WORLDWIDE AUTOMOTIVE PRODUCTION : AN UNPRECEDENTED DROP IN VOLUMES

AUTOMOTIVE PRODUCTION
(IN MILLIONS OF VEHICLES)

Between H1 2019 and H1 2020:

-14.7m of vehicles

Source IHS July 2020.

Plastic Omnium had a strong start to 2020. In the first quarter of 2020, despite a 22% drop in automotive production, the Group’s revenue stood at €2.1 billion, a level comparable to that of the first quarter of 2019. Net profit was positive.

In the second quarter of 2020, the Group faced a slump of 46% in worldwide automotive production, which reduced its revenue to €1.1 billion, led to significant operating losses despite rapidly implemented savings plans and generated high working capital requirements.

2020 Half-year results – key figures

Economic Revenue

€3,233m

– 29.9%

Outperformance

4.3 pts

vs automotive production at -33.8%

Consolidated Revenue

€2,962m

-30.6%

EBITDA

€171m

5.8% of consolidated revenue

Operating Margin

-€116m

-3.9% of consolidated revenue

Net Result 

(group share)

-€179m

excluding impairment of assets net of tax

-€404m

after -€267m in impairments of assets

Free Cash-Flow

-€572m

-€157m
before -€415m in change in WCR

Net Debt

€1,410m

Net debt/EBITDA = 2.1

Gearing 78%

Liquidity

€1.9Bn

TOP 10 OEMs

N°1

PSA / 9.5%
of consolidated revenue

N°2

BMW / 8.7%
of consolidated revenue

N°3

DAIMLER / 8.4%
of consolidated revenue

N°4

VOLKSWAGEN / 8.3 %
of consolidated revenue

N°5

AUDI / 8.2%
of consolidated revenue

N°6

GENERAL MOTORS / 7.2%
of consolidated revenue

N°7

FORD / 6.1%
of consolidated revenue

N°8

RENAULT / 6.1%
of consolidated revenue

N°9

CHRYSLER / 4.9%
of consolidated revenue

N°10

JAGUAR LAND ROVER / 4.1%
of consolidated revenue

H1 2020 Economic sales per region

H1 2020 Economic sales per customer

OUTLOOK

In the context of a general recovery in activity, worldwide automotive production remains difficult to predict due to changes in the global health and economic situation.

In the second half of 2020, Plastic Omnium has assumed a 15% drop in worldwide automotive production.

Over 2020 as a whole, worldwide automotive production is now expected to be 64 million vehicles. This assumption does not take account of a possible second wave of Covid-19.

In these market conditions, the Group will continue to lower its breakeven point.
In the second half of 2020, it anticipates:

  • an operating margin of at least 4%;
  • EBITDA of at least 10%;
  • free cash-flow of at least €250 million.

Over 2020 as a whole and depending on the pace of recovery in each key automotive market and the effect of different national and regional measures to support the automotive sector, the Group anticipates:

  • market outperformance of at least 5 points;
  • EBITDA higher than 8% of consolidated revenue;
  • a positive operating margin.

For 2021, Plastic Omnium assumes a slow recovery in worldwide automotive production with 70 million vehicles, compared with 86 million in 2019 and 64 million in 2020. This management assumption, which is well below the 76 million vehicles predicted for 2021 by the main forecasting institutes, will be used to resize the Group’s cost structure.

In this context, the Group is set to outperform worldwide automotive production by at least 5 points. Thanks to this growth combined with the initial effects of the new plan to generate annual savings of €240 million by the end of 2022, Plastic Omnium will significantly improve its results and cash generation over the period.

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