The worldwide automotive production showed strong dynamics in 2023 with a global production of 90.3 million light vehicles, corresponding to a 9.7% growth year on year. The market was supported by a very robust global demand and the progressive normalization of semi-conductor’s supply. The 2023 level exceeded the c. 89 million light vehicle production reached in 2019 (pre-Covid level), but with a different regional mix: in 2023, China represented 32% of worldwide light vehicle production (vs. 27% in 2019) and Europe represented 20% (vs. 24% in 2019).

Consistently with its early 2023 announcements, FORVIA has concluded its disengagement from Russia, with the sale of its three operating entities (Faurecia Environmental solutions‑Russia, Faurecia Automotive Solutions, Faurecia Interior Togliatti) in December 2023, after having obtained the necessary regulatory authorizations from the Russian administration. FORVIA have no operational activities in Russia since end of December 2023.

The impact of cost inflation has however persisted during the year 2023; compared to 2022, which predominantly caused by increase in raw material prices, cost inflation in 2023 mainly related to energy, labor and, to a lesser extent, raw material prices (some of them starting to go down).

During 2023, FORVIA signed and closed agreements finalizing the €1 billion first disposals program initiated in 2022 :

• ■the sale of the SAS Cockpit Modules division to the Motherson group for a value of €540 million (see Note  2.1);
• ■the sale of part of its exhaust after‑treatment business for commercial vehicles to the Cummins group for a value of €199.2 million  (see Note  2.2);
• ■the sale of part of its stake in Symbio to Stellantis for a value of €150 million. Upon closing of this transaction FORVIA, Michelin and Stellantis will be equal partners in Symbio.

and has initiated the second €1 billion disposals program in October with the agreement of :

• ■the sale of HELLA BHTC shares for a total enterprise value of €600 million (€300 million for each of the two co-owners). 

In August and November 2023, FORVIA’s corporate ratings assigned by S&P (BB), Moody’s (Ba2) and Fitch (BB+) were reaffirmed and the outlook was raised from “negative” to “stable” by the three rating agencies. 

The Group’s financial debt stood at €6,987 million at December 31, 2023 compared to €7,939 million at December 31, 2022. The €952 million decrease in the net debt mainly stems from the positive net cash flow evolution, the disposals that took place in 2023 and other elements.

In accordance with IFRS 5, “net income of discontinued operations” presented in the consolidated statement of comprehensive income amounted to €-5.4 million including the operations of the SAS business from January 1, 2023 to July 31, 203 for total sales of €593.6 million as well as the net loss on disposal related to this activity of €-6.3 million and the directly incrementable expenses related to the sale.

The accounting principles and methods applied to discontinued operations are identical to those used for the annual financial statements.

MSCI leading ESG rating agency upgraded FORVIA’s rating from “BBB” to “A”. The agency welcomes positive evolution in the governance, specifically the alignment of the Board structure with investor’s interests. MSCI also highlights the entry in the Lighting business which has intrinsically lower exposure to product liability risks than other products in the auto supplier sector. After the previous upgrade from “BB” to “BBB” obtained in July 2022, this new step underlines the Group’s constant progress on ESG topics and now ranks FORVIA within the first quartile of the MSCI 32 auto components manufacturers universe.

• ■FORVIA has successfully priced the New Notes, sustainability-linked 7.25% senior notes due 2026 (the “New Notes”) following a private placement arranged by BNP Paribas. FORVIA priced the New Notes at 101.75% of par, or a yield of 6.65%.

• ■As announced in January FORVIA has issued on February 1, 2023 €250 million of New Notes, sustainability-linked 7.25% senior notes due 2026. The proceeds of the issuance of the New Notes will be used to fully reimburse the Bridge-to-Bond and the Bridge-to-Equity in connection with the HELLA acquisition and for general corporate purposes.
• ■FORVIA has entered in February 2023 into exclusive negotiations with Cummins for the potential sale of a part of its Commercial Vehicle exhaust aftertreatment business. The potential transaction would be subject to customary conditions precedents, including regulatory approvals and completion of applicable employee representative consultations.
• ■FORVIA has announced mid-February 2023 to have signed with the Motherson group an agreement by which Motherson commits to acquire FORVIA SAS Cockpit Modules division (assembly and logistics services), reported as part of its Interiors Segment, for an enterprise value of €540 million. The transaction will be subject to customary conditions precedents, including regulatory approvals.
• ■HELLA has appointed Jörg Weisgerber and Stefan van Dalen, two executives from its own ranks, to the Management Board. Jörg Weisgerber is taking over from Björn Twiehaus as head of HELLA’s electronics business on April 1. Stefan van Dalen is succeeding Dr. Lea Corzilius as new Managing Director Lifecycle Solutions also as of April 1. Jörg Weisgerber and Stefan van Dalen both joined HELLA back in 2016.

• ■FORVIA has added to its operational capacity in the Americas with the opening of a new, state-of-the-art manufacturing facility in Monterrey, Nuevo León, Mexico. Featuring bioclimatic design principles to optimize energy efficiency and support the Group’s commitment to achieving carbon neutrality by 2045, the more than 33,500 square-meter facility will employ approximately 1,500 people and manufacture automotive seat structures, instrument panels, and center consoles aligned with industry megatrends in sustainability and light weighting.

• ■Auto Shanghai 2023 – From electrification to captain chair: FORVIA displayed deep understanding of Chinese market. FORVIA showcased breakthrough technologies at Auto Shanghai, participating for the first time as the world’s 7th largest automotive technology supplier. FORVIA presented its new solutions developed for the Chinese market alongside its global state-of-the-art portfolio, including its award-winning Solid-State Lighting High-Definition headlamp (SSL | HD).
• ■FORVIA, attended Hannover Messe 2023, in Hannover, Germany alongside Symbio, its joint-venture created with Michelin. Two breakthrough hydrogen solutions for Automotive and Infrastructure in the European Market were showcased:
  • ■containerized Hydrogen Storage: a lightweight storage solution aiming at drastically lowering the cost and CO2 footprint of transporting hydrogen, by storing c. 1 ton of H2 in the equivalent of a 40 feet container,
  • ■XL Gaseous Storage: a new 700 bar tank for truck applications which increases hydrogen capacity by 80% vs current 350 bar solution and provides new vehicle integration opportunities.

• ■FORVIA, Michelin and Stellantis have announced the signing of a binding agreement for Stellantis to acquire 33.3% stake in Symbio, a leader in zero-emission hydrogen mobility. FORVIA and Michelin will remain shareholders with 33.3% holding each.

• ■With the acquisition by Stellantis of a stake in Symbio (a joint venture between FORVIA and Michelin), confirmed in a joint press release by the three partners, FORVIA will receive a total amount of €150 million which will contribute to its €1 billion asset disposal program by the end of 2023. This asset disposal program includes two other operations already announced, representing together a cumulated enterprise value of almost €700 million:
  • ■the sale of FORVIA’s SAS Cockpit Modules division (assembly and logistics services) to the Motherson group, announced on February 19, is currently subject to regulatory approvals and the closing is expected early Q3 2023,
  • ■the sale of part of FORVIA’s commercial vehicle exhaust gas aftertreatment business in Europe and the United States, announced on February 16, is currently under exclusive and final negotiations with Cummins.
• These three operations are in addition to the two transactions already closed, the sale by FORVIA of its Interiors business in India to TAFE and the sale by HELLA of its stake in HBPO.
• FORVIA confirms it will deliver its €1 billion asset disposal program by the end of 2023. Those divestments contribute to FORVIA’s net debt reduction, its top priority following the acquisition of a majority stake in HELLA at the end of January 2022.
• ■FORVIA signed an agreement to transfer to Cummins a part of its commercial vehicle business in Europe and in the United States. Following an exclusive negotiations phase, FORVIA and Cummins have signed a Share and Asset Purchase Agreement under which FORVIA will sell a part of its commercial vehicle exhaust aftertreatment business in Europe and the US to Cummins for an enterprise value of €142 million after final technical adjustments.
• ■FORVIA boosts its renewable energy capacity to up to 70% across Europe with Renewable Power Capital deal. FORVIA continues to implement its decarbonization roadmap by signing a ten-year Power Purchase Agreement (PPA) with Renewable Power Capital. This deal is securing almost all the output from the 417 GWh, 24 wind turbines, Klevberget onshore farm in Sweden and will generate the equivalent of more than 40% of all FORVIA’s European yearly electric consumption. Building on existing deals, up to 70% of FORVIA’s consumption – 650 GWh – will be powered by renewable electricity thanks to a portfolio of 37 wind turbines. In addition to this capacity, 130 hectares of solar panels are being installed at more than 150 FORVIA sites, which provides up to 5% of its renewable energy mix.
• ■At the Shareholders’ Meeting of May 30, 2023, shareholders have renewed Denis Mercier as Board member for a period four years, and have appointed Esther Gaide and Dr Michael Bolle as Board members for a period four years. All three are considered as independent within the meaning of AFEP-MEDEF Code. Yan Mei and Dr Peter Mertens, whose terms of office expired at the close of this Shareholders’ Meeting, did not wish to be renewed.

• ■The FORVIA Foundation joins forces with the Maud Fontenoy Foundation and Plastic Odyssey to protect the oceans. Through its Corporate Foundation, FORVIA, is extending its action to protect the environment by joining forces with the Maud Fontenoy Foundation and Plastic Odyssey, two renowned organizations dedicated to protecting marine biodiversity.
• ■FORVIA starts deliveries of hydrogen tanks from first mass production plant in France. Type IV Hydrogen tanks have started rolling out from FORVIA’s groundbreaking mass production plant in Allenjoie, France. This first-of-its-kind facility in Europe and North America aims to produce 100,000 tanks annually. With hydrogen as a driving force behind the decarbonization of mobility and industry, FORVIA is committed to delivering safe and affordable hydrogen storage technology.

• ■FORVIA and BYD have launched the construction of a new state-of-the-art seat-assembly plant in the Rayong province of Thailand. 
• This strategic leap strengthens the global technical partnership developed with Chinese electric vehicles manufacturer BYD, propelling both companies further into the Asia-Pacific market. The collaboration has already yielded impressive results, with seven cutting-edge factories established in China, including four within the past 18 months.
• ■HELLA, the automotive supplier operating under the umbrella brand FORVIA, and the luxury car manufacturer Porsche, have launched the world's first high-resolution headlamp based on matrix LED technology. With over 32,000 individually controllable pixels per headlamp, this agreement raises automotive lighting technology to a new level. The digital headlamp system SSL | HD is now available for the first time in the new Porsche Cayenne.

• ■FORVIA manufacturing sites received more than 80 supplier quality awards from customers around the world in the first six months of 2023. FORVIA sites received awards from a globally diverse range of customers located in Europe, Asia, and the Americas. The awards reflect a variety of Quality and Total Customer Satisfaction achievements including innovation, project support and development, problem solving, and response timing.

• ■Motherson group has acquired 100% of “SAS” Cockpit Modules division (“SAS”), a global provider of assembly and logistics services for the automotive industry, based on an enterprise value of €540 million. Motherson is a diversified manufacturing specialist and one of the world’s leading automotive Group. The transaction complements its Modules and Polymer Products portfolio.
• ■In August  2023, FORVIA’s corporate ratings assigned by S&P (BB), Moody’s (Ba2) were reaffirmed and the outlook was raised from “negative” to “stable” by the two rating agencies 
• ■FORVIA has confirmed the sale of part of its shareholding in Symbio to Stellantis, completed on July 27. It enabled Stellantis to acquire a stake alongside Michelin and FORVIA in the leading company for fuel cell mobility, with each shareholder holding 33.33%.

• ■Five FORVIA Innovations were named Automotive News PACE and PACEpilot Finalists. FORVIA was honored to have five technologies selected as finalists for the 2023 Automotive News PACE and PACEpilot Awards. The PACE awards, now in their 29th year, are given to automotive suppliers in recognition of a technological innovation in product or process that have reached the commercial market. Automotive News had selected 34 finalists for the PACE award, including two FORVIA technologies:
  • ■FORVIA’s Immersive Display, a next-generation system that combines high and low-definition screen areas to create a seamless user experience, customizable to screen shapes and sizes,
  • ■FORVIA’s All-in-one seating innovation, where seat sensors can help identify potential physical pain.
• ■FORVIA has announced two innovations showcased in the Esprit Alpine trim of the highly anticipated, All-new Renault Rafale. These groundbreaking technologies, LUMI and Ecorium, are set to transform the way drivers interact with their vehicles, adding enhanced style, emotional connection and sustainability to the driving experience.
• ■FORVIA has showcased its technology at AAI Mobility, Europe’s largest automotive trade show. It presented its technology portfolio in three strategic growth areas at the IAA Mobility 2023 in Munich: Electrification and energy management, safe and automated driving, and digital and sustainable cockpit experiences.
• ■FORVIA has unveiled the world premiere of a seat structure made from fossil-free steel, produced with a very low CO2 footprint, reduced by almost 90% compared to a traditional steel seat structure. This groundbreaking achievement, realized through a collaboration with leading Nordic-based steel manufacturer SSAB, marked a momentous stride towards sustainable innovation.
• ■On September 11, FORVIA and CHERY, the world-renowned large-scale automobile manufacturing enterprise, signed a strategic cooperation agreement in presence of Patrick Koller, CEO of FORVIA; Ma Chuan, China Deputy Executive Vice President, Yin Tongyue, Chairman of CHERY and Qi Shilong, Deputy General Manager at CHERY among other guests. Based on the strong business synergy and solid cooperation foundation, FORVIA and CHERY established a long-term strategic partnership and further deepened all-round cooperation, especially in the field of smart cockpits.
• ■Bernard Schäferbarthold, currently Chief Financial Officer of HELLA, will become the new Chairman of the Management Board. This was decided by the Shareholders' Committee of HELLA GmbH & Co. KGaA at its meeting on September 29. Bernard Schäferbarthold will take over the position on January 1, 2024 from Michel Favre, who has mutually agreed with the Shareholders' Committee on an early termination of his mandate.

• ■FORVIA confirmed the successful completion of the transaction first announced on May 23, 2023 transferring designated parts of FORVIA’s commercial vehicle exhaust aftertreatment business in Europe and in the United States, for a total transaction value of €199.2 million, to its longstanding partner Cummins. The decision to transfer this business to Cummins was part of FORVIA’s strategy to focus on ultra-low emission solutions for light vehicles, where it is a leader in the market, and its hydrogen roadmap to bring a comprehensive portfolio of hydrogen storage solutions to market.
• ■HELLA, jointly with MAHLE, has announced the sale of their BHTC shares for a total enterprise value of €600 million (€300 million for each of the two co-owners). With the divestment of its stake in BHTC (accounted for by the equity method within HELLA’s accounts), HELLA will strengthen its focus on its core business areas: Electronics, Lighting and Lifecycle Solutions. The transaction is subject to approval by the relevant foreign trade and antitrust authorities and closing is expected to take place by mid-2024.

• ■At its meeting on 19 October 2023, the Board of Directors of FORVIA SE decided to coopt with immediate effect Nicolas Peter as an independent Board member. This cooptation follows Jürgen Behrend's resignation for personal reasons. Nicolas Peter is co-opted for the remainder of Jürgen Behrend's term of office, i.e., until the 2026 Annual General Meeting. Nicolas Peter worked for the BMW Group in various positions for more than three decades and was the chief financial officer and a member of the Board of Management from 2017 to May 2023. He has been chairman of the Board of Trustees of the BMW Foundation Herbert Quandt since 2020. Nicolas Peter serves also as a member of the German Government Commission for the German Corporate Governance Code (GCGC).
• ■FORVIA has officially inaugurated its industrial platform in Allenjoie (France) in the presence of Ms. Marie-Guite Dufay, President of the Bourgogne-Franche-Comté region, Mr. Franck Robine, Prefet of the region and Mr. Bruno Bonnell, Secretary General for Investments. Inaugurated in 2023, the Allenjoie platform includes two major sites and is FORVIA’s technological flagship in France. One plant produces seating components at an unparalleled degree of digitalization and automation, making it one of our most advanced facilities worldwide. The other is the first mass production site of vehicle hydrogen storage systems in Europe and will allow production costs for hydrogen solutions to be cut by five within two years. By 2030, this “Clean Mobility” plant will produce 100,000 hydrogen tanks a year, supporting the evolution in transport from ultra-low to zero emissions. Both plants are industry-leading examples of sustainable production, meeting the strictest environmental standards. The platform’s rooftop solar arrays, biomass-fired boilers, heat recovery and rainwater sanitation systems have earned it BREEAM Excellent certification – the first awarded to an industrial site in France.
• ■FORVIA has concluded a groundbreaking contract with a premium German OEM to introduce VIBE®, its cutting-edge immersive technology that redefines consumers’ time behind the wheel. FORVIA’s VIBE® technology delivers an unparalleled and safe experience by embedding tactile sensations within the car seat, creating a fully-immersive journey. After five years of intensive research and development in collaboration with Aurasens, pioneers in vibro-haptic composition, VIBE® has been set to make its debut in a next-generation premium SUV end 2025.
• ■FORVIA received three accolades at the CLEPA Innovation Awards 2023. The European Association of Automotive Suppliers, CLEPA, has recognized FORVIA for its outstanding contributions to shaping the future of mobility. In the eighth edition of the international competition, with a focus on Digital and Green innovations, three technologies from different FORVIA Business Groups received an award from CLEPA:
  • ■Automatic Diagnostics: a world’s-first strongly increasing vehicle repair efficiency,
  • ■NAFILean-R: more recycled content in sustainable materials,
  • ■XL Tank: game-changing solution to address the needs of Heavy-Duty hydrogen mobility.

• ■FORVIA has been awarded a contract from a major automotive manufacturer to supply Type IV hydrogen storage systems for medium-duty commercial trucks in the North American market, with start of production in 2025.
• ■In November 2023 FORVIA’s corporate ratings assigned by Fitch (BB+) was reaffirmed and the outlook was raised from “negative” to “stable” by Fitch.
• ■FORVIA, has officially inaugurated its latest Electronics mega plant Poenix in Fengcheng (Jiangxi, China) in the presence of government representatives, partners and more than 40 customers. The Phoenix plant in Fengcheng, China, is best-in-class both in smart manufacturing and sustainability. This new Electronics megaplant uses end-to-end digitalization to produce electronics systems for cockpit displays and automated driving, with a capacity of 2 million units per year. It sets a precedent for FORVIA – the first plant to be designed using digital-twin technology at such a level and scale to simulate its 89 production lines and workflows in a virtual environment, allowing streamlined construction and improved operational efficiency. This strategic pilot plant is on track to become a full “lighthouse” for the group, setting the standard for other similar plants around the world with real-time data analysis, state-of-the-art automation tools and intelligent digitalized warehousing. It is also FORVIA’s first plant to achieve net zero on scopes 1 and 2: its green building design has been awarded LEED Gold certification.
• ■One year after its creation, MATERI'ACT, a company of the FORVIA group, inaugurated its Headquarters and R&D center in Villeurbanne (France) on November 13. At the cutting edge of technology, this center brings together engineers, researchers and data scientists, and is destined to become a world-class center of excellence, and one of Europe's leading centers in the field of materials with very low CO2 footprints.
• ■FORVIA, combining the complementary strengths of Faurecia and HELLA, has received four accolades at the CES 2024 Innovation Awards in the category “Vehicle Tech & Advanced Mobility”:
  • ■HELLA’s FlatLight | µMX technology,
  • ■Skyline Immersive Display,
  • ■eMirror Safe UX,
  • ■Light Tile for Transparent Door.

• ■TMD Friction and HELLA, a company of the group FORVIA, have agreed to transfer the 50 percent share currently held by TMD Friction in the brake joint venture HELLA Pagid to HELLA. The two companies signed a letter of intent. HELLA would thus become the sole shareholder of HELLA Pagid. Founded in 2013, HELLA Pagid, a joint venture between automotive supplier HELLA and brake friction manufacturer TMD Friction, sells brake components and accessories on the global automotive aftermarket.
• ■Symbio, an equally owned joint venture between FORVIA, Michelin and Stellantis, has inaugurated SymphonHy, its first gigafactory, a center of technological and industrial excellence. Located in Saint-Fons, in the Auvergne-Rhône-Alpes region, SymphonHy is the largest integrated fuel cell production site in Europe, confirming Symbio's role as a technological and industrial leader.
• ■FORVIA has set up a 4-year strategic partnership with CentraleSupélec, a renowned French Higher Education and Research Institution specialized in engineering and systems sciences, to shape the future of Smart Vehicles. In pursuit of scientific advancements, FORVIA’s Clarion Electronics Business Group has harnessed its expertise and research activities in Artificial Intelligence (AI) for automotive applications, with a focus on data fusion and image processing.
• ■On December 8, 2023, FORVIA, successfully raised JPY19.2 billion – corresponding to c. €123 million - through a three-tranches senior bond issuance on the Japanese market. The three maturities of 2.25 years, 3.25 years and 5 years offer an average coupon of 2.62%. This transaction represented FORVIA’s first issuance of a “Samurai bond” – yen-denominated bonds issued by non-domestic issuers as well as the first-ever Samurai bond issuance by an international automotive supplier. It contributed to the diversification of FORVIA’s debt investor base and supports the globalization of its footprint.
• ■At its meeting held on December 14, 2023, the Board of Directors of FORVIA SE decided to propose, for approval at the 2024 Annual Shareholders’ Meeting, the renewal of the following Board members, each of whose current terms expire in 2024: Judy CURRAN, Jean-Bernard LÉVY, and Michel de ROSEN.

• ■Effective 19th December 2023, Jill GREENE is appointed Executive Vice-President, Group General Counsel and Board Secretary. She succeeds Nolwenn DELAUNAY and reports to CEO of FORVIA Patrick KOLLER.
• ■Effective 1st January 2024, Chuan MA is appointed Executive Vice-President, China. He reports to the CEO of FORVIA Patrick Koller. This appointment takes place at a time when Chinese OEMs are becoming Global Automotive players in the context of electrification of the Automotive industry.

• ■FORVIA, has been recognized for leadership in corporate transparency and performance on climate change by global environmental non-profit Carbon Disclosure Project (CDP), securing a place on its annual ‘A List’. Based on data reported through CDP’s 2023 Climate Change questionnaire, FORVIA is one of the very few companies that achieved ‘A’ – out of over 21,000 companies scored.

All press releases related to these events are available on the site www.forvia.com.

Worldwide automotive production increased by 9.7% from 2022 to 2023. It increased in EMEA (Europe Middle East and Africa) by 11.5%, increased in Americas by 8.6% and increased in Asia by 9.4%, of wich increased in China by 10.0%.

The data related to automotive production and volume evolution is based on S&P Global Mobility (ex-IHS Markit) forecast dated February 2024 (vehicles segment in line with CAAM for China).

FORVIA’s year-on-year sales evolution is made of three components:

• ■a “Currency effect”, calculated by applying average currency rates for the period to the sales of the prior year;
• ■a “Scope effect” (acquisition/divestment);
• ■a “Growth at constant scope & currencies”.

As “Scope effect”, FORVIA presents all acquisitions/divestments, whose sales on an annual basis amount to more than €250 million. Other acquisitions below this threshold are considered as “bolt-on acquisitions” and are included in “Growth are constant currencies”.

In 2023, there was no effect from “bolt-on acquisitions”.

Sales of products (parts, components and R&D sold to manufacturers) reached €25,950.2 million in 2023 compared to €23,233.1 million in 2022. This represents an increase of 11.7% on a reported basis and by an increase of 14.7% at constant scope & currencies.

Sales of tooling, prototypes and other services reached €1,297.7 million in 2023 compared to €1,340.6 million in 2022. This represents a decrease of 3.2% on a reported basis and an increase of 1.7% at constant scope & currencies. 

Sales reached €27,247.9 million in 2023 compared to €24,573.7 million in 2022. This represents an increase of 10.9% on a reported basis and an increase of 14.0% at constant scope & currencies.

Sales by region in 2023 were as follows:

• ■in EMEA, sales reached €12,650.6 million (46.4% of total sales), compared to €11,050.2 million in 2022. This represents an increase of 14.5% on a reported basis and by 14.0% at constant scope and currencies. This is to be compared to a 11.5% upturn in production market in EMEA;
• ■in Americas, sales reached €7,207.2 million (26.5% of total sales), compared to €6,822.7 million in 2022. This represents an increase of 5.6% on a reported basis and by 10.9% at constant scope and currencies. This is to be compared to a 8.6% upturn in production market in Americas;
• ■in Asia, sales reached €7,390.1 million (27.1% of total sales), compared to €6,700.8 million in 2022. This represents an increase of 10.3% on a reported basis and by 17.0% at constant scope and currencies. This is to be compared to a 9.4% upturn in Asia and 10.0% in China;

Worldwide sales amounted to €27,247.9 million compared to €24,573.7 million in 2022. This represents an increase of 10.9% on a reported basis and 14.0% at constant scope and currencies. This is to be compared to a 9.7% upturn in production market in the world source S&P Global Mobility (ex-IHS Markit) forecast dated February 2024.

In 2023, sales to FORVIA four main customers (VW, Stellantis, Renault-Nissan - Mitsubishi, Ford) amounted to €12,557.9 million or 46.1% compared to 47.9% in 2022:

• ■sales to the VW group totaled €4,739.3 million. They accounted for 17.4% of FORVIA's total sales. They increased by 13.5% on a reported basis and by 12.7% at constant scope & currencies compared to 2022;
• ■sales to the Stellantis group totaled €3,391.6 million. They accounted for 12.4% of FORVIA's total sales. They increased by 1.1% on a reported basis and by 3.8% at constant scope & currencies compared to 2022;
• ■sales to Renault-Nissan - Mitsubishi totaled €2,231.1 million. They accounted for 8.2% of FORVIA's total sales. They increased by 10.9% on a reported basis and by 15.2% at constant scope & currencies compared to 2022;
• ■sales to the Ford group totaled €2,195.9 million. They accounted for 8.1% of FORVIA's total sales. They decreased by 1.2% on a reported basis and increaed by 8.5% at constant scope & currencies compared to 2022;
• ■sales to the Chinese OEMs totaled €2,190.9 million. They accounted for 8.0% of FORVIA's total sales. They increased by 2.9% on a reported basis and by 10.3% at constant scope & currencies compared to 2022;
• ■sales to the Mercedes-Benz group totaled €1,915.1 million. They accounted for 7.0% of FORVIA's total sales. They increased by 16.2% on a reported basis and by 12.6% at constant scope & currencies compared to 2022;
• ■sales to a Global vehicle company group totaled €1,624.1 million. They accounted for 6.0% of FORVIA's total sales. They increased by 34.2% on a reported basis and by 36.4% at constant scope & currencies compared to 2022;
• ■sales to the BMW group totaled €1,513.0 million. They accounted for 5.6% of FORVIA's total sales. They increased by 30.8% on a reported basis and by 28.0% at constant scope & currencies compared to 2022.

In 2023:

• ■Seating totaled €8,551.1 million sales, up 11.0% on a reported basis and up 16.2% at constant scope & currencies compared to 2022;
• ■Interiors totaled €4,922.7 million sales, up 6.0% on a reported basis and up 11.5% at constant scope & currencies compared to 2022;
• ■Clean Mobility totaled €4,832.2 million sales, up 2.0% on a reported basis and up 11.4% at constant scope & currencies compared to 2022;
• ■Electronics totaled €4,137.9 million sales, up 17.5% on a reported basis and up 14.8% at constant scope & currencies compared to 2022;
• ■Lighting totaled €3,745.9 million sales, up 21.9% on a reported basis and up 15.2% at constant scope & currencies compared to 2022;
• ■Lifecycle Solutions totaled €1,058.1 million sales, up 18.5% on a reported basis and up 12.8% at constant scope & currencies compared to 2022.

In 2023:

• ■the operating income before amortization of acquired intangible assets totaled €1,439.1 million (5.3% of sales) in 2023, compared to €1,060.5 million (4.3% of sales) in 2022;
• ■gross expenditures for R&D totaled €2,197.5 million, or 8.1% of sales in 2023, compared to €2,067.5 million, or 8.4% of sales in 2022. The portion of R&D expenditure capitalized amounted to €1,269.9 million, compared to €1,170.8 million in 2022. The R&D capitalization ratio represented 57.8% of total R&D expenditure, whereas it represented 56.6% over the same period in 2022;
• ■the net R&D expenses reached €953.0 million (3.5% of sales) compared to €896.0 million in 2022 (3.6% of sales);
• ■selling and administrative expenses reached €1,270.3 million (4.7% of sales) compared to €1,175.1 million (4.8% of sales) in 2022;
• ■adjusted EBITDA – which represents operating income before depreciation, amortization and provisions for impairment of property, plant and equipment and capitalized R&D expenditures – totaled to €3,328.0 million (12.2% of sales), to be compared to €2,907.3 million (11.8% of sales) in 2022.

The operating income in 2023 compared to 2022 increased by €378.6 million:

• ■in EMEA, the operating income increased by €141.4 million, to reach €316.4 or 2.5% of sales. This is to be compared to €175.0 million or 1.6% in 2022;
• ■in Americas, the operating income increased by €132.6million, to reach €308.1 or 4.3% of sales. This is to be compared to €175.5 million or 2.6% in 2022;
• ■in Asia, the operating income increased by €104.5 million, to reach €814.5 or 11.0% of sales. This is to be compared to €710.0 million or 10.6% in 2022.

In 2023 :

• ■Seating operating income amounted to € 314.7 million (3.7% of sales) compared to € 197.0 million in 2022 (2.6% of sales);
• ■Interiors operating income amounted to € 200.9 million (4.1% of sales) compared to € 191.3 million in 2022 (4.1% of sales);
• ■Clean Mobility operating income amounted to € 383.7 million (7.9% of sales) compared to € 336.3 million in 2022 (7.1% of sales);
• ■Electronics operating income amounted to € 219.4 million (5.3% of sales) compared to € 140.8 million in 2022 (4.0% of sales);
• ■Lighting operating income amounted to € 192.8 million (5.1% of sales) compared to € 106.5 million in 2022 (3.5% of sales);
• ■Lifecycle Solutions operating income amounted to €127.6 million (12.1% of sales) compared to € 88.5 million in 2022 (9.9% of sales).

The net income group share is a gain of €222.2 million, or 0.8% of sales in 2023. This is to be compared to a loss of €381.8 million or -1.6% of sales in 2022. It represented an increase of €604.0 million.

In 2023:

• ■the amortization of intangible assets acquired represented an expense of €193.2 million compared to an expense of €189.9 million in 2022;
• ■the “other non-recurring operating income and expenses” represented an expense of €181.4 million, compared to an expense of €442.5 million in 2022. This item included €170.8 million in restructuring charges compared to an expense of €349.2 million in 2022;
• ■financial income amounted to €90.7 million, compared to €50.3 million in 2022;
• ■financial costs totaled €586.2 million, versus €377.1 million in 2022, mainly because of an increase in interest rates;
• ■other financial income and expense represented an income of €36.6 million, of which € 158.0 millions due to the partial session of Symbio shares and CVI activities, compared to an expense of €168.4 million in 2022. This income included €22.4 million from discounting pension benefit liabilities;
• ■the tax expense reached €232.4 million, compared to €177.0 million in 2022;
• ■the share of net income of associates is a loss of €2.2 million, compared to a gain of €11.4 million in 2022;
• ■net income attributable to minority interests totaled €143.4 million in 2023. It consists of net income accruing to investors in companies in which FORVIA is not the sole shareholder, mainly in China and HELLA, compared to €131.4 million in 2022.

Basic earnings per share amounted to €1.17 (diluted net earnings per share at €1.16) compared to €-2.20 in 2022 (diluted net earnings per share at €-2.20).

The net cash flow was an inflow of €649.1 million or 2.4% of sales compared to a net cash inflow of €483.4 million or 2.0% of sales over the same period in 2022 after  IFRS 5:

• ■the operating margin before depreciations and amortizations of non-current assets or adjusted EBITDA reached €3,328.0 million compared to €2,907.3 million in 2022, due to the increase in operating income by €378.6 million and the increase in depreciation and amortization by €42.1 million;
• ■restructuring represented cash outflows of €170.2 million compared to €181.9 million in 2022;
• ■the change in working capital requirement, including receivables factoring, represented a positive impact of €769.9 million compared to a positive impact of €588.3 million in 2022. This change consisted in part of a negative impact in inventories  of €135.1 million mainly concentrated on Tooling inventories  with €139.1 million, a positive impact in trade receivables of €207.6 million, payables of €444.2 million and other trade receivables and payables for €253.2 million.  The evolution of these balance sheet positions was impacted by exchange rate changes;
• ■capital expenditures on property, plant and equipment and on intangible assets represented cash outflows of €1,137.3 million or 4.2% of sales , versus €1,137.0 million or 4.6% of sales in 2022;
• ■capitalized research and development costs represented cash outflows of €1,046.0 million or 3.8% of sales, versus €954.2 million or 3.9% of sales in 2022;
• ■income taxes represented cash outflows of €515.3 million, compared to €362.1 million in 2022;
• ■finally, other cash flow items represented €51.1 million in outflows, compared to €14.6 million in outflows in 2022.

Growth in net cash flow in 2023 is supported by the initial results of the "Manage by cash" program launched in mid-2022.

The main elements of long-term financial resources are the following (Note 26 provides more details on each of these financings).

A series of bonds issued on the euro and yen financial markets:

• ■€300 million euros (1.00%) of bonds issued by Hella, maturing in May 2024;
• ■€1,000 million (2.625%) of bonds maturing in June 2025;
• ■¥11.7 billion (2.48%) of bonds maturing in March 2026;
• ■€750 million (3.125%) of bonds maturing in June 2026;
• ■€950 million (7.25%) of sustainability-linked bonds maturing in June 2026 (of which €150 million have been tendered in 2023 bringing the balance at the end of December 2023 to 799.9 million euros);
• ■€500 million (0.50%) of Hella bonds maturing in January 2027;
• ■€1,200 million (2.75%) of sustainability-linked bonds maturing in February 2027;
• ■¥6.8 billion (2.81%) of bonds maturing in March 2027;
• ■€890 million (2.375%) of bonds maturing in June 2027 (including a tap of €190 million issued in February 2021); 
• ■€700 million (3.75%) of bonds maturing in June 2028;
• ■¥0.7 billion (3.19%) of bonds maturing in December 2028;
• ■€400 million (2.375%) of Green Bonds maturing in June 2029;
• ■¥12 billion (3.50%) of Hella Note maturing in 2032.

A series of Schuldscheindarlehen (private placement under German law):

• ■213 million euros (out of the 700 million euros issued in 2018 and partially repaid since then) maturing in December 2024;
• ■747 million euros issued in 2021 and 2022, maturing in July 2024, January 2026, January 2027 and January 2028.

A series of bank loans:

• ■ a ¥30 billion credit facility maturing in February 2026. As at December 31. 2023, this facility was used up to ¥20 billion;
• ■a €315 million Credit Agreement with the European Investment Bank (EIB) maturing in July 2029 ; the amount drawn under the facility is €289 million euros as of December 31, 2023;
• ■a $300 million syndicated loan, signed by Faurecia Sistemas Automotrices SA DE CV with Latin American investors, maturing in March 2028;
• ■a €500 million Term loan maturing in June 2026 with two one-year extension options;
• ■a ¥10,000 million loan signed by Hella with maturity June 2033.

Besides, Forvia holds a €1,500 million syndicated credit facility whose maturity has been extended to May 2027, with a remaining one-year maturity extension option. As at December 31, 2023, this facility was not used and fully available for its total amount.

Hella’s syndicated credit facility amounts to €450 million, with one option to increase the available amount by €150 million and its maturity is December 2026, with a remaining one-year maturity extension option. As at December 31, 2023, this facility was not used and fully available for its total amount.

This guidance is based on:

• ■broadly stable worldwide automotive production in 2024 vs. 2023, in line with S&P’s latest forecast dated February 2024 that estimates 90.0 million light vehicles produced in 2024 vs. 90.3 million in 2023 (-0.4%);
• ■average 2024 currency rates of 1.10 for €/USD and of 7.50 for €/CNY.

And assumes no major lockdown impacting production or retail sales in any automotive region during the year.

It takes into consideration:

• ■a limited negative scope effect on sales of c. €50 million as the net effect of the disposal of the CVI business to Cummins (deconsolidated as from Q4 2023) for €(300) million largely offset by the consolidation as from January 1, 2024 of HELLA’s joint-venture in Lighting in China for c. €250 million;
• ■the impact of the first step, already announced, of the second €1 billion disposal program underway, i.e. the disposal by HELLA of its 50% stake in BHTC that should contribute cash proceeds estimated at c. €200 million.

2024 guidance is on track to reach POWER25 ambition:

• ■sales of between €27.5 billion and 28.5 billion;
• ■operating margin between 5.6% and 6.4% of sales;
• ■NCF ≥ 2023 in value;
• ■net debt/Adjusted EBITDA ratio ≤ 1.9x at Dec. 31, 2024.

The Group reiterates its FY2025 objectives, as presented at the Capital Markets Day held in November 2022:

• ■sales of c. €30bn;
• ■operating margin > 7% of sales;
• ■NCF of 4% sales;
• ■net debt/Adjusted EBITDA ratio of < 1.5x at Dec. 31, 2025.

These objectives were based on average 2025 currency rates of 1.05 for €/USD and of 7.00 for €/CNY and assumed no major lockdown impacting production or retail sales in any major automotive region over the period.

These objectives, evidently, did not take into consideration any impact from the second €1 billion disposal program that was announced in October 2023.

The net cash flow amounts to €649.1 million as of December 31, 2023 and €483.4 million as of December 31, 2022 restated (see chapter 1, paragraph 1.1.6).

The consolidated financial statements of the FORVIA group have been prepared in accordance with International Financial Reporting Standards (IFRS) published by the IASB, as adopted by the European Union and available on the European Commission website. These standards include International Financial Reporting Standards and International Accounting Standards (IAS), as well as the related International Financial Reporting Interpretations Committee (IFRIC) interpretations.

The standards used to prepare the 2023 consolidated financial statements and comparative data for 2022 are those published in the Official Journal of the European Union (OJEU) as of December 31, 2023, whose application was mandatory at that date. The new standards, amendments and revisions to the existing standards, whose publication is mandatory from January 1, 2023, have no significant impact on the Group consolidated financial statements.

Concerning the amendments to IAS 12 « International Tax Reform – Pillar 2 Model Rules » published in the OJEU on November 9, 2023, the Group has applied the temporary and mandatory exception related to accounting of deferred tax related to the Pillar 2 income taxes.

The Finance law published in the Official Journal on December 30, 2023 has transposed the European Directive 2022/2023, in order to implement the OECD tax reform (“Pillar 2”). This law is applicable for all accounting periods starting from December 31, 2023 and enforces for all big multinational companies a minimum taxation on income generated in each of the jurisdictions where they are active. The Group has performed the estimation of the potential impacts. In most of the cases, the application of the transitory measures should be possible, generating nil additional income tax. For the countries where these transitory measures can not be applied, no significant impact is expected for the Group.

Moreover, FORVIA has not undertaken any early application of new standards, amendments or interpretations whose application is mandatory after December 31, 2023, irrespective of whether or not they are adopted by the European Union.

The principal accounting policies considered have been applied consistently to all presented periods. Specifically, the operating margin (before amortization of intangible assets acquired) is the FORVIA group’s principal performance indicator. It corresponds to net income of the fully consolidated companies before:

• ■the amortization of intangible assets acquired in business combinations (customer relationship…);
• ■other non-recurring operating income and expenses, corresponding to material, unusual and non-recurring items including reorganization costs and early retirement costs, the impact of exceptional events such as the discontinuation of a business, the closure of an industrial site, disposals of non-operating buildings, impairment losses and reversals recorded for property, plant and equipment or intangible assets, as well as other material and unusual losses;
• ■income on loans, cash investments and marketable securities;
• ■finance costs;
• ■other financial income and expenses, which include the impact of discounting the pension benefit obligation and the return on related plan assets, the ineffective portion of interest rate and currency hedges, changes in value of interest rate and currency instruments for which the hedging relationship does not satisfy the criteria set forth in IFRS 9, and gains and losses on sales of shares in subsidiaries;
• ■taxes.

The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions when measuring certain assets, liabilities, income, expenses accounted for in the financial statements as well as for the evaluation of commitments given and contingent liabilities. These estimates and assumptions are primarily used when calculating the impairment of property, plant and equipment, right of use, intangible assets and goodwill, for measuring pension and other employee benefit obligations as well as for lease liabilities and depreciation of deferred tax assets. They are based on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions. These estimations are revised on a regular basis, notably in the current evolutive macro economic context. Moreover, the Group must exercise judgment in determining whether the criteria for recognizing an asset or group of assets as held for sale are met, pursuant to the provisions of IFRS 5 “Non-Current Assets Held for Sale and Discontinued Operations”.

These estimates consider also the Group plans in terms of carbon neutrality as approved by the Science Based Target Initiative (SBTi) in July 2022 and more specifically, achieving by 2025 CO2 neutral scopes 1 & 2 and by 2030 reducing green house gas (GHG) emissions by 45% of scope 3, among others by solar energy production on its sites (on site PPA), purchases of renewable energy (off site PPA) and the development of its transversal division for cutting edge sustainable and smart materials launched in July 2021, as well as the review of the group industrial portfolio to climatic risks on the basis on the GIEC scenarii.

The results of the sensitivity tests carried out on the carrying amounts of goodwill and provisions for pensions and other employee benefits are provided in notes 10 and 25.2, respectively. In addition, Note 11 “Intangible Assets” describes the main assumptions used for measuring intangible assets and Note 8.2 the assumptions for recognition of deferred tax assets.

Companies over which the Group exercises significant influence and which are at least 20%-owned are consolidated when one or more of the following criteria are met: annual sales of over €20 million, total assets of over €20 million, and debt of over €5 million.

Non-consolidated companies are not material, either individually or in the aggregate.

Subsidiaries controlled by the Group are fully consolidated. Control is presumed to exist when the Group holds more than 50% of a company’s voting rights and may also arise as a result of shareholders’ agreements.

Subsidiaries are fully consolidated as of the date on which control is transferred to the Group. They are no longer consolidated as of the date that control ceases.

Companies over which the Group exercises significant influence but not control, generally through a shareholding representing between 20% and 50% of the voting rights, are accounted for by the equity method. There is no joint operation in the sense of IFRS 11 within the companies consolidated by equity method.

The FORVIA group’s financial statements are presented in euros. Except if specifically specified, amounts are in millions of euros; generally, amounts presented are rounded to the closest unit; consequently, the sum of rounded amounts can present non-significant differences to the reported total. Moreover, ratios and variances reported are computed with the detailed amounts and not with the rounded amounts.

The functional currency of foreign subsidiaries is generally their local currency. The assets and liabilities of these companies are translated into euros at the year-end exchange rate and income statement items are translated at the average exchange rate for the year. The resulting foreign exchange gains and losses are recorded in equity.

Balance sheets and net income of Group entities active in hyperinflation economies are restated to take into account the changes in purchasing power of the local currencies using the official indexes at closing date. They are then translated in euros using the exchange rate of the closing date; without restatement of comparative periods in accordance with IAS 21. This is applied in 2022 and 2023 to Group affiliates in Argentina and in Türkiye.

However certain companies located outside the euro or the US-dollar zone and which carry out the majority of their transactions in euros or US dollars may, however, use euros or US dollars as their functional currency.

All material inter-company transactions are eliminated in consolidation, including inter-company gains.

The accounting policies of subsidiaries and companies accounted for by the equity method are not significantly different from those applied by the Group.

FORVIA has announced mid February 2023 to have signed with the Motherson group an agreement by which Motherson commits to acquire FORVIA's SAS Cockpit Modules division (assembly and logistics services), reported as part of its Interiors Segment. All the conditions were met from an IFRS point of view to qualify the activity as discontinued, mainly regarding the criteria of being a major line of business and the highly probable character of the sale.

Since January 1, 2023, applying IFRS 5, the corresponding assets and liabilities have been isolated in dedicated lines as the net result of the corresponding discontinued activities and so until July 31, 2023, effective date of the sale of these activities (see Note 2.1).

Due to the effective sale of these activities on July 31, 2023, there are no assets nor liabilities presented in separated lines in the consolidated balance sheet as of December 31, 2023.

The net income, other comprehensive income and cash flows items of discontinued operations are presented separately in the statement of financial position for the year 2023 and all prior periods presented in the financial statements. The comparative balance sheet for the previous year is not restated, as per IFRS5. 

Inter-company transactions other than the ones linked to management fees remain eliminated. The classification of management fees for which the sale of the SAS will have no impact has been maintained in operating income. The net impact of this sale is also presented in the net income of discontinued activities.

The restatements of the previously published financial statements for the year 2022 are detailed in the tables below.

The net cash flow published in 2022 (€470.8 million) amounts to €483.4 million as of December 31, 2022 after IFRS5 restatement.

On July 31, 2023, FORVIA has finalized the sale to the Motherson group of its SAS Cockpit Modules division (assembly and logistics services), reported as part of its Interiors Segment, for an entreprise value of €540 million. 

According to the sale contract, the process of determining potential price adjustments is ongoing; no significant impact is expected on group financial statements. On December 31, 2023, the loss on disposal after tax has been booked in “Net income of discontinued operations”.

In accordance with IFRS 10, the gain or loss on disposal of SAS is calculated based on the difference between:

• ■the global sale price, after goodwill and any costs related to the transaction and the estimated liabilities;
• ■the net equity, as recognized in the consolidated financial statement on July 31, 2023.

In accordance with IFRS 5, “net income of discontinued operations” presented in the consolidated statement of comprehensive income amounted to €-5.4 million including the operations of the SAS business from January 1, 2023 to July 31, 2023 for total sales of €593.6 million as well as the net loss on disposal related to this activity of €-6.3 million and the directly incrementable expenses related to the sale.

The accounting principles and policies applied to discontinued operations are the same as those applied for annual accounts.

FORVIA has finalized the sale of designated parts of FORVIA’s commercial vehicle exhaust aftertreatment business in Europe and in the United States, on October 2, 2023, for a total transaction value of €199.2 million, to its longstanding partner Cummins. As part of this transaction, Cummins acquired two plants located in Roermond (Netherlands) and Columbus South (Indiana, USA) as well as their related programs. According to the sale contract, the calculation of prospective price adjustments based on CVI accounts on transaction date is ongoing.

Consistently with its early 2023 announcements, FORVIA has concluded its disengagement from Russia, with the sale of its three operating entities (Faurecia Environmental solutions-Russia, Faurecia Automotive Solutions, Faurecia Interior Togliatti) in December 2023, after having obtained the necessary regulatory authorizations from the Russian administration. FORVIA has no operational activities in Russia since end of December 2023.

Within Seating perimeter, in China, the company Zhengzhou Faurecia Automotive Parts Co. Ltd has been created and is fully consolidated since April 2023, it is held at 70% by Group, and the company JinHua LEAP Faurecia Automotive Parts Co. Ltd, held at 51%, has been created and is fully consolidated since September 2023. In France, the company SIELEST has been absorbed into the company SIEDOUBS as of January 1, 2023. In Thailand, the company Rayong Faurecia Automotive Parts Co. Ltd held at 70%, has been created and is fully consolidated since November 2023.

For Interiors, in United States, the companies of Detroit Manufacturing Systems’ Group held at 49% and consolidated by equity method have been sold in June 2023.

Within Clean Mobility perimeter, companies dedicated to the hydrogen activities have been created in France, in Germany, in China, in South Korea and in United states during the first half year 2023. Following the sale of a part of the group shares to Stellantis, the company Symbio, consolidated by equity method, is held at 33% since July 2023.

In China, for Lighting segment, the company HELLA Faway Automotive Lighting (Tianjin) Co., Ltd has been created in May 2023. It is held at 39.98% and consolidated by equity method.

For Electronics, in China, the company Parrot Automotive Shenzhen, held at 100% and fully consolidated, has been liquidated in June 2023.

In Germany, for the Lifecycle Solutions segment, the company HELLA Pagid GmbH, consolidated by equity method and held at 49%, has been fully acquired on December 31, 2023.

FORVIA has completed on January 31, 2022 the acquisition of 79.5% of HELLA, group listed on the Frankfort Stock Exchange, comprising the 60% acquired from the family pool, of which 8.95% were paid through newly issued FORVIA shares and 19.5% as a result of the public tender offer mentioned above. FORVIA also acquired additional shares on the market, representing 2.09% of HELLA shares as of March 18, 2022. As of December 31, 2023, FORVIA holds 81.6% of HELLA shares. FORVIA has an exclusive control on HELLA, which is fully consolidated (including all its significant affiliates) since February 1, 2022.

Within the Seating perimeter, in China the companies Xian Faurecia Automotive Parts Co., Ltd and Changzhou Faurecia Automotive Parts Co., Ltd have been created and are fully consolidated since February 2022; they are held at 70% by the Group. The company Faurecia (Tianjin) Automotive Systems Co., Ltd has been created and is fully consolidated since February 2022; it is held at 100%. The company Faurecia (Changshu) Automotive System Co., Ltd in China, fully consolidated, is being held at 60% since october 2022 vs initially at 55%.

For the Electronics perimeter, in Mexico, the company Hitachi Automotive Systems San Juan Del Rio, S.A. de C.V held at 20% and consolidated in equity method had been sold in June 2022. In China, the company Changchun FAWSN Faurecia Cockpit of Future System Co., Ltd in China, has been acquired in July 2022 at 50% and is fully consolidated and the company Faurecia Clarion (Wuhan) has been created and is fully consolidated since September 2022, it is held at 100%.

Within the Lighting perimeter, the company HBPO Beteiligungsgesellschaft mbH in Germany, consolidated in equity method with a share of 27% since February 2022 following HELLA acquisition has been sold in December 2022.

The worldwide automotive production showed strong dynamics in 2023 with a global production of 90.3 million light vehicles, corresponding to a 9.7% growth year on year. The market was supported by a very robust global demand and the progressive normalization of semi-conductor’s supply. The 2023 level exceeded the 89 million LV production reached in 2019 (pre-Covid level), but with a different regional mix ; In 2023, China represented 32% of worldwide LVP (vs. 27% in 2019) and Europe represented 20% (vs. 24% in 2019).

The impact of cost inflation has however persisted during the year 2023. Compared to 2022, which predominantly caused by increase in raw material prices, cost inflation in 2023 mainly related to energy, labor and, to a lesser extent, raw material prices (some of them starting to go down).

No significant post-balance sheet events have occurred.

The Group is structured into business units based on the nature of the products and services offered:

• ■Seating (design and manufacture of complete vehicle seats, seating frames and adjustment mechanisms);
• ■Interiors (design, manufacture and assembly of instrument panels, door panels and modules);
• ■Clean Mobility (design and manufacture of exhaust systems, solutions for fuel cell electric vehicles, and aftertreatment solutions for commercial vehicles);
• ■Electronics (design and manufacture of display technologies, driver assistance systems and cockpit electronics), which includes HELLA Electronics and Clarion Electronics;
• ■Lighting (design and manufacture of lighting technologies);
• ■Lifecycle solutions (solutions extending the vehicle lifecycle as well as workshop equipment and special original equipment).

These business units are managed by the Group on an independent basis in terms of reviewing their individual performance and allocating resources. The tables below show reconciliation between the indicators used to measure the performance of each segment – notably operating income (before amortization of acquired intangible assets) – and the consolidated financial statements. Borrowings, other operating income and expense, financial income and expenses, and taxes are monitored at the Group level and are not allocated to the various segments. A review of the useful life for the fixed assets has been performed in regard to the climate changes and its regulatory consequences as known at the closing date, more specifically for the Clean Mobility segment, and has not enabled to identify any significant impact for the Group.

Revenue on parts is recognized when the control is transferred to the customer, incidental to ownership of the modules or parts produced. This generally corresponds to when the goods are shipped.

Revenue on tooling is generally recognized at the transfer of control of these tooling to the customer, usually shortly before serial production starts. Development costs are generally recognized as set up costs for the serial parts production and capitalized, they are then not considered as a revenue distinct from product sales, except specific cases depending on the contract with the customer.

FORVIA operates as an agent for monoliths sales, as well as for some cockpit components, these sales are then recorded at net value in the income statement. These agent flows represented €7,384.7 million in 2023 (€8,325.2 million in 2022 restated IFRS5) ; the counterparts in balance sheet are presented in the lines Contract assets (cf. note 17) and Trade accounts receivables in assets and  Trade payables in liabilities. 

Operating margin (before amortization of acquired intangible assets) is the FORVIA group’s principal performance indicator.

It corresponds to net income of the fully consolidated companies before:

• ■the amortization of intangible assets acquired in business combinations (customer relationship…);
• ■other non-recurring operating income and expenses, corresponding to material, unusual and non-recurring items including reorganization costs and early retirement costs, the impact of exceptional events such as the discontinuation of a business, the closure of an industrial site, disposals of non-operating buildings, impairment losses and reversals recorded for property, plant and equipment or intangible assets, as well as other material and unusual losses;
• ■income on loans, cash investments and marketable securities;
• ■finance costs, including finance costs on lease liabilities;
• ■other financial income and expenses, which include the impact of discounting the pension benefit obligation and the return on related plan assets, the ineffective portion of interest rate and currency hedges, changes in value of interest rate and currency instruments for which the hedging relationship does not satisfy the criteria set forth in IFRS 9, and gains and losses on sales of shares in subsidiaries;
• ■taxes.

Sales by operating segment break down as follows:

Sales* by major customer break down as follows:

Sales are broken down by destination region. Other items are presented by the region where the companies involved operate:

Details of expenses relating to the Group’s free shares plans and pension costs are provided in Notes 22.2 and 25, respectively.

Development costs are usually capitalized in intangible assets as they are considered as set up costs for the serial parts production, and then amortized to match the quantities of parts delivered to the customer, over a period not exceeding five years except under exceptional circumstances. For some specific contracts where the developments works are a separate performance obligation under IFRS 15 the corresponding costs comply with the definition of work in progress and are capitalized in inventory. These inventories are then expensed (cost of sales) when the corresponding revenue is recognized.

The development costs recognized in the cost of sales (stock decrease and R&D assets depreciation) amount to €924.4 million as of December 31, 2023, vs €877.8 million as of December 31, 2022 restated.

This table does not include allowances and reversals of provision for non-recurring items.

Other non-recurring operating income and expenses are analyzed as follows:

Reorganization costs (€170.8 million) include redundancy and site relocation payments for 2,796 people.

Deferred taxes are recognized using the liability method for temporary differences arising between the tax bases for assets and liabilities and their carrying amounts on the consolidated financial statements. Temporary differences mainly arise from tax loss carryforwards and consolidation adjustments to subsidiaries’ accounts.

Deferred taxes are measured using tax rates (and laws) that have been enacted or substantially enacted at the balance sheet date.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available in the short or medium term against which the temporary differences or the loss carry forward can be utilized, based on the Group’s strategic plan.

Deferred tax liabilities are accounted for every taxable temporary differences in relation with investment in subsidiaries, joint ventures and associates unless the Group has the capacity to control the timing of the reversal of temporary differences and if it is probable that they will not be reversed in a predictable future.

In compliance with IFRIC 23, accruals for risk on income tax are part of the income tax within the statement of comprehensive income and of income tax payables within the balance sheet (Note 28).

Corporate income tax can be analyzed as follows:

Corporate income tax can be analyzed as follows: