PARIS — Plastic Omnium reported 2019 revenue of 9.2 billion euros ($9.9 billion), an increase of 11 percent over 2018, but operating margin fell to 6 percent from 8.4 percent, and net profit fell to 258 million euros from 511 million euros, a 52 percent drop.
Free cash flow increased to 347 million euros from 218 million euros, a 59 percent increase, the supplier of exterior parts and fuel systems said this week.
Plastic Omnium said profitability had been hurt in 2019 by a significant increase in depreciation and difficulties at a new factory in Greer, South Carolina. The problems had led Plastic Omnium to cut its 2019 outlook to 6 percent, and it said that the plant would become profitable in 2021.
Under new CEO Laurent Favre, Plastic Omnium has set 2020 targets as outperforming worldwide automotive production by five percentage points, in a market that is expected to decline by 2.1 percent; increasing operating profit and earnings before interest, taxes, depreciation and amortization (EBITDA), with increased cost-cutting; and generating at least 200 million euros in free cash flow. The supplier said it outperformed global automotive production by 6.9 percentage points in 2019.
Plastic Omnium said in its financial results that it was “carefully monitoring” the effects of the Wuhan coronavirus outbreak.
Revenue in Europe increased 9.1 percent to 4.9 billion euros, largely due to the consolidation of a front-end module joint venture with Hella. Revenue in North America was up 22 percent to 2.6 billion euros because of growth in the SUV and light-truck market. In China sales rose 3.4 percent to 857 million euros on increased front-end module business.
Plastic Omnium ranks 27th on the Automotive News Europe list of top 100 global suppliers, with automotive revenues of $9.74 billion in 2018.
The supplier has two business units: Plastic Omnium Industries, which includes Intelligent Exterior Systems (bumpers and other panels) and Clean Energy (fuel tanks and other components); and Plastic Omnium Modules, a joint venture with Hella known as HBPO.
Plastic Omnium Industries accounted for 6.9 billion euros in revenue in 2019, up 1.2 percent from 2018, while the module business brought in 2.3 billion euros, an increase of 61 percent after Plastic Omnium took a controlling stake in the venture.
Plastic Omnium is controlled by the founding Burelle family, who hold an 85.4 percent stake in Burelle SA, a holding company that in turn controls 58.8 percent of Plastic Omnium shares. Laurent Burelle retired as co-CEO last year but remains chairman of the board of Plastic Omnium. His daughter Felicie Burelle was named managing director and is second in command to Favre.