Forvia SE

Reported H1 2026 sales were EUR 10.5 billion, down 4.3% year over year; organic sales declined 1.9%, slightly below global auto production, which was down 1%. Operating income was EUR 632 million and operating margin was 6%, up 30 basis points year over year. Net income group share reached EUR 3 million, versus a loss of EUR 269 million a year ago. Net cash flow rose 18% to EUR 432 million, or 4.1% of sales, with recurring net cash flow at EUR 403 million, or 3.8% of sales. Net debt decreased by EUR 503 million to EUR 5.5 billion and leverage improved from 1.7x to 1.6x. Order intake was EUR 13.4 billion, up 15% year over year. For full-year 2026, management confirmed sales of EUR 20 billion to EUR 21 billion at constant exchange rates, 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 Interiors transaction is still expected to close in Q4 2026 and should generate more than EUR 1 billion of additional net debt reduction upon completion.

Martin Fischer said the company is focused on executing the IGNITE plan, with progress across performance, transformation and culture. He highlighted lower bureaucracy, faster execution, stronger customer recognition and a 33% reduction in customer claims, while also stressing that Lighting remains the biggest turnaround task. His tone was confident but cautious, emphasizing that management remains disciplined on cost, cash and the Interiors divestiture while building a stronger growth pipeline.

Olivier Durand framed H1 as a meaningful step-up in profitability despite a soft market, with operating income of EUR 632 million, margin at 6%, and cost initiatives from EU FORWARD and SIMPLIFY supporting results. He said net cash flow was up 18% to EUR 432 million, recurring net cash flow was EUR 403 million, and investment ratio was 4.8% of sales in H1, with a full-year target of 6% to 6.5% of sales. He also noted the restructuring cash out is expected to peak in 2026 at around EUR 300 million, H2 will include about EUR 150 million of one-off cash outflows tied to a Mexico facility option and past tax litigation, and liquidity improved with around EUR 4 billion of gross cash at end-July and a renewed EUR 1.5 billion RCF maturing in 2031.

Analysts focused on whether North America’s 7.1% margin is now sustainable, the shape of H2 margins, capital allocation after the Interiors sale, China underperformance, and the strength of cash generation. Management said North America’s margin reflected real operational improvement rather than one-offs and should be sustained, and they expected H2 margin to be at least as good as H1 despite higher inflation and market uncertainty. They reiterated that China margins are being protected through strict cost flexibility, said Chinese OEM order intake is improving, and confirmed that after deleveraging toward 1.2x by 2028, the board will consider dividends and share buybacks. On cash, Olivier clarified that the EUR 150 million H2 items are mostly one-time and already included in guidance, while the Interiors-related transaction charges do not change the more than EUR 1 billion net debt reduction expected from closing.