4 percent last year to 5 to 6 percent.
Adjusted for special effects, Forvia reported an operating profit of a good three billion euros for 2022, slightly more than analysts had previously expected. The bottom line was that there were no withdrawals due to the Hella takeover and one-off effects Russia but a loss of 382 million euros.
In addition to concentrating on supposedly “groundbreaking technologies”, the planned SAS sale therefore has a very pragmatic meaning, as Koller admitted on Sunday. He must drive Forvia’s “one billion euro divestment program by the end of 2023”. With the two targeted deals, the Forvia boss would come a lot closer to that goal. However, Koller will have to announce many other tough decisions in the course of the year.