Paris —Plastic Omnium SA, the French supplier of front-end modules and fuel system components, reported strong results for 2018 despite a slump in global auto production.
Sales rose 7.6 percent to 8.2 billion euros, with an operating margin of 610 million euros, or 8.4 percent of sales, down slightly from 2017, when it was 9.6 percent.
Free cash flow was 218 million euros, compared with 176 million euros in 2017, the company said in a statement.
Investors welcomed Thursday's results, with shares up 3.6 percent in day trading on the French bourse. Plastic Omnium's share price took a hit in 2018, down 46 percent for the year as the European supplier sector lost 39 percent overall. The company said Thursday it was proposing a dividend of 0.74 euros per share, a 10 percent increase.
Looking ahead to this year, Plastic Omnium is forecasting that it will outperform the global automotive market by at least five percentage points, generate at least 200 million euros in free cash flow and increase the value of its operating margin.
Last year was a transition year for Plastic Omnium, as it sold off its plastics container business to become a pure automotive player. The company also bought out Mahle's 33.3 percent stake in the HPBO front-end module joint venture. Plastic Omnium is now organized around two main businesses: Plastic Omnium Industries, which makes exterior panels and trim as well as fuel system components such as tanks and filters; and Plastic Omnium Modules.
Plastic Omnium Industries had revenue of 6.8 billion euros in 2018, down 1.3 percent from 2017, with an operating margin of 9.2 percent, compared with 9.3 percent in 2017. The modules operation had 1.4 billion euros in revenue and an operating margin of 3.4 percent.