Posted Apr 29, 2022, 1:40 PM
Plastic Omnium wants to become a major player in automotive lighting. After having already acquired a small German player in the sector, AMLS, at the end of March for 65 million euros, the equipment supplier controlled by the Burelle family, this time disburses 600 million euros, in cash, to acquire the lighting activity of the Indian Varroc. “We are thus becoming a real player in lighting systems, which will allow us to meet the demand of our customers for integrated exterior systems”, explained Laurent Favre, general manager of the company.
Present in fuel tanks and pollution control systems, Plastic Omnium is also one of the world leaders in exterior car parts (particularly bumpers), which represent 40% of its 8 billion turnover. “There are strong synergies between these activities”, also insisted the leader. “In particular, with electrification [reducing stresses on the front and rear exterior of cars], lighting is taking an increasingly important part of vehicle personalization and safety,” he said. for follow-up.
New dedicated division
With Varroc’s lighting activities, which generated 800 million euros in turnover (in 2021) and employ 6,500 people in 8 factories and 8 R&D centers in around ten countries around the world (Mexico, Brazil , Morocco, Turkey, Czech Republic, United States, India, etc., Plastic Omnium wants to create a new dedicated division, which will generate 1 billion euros in turnover.
“Varroc’s activities are very complementary to those of AMLS (148 million euros in revenue last year), which is more oriented towards innovation and high-tech products, with also strong software skills”, explained Felicie Burell, Deputy Chief Executive Officer of Plastic Omnium.
Loss-making activities
The tricolor equipment manufacturer is counting on synergies with its own activities , and on his managerial skills, to turn the spotlight on Varroc, which is now in deficit: its gross operating surplus (Ebitda) was negative by more than 22 million euros last year, in particular due to use of insufficient factories, indicated Laurent Favre. It hopes to return to a double-digit Ebitda margin within 18 to 6 months.
Plastic Omnium is thus positioning itself in a booming lighting market (it anticipates growth of 5% per year by 2027), with a new division already counting most of the major manufacturers among its customers. A market worth 31 billion dollars in 2021 (29 billion euros) relatively concentrated, where the other French champions of automotive equipment, Valeo and Forvia (formerly Faurecia) with Hella , are already among the world leaders. Plastic Omnium will detail its medium-term objectives during an investor day, to be held on May 12.