PARIS -- Plastic Omnium has agreed to sell its environment business unit as it focuses on automotive operations.
The unit is one of the first businesses of Plastic Omnium, which was founded by Pierre Burelle after World War II and is still controlled by the Burelle family. It primarily makes large trash bins used by municipalities, and has 8,000 clients and revenue of about 330 million euros and operating margin of about 7 percent in 2017. Plastic Omnium said last fall that it was hoping to divest the business.
The buyer is a consortium of Latour Capital, a French investment firm, and Bpifrance, the state investment bank. A price was not disclosed. The sale is expected to be completed by the end of the year, pending antitrust approval.
As the automotive industry becomes more specialized and technology-focused, many large suppliers are selling off business units they deem to be nonessential or spinning them off into separate companies. In the most recent instance, Continental announced this week that it was planning an IPO for its powertrain unit to generate cash to invest in electrification and autonomous driving.
"The group is now an automotive pure player with the planned disposal of our environment division, which should materialize over the second half-year,” Plastic Omnium said. The company said Friday in announcing first-half results that it was reorganizing its business after the sale around two main areas: Plastic Omnium Industries, which includes exterior parts and fuel tanks; and HBPO, a joint venture that makes front-end modules.
A new strategic plan based on the reorganized structure will be presented in December. Plastic Omnium ranks 26th on the Automotive News Europe list of Top 100 global suppliers, and is the 15th largest in Europe.
Revenues up 4.8 percent in first half
Plastic Omnium reported first-half results on Friday that showed revenue growth of 4.8 percent to 3.82 billion euros on a like for like basis. Operating margin was 10.2 percent, and net income was 230 million euros, an increase of 9.4 percent over the first half of 2017.
The company said it expected revenues to reach 9 billion euros in 2018, with second-half results strengthened by its acquisition of Mahle’s stake in HBPO, which was finalized at the end of June. Plastic Omnium now holds two-thirds of the venture, with the rest held by Hella.
Plastic Omnium increased its level of capital investment in the first half by 33 percent over 2017, or 8.5 percent of revenue, compared to 6.2 percent in 2017. New investments include a new factory in India, ongoing construction of seven factories around the world, and three r&d centers, in Brussels; Wuhan, China; and Lyon, France.