Outlook On Auto Supplier Faurecia SE Revised To Positive On Earnings And Cash Flow Recovery Prospects; Affirmed At 'BB'

Faurecia limited the pandemic-related impacts on its free operating cash flow (FOCF) in 2020 through cost control and tight working capital management as the global auto market progressively rebounded in the second half of the year. We believe that Faurecia is well positioned to grow faster than car production volumes thanks to its solid order book, and that its operating margins will improve, potentially supporting a restoration in its funds from operations (FFO) to debt to pre-pandemic levels of 25%-30% by 2022. We are therefore revising our outlook on Faurecia to positive from stable, and affirming our 'BB' long-term issuer credit rating on Faurecia. We are also affirming our 'BB' issue rating, with a '3' (50%) recovery rating, on Faurecia's

...March 15, 2021 - Faurecia limited the pandemic-related impacts on its free operating cash flow (FOCF) in 2020 through cost control and tight working capital management as the global auto market progressively rebounded in the second half of the year. - We believe that Faurecia is well positioned to grow faster than car production volumes thanks to its solid order book, and that its operating margins will improve, potentially supporting a restoration in its funds from operations (FFO) to debt to pre-pandemic levels of 25%-30% by 2022. - We are therefore revising our outlook on Faurecia to positive from stable, and affirming our '##' long-term issuer credit rating on Faurecia. We are also affirming our '##' issue rating, with a '3' (50%) recovery rating, on Faurecia's unsecured notes. - The positive outlook indicates that we could raise our rating on Faurecia in the next 12-18 months if strong topline growth and operating margin expansion enable the company by 2022 to generate and sustain...

Ratings Action