Investing.com -- Forvia (EPA:FRVIA) reported strong first-quarter results with revenue of €6.70 billion, up 2.6% year-on-year (2.1% at constant exchange rates), prompting a 6% jump in its share price on Thursday.
The automobile company outperformed global automotive production, which grew 1.3% over the same period, driven by volume, pricing, and product mix gains.
This was partly offset by an unfavorable geographic mix, as production fell sharply in Europe and North America.
In Europe, which accounts for nearly half of group revenue, Forvia posted organic growth of 3.9%, boosted by the launch of Seating programs such as VW’s MQB platform and BMW (ETR:BMWG) X1/X2, along with ramp-ups in Electronics for autonomous driving with Volkswagen (ETR:VOWG_p).
In North America, revenue declined 5.1%, mainly due to a strong comparison base from last year’s tooling-related sales, though Electronics, particularly radar systems for GM, provided some support.
Sales in China rose 2.6%, held back by a 10% drop in business with international carmakers, despite a 20% increase with Chinese OEMs, including BYD (SZ:002594) and Chery.
Forvia expects stronger momentum in China in the second half of the year. Elsewhere in Asia, sales rose 16.4%, driven by demand from Japanese automakers for Electronics systems like surround view and in-vehicle infotainment.
Electronics continued to expand across all major markets, with its share of group orders reaching 40% in the first quarter, compared to 16% of revenue in 2024.
Seating also recorded strong growth, while Interiors tracked the market amid difficult prior-year comparisons.
Clean Mobility posted a slight decline, mainly due to weaker commercial vehicle demand in Europe, and Lighting was hit by the end of a U.S. program.
Forvia confirmed its 2025 full-year guidance, targeting sales between €26.3 billion and €27.5 billion, an operating margin of 5.2% to 6.0%, and net cash flow at or above 2024 levels (€655 million).
The French company also aims to reduce its net debt-to-EBITDA ratio to below 1.8x by year-end, with a goal of bringing it under 1.5x in 2026, supported by asset disposals already underway.
“Restoring our financial structure through robust and structural net cash flow generation and significant asset disposals, is a key objective on my roadmap. Disposal processes are ongoing,” said CEO Martin Fischer.
“These past few months, we have proactively addressed the potential impact of enacted tariffs with agility and determination: securing pass-throughs with our clients, optimizing our supply chain, and maximizing cost flexibility,” Fischer added.