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Rising results, double-digit growth, record operating margins … None of what was announced by Faurecia and Plastic Omnium this morning was enough to convince the markets.
Faurecia literally plunges 8% around 15h, while Plastic Omnium follows with an amputation of more than 5% of its stock market valuation. These underperformances take almost the entire sector since Valeo drops 3%, Michelin retreats 1.75%, just days before the publication of their half-year results. PSA and Renault are also maltreated since they deviate by 3.21% and 2% respectively. As a reminder, PSA owns 46% of the capital of Faurecia, which explains the strongest impact on its title. The two automakers will also publish their half-year results next week.
Excellent results
However, the two French automotive suppliers announced record half-year results. Faurecia has announced an 11% increase in its turnover (at constant exchange rate) to almost 9 billion euros. Its operating income increased by 11.1% and its operating margin peaked at 7.2% (+0.4 points). This last ratio was one of the weak points of the group led by Patrick Koller and which is getting closer and closer to market standards, where it was half as high a few years ago …
Read also: Stock market: what news of Valeo's match against Faurecia?
At Plastic Omnium, the news is also very good with a turnover up 4.8%, but especially with an operating margin of 10.2% , a figure in the top of the sector basket, and reaching a goal two years ahead. In addition, the family group (a cancellation of action scheduled for July 25 must bring the share of Burelle family to 58% of the capital) anticipates a sharp increase in its turnover in 2019 with the start of 7 factories in the next few months. "We will do better than the goals we had set for 2021", promises Laurent Burelle who displays and badumes his optimism.
Markets fear a bad second half
But the markets do not seem impressed. And it is Faurecia that seems to have given the wrong signal even though it was raising its growth forecasts.
"Faurecia published solid numbers this morning, as we expected. on the rise may seem too cautious to investors, "says Oddo in a note quoted by Reuters.
This morning, the group announced that its turnover would increase by 8% over the entire the year, compared with 7% initially expected. It estimates that its operating margin will reach 7.2% this year, against 7% announced. But for the badysts, these performances are already acquired thanks to the performances of the first semester. They therefore conclude that the second half will be worse …
"No one knows what the impact of the trade war and the various difficulties we will face in the second half of the year will be, and I think that it is important not to overshadow the expected growth over the coming period, "Faurecia CEO Patrick Koller said during a conference call with badysts.
In general, the markets are very feverish about the automotive sector with the accumulation of uncertainties related in particular to geopolitics: it goes from the return of the sanctions against Iran, to the commercial war maintained by Donald Trump. In addition, they have been accustomed by OEMs to perform well above the market by virtue of their new status as technology stocks.
OEMs have yet tried to defuse these fears. Patrick Koller repeated that his "prediction was conservative". For its part, Plastic Omnium recalled that the geography of its production, often close to production sites, largely freed it from exchange rate issues.
It will be necessary to monitor the next half-year results expected next week. Especially those of Valeo, whose title has fallen by more than 23% since January 1st …
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