UG United Guardian Inc

Successful execution of Push to Pass strategic plan

• Automotive recurring operating income at €1,442 million up by 10.7%, representing a record recurring operating margin of 7.3%1
• Group revenue at €29,165 million, up 5% vs 2016 H1
• Record Faurecia recurring operating margin1 at 5.7%
• Record Net income, group share, at €1,256 million
• Growth of net financial position at €7,631 million thanks to a positive €1,116 million Free Cash Flow2

Regulatory News:

Groupe PSA (Paris:UG):

"Groupe PSA record performance was achieved thanks to our customers who have made our last commercial launches great successes, and thanks to the continuous commitment of all Group employees in the execution of the Push to Pass plan, combining agility and business sense. The way the teams overcame headwinds brings confidence for the coming challenges." said Carlos Tavares, Chairman of Groupe PSA Managing Board.

Group revenues amounted to €29,165 million in the first half of 2017, up 5.0% compared to €27,779 million in the first half of 2016. The cumulated growth since the beginning of Push to Pass, excluding exchange rates impact, stands at +8.2%3.

Automotive revenues amounted to €19,887 million, also up 3.6% compared to the first half of 2016, benefiting from the success of the new models and the pricing discipline.

Group recurring operating income amounted to €2,041 million, up 11.5% compared to the first half of 2016. The Automotive recurring operating income grew by 10.7% compared to the first half of 2016 at €1,442 million. This 7.3% record profitability level was reached despite raw material cost increases and exchange rate headwinds, thanks to a positive product mix and further cost reductions.

Group non-recurring operating income and expenses had a negative impact of -€112 million, compared to -€207 million in the first half of 2016.

Group net financial expenses decreased to €121 million, compared to €150 million in the first half of 2016.

Consolidated net income reached €1,474 million, up by €91 million, in spite of the negative impact of operations in China. Net income, Group share, reached €1,256 million, compared to €1,212 million in the first half of 2016.

Banque PSA Finance reported recurring operating income4 of €312 million, up 5.1% compared to the first half of 2016.

Faurecia recurring operating income amounted to €587 million, an increase of

19.8% compared to the first half of 2016.

The Free Cash Flow of manufacturing and sales companies amounted to €1,116 million, driven by the improved profitability of operations.

Total inventory, including independent dealers, stood at 374,000 vehicles at 30 June 2017, down 25,000 units from end June 2016.

The manufacturing and sales companies' net financial position at 30 June 2017 was a positive €7,631 million, up €818 million compared to 31 December 2016.

Market outlook: for 2017, the Group expects the automotive market to grow by approximatively 3% in Europe, and 5% in China, Latin America and Russia.

Operational targets

The Push to Pass plan sets the following targets:

• Deliver over 4.5% Automotive recurring operating margin5 on average in 2016-2018, and target over 6% by 2021;
• Deliver 10% Group revenue growth by 20186 vs 2015, and target additional 15% by 20216.

Link to the presentation of 2017 H1 Results

Financial Calendar – 25 October 2017: third-quarter 2017 Revenue

Groupe PSA consolidated financial statements at 30 June 2017 were approved by the Managing Board on 20 July 2017 and reviewed by the Supervisory Board on 25 July 2017. 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 2017 are available at www.groupe-psa.com, in the “Analysts and Investors” section.

About Groupe PSA

With sales and revenue of €54 billion in 2016, the Groupe PSA designs unique automotive experiences and delivers mobility solutions that provide freedom and enjoyment to customers around the world. The Group has three car brands, Peugeot, Citroën and DS, as well as a wide array of mobility and smart services under its Free2Move brand, to meet the evolving needs and expectations of automobile users. The automobile manufacturer PSA is the European leader in terms of CO2 emissions, with average emissions of 102.4 grams per kilometre in 2016, and an early innovator in the field of autonomous and connected cars, with 2.3 million such vehicles worldwide. It is also involved in financing activities through Banque PSA Finance and in automotive equipment via Faurecia. Find out more at groupe-psa.com/en.

Media library: https://medialibrary.groupe-psa.com/ / Twitter: @GroupePSA

1 Recurring operating income related to revenue2 Sales and Manufacturing companies3 Versus 2015 H1 at constant (2015) exchange rates4 100% of the results of Banque PSA Finance. In the financial statements of Groupe PSA, the joint ventures are accounted for at equity.5 Recurring operating income as a proportion of revenue6 At constant (2015) exchange rates

Appendices

Consolidated Income Statement

    First-half 2016   First-half 2017 (in million euros)  

Manufacturing and sales companies

 

Finance companies

 

Eliminations

  TOTAL  

Manufacturing and sales companies

 

Finance companies

  Eliminations   TOTAL Revenue   27,684   102   (7)   27,779   29,089   87   (11)   29,165 Recurring operating income (loss)   1,823   7   -   1,830   2,026   15   -   2,041 Operating income (loss)   1,616   7   -   1,623   1,914   15   -   1,929 Net financial income (expense)   (154)   4   -   (150)   (121)   -   -   (121) Income taxes   (299)   (11)   -   (310)   (440)   (6)   -   (446) Share in net earnings of companies at equity   62   87   -   149   (1)   113   -   112 Profit (loss) from operations held for sale or to be continued in partnership   47   24   -   71   -   -   -   - Consolidated profit (loss) for the period   1,272   111   -   1,383   1,352   122   -   1,474 Attributable to equity holders of the parent   1,102   110   -   1,212   1,137   119   -   1,256 Attributable to minority interests   170   1   -   171   215   3   -   218 Basic earnings per €1 par value share attributable to equity holders of the parent               1.51               1.44                

Consolidated balance sheet

ASSETS   31 December 2016   30 June 2017 (in million euros)  

Manufacturing and sales companies

 

Finance companies

  Eliminations   TOTAL  

Manufacturing and sales companies

 

Finance companies

  Eliminations   TOTAL Total non-current assets   22,311   1,654   -   23,965   23,219   1,648   -   24,867 Total current assets   20,133   1,087   (32)   21,188   22,947   1,167   (39)   24,075 Total assets of operations held for sale or to be continued in partnership   -   -   -   -   -   -   -   - TOTAL ASSETS   42,444   2,741   (32)   45,153   46,166   2,815   (39)   48,942                  

EQUITY AND LIABILITIES

  31 December 2016   30 June 2017 (in million euros)  

Manufacturing and sales companies

 

Finance companies

  Eliminations   TOTAL  

Manufacturing

and sales companies

 

Finance companies

  Eliminations   TOTAL Total equity               14,618               15,683 Total non-current liabilities   10,123   15   -   10,138   11,323   6   -   11,329 Total current liabilities   19,797   632   (32)   20,397   21,351   618   (39)   21,930 Transferred liabilities of operations held for sale or to be continued in partnership   -   -   -   -   -   -   -   - TOTAL EQUITY & LIABILITIES               45,153               48,942  

Consolidated Statement of Cash Flows

    First half of 2016   First half of 2017 (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   1,225   76   -   1,301   1,352   122   -   1,474 Funds from operations   2,798   69   -   2,867   2,927   56   -   2,983 Net cash from (used in) operating activities of continuing operations   3,187   907   (74)   4,020   3,047   61   -   3,108 Net cash from (used in) investing activities of continuing operations   (1,560)   21   14   (1,525)   (1,931)   3   -   (1,928) Net cash from (used in) financing activities of continuing operations   (903)   (173)   (104)   (1,180)   669   -   (1)   668 Net cash related to the non-transferred debt of finance companies to be continued in partnership   -   (2,258)   175   (2,083)   -   -   -   - Net cash from the transferred assets and liabilities of operations held for sale or to be continued in partnership   (78)   1,201   (11)   1,112   -   -   -   - Effect of changes in exchange rates   (95)   10   -   (85)   (58)   (1)   -   (59) Increase (decrease) in cash from continuing operations and from operations held for sale or to be continued in partnership   551   (292)   -   259   1,727   63   (1)   1,789 Net cash and cash equivalents at beginning of period   10,453   893   (54)   11,292   11,464   530   (8)   11,986 Net cash and cash equivalents of continuing operations at end of period   11,004   601   (54)   11,551   13,191   593   (9)   13,775                

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