CONSUMER CYCLICALS: Forvia Guidance Cut; Credit Negative
Ba2/BB/BB+ EUR Spreads Up To 20bp Wider
Presumably not a huge surprise given recent moves in the sector. Release cites continued market challenges in Europe and growth in China delayed to 2025.
• FY24 sales guidance revised to EUR 26.8bn-27.2bn (from lower end of EUR 27.5bn-28.5bn range vs. BBG consensus of EUR 27.3bn).
• Op margin outlook lowered to 5.0%-5.3% (from 5.6%-6.4% vs. BBG consensus of 5.65%).
• Net Cash Flow guidance revised to ≥ EUR 550mn (from ≥ EUR 649mn vs. BBG consensus of EUR 635mn).
• Net Debt/Adj. EBITDA ratio target ≤ 2.0x by YE 2024 (from ≤ 1.9x vs. BBG consensus of 1.9x) , still aiming for <1.5x by YE 2025 (vs. BBG consensus of 1.6x)
• Accelerating EU-FORWARD initiative for cost reduction and efficiency, targeting EUR 400mn synergies by 2025 (up from EUR 350mn).