PSA Peugeot Citroën: Full Year 2012 Financial Results

  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

Business Wire

PARIS -- February 13, 2013

Regulatory News:

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
    down 10.3%.
  *Consolidated recurring operating loss of €576 million despite a very tough
    environment, with a recurring operating loss of €1,504 million for the
    Automotive Division.
  *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
Group’s recovery.”

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
€1,022 million.

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
    in 2011.
  *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.

Financial Calendar

  *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, in the “Analysts/Investors” section.


Consolidated Statements of Income

                   2012                                                              2011                                                           
(in millions of        Manufacturing       Finance                                          Manufacturing       Finance
euros)              and Sales        Companies    Eliminations    TOTAL      and Sales        Companies    Eliminations    TOTAL
                       Companies                                                            Companies
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
Attributable to
equity holders      (5,296)          281          5               (5,010)    238              345          5               588
of the parent
Attributable to
minority            78               12           (5)             85         192              9            (5)             196
(in euros)                                                                                                          
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
for sale
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
                   Companies                                                           Companies
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

                      2012                                                              2011                                                            
(in millions of           Manufacturing       Finance                                          Manufacturing       Finance
euros)                 and Sales        Companies    Eliminations    TOTAL      and Sales        Companies    Eliminations    TOTAL
                          Companies                                                            Companies
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
of year


PSA Peugeot Citroën
Media Relations
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
Investor Relations
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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