Investment presentation PSA Peugeot Citroën
www.psa-peugeot-citroen.com/

Activities

The PSA Group is Europe’s second largest car manufacturer. After the acquisition of General Motors’ European business, its growth relies on five car brands – Peugeot, Citroën, DS, Opel and Vauxhall, each with its own worldwide reputation and distinct personality – as part of co-ordinated international strategies and a coherent product plan. Besides car manufacturing, the PSA Group has two other major business lines: financing for car brand sales networks and customers (Banque PSA Finance), and the design and production of components and modules for automotive production (FAURECIA, of which PSA is the majority shareholder). The Group retains a 25% interest in Gefco, a transport and logistics company.

In 2017, taking into account the Opel/Vauxhall acquisition, the Group’s sales volume increased by 15.4% relative to 2016. In Europe, the Group’s volume of vehicle sales increased by 23.2% relative to 2016. Sales of vehicles assembled outside Europe account for 35% of total sales. In China and Southeast Asia, the Group’s vehicle sales volumes fell 37.4% in 2017. The Middle East & Africa region represents the Group’s third largest market, and unit sales there rose 61.4% in 2017, driven in particular by the PSA Group’s return to Iran.

The Group’s revenue came in at €65.2 billion in 2017, up 12.9% at constant scope and exchange rates compared with 2016 and up 20.7% factoring in the Opel/Vauxhall impact. Revenue in the PCD (Peugeot Citroën DS) Automotive division rose 9.9% to €40.7 billion, due in particular to the success of recently launched models and an improved product mix. Revenue in the OV (Opel/Vauxhall) Automotive division totalled €7.2 billion in 2017. FAURECIA’s revenue rose 7.9% to €20.2 billion.

The Group’s recurring operating income totalled €3.9 billion in 2017, up 23.4% compared with 2016. Recurring operating income in the PCD Automotive division rose 33.3% year-on-year to €2.9 billion and equalled 7.3% of revenue, despite higher raw materials costs and negative exchange-rate effects. That strong performance resulted in particular from a favourable product mix and further cost-cutting. The OV Automotive division made a recurring operating loss of €179 million in 2017. FAURECIA’s recurring operating income rose 20.6% to €1,170 million. Including OV, the Group’s recurring operating margin was 6.1% as opposed to 6% in 2016.

Free cash flow of manufacturing and sales companies amounted to €500 million, and operational free cash flow totalled €1.6 billion. The net financial position of industrial and commercial activities was positive at €6.2 billion at 31 December 2017, versus €6.8 billion at 31 December 2016. A dividend of €0.53 per share will be put to the vote in the next AGM.

Based on these good results, the PSA Group confirmed its targets for the “Push to Pass” plan, aiming to achieve recurring operating margin averaging over 4.5% in the Automotive division between 2016 and 2018 and 6% in 2021. The Group is also aiming to grow revenue by 10% between 2015 and 2018, and by a further 15% by 2021.

In 2018, the Group expects the auto market to be stable in Europe and to grow by 4% in Latin America, 10% in Russia and 2% in China.

FFP’s investment

PSA’s automobile business was founded by the Peugeot family. FFP invested €115 million in the group’s 2014 capital increase and received 67 million warrants. In 2015, FFP sold 8 million of those warrants and monetised the remainder through derivatives transactions that were unwound in late 2016, since when FFP has not owned any PSA warrants.

At 31 December 2017, FFP and its majority shareholder Établissements Peugeot Frères (EPF) were one of the Group’s three main shareholders, with 12.2% of its share capital and 17.6% of its voting rights. FFP owns 9.3% of PSA’s share capital and 13.2% of its voting rights.

The value of the shareholding, for the purposes of Net Asset Value and the consolidated financial statements, is based on the share price at 31 December 2017.

Robert Peugeot represents FFP on the Peugeot SA Supervisory Board; he is Chairman of the Strategy Committee and a member of the Finance and Audit Committee. Marie-Hélène Peugeot-Roncoroni is Vice-Chairman of FFP’s Board of Directors and Vice-Chairman of Peugeot SA’s Supervisory Board, and she represents EPF on the latter. Frédéric Banzet, senior partner of FFP, is a non-voting member of the Supervisory Board.

Update at t 2017 December 31st