Faurecia says Europe to weigh on profits
PARIS (Reuters) - French auto-parts maker Faurecia (EPED.PA) announced 3,000 European job cuts and lowered its medium-term earnings target, hit by a European auto market slump it said would erode sales in the region for the next five years.
The company, 57.4 percent-owned by PSA Peugeot Citroen, will eliminate 1,500 jobs by year-end and a further 1,500 in 2013, a spokesman said on Monday, adding that the cuts have yet to be announced to unions.
Faurecia said restructuring charges for 2012-2013 would amount to a combined 190 million euros ($242 million). The company employs some 96,700 workers worldwide, of whom 55,800 are in Europe and 14,300 in France.
The total number of planned job cuts was confirmed after the company, which supplies car seats, exhausts and plastic parts to carmakers including Volkswagen (VOWG_p.DE), postponed a 5 percent operating margin goal from 2014 to 2016.
The target downgrade reflects a "new European context with a very weak environment", Faurecia said in a London investor presentation. The margin was 4 percent last year.
Faurecia shares rose 2.6 percent to close at 11.78 euros in Paris after the presentation, paring its decline so far this year to 22 percent.
European product sales will edge down to 7.6 billion euros in 2016 from 7.7 billion last year, Faurecia said, while fixed-cost savings from the cutbacks will amount to 50 million euros next year and double in 2014.
The company, based in the Paris suburb of Nanterre, is pushing an expansion in North America, Asia and emerging markets such as Russia to compensate for the European slump.
Faurecia predicted that North American sales would rise 65 percent to 4.3 billion euros over the five years to 2016 as Chinese business almost triples to 2.6 billion.
The group forecast group revenue of 22 billion euros in 2016, of which 55 percent would come from outside Europe.
It targeted net debt below 50 percent of earnings before interest, tax, depreciation and amortization in the same year.
($1 = 0.7868 euros)
(Reporting by Laurence Frost; Editing by James Regan)