Faurecia: Patrick Koller’s method to win back the markets – archyworldys

Patrick Koller, CEO of Faurecia, has not waited a year since the emancipation of its historic shareholder, the PSA group now Stellantis, to take action. Since the sale of the 44% stake in Faurecia, the leading French automotive supplier wants to accelerate its growth projects but also the transformation of its model.

With the acquisition of Hella for 6.7 billion euros (including 3.4 billion in cash), the German specialist in automotive lighting, Faurecia has crossed a critical threshold to establish itself as a major player in the automotive equipment. Already the world leader in seats and dashboards, an expert in on-board electronics, the French group lacked a technological brick linked to interior and exterior lighting. For Patrick Koller, it is about complementing his expertise in the cockpit of the future, an integrated product with very high added value for the car of tomorrow, receptacle of the revolution in automotive connectivity. Faurecia has already been working with Hella for several years in the cockpit of the future, thus ignoring the products of its compatriot Valeo, which is never really its competitor, but with whom it nevertheless maintains an ego rivalry.

In search of an effect of size

Patrick Koller is thus accelerating the transformation of Faurecia, which he initiated when he was inducted into the head of the group in 2016. He believes that he has completed the first phase around the repositioning of the group on products with high added value, more oriented towards decarbonisation. , electrification and connectivity. From now on, it is a question of seeking a sizeable effect of which he has never hidden his ambition. In June 2017, he declared to The gallery think about creating “a fourth leg” in order to seek growth and a size effect.

With its turnover of 18 billion euros (2019), Faurecia is an average equipment supplier compared to a Bosch (78 billion) or a Continental (45 billion). But this new branch project ended up being abandoned. Too complicated to implement, too expensive, too risky. Patrick Koller thus closes the Magneti-Marelli file, Italian equipment supplier put up for sale by the Fiat group. Then, it is content to go into hydrogen through a joint venture with Michelin, Symbio. Rather than building a new activity, Patrick Koller therefore prefers to strengthen the businesses where he is already very present. He had already illustrated this method with the takeover, in 2019, of the Japanese company Clarion, a specialist in on-board electronics. With the takeover of Hella, Faurecia is therefore completing its ambition of establishing itself as a key player in the car of the future and increasing its business volume by nearly a third (6 billion).

Better market valuation

But this operation is above all an opportunity for Patrick Koller to offer the market a better understanding of his growth strategy. The boss of Faurecia confirms his strategy of innovation and positioning in buoyant segments, but above all his ability to break the bank if necessary. A real surprise from the man who made the group’s deleveraging a real financial matrix. This operation may mark the end of a chronic undervaluation suffered by the Faurecia group since the last financial crisis.

The stock’s lack of liquidity (in particular due to the overwhelming 44% stake of the former shareholder), an unfavorable comparison with Valeo more perceived as a “tech value”, and a lack of strategic visibility, had set a real ceiling of glass on the title. This situation was badly experienced by Faurecia’s management for a long time, which systematically deplores a valuation that does not reflect the reality of the group or its prospects. The euphoric reception of investors (+ 11%) on the title the day after the takeover of Hella could open a new page for Faurecia.