Driven by strong organic growth in Europe, Faurecia’s profitability in the first half of 2016 exceeded expectations encouraging the company to up the earnings guidance for the next quarter.
French car parts supplier raised its full-year guidance on profit and cash generation after reporting a stronger first-half performance in Europe.
European carmakers have been upgrading their European auto market forecasts since the start of the year as the recovery in demand gathers pace.
Faurecia’s operating income rose to 490 million euros ($539.2 million), or 5.1 percent of total sales, over the first six months of the year compared with 384 million euros a year ago.
“Faurecia’s robust profitability in the first half of 2016 … was driven by a strong organic growth in Europe, clearly outperforming automotive production, a profitability breakthrough in North America and robust profitability in Asia,” Chief Executive Patrick Koller said in a statement on Monday.
Faurecia, which is 47 percent owned by French carmaker PSA Peugeot Citroen, said it expected operating margin on total sales of no less than 5 percent, versus its previous guidance of 4.6 to 5 percent.
The company also targeted net cash flow of minimum 300 million euros, compared with its earlier expectation of around 300 million euros.
Faurecia confirmed its guidance on total sales growth in 2016 of 1 to 3 percent.