Forvia (FRVIA) Status update summary

Transaction overview

• Agreement signed to sell the Interiors business to Apollo-managed funds for an enterprise value of EUR 1.82 billion, representing a 3.1x 2025 adjusted EBITDA multiple.

• Transaction expected to close by year-end, subject to regulatory approvals and works council consultations.

• All Interiors employees, approximately 31,000, will transfer to the new company, which includes 59 plants and €4.8bn in sales.

• Net debt reduction of at least EUR 1 billion is targeted, with all proceeds allocated to debt repayment and near-term maturities.

• Gross debt reduction from the transaction will exceed EUR 1.4 billion, with annual financial expense savings of EUR 50–70 million.

Strategic and operational impact

• The sale marks a key milestone in the IGNITE Strategic Roadmap, sharpening focus on high-value, technology-driven activities and growth clusters.

• No significant dis-synergies expected for remaining business units, as product sourcing and sales have historically been independent.

• Limited overlap in material sourcing, with estimated single-digit million euro impact from purchasing dyssynergies.

• MATERI'ACT, the sustainable plastics unit, will remain and continue supplying the divested business.

• Corporate services and related personnel will transfer to ensure the new company is self-sustained.

Financial details and guidance

• Guidance for 2026 is set at EUR 20–21 billion in sales, operating margin between 6.0%–6.5%, and net cash flow at ≥3.0% of sales.

• 2028 ambition targets sales of EUR 21–22 billion, operating margin ≥7%, and net debt/EBITDA at 1.2x.

• Net debt/adjusted EBITDA expected to improve to 1.5x in 2026 from 1.7x in 2025.

• All bridge elements for net debt reduction include transaction costs, minority interests, debt adjustments, and tax costs.

• Minority P&L leakage will be reduced by about EUR 30 million annually starting 2027.