2008 First half results I

Transcription

1 2008 First half results I 1

2

3 Content Key fi gures 2 Interim management report 3 Consolidated fi nancial statements 9 Statement by the person responsible for the 2008 interim fi nancial report 31 Statutory auditors review report on the 2008 interim fi nancial information 32 Faurecia 2, rue Hennape Nanterre Cedex - France Tel.: + 33 (1) Fax: + 33 (1)

4 Key fi gures Key fi gures 6, , ,979.6 (+7.7%) (+2.7%) (-0.1%) H H1 H % 1.0% 1.4% H H1 H Sales (in M) Growth on a like-for-like basis excluding sales of catalytic converter monoliths. H H1 H Operating income (1) (in M and as a % of sales) Net income (in M) % 4.7% 4.9% 2.5% 2.1% 2.3% 5.5% 4.9% 4.8% H H1 H EDITDA (2) (in M and as a % of sales) H H1 H Capital expenditure (in M and as a % of sales) H H1 H Gross R&D expenditure (3) (in M and as a % of sales) 55,709 57,864 60,761 1, , , , H H1 H Number of employees Dec Dec. June 2008 Total equity (in M) Dec Dec. June 2008 Net debt (in M) (1) Before operating income and expense, corresponding to material unusual and non-recurring items. (2) Operating income + depreciation, amortisation and provisions for impairment in value of property, plant and equipment and intangible assets. (3) Before capitalized development costs and amounts billed to customers. 2 Faurecia First half results

5 Interim management report Interim management report SIGNIFICANT EVENTS OF FIRST-HALF 2008 In line with the Group s recovery plan, the fi rst six months of 2008 were marked by the following factors: strong sales growth in North America, South America and Asia where Faurecia is consolidating and expanding its positions; a return to profi t in North America; an increase in consolidated operating income; improved net cash fl ows. BUSINESS REVIEW AND CONSOLIDATED SALES The Faurecia Group posted consolidated sales of 6,601.3 million in fi rst-half 2008, up 1.4% on the corresponding prior-year period. Excluding catalytic converter monoliths, sales came to 5,761.4 million, representing 2.7% growth on a like-for-like basis (at constant exchange rates and based on a constant Group structure). Currency effects had a negative 2.2% impact and changes in Group structure had a positive effect of 0.7%. Changes in Group structure during the period included the impact of the October integration into the Vehicle Interiors business of the Romania-based company Euro Plastic Systems (Euro APS), which supplies the Dacia factory in Pitesti, Romania sales break down as follows by major geographic region: Europe posted sales of 5,023.5 million, edging back 0.1% from the year-earlier fi gure of 5,029.0 million. Like-for-like and excluding catalytic converter monoliths the decrease was 1.1%. Changes in Group structure had a positive 0.4% impact sales were boosted in Europe by (i) higher BMW and Dacia- Renault sales; (ii) the ramp-up of vehicles launched in, including the Audi A4, Peugeot 308 and Renault Laguna; and (iii) the impact of new launches in 2008 such as the Seat Ibiza, Citroën C5, PSA Berlingo/Partner and the Peugeot 308 SW, which were offset by a fallback in end-of-life models. North America turned in another robust showing during the period despite diffi cult market conditions, reporting sales of million compared with million in fi rst-half. On a like-for-like basis (stripping out a signifi cant 14.9% negative currency impact) and excluding catalytic converter monoliths, the year-on-year increase was 19.6%. This performance was achieved thanks to (i) new vehicle launches including the BMW X6; (ii) the ramp-up of programs launched in by General Motors for the Cadillac CTS and Chevrolet Malibu; and (iii) good sales levels with the Ford and Volkswagen groups which made up for the downturn in business with Chrysler. During the fi rst half of 2008 almost one third of the Group s sales in North America were generated with European automakers, refl ecting higher business volumes with BMW and Volkswagen, which grew 42.1% and 9.6% respectively. Faurecia First half results 3

6 Interim management report South America reported sales of million in fi rst-half 2008, up 26.5% on a reported basis and 23.9% like-for-like and excluding catalytic converter monoliths. Currency effects had a positive 3.1% impact. In Asia sales climbed 13.4% like-for-like and excluding catalytic converter monoliths, coming in at million. China posted 19.8% growth whereas South Korea s sales contracted 1.3%. The Group continued to diversify its customer portfolio during the period, reporting higher sales (excluding catalytic converter monoliths) with General Motors, BMW, Ford, Volkswagen and PSA Peugeot Citroën, up 31.9%, 21.4%, 3.8%, 2.0% and 0.6% respectively also saw the opening of additional new manufacturing facilities, including a metalworking plant for the Automotive Seating business at San Luis Potosi in Mexico and two new Exhaust Systems sites one at Qingdao in China and the other at Jang An in South Korea. Likewise, the Group announced its plan to open a new plant at Kenitra in Morocco which will supply automotive seating trim covers to Renault-Nissan and Volkswagen production facilities in Europe. At the same time, the Pisek facility in the Czech Republic which was opened in November to produce exhaust systems, interior systems and seating frames has been expanded. Action plans implemented during the period to adapt and optimize the Group s industrial capabilities resulted in a reorganization of the Automotive Seating business and the restructuring of certain manufacturing facilities. The production of acoustic components carried out by the Fuenlabrada and Terrassa facilities in Spain whose closure was announced in has now been transferred to other sites. In addition, two acoustic facilities in Germany were sold during the period to the Stankiewicz group. A manufacturing reorganization plan was implemented in the Group s Slush business (PVC skins for instrument panels) which led to a decrease in production at the Audincourt plant in France. Furthermore, two automotive seating trim cover facilities were closed in the Czech Republic and Faurecia announced the closure of the Granger and Troy West Exhaust Systems plants in the United States. During fi rst-half 2008 the Group s research, development, design and quality capabilities were showcased when Faurecia received the 2008 Janus Industry Award from the French Design Institute for its Premium Attitude concept, as well as Nissan s Global Supplier Quality Award. 4 Faurecia First half results

7 Interim management report SALES BY BUSINESS SEGMENT Interior Modules Automotive Seating Automotive Seating generated sales of 2,761.5 million in the fi rst six months of 2008, up 3.0% on fi rst-half on a reported basis and 4.7% based on constant exchange rates. This division s business was bolstered by the numerous launches carried out in as well as by the start-up of eight new programs in fi rst-half In Europe, Automotive Seating sales were on a par with fi rst-half, coming in at 2,242.5 million versus 2,234.9 million. Business was brisk in North America, where sales surged 28.6% at constant exchange rates to million, spurred by a 58.2% jump in sales to General Motors due to the Cadillac CTS and Chevrolet Malibu and 57.2% growth in business with BMW thanks to the X5 and X6. Asia and South America reported Automotive Seating sales of 94.7 million and 62.7 million respectively, representing 20.8% growth for both regions. Vehicle Interiors Vehicle Interiors sales retreated from 1,800.3 million to 1,795.5 million, representing a slight contraction of 0.3% on a reported basis and 0.2% like-for-like. The 2.3% negative currency impact during the period was mostly offset by the 2.2% positive effect of changes in Group structure stemming from the new business with Dacia-Logan in Romania. In Europe, Vehicle Interiors sales edged back 3.1% (5.9% like-for-like) to 1,418.3 million. At constant exchange rates North America s sales climbed 28.5% to million, powered by the Chevrolet Malibu, Cadillac CTS and BMW X5 and X6, while Asia posted 15.8% growth with sales of 43.3 million and South American sales expanded 17.4% to 58 million. Overall, sales for the Interior Modules segment came to 4,557.0 million for the fi rst six months of 2008, up 1.7% on a reported basis and 2.7% like-for-like. Changes in Group structure had a positive 0.9% impact and exchange rates had a negative effect of 1.9%. Faurecia First half results 5

8 Interim management report Other Modules Exhaust Systems Exhaust Systems sales totaled 1,541.8 million in fi rst-half 2008, up 5.2% excluding the negative 5.6% currency impact. Without catalytic converter monoliths the sales fi gure was million with growth coming in at 1.5% excluding the negative 5.0% currency impact. Sales of catalytic converter monoliths amounted to million, up 2.3% on a reported basis and 8.4% based on constant exchange rates. In Europe, Exhaust Systems sales stood at million, or million excluding catalytic converter monoliths. At constant exchange rates and excluding catalytic converter monoliths they decreased 3.9%. North America reported Exhaust Systems sales of million ( million excluding catalytic converter monoliths), representing a 3.2% like-for-like increase after stripping out the signifi cant 13% negative currency impact. The contraction in sales to General Motors and Chrysler during the period was offset by strong business levels with Ford, particularly for small vehicles including the Ford Fusion, Focus and Escape. In Asia, fi rst-half 2008 sales came to million ( 90.6 million excluding catalytic converter monoliths), representing a 6.0% like-for-like rise excluding catalytic converter monoliths. China s 15.2% sales growth offset the slight 1.7% decrease in South Korea. Front End Front End sales totaled million, representing a 4.9% increase at constant exchange rates. The impact of the 6.8% growth recorded in Europe, propelled by the Audi A4 and BMW 1 Series, was weakened by a downturn in sales levels with Chrysler in North America. Altogether, the Other Modules segment posted sales of 2,044.3 million, up 0.7%, or 5.1% excluding the 4.4% negative currency impact. Without catalytic converter monoliths, the segment s sales came to 1,204.4 million and the growth fi gure was 2.9% excluding the negative 3.3% currency impact. RESULTS Operating income* for the fi rst six months of 2008 amounted to 90.3 million and represented 1.4% of consolidated sales, up 27.5 million and 0.4 points respectively on the comparable prior-year period. This improvement stems from the turnaround in operating income in North America during fi rst-half 2008, which came in at 10.0 million compared with an operating loss of 54.3 million for the fi rst six months of. This upswing was driven by higher volumes and especially, lower production costs, improved industrial productivity and an enhanced procurement performance. EBITDA stood at million, representing 4.9% of sales, versus million (4.7% of sales) in fi rst-half. * Before other operating income and expense which corresponds to material items that are unusual and non-recurring in nature. 6 Faurecia First half results

9 Interim management report Interior Modules reported operating income of 6.8 million (0.1% of sales) against a 4.9 million operating loss in fi rst-half. Operating income generated by the Other Modules segment climbed 15.8 million to 83.5 million, representing 4.1% of sales. At million and 4.8% of sales, gross research and development costs were on a par with the fi rst-half fi gures of million and 4.9% of sales. Excluding amounts billable to customers, R&D costs totaled million or 2.0% of sales, representing a 0.1 percentage point decrease versus fi rst-half. Start-up costs fell to 25.2 million from 28.6 million. Selling and administrative expenses totaled million, representing 2.8% of sales, up only slightly on the million (2.8% of sales) recorded for the equivalent period of. Other operating income and expense, which represented a net expense of 27.2 million, primarily comprised restructuring costs, which decreased to 30.6 million from 39.9 million in fi rst-half, and related to the continuing drive to optimize the Group s industrial capabilities. The main restructuring measures carried out during the period included (i) the closure of two automotive seating trim cover production plants in the Czech Republic; (ii) the downsizing of the Audincourt site in France; and (iii) the closure of an Exhaust Systems plant in North America and the transfer of its operations to Mexico. The restructuring plans implemented during the period affected 1,298 employees. Net fi nance costs stood at 49.2 million, or 0.7% of sales, compared with 49.7 million in fi rst-half. This stability was achieved thanks to the Group s even debt levels as well as the impact of an effective hedging policy which enabled Faurecia to keep its average interest rate on borrowings at 4.22% for the fi rst six months of 2008 compared with 4.19% in the corresponding prior-year period. Other fi nancial income and expense represented net income of 1.0 million versus 6.5 million in the fi rst six months of. The tax charge for fi rst-half 2008 was 38.7 million, against 22.3 million for the same period of. This increase was primarily due to the higher income levels reported by profi t-making subsidiaries. No deferred tax assets are recognized for the majority of tax losses made by Group subsidiaries. Equity in net income of companies accounted for by the equity method amounted to 4.4 million, up from 0.7 million in fi rst-half. The Group ended the six months to June 30, 2008 with an net attributable loss of 22.2 million after minority interests of 2.8 million. The net attributable loss in fi rst-half came to 47.4 million. The loss per share was 0.92 in fi rst-half 2008 compared with 1.98 one year earlier. Faurecia First half results 7

10 Interim management report FINANCIAL STRUCTURE AND DEBT Cash flow from operations totaled million (3.6% of sales), up 48.7 million on the prior-year figure of million (2.9% of sales). This increase was primarily fueled by the rise in the Group s operating income. Working capital requirement increased by 21.0 million compared with a million reduction in fi rst-half. However, adjusted for the positive million impact arising from the Group s increased use of sales of trade receivables, working capital requirement rose 31.5 million in fi rst-half, on a par with the increase for fi rst-half Capital expenditure amounted to million or 2.3% of sales in the fi rst six months of 2008, versus million and 2.1% one year earlier. The Group continued to implement its highly selective capital expenditure strategy which focuses on the least capital intensive solutions. Capitalized development costs totaled 81.4 million, versus 85.7 million in fi rst-half. Excluding the impact of the Group s increased use of sales of trade receivables, net cash fl ows improved by a signifi cant 28.7 million in the fi rst six months of 2008, representing a total net cash outfl ow of 31.8 million compared with 60.5 million for fi rst-half. Overall, net debt as of June 30, 2008 stood at 1,650.4 million, up 34.4 million on December 31,. Total equity amounted to million at the period end, compared with million as of December 31,, and the Group s gearing ratio remained stable at 1.9. OUTLOOK In the second half of the year, against a backdrop of rising raw materials prices whose impact is expected to be under control, Faurecia is aiming versus the second half of for a signifi cant improvement in operating income in both North America and Europe. Faurecia confi rms its sales growth target for the full year together with an improvement in operating income and a reduction in net debt. 8 Faurecia First half results

11 CONSOLIDATED INCOME STATEMENTS (in millions) Notes 2008 Full-year SALES 4 6, , ,660.7 Cost of sales 5 (6,192.2) (6,130.1) (11,914.7) Research and development costs (131.2) (137.5) (268.6) Selling and administrative expenses (187.6) (181.2) (356.3) OPERATING INCOME Other operating income and expense 6 (27.2) (38.4) (225.8) Income from loans, cash investments and marketable securities Finance costs (66.9) (59.0) (117.0) Other financial income and expense (13.8) INCOME (LOSS) BEFORE TAX OF FULLY CONSOLIDATED COMPANIES 14.9 (18.8) (219.6) Current taxes 8 (37.9) (18.7) (8.8) Deferred taxes (0.8) (3.6) (4.8) NET INCOME (LOSS) OF FULLY CONSOLIDATED COMPANIES (23.8) (41.1) (233.2) Equity in net income of companies accounted for by the equity method CONSOLIDATED NET INCOME (LOSS) (19.4) (40.4) (230.9) Attributable to equity holders of the parent (22.2) (47.4) (237.5) Attributable to minority interests Basic earnings (loss) per share (in ) 9 (0.92) (1.98) (9.87) Diluted earnings (loss) per share (in ) 9 (0.92) (1.98) (9.87) Faurecia First half results 9

12 CONSOLIDATED BALANCE SHEETS ASSETS (in millions) Notes June 30, 2008 Dec. 31, Goodwill 10 1, ,288.6 Intangible assets Property, plant and equipment 1, ,408.9 Investments in companies accounted for by the equity method Other equity interests Other non-current financial assets Other non-current assets Deferred tax assets TOTAL NON-CURRENT ASSETS 3, ,351.6 Inventories, net Trade accounts receivable 12 1, ,635.2 Other operating receivables Other receivables and prepaid expenses Currency and interest rate derivatives Cash and cash equivalents TOTAL CURRENT ASSETS 3, ,109.9 TOTAL ASSETS 6, , Faurecia First half results

13 LIABILITIES AND SHAREHOLDERS EQUITY (in millions) Notes June 30, 2008 Dec. 31, SHAREHOLDERS EQUITY Capital stock Additional paid-in capital Treasury stock (11.5) (11.5) Retained earnings Translation adjustments Net loss for the period (22.2) (237.5) TOTAL SHAREHOLDERS EQUITY MINORITY INTERESTS TOTAL EQUITY Long-term provisions Long-term debt 15 1, ,160.0 Other non-current liabilities Deferred tax liabilities TOTAL NON-CURRENT LIABILITIES 1, ,383.4 Short-term provisions Short-term debt 15 1, ,023.5 Prepayments from customers Trade payables 2, ,162.6 Accrued taxes and payroll costs Other payables Currency and interest rate derivatives TOTAL CURRENT LIABILITIES 4, ,231.8 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 6, ,461.5 Faurecia First half results 11

14 CONSOLIDATED CASH FLOW STATEMENTS (in millions) 2008 Full-year I - OPERATING ACTIVITIES CONSOLIDATED NET INCOME (LOSS) (19.4) (40.4) (230.9) Depreciation and amortization Deferred tax (benefits) charges Increase (decrease) in long-term provisions (3.7) (3.2) (10.0) Equity in net income of companies accounted for by the equity method, net of dividends received 15.6 (0.7) (0.8) Capital (gains) losses on disposals of non-current assets (1.5) (1.0) 3.1 Other 11.7 (12.2) 2.8 CASH FLOW FROM OPERATIONS Increase (decrease) in short-term provisions (17.5) (20.1) 51.4 Change in inventories (50.1) (27.7) 28.2 Change in trade accounts receivable (243.4) (239.6) Change in trade payables Change in other operating receivables and payables Change in other receivables and payables (7.8) (Increase) decrease in working capital requirement (21.0) NET CASH PROVIDED BY OPERATING ACTIVITIES II - INVESTING ACTIVITIES Additions to property, plant and equipment (153.3) (136.6) (306.8) Capitalized development costs (81.4) (85.7) (159.2) Acquisitions of investments (2.7) (9.4) (25.2) Proceeds from disposals of property, plant and equipment Proceeds from disposals of financial assets Change in investment-related receivables and payables (7.4) (2.5) (4.7) Other movements 0.0 (2.7) 4.4 NET CASH USED BY INVESTING ACTIVITIES (238.0) (230.7) (481.7) NET CASH (USED) PROVIDED BY OPERATING AND INVESTING ACTIVITIES (I)+(II) (21.2) III - FINANCING ACTIVITIES Issuance of shares by Faurecia and fully-consolidated companies Dividends paid to minority interests in consolidated subsidiaries (4.5) (8.3) (11.2) Issuance of debt securities and increase in other financial liabilities Repayments of debt and other financial liabilities (181.2) (84.4) (193.0) NET CASH USED BY FINANCING ACTIVITIES (140.4) (58.0) (68.8) IV - OTHER CHANGES IN CASH AND CASH EQUIVALENTS Impact of exchange rate changes on cash and cash equivalents (1.6) 0.4 (3.8) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (163.2) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT THE PERIOD END (Note 15) Faurecia First half results

15 STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY (in millions) Balance as of Dec. 31, 2006 before appropriation of net income (loss) Number of shares Capital stock Additional paid-in capital Treasury stock Retained earnings Translation adjustments Total shareholders equity Minority interests 24,259, (12.5) , ,090.6 Net loss for the period (47.4) (47.4) 7 (40.4) Translation adjustments (0.4) 2.9 Changes in fair value of currency hedging instruments Total income and expense recognized directly in equity Total (0.2) (0.2) (0.2) (47.6) 3.3 (44.3) 6.6 (37.7) Issue of share capital (1) 112, dividend 0.0 (8.3) (8.3) Measurement of stock options Sales of treasury stock Changes in scope of consolidation Recognition of 2006 losses of the parent company Balance as of June 30, before appropriation of net income (loss) (165.2) ,372, (11.8) ,051.0 Net loss for the period (190.1) (190.1) (0.4) (190.5) Translation adjustments (4.5) (4.5) (1.7) (6.2) Changes in fair value of currency hedging instruments Total income and expense recognized directly in equity (184.5) (4.5) (189.0) (2.1) (191.1) Issue of share capital (1) 22, dividend 0.0 (2.9) (2.9) Measurement of stock options Sales of treasury stock Changes in scope of consolidation 0.0 (13.2) (13.2) Balance as of Dec. 31, before appropriation of net income (loss) 24,395, (11.5) Net loss for the period (22.2) (22.2) 2.8 (19.4) Translation adjustments Changes in fair value of currency hedging instruments Total income and expense recognized directly in equity (10.0) Issue of share capital (1) dividend 0.0 (4.5) (4.5) Measurement of stock options Sales of treasury stock Changes in scope of consolidation Balance as of June 30, 2008 before appropriation of net income (loss) 24,395, (11.5) (1) Shares issued on exercise of stock options. Faurecia First half results 13

16 NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS Faurecia S.A. and its subsidiaries form one of the world s leading suppliers of six major vehicle modules: seats, cockpits, doors, acoustics modules, front ends and exhaust systems. The Group has operations in 28 countries, spanning 190 sites. Faurecia s registered office is located in Nanterre, in the Hauts-de-Seine region of France. The Company is quoted on Compartment A of Euronext Paris. The interim consolidated financial statements were approved by Faurecia s Board of Directors on July 21, Note 1 Summary of significant accounting policies The interim consolidated financial statements of the Faurecia Group have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, including International Accounting Standards (IASs) and related Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC). The interim consolidated financial statements comply with IAS 34, Interim Financial Reporting, which permits entities to present condensed information. They should therefore be read in conjunction with the annual consolidated financial statements for the year ended December 31,. The standards used to prepare the interim consolidated financial statements for the six months ended June 30, 2008 and comparative data for are those published in the Official Journal of the European Union (OJEU) as of June 30, 2008, and whose application was mandatory at that date. The Group does not intend to early adopt IFRS 8, Operating Segments prior to its effective date of January 1, Management is in the process of assessing the possible impact of this new standard on the presentation of the Group s segment information and the measurement of goodwill. Note 2 Changes in scope of consolidation In first-half 2008, Faurecia (i) set up a new automotive seating trim cover manufacturer called Faurecia Equipements Automobiles Maroc; and (ii) purchased all of the shares in Al Manufacturers a South- Africa based company operating in the Vehicle Interiors business for 2.1 million. Faurecia Technoplast Automotive a Russian company formed in to produce Interior modules was fully consolidated during the period. 2-2 During Faurecia acquired a 50% interest in Romania-based Euro Auto-Plastic Systems srl in the Vehicle Interiors business for 9.4 million. In addition, Faurecia set up three new companies in China in Faurecia (Shanghai) Automotive Systems Co Ltd., Faurecia Wuhan Automotive Seating Co Ltd. and Faurecia Qingdao Exhaust Systems Co Ltd as well as one new company in South Korea, Faurecia Trim Korea Ltd. Faurecia also acquired the 50% interest held by the Duroplast Group in Faurecia Duroplast Mexico for 18.3 million, raising its stake in the company to 100%. 14 Faurecia First half results

17 Lastly, in early Faurecia purchased certain assets of Cadence Innovation in France for 0.4 million. 2-3 Impact on consolidated data of changes in scope of consolidation Changes in scope of consolidation did not have a material impact on the Group s interim consolidated financial statements. Note 3 Seasonal fluctuations in business levels Business levels in the automotive industry are traditionally higher in the first half of the year than in the second half. Faurecia First half results 15

18 Note 4 Information by business segment 4-1 Key figures by business segment 2008 (in millions) Interior modules Other modules Holding companies Total Sales 4, , ,730.0 Inter-segment eliminations (14.8) (10.0) (103.9) (128.7) Consolidated sales 4, , ,601.3 Operating income Segment income (loss) (24.4) Net financial expense (49.2) Corporate income tax (38.7) Equity in net income of companies accounted for by the equity method 4.4 Net loss for the period (19.4) Segment assets Property, plant and equipment, net 1, ,412.4 Other 3, , ,587.5 Total segment assets 4, , ,999.9 Investments in companies accounted for by the equity method 35.0 Other equity interests 5.1 Short and long-term financial assets Tax assets (current and deferred) 95.2 Total assets 6,596.4 Segment liabilities 2, (2.9) 3,630.6 Borrowings 2,074.4 Tax liabilities (current and deferred) 44.1 Shareholders equity and minority interests Total liabilities 6,596.4 Capital expenditure Depreciation of property, plant and equipment (133.3) (22.8) (1.4) (157.5) Impairment in value of property, plant and equipment Faurecia First half results

19 (in millions) Interior modules Other modules Holding companies Total Sales 4, , ,642.5 Inter-segment eliminations (24.1) (10.8) (96.0) (130.9) Consolidated sales 4, , ,511.6 Operating income (loss) (4.9) Segment income (loss) (39.3) Net financial expense (49.7) Corporate income tax (22.3) Equity in net income of companies accounted for by the equity method 0.7 Net loss for the period (40.4) Segment assets Property, plant and equipment, net 1, ,424.4 Other 3, , ,818.0 Total segment assets 4, , ,242.4 Investments in companies accounted for by the equity method Other equity interests 1.3 Short and long-term financial assets Tax assets (current and deferred) 87.5 Total assets 7,090.6 Segment liabilities 2, (18.3) 3,696.2 Borrowings 2,277.8 Tax liabilities (current and deferred) 65.6 Shareholders equity and minority interests 1,051.0 Total liabilities 7,090.6 Capital expenditure Depreciation of property, plant and equipment (125.9) (32.4) (1.6) (159.9) Impairment in value of property, plant and equipment Faurecia First half results 17

20 Full-year (in millions) Interior modules Other modules Holding companies Total Sales 8, , ,906.6 Inter-segment eliminations (37.5) (19.1) (189.3) (245.9) Consolidated sales 8, , ,660.7 Operating income (loss) (15.5) Segment income (loss) (235.5) (11.4) (118.5) Net financial expense (101.1) Corporate income tax (13.6) Equity in net income of companies accounted for by the equity method 2.3 Net loss for the period (230.9) Segment assets Property, plant and equipment, net 1, ,408.9 Other 3, , ,296.7 Total segment assets 4, , ,705.6 Investments in companies accounted for by the equity method Other equity interests 1.8 Short and long-term financial assets Tax assets (current and deferred) 85.6 Total assets 6,461.5 Segment liabilities 2, ,393.5 Borrowings 2,197.3 Tax liabilities (current and deferred) 24.4 Shareholders equity and minority interests Total liabilities 6,461.5 Capital expenditure Depreciation of property, plant and equipment (263.4) (47.1) (2.8) (313.3) Impairment in value of property, plant and equipment (23.7) (23.7) 4-2 Sales by business segment (in millions) 2008 % % Full-year % Interior modules - Automotive Seating 2, , , Vehicle Interiors 1, , , , , , Other modules - Exhaust Systems 1, , , Front End , , , Total 6, , , Faurecia First half results

21 Note 5 Operating expenses 5.1 Analysis by function (in millions) 2008 Full-year Cost of sales (6,192.2) (6,130.1) (11,914.7) Research and development costs (131.2) (137.5) (268.6) Selling and administrative expenses (187.6) (181.2) (356.3) Total (6,511.0) (6,448.8) (12,539.6) 5.2 Analysis by nature Full-year (in millions) 2008 Purchases used in production (4,537.5) (4,493.9) (8,686.1) External expenses (580.5) (582.6) (1,118.2) Payroll costs (1,234.2) (1,216.1) (2,339.8) Taxes other than on income (29.8) (34.1) (55.2) Other income and expense (*) Depreciation, amortization and provisions for impairment in value of non-current assets (231.1) (241.7) (475.7) Charges to and reversals of other provisions (5.7) Total (6,511.0) (6,448.8) (12,539.6) (*) Including production taken into inventory or capitalized (development and tooling) Research and development costs (in millions) 2008 Full-year Research and development costs, gross (317.9) (318.0) (613.1). amounts billed to customers and changes in inventories capitalized development costs amortization of capitalized development costs (73.6) (77.2) (158.3). charges to and reversals of provisions for impairment in value of capitalized development costs (2.1) (3.6) (1.1) Net expense (131.2) (137.5) (268.6) 5.4 Depreciation, amortization and provisions for impairment in value of non-current assets (in millions) 2008 Full-year Amortization of capitalized development costs (73.6) (77.2) (158.3) Amortization of other intangible assets (4.0) (5.7) (11.6) Depreciation of specific tooling (8.1) (6.1) (13.3) Depreciation of other items of property, plant and equipment (143.3) (149.1) (291.4) Provisions for impairment in value of capitalized development costs (2.1) (3.6) (1.1) Total (231.1) (241.7) (475.7) Faurecia First half results 19

22 Note 6 Other operating income and expense Other operating income and expense can be analyzed as follows: (in millions) 2008 Full-year Provisions for contingencies (56.1) Provisions for impairment in value of Vehicle Interiors assets (44.3) Other provisions for impairment in value of assets (20.8) Reorganization expenses (*) (30.6) (39.9) (104.4) Early retirement costs 0.0 (0.1) Gains on disposals of assets, net Other (0.2) (0.3) (0.8) Total (27.2) (38.4) (225.8) (*) In first-half 2008, this item included 27.4 million worth of restructuring costs, and 3.2 million in provisions for impairment in value of non-current assets (versus respective amounts of million and 2.7 million for full-year ). In first-half reorganization expenses exclusively corresponded to restructuring costs. Restructuring costs concerned 1,298 employees in the first six months of Note 7 Other financial income and expense (in millions) 2008 Full-year Impact of discounting pension benefit obligations (4.6) (4.5) (9.4) Changes in the ineffective portion of gains and losses on currency hedges (1.9) Changes in fair value of currency hedges relating to debt (0.1) Changes in fair value of interest rate instruments (8.7) Gains on sales of securities 1.7 Other Total (13.8) Note 8 Corporate income tax The effective corporate income tax charge can be reconciled with the theoretical tax charge as follows: (in millions) 2008 Full-year Income (loss) before tax of fully consolidated companies 14.9 (18.8) (219.6) Tax at standard French tax rate of 34.43% (5.1) Impact of income taxable at a reduced rate in France and Spain 2.0 Impact on deferred taxes of changes in tax rates - (5.3) Impact of different tax rates applicable to foreign subsidiaries Tax credits Utilization of previously unrecognized tax loss carryforwards Tax loss carryforwards arising during the period for which no deferred tax asset was recognized (39.1) (46.7) (111.6) Impairment of previously recognized tax assets (1.1) (1.1) Permanent differences (11.1) (5.2) (3.7) Effective corporate income tax charge (38.7) (22.3) (13.6) Deferred tax assets are not recognized for tax loss carryforwards that are not certain of being utilized. As of June 30, 2008, these assets amounted to million, compared with million as of December 31,. 20 Faurecia First half results

23 Note 9 Earnings (loss) per share 2008 Full-year Number of shares outstanding at the period end 24,395,048 24,372,068 24,395,048 Adjustments: - treasury stock (270,814) (279,339) (270,814) - impact of share issues weighted based on the period between the date of the share issue and the period end (93,366) (58,262) Basic weighted average number of shares 24,124,234 23,999,363 24,065,972 Weighted impact of dilutive instruments (stock options)(*) 20, ,849 93,935 Weighted average number of shares after dilution 24,144,882 24,115,212 24,159,907 (*) As of June 30, 2008, 1,506,683 stock options were outstanding and exercisable, compared with 1,258,303 as of December 31, and 1,326,983 as of June 30,. Basic and diluted earnings (loss) per share (in ) 2008 Full-year Basic earnings (loss) per share (0.92) (1.98) (9.87) Diluted earnings (loss) per share (0.92) (1.98) (9.87) Basic earnings per share are calculated by dividing net income by the weighted average number of shares outstanding during the period, excluding treasury stock. Note 10 Goodwill (in millions) Gross Impairment Net Net goodwill as of January 1, 1,552.7 (263.4) 1,289.3 Acquisitions and minority interest buyouts Translation adjustments and other movements (11.0) (11.0) Net goodwill as of December 31, 1,552.0 (263.4) 1,288.6 Acquisitions, minority interest buyouts and price adjustments (0.7) (0.7) Translation adjustments and other movements (10.0) 1.9 (8.1) Net goodwill as of June 30, ,541.3 (261.5) 1,279.8 Net goodwill breaks down as follows by business: (in millions) June 30, 2008 Dec. 31, Automotive Seating Vehicle Interiors Front End Exhaust Systems Total 1, ,288.6 Faurecia First half results 21

24 Note 11 Investments in companies accounted for by the equity method As of June 30, 2008 this item broke down as follows: (in millions) % interest (*) Group share of equity Dividends received by the Group Group share of sales Group share of total assets Vanpro Assentos Lda Teknik Malzeme Copo Iberica Sa Componentes de Vehiculos de Galicia SA Faurecia Japon NHK Co. Ltd 50 (3.1) Arsed d.o.o Kwang Jin Faurecia Ltd Total SAS Group (20.0) Total (20.0) (*) Percent interest held by the company that owns the shares Movements in investments in companies accounted for by the equity method (in millions) 2008 Full-year Group share of equity at beginning of period Dividends (20.0) 0.0 (1.5) Group equity in net income Changes in scope of consolidation Capital increase Translation adjustments (0.8) Group share of equity at the period end Group share of total assets of companies accounted for by the equity method (in millions) June 30, 2008 Dec. 31, Non-current assets Current assets Cash and cash equivalents Total assets Shareholders equity Borrowings Other non-current liabilities Non-financial current liabilities Total liabilities and shareholders' equity Faurecia First half results

25 Note 12 Trade accounts receivable In 2000, Faurecia and certain of its French subsidiaries entered into a one-year agreement with a Group bank providing for the sale of receivables. Under this agreement, which was renewable through November 2005, the bank s right of recourse was limited to the amount of the related subordinated deposit. The agreement was renegotiated in 2004 for a one-year period, renewable through December, in order to provide for the transfer of substantially all of the risks and rewards relating to the sold receivables. It was subsequently renewed on November 30, for a further five years until end- November In order to further diversify its financial resources, in December 2002 Faurecia entered into a second one-year renewable agreement with another Group bank, extending the receivables sale program to other French and non-french subsidiaries in Europe. This program remained in force until May, when it was replaced by renewable open-ended agreements that provide for the transfer of substantially all of the risks and rewards of a portion of the sold receivables. In addition, in 2004, 2006 and other receivables sale agreements were entered into between certain of the Group s European subsidiaries and a number of their banks, providing for the transfer of substantially all of the risks and rewards of the sold receivables. The following table shows the amount of sold receivables with maturities beyond June 30, 2008 for which substantially all the risks and rewards have been transferred, and which have therefore been derecognized: (in millions) June 30, 2008 Dec. 31, Receivables sold and derecognized Individually impaired receivables do not represent a material amount in relation to total trade accounts receivable. Given the high quality of Group counterparties, late payments do not represent a material risk and generally arise from administrative issues. Note 13 Shareholders equity 13-1 Capital stock and additional paid-in capital As of June 30, 2008 the Company s capital stock amounted to 170,765,336, divided into 24,395,048 fully paid-up common shares with a par value of 7 each. Shares which have been registered in the name of the same holder for at least two years carry double voting rights Employee stock options a) Stock subscription options The Company has a policy of issuing stock options to the management of Group companies and their over 50%-owned subsidiaries allowing them to subscribe for newly-issued Faurecia shares. As of June 30, 2008 a total of 1,506,683 stock subscription options were outstanding. Exercising these options would result in: - capital stock being increased by 10.5 million - additional paid-in capital being increased by 63.9 million. Faurecia First half results 23

26 Details of the stock subscription option plans as of June 30, 2008 are set out in the table below: Date of Shareholders Meeting June 18,1992 May 31, 1994 May 31, 1994 May 3,1995 May 31, 1994 June 5, 1997 Date of Board Meeting Of which granted to senior executive management/ Executive Committee members Start of exercise period Number of Exercise price options Expiry of exercise (in ) granted period April 7,1994 April 8, ,000 75, April 6, 2009 Oct. 20, 1994 Oct. 21, ,000 30, Oct. 19, 2009 May 3, 1995 May 4, ,000 15, May 2, 2010 Sept. 12, 1996 Sept. 13, ,000 40, Sept. 11, 2011 June 26, 1997 June 27, ,000 15, June 25, 2012 June 26, 1997 June 27, ,500 15, June 25, June 5, 1997 Feb. 22, 2002 Feb. 23, ,700 69,500 June 1, Feb. 22, 2012 June 1, 2001 Nov. 28, 2002 Nov. 29, , ,000 May 14, Nov. 27, 2012 May 14, 2002 May 25, 2004 May 23, 2005 May 23, 2005 May 29, April 14, 2004 April 14, , , April 13, 2014 April 19, 2005 April 18, , , April 18, 2015 April 13, 2006 April 12, , , April 12, 2016 April 16, April 17, , , April 17, 2017 April 10, 2008 April 10, , , April 10, 2016 Options exercised Options forfeited Number of options outstanding as of June 30, ,600-21, ,000-15,000 63,000 1,000 7,000 91,500-33,500 31,500 1,500 21,000 26,000 9,500-28, , ,500 91, ,120 72, , ,000-79, ,000-77, ,000 28, ,500-2, ,500 Total 1,506, Faurecia First half results

27 b) Stock purchase options Between 1999 and 2001, the Company granted stock options to the management of Group companies and their over 50%-owned subsidiaries, allowing them to purchase existing Faurecia shares. As of June 30, 2008, a total of 260,980 stock purchase options were outstanding. Details of the stock purchase option plans as of June 30, 2008 are set out in the table below: Date of Shareholders Meeting June 1, 1999 Date of Board Meeting Of which granted to senior executive management/ Executive Committee Start of exercise period Number of Exercise price options Expiry of exercise (in ) granted members period Sept. 6, ,000 53,100 Sept. 6, June 1, 1999 Sept. 4, ,000 54,900 Sept. 4, 2005 May 22, May 22, 2000 April 26, ,500 40,000 April 26, Sept. 5, 2009 Sept. 3, 2010 April 25, 2011 Options exercised Options forfeited Number of options outstanding as of June 30, ,600 17, , ,920 42, ,830 16,500 5,000 22,000 Total 260,980 Note 14 Long- and short-term provisions Long-term provisions (in millions) June 30, 2008 Dec. 31, Provisions for pensions and other employee benefits. Pensions Long-service awards Healthcare costs Provisions for early retirement costs Total Short-term provisions (in millions) June 30, 2008 Dec. 31, Restructuring Risks on contracts and customer warranties Claims and litigation Other Total Faurecia First half results 25

28 Note 15 Net debt (in millions) June 30, 2008 Dec. 31, Bonds Bank borrowings Other borrowings Obligations under finance leases SUB-TOTAL LONG-TERM DEBT 1, ,160.0 Current portion of long-term debt Short-term borrowings (1) Payments issued (2) (a) 6.6 Derivatives (net) (29.1) (17.4) TOTAL 2, ,166.1 Cash and cash equivalents (b) (380.3) (550.1) NET DEBT 1, ,616.0 Net cash and cash equivalents (b) - (a) (1) Including bank accounts in credit (2) Payments awaiting clearance by the bank as they fall due on a non-banking day. The contra-entry is an increase in cash and cash equivalents under assets Eurobond and syndicated line of credit On October 5, 2005, Faurecia issued 300 million worth of bonds redeemable in October In addition, since November 2004, Faurecia has had access to a medium-term syndicated line of credit of up to 1,600 million which can be drawn down for renewable periods of one, three or six months through November As of June 30, 2008, the undrawn portion of this credit line amounted to million. The contracts relating to these two forms of borrowings include covenants, certain of which concern consolidated financial ratios. As of June 30, 2008, the Group complied with all of these ratios, as shown in the table below: Type of ratio Contractual ceiling/floor Value as of Ratio June 30, 2008 Amount Adjusted net debt*/ebitda** 3.50 ceiling ,687.9/613.7 EBITDA**/net interest 4.50 floor /100.6 * Adjusted net debt = consolidated net debt + adjustments for certain commitments given, based on definitions provided in the credit agreement (e.g. mortgages or collateralized liabilities). ** Earnings before interest, tax, depreciation and amortization = Operating income + depreciation, amortization and provisions for impairment in value of property, plant and equipment and intangible assets Securitization and factoring programs Part of Faurecia's financing requirements is met through receivables sale programs (see Note 12). As of June 30, 2008, financing under these programs corresponding to the cash received as consideration for the receivables sold totaled million versus million as of December 31,. 26 Faurecia First half results

29 (in millions) June 30, 2008 Dec. 31, Financing Guarantee reserve deducted from borrowings (28.4) (27.6) Cash received as consideration for receivables sold Receivables sold and derecognized (384.9) (387.5) 15-3 Analysis of borrowings by interest rate and currency As of June 30, 2008, 84.7% of the Group s borrowings were at variable rates, representing 1,720.8 million. Interest on variable-rate borrowings payable between July 2008 and December 2010 has been hedged (see Note 16.2). (in millions) June 30, 2008 Variable rate borrowings 1, % Fixed rate borrowings % Total 2, % Borrowings (taking into account currency swaps) break down as follows by repayment currency: (in millions) June 30, 2008 Dec. 31, Euro 1, % 1, % US dollar % % Other currencies % % Total 2, % 2, % As of June 30, 2008, the weighted average interest rate on outstanding borrowings was 4.22%. Note 16 Hedging of currency and interest rate risks 16-1 Hedging of currency risks Currency risks relating to the commercial transactions of the Group s subsidiaries are managed centrally by Faurecia, principally using forward purchase and sale contracts and options as well as foreign currency financing. Faurecia hedges its commercial positions either through derivatives or by setting up loans denominated in the same currency as the subsidiary s related exposure. Currency risks on future transactions are hedged on the basis of estimated cash flows determined in forecasts validated by General Management, and the related derivatives are classified as cash flow hedges. Subsidiaries outside the euro zone are granted inter-company loans in their operating currencies. Although these loans are refinanced in euros and eliminated on consolidation, they contribute to the Group s currency risk exposure and are therefore hedged through swaps. Currency hedges are recognized in the balance sheet at fair value, determined based on measurements confirmed by banking counterparties. Faurecia First half results 27

30 Information on hedged notional amounts: As of June 30, 2008 Carrying amount Assets Liabilities Notional amount Within 1 year Fair value hedges - Forward currency contracts (0.1) (29.8) (29.8) - Currency options - Inter-company loans in foreign currencies swapped for euros Cash flow hedges - Forward currency contracts Currency options 13.0 (223.2) (223.2) Overhedging and trading (1.7) Of which currency hedges for operations 11.3 Of which hedges of receivables and borrowings Maturities 1 to 5 years Beyond 5 years As of December 31, Carrying amount Assets Liabilities Notional amount Within 1 year Fair value hedges - Forward currency contracts (0.1) (14.0) (14.0) - Currency options - Inter-company loans in foreign currencies swapped for euros Cash flow hedges - Forward currency contracts Currency options 7.9 (225.7) (225.7) Overhedging and trading (1.5) Of which currency hedges for operations 6.4 Of which hedges of receivables and borrowings The impact of currency hedges on income and equity can be analyzed as follows: Maturities 1 to 5 years Beyond 5 years Impact of cash flow hedges (in millions) June 30, 2008 Dec. 31, Fair value at beginning of period Changes in effective portion of gains and losses recorded in equity Changes in ineffective portion of gains and losses recorded in income Purchases of options Derecognition on exercise or disposal of instruments (8.6) (3.3) Fair value at the period end Ineffective portion of hedges recorded in the income statement Intrinsic values recycled to the income statement where hedge accounting no longer applied Pre-tax impact on income Net impact on equity Faurecia First half results