UG United Guardian Inc

• 6.8% of recurring operating margin1 for the Automotive division and 5.1% for Faurecia
• Net income, Group share, doubled to €1.2 billion
• €1.8 billion in Free Cash Flow2
• Roll out has started for the "Push to Pass" plan; the product blitz and international development have been launched. The PSA Group has greater agility than ever before for continuing its profitable growth.

Regulatory News:

PSA Group (Paris:UG)

Group revenue amounted to €27,779 million in the first half of 2016, compared to

€28,036 million in the first half of 2015 (after restatement in accordance with IFRS 5, detailed in the appendices), growth of 2.4% at constant exchange rates. Net of the unfavourable changes in exchange rates, it is down by 0.9%.

Automotive division revenue amounted to €19,190 million, also up 2.5% compared to the first half of 2015 at constant exchange rates, attributable to the success of the models and the pricing power strategy. Net of the unfavourable changes in exchange rates, it is down by 1.1%.

Group Recurring Operating Income amounted to €1,830 million, up 32% compared to the first half of 2015. With Recurring Operating Income of €1,303 million, the Automotive division grew by 34% compared to the first half of 2015. This growth is buoyed particularly by increased volumes3, as well as the continued reduction of fixed costs and production costs.

Non-recurring operating income and expenses amounted to -€207 million, compared to -€343 million in the first half of 2015.

Group net financial expenses fell by half to -€150 million, compared to -€334 million in the first half of 2015.

Group consolidated net profit amounted to €1,383 million, up by €663 million. Net income, Group share, is €1,212 million, compared to €571 million in the first half of 2015.

Banque PSA Finance reported Recurring Operating Income of €297 million4, a rise of 1% compared to the first half of 2015.

Faurecia's Recurring Operating Income amounted to €490 million, an increase of

€106 million compared to the first half of 2015.

Free Cash Flow of Manufacturing and sales companies amounted to €1,846 million, driven by improved funds from operations.

Total inventory, including independent dealers, stood at 399,000 vehicles at 30 June 2016, up 8,000 units from end June 2015.

The Manufacturing and sales companies' net financial position at 30 June 2016 was a positive €5,972 million, up €1,412 million on 31 December 2015.

Market outlook

For 2016, the Group expects the automotive market to grow by about 4% in Europe and 8% in China, and to shrink by around 12% in Latin America and 15% in Russia.

Operational targets

The Push to Pass plan, unveiled on 5 April 2016, sets the following targets:

• Reach an average 4% automotive recurring operating margin in 2016-2018, and target 6% by 2021;
• Deliver 10% Group revenue growth by 20181 vs 2015, and target additional 15% by 20211.

Carlos Tavares, Chairman of the Managing Board of the PSA Group, said: "Our continued performance reflects the success of the company's structural transformation, its efficiency, and the profound change of spirit within the Group. In a changing environment, all our teams are focused on operational excellence and continue to demonstrate their agility in deploying our Push to Pass strategic plan."

Financial Calendar - 26 October 2016: 3rd Quarter 2016 Revenue

The PSA Group's consolidated financial statements at 30 June 2016 were approved by the Managing Board on 22 July 2016 and reviewed by the Supervisory Board on 26 July 2016. The Group's Statutory Auditors have completed their audit and are currently issuing their report on the consolidated financial statements.

The interim results report and interim financial results presentation for 2016 are available at www.groupe-psa.com, in the “Analysts and Investors” section.

About PSA Group

With its three world-renowned brands, Peugeot, Citroën and DS, the PSA Group sold 3 million vehicles worldwide in 2015. Second largest carmaker in Europe, the PSA Group recorded sales and revenue of €54 billion in 2015. The Group confirms its position of European leader in terms of CO2 emissions, with an average of 104.4 grams of CO2/km in 2015. With a fleet of 1.8 million connected vehicles on the road worldwide, the Group is on the cutting edge of innovation in this field, and is expanding its services as a mobility provider. It is also involved in financing activities (Banque PSA Finance) and automotive equipment (Faurecia).For more information, please visit

groupe-psa.com/en

1 At constant (2015) exchange rates

Appendices

The Group’s interim 2015 financial statements have been restated in accordance with IFRS 5.

Impact of the plan to sell Faurecia's Automotive Exteriors business on the Group's financial statements comparatives (30 June 2015)

(in million euros)

 

First half 2015 as reported in July 2015

 

Automotive Exteriors

IFRS5 impacts

 

First half 2015 as reported in July 2016

Group Revenue   28,904   (868)   28,036 Group Recurring operating income (loss)   1,424   (40)   1,384 Free Cash Flow*   2,792   (74)   2,718

* Manufacturing and sales companies: Automotive Division and Faurecia

Consolidated Income Statement

    First-half 2015*   First-half 2016 (in million euros)  

Manufacturing and sales companies

 

Finance companies

  Eliminations   TOTAL  

Manufacturing and sales companies

 

Finance companies

  Eliminations   TOTAL Revenue   27,904   140   (8)   28,036   27,684   102   (7)   27,779 Recurring operating income (loss)   1,365   19   -   1,384   1,823   7   -   1,830 Operating income (loss)   1,022   19   -   1,041   1,616   7   -   1,623 Net financial income (expense)   (339)   5   -   (334)   (154)   4   -   (150) Income taxes   (307)   (13)   -   (320)   (299)   (11)   -   (310) Share in net earnings of companies at equity   174   59   -   233   62   87   -   149 Profit (loss) from operations held for sale or to be continued in partnership   40   60   -   100   47   24   -   71 Consolidated profit (loss) for the period   590   130   -   720   1,272   111   -   1,383 Attributable to equity holders of the parent   448   123   -   571   1,102   110   -   1,212 Attributable to minority interests   142   7   -   149   170   1   -   171 Basic earnings per €1 par value share attributable to equity holders of the parent               0.73               1.51

* Restated according to IFRS 5

Consolidated balance sheet

ASSETS   31 December 2015   30 June 2016 (in million euros)   Manufacturing and sales companies   Finance companies   Eliminations   TOTAL   Manufacturing and sales companies   Finance companies   Eliminations   TOTAL Total non-current assets   20,926   1,131   (2)   22,055   21,853   1,248   (1)   23,100 Total current assets   18,839   1,193   (608)   19,424   20,617   925   (647)   20,895 Total assets of operations held for sale or to be continued in partnership   616   7,048   (33)   7,631   777   3,826   (20)   4,583 TOTAL ASSETS   40,381   9,372   (643)   49,110   43,247   5,999   (668)   48,578

EQUITY AND LIABILITIES

31 December 2015 30 June 2016 (in million euros) Manufacturing and sales companies Finance companies Eliminations TOTAL Manufacturing

and sales companies

Finance companies Eliminations TOTAL Total equity       12,219       13,347 Total non-current liabilities 9,984 17   10,001 11,535 15 - 11,550 Total current liabilities 20,104 3,405 (551) 22,958 19,964 1,188 (604) 20,548 Transferred liabilities of operations held for sale or to be continued in partnership 401 3,623 (92) 3,932 420 2,777 (64) 3,133 TOTAL EQUITY & LIABILITIES       49,110       48,578

Consolidated Statement of Cash Flows

    First half of 2015*   First half of 2016 (in million euros)   Manufacturing and sales companies   Finance companies   Eliminations   TOTAL   Manufacturing

and sales companies

  Finance companies   Eliminations   TOTAL Consolidated profit (loss) from continuing operations   550   (11)   -   539   1,225   76   -   1,301 Funds from operations   2,566   (24)   1   2,543   2,798   69   -   2,867 Net cash from (used in) operating activities of continuing operations   3,453   6,161   54   9,668   3,187   907   (74)   4,020 Net cash from (used in) investing activities of continuing operations   (1,305)   (25)   136   (1,194)   (1,560)   21   14   (1,525) Net cash from (used in) financing activities of continuing operations   (358)   (496)   343   (511)   (903)   (173)   (104)   (1,180) Net cash related to the non-transferred debt of finance companies to be continued in partnership   -   (6,829)   (360)   (7,189)   -   (2,258)   175   (2,083) Net cash from the transferred assets and liabilities of operations held for sale or to be continued in partnership   34   (375)   (254)   (595)   (78)   1,201   (11)   1,112 Effect of changes in exchange rates   146   -   -   146   (95)   10   -   (85) Increase (decrease) in cash from continuing operations and from operations held for sale or to be continued in partnership   1,970   (1,564)   (81)   325   551   (292)   -   259 Net cash and cash equivalents at beginning of period   8,429   2,601   (129)   10,901   10,453   893   (54)   11,292 Net cash and cash equivalents of continuing operations at end of period   10,399   1,037   (210)   11,226   11,004   601   (54)   11,551

* Restated according to IFRS 5

1 Recurring operating income to revenue

2 In the first half of 2016, for Manufacturing and sales companies

3 Excluding China

4 100% of the results of Banque PSA Finance. In the financial statements of the PSA Group, the joint ventures are accounted for at equity, and the other businesses covered by the Santander agreement are reclassified under "Operations held for sale or to be continued in partnership".

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