Operational cash above target
Regulatory News:
In 2013, PSA Peugeot Citroën (Paris:UG) pursued its turnaround
plans, within a European market down by a 2%.
- The brand differentiation and
repositioning strategy was implemented with the launch of the
Peugeot 2008, 308, 208 GTi and XY, the Peugeot 301 and the Citroën
C4 Picasso, C4 L, C-Elysée and DS3 Cabrio;
- The plan to restructure manufacturing
and sales operations in France led to 2,250 departures with
appropriate support. The New Social Contract signed in 2013 is
paving the way to improved competitiveness in Europe, while
maintaining a strong manufacturing base in France;
- Sales outside Europe rose to 42% of
total volumes, with a very good performance in China. The Group is
in line with its objective of generating 50% of its sales outside
Europe in 2015;
- The Alliance with GM on manufacturing
was established in Europe, with three joint projects and a joint
purchasing organisation.
The PSA Peugeot Citroën Group is ready for the next phase of its
development, and today announces four major projects of operations1
to this effect:
- Reinforcement of the industrial and
commercial partnership with Dongfeng;
- €3.0 billion capital increases, with
the attribution of free warrants to existing shareholders;
- Renewal of confirmed line of credit for
€2.7 billion;
- Beside, PSA Peugeot Citroën announces
that it has entered in exclusive negotiations to form a partnership
between Banque PSA Finance and Santander1.
2013 Results
- €54.1 billion in consolidated revenues,
down 2.4% on 2012. Automotive Division revenues down 4.8% to €36.5
billion.
- Consolidated recurring operating loss
limited to -€177 million, with a recurring operating loss of
-€1,042 million for the Automotive Division.
- Significant reduction in cash burn,
with operating free cash flow2 of -€426 million vs - €3 billion in
2012.
- -€4,148 million in net debt at 31
December 20133.
Summary Income Statement
In € millions 2012*
2013 Revenues 55,446
54,090 Recurring operating loss** (560)
(177) As a %
of revenues -1%
-0.3% Net loss, Group share (5,008)
(2,317)
*Reflects the application of IFRS 5 with respect to the sale of
Gefco following the closing on 20 December 2012.
**Reflects the application of IAS19R with respect to the
Employee Benefits beginning in 2013 (impact of €16 million on
consolidated recurring operating income at Group level, of which
and of €8 million on Automotive Division recurring operating
income); and reflects the application of IAS 36 on the Automotive
Division of €595-million over the year.
Commenting on these results, Philippe Varin, Chairman of the
PSA Peugeot Citroën Managing Board, said:
“We have gone through some very challenging years for the
European automotive industry, which have added to the Group’s
structural difficulties, notably its over-dependence on Europe. We
vigorously implemented difficult restructuring measures which are
now starting to bear fruit. We also launched core models this year
that have exceeded their initial sales targets. The globalisation
process is proceeding apace, with in particular an excellent
performance in China.
The exceptional mobilization of all our employees has enabled us
to lay the foundations for a turnaround in Europe and to return to
profitable growth.
With today’s announcements, we are giving a new impetus to our
Group, with an ambitious industrial and commercial plan, and solid
financial resources.”
Outlook
In 2014, PSA Peugeot Citroën expects growth in automotive demand
to be slightly positive at around 2% in Europe and around 10% in
China, with a 2% decline in Latin America, and a stable market in
Russia.
Continuing the trend of 2013, we will pursue our active cash
management to target positive operational free cash flow4 in 2016
at the latest. Beyond, the operating free cash flow generation
should accelerate due to the structural benefit of the projects of
transactions.
Consolidated results: Group recurring operating loss of €177
million in a difficult European market.
- Consolidated revenues declined by
2.4% over the year to €54.1 billion, albeit with a 1.5% upturn
in the fourth quarter. Automotive Division revenues stood at
€36,461 million, a 4.8% decline that primarily reflected lower
volumes and a negative currency effect. Among the other divisions,
Faurecia reported €18,029 million in revenues, up 3.9%, while
Banque PSA Finance (BPF) saw a 7.2% decline to €1,773 million;
- The consolidated recurring operating
loss for the year came to - €177 million versus- €560 million loss
reported in 2012. The Automotive Division’s recurring operating
loss improved by €454 million to €1,042 million over the year,
lifted by a positive product mix, strict price discipline
significant cost reductions and lower amortization charges
following 2012 impairment. Faurecia delivered recurring operating
income of €538 million, up 4.3%, while Banque PSA Finance reported
€368 million, down 5.9% due to weak European markets and higher
financing costs;
- Non-recurring operating income and
expenses came to a net expense of - €1,169 million, versus a net
expense of - €4,122 million in 2012.
The net expenses mainly comprised a -€1,101 million impairment
charge, mainly recognised with respect to the assets of the
Automotive Division, primarily to reflect the deteriorating
automobile markets and adverse exchange rate movements in Russia
and Latin America. These impairments, which did not entail any cash
out and are reversible, will lead to a readjustment in the
depreciable asset base in future years.
Restructuring costs amounted to -€460 million in 2013, versus
-€528 million in 2012 relating to measures within the plans
implemented in 2013, the additional measures of the New Social
Contract, and including -€91 million in restructuring costs at
Faurecia.
- The net financial result amounted to
- €658 million, versus - €430 million in 2012. The increase is
attributable to the rise in financial costs following the bond
issues of the year, partly offset by the disposal of BNP Paribas
shares for €89.3 million.
The consolidated net loss, Group share of -€2,317 million,
versus -€5,008 million in 2012.
Results by division
Automotive Division: product mix performance despite market
and currency headwinds
In € millions 2012
2013 Revenues 38,299
36,461 Recurring operating loss* (1,496)
(1,042) As a
% of revenues -3.9%
-2.9%
* Reflects the application of IAS19R with respect to the
Employee Benefits beginning in 2013 (impact of €16 million on
consolidated recurring operating income at Group level, of which
and of €8 million on Automotive Division recurring operating
income); and reflects the application of IAS 36 on the Automotive
Division of €595-million over the year.
- Automotive Division revenues
declined by 4.8% to €36,461 million in 2013, in a European market
down 2%. The downward trend slowed down in the second half, with
revenues decreasing by 1.8%.
Sales of assembled vehicles outside Europe accounted for 42% of
total unit sales, up from 38% in 2012. Revenue from new vehicle
sales fell 8% to €25,532 million from €27,765 million the year
before.
The product mix remains positive at +0.8%, reflecting the
success of new launches and the differentiation of the Peugeot and
Citroën brands. The 0.7% price effect reflects the Group’s
commitment to focusing on the most profitable retail channels
throughout the year. Premium vehicles represented 19% of unit sales
in 2013, compared with 9% in 2009.
The sales performance reflects the success of the new models
launched during the year:
- The Peugeot 208 with 353,000 units sold
in Europe and Brazil in 2013;
- The Peugeot 308, with nearly 42,000
units sold in its three months on the market and a high mix.;
- The Peugeot 2008, with over 100,000
vehicles sold, which significantly exceeded its targets, leading to
the introduction of a second production shift at the Mulhouse
plant;
- The new Citroën C4 Picasso and Grand C4
Picasso, which deliver best-in-class carbon emissions
performance;
- The Citroën C4L in China, the extension
of the DS line, and more recently the Peugeot 301 and the Citroën
C-Elysée, which also exceeded their targets.
The pace of new model launches will continue in 2014, in
particular with the new Peugeot 308 SW and the Peugeot 108, the
Citroën C4 Cactus and the new Citroën C1 and other models in the
rest of the world.
These favourable effects were not sufficient to offset i) the
5.4% year-on-year contraction in volumes, which reflected both the
weakness in European demand and disruptions to Citroën C3 sales due
to work stoppages at the Aulnay plant; and ii) the very negative
currency effect (3.5%).
- The Automotive Division ended the
year with a recurring operating loss of €1,042 million, versus
€1,496 million in 2012.5
The improvement in the recurring operating result reflects the
Division’s overall performance during the year, for €1,340 million.
It was led by the sharp improvement in the product mix, for €406
million, following the recent launches; a limited price effect that
added €287 million; a €933 million improvement in production and
other costs; and a €140-million gain on R&D expenses. These
factors helped to offset the negative €264-million impact of market
share losses.
In contrast to this positive performance, the market environment
remained unfavourable, reducing recurring operating income by €886
million, in particular via the decline in demand, for €147 million
and in particular the highly negative currency effect for €526
million, mainly due to the Argentine peso, the Brazilian real, the
British pound and the Russian rubble.
Inventory of new vehicles at 31 December stood at 384,000
vehicles, representing 62 days of sales, down 32,000 units from 31
December 2012, in line with targets.
- Strategic development in China:
557,000 vehicles sold; dividend of €100 million
In 2013, domestic sales of DPCA vehicles rose by 26% to
550,000 units and market share improved to 3.64%, with the
successful launches of the Citroën C4-L and the Peugeot 3008
crossover SUV, followed by the Citroën C-Elysée and the Peugeot
301. DPCA profit attributable to PSA Peugeot Citroën came to €187
million for the year, while the dividend paid to the Group
increased by 19% year-on-year to €100 million (RMB 905 million).
Following the inauguration of the third Wuhan facility on 2 July
2013, production capacity is expected to reach 750,000 units a year
in 2015. The construction of a fourth facility by DPCA is under
consideration.
The second Chinese joint venture, CAPSA, launched the DS line in
the local market with the DS5, DS4, DS3 and the DS3 Cabrio. A total
of 52 outlets had been opened as of 31 December and the first DS
World was inaugurated in March in Shanghai. Local production of the
DS5 began in the second half at the Shenzhen plant, with an initial
production capacity of 200,000 vehicles and engines a year. After
going on sale in October, the first orders have exceeded
expectations.
- Two regions to be improved: Latin
America and Russia.
In Latin America, sales rose 7% to 303,000 units, for a market
share of 4.9% overall, albeit with wide variations among the
countries.
In Argentina, the Group maintained its growth momentum, with
sales up more than 27,8% year-on-year and the newly launched
Peugeot 301 and Citroën C4 Lounge exceeding forecasts.
Nevertheless, import restrictions and the highly negative exchange
rate environment are expected to weigh on the Group’s growth in the
region in 2014.
In Brazil, demand declined for the first time in ten years, by
1.5%, while the negative impact from the real was sharply
detrimental to the Group’s results.
Sales in Russia fell 22.3% to 61,100 units in a market down
5,4%, with a major adverse impact from the unfavourable rubble-euro
exchange rate. Latin America and Russia are two regions that
require improvement by optimising costs, streamlining the model
ranges and increasing local integration in order to to reduce
regional exchange rate sensitivity.
- Sales successes in the rest of the
world
The Peugeot 301 and Citroën C-Elysée proved highly successful
and enjoyed very positive growth in the Mediterranean region,
particularly in Algeria and Turkey where unit sales rose by 6.9%
and 7.6% respectively compared with 2012.
Faurecia: sustained expansion outside Europe and a reduction
in net debt
In € millions 2012
2013 Revenues 17,365
18,029 Recurring operating income 516
538 As a % of
revenue 3.0%
3.0% Consolidated profit 185
143
Faurecia reported 3.8% growth in revenue in 2013, with a 4.5%
increase in recurring operating income, to €538 million. The
operating margin at 3.0% was unchanged from 2012. Free cash
improved relative to the 2012 level. Net debt was reduced to €1,629
million.
Banque PSA Finance: high 29.1% penetration rate; success of
the Distingo passbook
In € millions 2012
2013 Net banking revenue
1,075
891 Revenues 1,910
1,773 Recurring operating
income 391
368
Banque PSA Finance’s performance reflected tough conditions in
Europe, with net banking revenue down 17% to €891 million, which
reflected the cost of financing and the decline in vehicle sales.
The bank's penetration rate remained at a high level of 29.1%. Net
risk provisions improved to 0.61% of average net loans outstanding
from -1.23% in 2012.
The Distingo passbook savings account ended the year with €955
million in deposits, reflecting its popularity with consumers.
The dividend paid by Banque PSA Finance amounted to €281 million
in 2013.
Financial condition
- Net debt of the manufacturing and sales
companies amounted to €4,148 million at 31 December 2013 compared
with €3,148 million a year earlier. The net debt of the Automotive
Division (industrial and commercial companies excluding Faurecia)
rose by €1,263 million over the year to €2,519 million, while that
of Faurecia stood at €1,629 million, an improvement of €263 million
on 2012.
- In 2013, the group significantly
reduced it cash burn, with operating free cash flow6 at a negative
€426 million compared with a negative €3 billion in 2012.
- Funds from operations, which amounted
to €1,288 million before restructuring costs of €588 million,
helped to finance part of the -€2,397 million in capital
expenditure and capitalised R&D that supported the Group’s
expansion in Europe and the rest of the world, and the -€71 million
in financial investments (mainly the CAPSA joint venture). Capital
expenditure and capitalised R&D costs were reduced by €1.4
billion over the year. The working capital requirement of the
manufacturing and sales companies rose by €397 million, with an
improvement of €323 million in inventory, a €9-million rise in
receivables and a €77 million increase in payables. Inventory stood
at 384,000 vehicles, a ratio of 62 days.
- In 2013, the Group maintained its
financial security above €10 billion to €10,121 million. In
addition to the €1 billion bond with 5 year maturity successfully
realized in February 2013, PSA Peugeot Citroën also issued a €600
million bond in September 2013 and drawn the €300 million E.I.B.
agreement in December 2013.
- Financial structure and balance
sheet
At 31 December 2013, the group had €6.6 billion in cash
resources and €3.6 billion in undrawn credit facilities. Equity
amounted to €7,791 million at 31 December, mainly reflecting past
impairments.
PSA Peugeot Citroën announced today that its
2013 financial report is now available and has been filed with the
French Autorité des Marchés Financiers (AMF). The report and the
2013 financial results presentation are available on
www.psa-peugeot-citroen.com, in the “Analysts/Investors”
section.
Financial Calendar:
- April: Carlos Tavares “Back in the
Race” Investor Day
- 30 April 2014: First-quarter 2014
revenues
- Second quarter 2014: Annual
Shareholders' Meeting
- 30 July 2014: First-half 2014
results
The consolidated financial statements for the year ended 31
December 2013 were approved by the Managing Board on 11 February
2014 and reviewed by the Supervisory Board on 18 February 2014. The
Group’s Statutory Auditors have audited the financial statements
and are currently issuing their reports.
Appendices
Consolidated Statements of Income
2013 2012* (in millions of
euros)
Manufacturing and Sales Companies Finance
Companies Eliminations TOTAL
Manufacturing and Sales Companies Finance
Companies Eliminations TOTAL
Revenues 52,627 1,773 (310)
54,090 53,860 1,910 (324)
55,446 Recurring operating income/(loss) (545) 368
(177) (951) 391 -
(560) Non-recurring operating
income/(expense) (1,169)
(1,169) (4,121) (1) -
(4,122) Operating Income/(loss) (1,714) 368
(1,346) (5,072) 390 -
(4,682) Consolidated
profit/(loss) (2,456) 238
(2,218) (5,216) 293 -
(4,923) Group share (2,546) 223 6
(2,317) (5,294) 281
(5,008) Attributable to minority interests 90 15 (6)
99 78 12 (5)
85
Basic earnings/(loss) per €1 par value
share
(6.77)
(15.59)
Consolidated Balance Sheets
Assets
31 December 2013 31 December
2012 (in millions of euros)
Manufacturing and Sales
Companies Finance Companies
Eliminations TOTAL Manufacturing and Sales
Companies Finance Companies
Eliminations TOTAL Total non-current assets
19,583 389 (1) 19,971 21,208 424 - 21,632 Total current assets
15,550 24,668 (568) 39,650 17,200 26,699 (656) 43,243 Total assets
held for sale 43 43 9 0 0 9 TOTAL ASSETS
35,176 25,057 (569) 59,664
38,417 27,123 (656) 64,884 Equity and
Liabilities
31 December 2013 31 December 2012 (in
millions of euros)
Manufacturing and Sales Companies
Finance Companies Eliminations TOTAL
Manufacturing and Sales Companies Finance Companies
Eliminations TOTAL Total equity
7,791 10,167 Total non-current liabilities
12,668 363 (1) 13,030 12,650 345 - 12,995 Total current liabilities
18,006 21,405 (568) 38,843 18,971 23 361 (656) 41,676 Liabilities
related to discontinued operations 46 0
0 46 TOTAL EQUITY & LIABILITIES
59,664 64,884
Consolidated Statement of Cash Flows
2013
2012
(in millions of euros)
Manufacturing and Sales Companies
Finance Companies Eliminations
TOTAL Manufacturing and Sales Companies
Finance Companies Eliminations
TOTAL Consolidated profit/(loss) from continuing
operations (2,453) 238 (2,215)
(6,019) 293 - (5,726) Funds from
operations 700 469 64 1,630
1,033 290 - 1,323 Net cash from
operating activities (1 097) 287 64 1 630 431 1 050 (64) 1,417 Net
cash used in investing activities (2,431) (42) (2,473)
(2,450) (1) 3 (2,448) Net cash from/(used in) financing activities
2,204 (286) 1 918 2,387 (532) 4 1,859 Effect of changes in
exchange rates (91) (6) 5 (92) (6) (2) 2 (6)
Net
increase/(decrease) in cash and cash equivalents 779
135 69 983 362 515 (55)
822 Net cash and cash equivalents at beginning of period
5,399 1,669 (279) 6,789 4,692 1,154 (223) 5,623
Net cash and
cash equivalents at end of period 6,137 1 804
(210) 7,731 5,399 1,669 (279)
6,789
- Reflects the application of IAS19R with
respect to the Employee Benefits beginning in 2013 (impact of €16
million on consolidated recurring operating income at Group level,
of which and of €8 million on Automotive Division recurring
operating income); and reflects the application of IAS 36 on the
Automotive Division of €595-million over the year..
1 Please refer to the separate press releases issued today.
These operations, which have been agreed in principle by the
parties involved, remain subject to the signature of a binding
documentation, planned at the end of March 2014, and the approval
of regulatory bodies, notably in France and China, as well as the
approval of the Extraordinary General Meeting of PSA Peugeot
Citroën shareholders due to take place in the second quarter of
2014.
2 Free cash flow excluding restructuring and exceptional of
manufacturing and sales companies.
3 Net debt of manufacturing and sales companies.
4 Free cash flow excluding restructuring and exceptional of
manufacturing and sales companies
5 The non-recurring impairment charges recognised on Automobile
Division assets in 2012 in accordance with IAS 36 led to a decline
in depreciation and amortisation expense, which had a positive
€595-million impact that has been recognised in production and
procurement, R&D and production costs.
6 Corresponding to free cash flow of a negative €1,048 million
after -€588 million in restructuring costs and €37 million in
non-recurring income (mainly CAPSA financing for -71M€).
PSA Peugeot CitroënMedia relationsJean-Baptiste Thomas+33
(0) 1 40 66 47 59jean-baptiste.thomas@mpsa.comPierre-Olivier
Salmon+33 (0) 1 40 66 49 94pierreolivier.salmon@mpsa.comAntonia
Krpina+33 (0) 1 40 66 48 02antonia.krpina@mpsa.comXiaoyan
Hua-Schwab+33 (0) 1 40 66 54 22xiaoyan.hua-schwab@mpsa.comLaure de
Servigny+33 (0) 1 40 66 35 42laure.deservigny@mpsa.comorInvestor
relationsCarole Dupont-Pietri+33 (0) 1 40 66 42
59carole.dupont-pietri@mpsa.comAnne-Laure Descleves+33 (0) 1 40 66
43 65annelaure.descleves@mpsa.comKarine Douet+33 (0) 1 40 66 57
45karine.douet@mpsa.com
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