Feb 24 (Reuters) - France-based car parts supplier Forvia expects its sales to fall in 2026, reflecting declines across all major regions where it operates. Forvia, which supplies parts to Stellantis,
Forvia Streamlines Portfolio to Enhance Growth and Reduce Debt
By Mathias de Rozario and Gilles Guillaume
Feb 24 (Reuters) - French-based car parts supplier Forvia aims to simplify its portfolio to drive growth, cash generation and reduce debt by 2028, it said on Tuesday, as it forecast lower sales over the next few years but higher margins.
Forvia's Strategic Portfolio Simplification
Forvia, which supplies parts to Stellantis, Volkswagen and Ford, is in advanced negotiations with several parties to divest its interiors business, as part of an ongoing push to trim its portfolio, it said.
"The period from (2025) to 28, is about focus and strength. Focus means that we simplify our portfolio, we strengthen execution, we improve profitability and cash generation," CEO Martin Fischer said in a call with journalists.
Forvia said it expects annual sales to fall to 21 billion-22 billion euros ($24.7 billion-$25.9 billion) by 2028 including potential divestitures, while its operating margin will rise to at least 7% of sales.
Market Reaction and Growth Projections
Forvia shares rose 2.5% by 0815 GMT.
The group also sees the organic compound annual growth rate at or above 2% in 2028 and at or above 12% and 4% for the Electronics and Seating businesses respectively, after 2028.
In addition to these businesses which the group called "the Growth cluster", it expects its four other businesses, its "Value cluster", to drive performance and cash generation.
Debt Reduction and Financial Strategy
Forvia said it had net debt of 6 billion euros at the end of 2025.
Divestiture of the interiors business, expected this year, will reduce the group's net debt by more than 1 billion euros, Chief Financial Officer Olivier Durand told the call.
The group expects to reduce its leverage ratio so that its net debt will be 1.2 times EBITDA by 2028, down from 1.7 times in 2025.
Forvia expects annual sales of between 20 billion and 21 billion euros this year, down from 26.2 billion euros in 2025, but sees its operating margin rising to between 6% and 6.5% from 5.6% last year.
Its outlook is based on estimated worldwide automotive production of 92.8 million light vehicles this year, Forvia said in its earnings statement.
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(Reporting by Mathias de Rozario in Gdansk and Gilles Guillaume in Paris; Editing by Milla Nissi-Prussak, Matt Scuffham and Susan Fenton)
