© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, thank you for standing by, and welcome to first quarter from Faurecia. [Operator Instructions] After the speaker's presentation, there would be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over your speaker today, Michel Favre. Please go ahead, sir.
Thank you. Good morning, ladies and gentlemen. I am Michel Favre, the Group's CFO. Thank you for attending the conference call. I am with Olivier Durand and Marc Maillet, our outstanding Deputy CFO and Head of Investor Relations. I will present our sales figures for the first quarter. The press release was posted this morning at 7:00 a.m. Paris time on our website. And the slide show that now I am going to comment is also available on our website. Starting with Slide 2. I would like first to highlight the restatements that we have made to our 2020 accounts. As announced on February 18, we have signed a memorandum of understanding for the sale of our Acoustics and Soft Trim division, AST, to the Adler Pelzer Group. All conditions are met to qualify the activity as discontinued in compliance with IFRS 5. Consequently, group sales in 2022 -- '21, sorry, exclude the AST figures, and previous periods are restated and presented accordingly. I remind you that AST is posting circa EUR 250 million of sales, which are low margin. As regard Q1 2020 sales were restated to EUR 3,678 billion versus EUR 3,739 billion as released in April 2020. The table at the end of this slide present 2020 restated quarterly sales figures. Only Interiors in Europe are impacted by this restatement. Let's now, on Slide 3, start with the main highlights of our sales in Q1. Organic growth was strong at 12.2% with double-digit organic growth for our 3 major business groups, close to 6% for Clarion Electronics, which sales were impacted by the shortage of electronic components. We're estimating this impact from Clarion at around 5% of sales or EUR 9 million. Organic growth was particularly strong in China with 88.4%. Of course, we must remember that last year, China was a country most impacted by the crisis in Q1 with sales down more than 40% versus Q1 2019. It is worth mentioning that sales of EUR 670 million in Q1 2021 even exceeded the EUR 604 million posted in Q1 '19 before the COVID. In every region, we posted stronger performance: plus 590 basis points in Europe; plus 540 basis points in North America; and largely over 1,000 bps in Asia and South America. Nevertheless, at group level, our organic growth of 12.2% is slightly below the worldwide automotive production growth of 12.8% according to the latest IHS Markit data. As you perfectly know, this is due to the strong unfavorable geographic mix impact in the quarter, estimated at circa minus 900 basis points. This is partly due to the fact that Asia, the only region where automotive production grew during the quarter, represented only 17% of Faurecia assets in Q1 2020, while it represented 44% of worldwide automotive production. The geographic mix effect, we turned around to very positive in Q1 and positive in H1 as Faurecia is more exposed to Europe and North America, the 2 regions that will recover strongly versus the trough of Q2 2020. Combined with the ramp-up of the new Seating programs, a part of which will start in Q2, we see an acceleration of outperformance in Q2, and we are more than on track to reach the targeted full year outperformance of at least 600 basis points. Apart from the sales figures, I would like to outline 2 events that happened in Q1. In February, fully in line with our strong conviction that hydrogen is the best solution for zero emissions, we acquired a major stake in CLD, which is one of China's largest high-pressure tank manufacturers. CLD operates 2 plants, employs 200 people and has a capacity of 30,000 tanks per year. In March, we successfully issued EUR 400 million of Senior Green Notes due 2029 at 2.38%. The first issue of green bonds reflects Faurecia's strong commitment to sustainable mobility, and in particular, to investment in hydrogen mobility. It is the best price that Faurecia ever gets on a bond issue, taking the maturity into account. Slide 4 shows the usual bridge of sales between Q1 2020 and Q1 2021. On the extreme left, we have just reminded the sales figure for Q1 2019 before the COVID-19 crisis. It shows that our main markets have not yet fully recovered from the crisis, and I will give you only 1 figure. Volumes in Q1 2021 are minus 11.6% versus 2019. So we are still in the very, very low market. We also reminded the Q1 2020 sales figure, as presented last year, that included sales for AST. Our Q1 2020 sales restated for IFRS 5, comparable to Q1 2021, amounted to EUR 3.678 billion. Currency effect was negative and quite significant with EUR 183 million or minus 5% of sales with the U.S. dollar and Brazilian real representing around 2/3 of this figure. Scope effect was a positive contribution of EUR 60 million due to 1-month of consolidation of SAS the month of January as assets was consolidated last year from February 1. As previously indicated, organic growth in the quarter amounted to EUR 450 million or 12.2% of sales. As a result, sales in Q1 2021 amounted to EUR 4.005 billion, up 8.9% year-on-year on a reported basis. Let's start on Slide 5, the review by business group. Seating, which represented 39% of group sales in Q1, posted sales of EUR 1.544 billion. Sales grew at a double-digit on an organic basis at plus 13.6%. Organic growth was very strong in China, both with international and Chinese OEMs, while SAS in other regions recorded organic growth at or above 5%. As already commented, significant SOPs will happen in Q2 and ramp up during the rest of the year, boosting Seating outperformance in the coming quarters. Interiors, which represented 30% of group sales in Q1, posted sales of EUR 1.225 billion. Sales grew at a double-digit on an organic basis at plus 11.7%. Reported sales included the positive scope effect of EUR 60 million or plus 5.4% of sales due to the additional month of consolidation of SAS, already commented. But this positive scope effect did not fully offset the negative currency effect of EUR 67 million or minus 6% of sales. Organic growth was driven by China and Europe as well as SAS that grew by plus 30% on an organic basis. Let's continue on Slide 6 with Clean Mobility and Clarion Electronics. Clean Mobility, which represented 26% of group sales in Q1, posted sales of EUR 1.038 billion. Sales grew double-digit on an organic basis at plus 12.3%. Organic growth was mostly driven by China, up 84%, and commercial vehicles, up 22%. Clarion Electronics, which represented 5% of group sales in Q1, posted sales of EUR 199 million. Sales grew by 5.7% on an organic basis. Organic growth was mainly driven by China, where sales tripled year-on-year. The impact on Q1 sales of the shortage of electronic components was estimated at, at least EUR 9 million. On Slide 7, there is a review by region. Europe, which represented 51% of group sales in Q1, posted sales of EUR 1.970 billion. Reported sales included a positive cost impact of EUR 35 million or plus 1.9% of sales. That slightly exceeded a negative currency effect of EUR 28 million or minus 1.5% of sales. Sales grew by 5% on an organic basis, outperforming by 590 basis points regional automotive production that dropped by 0.9%. Organic growth was mainly driven by Seating and Interiors. North America, which represented 23% of group sales in Q1, posted sales of EUR 952 million. Reported sales included a strong negative currency effect of EUR 88 million, or minus 8.6% of sales, that largely offset a positive scope effect of EUR 17 million or plus 1.6% of sales with the organic growth of EUR 9 million or plus 0.9% of sales. The strong negative currency effect resulted in a drop of 6.1% in sales on a reported basis. Sales grew by 0.9% on organic basis, outperforming by 540 basis points regional automotive production. Organic growth was mainly driven by Seating. Let's continue on Slide 8 with Asia and South America. Asia, which represented 23% of group sales in Q1, posted sales of EUR 928 million. Sales in the region grew by 48.7% on an organic basis, outperforming regional automotive production by 1,730 basis points. All business group posted strong double-digit growth, mainly driven by growth in China. In China, sales grew by 88.4% on an organic basis, outperforming regional automotive production by 480 basis points. All business group posted very strong double-digit growth in the country. It is worth repeating that our sales, both in Asia and China, significantly exceeded pre-COVID sales of Q1 2019. South America, which represented 3% of group sales in Q1, posted sales of EUR 113 million. Reported sales included a strong negative currency effect of EUR 41 million or minus 32% of sales. The strong negative currency effect largely offset a limited positive scope of EUR 1 million. As a result, reported sales were down 11.5% year-on-year. The 20.1% organic growth outperformed regional automotive production by 1,610 basis points. Organic growth in South America was mainly driven by Interiors and Clean Mobility. Now that we have reviewed our sales performance in Q1. Let me, on Slide 9, give a quick look-back at the spin-off process that happened in March and is now behind us. The distribution of Faurecia shares by Stellantis is completed, and Faurecia is now a free float of circa 85%. Most of the remaining 15% relate to the stake held by the 4 historical shareholders of PSA and FCA, which means: Exor, 5.5%; Peugeot 1810 with 3.1%; Bpifrance with 2.4%, Dongfeng with 2.2%. As you know, all 4 shareholders have undertaken a low cap agreement for a period of 6 months following the completion of the distribution by Stellantis, but of course, may decide to remain shareholders for a long period. Notably, Peugeot indicated its strong commitment to Faurecia, and our shareholders at the next AGM will be asked to appoint the company, Peugeot 1810, as a Board member with Robert Peugeot as permanent representative. And you know that Robert Peugeot has been involved for a long time with Faurecia. We are proud to consider that the spin-off process, which was a big event for Faurecia and all the shareholders, was a success. Thanks to intense communication efforts from the company, including the Capital Markets Day to update on the group perspective as well as very active investor meetings campaign and also further support from bank brokers, we have been able to create enough appetite from investors to absorb the significant movement in shares. At the close of Friday, our share price was up 15.9% year-to-date, outperforming the SBF 120 Index by 12.6% over the same period. I would like to thank all the team of Faurecia for this good performance. I would like to thank as well our advisers and brokers, Lazard, Berenberg, JPMorgan, Societe Generale, for this, I will say, very good performance. Now our share liquidity, a significant increase with average daily volumes traded since the record date that have more than doubled versus volumes traded before recorded. Since March 22, our share is including the CAC Next 20 Index. Our shareholder base is enlarged and more diversified. Lastly, let me remind you that our upcoming nondilutive Employee Shareholding Plan, named faur’Eso, with shares delivery on July 28, will also give opportunity to employees to become shareholders of the company with the target that total shareholding of our employees will represent after this operation circa 2.6% of the capital of Faurecia. Let me now conclude on Slide 10 with the confirmation of all our financial targets for the year. The latest IHS forecast that was released last week estimates worldwide automotive production in 2021 at 79.7 million vehicles, up 13%. This is downward revision of around 500,000 vehicles versus the previous forecast of March. It's a consequence of the shortage of electronic components that impacts all our customers. As you know, since February, our guidance for 2021 was based on a cautious assumption of 76.6 million vehicles to be produced in the world in 2021, an increase of 8% versus 2020. So this presence is giving us more than comfort towards our guidances. Even taking into consideration the shortage of electronics and the subsequent downward revision of IHS forecast, all our assumptions remain valid. As a consequence, I can, with great confidence, fully confirm our targets for the full year: sales of at least EUR 16.5 billion with a strong outperformance of at least 600 basis points; operating margin of circa 7%, close to pre-COVID levels; net cash flow of circa EUR 500 million and a net debt-to-EBITDA ratio of less than 1.5x. Clearly, all of these figures will be fully, I will say, achieved. Thank you very much for your attention. The floor is now yours. Operator, can we start the Q&A session?
[Operator Instructions] We have our first question from the line of Tom Narayan from RBC.
It's Tom Narayan, RBC. The first one, and I'm sure everybody has this question, could you just give us a little more detail on your decision to maintain the 8% production guidance? I understand you're being prudent, but maybe folks would appreciate some of the components there. Maybe what would it have been, let's say, there was no semiconductor production impact, for example? And then secondly, OEMs of late have been making a lot of comments on EV component insourcing. Daimler, last week at their EQS event, said they were going to be doing their own power electronics and e-motors and battery management systems. So it would appear that your Seating and Interior business could be okay there. But what about Clean Mobility? And then third, the long-term guidance issued at your CMD suggested some pretty significant market share gains in North America in Seating and Interior, which you would think North America is a pretty mature market. I understand you're underpenetrated there. But curious if you've learned anything new in Q1 that would suggest confidence that you could achieve those targets?
Thank you, Tom. Of course, we start with semiconductors because it's a big disturbance for the market, difficult to understand what are the arbitration inside -- I would say, the suppliers arbitration inside the customers. And because in some cases, we have seen some customers favoring one region with respect to others or favoring some models with respect to others. So difficult to understand everything. The fact is that automotive business consume more or less 10% of the semiconductors of this world. I can say the 10%, which is a big figure and a low figure. We can shout, we can say what we want, we are only at 10%.Second thing, we see some erratic communication. I remember one carmaker saying, "Things are now completely fixed." And the week after, he was making some downtime. So we are more today still at end to month, very low level of inventories. And of course, it will continue like this probably some months. There will be potentially a peak this month and next month. Progressively, things will probably be better. We know that in this business, Q3 is important for the consumer goods to prepare Christmas. And probably like last year, things will ease, if you can use this expression. There will be some new CapEx. So we can be a little more optimistic for the last quarter. So we -- as for Asia, what we can say that we remain, if you see, at the same rhythm horizon in our guidance as the first quarter, 19 million vehicles. Probably it's very cautious per quarter, it's very cautious, but it's a fact. Everything, I will say, upwards will be an upside. And I'll remind you the sensitivity I gave at different times, 1 million vehicles production more in this world, means -- that with the same mix, means EUR 200 million of sales and close to EUR 50 million of EBIT. So clearly, the upside is significant. After that, I will say, month after month, we see how things will improve. On the big announcement of electrical vehicles. As usual, big announcement means 5 years lead time. I am sorry to say that. So we are speaking of 2025, 2026, et cetera. But what they will decide on insourcing batteries to cars, sorry, is not affecting our Clean Mobility business. What is key is how fast our ICEs will be or could be substituted by electrical vehicles and how fast hydrogen will develop because we are convinced and we are more and more convinced that hydrogen is the only clean solution. And so we are convinced that things will accelerate. So we are totally, for the moment, inside our guidance on the ICEs, the number of ICEs, et cetera, for the period at least until 2025. We think that it will be probably more positive than we were thinking for Faurecia. After that, we have to see, like you, our markets will evolve, what will be the evolution of the infrastructure. I doubt that electric infrastructure will fit the number of volumes that are expected as [ BEVs. ] And now market share gain. Sorry to be blunt, we are not speaking of the future. We have gained the market share. It's a fact. We are starting the business. We are starting as business, I will say, we sell Jeep, we sell Tesla, et cetera, has been awarded in the last 2 to 3 years. So our growth in North America is secured. Of course, it's a daily, I will say, fight to continue to grow. I'll remind you that this year, we have EUR 26 billion order intake target. The good news that we give you is that we are totally inside in our road map at the end of March. And I will add that for everything, we are at least in line with our road map, I will say, at the end of March. The first quarter was a very positive quarter for Faurecia.
We have another question from the line of Giulio Pescatore from Exane.
[Foreign Language] So my first question is on the 2021 guidance. Can you confirm that the assumption behind the guidance in terms of FX and scope are still the one that you made at the time of the full year earnings release? And then maybe if you could help us with -- help us a bit with the assumption behind the free cash flow guidance as well. I mean, what are you assuming for working capital? And yes, and that will be very helpful. And then maybe one last one, more high level. I mean, are you seeing anything in the way that the new Euro 7 regulation is shaping up that makes you more cautious or maybe even more optimistic about the outlook for the Clean Mobility segment in the midterm?
Thank you, Giulio. For the ForEx, we kept $1.20 per EUR 1 and CNY 7.80 per EUR 1, which are the main assumption. In U.S., the sensitivity is very low, if say, we have more or less. So it's not a big problem. So today, when you see the figures, we are -- vertically, we have an upside, okay? Free cash flow guidance, we were not repeating the story of the restructuring cash-out. It is a fact. So we'll be close to EUR 180 million for this year cash-out, fully taken into account. On the working capital, thanks to the 1-day reduction in inventories, we should be slightly positive. And I repeat, I would say, around EUR 500 million cash flow, knowing that we are better end of March. And we are somewhere significantly better, which means that when we are disciplined and when we control the CapEx, I would say, things are visible. Regulations, it's too early to speak about regulations. There is an important step for 2025 with the EC. We see some polemics and we see some discussions. Sorry to say that we are not involved, moreover. So difficult to speak about that story.
We have another question from the line of Thomas Besson from Kepler Cheuvreux.
[Foreign Language] Three questions as well, please. First, can you say a few words about the business you acquired in China? You said quite a big production capacity in terms of storage system. Can you give us some -- maybe some revenues, some orders, some ideas of what the contribution is going to be in 2022, 2025 or 2030? Is that the metric you want to follow as for the targets you had given for hydrogen? That's the first one. The second, I'd like you to come back to the time line of the new contracts in Seating and confirm that they are incremental in terms of profitability. And last, I'd like to come back to the unavoidable topic of various stoppages. Can you just help us understand the visibility you have in Q2 on production levels? And what kind of impact on earnings you saw in Q1 or you anticipate in Q2? I understand it's within the guidance, but explain to us how you can react to this very limited visibility?
Thank you, Thomas. CLD is a little early because we are still in the process of acquisition. Figures are low, I will say, on SAS, I think something like EUR 30 million. But this is the only figure I can give you now, sorry to say that. We have to go back to you with the closing of the acquisition. Seating profitability, I will say that the new contracts will at least give the same profitability as today. Growth, as you have understood, Thomas, will be quite nice, and Seating will definitely post a margin over 7%. For the production level, we have a paradox. Of course, production level is low. And I repeat, markets are very low when we compare to '19. So we are still in the very low range. So when things will restart, it will be quite impressive. I will say as well that inventories of our customers are very low. We are estimating that today, something like 1 million cars -- sorry to repeat the figure, circa 1 million cars inventory are missing in the states. There are 40 days when they were usually at 45 days or more, so -- sorry, 55 days or more. So that means that, clearly, when things -- when semiconductors will be available, things will restart very, very, I would say, at a very dynamic pace. The paradox is that we are accelerating, I will say, our outperformance. So thanks to the outperformance, we have excepted some plants. We don't have today any big issue at activity, which is a good thing. And this is a thing and will continue to help, of course, our profitability. So as you know, we are active. So in regions -- because there are some regions, Germany, for instance, north of France, et cetera, where production is low. Of course, we have adjusted or we are adjusting our means. And in other regions, we have to manage today growth and to find the right people and to manage the growth. So we try to be as quick and agile as possible.
We have another question from the line of Sascha Gommel from Jefferies.
I have also a few questions, please. The first one would be actually on the flowback versus share buyback. Did you utilize the full volume of your buyback volume around the flow back? Or is there something left on the table for the rest of the year?
No, it's finished. So the share repurchase for the -- to avoid the decision is done. It's been, I think, concluded, if I'm not mistaken, between Thursday or Friday. So it was done. It has not matched the flowback. The flowback happened probably before we were seeing the transactions. So it was -- on top of that, it was not a bigger amount. So I think this was -- everything is done. I have no issue on that.
Okay. Perfect. My second question would be a bit on working capital because, obviously, we ended the year 2020 at a very high sales level and so very efficient working capital level. And now with all this volatility in the market and potentially some inefficiencies on the inventory side, how should we think about your working capital at the end of the first half? Do you see some burden from this current situation? Or are you able to manage that very efficiently right now?
Yes. As I said, I think, end of February, we have already achieved some inventory reduction, mainly in the last 2 months of the year. We saw, again, the cash impact afterwards. We are today targeting or if you prefer, forecasting, the same level of working capital between end of June and end of December -- end of June '21 and end of December '20.
Okay. Very clear. And then my last question would be a follow-up on the Seating market share you were talking about earlier. And I understand you already secured that market share. But since your -- one of your main competitors in the U.S. has fixed the operating problems and now also the balance sheet, do you think they'll become more aggressive again to try to regain some of the market share they lost? Or you think you can defend that very easily?
It's a very good question. I will say that it's not only a question of the first quarter. They were already back last year. I tell you they want to defend the market share, which is normal. We think that on metal, we have an advantage. We think that we are more -- I will say, we have some patents. So we have a technical advantage and we'll continue to gain market share, which is what we see and what we will achieve. And I insist that the order book was really good in -- for Seating last year. And this year, it is starting very well. On complete seat, we are more an outsider. So we continue to gain some market share, right, I would say, with some customers. When we take market share with Tesla, for instance, it's a new one. So we are gaining, I would say, progressively, but without making too much, I would say, damage to our big competitors. It's a market share between 9% to 10% on the complete seat, while the market share on metal is much more. We are probably on the big platform at 20%.
We have another question from the line of Stephen Reitman from Societe General.
Michel, the question, the -- we've seen so far, indications that the automakers have been able to favor the more higher contribution margin vehicles. And so they're not taking so much of a hit in the first quarter from a semiconductor shortage. How are you adapting to this as well in terms of -- as they reduce certain programs and try to concentrate on other ones? And are you able also to try to match that, do you believe?
I don't want to speak for my customers, but I think what you have said and noted is completely true. We think that they are favoring some models or some regions. When we say favoring, that means to keep the same volumes as before. So -- and we have not seen some up and downs on that. So clearly, it was not a difficulty to fit the requirement, the production equipment for these models that they have favored. The problem is more when they stop our production overnight. It happens, just to be clear, it happens. For customers who have some difficulties, it happens. We are a just-in-time company. We try to be agile so we adapt as quick as possible. But sorry to say that, contractually, if they stop overnight, they have to compensate. So it is what is happening. It is the same as what you said, which we speak clearly, we ask for compensation. Compensation usually is to postpone some productivities. But we cannot accept that just stop overnight. We have to -- need 2 days, 3 days to, I will say, organize the downtime of our people. So this is a fact, which is a consequence -- I don't know if it was a question, but it's a consequence of the fact that visibility of our customers are very limited. It's very limited.
And it might be early days at the moment, but there has been talk that the automakers, they're looking now to get more involved in sourcing of key components, like semiconductors as well, to ensure that their Tier 1 supplies and whatever have adequate supplies. Can you say anything from a clearing perspective in that?
No, for the moment not. Of course, they want to be more involved with a change, which is complex because you have at least 2 types of supplies. I am not an expert, but I know that some processes which are very CapEx-intensive, are very much concentrated. After that, you have some, I would say, suppliers making the final assembly and welding point. So it's a complication. I don't know how they could manage that or are they prepared, sorry to say, to manage that. But for the moment, we don't see a consequence. We are more working mainly for Clarion this time to manage the shortage and to avoid any disruption for our carmakers.
We have another question from the line of José Asumendi from JPMorgan.
Just a few items, please. The first one, if you come back a little bit more to Clarion and any news in terms of product developments on the display side or RFQs or business wins by region that you have seen sort of developing in the past quarter? Second question, around the CapEx guidance maybe for the first half. Where do you see CapEx for the first half? And then third one, I know it's difficult to quantify the situation on the semiconductor supply chain issues. But can you comment a little bit around versus your initial assumptions for the second quarter or for the full year, how far have you reduced your internal budgeting production forecast for the year versus where you were maybe in December?
Okay. At display, we don't comment, sorry, José, the order intake per quarter. The only thing I have given is that we are totaling the road map towards the '26 and we continue to be awarded on some display. That is what I can say today. CapEx guidance this year will be maximum of EUR 600 million of CapEx. That's probably below. And we say, half of it in the first half, mainly because we have been restrictive. So I don't think we will be over EUR 300 million. Q2, the paradox in Q2 is that -- sorry to say that, José, you will be disappointed, but we are totally in line with our budget.
Very good.
Our budget was made of EUR 19 million, and we are totally in line with our budget. I have the figure with me, I'm sorry. We can give you because it's a budget. We are EUR 18 million above our sales with respect to budget with the last forecast of our customers.
Can I follow-up? On the Chinese momentum sequentially on a quarterly basis, are you seeing a big slowdown as we go into Q2, Q3, Q4? Are you seeing much more of a stable pattern versus the first quarter? What's your sense overall of your Chinese business? Do you think it's slowing down? Or do you think it's stabilizing? Or do you think it's actually accelerating versus Q1?
Q1 was very good. Q2 is below. Q2 is below. We see every month a small upside is a program, but Q2 is below. So difficult if it is a more cautious forecast or is there was a problem of inventories -- not a problem, allocation of inventory to boost in the first quarter. But you're right, Q2 is slightly below. It's too early to speak of Q3, Q4. So today, we have no concern about our expectation for China in the full year. We are above. After that, we have -- we need to see what will be still the upside with respect to that.
We have another question from the line of Martino De Ambroggi from Equita.
Martino from Equita. The first question is a follow-up on the Seating because you are starting new programs. But could you quantify the impact starting from second quarter this year and on next year in terms of sales coming from these new programs, justifying the strong outperformance? The second is on the Asian operating profit. I suppose this year will exceed the double-digit threshold. Could you elaborate on the potential target in terms of profitability with a very rough range for this year? And the third question is on the hydrogen business. You guided for EUR 50 million, including tanks and stacks. So far, Stellantis made the announcement. But how many clients you need to achieve these targets you are guiding for 2022?
Okay. Marc, do you have a figure for the Seating? I will check afterwards. I will check. Marc, yes? Marc, isn't connected, sorry. For Seating, sorry, I will give you the figures. You say for the business starting in Q2 or for the total new businesses?
No, starting from second quarter for the rest of the year. How much is the business coming from these new programs?
We are roughly speaking of a little more than EUR 300 million.
EUR 300 million, right.
EUR 300 million.
Sorry, I could not be on the line. Yes, exact, correct, Michel. We are slightly -- we are at EUR 350 million or slightly above.
Thank you, Marc.
Thank you.
On Asia, we will definitely post double-digit figures. Sorry, I will not give more flavor on that. But we are, as you have understood, we had a very good first quarter in China. The forecast is not bad at all. So we are clearly more than in line with our road map. On 2022, things are done. So clearly, the main business in 2022 is PSA, the commercial vehicles for both tanks and stack. And the Hyundai business will start, I would say, late 2022, if we are not mistaken. And this is as well stack and tanks. After that, we have the Renault business, which is today, tanks. We are still developing the stack. We'll see how things will evolve with Renault according to the project. Because, as you know, they have made a JV with Plug Power. So they are, for the short, medium term, the 3 key customers. You have, as you know, at least 2 years. So the work, we will be awarded this year. And you know that some important RFQs, request for quotations, are today on the table, this will mainly impact 2024 onwards.
Okay. So you already covered this target. Okay.
If you don't mind, so thank you for giving me this opportunity. 2021, 2022 is made. We know where we have been awarded. We know what we have to do. So after that, of course, volumes mix could play, but we have -- we know the content of our sales. 2023, there will be a small impact from the order intake of the first half 2021, et cetera, on the rolling point of view. And I remind you my guidance for 2025, I say that 2/3 are totally secured. 1/3 will be secured with the order intake of 2021, 2022, mainly small impact of first half 2023. Thank you for this question.
There are no further questions. I will hand back over to Michel Favre.
Okay. Thank you to all of you. So as you can see, we have -- we made a very good first quarter. We are totally inside our roadmap. So we continue, I would say, to deliver and to be focused and agile because the market is not easy to deal with the semiconductors. I think these topics will continue probably up to the end of the Q3 September. And look, what I think is that things will restart smoothly in the H2. So probably, we have an upside in H2. It is -- if I want to give a very positive message, it is my conviction. Thank you to all of you, and see you soon.
That concludes the conference for today. Thank you for participating. You may all disconnect.