PSA Peugeot Citroën: Full Year 2012 Financial Results
- Group recurring operating loss of €576 million
- The foundations for the Group’s rebound have been laid
PARIS -- February 13, 2013
In the context of the deterioration of the European automotive market, the
overall efforts deployed by the Group and the difficult decisions taken have
enabled PSA Peugeot Citroën (Paris:UG) in 2012 to lay the foundations for its
industrial and commercial rebound.
The strong mobilisation around the implementation of the necessary measures
enabled the Group to accomplish the following:
*To launch the Peugeot 208 which is number one in Europe in December in its
*To roll out successfully HYbrid 4 technology, and reach second position in
the hybrid market in Europe
*To exceed our targets in terms of cost reduction (€1.2 billion), asset
disposals (€2 billion), and inventory reduction
*To implement a difficult but necessary restructuring plan, within the
framework of a responsible social dialogue
*To implement the Alliance with General Motors
*To reinforce the Group’s financial security and confirm the funding of BPF
for more than three years
These measures, together with the impairment of the Automotive Division
assets, announced on February 7^th, enable the Group to start 2013 with a
solid base to assure its rebound.
Full Year 2012 Results
*Group revenues down 5.2% to €55.4 billion. Automotive Division revenues
*Consolidated recurring operating loss of €576 million despite a very tough
environment, with a recurring operating loss of €1,504 million for the
*Net loss, Group share of €5,010 million after an impairment charge of
€3,009 million in respect of the global value of the Automotive Division
assets under the application of IAS 36 and €879 million in application of
IAS 12, to reflect the deterioration of the European market, with no
impact on the Group’s solvency or its liquidity.
*Negative free cash flow of €1,387 million
*Net debt at 31 December 2012 reduced by €211million to €3,148 million,
with an Automotive Division net debt^1 reduced by €712 million to €1,256
Summary income statement
In € millions 2011(*) 2012
Revenues 58,509 55,446
Recurring operating income/(loss) 1,093 (576)
As a % of revenue 1.9% -1.0%
Net income, Group share 588 (5 010)
(*): Reflects the application of IFRS 5 with respect to the sale of Gefco
following the closing on 20 December.
^1 Industrial and Commercial activities excluding Faurecia
Commenting on these results, Philippe Varin, Chairman of the PSA Peugeot
Citroën Managing Board, said:
“The Group’s 2012 results reflect the deteriorated environment in the
automotive sector in Europe. In this context we have taken the difficult but
necessary measures to reorganise our manufacturing base in France. The results
of the cost reduction and asset disposal plans have exceeded our targets,
highlighting the exceptional commitment of our employees. Finally, our
strategic Alliance with GM has entered into execution phase.
Today, the foundations for our rebound have been laid. We are going to build
on the strong identity of our brands and differentiate their customer
territories. We are going to focus our investments, actively restore our
profitability in Europe and reap the benefits from our investments in growing
On this occasion, Thierry Peugeot, chairman of the Supervisory Board of PSA
Peugeot Citroën stated:
“Despite the difficult context that the Group is facing, I am extremely
confident in the capabilities of all the Groups employees and of the Managing
board led by Philippe Varin to turn the situation around and assure our
Free cash flow : confirmation of our previous guidance
In the current environment, the Group expects to see a contraction in the
European market of around 3% to 5% in 2013, and growth of approximately 8% in
China, 2% in Latin America and 2% in Russia.
In 2012, free cash flow stands at €-1387 million. Operational free cash flow
(excluding exceptional items and restructuring) amounts to -€3 billion, out of
which -€2.5 billion for the Automotive Division and -€0.5 billion for
In 2013, the Group aims to halve the rate of its operational free cash flow
consumption, and confirms its objective of restoring operational cash flow to
break-even by the end of 2014.
Consolidated results: Recurring Operating loss limited to €576 million despite
deterioration of European market
*Consolidated revenues declined by 5.2% to €55,446 million in 2012,
impacted by the 10.3% drop in Automotive Division revenues, to €38.3
billion, primarily reflecting an 8.8% decline in units sales excluding
CKDs, and an unfavourable country mix, with markets in Southern Europe
accounting for 57% of Group sales. Revenues from the other Divisions rose
during the year, with Faurecia contributing €17,365 million and Banque PSA
Finance (BPF) €1,910 million.
*The consolidated recurring operating loss amounted to €576 million, versus
consolidated recurring operating income of €1,093 million a year earlier.
This result was primarily attributable to the Automotive Division, which
recorded a loss of €1,504 million for the year compared with a loss of €92
million in 2011, impacted by lower volumes and pricing pressure. It also
reflects the suspension in sales of CKD units to Iran since February and
the deconsolidation of Gefco. The recession in Europe also weighed on
Faurecia's recurring operating income, which declined by 21% to €514
million. At BPF, recurring operating income fell by 26.5% to €391 million,
reflecting a revision in November of the statistical model used to
calculate provisions in respect of retail loans, which had an exceptional
impact of €136 million.
*Non-recurring operating income and expenses came to a net expense of
€4,122 million, versus a net expense of €417 million in 2011.
In accordance with IAS36 and the recommendation of the AMF, a non-cash
impairment charge of €3,009 million was recognised in 2012 with respect to the
tangible and intangible assets of the Automotive Division to reflect the
downgraded outlook for the European automobile market. The European market is
likely to remain at 2012 levels for the foreseeable future.
These impairments do not entail any cash out, and are reversible. They lead to
a readjustment of the amortisable asset base in future years. Total tangible
and intangible assets of the Automotive Division after depreciation stand at
€13.9 billion, out of a total Group balance sheet of €64.8 billion.
In 2012, provisions related to the new measures to reorganise the industrial
activities and redeploy the workforce as announced in July 2012, were
recognised in the 2012 results for an amount of €528 million, of which €440
million for the Automotive Division. Elsewhere, other non-recurring operating
charges of €855 million arose on the impairment of specific assets and
provisions for contracts at the Automotive Division of which €612 million were
already booked in the first half.
*Net financial expense rose to €418 million from €329 million in 2011,
reflecting, among other things, the impact of repaying the loan from the
French State in 2011, which generated a €73-million provision reversal in
the first-half of 2011, the two new bond issues by PSA Peugeot Citroën of
€500 million in September 2011 and of €600 million in April 2012, whose
finance costs came to €60 million in 2012. On top of these, €59 million
came from Faurecia with a new €250 million bond issue and a €140 million
tap on the bond issue of November 2011.
*The net loss, Group share totalled €5,010 million, versus a profit of €588
million in 2011 after the depreciation of assets and exceptional charges.
An additional depreciation charge of €879 million was recorded in respect
of the net loss of value of deferred taxes under IAS12.
Results by Division
Automotive Division: Cost reduction exceeds target
In € millions 2011 2012
Revenues 42,710 38,299
Recurring operating income/(loss) (92) (1,504)
As a % revenue -0.2 % -3.9%
*Automotive Division revenues declined by 10.3% to €38,299 million in 2012,
in a European market down 8.6%, with high exposure for PSA Peugeot Citroën
in Southern Europe. Overall Group sales in Europe fell by 14.8% over the
Revenues from new vehicle sales declined by 12.4% to €27,765 million from
€31,677 million in 2011.
They benefited in part from, a favourable impact from the product mix, at
2.2%. This confirms the move upmarket of the Peugeot and Citroën brands in
2012, with the launches of the Peugeot 208 (already 220000 units sold), the
Citroën DS5, SUVs and four hybrid vehicles extending the line-up.Premium
vehicles accounted for 18% of sales, double their share three years ago.
However this positive impact was insufficient to offset the 11.4% contraction
in volumes in comparison with 2011, the first half of which benefited from a
surge in registrations ahead of the phase-out of scrappage incentives. Price
pressure remained aggressive, resulting in a negative 1.0% price effect. The
exchange rate effect was slightly favourable over the year.
Sales outside Europe accounted for 38% of the 2012 consolidated total,
compared with 33% in 2011.
*The Automotive Division reported a recurring operating loss of €1,504
million in 2012, compared with a recurring operating loss of €92 million
the previous year .
The loss reflected the contraction in demand (for €729 million) and the
continued adverse impact of raw materials and other costs (for €394 million),
with an overall negative impact from the unfavourable operating environment of
The Group’s significant efforts to reduce costs fed through to savings of
€1,181 million, significantly above the target of €1 billion. The product mix
continued to improve, with a €321 million gain.
However, these positive effects did not fully offset the €559 million impact
of market share losses in the deeply depressed European markets, the
contraction in Latin America in the first half, nor the heavy €1,155 million
impact from price pressure, notably through product enrichment ahead of new
launches. Together, these factors led to a negative Automotive Division
performance of €391 million in 2012.
Inventory at 31 December stood at 416,000 vehicles, down 29,000 from 31
December 2010, in line with objectives.
*Strategic development in China: Units sales driven by commercial
successes; dividend up by 32%
Vehicle sales in China grew by 9.2% to 442,000 units. DPCA profit attributable
to PSA Peugeot Citroën came to €171 million for the year. The dividend paid to
the Group increased by 31.7% to RMB 776 million from RMB 589 million in 2011.
Two new C segment models, the Citroën C4-L and the Peugeot 3008 SUV, were
presented in the second half.
The third plant in Wuhan has been under construction since May 2011, with the
first facility scheduled to come on-stream in the second half of 2013. In
2015, DPCA will have a production capacity of 750,000 units a year at Wuhan.
On 28 June 2012, the second Chinese joint venture, CAPSA, introduced the DS
line in the local market, with the DS5 and DS4. The DS3 was launched in the
second half. 25 DS Stores had been opened as of 31 December. Local production
will begin in the second half of 2013. With operations in Shenzhen, the joint
venture will have initial annual production capacity of 200,000 vehicles and
*Sustained expansion in Russia: production launch at full capacity
In Russia, Group sales rose 4.9% to 78,000 units, with growth led by the
locally assembled Peugeot 308 and Citroën C4. In September, these models were
joined by the Citroën DS4, DS5 and C4 Aircross and the Peugeot 508 and 4008,
as well as the Peugeot 408, the first model to be entirely built in Russia.
Local sales of light commercial vehicles increased by 18%, for a 7.4% share of
the market (up 0.9 pt).
*Model line-up renewed in Latin America: ROI break even in the second half
of the year.
In Latin America, Group sales fell 13.2% to 283,000 units, impacted by the
prolonged production stoppage at the Porto Real plant and a tense competitive
environment. Market share stood at 4.8% for the year. The situation is
expected to stabilise, with the model lines currently being renewed. The
recent launch of the Peugeot 308 was followed in the second half by the
introduction of the Citroën C3. The Citroën DS3, DS4 and C4-Aircross and the
Peugeot 508 and 4008 also enhanced the line-up in 2012.
Faurecia: positive contribution to recurring operating result
In € millions 2011 2012
Revenues 16,190 17,365
Recurring operating income 651 514
As a % revenue 4.0% 3.0%
Consolidated profit 413 184
*Faurecia reported a 7.3% increase in revenues in 2012, with a
like-for-like gain of 2.0%. Recurring operating income declined by 21.0%
to €514 million as a result of the situation in Europe. Recurring
operating margin stood at 3.0% versus 4.0% in 2011.
Banque PSA Finance: record penetration rate at 29.8%, and financing confirmed
for over 3 years
In € millions 2011 2012
Net banking revenue 1,032 1,075
Revenues 1,902 1,910
Recurring operating income 532 391
*Banque PSA Finance turned in a good performance in 2012, with net banking
revenue up 4.2% to €1,075 million despite a contraction in originations
reflecting the slowdown in Automotive Division sales. The bank’s
penetration rate among the Group’s customers rose by 2 points to an
historic high of 29.8%. Net risk provisions stood at 1.23% of average net
loans outstanding, reflecting a revision in the statistical model used to
calculate provisions for retail credit losses. The core tier-one capital
ratio remained high at around 13%.
*Thanks to the success of several refinancing transactions, the Bank enjoys
€8.2 billion in liquidity reserves, in line with its strategy of
maintaining a security margin exceeding six months. In 2012, BPF benefited
from access to LTRO and ECB financing, and increased its recourse to
securitisation to improve the diversification of its financing sources.
*The Bank’s refinancing has been strengthened, with confirmed sources
covering more than three years:
*€11.5 billion in confirmed bank facilities with the banking pool.
*A €7 billion French State guarantee approved on 29 December 2012 to back
new bond issues, with the temporary agreement of the European Commission
for a €1,2 billion initial amount
*An increase in the securitization and repo elligible from 18% to around
*The launch of a passbook savings account for retail customers in the first
half of 2013.
Robust financial security
*Net debt of the manufacturing and sales companies amounted to €3,148
million at 31 December 2012 compared with €3,359 million at 31 December
2011. Faurecia’s net debt totalled €1,892 million, up from €1,391 million
a year earlier. The net debt of the Automotive Division (industrial and
commercial companies excluding Faurecia) was reduced by €712 million over
the year to €1,256 million.
*With a strong €10.6 billion in financial security, compared with €9.3
billion at 31 December 2011, the financial position is solid, with €7.3
billion in cash reserves and €3.2 billion in undrawn lines of credit.
*These resources were strengthened during the year with the €1 billion
capital increase, the issue of €600 million in 5.625% bonds maturing in
more than five years, the disposal of €2 billion worth of assets and the
payment of an exceptional dividend by Banque PSA Finance. They offset the
operational cash flow consumption for the year of €2,807 million excluding
exceptional items (exceptional dividend from Banque PSA Finance, asset
disposals and financial investments) after consumption of €1,763 million
*Funds from operations, which amounted to €1,033 million versus €2,395
million at end-2011, were used to finance €3,814 million in capital
expenditure and capitalised R&D to support the Group's development in and
outside Europe, product momentum and €67million in financial investments
(mainly the CAPSA joint venture). Change in working capital of the
manufacturing and sales companies was a negative €602 million, with a
limited €339 million decrease in inventories, receivables reflecting
seasonal variations and an €835 million decrease in payables due to
production stoppages in the last quarter.
*The Group received an exceptional dividend from Banque PSA Finance of €360
million. Asset disposals were above target, with €448 million from the
sale of CITER, €634 million from real estate disposals and €897 million
from the sale of Gefco. The capital increase raised an additional €967
million in equity financing, with another €89 million from the sale of
treasury stock and rights.
*Strengthened financial position and balance sheet
With €7.3 billion in cash resources at 31 December 2012 and €3.2 billion in
undrawn back-up facilities, the balance sheet of the manufacturing and sales
companies remains solid. Equity amounted to €10,557 million at 31 December
2012 and gearing stood at 29.8% compared with 23% at end-2011.
*24 April 2013: First-quarter 2013 revenue
*24 April 2013: Annual Shareholders’ Meeting
*31 July 2013: First-half 2013 results
The consolidated financial statements for the year ended 31 December 2012 were
approved by the Managing Board on 11 February 2013 and reviewed by the
Supervisory Board on 12 February 2013. The Group’s Statutory Auditors have
audited the financial statements and are currently issuing their reports.
PSA Peugeot Citroën announced today that its 2012 financial report is now
available and has been filed with the French Autorité des Marchés Financiers
(AMF). The report and the 2012 financial results presentation are available on
www.psa-peugeot-citroen.com, in the “Analysts/Investors” section.
Consolidated Statements of Income
(in millions of Manufacturing Finance Manufacturing Finance
euros) and Sales Companies Eliminations TOTAL and Sales Companies Eliminations TOTAL
Sales and 53,860 1,910 (324) 55,446 56,926 1,902 (319) 58,509
operating (967) 391 - (576) 561 532 - 1,093
operating (4,121) (1) - (4,122) (417) - - (417)
Operating (5,088) 390 - (4,698) 144 532 - 676
Consolidated (5,218) 293 - (4,925) 430 354 - 784
equity holders (5,296) 281 5 (5,010) 238 345 5 588
of the parent
minority 78 12 (5) 85 192 9 (5) 196
earnings/(loss) (15,60) 2,64
per €1 par value
Consolidated Balance Sheets
Assets 31 December 2012 31 December 2011
(in Manufacturing Finance Manufacturing Finance
millions of and Sales Companies Eliminations TOTAL and Sales Companies Eliminations TOTAL
euros) Companies Companies
non-current 21,172 425 - 21,597 25,286 367 (25) 25,628
current 17,200 26,699 (656) 43,243 16,550 27,431 (618) 43,363
assets held 9 0 0 9 0 0 0 0
TOTAL 38,381 27,124 (656) 64,849 41,836 27,798 (643) 68,991
Equity and 31 December 2012 31 December 2011
(in millions Manufacturing Finance Manufacturing Finance
of euros) and Sales Companies Eliminations TOTAL and Sales Companies Eliminations TOTAL
Total equity 10,557 14,494
non-current 12,228 342 - 12,570 12,184 369 - 12,553
current 18,971 23,361 (656) 41,676 18,849 23,738 (643) 41,944
related to 46 0 0 46 0 0 0 0
& 64,849 68,991
Consolidated Statement of Cash Flows
(in millions of Manufacturing Finance Manufacturing Finance
euros) and Sales Companies Eliminations TOTAL and Sales Companies Eliminations TOTAL
Consolidated (6,021) 293 - (5,728) 280 354 - 634
Funds from 1,033 290 - 1,323 2,395 339 - 2,734
Net cash from
operating 431 1,050 (64) 1,417 1,717 17 (179) 1,555
Net cash used in
investing (2,450) (1) 3 (2,448) (3,635) (19) - (3,654)
Net cash from/(used
in) financing 2,387 (532) 4 1,859 (2,663) (158) 78 (2,743)
Effect of changes (6) (2) 2 (6) 5 (2) 2 5
in exchange rates
increase/(decrease) 362 515 (55) 822 (4,576) (162) (99) (4,837)
in cash and cash
Net cash and cash
equivalents at 4,692 1,154 (223) 5,623 9,253 1,316 (127) 10,442
beginning of year
Cash and cash
equivalents at end 5,399 1,669 (279) 6,789 4,692 1,154 (223) 5,623
PSA Peugeot Citroën
Jean-Baptiste Thomas, +33 (0) 1 40 66 39 39
Pierre-Olivier Salmon, +33 (0) 1 40 66 49 94
Jean-Baptiste Mounier, +33 (0) 1 40 66 54 22
Carole Dupont-Pietri, +33 (0) 1 40 66 42 59
Olivier Sartoris, +33 (0) 1 40 66 43 65
Christophe Fournier, +33 (0)1 40 66 57 45
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