Bond Faurecia Group 3.125% ( XS1963830002 ) in EUR

Faurecia Group

100 % ▲

France

XS1963830002 ( in EUR )

3.125% per year ( payment 2 times a year)

14/06/2026

Prospectus brochure of the bond Faurecia SA XS1963830002 en EUR 3.125%, maturity 14/06/2026

100 000 EUR

500 000 000 EUR

15/12/2025 ( In 50 days )

Faurecia SA is a French multinational automotive supplier specializing in automotive seating, interiors, and clean mobility solutions.

The Bond issued by Faurecia Group ( France ) , in EUR, with the ISIN code XS1963830002, pays a coupon of 3.125% per year.
The coupons are paid 2 times per year and the Bond maturity is 14/06/2026

EXHIBIT A
This document is not an offer of securities for sale in the United States. The notes being offered by Faurecia (the "2026
Notes") may not be sold in the United States unless they are registered under the Securities Act or are exempt from
registration. The offering of 2026 Notes described in this announcement has not been and will not be registered under the
Securities Act, and accordingly any offer or sale of 2026 Notes may be made only in a transaction exempt from the
registration requirements of the Securities Act.
It may be unlawful to distribute this document in certain jurisdictions. This document is not for distribution in Canada,
Japan or Australia. The information in this document does not constitute an offer of securities for sale in Canada, Japan
or Australia.
Promotion of the 2026 Notes in the United Kingdom is restricted by the Financial Services and Markets Act 2000 (the
"FSMA"), and accordingly, the 2026 Notes are not being promoted to the general public in the United Kingdom. This
announcement is for distribution only to, and is only directed at, persons who (i) have professional experience in matters
relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion)
Order 2005, as amended (the "Financial Promotion Order"), (ii) are persons falling within Article 49(2)(a) to (d) (high
net worth companies, unincorporated associations, etc.) of the Financial Promotion Order, or (iii) are persons to whom
an invitation or inducement to engage in investment activity within the meaning of section 21 of the FSMA in connection
with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such
persons together being referred to as "relevant persons"). This announcement is directed only at relevant persons and
must not be acted on or relied on by anyone who is not a relevant person.
MiFID II professionals/ECPs-only/No PRIIPs KID Manufacturer target market (MIFID II product governance) is
eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document
(KID) has been prepared as the 2026 Notes are not available to retail in EEA.
Neither the content of Faurecia's website nor any website accessible by hyperlinks on Faurecia's website is incorporated
in, or forms part of, this announcement. The distribution of this announcement into jurisdictions other than the United
Kingdom may be restricted by law. Persons into whose possession this announcement comes should inform themselves
about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.
No money, securities or other consideration is being solicited, and, if sent in response to the information contained
herein, no money, securities or other consideration will be accepted.

CERTAIN DEFINITIONS
In this Offering Circular (except as otherwise defined in ``Terms and Conditions of the Notes'', for
purposes of that section only, or in our audited consolidated financial statements, which have been
incorporated by reference into this Offering Circular):
*
References to ``our group'' or the ``Group'' are to Faurecia and its consolidated subsidiaries,
whereas references to ``Faurecia'' or the ``Issuer'' are to Faurecia S.E. References to ``us'', ``we''
or ``our'' are to the Group or to Faurecia, as the context requires;
*
``2023 Notes'' refers to A700 million in principal amount of 3.625% Senior Notes due 2023,
which we issued on 1 April 2016;
*
``2025 Notes'' refers A700 million in principal amount of 2.625% Senior Notes due 2025, which
we issued on 8 March 2018;
*
``Bridge Loan'' means the A500 million loan incurred under the A1,300 million facility agreement
among us as borrower and Cre´dit Agricole Corporate and Investment Bank dated 25 October
2018 which we entered into in order to finance the Clarion Acquisition and to pay related
expenses and transaction costs (the ``Bridge Facility Agreement''). The Bridge Facility Agreement
is a 1-year term loan facility with an option to extend the maturity by up to a year with two
six-month extension options. In December 2018, we entered into a transaction to issue
A700 million in principal amount of Schuldschein (a private placement under German law) in
multiple tranches, which we issued in December 2018 and January 2019 (the ``Schuldschein'').
The receipt of the net proceeds of the issue of the Schuldschein enabled us to reduce the
committed funds available under the Bridge Facility Agreement to A750 million by January
2019. The net proceeds of the Notes being offered hereby will repay the Bridge Loan in full.
*
``Clarion'' refers to Clarion Co, Ltd.;
*
``Clarion Acquisition'' has the meaning ascribed to it in ``Summary Our Competitive Strengths
Attractive underlying market fundamentals Cockpit of the Future'';
*
``CO2'' refers to carbon dioxide;
*
``g'' refers to the unit of mass, ``gram'';
*
``g/km'' refers to grams per kilometer;
*
``HMI'' refers to human-machine interfaces;
*
``Initial Purchasers'' refers to Citigroup Global Markets Limited, Cre´dit Agricole Corporate and
Investment Bank, HSBC Bank plc, Goldman Sachs International, J.P. Morgan Securities plc,
MUFG Securities EMEA plc, Bank of China Limited, London Branch and Bankinter, S.A.;
*
``IVI'' refers to in-vehicle-infotainment;
*
``kg'' refers to the unit of mass, ``kilogram'';
*
``km'' refers to the unit of distance, ``kilometer'';
*
``OEMs'' refers to Original Equipment Manufacturers;
*
``Refinancing'' refers to the issuance of the Notes offered hereby and the use of proceeds
therefrom to repay in full the Bridge Loan;
*
``Senior Credit Agreement'' means the A1,200 million senior credit agreement among us as
borrower and various lenders, dated 15 December 2014 and amended and restated on 24 June
2016 and further amended and restated on 15 June 2018. The Senior Credit Agreement is
composed of a five-year facility maturing in 2023 for an amount of A1,200 million and was
undrawn as at 31 December 2018 and as at the date of this Offering Circular. The facility under
the Senior Credit Agreement is referred to herein as the ``Senior Credit Facility''.
vi

PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Faurecia is the parent company of the Group. This Offering Circular includes audited consolidated
financial statements of Faurecia as at and for the years ended 31 December 2018 and 2017. Our
audited consolidated financial statements as at and for the year ended 31 December 2018,
incorporated by reference herein, also present comparable financial data for the year ended
31 December 2017. Our audited consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (``IFRS'') as adopted by the European Union. Our
audited consolidated financial statements for the year ended 31 December 2018 have been approved
by our Board of Directors on 15 February 2019. Our statutory auditors are PricewaterhouseCoopers
Audit and Ernst & Young Audit. From the date of our next annual general meeting on 28 May
2019, Mazars LLP will replace PricewaterhouseCoopers Audit as part of our standard auditor
rotation policy.
In this Offering Circular, references to ``euro'' and ``E'' refer to the lawful currency of the member
states participating in the third stage of the Economic and Monetary Union under the Treaty
Establishing the European Community, as amended from time to time.
We publish our audited consolidated financial statements in euros. Some financial information in this
Offering Circular has been rounded and, as a result, figures shown as totals in this Offering Circular
may vary slightly from the exact arithmetic aggregation of the figures that precede them.
Constant Basis Presentation and Other Non-IFRS Measures
Figures presented in this Offering Circular are calculated on an actual historical basis and, where
noted, on a constant or ``like-for-like'' basis, which means that comparable items are presented using
a constant consolidation scope but not using constant exchange rates, unless otherwise indicated. The
percent change from one period to another has generally been given on a ``like-for-like'' basis in
order to eliminate the impact of changes in consolidation scope (that is, changes in the entities that
we consolidate in our audited consolidated financial statements due to acquisitions, divestures or
mergers).
For comparison purposes, we restate sales to factor in acquisitions and joint ventures, which we refer
to as ``bolt ons''. Exchange rates are restated only for sales which are reported in a currency other
than euro and where we compare by applying the previous year U.S. dollar/euro exchange rate to
both the previous year and the current year sales. The scope is restated by calculating this year sales
as at the last year perimeter. In our consolidated financial statements as at and for the year ended
31 December 2017, we restated sales to factor in exchange rate fluctuations and changes in perimeter,
which we referred to as organic growth.
In this Offering Circular, we present our estimated order book (calculated on a three-year rolling
basis) as of 31 December 2018, 2017 and 2016. Our order book represents the sales that we expect to
record when we receive firm production orders, under contracts for vehicle programs that we have
been awarded but which are not yet in production. The value of our order book as of any given date
is based on the estimated production volumes of vehicle programs as well as their estimated lifetime.
We discount the production volumes indicated by our customers based on factors including our
management's knowledge of such customer, our historical relationship with such customer and
internal and external industry forecasts. We do not increase the estimated production volumes beyond
those estimated provided to us by our customers.
In this Offering Circular, we present certain information relating to potential synergies which we
believe may result from the Clarion Acquisition. These synergy estimates are based on a number of
assumptions made in reliance on the information available to us and management's judgments based
on such information. We have not included any estimate of the costs required to achieve these EBIT
and cost reduction synergies and the costs we incur in trying to realize these synergies may be
substantially higher than our current estimates and may outweigh any benefit. The assumptions used
in estimating these synergies are inherently uncertain and are subject to a variety of significant
business, economic and competitive risks and uncertainties. We cannot assure you that the
information on which we have based our assumptions will not change or that we will be able to
realize any of the synergies or other benefits we believe are possible from the Clarion Acquisition.
In addition, this Offering Circular includes certain supplemental indicators of performance and
liquidity that we use to monitor our operating performance and debt servicing ability. These
indicators include EBITDA, net cash flow, the value of our order book and, for periods prior to our
vii

implementation of IFRS 15, value added sales (as discussed below). These measures are unaudited
and we are not required to present them under IFRS. Such indicators have limitations as analytical
tools, and investors should not consider them in isolation from, or as a substitute for analysis of,
related indicators derived in accordance with IFRS. We use these non-IFRS financial measures in this
Offering Circular because we believe that they can assist investors in comparing our performance to
that of other companies on a consistent basis. However, our computation of EBITDA, net cash flow,
value added sales and other non-IFRS financial measures may not be comparable to similarly titled
measures of other companies. For example, depreciation and amortization can vary significantly
among companies depending on accounting methods, particularly where acquisitions or non-operating
factors including historical cost bases are involved. We believe that EBITDA, and net cash flow,
order book and the other non-IFRS financial measures, as we define them, are also useful because
they enable investors to understand our performance over time, without the impact of various items
that we believe do not durably affect our operating performance. However, investors should not
consider these measures as alternatives to measures of financial performance, operating results or cash
flows that are determined in accordance with IFRS.
Restatement of Comparative Financial Statements
Application of IFRS 15 Revenue from Contracts with Customers
We have adopted IFRS 15 (Revenue from Contracts with Customers) with effect from 1 January 2018.
Our consolidated financial statements as at and for the year ended 31 December 2018 (``2018
Consolidated Financial Statements''), including ``sales'', therefore reflect the adoption of IFRS 15. As
our application of IFRS 15 is retrospective, the consolidated financial figures as at and for the year
ended 31 December 2017 which are included in our 2018 Consolidated Financial Statements for
comparison purposes (``2017 Comparative Consolidated Financial Information'') have been restated to
reflect the application of IFRS 15. Financial information which is presented in this Offering Circular
as at and for the year ended 31 December 2017 has been extracted from the 2017 Comparative
Consolidated Financial Information, and is presented as `Restated'.
We have set out at note 1.B to our 2018 Consolidated Financial Statements additional information
relating to the adoption of IFRS 15, including tables setting out our consolidated statement of
comprehensive income, consolidated balance sheet and consolidated cash flow statement as at and for
the year ended 31 December 2017 showing the adjustments made as a result of the application of
IFRS 15. We have also set out at note 1.7 to the Business Review section which is contained in our
2018 Annual Results (as defined below) (and incorporated by reference into this Offering Circular)
further information showing the reconciliation of sales and operating income as a result of the
adoption of IFRS 15 for each of our business groups and regions as at and for the year ended
31 December 2017. See note 1.B to our 2018 Consolidated Financial Statements and note 1.7 of the
Business Review section of our 2018 Annual Results for further information.
We have not restated our consolidated financial statements as at and for the year ended 31 December
2016 or for any period prior to that date to reflect the adoption of IFRS 15 and therefore financial
information presented in this Offering Circular in respect of such dates or periods may not be directly
comparable to financial information extracted from our 2018 Consolidated Financial Statements or
our 2017 Comparative Consolidated Financial Information.
Prior to the adoption of IFRS 15, we reported ``total sales'' and ``value added sales'' in our audited
consolidated financial statements both for the Group and by operating segment. Total sales consisted
of sales of automotive parts and components to customers, or product sales, sales of tooling, research
and development (``R&D''), prototypes and other services and sales of catalytic converter monoliths.
Value added sales consisted of our total sales excluding sales of catalytic converter monoliths.
Catalytic converter monoliths are a pre-packaged raw material component for catalytic converters,
which are chosen by customers and sold on a ``pass-through'' basis with no mark-up. There was no
difference between value added sales and total sales for our Faurecia Interiors and Faurecia Seating
business groups. Following the adoption of IFRS 15, we report ``sales'' and no longer report ``total
sales'' or ``value added sales'', with operating margins calculated as a percentage of ``sales''.
We have included in this Offering Circular certain financial information in relation to Clarion
including, in particular, Clarion's consolidated revenues, operating income and net income for the
years ended 31 March 2018 and 31 March 2017. The financial data relating to Clarion has been
extracted or derived from Clarion's published audited consolidated financial statements as at and for
the year ended 31 March 2018. Accordingly, our auditors have not audited, reviewed or performed
any procedures with respect to this financial data. We confirm that financial data relating to Clarion
viii

has been accurately reproduced and that as far as we are aware and are able to ascertain from
information published by Clarion, no facts have been omitted which would render the reproduced
information inaccurate or misleading.
ix

SUMMARY
The following summary highlights selected information contained elsewhere in this Offering Circular.
Accordingly, this summary may not contain all of the information that may be important to you. We
urge you to carefully read and review this Offering Circular in full, including the documents incorporated
by reference herein, in order to fully understand the Group. You should also read the ``Risk Factors''
section in this Offering Circular to determine whether an investment in the Notes is appropriate for you.
Our Company
We are one of the world's largest automotive equipment suppliers. We develop, manufacture and sell
high-quality and highly-engineered products and we operate through three business groups: Faurecia
Seating, Faurecia Interiors and Faurecia Clean Mobility. We are adapting our business and aligning
our strategy to take advantage of the significant trends impacting the automotive industry. As a
result, we are developing into a technology company which provides solutions for sustainable mobility
and cockpit systems. We have become one of the top 10 automotive technology suppliers in the
world by revenue. Our acquisition of Clarion will provide us with critical mass as a leading player in
cockpit electronic systems and software integration. Following our acquisition of Clarion, we intend
to establish a fourth business group, Faurecia Clarion Electronics, with its head office in Japan. This
new business group will incorporate our subsidiaries, Parrot Automotive SAS (``Parrot Automotive''),
a leader in automotive connectivity and infotainment, and Jiangxi Coagent Electronics Co Ltd.
(``Jiangxi Coagent Electronics''), which develops human-machine interfaces (``HMI'') and in-vehicle-
infotainment (``IVI''), including displays, voice recognition and smartphone applications. Faurecia
Clarion Electronics will focus on manufacturing and developing products which advance our ``Cockpit
of the Future'' strategy, in particular, cockpit integrations systems and our cockpit intelligence
platform (``CIP''). We estimate that at least one third of vehicles in service in the world were
originally equipped with at least one product manufactured by us.
Faurecia Seating. We are a global leader in seating solutions and we estimate we are currently the
world's leading supplier of seat frames and mechanisms and number three supplier of complete seats.
We design and manufacture seat systems, as well as components: frames, mechanisms, foam, seat
covers, electronic systems, mechatronics and pneumatics. During the manufacturing process, we
assemble the various components to create complete systems, front seats and rear seats, delivered on
a just-in-time basis to our customers' plants. We develop solutions for the Cockpit of the Future with
an emphasis on advanced safety, comfort, health and wellbeing, quality and versatility. In 2018, sales
reached A7,438.0 million (43% of sales).
Faurecia Interiors. We estimate we are currently one of the two global leaders in the supply of
automotive interior systems. We manufacture cockpit modules (instrument panels and central
consoles), door panels, as well as smart surfaces and solutions for HMI, personalized cabin climate
comfort and air quality. Our solutions incorporate the use of natural and recycled materials. In 2018,
sales reached A5,471.7 million (31% of sales).
Faurecia Clean Mobility. We are a global leader in clean mobility solutions. We develop and
manufacture innovative solutions for reducing emissions (including zero emissions solutions) and
improving energy efficiency, acoustic performance and powertrain electrification. We estimate that we
are currently the world's leading supplier of exhaust systems and components (including mufflers,
manifolds, particulate filters and catalytic converters). We develop and manufacture complete exhaust
systems, including components reducing emissions as well as components for exhaust system acoustics.
In 2018, sales reached A4,615.0 million (26% of sales).
We are undertaking a significant transformation in our business and strategy to enable us to seize
new opportunities in a rapidly changing automotive industry. Our strategy seeks to accelerate
profitable growth by developing higher value and innovative products in response to the significant
global trends impacting the automotive sector. These global trends include, in particular, CO2 and
emissions regulation, the increasing electrification, connectedness, autonomy of vehicles and the
emergence of ride-sharing. We refer to our strategic priorities in these areas as ``Sustainable Mobility''
and ``Cockpit of the Future''. Even though growth in the Chinese market slowed down in the second
half of 2018, we believe that the Asian markets represent a significant source of growth potential and
high profitability. Our strategy is therefore to continue to expand our portfolio in China with our
current customers and strengthen our relationship with major Chinese automakers to accelerate our
business activity. In 2018, we concluded two new joint ventures with FAW Group and Wuling
Industry to develop Cockpit of the Future technologies and Sustainable Mobility solutions. Our
1

current target is to achieve 40% of our sales in China with Chinese Original Equipment
Manufacturers (``OEMs'') by 2020.
In order to accelerate the development and integration of new products, technology and services, we
have developed a collaborative approach to innovation which we refer to as our innovation
ecosystem. Our innovation ecosystem has four principal aspects:
(i)
strategic and technology partnerships with key parties in different industrial and technology
sectors, in particular, with HELLA GmbH & Co. KGaA (``HELLA'') on lighting and
electronics, ZF Friedrichshafen AG (``ZF'') for advanced safety, Mahle GmbH (``Mahle'') for
thermal comfort, Stelia Composites for fuel cell tanks and Accenture PLC (``Accenture'') for
data analytics;
(ii)
academic partnerships with universities and scientific institutions such as Massachusetts Institute
of Technology (MIT), Stanford University and the Colle`ge de France, as well as with technical
universities;
(iii) investments in start-ups through Faurecia Ventures; and
(iv)
technology platforms to collaborate with local start-ups.
We operate 35 research and development centers worldwide and employ approximately 7,300
engineers.
We have introduced digital technology to improve operational efficiency and transform working
practices in our production facilities. In 2017, we deployed digital management tools as part of our
Digital Enterprise strategy, including real-time information sharing, collaborative robots and
autonomous guided vehicles, to optimize assembly automation, quality control and production
efficiency. By the end of 2018, over 550 collaborative robots and 800 automated guided vehicles had
been installed at Faurecia production sites. More than a hundred of our factories have digital
production dashboards, allowing real-time information sharing on the operation of production lines.
Over 300 machines are connected to a data pool allowing monitoring and easing predictive
maintenance.
We maintain close relationships with almost all of the world's leading car manufacturers and work
closely with customers to develop the design and functionality of our products. Each of Ford,
Volkswagen, the Renault-Nissan-Mitsubishi group, the PSA Peugeot Citroe¨n group and Fiat Chrysler
accounted for more than A1.0 billion of our sales in 2018. We have a broad geographic footprint, and
are one of the few automotive equipment suppliers with the capacity to supply automakers' global
programs where the same car model is produced throughout several regions. We have experienced
significant growth in Asia with sales increasing from approximately 5.9% of total sales in 2008 to 19%
of sales in 2018.
We are involved in all stages of the automotive equipment development and supply process. We
design and manufacture automotive equipment adapted to each new car model or platform, and
conclude contracts to provide these products throughout the anticipated life of the model or platform
(usually between five and ten years). Our customers rely increasingly on global platforms, based upon
which they will produce a variety of car models. This allows us to decrease costs through a greater
commonality of components, and to benefit from components or modules which can be used in more
than one generation of cars. We participate in this evolution by offering generic products associated
with our customers' platforms, such as standard seats frames. At the end of 2018, we had over 700
programs in the development phase and, in 2018, we successfully launched over 220 programs,
including for vehicles such as the Peugeot 508, Dodge RAM 150, Nissan Altima and Ford Focus. In
addition, we tend to benefit from a high renewal rate of our programs (91.7% in 2018).
The quality of our products is widely acknowledged among automakers. We ensure the quality of our
products through our Faurecia Excellence System, a rigorous set of project management procedures
and methodologies, and by the expertise of our engineers and technicians who design products and
develop technological solutions. In 2018, we launched our Total Customer Satisfaction program to
collect customer feedback in real-time digitally through an application. As a result, for the six months
ended 31 December 2018, our customers rejected less than 15 defective parts per million parts
delivered, below the target set by the Group. The Faurecia Excellence System, renamed ``FES X.0'',
was updated in 2018 to make it more pragmatic and accessible to employees as well as to accelerate
digitization. FES X.0 is being deployed during 2019 and will be an important contributor to our
Total Customer Satisfaction program and our financial performance.
2

We proactively maintain very close relationships with our customers and seek to be their strategic
suppliers. Among others, we reached the following milestones in 2018 and 2017:
*
being awarded a record contract for our seating business by the BMW Group, which was the
highest single order intake ever for us in terms of sales volume;
*
being recognized with two German Innovation Awards for our ``Morphing Instrument Panel''
and ``Immersive Sound Experience'', two of our Cockpit of the Future solutions, in 2018;
*
being recognized with the Innovation award at the 2018 Groupe Renault Suppliers event, for
our innovative concept for future vehicle interiors;
*
being recognized with the EcoVadis Sustainable Procurement Leadership Award for the global
excellence of our ``Buy Beyond'' sustainable procurement program in 2018;
*
being awarded first prize in the Environment category for our exhaust heat recovery system
(``EHRS'') at the Auto-Moto Innovation Awards in 2017;
*
being recognized at the JEC World 2017 Innovation Awards with two awards for our
Lightweight Solutions;
*
being recognized with over 40 awards for quality and operational performance in 2017, many of
which were awarded by Chinese Original Equipment Manufacturers;
*
being recognized ``Best supplier'' and being awarded with the ``5 star quality'' award by
Hyundai Kia in 2017;
*
being part of the 44 suppliers selected by Volkswagen as strategic partners, in their FAST
(``Future Automotive Supply Tracks'') corporate initiative;
*
being a member of the ``Supplier Councils'' for Ford, the PSA Peugeot Citroe¨n group and Fiat
Chrysler; and
*
being awarded with a Supplier Diversity and Inclusion Award by Ford Europe in 2017.
For the year ended 31 December 2018, our sales amounted to A17,524.7 million compared to
A16,962.1
million
in
2017
and
our
EBITDA
amounted
to
A2,140.6
million
compared
to
A1,950.9 million in 2017. As at 31 December 2018, we employed around 114,693 people (including
temporary workers) in 37 countries, spread over approximately 320 sites.
For the year ended 31 December 2018, our order book for sales (calculated over a three-year rolling
basis) was A63 billion, a record level for us, compared to A62 billion at the end of 2017 and
A53 billion at the end of 2016. We refer to the opportunities to develop products and services to meet
our strategic priorities of Smart Mobility and Cockpit of the Future as ``New Value Spaces''. In
2018, our order intake for sales in New Value Spaces represented A2.7 billion of which commercial
vehicles and high horsepower engines represented A1.2 billion of orders and Cockpit of the Future
represented A1.5 billion of orders.
Our Competitive Strengths
Leading market positions in our business groups
Based on our estimates, we have leading market positions in each of our three business groups. In
2018, we estimate that we were, globally, a leader in seating solutions and the leading supplier of
frames and mechanisms for seats, the number three supplier of complete seats, one of the two leading
suppliers of interior systems and the leading supplier of clean mobility solutions. In 2018, our
business groups achieved the following results:
*
Faurecia Seating's sales reached A7,438.0 million (43% of sales). We believe that in 2018 we had
a 11.4% global market share by value;
*
Faurecia Interiors' sales reached A5,471.7 million (31% of sales). We believe that in 2018 we had
a 13.0% global market share by value; and
*
Faurecia Clean Mobility's sales reached A4,615.0 million (26% of sales). We believe that in 2018
we had a 32.7% global market share by value.
Our market leadership in each business group and our global platforms are significant strategic
advantages as customers typically look to well-established suppliers when awarding new business. This
has allowed us in recent years to win new business from both existing and new customers. For
instance, we entered into a partnership with Cummins, a leading manufacturer of medium and heavy-
duty engines for on and off-highway commercial vehicles.
3

This partnership provides significant new opportunities for our Clean Mobility business group in the
commercial vehicle market to take advantage of global regulatory pressure to reduce carbon footprint
and toxic emissions. We also benefit from sales visibility and stability, due to the difficulty for
automakers to change suppliers in the midst of development and production of a car model, and
from a high renewal rate of our programs (91.7% in 2018). We believe that our leading market share
in each of our business groups positions us well for future growth, allows us to negotiate favorable
terms from our suppliers and to further diversify our business model.
Highly diversified business model
We believe that the high degree of diversification through our business groups, our geographic
presence, and our number of customers and range of products limits our exposure to adverse changes
in the global or local economic environment and in the various end-markets we serve, while
simultaneously mitigating counterparty risk. This high degree of diversification in turn supports the
resilience of our sales and our profitability.
The following charts show our sales in 2018 by region, business group and customer.
Sales by region
Sales by business group
(2018)
(2018)
South
Rest of
America
World 1%
Clean
4%
Mobility
26%
Asia
19%
Seating
Europe
43%
51%
25%
31%
North
Interiors
America
Sales by customer
(2018)
Others
CVE
VW
Chinese OEMs
3% 9%
19%
4%
Daimler
5%
BMW
5%
Ford
16%
5%
GM
7%
FCA
14%
13%
Renault-
PSA
Nissan
In recent years we have further increased our customer diversification. In 2018, our two largest
customers accounted for 34.8% of sales compared to approximately 48% of total sales in 2008. We
also further increased our geographic diversification by increasing the share of our Asian sales. In
2018, sales in Europe, North America and Asia were 51%, 25% and 19% of sales, respectively
compared to approximately 74.4%, 14.8% and 5.9% of total sales, respectively, in 2008. This increased
diversification reduces our exposure to a single geographic area, end-market, automaker or car model.
We benefit from a global customer base. Although Japanese and South Korean automakers tend to
use their own network of suppliers, we managed to become a supplier to Nissan and Hyundai. We
are present on most market segments, from entry-level models to premium and luxury cars, which
make us less vulnerable to the parameters which may affect one particular segment.
4

Attractive underlying market fundamentals
We are undertaking a significant transformation in our business and strategy to enable us to take
advantage of the major trends impacting the automotive industry. In particular, CO2 and other
emissions regulation, the increasing electrification, connectedness and autonomy of vehicles and the
emergence of ride-sharing. As a result, we are developing into a technology company which provides
solutions for sustainable mobility and cockpit systems. We believe that our global footprint and
technological leadership enable us to benefit from attractive underlying market fundamentals.
Sustainable Mobility
Social and political pressures on the automotive industry to reduce emissions have never been higher.
Regulatory changes which seek to reduce the impact of automobiles on the environment and the
increasing demand for electrified vehicles, have had, and will continue to have, a significant impact in
our markets. This creates significant business opportunities for us and we have made sustainable
mobility a strategic priority.
For example, in 2018 the European Commission confirmed its drastic tightening of average CO2
targets. The current requirement for passenger vehicles is 95g/km CO2 by 2020. The next requirement
will be a reduction of 15% to around 80g/km CO2 by 2025. In China, the government has set a
target of 90g/km CO2 for passenger vehicles by 2025 and certain cities and provinces have also
introduced emissions regulations which require passenger vehicles to reduce particulate matter ahead
of national regulations. India is also implementing stricter CO2 targets for passenger vehicles of
around 110 g/km CO2 by 2022, a reduction of 15% from current requirements. In February 2019, the
European Commission also proposed stricter CO2 requirements for commercial vehicles with
reductions from current levels of 15% by 2025 and 30% by 2030. We also expect stricter emissions
regulations for commercial vehicles in China and India.
Our strategic roadmap for Sustainable Mobility focuses on the following three areas:
*
developing innovative solutions for hybrid vehicles that improve fuel economy, such as exhaust
heat recovery solutions and lightweighting;
*
developing ultra-clean solutions for commercial vehicles and high horsepower engines, and;
*
developing solutions for zero emissions, in particular fuel cell technology and battery housing
sub-systems and modules.
For example, on hybrid vehicles, we developed our exhaust heat recovery system (``EHRS''), which
reduces fuel consumption by up to 7% by recovering heat produced by drivetrains and lost through
the vehicle exhaust system and using the recovered heat to maintain appropriate engine temperature
and heat the cabin, which is particularly important in hybrid vehicles. We also developed our electric
heated catalyst (``EHC'') technology to minimize the emission of pollutants from internal combustion
engines in order to bring vehicles in line with more stringent new emissions regulations. We expect
increasing regulation to reduce emissions, which will drive the demand for our clean mobility
solutions and significantly increase the overall value of our exhaust line.
For zero emissions vehicles (that is, pure electric vehicles), we developed lightweight battery housing
with integrated battery thermal management. We have also developed lightweight hydrogen tanks and
stacks for fuel cell vehicles, which we regard as a credible alternative for zero emissions vehicles such
as long range SUV vehicles or commercial vehicle application.
The market for emissions purification systems for high horsepower engines also presents significant
business opportunities. High horsepower engines are used in marine propulsion, power generation,
rail, agricultural and other industries. Hug Engineering, which we acquired in 2018, is a leader in gas
purification systems for high horsepower engines. We believe that it is well positioned to capitalize on
opportunities which will arise as a result of the enforcement of new environmental regulations which
are expected to cover over 75% of the global market for high horsepower engines by 2030.
Cockpit of the Future
The increasing connectedness and autonomy of vehicles, as well as the significant potential growth in
``shared mobility'' such as ride-hailing or car-pooling, will radically alter the driving experience and as
a consequence vehicle seating and interiors. Customers' expectations for infotainment are increasing
and autonomous vehicles will allow the driver to engage in activities not previously possible while
driving, such as relaxing, working and socializing. Users of shared mobility will expect more
personalized interiors and digital continuity in vehicles. As a result, vehicle seating and interiors will
be substantially redesigned and enhanced to deliver the ``Cockpit of the Future''. Our ``Cockpit of the
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