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Investing.com -- Forvia (EPA:FRVIA) saw its shares soar more than 10% on Monday after the French auto parts maker delivered solid results for the first half (H1) of 2025 despite a tough macro environment, with in-line sales and EBIT ahead of estimates. It also reiterated its outlook for the year.
The company posted H1 sales of €13.48 billion, slightly ahead of the consensus estimate of €13.45 billion. Organic sales rose 1.1%, with product-related growth of 2.9%, led by a 10% year-on-year increase in Electronics and a 4% rise in Seating. These gains offset softer performance in Clean Mobility and Lifecycle Solutions.
EBIT came in at €722 million, above the €697 million consensus, with an operating margin of 5.4%, up 20 basis points from a year earlier.
Net cash flow reached €418 million, more than double the consensus of €191 million. Net debt stood at €6.43 billion, broadly in line with expectations.
"This is a strong set of results from Forvia against a difficult backdrop, with sales in line with cons. & EBIT 4% ahead, driven by momentum in Electronics & Seating, and net cash flow materially ahead, driven by significantly lower capex," Jefferies analyst Vanessa Jeffriess said in a note.
Looking ahead, Forvia reaffirmed its 2025 outlook on Monday, maintaining its target of an operating margin between 5.2% and 6.0% and a minimum net cash flow of €655 million, based on expected sales of €26.3 billion to €27.5 billion at constant exchange rates.
"We enter H2 with a cautiously optimistic sentiment for Forvia but we also remain mindful of short-term risks with call-offs volatility most probably pushed to the right after a more resilient Q2 production environment," Barclays (LON:BARC) analysts said.
That said, they believe Forvia has the necessary internal levers to manage ongoing market volatility, including an expected acceleration in EU-Forward savings during the second half of the year.
The team forecasts a sequential improvement in operating margin in H2 and forecasts a full-year margin of 5.5%, which sits comfortably within the company’s guidance range of 5.2% to 6%.
Forvia posted a net loss of €269 million in the first half of 2025, weighed down by a €136 million impairment tied to its hydrogen joint venture after Stellantis (NYSE:STLA) decided to exit the technology. The result marks a sharp reversal from a small profit a year earlier.
"It’s clear that there’s a major review to be carried out, that we’re trying to work responsibly," Chief Financial Officer Olivier Durand told reporters, adding that the companies involved are exploring potential options for the venture.
New orders totaled €14 billion in the first half, slightly below the €15 billion recorded a year earlier. Still, Forvia maintained its full-year revenue target of €26.3 billion to €27.5 billion.
"A number of tenders were postponed because of uncertainties over certain markets, and we were affected. I expect an improvement in the second half of the year," Durand added.