Forvia Hella H1 earnings decline 4.5% as margins narrow

Published 25/07/2025, 06:34
© Reuters

Investing.com -- Forvia Hella (OTC:HLLGY) on Friday reported a 4.5% decline in operating income to €237 million for the first half of fiscal year 2025, down from €248 million in the same period last year. 

Sales totaled €3.98 billion on a reported basis, compared with €4.03 billion a year earlier, reflecting a 1.3% decrease. Adjusted for currency effects, sales declined 0.4% to €4.02 billion.

The company’s operating margin narrowed to 6% from 6.2%. Net cash flow increased 33.6% year over year to €114 million, representing 2.9% of reported sales, up from 2.1%.

Sales in the Electronics business rose 4.0% year over year to €1.7 billion, driven by demand in the radar segment and growth in the Americas and China. 

Operating income in the Electronics segment fell to €121 million from €127 million. The operating margin in that segment declined to 7.0% from 7.6%.

In contrast, sales in the Lighting division dropped 7.3% to €1.9 billion, compared with €2 billion a year ago. 

The decline was attributed to the phase-out of large-volume series projects, with particular weakness in China, the Americas, and Europe. 

Operating income in the Lighting segment was €63 million, slightly below the previous year’s €66 million. The operating margin rose to 3.4% from 3.3%.

The Lifecycle Solutions segment posted a 6.6% decline in sales to €501 million, down from €537 million. 

The decrease was linked to continued reluctance to invest in the commercial vehicle and construction machinery sectors. 

Operating income dropped to €53 million from €63 million. The margin in the segment fell to 10.6% from 11.7%.

Forvia Hella confirmed its full-year 2025 outlook, maintaining expectations for currency-adjusted sales between €7.6 billion and €8 billion and an operating income margin between 5.3% and 6%. Net cash flow is projected to be at least €200 million.

The company said it continues to implement its competitiveness program launched in February 2024 and an initiative called “SIMPLIFY,” aimed at streamlining business structures and reducing costs. 

It expects gross savings of around €80 million annually by the end of 2028 and up to €100 million in implementation costs during the same period.

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