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.

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.

This is a translation into English of the statutory auditors’ report on the consolidated financial statements of the Company issued in French and it is provided solely for the convenience of English-speaking users.

This statutory auditors’ report includesinformation required by European regulations and French law, such as information about the appointment of the statutory auditors or verification of the information concerning the Group presented in the management report and other documents provided to shareholders.

This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

To the shareholders,

In compliance with the engagement entrusted to us by your annual general meeting, we have audited the accompanying consolidated financial statements of Forvia for the year ended December 31st, 2023. 

In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at December 31st, 2023 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

The audit opinion expressed above is consistent with our report to the Audit Committee.

Forvia SE company is a holding company which directly and indirectly provides financial, accounting, IT, executive management and administrative services to companies in the Group.

The sales 2023 are going down to €85.3 million, compared to €96.6 million in 2022.

Forvia invoices trademark royalties, calculated as a proportion of the subsidiaries’ sales. These royalties, extended since 2015 to all companies wholly owned by the Group, totaled €59.3 million in 2023, versus €64.2 million in 2022.

The operating result for the year 2023 is a loss of €1.0 million to be compared to a profit of €18.5 million in 2022.

The net financial income totaled €83.6 million, compared to a net financial income of €314.0 million in 2022.

The variance is mainly due to the decrease in dividends received from €277.3 million in 2022 to €87.2 million in 2023. Interest income, net of interest expense, represents €1.4 million, compared to €44.1 million in 2022.

In 2023, the net non-recurring loss is at €3.1 million versus a loss of €2.4 million in 2022.

Tax income amounted to €7.9 million, compared with €14.3 million for fiscal year 2022. This corresponds to the tax income recognized from the positive earnings of French subsidiaries that are part of the consolidated tax group.

Net income for the fiscal year showed a profit of €87.1 million (5). This compares with a profit €344.3 million in 2022.

Year ended December 31, 2023

This is a translation into English of the statutory auditors’ report on the financial statements of the Company issued in French and it is provided solely for the convenience of Englishspeaking users. This statutory auditors’ report includes information required by European regulations and French law, such as information about the appointment of the statutory auditors or verification of the management report and other documents provided to the shareholders. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

To the shareholders,

In compliance with the engagement entrusted to us by your annual general meeting, we have audited the accompanying financial statements of Forvia SE for the year ended December 31st, 2023.

In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as at December 31st, 2023 and of the results of its operations for the year then ended in accordance with French accounting principles.

The audit opinion expressed above is consistent with our report to the Audit Committee.

This section describes the parties involved in FORVIA group's Enterprise Risk Management program (ERM) and the main risk factors to which the Group believes it is exposed as of the date of this Universal Registration Document. However, other risks that the Group is not aware of at the date of this Universal Registration Document, or which are not considered to date as likely to have a significant unfavorable impact for the Group, its Business Groups, its financial position, its results or its outlook, may exist or occur.

The risk factors of the Group presented below are those identified as being within its ERM scope as of the date of this Universal Registration Document, it being understood that certain information presented below and identified as such relates specifically to the 2023 fiscal year.

The Group operates its activities in an environment that is constantly changing. It is therefore exposed to risk factors that could result in events whose probability of occurrence and/or severity could adversely affect the achievement of its objectives in the short, medium or long term.

Raising awareness of risk culture is the key element of the methodology, for which training is provided to all players in the risk management system. The Group works every year on a risk tolerance mapping through a global approach that is broken down into several stages:

• 1 .the definition of the Group’s context and associated objectives; this forward-looking strategy phase is carried out at the beginning of the year as part of the strategic plan. Thanks to a bottom-up approach, for each product line, the deliverable is formalized with a SWOT analysis and a risk tolerance mapping, with three key factors:
  • ■the uncertainties related to the global environment and the automotive sector,
  • ■the threats, known or unknown, that could affect the Group’s objectives,
  • ■the opportunities associated with the threats identified in order to achieve the Group’s objectives.
• A version is then consolidated by business groups with the entries of its product lines to form a Strategic risk mapping that represents the net impact in function of the time horizon; a final version is then consolidated for the Group;
• 2 .the risk assessment of which the Group is aware, with three phases:
  • ■risk identification which is approached via various methods, including surveys and interviews with the main stakeholders at Group and business level,
  • ■risk analysis by the causes and consequences to better qualify the risk parameters using a qualitative method,
  • ■risk assessment using the prioritization method described below;
• 3 .the risk processing is done using four different levers so called 4T (terminate or avoid, treat or reduce, transfer or share and then tolerate the residual risk) and this thanks to risk control tools that apply for:
  • ■the probability of occurrence with control measures, to anticipate the occurrence of any known and possible event,
  • ■the impact (or severity) with appropriate mitigation plans, to limit the effects of any adverse event as far as possible.

The Group’s risk mapping changes each year according to the external and internal context. It is submitted to the Risk Committee for approval.

There are two other specific risk mappings in accordance with the new regulations:

• ■the corruption risk mapping in application of the provisions of the Sapin II law;
• ■the extra-financial performance risk mapping in the context of the Non-Financial Performance Declaration.

Since 2022, more granular risk analyzes have been carried out at the level of functions, Business Groups or regions, and these feed into the Group’s vision. They also give more autonomy to the operational teams thanks to the deployment of tools and help to raise their awareness of risk management and culture. The result is formalized in the form of risk tolerance maps. They are specific to the scope in question and are accompanied by risk mitigation measures and plans.

The link between risk management and internal control is described in Section 2.2.2.2. “Internal control” in this section.

The assessment of the main risks takes into account the control measures implemented to reduce the risk (net or residual risk) and is based on a simplified risk tolerance mapping with a three-level scale:

• ■impact or severity (low/medium/high) which is characterized by financial, operational, reputational, human and/or legal criteria;
• ■the probability of occurrence (low/medium/high) which is characterized by a frequency.

Since 2022, the Group created the ABC Risk class method to better control risk (see paragraph 2.2.4 "Risk department").

The simplified mapping of the main risk factors is shown below. The different risk factors included in this matrix are detailed in this section. The risk tolerance mapping is an internal tool to manage the Group's risk factors. It is also validated by the Audit Committee and by the Board of Directors of FORVIA SE once a year.

Note: The abbreviation   NFPD  indicates that this risk presents non-financial challenges, which are described in detail in Chapter 4 “Non-Financial Performance.” Identification of the primary CSR risks & opportunities is based on CSR risk mapping produced by the Group to supplement Group risk mapping. A risk universe (and the associated descriptions) was thus defined during a process that included consultations with internal and external stakeholders. Identified risks were rated by stakeholders. The risks selected are those with high criticality during this rating phase and have been approved by the Group’s Risk Committee.

In addition to the simplified mapping of the main risks above, the following table provides a summary of the risk factors and the associated measures of control. The categories below are not set out in order of importance. However, within each category, the risk factors are set out in decreasing order of importance as determined by the Group at the date of this Universal Registration Document on the basis of an assessment of their probability and potential impact, taking into account mitigating measures (net risk). The assessment made by the Group of this ranking in terms of importance may however be modified at any time, in particular, in response to new events outside or within the Group. Moreover, even a risk that is currently considered to be of lesser importance could have a significant impact on the Group should it occur at a future date.

Other risks of which the Group is currently unaware, or which it does not consider significant at the date of this Universal Registration Document, could also affect its business.

The Audit Committee (specialized committee of FORVIA SE's Board of Directors), which is tasked with overseeing the effectiveness of the risk management program and the internal control system (which are not limited to accounting and financial risks), informs FORVIA SE's Board of Directors of the main actions taken by the Group in this domain. Risk contributors provide information to the Audit Committee which conducts a formal annual review of the global risk management program and the internal control system.

The following diagram provides a summary of the organization and processes of risk management and internal control within the Group.

The Group’s Executive Committee examines the major operational risks inherent to the Group’s business during the monthly meetings of the Operations Committee, and at least once per year it reviews the risk mapping prepared by the Group’s Risk Committee.

The Executive Management of each business (Business Group) is responsible for identifying and managing the operational risks inherent to its business, which are examined by the respective Operations Committee and Risk Committee. The operational and support functions direct and lead the actions, including risk management, necessary to achieve the Group’s objectives.

The Group's asset protection policy is based on the implementation and ongoing adaptation of a policy of (i) preventing industrial risks and (ii) transferring the main insurable risks to the insurance market.

In addition, given the trend in claims and the unfavorable trend in the insurance market – in particular the increase in deductibles – Faurecia is de facto its own insurer to a certain extent. The Group has set up a captive reinsurance company based in Luxembourg in order to further structure this self-insurance. Since 2021, the Group has obtained approval from the Luxembourg Insurance Commission for FORVIA-Ré, which participates in the hedging of the Group’s civil liability, damage and business interruption insurance programs.

The Group has taken out a fire, property damage and business interruption insurance policy with a co-insurance group of major insurers led by FM Global.

Buildings and equipment are insured as replacement values. The guarantees are organized around a Master policy which directly covers the risks located in the area of freedom to provide services and local policies for subsidiaries located outside this area.

The premium rates applicable to exposed capital (direct damage and annual gross margin) depend directly on the Highly Protected Risk (HPR) classification assigned to the site, after audit by the insurer.

The Group was recently affected by several major incidents:

• ■June 2019: destruction following a fire at the plant belonging to the FCM supplier Modulo in Poland;
• ■November 2019: a fire in a workshop used for the manufacturing of flooring and trim and door panels in the Abrera plant in Spain following an outbreak of a fire on a painting production line.

These claims and general developments in the insurance market have led to a significant tightening of the program’s terms and conditions:

• ■a sharp increase in deductibles, particularly for major sites that are poorly protected or exposed to high natural risks;
• ■increase in the premium;
• ■increase in the deductible for failures, and reduction in the level of coverage provided for indirect failures (tier-2 and above suppliers, customer suppliers).

Following recent incidents, prevention actions have been stepped up by:

• ■monitoring by the Risk Committee of the fire protection action plans of the most vulnerable main sites;
• ■the launch of an analysis and a monitoring of the fire and natural risks of our main suppliers, in particular through the precise location of their production plants;
• ■the launch of a technical and an economic evaluation of the costs of securing sites exposed to a high risk of flooding, earthquakes, wind or snowfall.

FORVIA completely reviewed the production of insurable property values at the time of the renewal in July 2023: the insured assets are now valued by a specialized service provider according to an algorithmic and predictive methodology based on the characteristics and location of the buildings as well as the list of equipment present at each site. Inventory and gross margin values are extracted from the ERP and then allocated to each site. This innovation made it possible to contain the inflation of securities and therefore the premium budget.

Lastly, the increase in climatic hazards could increase claims related to natural events or trigger other events (heat waves, water scarcity, etc.) likely to affect the Group’s operations. A comprehensive analysis of the industrial park portfolio was carried out by an external partner in 2022, with the aim of anticipating the likely impacts of climate change on the most vulnerable industrial parks. Based on this analysis of exposure to natural disasters, the Group assesses the resilience of its activities using the OCARA method. In 2023, five pilot sites have tested the methodology before rolling it out at its most exposed sites.

Damage insurance is supplemented by builder’s risk insurance and insurance covering the transportation of goods or equipment and political risk.

The previously regional transport insurance policies have been consolidated into an integrated global program with the insurer AXA XL since January 1, 2022. Prevention actions are underway to control claims in countries affected by recurring claims such as Mexico, Brazil and South Africa.

The information below constitutes the chapter relating to the corporate governance report as provided for by the last paragraph of Article L. 225-37 of the French Commercial Code.

Some of the information forming an integral part of the corporate governance report, as required by Articles L. 22-10-8 and L. 22-10-10 of the French Commercial Code, is included in other chapters of this Universal Registration Document. Where applicable, references included in this section indicate the chapter of this Universal Registration Document to which they refer.

This chapter has been prepared on the basis of the work carried out by the Group’s Legal department and Human Resources department.

The Company refers to the AFEP-MEDEF Corporate Governance Code for listed companies, available on the MEDEF website (www.medef.fr).

The diagram below summarizes the composition of the Board of Directors and the Committees (permanent) at the date of this Universal Registration Document: 

The table below presents the key figures of the Board of Directors at the date of this Universal Registration Document.

In addition to Executive Management, the information about which is given in Section 3.1.2.4 “Governance structure and shareholder dialog”, the Group has an Executive Committee and is also supported by Group Leadership Committee (TOP 300). The diversity policy within the governing bodies is described in Chapter 4 “Environmental and social performance”, Section 4.3.1.4. “Actions and assesssment of their effectiveness” paragraph Diversity & Inclusion of this Universal Registration Document.

As mentioned in Section 4.3.1.4. paragraph Diversity & nclusion of this Universal Registration Document, FORVIA has set itself the goal of boosting the recruitment and internal promotion of women in order to increase the presence of women among engineers and executives and in the Group top management with targets at 24% in 2025 and at 30% in 2030 of women in the Group Leadership Committee (TOP 300). As at December 31, 2023, the TOP 300 leaders comprised 27% women (compared to 23% in 2022) evidencing a strong feminization dynamic in the top management. The feminization of the Group Leadership Committee (TOP 300), in particular by the 2030 horizon, allows to build the necessary “reservoir”, in order to accelerate the gender balance in the Executive Committee (given that the majority of the Executive Committee’s members comes from the Group Leadership Committee (TOP 300).

In this context, FORVIA has notably implemented ambitious actions and initiatives described in Section 4.3.1.4. paragraph Diversity & Inclusion  of this Universal Registration Document, in particular, in terms of hiring, training and promotion of female talents. In 2023, the Group will continue its efforts in terms of the promotion of female talent, notably by implementing a new program referred to as “RISE” in favor of about 40 identified female talents (who may occupy top leaders positions, including Executive Committee member). This nine-month program includes collective coaching sessions, co-development exercises and networking events. It is sponsored by four members of the Executive Committee, including the Chief Executive Officer. By developing female talent at the highest level, the Group wishes to develop a more inclusive management, allowing female potential to be developed in turn by these role models.

In addition, it is to be noted that recent performance share plans for the Group Leadership Committee (TOP 300) include an internal condition relating to gender balance, therefore supporting actions in favor of the feminization of top management.

On an annual basis, the Board of Directors carries out a review of the succession plan for the Executive Committee (with a special attention to the percentage of women in the succession plan) and a specific review of the Group diversity policy.

FORVIA’s Executive Management is provided, under the responsibility of the Chief Executive Officer, by an Executive Committee which meets at least once a month to review the Group’s results and deliberate on general Group issues, or as often as the interests of the Company require.

The composition of the Executive Committee as of January 1, 2024, was as follows:

The table below presents key figures on the composition of the Executive Committee as of January 1, 2024:

The Board of Directors, further to a proposal from the Compensation Committee, sets the compensation for executive and non-executive corporate officers in accordance with the applicable legal provisions and the compensation policy.

The compensation policy setting the structure as well as the principles and criteria defined in order to determine the compensation and all benefits granted to the Chairman of the Board of Directors for the fiscal year ended December 31, 2023, which was 99.79% approved at the Company’s General Meeting held on May 30, 2023 pursuant to the 12th resolution, is set out in the Company’s 2022 Universal Registration Document, in Section 3.3.4.1 “Compensation policy for corporate officers”, and more specifically in Section 3.3.4.1.2. “Compensation policy for the Chairman of the Board of Directors”.

It should be noted that, in a summarized form, as in previous years, the 2023 compensation policy for the Chairman of the Board of Directors provided for fixed compensation, benefits in kind and social protection schemes.

The Chairman of the Board of Directors’ compensation, for the 2022 and 2023 fiscal years, as described below, complies with the compensation policy approved by the shareholders. 

On February 17, 2023, the Board of Directors, on the recommendation of the Compensation Committee, decided, subject to the adoption of the 2023 compensation policy by the Company’s General Meeting, to maintain the annual fixed compensation of the Chairman of the Board unchanged at €300,000. This has remained unchanged since 2017.

The fixed annual compensation of the Chairman of the Board of Directors, net of benefits in kind related to the provision of an assistant for his activities other than those relating to the chairmanship of FORVIA, amounted to €265,200 (excluding benefits in kind and social protection described thereafter). It was paid in full in 2023.

In addition to the provision of a personal assistant for activities other than those related to the chairmanship of FORVIA for an amount valued at €34,800 (which is included in the above mentionned €300,000), the Chairman of the Board of Directors was provided with a company car. This benefit is valued at €6,624.

The total amount of benefits in kind is valued at €41,424.

It is finally specified that the Company paid €4,765 in consideration of the supplementary health/life/disability pension scheme.

With the exception of the components described above, the Chairman of the Board of Directors did not receive any other compensation (including compensation for his duties as Board member), including by a company comprised in the scope of consolidation of the Company within the meaning of Article L. 233-16 of the French Commercial Code.

The tables below present the compensation and benefits paid during the 2022 and 2023 fiscal years or granted for these fiscal years to the Chairman of the Board of Directors.

It is stipulated that, since the Chairman of the Board of Directors receives only fixed compensation as well as benefits in kind and has social protection schemes, to the exclusion of any other compensation, tables No. 4 to No. 7 and No. 10 provided for by the AFEP-MEDEF Code and AMF recommendation No. 2021-02 are not applicable.

The compensation policy setting the structure as well as the principles and criteria established to determine the compensation and all benefits granted to the Chief Executive Officer for the fiscal year ended on December 31, 2023, which was 92.66% approved by the Company’s General Meeting of May 30, 2023 in the 13th resolution, appears in the Company’s 2022 Universal Registration Document in Section 3.3.4.1 “Compensation policy for corporate officers”, and more specifically in Section 3.3.4.1.3. “Compensation policy for the Chief Executive Officer”.

The compensation policy for the Chief Executive Officer for 2023 therefore provided for the following:

• ■a fixed annual compensation;
• ■a variable annual compensation, subject to performance conditions and representing up to a maximum of 180% of the fixed annual compensation;
• ■a long-term compensation in the form of free share allocations subject to presence and performance conditions;
• ■termination payment;
• ■an indemnity in return for a non-compete commitment;
• ■a notice period and a non-poaching/non-solicitation commitment;
• ■additional defined contributions and benefits pension schemes;
• ■benefits in kind and social protection;
• ■a compensation for his duties in the Shareholder Committee of HELLA.

The Chief Executive Officer’s compensation for the 2023 fiscal years, as described below, is compliant with the compensation policy as approved by the shareholders.

The 2023 fiscal year was marked by the continuation of the transformation of the Group in a context which remained tense in the automotive sector. The Company has carried on the necessary actions in terms of deleveraging trajectory, improvement of the operating income, protection of cash and make fixed costs more flexible . The Group has thus executed its strategy related to the sale of assets as per the plan submitted to Shareholders and advanced the various synergy programs following the consolidation of HELLA. It has in addition pursued its ambitious carbon neutrality plan, which has produced effects in all the Group's sectors and geographies.

These achievements are reflected in the compensation of the Chief Executive Officer in 2023, a significant part of which is based on the Group's performance, in particular for the short-term and long-term variable aspects.

On February 17, 2023, the Board of Directors, on the recommendation of the Compensation Committee, decided, subject to the adoption of the 2023 compensation policy by the Company’s General Meeting, to maintain the fixed annual compensation of the Chief Executive Officer unchanged.

As a result, the fixed annual compensation of the Chief Executive Officer amounted to €1,100,000 for the 2023 fiscal year. This amount was paid in full in 2023.

On the recommendation of the Compensation Committee, the Board of Directors set the procedures for determining the variable compensation of the Chief Executive Officer for 2023, in accordance with the 2023 compensation policy approved by the shareholders.

The table below summarizes the results of the analysis carried out by the Board of Directors on February 16, 2024, on the recommendation of the Compensation Committee, and assesses the levels of achievement of the quantifiable and qualitative criteria targets set in respect of the variable annual compensation for the fiscal year ended December 31, 2023: (note on the basis of the pre-estimate presented in December)

Detailed explanations regarding the assessment of quantifiable and individual criteria:

• ■quantifiable criteria:
  • ■the criterion relating to the net debt to EBITDA ratio was defined by the Board of Directors with reference to the deleveraging trajectory following the acquisition of HELLA, and the targets were set in the Group's budget. Achievement was measured at June 30, 2023 and December 31, 2023, and the Board of Directors noted that the objectives had been reached at 167.50%,
  • ■the criterion relating to synergies from the integration of HELLA was defined by the Board of Directors with reference to the HELLA integration plan and the expected financial synergies at the level of the consolidated Group, and the objectives were set in the Group budget. Achievement was measured at December 31, 2023, and the Board of Directors noted that the objectives had been reached to the maximum extent possible,
  • ■the environmental criterion linked to carbon neutrality has been defined by the Board of Directors with reference to the trajectory for achieving the Group's commitments for 2025 and in line with the intermediate stage of 2023, as specified in the "sustainability-linked financing framework". Achievement was measured as of December 31, 2023 and the Board of Directors noted that the Group had reached its maximum target, with 27.3 tons of CO2 issued per € million of revenue;
• ■individual criterion: given the objectives set and the results obtained, 123.30% of the individual criterion was met. The elements taken into account are detailed below:
  • ■the amount of new orders in € was overachieved at Forvia level; operating margins associated with these orders were higher than the Forvia budgets set by the Board of Directors.
  • ■the amount of fixed costs reduction has been achieved in accordance with the budget objective set by the Board of Directors.

After examining the rate of achievement of the objectives of the criteria for the variable annual compensation for the 2023 fiscal year, the Board of Directors of February 16, 2024, noted that the total amount of the variable annual compensation for 2023 amounts to € 1,782,921, compared to €1,980,000 for the 2022 fiscal year (and €300,000 for the 2021 fiscal year). Taking into account the amount of variable annual compensation for fiscal year 2023 resulting from outperformance relative to the quantifiable criteria, the relative proportion of fixed and variable annual compensation for fiscal year 2023 is as follows: 38% for fixed annual compensation and 62% for variable annual compensation.

In accordance with the provisions of Article L. 22-10-34 of the French Commercial Code, the variable compensation for the fiscal year ended December 31, 2023, shall be paid only after the shareholders, in a General Meeting to be held on May 30, 2024, have approved the components of compensation paid during the course of the 2023 fiscal year or awarded in respect of this fiscal year to Patrick Koller, Chief Executive Officer.

It is also acknowledged that the payment of Patrick Koller’s variable annual compensation for the 2022 fiscal year, which amounted to €1,980,000 was, in accordance with the law, subject to a favorable vote at the General Meeting of May 30, 2023, on the components of compensation paid or awarded in respect of the 2022 fiscal year (10th resolution). Since the vote in favor of this resolution was 84.27%, the payment of Patrick Koller’s variable annual compensation for the 2022 fiscal year was made after this General Meeting.

Introductory information: Plan delivered in 2023/Plan for which the performance assessment took place in 2023/Plan for which the performance conditions are set by reference to the 2023 fiscal year

Plan no. 11 awarded in 2019 – Total performance of 11.5% (assessed as at December 31, 2021)

The Board of Directors, at a meeting held on October 9, 2019, on a recommendation from the Compensation Committee, resolved to grant a maximum of 1,147,260 performance shares, including 56,220 to Patrick Koller (Chief Executive Officer). In addition to a condition of presence, this grant is subject to (i) an external condition of net earnings per share assessed between the 2018 fiscal year and the 2021 fiscal year, by comparison with a reference group of global automotive suppliers, weighting 30%, (ii) an internal condition related to the Group net income (after tax) at December 31, 2021, weighting 60% and (iii) a CSR internal condition related to gender diversity within the “Managers and Professionals” category (Group executives), weighting 10%.

At its meeting of February 18, 2022, the Board of Directors noted, on the recommendation of the Compensation Committee (i) the non-achievement of the quantified objectives of the internal condition related to the Group’s net income (after tax) as assessed at December 31, 2021 (weighting of 60%) and (ii) the achievement of 115% of the internal CSR condition linked to gender balance within the “Managers and Professionals” category at December 31, 2021.

At its meeting of April 21, 2022, the Board of Directors noted, on the recommendation of the Compensation Committee, the non-achievement of the external condition linked to the net earnings per share of plan no. 11.

The total achievement is therefore at 11.5%.

As a consequence and given the decision made by the Board of Directors on July 22, 2022, to proceed to an adjustment of the number of unvested rights to free shares related to the Performance Share Plans (as a result of the capital increase carried out by the Company in June 2022), the number of performance shares that has therefore been delivered to the Chief Executive Officer on October 9, 2023 is 5,365 shares.

The conditions for the definitive vesting of these shares, set out in the summary table below, are described in more detail in chapter 5 “Capital stock and shareholding structure”, section 5.2.2 of the 2022 Universal Registration Document. In accordance with the term of plan No. 11, 70,843 shares were delivered to the beneficiaries concerned on October 9, 2023, including 5,365 shares to the Chief Executive Officer.

Plan no. 12 awarded in 2020 – Assessment of performance at December 31, 2022, in 2023

The Board of Directors, at a meeting held on October 22, 2020, on a recommendation from the Compensation Committee, resolved to grant a maximum of 1,384,630 performance shares, including 61,140 to Patrick Koller (Chief Executive Officer).

In view of the decision of the Board of Directors on July 22, 2022, to adjust the rights to free shares subject to performance conditions not yet vested (as a result of the capital increase carried out by the Company in June 2022), the maximum number of performance shares now granted to Patrick Koller,under plan no. 12, has been adjusted to 65,958 .

In addition to a condition of presence, this grant is subject to (i) an external condition of net earnings per share assessed between the 2019 fiscal year and the 2022 fiscal year, by comparison with a reference group of global automotive suppliers, weighting 30%, (ii) an internal condition related to the Group net income (after tax) as of December 31, 2022, weighting 60% and (iii) a CSR internal condition related to gender diversity within the “Managers and Professionals” category (Group executives), weighting 10%.

The impact of the integration of HELLA into FORVIA's accounts as from 2022, as well as exceptional events such as the war in Ukraine and the level of vehicle production, have been restated from the internal target criterion for net income after tax under plan no. 12 by decision of the Board of Directors on July 22, 2022, while maintaining the same trajectory curve.

At its meeting of April 13, 2023, the Board of Directors noted, on the recommendation of the Compensation Committee (i) the achievement of 94.7% of the quantified objectives of the internal condition related to the Group’s net income (after tax) as assessed at December 31, 2022 (weighting of 60%), (ii) the achievement of 127.9% of the internal CSR condition linked to gender balance within the “Managers and Professionals” category at December 31, 2022 and (iii) the non-achievement of the external condition related to net earnings per share.

The total achievement is therefore at 69.6%

As a consequence and given the decision made by the Board of Directors on July 22, 2022, to proceed to an adjustment of the number of unvested rights to free shares related to the Performance Share Plans (as a result of the capital increase carried out by the Company in June 2022), the number of performance shares that will therefore be delivered to the Chief Executive Officer in October 2024 will be 35,312 shares.

Plan no. 13 awarded in 2021 – Assessment of performance at December 31, 2023, in 2024

The Board of Directors, at a meeting held on October 25, 2021, on a recommendation from the Compensation Committee, resolved to grant a maximum of 1,389,000 performance shares, including 96,150 to Patrick Koller.

In view of the decision of the Board of Directors on July 22, 2022, to adjust the rights to free shares subject to performance conditions not yet vested (as a result of the capital increase carried out by the Company in June 2022), the maximum number of performance shares now granted to Patrick Koller has been adjusted to 103,727 under plan no. 13.

On July 26, 2023, the Board of Directors decided to adjust the net income after tax objective of plan no. 13 while maintaining the same achievement curve, in order to take into account the exceptional circumstances related to the integration and financing of the acquisition of HELLA, inflation, the impact of the ecological transition, and restructurings.

At its meeting of February 16, 2024, the Board of Directors noted, on the recommendation of the Compensation Committee (i) the achievement of 58.3% of the quantified objectives of the internal condition related to the Group’s net income (after tax) as assessed at December 31, 2023 (weighting of 60%), (ii) the achievement of 130% of the internal CSR condition linked to gender balance within the “Managers and Professionals” category at December 31, 2023.

The achievement of the external condition of net earnings per share of plan no. 13 will be assessed by the Board of Directors at its meeting reviewing the first quarter 2024 sales.

Executive Super Performance Initiative (ESPI) Plan awarded in 2021 – second tranche assessment in 2023

The Board of Directors, at a meeting held on July 23, 2021, on a recommendation from the Compensation Committee, resolved to grant a maximum of 673,549 performance shares, including 71,941 to Patrick Koller (Chief Executive Officer).

The definitive vesting of these free shares to Patrick Koller (Chief Executive Officer) is subject to the following two conditions:

1. ■50% of the rights subject to a condition of Annual Relative Total Shareholder Return (TSR), with a level of achievement noted each year, over a period of five years, giving rise to a maximum annual partial vesting of 20% of the tranche of the year in question. The total amount of the definitive grant under the Annual Relative TSR will be equal to the sum of the five years of partial vesting of the Annual Relative TSR;
2. ■50% of the rights subject to a condition of Average Relative Five-Year TSR, not giving rise to any partial vesting, the level of realization being calculated at the end of the five-year reference period and taking into account all the Relative Annual TSR of the period.

In view of the decision of the Board of Directors on July 22, 2022, to adjust the rights to free shares subject to performance conditions not yet vested (as a result of the capital increase carried out by the Company in June 2022), the maximum number of performance shares now granted to Patrick Koller, under the ESPI plan, has been adjusted to 77,610 .

At its meeting of July 26, 2023, the Board of Directors, on the recommendation of the Compensation Committee, noted the non-fulfillment of the second tranche of the annual relative Total Shareholder Return (TSR) condition. Consequently, the maximum number of shares remaining for Patrick Koller (Chief Executive Officer) is 62,088.

The conditions for the definitive vesting of these shares described above, as well as the consequence of the neutralization of the capital increase carried out by the Company in June 2022, are set out in Chapter 5 "Capital stock and shareholding structure", section 5.2.2 "Potential capital stock" of this Universal Registration Document.

The table below summarizes, for the three Plans No. 11 to 13, described above, the maximum number of shares to be allocated to the Chief Executive Officer, the rate of achievement of the performance conditions, the rate of vesting and the number of shares delivered (or to be delivered) to the Chief Executive Officer; The features of plan no. 14 (and the number of performance shares allocated to the Chief Executive Officer under this plan) are detailed in Chapter 5.

At a meeting held on July 26, 2023, the Board of Directors, on a recommendation from the Compensation Committee, resolved, on the basis of the 22nd resolution of the General Meeting of May 30, 2023, to grant a maximum of 2,116,540 performance shares, of which 146,270 performance shares (i.e., 0.07% of the capital stock at December 31, 2023) to Patrick Koller (Chief Executive Officer).

The valuation of the maximum grant, according to the standards used for the consolidated financial statements, amounts to €2,603,606, i.e. 236.69% of the reference fixed compensation.

The internal and external conditions of plan no. 15 as well as the objectives are presented in the table below:

In case of deviation in the volumes of the worldwide automobile production compared to the Company's strategic plan figures for the year in question, the Board of Directors shall have the possibility to adjust mechanically the objectives of the internal financial criteria. This possibility is detailed in Chapter 5 “Capital stock and shareholding structure”.

An attendance condition (subject to standard exceptions) applies to all beneficiaries including the Chief Executive Officer. The vesting is completed after a four-year vesting period, it being stipulated that no holding period is stipulated by the plan.

General provisions

The Chief Executive Officer must retain, in registered form and while he continues to hold office, at least 30% of all shares actually acquired under each plan. This percentage threshold requirement ceases to apply when the Chief Executive Officer holds a number of shares corresponding to three years of base gross compensation, factoring in all the previously established plans, and becomes applicable again if the Chief Executive Officer no longer holds the number of target shares corresponding to this level of base gross compensation. As of the date of this Universal Registration Document, the Chief Executive Officer holds 154,751shares.

In accordance with the AFEP-MEDEF Code, Patrick Koller (Chief Executive Officer) has made a formal commitment not to use any risk hedging transactions on the performance shares granted to him.

The Chief Executive Officer benefits from the same pension scheme as the one provided for the other members of the Group’s Executive Committee with a French contract. This plan includes a supplementary defined contributions pension scheme and a supplementary defined benefits pension scheme.

The main features of these schemes are described in the summary table below, being reminded that following the freezing of past potential rights under defined benefits pension schemes governed by Article L. 137-11 of the French Social Security Code, complying with Law No. 2019-486 of May 22, 2019 and Order No. 2019-687 of July 3, 2019 transposing the directive on pension rights’ portability, the Group implemented two vested rights supplementary pension schemes for rights relating to periods of employment after January 1, 2020 that comply with the new legal requirements set out in Article L. 137-11-2 of the French Social Security Code.

Further information on these pension schemes can be found in Note 25-2 to the consolidated financial statements.

Patrick Koller (Chief Executive Officer) benefits from a termination payment of up to 24 months of compensation which was authorized by the Board of Directors on July 25, 2016, pursuant to the procedure of Article L. 225-42-1 of the French Commercial Code (now repealed and reproduced in Articles L. 22-10-4 and L. 22-10-8 of the French Commercial Code) and approved by the General Meeting of May 30, 2017, in respect of its 5th resolution. This payment was adjusted during the review of the Chief Executive Officer’s package by the Board of Directors on February 14, 2020, in order to align the calculation methods for the reference compensation with those of the non-competition clause, and approved in accordance with the law by the General Meeting of June 26, 2020, as part of the vote on the compensation policy for the Chief Executive Officer for 2020 (16th resolution). The conditions of this compensation have remained unchanged since that date.

The terms and conditions of the termination payment granted to the Chief Executive Officer are described in the compensation policy for the Chief Executive Officer for 2023 and 2024, which appear respectively in Sections 3.3.4.1.3 “Compensation policy for the Chief Executive Officer” of the 2022 Universal Registration Document and this Universal Registration Document.

This payment was not triggered during the 2023 fiscal year.

Since the decision of the Board of Directors of February 14, 2020, Patrick Koller (Chief Executive Officer) is subject to a non-compete commitment for a period of 12 months applicable in the event of his resignation, it being specified that the obligation to pay the compensation due in return for this commitment became effective following the approval, in accordance with the law, by the General Meeting of June 26, 2020 of the 2020 compensation policy for the Chief Executive Officer in respect of the 16th resolution. The conditions of this non-compete commitment remained unchanged in 2023.

The terms of the non-compete commitment, and the related indemnity, to which the Chief Executive Officer is entitled, are described in the compensation policy for the Chief Executive Officer for 2023 and 2024 which appear respectively in Sections 3.3.4.1.3 “Compensation policy for the Chief Executive Officer” of the 2022 Universal Registration Document and this Universal Registration Document.

This payment was not triggered during the 2023 fiscal year.

Patrick Koller is subject to six months’ notice in the event of his resignation and has a non-solicitation commitment of 12 months. These provisions were decided by the Board of Directors on February 14, 2020, and became effective following the approval, by the General Meeting of June 26, 2020, of the 2020 compensation policy for the Chief Executive Officer in respect of the 16th resolution. The terms of the notice period and the non-solicitation commitment remained unchanged in 2023.

The terms of the notice period and the non-solicitation commitment are described in the compensation policy for the Chief Executive Officer for 2023 and for 2024 which appear respectively in Sections 3.3.4.1.3 “Compensation policy for the Chief Executive Officer” of the 2022 Universal Registration Document and this Universal Registration Document.

These measures were not triggered during the 2023 fiscal year.

Patrick Koller has been provided with a company car. The total amount of the benefits in kind is €21,850.

It is also specified that the Company paid, in respect of the supplementary medical/life/disability insurance plan, €7,460.

With the exception of the items described above, Patrick Koller did not receive any other compensation or benefits (including for his duties as a Company Board member).

For information, Patrick Koller receives compensation for his term of office on the HELLA Shareholders’ Committee (for more information, please refer to the HELLA annual report). Such approach is in line with German corporate standard (notably for listed companies controlled by another listed company).

FORVIA has an active engagement policy with its investors and proxy advisory firms during the financial roadshows to discuss governance as well as developments in governance and compensation-related best practices. Numerous meetings were held during the first quarter of 2023, until the General Meeting of 2023, on compensation topics (see section 3.1.2.4. “Governance structure and shareholder dialog” of this Universal Registration Document).

The Board of Directors took their comments into account, in particular with regard to the stability of the compensation structure and the level of the fixed compensation of the Chief Executive Officer (following the increase granted by the General Meeting in 2022). Thus, the fixed compensation of the Chief Executive Officer remained unchanged between 2022 and 2023. Also, for the sake of continuity, the structure of the compensation policy proposed by the Board of Directors for the 2024 financial year remains unchanged (see below the compensation policy for the Chief Executive Officer for 2024).

FORVIA has also taken into account the expectations of its shareholders and voting advisory agencies with regard to the growing importance of Environmental, Social and Governance (ESG) criteria in the assessment of executive performance. A criterion linked to the carbon neutrality trajectory has been integrated into the elements of the short-term variable compensation of the Chief Executive Officer (as well as those of all the beneficiaries of a variable compensation system in the Group) from year 2022, as presented in the 2022 Compensation Policy. FORVIA has also included in its performance share plan no. 11 granted in 2019, an objective related to gender diversity and added a second ESG objective linked to carbon neutrality among the performance conditions applicable to the Performance Share Plan awarded to the Chief Executive Officer in 2023.

The elements of compensation awarded or paid to the Chief Executive Officer are in accordance with the provisions adopted by the Board of Directors, upon recommendation of the Compensation Committee and voted by the General Meeting held on May 30, 2023 (13th resolution adopted with 92.66% of the votes).

The compensation paid contributes to the long-term performance of the Company insofar as the criteria for variable compensation are consistent with the long-term strategy of the Group.

The tables below set out the compensation and benefits paid during fiscal years 2022 and 2023 or awarded in respect of these fiscal years to Patrick Koller, the Chief Executive Officer.

To the extent that all stock subscription options ceased to be in force, tables No. 4, No. 5 and No. 8 on options awarded or exercised during the fiscal year as defined by the AFEP-MEDEF Code and AMF recommendation No. 2021-02 are not applicable. This is also the case with regard to table No. 10 of the AFEP-MEDEF Code given that Patrick Koller does not receive multi-annual variable compensation in cash.

Lastly, the tables setting out the past granting of performance shares (table No. 9 of the AFEP-MEDEF Code and table No. 10 of AMF recommendation No. 2021-02) are set out in Chapter 5 “Capital stock and shareholding structure,” Section 5.2.2 “Potential capital stock”.

The total maximum number of performance shares outstanding at December 31, 2023, which may vest to Patrick Koller (minus the number of shares already vested) represents a total of 517,227 shares, i.e., 0.26% of FORVIA’s capital at that date. This number is obtained after adjustment related to the capital increase of June 2022.

This paragraph relates specifically to multiples of compensation between the level of compensation of executive corporate officers and the level of average and median compensation of Group employees in France. It also deals with the annual evolution of compensation for executive and non-executive corporate officers and Group employees in France, as well as Group performances’ evolution. Information is presented, for the 2019-2023 period, in accordance with the AFEP guidelines on compensation multiples updated in February 2021. It is also the case for the table on data.

The Group’s governance structure has been composed of a Chairman of the Board of Directors and a Chief Executive Officer.

The corporate office of Chairman of the Board of Directors has been held by Michel de Rosen since May 30, 2017. The corporate office of Chief Executive Officer has been held by Patrick Koller since July 1, 2016.

As for the employees’ scope to be taken into account, FORVIA SE, as the holding company of the Group, and having only seven employees for a total France headcount of 8,824 employees, as of December 31, 2023 it has been decided to take into consideration a more representative scope for the Business Group in France, and to take into account all French legal entities integrated into the Group (HELLA perimeter excluded) from January 1 to December 31(3), according to AFEP-MEDEF Code (§26-2) and AFEP guidelines on compensation multiples, updated in February 2021.

It is specified that the Group’s French headcount only represents, at the end of 2023, 7% of the Group’s total headcount and includes nearly 60% of non-executive employees.

The compensations taken into account in calculations are those French employees of the Group (HELLA perimeter excluded) who were present throughout the entire year in question. The compensation for part-time employees has been recalculated to the full-time equivalent. The components of the compensation used for these ratios have been calculated on the basis of the fixed and variable compensation paid over the course of the fiscal years in question, including incentive plans and profit-sharing, as well as the performance shares granted, to the target, over the same fiscal years and recorded at fair value(4). Short-time working allowances were also taken into account. Only additional pension schemes that represent a posterior benefit to the contract and corporate offices were not taken into account.

The increase of the Chief Executive Officer's compensation in 2023, for the purpose of the equity ratio, is mainly linked to the amount of his annual variable compensation for 2022 paid in 2023, in comparison to previous financial year (2022). This increase in linked to the very good results in terms of transformation of the Group, implementation of the strategy and preservation of financial results as mentioned in sections 3.3.1.2.2. and 3.3.1.2.2.2. of the 2022 Universal Registration Document.

In addition, the performance criterion used to assess Group performance is the operating income. This criterion is established on a consolidated basis.

(Tablein accordance with AFEP guidelines on compensation multiples updated on February 2021)

The tables below present a summary of the compensation and benefits paid during the 2021 fiscal year or awarded in respect of this same fiscal year to the executive and non-executive corporate officers.

The AFEP-MEDEF Code requires detailed reporting on the application of its recommendations and explanations to be provided, if applicable, as to why a company may not have implemented some of them. As of the end of the 2023 fiscal year, FORVIA did not entirely comply with the recommendations contained in the AFEP-MEDEF Code on the following issues.

Pursuant to the Company's bylaws, each Board member must hold at least 20 shares throughout the term of office.

Furthermore, the internal rules of the Board of Directors provide that each Board member must hold 500 shares in the Company, including 20 shares provided for in the bylaws, during the entire term of their corporate office. However, Board members who do not receive compensation in respect of their directorship are only required to hold 20 shares provided for in the bylaws and, in accordance with the law, Board members representing employees are not required to hold a minimum number of shares.

The internal rules of the Board of Directors’ also state that the Chairman of the Board of Directors must hold shares corresponding to one year’s compensation (including the 500 shares held as a Board member) and must comply with this obligation within two years of being appointed as Chairman.

At  December 31, 2023, the corporate officers held approximately 3.2% of the Company’s capital stock and 5.3% of the voting rights (including 3.1% of the capital stock and 5.1% of the voting rights held by Peugeot 1810). 

Details of the number of shares held by each corporate officer are provided in the summary table in section 3.1.2.1. “General information on the composition of the Board of Directors” and in the biographies of the Board members in section 3.1.2.2. "Board members’ expertise, positions and corporate offices as of the date of this Universal Registration Document". It is apparent from this information that, as at December 31, 2023, the Board members comply with the holding obligations laid down in the bylaws and internal rules. 

Within the framework of an active conflict of interests management policy and to collect the information required under Annex 1 item 12 of European Regulation No. 2019/980, each year the Company provides its Board members with a detailed questionnaire allowing them to obtain the information required and thus make the necessary declarations.

To the Company’s knowledge and on the date this Universal Registration Document was drawn up, there is no family relationship between FORVIA's corporate officers.

Moreover, to the Company’s knowledge and on the date this Universal Registration Document was drawn up, none of the members of the Board of Directors and Executive Management have, within the last five years:

• ■been found guilty of fraud;
• ■been incriminated by a statutory or regulatory authority (including designated professional bodies);
• ■been publicly sanctioned by a statutory or regulatory authority (including designated professional bodies);
• ■been banned by a tribunal from serving as a member of an administrative, management or supervisory body or from being involved in the management of an issuer;
• ■been involved in a bankruptcy, receivership, liquidation, or receivership of companies having served as a member of an administrative, management or supervisory body.

To the Company’s knowledge and on the date this Universal Registration Document was drawn up, no potential conflicts of interest have been identified between the duties of each of the members of the Board of Directors and the Executive Management with regard to the Company and their private interests and/or other duties. It is specified that one Board member, Peter Mertens, whose mandate expired at the end of the annual general meeting dated May 30, 2023, has a minority interest in a start-up in which the Group has made a very small investment (less than 0.03% of the Group’s sales of the period during which the investment was made (2019) and was appointed, in November 2019, as a Board member of this Company. It is noted that this investment was made prior to the effective appointment of Peter Mertens as a Board member of the Company, that the investment conditions are similar for all minority investors (including the Company), that the Company does not have voting rights on the Board of Directors of this start-up and that the decisions on this investment are not made at the level of the Board of Directors of the Company. In addition, if a conflict of interest were to arise, the provisions of the internal rules on this subject would apply (for details of these rules, see Section 3.1.3.1. “Organization of the Board of Directors”, paragraph “Board members’ obligations”).

As part of the HELLA acquisition, the Company made a commitment for representation of the HELLA family pool on the Company’s Board of Directors. This commitment continues as long as the HELLA Family Pool holds at least 5% of the Company’s capital stock.

In accordance with the Investment Agreement of August 14, 2021, as subsequently amended, the HELLA family pool has undertaken not to sell:

• ■for a period of 18 months from the date of completion of the acquisition, i.e., until July 31, 2023, their shares held in the Company;
• ■during a period of 12 months as from the expiry of the preceding period described above, i.e., until July 31, 2024, more than 5% of the Company’s capital stock (as outstanding on July 31, 2023).

These lock-up commitments are subject to the usual exceptions in this respect, formalized in a contract under German law entered into between Faurecia and the members of the HELLA family pool on January 27, 2022, entitled the “Blocking Agreement”. Moreover, the Company has been informed of the execution by the HELLA family pool of a shareholders’ agreement constituting a concert action vis-à-vis Faurecia. This shareholders’ agreement also provides for preemptive rights to the benefit of the other members of the HELLA family pool on shares held by a member excluded from the shareholders’ agreement.

Lastly, to the Company’s knowledge and as of the date of this Universal Registration Document, there are no other restrictions accepted by the members of the Board of Directors and Executive Management concerning the sale, within a certain time period, of the Company’s shares they hold, with the exception of (i) the provisions of the bylaws and the internal rules on shareholding (see section 3.5.2. “Transactions in the Company's securities by corporate officers” of this Universal Registration Document) and (ii) the holding obligation related to the allocation of performance shares to the Chief Executive Officer under the terms of which he must retain at least 30% of the shares effectively vested under each plan. This percentage threshold requirement ceases to apply when the Chief Executive Officer holds a number of shares corresponding to three years of base gross compensation, factoring in all the previously established plans, and becomes applicable again if the Chief Executive Officer no longer holds the number of target shares corresponding to this level of base gross compensation.

In accordance with the law and bylaws, the Board of Directors can, within the limit of a total amount which its fixes, authorize the Chief Executive Officer to issue sureties, endorsements and guarantees on behalf of the Company.

In its meeting held on July 26, 2023, the Board of Directors authorized the Chief Executive Officer to issue sureties, endorsements and guarantees within the limits of a global amount of €50 million, up to a limit of €10 million per transaction, for a one-year period. If the Group is required to provide advance payment guarantees or performance bonds for contracts with successive partial deliveries, the Chief Executive Officer is authorized to provide guarantees representing a maximum of €5 million per transaction. It is specified that sureties, endorsements and guarantees provided to tax and customs regimes may be given without any limit on the amount. 

The Statutory Auditors’ special report on related-party agreements is included in Section 3.8.4 of this Universal Registration Document. It mentions two related-party agreements, signed in 2022, still in force, one of which was renewed twice in 2023. As a reminder, no related-party agreement was entered into during previous fiscal years.

The table summarizing the current delegations of authority granted by the General Meeting in the area of capital increases and showing the use made of these delegations during the period is presented in Chapter 5, Section 5.2.1 “Authorized capital stock” of this Universal Registration Document.

The specific conditions governing shareholders’ participation in the General Meeting or the provisions of the bylaws which outline these conditions are included in Chapter 6, Section 6.1 “Legal information”.

Lastly, factors likely to affect a public takeover bid or exchange are described in Chapter 6, Section 6.1 “Legal information”.

This chapter on sustainable performance answers:

• ■the requirements of Order No. 2017-1180 of July 19, 2017 and Decree No. 2017-1265 of August 9, 2017 creating a Non-Financial Performance Declaration, described in more detail in Articles L. 225-102-1 and R. 225-105 et seq. of the French Commercial Code;
• ■the requirements of law No. 2017-399 of March 27, 2017 on the duty of care.

Non-financial information covers the same scope as that used for the financial statements, i.e. the entire scope of consolidation of the Group excluding equity-accounted companies (see Chapter 1).

FORVIA takes into account its upstream and downstream value chain on all environmental issues (see 4.2.), particularly on the climate (see 4.2.2). The Group includes the stakeholders of its value chain in the reporting: suppliers (see 4.3.2), affected communities (see 4.3.3), consumers and end-users (see 4.3.4). The methodology is detailed in Section 4.5.2.

• ■End of May 2023, the company Faurecia SE (European company) became FORVIA SE

At the date of publication of this report, Faurecia owns more than 80% of HELLA, and the two companies form the FORVIA group. The consolidation of FORVIA group data is underway for certain topics. To ensure a better understanding, it is important to note the following points:

• ■When the term "FORVIA SE" is used, it refers to the scope of the former Faurecia SE entity.
• ■When the term "FORVIA" is used, it refers to the combined scope of Faurecia SE and HELLA.

This year, the structure of the chapter on environmental and social performance was reworked in order to anticipate the expectations of the Corporate Sustainability Reporting Directive (CSRD). This chapter is structured according to the architecture of the European Sustainability Reporting Standards (ESRS), in four main sections: general information (see 4.1), Environment (see 4.2), Social (see 4.3) and Governance (see 4.4). It already meets the requirements for some of the information that will need to be published in the 2024 fiscal year.

For FORVIA’s carbon footprint, the Group uses estimates for value chain data. Sources of uncertainty associated with greenhouse gas (GHG) emissions estimates, results and calculation methodology are published in Note 4.5.2. Specificities relating to the reporting scope and the methodologies for calculating GHG emissions, volatile organic compounds (VOCs), and environmental indicators are presented in the same methodological note.

The Group’s vigilance plan is presented in Section 4.3.2.4. and its response to the European Taxonomy in Chapter 4.2.2.

FORVIA ensures compliance with best environmental, social and societal practices and adheres to recognized international norms and standards. The Group also relies on recognized CSR partners and methodologies to monitor and support its supply chain, develop its climate strategy and protect biodiversity, as well as international reporting frameworks to ensure transparency.

FORVIA’s CSR strategy participates in the United Nations Sustainable Development Goals (SDG): adopted in 2015 by 193 countries at the United Nations, the 17 Sustainable Development Goals constitute an action plan for a fair transition towards sustainable development by 2030. FORVIA supports these goals and contributes to them through its CSR strategy.

From an environmental standpoint, the Group’s overall ambition is to become the most environmentally friendly automotive technology company, aiming for “zero waste”, “zero air, water and soil pollution” and a minimal impact on biodiversity. The Group’s environmental policy therefore focuses on respect for the environment and creating a positive impact on communities. In this context, in addition to ensuring compliance with regulatory requirements and its stakeholders’ demands, the Group aims to reduce the environmental impact of its operations by focusing on reducing its CO2 footprint and its impact on air, water and soil. The Group actively takes measures to protect the environment, prevent pollution, protect biodiversity, and fight against climate change with a commitment certified by SBTi (Science-Based Target initiative) net zero standard, to reduce its scopes 1 & 2 emissions by 80% by 2025, its scope 3 emissions by 45% by 2030 and its scopes 1, 2, and 3 emissions by 90% by 2045 (see Chapter 4.2.3):

The different areas of the environmental policy consist of:

• ■ensuring regulatory compliance and meeting the expectations of its stakeholders;
• ■preventing and reducing air, water and soil pollution, by limiting the use of chemical substances of concern throughout the supply chain in order to avoid any accidental discharges into water and soil;
• ■setting and deploying targets for reducing the waste produced and increasing the recycling rate;
• ■reducing its impact on water use, starting with actions in water-stressed areas;
• ■identifying biodiversity action plans for sites located near protected areas;
• ■training employees to develop a personal sense of environmental responsibility;
• ■implementing continuous improvement, in particular by deploying ISO 14001 certification procedures across all production plants, based on the requirements and audits of the FORVIA Excellence System.

The Business Groups implement this policy in their respective scope, and the whole is supervised by the 10 Green Fundamentals which cover all of the focuses above. The Group ensures that their roadmaps are aligned with the highest levels of requirements and targets thanks to audits of 10 Green Fundamentals and system audits.

The environmental policy applies to all of the Group’s Business Groups and regions. It is designed and updated taking into account the expectations expressed by the Group’s stakeholders (see 4.1.3.2. Stakeholders’ interests and points of views).

It is steered by the Group’s HSE+S (Hygiene, Security, Environment and Physical Safety) department. FORVIA SE’s Vice President HSE+S, who himself reports to the Executive Vice President in charge of operations, coordinates a network of HSE Directors in each Business Group and a network of HSE managers at the level of the operational divisions and plants.

The HSE organization of HELLA is also based on an HSE department and an HSE network, and will be gradually integrated with that of FORVIA SE.

In 2023, FORVIA strengthened its environmental prevention management approach at its plants. Until 2022, the Group required plants to deploy the 10 Green Attitudes. Based on a voluntary approach, these 10 attitudes covered the topics of soil and groundwater protection, reduction of energy consumption and CO2 emissions, prevention of air pollution and control of waste production. In 2023, the Group transformed these attitudes into 10 Green Fundamentals, the implementation of which is now mandatory for all sites and verified at least once a year. These Green Fundamentals are based on operational and organizational requirements. The approach, previously on a voluntary basis, therefore became mandatory in 2023 and applicable to all plants worldwide. In 2024, each plant will have to define the deployment plan for the 10 Green Fundamentals.

In addition, each Fundamental includes both general obligations for management, applicable to the entire plant, and specific and very concrete instructions that are communicated to all employees.

The approach used by the Group to prioritize actions in the environmental field is called “I know, I care, I reduce”. For management as for all employees, this reflects the fact that it is necessary to start by understanding and measuring the environmental impact (network plan, critical facilities, consumption), taking care of it (maintenance, possible repairs) and then being able to support improvement plans on with solid foundations.

This leads to technical actions and employee awareness campaigns.

The awareness-raising approach, updated in 2023, takes the form of posters, theoretical and practical training courses at the plants and a self-assessment questionnaire. The latter makes it possible to measure the progress of the adoption of the 10 Green Fundamentals by the plants.

As part of its 10 Green Fundamentals, FORVIA supports its plants in their training on these 10 key topics, and makes its employees aware of the best practices to be systematically adopted. In 2023, the Group strengthened internal communications on environmental issues. For example, the first Environment Week was created, punctuated by events and communications, webinars and educational Articles on the impacts of waste, water and biodiversity.

FORVIA has also organized monthly highlights on environmental topics, since 2023. Green moments are an opportunity to share an environmental subject, policy or target, along with information on the subject and easy-to-implement best practices. The topics covered are varied: refrigerant gases, rainwater protection, waste management, etc. They are intended for all operators, at all sites, in plants and at research and development sites.

Lastly, FORVIA organizes a monthly best practices competition. All Group sites and entities share their best practices on a monthly basis, whether they apply or exceed FORVIA standards. In 2023, more than 300 best environmental practices were identified on the topics of water resource conservation, waste sorting and optimization, chemical management, climate change mitigation and the adaptation of the Group’s Business Groups to this change, the monitoring of regulatory compliance, training spaces dedicated to the environment and the prevention of emergency situations. These best practices are shared at a monthly meeting with all HSE managers of the Group and all sites.

Since February 2023, the Group has set up a monthly reporting tool to more accurately measure and monitor site water withdrawal and waste generation. This monitoring makes it possible to quickly detect abnormal variations and identify their causes. For example, a sudden increase in water withdrawal or waste generation may be due to a cleaning action, a leak, waste to be managed following a construction site or a one-off action, such as the disposal and recycling of obsolete packaging. Thanks to this tool, the Group can take corrective measures quickly and effectively, while promoting continuous improvement. Identifying exceptional or seasonal effects makes it possible to define a “baseline” with which each site can compare itself over the following period and measure its actual performance.

All FORVIA plants are IATF 16949 certified for quality management. This standard defines the quality requirements of the automotive sector: continuous improvement, defect prevention, reduction of non-compliance and waste in the supply chain, etc.

The FORVIA group’s operations management system is based on a framework, called the FORVIA Excellence System (FES). In 2023, FORVIA adapted this system to enable its adoption by the HELLA sites. The new standard was renamed FES 4.0.

In line with FORVIA SE’s strategic plan, the FES is designed to continuously improve:

• ■Total Customer Satisfaction (TCS);
• ■sustainable competitiveness;
• ■talent development.

FES 4.0 capitalizes on more than 20 years of experience and its foundation, “People development & stable conditions”, consists in particular of workplace safety and environmental protection. It guarantees that the operational performance of production plants is at the highest level, regardless of their geographical position and local specificities. It is based on more than 60 fundamentals, each consisting of around ten criteria.

In particular, it includes operational control related to the three fundamentals:

• ■the environmental policy of operations (see Section 4.2. Environment – Environmental impact of operations);
• ■workplace safety (see 4.3.1.4. Actions and assessment of their effectiveness – Workplace Health and Safety);
• ■product safety (see 4.3.4.4. Actions and assessment of their effectiveness – Product safety culture);
• ■optimizing energy consumption and reducing greenhouse gas emissions (see 4.2.3.3. Climate actions and resources: scopes 1 & 2).

FES 4.0 supports plants in the application of operational requirements, compliance with quality standards, regulatory compliance for the environment and safety, applied to the automotive industry. The application of the requirements expressed in FES 4.0 prepares for IATF 16949, ISO 14001, ISO 50001, ISO 45001 certifications.

The application of the FES fundamentals and criteria is subject to a self-assessment and Internal Audit program:

• ■the sites carry out a monthly self-assessment and an in-depth review every three months;
• ■the divisions conduct annual internal mock audits;
• ■lastly, the Group conducts annual Internal Audits on a representative sample of plants. In 2023, more than 150 plants were audited. In 2024, 158 sites will be audited.

The FES is enriched annually with best internal and external lean manufacturing practices (Lean Manufacturing). In 2023, the Group strengthened the environmental component on the energy efficiency, reduction of greenhouse gas emissions, reduction of waste generation at source and waste sorting criteria. The Group also strengthened the section on data digitization.

In addition, in order to accelerate the deployment and use of digital resources, the Group also expanded the scope of “traditional” standards by adding, for each fundamental, an additional section focused on the implementation of the digital tools related to the requirements of the management system.

The Group can now assess its plants and identify the best-performing plants and those in need of improvement, based on their impact on the environment and the climate. This progress, initiated on pilot sites in 2023, will be rolled out in 2024.

All new employees arriving at a site attend an awareness-raising session on best environmental practices.

The Group has developed an online university offering numerous training courses. Environmental training is mainly carried out internally. These training courses, either regulatory or at the Group’s initiative, deal with environmental impact and risk management, waste classification and management, chemicals management, implementation of natural disaster emergency response plans, the environmental monitoring of subcontractors’ sites, energy consumption management and the reduction of greenhouse gas emissions. On this last point, the Group has initiated a process of deploying the Climate Fresk to its managers in the industrial operations area.

The training courses provided by external organizations mainly aims to develop internal expertise, such as mastering the ISO 14001 certification process.

FORVIA is committed to ISO 14001 certification for all production plants with more than two years of activity. The percentage of sites with ISO 14001 certification (or with an action plan for ISO 14001 certification, with more than two years of activity) is tracked every six months by the Risk Committee.

Within the FORVIA SE Scope, 87% of production plants are certified, i.e. 138 sites. Within the HELLA scope, 100% of the production plants are certified.

The change between 2022 and 2023 is due to the fact that seven additional sites were certified in 2023 within the Faurecia scope, and by the exit from the reporting scope of the SAS business, which had a large majority of certified sites.

To improve the energy efficiency of sites and, more generally, to reduce their environmental impact starting from the design phase, FORVIA ensures that all of its new buildings (new constructions) are Leadership in Energy and Environmental Design (LEED®) or BREEAM® certified. To obtain certification, new buildings must meet strict requirements in terms of site layout, efficient water management, energy use, the selection of materials, interior air quality and design factors.

To support the sites in these new certifications, the Group has set up a LEED® or BREEAM® certification procedure. In 2022, the Allenjoie site of the Clean Mobility Business Group obtained BREEAM Excellent certification. It is the first industrial building in France to obtain this certification and the second in Europe. In Germany, the Hanover site obtained Platinum Deutsche Gesellschaft für Nachhaltiges Bauen (DGNB) certification. In 2023, Fengcheng’s new electronics plant in China received LEED® Gold certification and the FAS site in Allenjoie obtained BREEAM Excellent certification.

Employees, suppliers, customers, communities: people are at the heart of the Group’s mission. With a global presence, more than 125,000 employees for the FORVIA scope and nearly 86,000 for the FORVIA SE Scope, in 2023, the Group is convinced of the importance of promoting a culture of development, integrity and safety with its employees everywhere that the Group operates.

A member of the United Nations Global Compact since 2004, the Group is committed to respecting and promoting the international conventions of the International Labor Organization (ILO) on human rights, labor standards and the environment in its operational and commercial practices.

The different focuses of the Group’s social commitment include:

• ■recruiting the best talents, offering them attractive development prospects and promoting diversity within its teams while guaranteeing a safe working environment for all staff working on its sites, whether they are employees or people external to the Company (see 4.3.1);
• ■building a responsible supply chain through solid and lasting relationships with suppliers whose ethical and social values and environmental priorities are aligned with our own (see 4.3.2);
• ■supporting local communities by developing the solidarity commitment of its employees (see 4.3.3);
• ■developing products and services of irreproachable quality and safety and technologies for an ever safer and smarter driving environment (see 4.3.4).

In 2023, FORVIA SE and HELLA continued to align their human resources management systems with a common FORVIA approach, taking into account, among other things, the French anti-corruption law Sapin II.

As an international company, FORVIA SE takes into account the impacts that the Group may have on all people involved in its value chain. To this end, the Group ensures that it interacts with the various stakeholders resulting from its activities, in particular with its employees, temporary workers, subcontractors, suppliers and local communities (see Chapter 4.1).

The Board of Directors oversees the corruption prevention and detection system. It is also responsible for monitoring the effectiveness of the internal control and risk management systems.

For several years, the Group has had a Governance, Nominations and Sustainability Committee, one of whose missions is to review the ethics and compliance policy with regard to best governance practices (see Chapter 3).

In 2020, in the context of the Sapin II law in particular, the risk of corruption mapping was updated based on interviews and questionnaires sent to people exposed to the identified corruption risks. In 2021 and 2022, new compliance indicators (monitoring in particular of accounting data concerning donations, sponsorship, payment of commissions as well as cases reported in the Speak Up tool) were created and collected to update it. This mapping will be overhauled in 2024, notably to include the compliance indicators updated in 2023. These various figures made it possible to draw up remediation plans adapted to the level of residual risk.

The identification of these risks is integrated into FORVIA’s overall risk mapping process (see Chapter 2).

The Compliance department works closely with legal experts on antitrust issues and with the control functions, whether permanent or periodic, in order to ensure effective control of the risks identified.

With a global presence and more than 153,000 employees in 2023, FORVIA is convinced of the importance of promoting a culture of integrity, safety and vigilance wherever the Group operates.

A member of the United Nations Global Compact since 2004, FORVIA is committed to respecting and promoting the international conventions of the International Labor Organization (ILO) on human rights, labor standards and the environment in its business practices.

FORVIA SE’s Code of Ethics contains all of its rules and principles, which must be understood and respected in all countries, by all employees and partners, in each line of business.

FORVIA is therefore committed to:

• ■remaining vigilant and complying with the highest ethical standards: this is an essential part of the corporate culture, anchored in FORVIA SE’s convictions and values;
• ■guaranteeing a safe working environment for all staff working on its sites (see Section 4.3.1), whether they are employees or external parties;
• ■building a responsible supply chain (see Section 4.3.2) through solid and lasting relationships with suppliers whose ethical and social values and environmental priorities are aligned with our own;
• ■developing products and services of irreproachable quality and safety and technologies for an ever safer and smarter driving environment (see Section 4.3.4).

This year, FORVIA SE and HELLA continued to align their management systems with a common FORVIA approach, taking into account, among other things, the French anti-corruption regulation (Sapin II) and the guidelines of the French Anti-Corruption Agency.

FORVIA SE’s ethics and compliance program helps to build a strong culture of integrity. It includes policies and procedures that are the subject of training and communication campaigns.

Created in 2005 and revised several times, FORVIA SE’s Code of Ethics (6) encompasses respect for human rights and fundamental labor rights, economic and social dialog, respect for the environment, ethics and rules of conduct – in particular those related to the prevention and detection of corruption.

It includes updates to FORVIA SE’s compliance systems and tools resulting from the requirements of the Sapin II law. The Code is intended to strengthen the Group’s ethical culture. The FORVIA SE Management Code and the other systems, such as the Anti-Corruption Code of Conduct and the Best Practices Guide in the fight against anti-competitive practices, translate many of the principles set out in the Code of Ethics into operational requirements (see also Chapter 2 of this document).

In accordance with the Sapin II law and the law on the duty of care (see Section 4.3.2.5), FORVIA SE has set up an alert system to manage allegations of violations of regulations and the Group’s internal rules. Thus, employees (including temporary employees, subcontractors, etc.), partners, suppliers, and civil society (NGOs), civil society organizations and local communities have access to the reporting system described in the Code of Ethics.

Internally, employees are invited to contact their line manager, the human resources manager or a compliance manager (including the Compliance Leaders identified within each division), orally or in writing.

The other method of reporting, accessible internally and externally to all stakeholders, is a dedicated whistle-blowing hotline – Speak Up, accessible via an internet link (http://faurecia.ethicspoint.com). Depending on the nature and importance of the events reported, additional investigations may be launched, an inquiry may be set up or an Internal Audit decided upon.

The identity of any person using the hotline, as well as all the details enabling them to be identified, are protected and kept confidential by the persons responsible for them within FORVIA SE. These people are specially trained to receive and investigate this type of alert. Alerts can be entered into the tool in the desired language by the whistle-blower. Upon receipt of this request, the investigation procedure is initiated in order to deal with it in accordance with the applicable internal and local rules. At the end of the investigation, corrective actions can be taken. The Compliance department (see Section 2) monitors the implementation of these actions and periodically reports on the trends identified.

This entire system is the subject of regular communications, notably in 2023 through a communication campaign at the time of the International Anti-Corruption Day, launched among all Group employees, in order to strengthen the culture of compliance. The Group has also communicated internally on the Group’s core values, one of which is RESPECT, which refers to compliance.

To assess the level of satisfaction of the relationship between FORVIA SE and its suppliers, the Group conducts an annual satisfaction survey. The index is established on a scale of one to four and measures supplier satisfaction in five areas: strategy, innovation, operational excellence, business ethics and decarbonization.

The 2023 survey was conducted among more than 1,700 direct suppliers of the FORVIA group representing two-thirds of the Group’s direct industrial purchasing volume. The level of satisfaction reached a score of 2.99 on a scale of 1 to 4, up compared to 2022 (score of 2.97). More than two-thirds of suppliers have perceived an improvement in our relationships and a majority of them see the creation of the FORVIA group as an opportunity. The main areas of progress that emerge are better visibility on future projects and better consideration of supplier innovations.

In order to maintain a strong compliance culture, the Compliance department has set up different training sessions accessible to all employees (including part-time employees, interns, consultants, etc.). These training courses are tailored to FORVIA SE’s risk profile with which local teams may be confronted.

Along with the Human Resources, Internal Audit and Control teams, the Compliance department ensures that all the identified people are effectively trained in the internal rules, in order to maintain a strong ethics and compliance culture in the Group.

• ■Over the last three years, a total of 47,600 employees (employees, consultants, interns, etc.) have taken Ethics (25,900) and Antitrust (21,600) training modules (MOOCs).
• ■By the end of 2023, 46,700 employees (employees, consultants, interns, etc.) had taken the Anti-corruption MOOC, including 97.7% of the target population.
• ■Refresher training sessions are regularly organized at the industrial sites and in the divisions, in particular on the risks of breaches of best practices in the fight against anti-competitive practices.

Employees also have access to practical guides on anti-competitive practices, reporting and managing conflicts of interest and the internal whistle-blowing procedure on allegations of non-compliance with the Code of Ethics. Significant communication efforts have ensured that these guides are widely distributed.

In support of its overall business strategy and objectives, FORVIA SE’s tax policy complies with the Code of Ethics. It is entrusted to a global team of tax professionals and is based on a firm set of principles.

FORVIA SE complies with the letter and spirit of applicable laws and regulations, and relies on the relevant international standards (for example, the OECD guidelines).

FORVIA SE ensures that tax filings and payments are made in accordance with all local regulations. The Group also maintains all tax records and performs tax reporting as required by any law in countries in which the Group operates.

FORVIA SE is committed to showing integrity and total transparency and to establishing constructive relationships with the tax authorities. In the event of a legal interpretation that does not agree with the tax authorities, FORVIA SE is prepared to refer the matter to the competent court to defend the interpretation of the law made by the Group.

FORVIA SE manages tax affairs in a proactive manner and does not use contrived or abnormal tax structures that are intended for tax avoidance, have no commercial substance and do not meet the spirit of local or international law. FORVIA SE does not use secret jurisdictions or so-called “tax havens” for tax avoidance.

The aim is to pay an appropriate amount of tax according to where value is created within the normal course of industrial or commercial activity. Consequently, all transfers of goods and services between companies within the Group are conducted on an arm’s length basis. The pricing of such transactions between Group companies is based on fair market terms and reflects the commercial nature of the transactions.

The assessment of taxes respects shareholder value and fully complies with all legal and regulatory obligations, in line with stakeholders’ expectations.

In 2023, there were no convictions or fines against FORVIA SE with regard to the fight against corruption and acts of corruption.

In 2023, FORVIA adopted a policy on government relations and advocacy (7) which sets out its commitment to responsible lobbying and political commitment. This policy aims to ensure that FORVIA’s advocacy and government relations activities are conducted in an ethical, transparent and honest manner, and in compliance with applicable laws and regulations. This policy applies globally and for the entire Group.

FORVIA engages with governments and other public players to support the Company’s strategy, in particular with regard to:

• ■the strengthening of its industrial and technological centers, in order to guarantee its competitiveness and its ability to meet market needs;
• ■its commitment to sustainability and climate action, supported by its roadmap to achieve net zero emissions by 2045;
• ■the promotion of research and innovation, in order to guarantee its future development;
• ■the protection of fundamental human rights.

FORVIA’s lobbying strategy includes interaction with its stakeholders, including political decision-makers and other public authorities in the regions where FORVIA operates.

The Group takes into account the impact studies of draft regulations or legislation on a series of important issues for its activities, in particular:

• ■the environment, including measures to combat climate change;
• ■tax rules;
• ■social issues.

FORVIA communicates its positions on policy, regulatory and legislative proposals to policy-makers directly or through its professional associations to answer their questions or propose adjustments to take into account the interests of all FORVIA’s stakeholders.

FORVIA maintains regular discussions with its professional associations: CLEPA in Brussels, PFA in France, VDA in Germany and MEMA in the USA.

FORVIA is committed to conducting its lobbying activities in an ethical and responsible manner. Its anti-corruption Code of Conduct requires risk-based due diligence for intermediaries who are considered to be at high risk of corruption. Depending on the information obtained, it may be decided not to enter into relations with these intermediaries, in particular lobbyists. Training on the Anti-Corruption Code of Conduct is mandatory for the entire Group. In accordance with its internal rules on the management of third parties in terms of compliance, the main internal stakeholders must share the relevant information in order to implement the required prior assessment.

Within the Board of Directors and the Executive Committee, the Executive Vice President in charge of Communications, Public Affairs and Sustainable Development is responsible for monitoring lobbying activities.

In order to ensure the dissemination of information on subjects that may be considered sensitive, the Group is registered in the European Union Transparency Register under the number 963186850826-94.

FORVIA does not fund political parties, does not make financial contributions to political campaigns and is not actively involved in political campaigns.

Details by late payment tranche are available in Section 1. Financial and accounting information (see Note 27.1 – Trade payables and related accounts).

The Group has not been involved in any legal proceedings for late payments.

For the year ended December 31, 2023

This is a free translation into English of the independent third-party organization’s report issued in French and is provided solely for the convenience of English-speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.

To the shareholders,

In our capacity as independent third-party organization, member of Mazars Group and accredited by COFRAC Inspection under number 3-1895 (scope of accreditation available on www.cofrac.fr), we have performed work to provide a reasoned opinion that expresses a limited level of assurance on the historical information (observed and extrapolated, hereinafter respectively the "Information") of the consolidated extra-financial performance statement, prepared in accordance with the entity’s procedures (hereinafter the “Guidelines”) for the financial year ended December 31, 2023, presented in the management report of the group (hereinafter the “Statement”) , in application of the provisions of Article L. 310-1-1-1 of the Insurance Code which refers to Article L225-102-1 of the Commercial Code.

Based on the procedures we performed, as described in the "Nature and scope of our work” and the evidence we collected, nothing has come to our attention that causes us to believe that Statement is not presented in accordance with the applicable regulatory requirements and that the Information, taken as a whole, is not presented fairly in accordance with the Guidelines, in all material respects.

The lack of a commonly used framework or established practice on which to base the assessment and evaluation of information allows for the use of alternative accepted methodologies that may affect comparability between entities and over time.

The Statement has been prepared in accordance with the entity’s procedures, the main elements of which are presented in the Statement and are available on request from the entity’s head office.

The Information may contain inherent uncertainty about the state of scientific or economic knowledge and the quality of external data used. Some of the Information is dependent on the methodological choices, assumptions and/or estimates made in preparing the information and presented in the Statement.

The Board of Directors is responsible for:

• ■selecting or setting appropriate criteria for the provision of the Information;
• ■preparing the Statement with reference to legal and regulatory requirements, including a presentation of the business model, a description of the principal non-financial risks, a presentation of the policies implemented considering those risks and the outcomes of said policies, including key performance indicators and also, the Information required by Article 8 of Regulation (EU) 2020/852 (EU Taxonomy);
• ■and implementing internal control procedures deemed necessary to preparation of information, free from material misstatement, whether due to fraud or error.

The Declaration was established by applying the Company's Standards as mentioned above.

Based on our work, our responsibility is to provide a report expressing a limited assurance conclusion on:

• ■the compliance of the Statement with the requirements of article R. 225-105 of the French Commercial Code;
• ■the fairness of the Information provided in accordance with article R. 225 105 I, 3° and II of the French Commercial Code, i.e., the outcomes, including key performance indicators, and the measures implemented considering the principal risks (hereinafter the “Information”).

We have carried out work aimed at formulating a reasoned opinion expressing a conclusion of moderate assurance on the historical information, observed or extrapolated.

However, it is not our responsibility to comment on the entity’s compliance with other applicable legal and regulatory requirements, in particular the French duty of care law and anti-corruption and tax avoidance legislation nor on the compliance of products and services with the applicable regulations.

This is not our responsibility to express an opinion on:

• ■the entity’s compliance with other applicable legal and regulatory requirements (in particular with regard to the Information required by Article 8 of Regulation (EU) 2020/852, the due diligence plan and the fight against corruption and tax evasion);
• ■the truthfulness of the Information provided for in Article 8 of Regulation (EU) 2020/852 (EU Taxonomy);
• ■the compliance of products and services with applicable regulations.

The work described below was performed with reference to the provisions of articles A. 225-1 et seq. of the French Commercial Code, as well as with the professional guidance of the French Institute of Statutory Auditors (“CNCC”) applicable to such engagements and with ISAE 3000 (reviewed)(8).

Our independence is defined by the requirements of article L. 822-11-3 of the French Commercial Code and the French Code of Ethics (Code de déontologie) of our profession. In addition, we have implemented a system of quality control including documented policies and procedures regarding compliance with applicable legal and regulatory requirements, the ethical requirements and French professional.

Our work was carried out by a team of around 10 people between November 2023 and February 2024.

We conducted approximatively 30 interviews with the people responsible for preparing the Statement.

We planned and performed our work considering the risks of significant misstatement of the Information.

We are convinced that the procedures we have carried out in the exercise of our professional judgment enable us to provide a limited assurance conclusion:

• ■we obtained an understanding of the consolidated entities’ activities and the description of the principal risks associated;
• ■we assessed the suitability of the criteria of the Guidelines with respect to their relevance, completeness, reliability, neutrality and understandability, with due consideration of industry best practices, where appropriate;
• ■we verified that the Statement includes each category of social and environmental information set out in article L. 225 102 1 III as well as information regarding compliance with human rights and anti-corruption and tax avoidance legislation;

• ■we verified that the Statement provides the Information required under article R. 225-105 II of the French Commercial Code, where relevant with respect to the principal risks, and includes, where applicable, an explanation for the absence of the Information required under article L. 225-102-1 III, paragraph 2 of the French Commercial Code;
• ■we verified that the Statement presents the business model and a description of principal risks associated with all the consolidated entities’ activities, including where relevant and proportionate, the risks associated with their business relationships, their products or services, as well as their policies, measures and the outcomes thereof, including key performance indicators associated to the principal risks;
• ■we referred to documentary sources and conducted interviews to:
  • ■assess the process used to identify and confirm the principal risks as well as the consistency of the outcomes, including the key performance indicators used, with respect to the principal risks and the policies presented, and
  • ■corroborate the qualitative information (measures and outcomes) that we considered to be the most important presented in Appendix 1. Concerning certain risks such as social dialogue, business ethics, sustainable supply chain, product quality and safety, climate transition, for the others risks, our work was carried out on the consolidating entity and on a selection of entities ;
• ■we verified that the Statement covers the scope of consolidation, i.e., all the consolidated entities in accordance with article L. 233-16 of the French Commercial Code within the limitations set out in the Statement;
• ■we obtained an understanding of internal control and risk management procedures the entity has put in place and assessed the data collection process to ensure the completeness and fairness of the Information;
• ■for the key performance indicators and other quantitative outcomes that we considered to be the most important presented in Appendix 1, we implemented:
  • ■analytical procedures to verify the proper consolidation of the data collected and the consistency of any changes in those data,
  • ■tests of details, using sampling techniques, in order to verify the proper application of the definitions and procedures and reconcile the data with the supporting documents. This work was carried out on a selection of contributing entities(9) and covers between 16% and 100% of the consolidated data relating to the key performance indicators and outcomes selected for these tests;
• ■we assessed the overall consistency of the Statement based on our knowledge of all the consolidated entities.

We are convinced that the work carried out, based on our professional judgement, is sufficient to provide a basis for our limited assurance conclusion; a higher level of assurance would have required us to carry out more extensive procedures.

The independent third-party organization,

Mazars SAS

Paris La Défense, February 19th, 2024

• ■Safety in the workplace
• ■Talents attraction and retention
• ■Social dialogue
• ■Employee commitments
• ■Business ethics
• ■Responsible supply chain
• ■Product quality and safety
• ■Environmental impact of sites and climate change

• ■Total number of employees recorded and split by contract
• ■FR0t (Accidents with lost time per millions of hours worked) by employees and temporary workers
• ■FR1t (Accidents without lost time per millions of hours worked) by employees and temporary workers
• ■Turnover rate of managers and professionals
• ■Employee Engagement Index
• ■Percentage of M&P having received training on the Code of Ethics
• ■Share of direct suppliers assessed for CSR performance
• ■Customer satisfaction index
• ■Part of ISO 14001-certified production plants
• ■Energy consumption (MWh)/€m of sales
• ■Tons of waste/€m of sales
• ■Tons of CO2 equivalent/€m of sales (scopes 1 and 2)
• ■Carbon footprint (scope 1, 2, 3)

All issued shares are representing the Company’s capital stock.

As of December 31, 2023, the Company’s capital stock amounted to €1,379,625,380, divided into 197,089,340 fully paid-up shares with a par value of €7 each, all in the same class.

The total number of double voting rights existing within the Company represents less than 7% of the total number of voting rights as of December 31, 2023.

The breakdown of FORVIA’s capital stock and voting rights as of December 31, 2023 and over the last three fiscal years is as follows:

Shareholding structure at December 31, 2023 

Changes in the main shareholders over the last three fiscal years

The table below summarizes the financial authorizations and delegations for capital increases and cancellations of shares granted by the General Meeting held on May 30, 2023, as well as the use made of them during the 2023 fiscal year and since the beginning of the 2024 fiscal year up to the date of this Universal Registration Document.

The General Meeting of May 30, 2023 authorized the implementation of a share buy-back program (Resolution 14) which replaced, from that date, the program authorized by Resolution 13 of the General Meeting of June 1, 2022.

Since April 27, 2009, FORVIA has been implementing a liquidity contract that complies with the AMAFI Charter.

The current liquidity contract was signed on November 18, 2019 between FORVIA and Rothschild Martin Maurel. This contract, which complies with the AMF decision no. 2021-01 of June 22, 2021 covering the implementation of liquidity contracts on equity securities in respect of accepted market practices, replaced the previous contract of November 20, 2015, as amended on May 24, 2018.

The liquidity contract was signed for 12 months, from November 18, 2019 and is thereafter renewable by tacit renewal for successive 12-month periods. The amount of €10,837,505.31 was recorded as credit in the liquidity account on November 15, 2019.

The liquidity contract covers Company shares, and the trading platform on which the transactions are carried out is the Euronext regulated market in Paris.

The contract stipulates that its execution shall be suspended under the conditions set out in Article 5 of the above-mentioned AMF decision, namely (i) while stabilization measures are being carried out under the meaning of (EU) Regulation no. 596/2014 of the European Parliament and Council of April 16, 2014 on market abuse, with the suspension of the liquidity contract taking place from the admission to trading of the securities concerned by the stabilization measures up to the publication of the information indicated in Article 6, Paragraph 3 of the Delegated (EU) Regulation no. 2016/1052 and (ii) during a public offering period or pre-offering period and until the offer is closed, when the issuer initiates the public offering or when the issuer’s securities are targeted by the offering.

The contract may also be suspended on the Company’s request for technical reasons, such as the counting of shares with voting rights before General Meetings or the counting of shares giving rights to dividends before the ex-dividend date and for a period that it shall specify.

The contract may be terminated at any time by the Company, without notice and with notice of one month for the investment services provider.

In 2023, under the liquidity contract, cumulative purchases related to 3,996,678 shares, i.e. 2% of the capital stock, for a value of €79,215,537 and cumulative sales related to 4,066,678 shares for a value of €80,866,007. The capital gain generated in 2023 under the liquidity contract amounted to €1,650,469. Management fees for the liquidity contract came to €150,000 in 2023. Under this liquidity contract, as at December 31, 2023, the following assets were included in the liquidity account: 0 securities and €10,865,799 in cash.

FORVIA shares (ticker code FRVIA) are listed on compartment A of the regulated market of Euronext Paris. They are listed on the CAC Next 20 and CAC 40 SBT 1.5° indices of Euronext and the MSCI France index.

The share price at the 2023 closing date (Friday, December 29, 2023) was €20.42 compared to a closing price of €14.13 (Friday, December 30, 2022), i.e. a market capitalization of approximately €4.025 billion at the end of 2023 compared to approximately €2.785 billion at the end of 2022 (the number of shares being identical at the end of the two years, i.e. 197,089,340 shares).

This increase of 44.52% over the year 2023 partially corrects the sharp decline in 2022, which was mainly caused by the combination of the strong impact of the war in Ukraine on the financial markets and the global macroeconomic environment, particularly in terms of inflation, simultaneously with the finalization of the strategic acquisition of a majority interest in the equipment manufacturer HELLA, largely financed by debt.

Over the same period of 2023, the French CAC 40 and SBF 120 indices increased by 16.52% and 15.26% respectively.

While the global macroeconomic context remained tense in 2023, with inflation still high and interest rates raised several times, the FORVIA share rose more than the indices already mentioned and also peers such as Plastic Omnium and Valeo (down 11.63% and 16.68% respectively in 2023). Indeed, in 2023 the Group demonstrated its ability to finalize the refinancing of the HELLA acquisition and also, through the effective completion of a first asset disposal program for €1 billion, that its priority objective was to accelerate its deleveraging after the HELLA acquisition, thus alleviating investor risk aversion in an inflationary environment.

In October 2023, again with a view to accelerating the Group’s debt reduction, a second asset disposal program for €1 billion was announced during the publication of the Q3 sales.

The average price of FORVIA’s share over 2023 was €19.58. The price peaked at €25.40 on July 24, 2023, and hit its lowest closing price of the year, €14.40, on January 2, 2023.

The average number of monthly trades on Euronext was 22.335 million shares, representing €435.77 million.

For many years, FORVIA’s management has made it a priority to establish a relationship of trust with financial market players by developing a constant dialog with its shareholders and lenders.

FORVIA therefore encourages constructive dialog, both on its financial results and on its strategy and latest news, through accurate, comprehensive, regular and transparent financial reporting, in accordance with current regulations and as close as possible to financial communication best practices.