Forvia Se

Reported H1 2026 sales were EUR 10.5 billion, down 4.3% year over year; on an organic basis, sales fell 1.9%, versus global automotive production down 1%. Operating income was EUR 632 million and operating margin was 6%, up 30 basis points year over year. Net income group share was EUR 3 million, versus a loss of EUR 269 million in H1 2025. Net cash flow was EUR 432 million, up 18% year over year, equal to 4.1% of sales; recurring net cash flow was EUR 403 million, or 3.8% of sales. Net debt fell by EUR 503 million to EUR 5.5 billion and leverage improved from 1.7x to 1.6x. Order intake reached EUR 13.4 billion, up 15% year over year. For 2026, management confirmed sales of EUR 20 billion to EUR 21 billion, operating margin of 6% to 6.5%, net cash flow of at least 3% of sales, and leverage of 1.5x. Management also said the full-year investment ratio should be between 6% and 6.5% of sales, and noted a one-off H2 charge of around EUR 150 million tied to the Interiors divestiture, with approximately EUR 150 million of H2 cash outflows from the Mexico purchase option and past tax litigation.

Martin Fischer emphasized that execution of the IGNITE plan is the company’s top priority and said all three strategic pillars showed progress in H1: performance, transformation and culture. He highlighted better margins, stronger cash flow, the largest organic debt reduction since the HELLA acquisition, and a 15% rise in order intake, while saying the Interiors divestiture remains on track for Q4 2026. His tone was confident but still cautious on the market, repeatedly pointing to inflation, geopolitics and China as uncertainties while stressing cost discipline, innovation and diversification into areas such as defense.

Olivier Durand focused on the financial step-up: sales of EUR 10.5 billion, operating income of EUR 632 million, 6% margin, EUR 432 million of net cash flow and EUR 403 million of recurring net cash flow. He said working capital and factoring had limited impact, investment ratio was 4.8% of sales in H1 and is expected to move to 6% to 6.5% for the full year, and restructuring cash out is expected to peak in 2026 at around EUR 300 million. He also highlighted gross cash of EUR 4 billion at end-July, around EUR 850 million of debt maturities repaid year to date, renewal of the EUR 1.5 billion revolver to 2031, and confirmation that the Interiors transaction should add more than EUR 1 billion of additional net debt reduction when it closes.

Analysts pressed on whether North America’s 7.1% margin is sustainable, and management said it reflects real operational improvement rather than one-offs and should remain at about that level. Questions on H2 margin and cash flow were met with guidance that H2 profitability should be at least as good as H1, with inflation headwinds offset by internal actions and pass-through, while H2 cash will absorb one-off outflows tied to the Mexico facility option and tax litigation. Other key topics were Volkswagen’s push to reduce vehicle/component variance, China underperformance versus stable margins, and the Lighting turnaround; management said the VW trend should help simplify the supply chain, China weakness is mainly linked to BYD but margins were protected by cost flexibility, and Lighting’s recovery is expected to ramp from actions already underway.