(News Bulletin 247) – The automotive supplier clearly outperformed global production in the first half. The company confirms all of its objectives for the current financial year.

The first major listed automotive supplier to publish its first-half financial results, Plastic Omnium did not disappoint.

Over the first six months of the year, economic revenue, which includes the share of joint ventures in which the company is present, amounted to 5.815 billion euros, up 34.7% on a reported basis and 20.2% on a like-for-like basis, i.e. excluding currency and scope effects.

The evolution of the company’s turnover outperformed global automotive production by 8.9 percentage points, measured with growth of 11.3% over the half-year by S&P Global Mobility.

Consolidated sales amounted to 5.29 billion euros, up 35% year-on-year and 19.9% ​​like-for-like.

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The margin the “real surprise” of the publication

Plastic Omnium was supported by all of its activities, with relatively homogeneous growth for its “industries” division (lighting, tanks, bodywork, energy storage systems) and its module assembly division, up 16.7% and 29% respectively on a like-for-like basis.

At the regional level, the group recorded its strongest growth in Europe, with an increase of 23.4% like-for-like, and it also posted strong growth in China, of 17.5%. In these two geographies, the company outperformed local automotive production by 7.5 points and 10.6 percentage points respectively.

In China, the outperformance “is linked to the group’s relevant positioning with manufacturers in China, in a market that is accelerating towards electric mobility”, explained the company.

But beyond the activity, “the real positive surprise of the semester concerns profitability, the group having achieved an operating margin of 210 million euros, beyond our expectation of 190 million euros and is thus ahead of our objective of 4% margin for the 2023 financial year”, underlines TP ICAP Midcap.

The operating margin stood at 4% against 4.6% a year earlier. On a like-for-like basis, the margin was 4.9%, up €50 million. But the acquisitions had a negative impact (by 20 million euros) on profitability, thus reducing the profitability rate to 4%.

Lighting near the end of the tunnel?

Plastic Omnium has notably strengthened its position in lighting in recent years via the takeovers of Varroc Lighting Systems and AMLS last year, two companies whose group has set out to improve their low margins. Plastic Omnium nevertheless indicated on Monday that this plan was proceeding in accordance with its expectations, with a margin back in the green in June, for the first time.

The company’s net profit was almost stable at 100 million euros against 104 million euros a year earlier.

Cash generation increased strongly, with free cash flow at 191 million euros, up 43.1% compared to the first half of 2022.

On the strength of this satisfactory first half, Plastic Omnium has confirmed its objectives for the 2023 financial year, namely “strongly growing” economic revenue that outperforms global automotive production, an operating margin of more than 400 million euros and free cash flow of more than 260 million euros.

On the Paris Stock Exchange, the market welcomes these announcements, the Plastic Omnium share taking 6% around 10:30 a.m. in a falling market, the SBF 120 losing 0.2% at the same time. Stifel notes that sales and operating margin exceeded consensus expectations by 1% and 4% respectively.