Oklo stock tumbles as Financial Times scrutinizes valuation
Forvia’s Q3 2025 earnings call revealed steady sales performance despite currency headwinds, with sales reaching €6.1 billion. The company maintained its revenue forecast, but the stock fell 6.99% pre-market due to concerns over currency impacts and automotive production declines. According to InvestingPro analysis, Forvia is currently undervalued, with the stock showing significant volatility and a notable 67% gain over the past six months despite recent pressures.
Key Takeaways
- Forvia’s sales were €6.1 billion, slightly below the forecast due to currency effects.
- Stock dropped by 6.99% following the earnings release.
- Electronics segment showed strong growth with an 18.6% increase in organic sales.
- The company reaffirmed its full-year guidance for 2025.
Company Performance
Forvia’s Q3 2025 performance showed resilience with €6.1 billion in sales, slightly impacted by unfavorable currency exchange rates. The electronics segment was a standout, posting double-digit growth, while the overall product sales increased by 1.1%. Despite these gains, the company faces challenges from a shrinking global automotive market. InvestingPro analysis reveals a weak gross profit margin of 13.5%, though the company maintains a "GOOD" overall financial health rating.
Financial Highlights
- Revenue: €6.1 billion, down 3.7% due to currency effects
- Organic sales: Flat overall, with a 1.1% increase in product sales
- Nine-month sales: €19.6 billion, up 0.8% organically
Market Reaction
Forvia’s stock fell 6.99% in pre-market trading, reflecting investor concerns about currency impacts and declining automotive production forecasts. The stock’s decline is significant compared to its 52-week range, indicating a cautious market sentiment.
Outlook & Guidance
Forvia confirmed its full-year guidance for 2025, aiming for a leverage factor below 1.5% by 2026. The company plans to maintain an order intake between €28-30 billion and has scheduled a Capital Markets Day for February 2026.
Executive Commentary
CEO Martin Fischer emphasized the company’s focus on diversifying its customer base and maintaining a strong position in key segments. CFO Olivier Durand noted expectations for improved performance in the second half of the year.
Risks and Challenges
- Currency fluctuations continue to impact reported sales.
- Global automotive production is expected to decline by 2.8% in Q4.
- Supply chain risks are rising, particularly concerning components from China.
- Market volatility in China, with production slowdowns at major clients like BYD and Li Auto.
Q&A
Analysts raised concerns about potential supply chain disruptions and the impact of a recent fire at Novelis. Forvia’s management outlined mitigation strategies, including sourcing alternative components and redesigning products to adapt to changing market conditions.
Full transcript - Forvia (FRVIA) Q3 2025:
Conference Operator: Good morning. This is the conference operator. Welcome and thank you for joining the Forvia third quarter sales results conference call and webcast. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Martin Fischer, CEO of Forvia. Please go ahead, sir.
Martin Fischer, CEO, Forvia: Thank you very much, and good morning, ladies and gentlemen. Thank you for joining us today for our Q3 2025 sales call, which I’m presenting together with our CFO, Olivier Durand. I’ll start by sharing our third quarter highlights. Olivier will talk you through the details of our Q3 sales, and in the end, I’ll wrap up with our outlook for the full year 2025. By now, you all know the three priorities we have set for ourselves: best-in-class performance, business transformation, and invigorating our culture. They are now firmly embedded in the way we manage internally, and they also determine how we engage externally. I’m very pleased to highlight the progress that we made in Q3. First of all, our best-in-class performance. We operate in an uncertain market. Customer mix volatility in the third quarter added to regional fluctuations already amplified by the tariffs.
Nevertheless, sales proved to be resilient, and it was flat in Q3 and slightly up organically over the first nine months of the year. In such conditions, the focus is ultra-clear. We maintain discipline in operations and launches. We keep tight control of costs and cash, and thereby offset all the market volatility. Thanks to the discipline and despite mounting uncertainties, we are on track to deliver on our 2025 guidance as presented earlier this year. Second, our business transformation is moving forward. Starting with our divestiture program, we have a target to sell additional sizable assets. For those, we have received strong inbound interest from both private equity and strategic players. The divestitures are progressing according to our plan, and at this point in time, we still will not comment on market rumors and any speculations around those.
At the same time, our target business portfolio, which we will present at our CMD in February 2026, will indeed reflect a simplified group structure, focusing on product lines with clear leadership positions and a disciplined approach to capital allocation. Thirdly, let’s come to invigorating our culture. The new division-centric model that I presented during our half-year results call at the end of July is now in place. Also, the Simplify project that optimizes SG&A and indirect costs has resulted in immediate actions. The governance structure is established, and we drive short as well as long-term initiatives under Simplify. Last but not least, there have been further personnel changes in essential functions. Raphael Viard was appointed as CBIO in charge of artificial intelligence, digital, and IT. Second, in order to drive our innovation internally and together with partners, Vanessa Picor was promoted to Chief Technology Officer.
As stated before, we enforce the most important functions of the company that serve our mission. Speaking of technology, our goal is very clear. We positioned the group to lead the transformation of the automotive industry. In the third quarter, we continue to leverage market dynamics. I would like to start with the technology trends. Electronics are at the heart of the transformation. That’s very obvious. This activity keeps growing at a double-digit rate at Forvia. The Q3 growth was majorly driven by radar products and in-vehicle infotainment systems. As a specific product announcement, our new radar generation, ForWave 7, has just received its first award, and it provides good solutions to key environmental data generation for advanced automated driving. Excuse me. Clean mobility is also performing very well in Q3. It benefits from the slowdown in full electrification and the growing shift towards hybrids.
Thanks to our leadership, the business continues to consolidate the market. This is very well illustrated by the recent SOP after taking over ultra-low emissions products from a German OEM’s in-house production. Next one is Seating, and Seating constantly keeps innovating at fantastic speed. We presented the new Zen massage seat at the Shanghai Auto Show. We talked about that in an earlier call. Now it will soon be featured on the LS9, the new six-seat luxury model from IM Motors, which is the joint venture between SAIC and Alibaba. Lighting is moving ahead too. After the success of its flat light rear applications using micro-optics, the team is now bringing it to a front version. In parallel, Lighting also received several awards in Q3, especially in the volume segment. This underlines the scope extension of the Lighting business from technology leadership to mass market penetration.
Let’s move on to the next. In parallel to relying on our strong technological edge, we also pursue our diversification strategy to unlock untapped customer potential. We are happy to supply our Asian customers when they serve global markets. In Europe, we won a new Interiors program with Toyota for an electric vehicle car line. Also, we secured our first Seating order with HKMC outside of Korea, delivering comfort modules both in Europe and in the U.S. The same holds true for our Chinese customers, where we have just signed a letter of intent to extend our partnership with Chery beyond China. In the Chinese market itself, we further broaden our customer portfolio to become more robust against customer mix volatility. Let me give you two examples. Number one, we’ve added a fast-growing EV player from outside the traditional auto industry to our panel.
Number two, Lighting received numerous awards from Geely across several of its brands. Last but not least, India is emerging as a new growth market. After my visit earlier this month, we have re-emphasized the focus on India. We have already booked €500 million in orders this year, mainly in Electronics. We are also now better leveraging our strong engineering presence in India to generate local product sales. You can conclude our direction is very clear. We are becoming a more focused company in our portfolio, and at the same time, we become more diversified in our customers and regions. With that, Olivier, please take over for the Q3 CIO’s details.
Olivier Durand, CFO, Forvia: Thank you, Martin, and good morning to all of you. Let me now take you to the main highlights of Q3 with a focus on the sales evolution, but also our recent financing actions. Regarding sales, as mentioned, the sales reached €6.1 billion in Q3, which is down 3.7% on a reported basis, which is entirely due to currency effects. As in Q2, sales were impacted by the depreciation of the U.S. dollar and the yuan versus the euro, which is the main reason of this Forex headwind. Organic sales were flat overall, with product sales up 1.1%, while tooling sales are normalizing after exceptionally high levels of last year due to a record number of program launches, notably in Interiors. Let me highlight that product sales represent the recurrent evolution of our activity.
For the first nine months, sales totaled €19.6 billion, up 0.8% on an organic basis, i.e., excluding Forex. Regarding Forex impacts, which started in Q2, it is now at €443 million for the year and should continue to weigh on sales in Q4 as well as early Q2 if currencies are following the same trends. Let me highlight that this has a very limited effect on our operating margin as our cost base is essentially local in the three dominant markets: China, Europe, and North America, providing largely a natural edge on currencies. Let me now go through the details of the Q3 sales performance across business groups and regions. I will start with business groups. Electronics remains our strongest growth engine, up 18.6% organically, which is actually the highest growth momentum since the ELA acquisition. Growth was strong across all regions, driven by radars and infotainment systems.
Clean Mobility delivered a solid 8.7% organic growth. Two key drivers behind this evolution. First, the slowdown in electrification, which supported ICE and even more hybrid car production in North America and in Europe. Second, the takeover of an export business from a major European OEM, which is now impacting the sales. Lifecycle Solutions returned to organic growth after five quarters of decline, and we see this positive momentum continuing into Q4. I will turn now to Seating. After a solid first half, the business faced headwinds in Q3. In Europe, sales were hit by soft demand from premium brands, which included some unfavorable timing effects. In China, the growth with Chery was more than offset by lower production at BYD and Li Auto. You know that BYD and Li Auto have reduced production overall in the period. North America has shown modest growth supported by Ford and Stellantis.
Now, moving to Interiors, product sales were up 6.9% organically, with solid momentum in China and North America. Total organic sales of the business group were down 1.4%, which is related to the normalization of tooling sales that I mentioned before. This normalization should continue in Q4 before stabilizing in Q6. Finally, Lighting performance was broadly in line with H1, with programs phased out not yet offset by new launches, especially in China and Europe. The business is rebuilding its program pipeline, and Q3 order intake was encouraging with new wins in the mass market and in China. Now, moving to page nine, we are showing a mixed picture across regions. In North America and in the rest of Asia, i.e., Asia outside China, sales clearly outperformed market production, mainly thanks to the strong contribution from Clean Mobility and Electronics.
In Europe, performance was softer, reflecting lower volumes with premium OEMs and the temporary production stop at GLR. In China, market growth was once again driven by Chinese OEMs, but with some important swings inside. Chery and Geely clearly led the market, and we benefited from the expansion of Chery, but we are less present with Geely. Conversely, BYD and Li Auto registered a significant decline in production, which has weighted in our sales. In this context, we continue to act decisively on what we can control, in particular by enhancing cost flexibility at plant level to protect our performance and manage volatility in China and globally. Let me close now this Q3 overview with a word on our debt profile. Once again, in the third quarter, we have been quite active in the refinancing domain.
We completed around €1.3 billion of refinancing, which means a cumulative year-to-date number of €2.7 billion. As you can see on the chart, this has allowed us to clear most of our 2026 maturities and divide by two our 2027 maturities. We have a debt maturity of 3.6 years now, and we have a much more balanced debt situation from 2027 onwards. At the same time, we have done those actions with broadened funding sources, notably through two U.S. bond issuances, the last one being in September. Those actions solidify our financial profile. With this, I will now hand it over back to you, Martin.
Martin Fischer, CEO, Forvia: Yeah, thanks, Olivier. Looking ahead to year-end, S&P expects global automotive production to fall by 2.8% in the fourth quarter. At the same time, supply chain risks are rising, and we continue to monitor those very closely. In this context, it is utmost important that we remain agile and focus on what we can control. We manage our costs and cash through four key levers. First of all, we flex the production costs to the current volumes, and we reduce our indirect spend. We capture additional benefits from EU Forward, and the number of committed departures in the meanwhile has reached 5,800 positions out of the overall goal of 10,000. You can see the difference from our H1 reported number of 5,000. Furthermore, we deploy immediate actions and prepare the long-term initiatives on the program Simplify.
Last but not least, we maintain our strict CapEx discipline, as it was already displayed in H1. With all that action, we confirm our 2025 guidance as announced at the beginning of the year. I have to say, I look really forward to welcoming you on February 24 next year to first present our full-year 2025 results and then host our Capital Market Day. Forvia is building a simplified and value-creating portfolio, which is designed to make the company stronger and more focused. Thank you very much for listening in, and now we’re happy to take your questions.
Conference Operator: Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. First question is from Jose Asumendi, JPMorgan Chase & Co.
Jose Asumendi, Analyst, JPMorgan Chase & Co.: Good morning, Martin, Olivier. Two questions, please. The first one, can you comment whether you’re seeing some significant production disruption in the fourth quarter from some of the related supply impacts we’re seeing from Novelis or in Europe? Novelis in the U.S., which is more sort of Europe-related. Second, Olivier, can you give us a bit of your thoughts around the second half versus first half, key positives and negatives when it comes to that profit bridge? Thank you.
Martin Fischer, CEO, Forvia: Yeah, morning, Jose, and thanks for the questions. Let me get started on the supplier disruptions. As we speak, there are obviously two that we have a very close eye on. One is after the Novelis fire in the U.S., and the other one is next period and the export limitations that we face from China. Where we stand right now with Novelis, yes, there is going to be impact on the industry in Q4. I think customers like Ford and Stellantis are impacted off that. So far, when we see the call-offs and how the OEMs reconfigure their business to accompany the situation, we would see a not-so-dramatic impact on our sales numbers yet. Consider a couple of $10 million in sales decline, which we very well cover within our guidance, and as we commented also through flexing actions that we take on the impacted operations.
Next period, this is certainly developing as we speak. First of all, yes, we do use next-period components in our products, in the Electronics segment. We are watching very carefully how the political situation unfolds around it. We have made use of our voice to explain to governments on all levels what the implications are. You have seen that from the news as well, that there is diplomatic action happening as we speak. What we do in the meanwhile is we have installed a cross-functional task force that works on all sorts of mitigation measures to ensure supply continuity. Think about it as us buying every chip we can get from the market globally. We also prepare our products for the use of alternative components. These are, I would say, bread-and-butter components, MOSFETs, and so on. We redesign our products to accompany components from alternative vendors.
At the same time, we are in very close contact with our customers. Referring back to the electronics components crisis, we expect that some arbitrage mechanisms will also be facilitated from our OEM customers, such that we can keep up production across the OEMs, as long as somewhat possible. We will have to see how this whole situation in the end develops, and if export from the Chinese side is going to be enabled again. With that, I would hand over for the second question to Olivier.
Olivier Durand, CFO, Forvia: On the profit bridge between first half and second half, I would say the negative element is the volume of activity and the production volume, even though it’s not, in fact, the type of fear that existed at the beginning of the year is expected overall to be a bit lower. This is the case also for us. The Forex is not playing too much because, as mentioned, the cost base in the different jurisdictions is matching the one of the revenues. On the positive side is the action that we are taking in terms of cost. EU Forward is in full speed. Simplify has been launched. Operationally speaking, we expect a better performance in H2 than in H1. This is how we are offsetting, in fact, the variation in volume in the second half.
Martin Fischer, CEO, Forvia: Thank you. Thank you very much.
Conference Operator: Next question is from Christoph Laskawi, Deutsche Bank AG.
Christoph Laskawi, Analyst, Deutsche Bank AG: Good morning. Thank you for taking my questions. I’d like to come back to the next period, situation in Europe, please. Could you comment a bit on where your inventories currently stand? I take your comments as you are currently going to brokers and buying as much volumes as you can. This was the same in the semi-shortage a couple of years back, but it was very costly. Do you already see any cost impact from that? Is there a way to quantify it at this stage? On the product redesign, also, that was part of the problem a couple of years back. I believe you are probably quicker now. How long does it take on average just to redesign the product, start the sourcing? We are at least hearing that the semi-capacity is available.
Can it be done in the timeframe that it needs to be done, before we see bigger production cuts? Last question. I know you said you don’t want to comment on market speculation for any disposals. I’ll slightly phrase it differently. The timeline that you have in mind for disposals, would that timeline allow for Q4 announcement of a deal, or should we be more patient and wait for 2026? Thank you.
Martin Fischer, CEO, Forvia: Yeah, morning, Christoph, and thanks for these very thoughtful questions. Let’s talk next period first. What we do is, we run a really tight ship task force to calculate always where is the reach and how can we improve that. As we know from the semiconductor crisis, this is a highly dynamic process because we will be working with our customers as well. Not only have our demand to the suppliers calculated, but we also will balance that with the demands from our customers to ourselves. If you really want to look at timeframe, this is weeks to months, and it’s a bit hard to give a general answer to that one. We have seen that in the semiconductor crisis as well.
When we come to runouts of components, there’s always a way for the OEM to help between the suppliers as well to really get to build the maximum number of vehicles. I expect this to happen as well if that situation around next period shipments from China persists. On the cost side, that’s certainly by far too early to say what are going to be the implications. Those purchases we have been doing are not going to move the needle in the bigger picture of our annual results. That’s why we are very clear that we stick to our annual guidance. Last but not least, to the redesign question, that’s a very good one too. It depends a bit on the product type, how long it’s going to take to redesign. I would say the more safety-critical a product is, the longer it will take to redesign.
Not that it is part of the Forvia portfolio, but if some of our peers have an airbag ECU, that is highly safety relevant. There, the qualification, the validation requirements are really high. I would say you can really expect months and months for that to take place. On the other hand, if we have a MOSFET sitting in a radio that is by no means any safety relevant, we have an easier time and also an easier validation of an alternative part. Depending on the readiness and the pressure that we all see, this can be done within weeks, in fact. I hope that gives you a little bit of a feel on what the mitigation actions can be around next period. To your second question, how about timeline for disposals? We fully remain committed to our leverage factor going below 1.5% by the end of 2026.
That’s the timeframe within I want to look at these disposals. We are moving at high speed through the processes. As I said before, we are not going to put ourselves under time pressure with concluding negotiations of such transactions.
Christoph Laskawi, Analyst, Deutsche Bank AG: Very helpful. Thank you.
Conference Operator: Next question is from Thomas Besson, Kepler Cheuvreux.
Thank you very much. Three questions, please. First, to come back on these potential disruptions, can you talk about your, what is usually your six-week visibility, your call-offs? Do you see any impact already, as the situation actually started already a few weeks ago, or do you see things operating normally? Can you add a comment as well on the GLR ramp-up, which I think is probably a third smaller disruption? Second, you mentioned the transfer of an exhaust business from one of your German customers to you. Could you explain what it is exactly, the revenues impact, and whether this was treated as an organic revenue element or not in the quarter and year to date? Can you give the revenue impact, please, for expected for 2025? Lastly, can you help us understand the gap between your electronics revenue growth and the electronics revenue growth at Hella?
Because yours is substantially higher, which seems to imply that Clarion had kind of a really, really, really strong rate. Or am I missing something? Thank you.
Martin Fischer, CEO, Forvia: Yeah, Thomas, good morning. Thanks for the three questions. Your second question did not come across quite clear in the beginning. You were asking for some revenue impact. Could you better specify? Sorry, I was interrupted here.
Sure. No problem. You mentioned in your, sorry, I have a cold, so my voice is not very easy to understand today. You said in the presentation that you integrated one of your clients’ exhaust business in the quarter. Could you indicate what the revenue impacts from that transfer, what the revenue impact year to date, and whether this was considered to be organic or whether this is considered to be inorganic?
Okay. Good. Let me start with the disruptions and the six-week visibility. That one is obviously, again, a very multifaceted answer or question. It all depends on how the global supply chain works. There is one view that we have on our own supply, but then we depend on all the others who supply electronics control units that have or used to have next-tier parts into the vehicle. So far, we have not received any feedback on stoppages, but that is really to be watched day by day. I cannot give you any better outlook now for the next six weeks yet. For the electronics revenue growth, you clearly mentioned the mix that you could conclude from the Hella publication and then the total segment figure that you presented. Yes, we did have a very strong quarter, obviously, on the Clarion Electronics sites with its infotainment devices.
Clarion in Q3 was basically growing 31% year over year, and the Hella Electronics site was 14%, making for that mixed number that you saw.
Olivier Durand, CFO, Forvia: Yeah, I think a little bit about, I think we had also a question on GLR and about the exhaust development. On GLR, GLR is a very small customer for us. I think it’s around $20 million a month. You can derive. In September, we had, I think, half a month impact in our sales from the cybersecurity attack on GLR. On the exhaust, yes, we have the start of this impact of the transfer of the in-house activity from one European OEM. This is part of our organic number. I think on the full-year basis, it’s, in fact, it’s a two-digit number. It’s $70 million, $80 million, if I’m not mistaken. Part of it, part of it this quarter, but this is part of our organic number. Let me highlight that in clean mobility, we have also the U.S.
development, which is with the evolution, or I would say even the reverse of the electrification, meaning that clean mobility in North America will have a further development in the coming quarters.
Thank you very much.
Conference Operator: Next question is from Vanessa Picor. Please go ahead.
Vanessa Picor, Analyst/Participant: Good morning. Just in one on China. We’ve obviously gone this year from expecting outperformance in the second half to then quite significant underperformance. I understand the customer mix, but maybe you could help us out with how you’re thinking about that relative performance in the fourth quarter given overall production will be tougher. Secondly, maybe if you can just speak generally about your order intake given this lower activity you saw in the first half and how that’s been in the third quarter.
Martin Fischer, CEO, Forvia: Yeah, good morning, Vanessa. Happy to answer those two questions. In fact, Q3 and we expect also Q4 is basically impacted by that mix change. You see the numbers from the market. You see the numbers from S&P as well. BYD, our biggest account with the Chinese OEMs, has slowed down year over year rather than growing. You have seen vehicle level announcements of more than 5 million for the full year 2025 from BYD. The more recent announcements are pointing in the direction of 4.5 million. You can see what that means. The second one that has slowed down significantly is Li Auto, also a strong customer of ours. They always had a really strong stand in the market through their plug-in hybrids, the range extenders. We now see that other OEMs catch up in that technology.
At the same time, Li Auto is just transitioning now into fully electric vehicles that are just starting to kick in. Those two customers were a setback for us. The winners in the market were, for instance, the Geely Group, where we are present but only with a minor sales share. That is pretty much the effect you could see. We expect that to also go into Q4. At the same time, you know how dynamic the Chinese market is and how pricing policy changes, for instance, between the various OEMs can also impact the mix. What we have been doing over there is clearly adjust our tubes, our cost situation in the impacted plants. We want to flex very well in order to sustain bottom line and cash. That’s why we are reconfirming our guidance for the full year. That works well.
On the order intake, I’m happy to report that we are on track to make the $28 billion to $30 billion this year. We had announced the $14 billion by H1. It’s pretty much on the same slope. Through my comments, I gave you a couple of highlights where I say there’s really strategic differentiation or strategic variety now in our order intake. We want to grow in areas where, with our current technology, we can still win sales. You saw that being true for India. We extend with the Japanese and the Korean customers globally. Again, we are also diversifying our customer base in China in order to protect from this kind of volatility that we’re seeing right now as an impact.
Conference Operator: Thank you. Next question is from Stephen Benhamou.
Yes, good morning. A question about China, please. Could you comment on whether you are actually seeing already some impacts from the Chinese government’s initiative to reduce the payment terms, or to shorten the payment terms, I should say, or from OEMs to their suppliers to bring down to 60 days? Thank you.
Martin Fischer, CEO, Forvia: Nice to you. So far, I would say on an average, we do business as usual. I could not comment that payment terms significantly change in one or the other direction.
Do you have any expectation of the timeline when the government’s initiative will be enacted by the OEMs?
No, I cannot speak to that really. What is important for us is that we live over there in a sound system where payment terms that are agreed between our customers and ourselves are also being mirrored on our supply side. By no means do we want to hold between different terms. That’s our way of dealing with the situation. We will stay tuned and see if there’s any change going to come.
Thank you very much.
Conference Operator: For any further questions, please press star and one on your telephone. Gentlemen, we have no more questions from the conference call.
Martin Fischer, CEO, Forvia: I want to thank all the participants and want to thank you for those specifically very good questions this morning. You see that we keep pushing forward in our three priorities: performance, transformation, and culture. This will make for our results in H2 as well. I look forward again to seeing you all on the 24th of February for our CND and obviously the full-year results at that time as well. Thank you very much and have a wonderful day.
Olivier Durand, CFO, Forvia: Good day.
Conference Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.
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