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Investing.com -- Automotive supplier Forvia (EPA:FRVIA) shares fell more than 6% on Monday despite third-quarter results broadly in line with expectations, as mixed divisional performance and regional headwinds weighed on trading, according to Jefferies.
The automotive supplier posted Q3 FY25 sales of €6.12 billion, slightly above Jefferies’ estimate of €6.04 billion but below the consensus of €6.36 billion.
Organic growth was flat, while product organic growth rose 1.1%, offset by a 3.7% decline in foreign exchange headwinds.
The company underperformed the overall market by 440 basis points, reflecting a negative 130 basis point hit from negative geographical mix, negative 110 basis points from normalization in tooling sales, and negative 200 basis points from volume and mix effects.
Divisionally, Electronics led growth with an 18.6% year-on-year increase, driven by radar systems, battery management, and in-vehicle infotainment across major regions.
Clean Mobility rose 8.7%, benefitting from an accelerated North American market, led by Ford and Stellantis.
Lifecycle Solutions returned to growth at 4.9%, following five quarters of decline, supported by agriculture and commercial truck vehicle demand.
Other divisions faced declines: Seating fell 9.5% due to an unfavorable Chinese customer mix, Interiors dropped 1.4% as tooling sales normalized in the U.S., and Lighting decreased 6.4%, impacted by softer European activity and the phase-out of high-volume programs in China.
Regionally, EMEA posted a 1.8% decline in organic sales, underperforming by 260 basis points, with the Jaguar Land Rover production shutdown and a slowdown in premium brands cited as factors.
The Americas grew 5.8%, outperforming by 110 basis points on strong demand from U.S. and Japanese automakers.
Asia declined 2.7% organically, with China down 7.4% despite national production growth of 9.8%, reflecting shifts away from key customers BYD and Li Auto, partially offset by ramp-ups with Chery.
Jefferies noted underperformance in China is expected to continue into the fourth quarter.
FORVIA continued its EU-Forward initiative, reducing 800 jobs in 3Q25, reaching 60% of the FY28 target.
The company also launched the SIMPLIFY program, aiming to cut SG&A and production overhead costs by €110 million by FY28, while focusing on cost control, cash management, and production flexibility. Disposal processes are progressing rapidly, though no further details were provided.
The company confirmed FY25 guidance, projecting sales between €26.3 billion and €27.5 billion at constant exchange rates, an EBITA margin of 5.2% to 6%, net cash flow of at least €655 million, and a net debt-to-EBITDA ratio of no more than 1.8x at December 2025 on an organic, constant exchange basis.
Despite supply chain risks, management indicated that OEM stoppages have not risen significantly and that volatility can be managed.
Jefferies maintained its “buy” rating ahead of FORVIA’s site visit, noting that higher-margin areas are outperforming peers and that order intake remains on track for the fourth quarter.