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France’s Faurecia (EO) falls on second guidance downgrade

By Jenni Reid

09:42, 29 November 2021

Faurecia sign in Silicon Valley
French automotive supplier Faurecia has downgraded its full-year forecast for the second time this year – Photo: Shutterstock

French automotive supplier Faurecia fell to a two-month low on the Euronext Paris in early Monday trading as it downgraded its guidance for a second time this year. 

EO stock was down 5.9% to €37.96 at 11:00 CET, putting it down 6.9% in the year to date. 

The update came after IHS Markit lowered its forecast for automotive production in Europe in the second half from the 7.8 million vehicles it predicted in September to 6.8 million vehicles. 

In a conference call, chief financial officer Michel Favre called the move “completely unusual in the recent history of Faurecia,” and apologised for the announcement. 

Further issues 

Favre said the two car companies most affected by the production downgrade, Volkswagen and Stellantis, were its main customers. 

Faurecia is also feeling the effects of global supply chain issues, uncertainty about how Covid restrictions may impact production in December, and one-off costs related to issues launching a site in Michigan. 


15,730.00 Price
-1.630% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8

Oil - Crude

74.25 Price
-0.380% 1D Chg, %
Long position overnight fee -0.0137%
Short position overnight fee -0.0082%
Overnight fee time 22:00 (UTC)
Spread 0.030


2,031.30 Price
-1.680% 1D Chg, %
Long position overnight fee -0.0193%
Short position overnight fee 0.0111%
Overnight fee time 22:00 (UTC)
Spread 0.50


41,586.25 Price
+4.400% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

It now expects sales to total between €15bn ($16.93bn) and €15.5bn, down from a previous forecast of around €15.5bn; a sales operating margin of 5.5%, down from 6% to 6.2%; and net cash flow of around €300 million, down from €500 million. 

Favre added that current instability in manufacturing made it impossible to work out its costs for the rest of the year, and that the business would be working at reduced capacity with no ability to plan when it would be back up to full capacity. 

Market moves

French tyre manufacturer Michelin was down 0.35% by 11:00 CET (UTC+1), while French car companies also felt the impact, with Renault down 0.59% and Peugeot down 0.37%. 

The CAC40 benchmark French index was up 0.57%.

Read more: Car stocks to watch

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The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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