A compelling strategic rationale
Faurecia’s acquisition of HELLA is a unique opportunity for two advanced technology companies to accelerate their transformation, achieve critical size and leading positions in Electronics (€7bn of sales by 2025) and Lifecycle Solutions. These two compatible and profitable companies are highly complementary in terms of technology, customer and geographic fit. They are completely aligned with automotive megatrends. The combined Group will extend its reach, strengthening proximity and customer intimacy, accelerating growth in Asia, and providing an enhanced electronics and electrification offer (BEVs & FCEVs).
The Group’s exposure to Internal Combustion Engine (ICE) will be reduced to about 10% of its sales in 2025. The quality of these sales is part of our strategic response to this key transformation challenge for the automotive industry.
A sustainable setup with clear governance and cooperation framework
Faurecia is now the controlling shareholder of HELLA. HELLA will continue to be a listed company with its own independent governance, and will be fully consolidated into Faurecia’s financial accounts as from February, 1, 2022. A clear governance model has been established along with appropriate legal frameworks to allow Faurecia and HELLA to work efficiently together in all domains and enable the combined Group to steer progress in the best interests of both companies and their stakeholders. To align the business models of both companies, HELLA has formally established three Business Groups (Electronics, Lighting and Lifecyle Solutions), headquartered in Lippstadt (Germany), each with full P&L accountability, and both companies will continue to converge towards common processes to ensure a consistent Group approach and consolidation.
As the Hueck family pool has become Faurecia’s largest shareholder with a stake of c. 9%, Dr Jürgen Behrend’s appointment to the Faurecia Board of Directors, as representative of the Family pool, will be proposed at the next Faurecia shareholders’ meeting, underlining the Family pool’s strong interest in the combined group.
Ready to achieve cost synergies above €250m and create strong value
Faurecia has successfully finalized the acquisition of HELLA in a short period of time, demonstrating the effective preparation and successful teamwork between the two companies. Our teams are now ready to execute 10 validated synergy projects representing more than 95% of the full potential.
The execution of a significant cost synergies and optimization plan will generate over €250m EBIT run-rate, above what was initially announced, with an 80% P&L impact to be achieved in 2024. Revenue synergies are expected to reach between €300m and €400m of sales by 2025, and cash-flow optimizations are expected to generate around €200m per year on average from 2022 to 2025.
An increased scope, scale and ambition targeting sales above €33 billion, above 8.5% of operating margin and c. €1.75bn of net cash flow in 2025
The combined Group operates through six Business Groups – Interiors, Seating, Electronics, Clean Mobility, Lighting and Lifecycle Solutions – with leading positions and critical size. It deploys a portfolio of 24 product lines.
The 2025 ambition combines strong sales outperformance, best-in-class profitability and strong cash generation, thus contributing to quick deleveraging post-acquisition.
Frame everything through the lens of sustainability
Climate change affects every single person and community on our planet. Together, Faurecia and HELLA have a role to play in limiting its progression. Acting responsibly is key to ensuring sustainable development for future generations. The combined Group will continue to develop through the lens of sustainability by confirming a commitment to become CO2 neutral in operations (scopes 1&2) by 2025 and CO2 Net Zero no later than 2050.
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The combined Group will present its ambitions and reveal its new name during a press conference planned today at 11.00am (Paris time)https://day1-faurecia-hella.com/register-login