PSA posted significantly improved 2014 losses

PSA posted significantly improved 2014 losses

PSA Peugeot Citroen has posted a 2014 net loss of EUR555m (US$632m), a four-fold improvement on the previous year's negative figure of EUR2.23bn.

The manufacturer recorded EUR53.6bn in revenue, with recurring operating income of EUR905m, up EUR1.3bn from a loss of EUR364m in 2013.

PSA's automotive division ended the year with recurring operating income of EUR63m, up EUR1.1bn from a loss of EUR1.04bn in 2013.

Net export volume was 310,000 vehicles, up 5.3% compared to last year, a performance the company maintains makes PSA France's third leading exporter.

"The PSA Back in the Race plan is important for the company, its employees and its shareholders, but it's also important for France because PSA is a major player in the economy," said PSA chairman, Carlos Tavares.

"This is why we're dedicated to boosting the competitiveness of our plants in France, every single day."

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Communications Division - 75 avenue de la Grande-Armée - 75116 Paris, France +33 1 40 66 42 00 – psa-peugeot-citroen.com – @PSA_news Press Release 18 February 2015 PSA Peugeot Citroën ‘Back in the Race’ €2.2 billion of operating Free Cash Flow in 2014, the Group is net debt free • €53.6 billion in revenue for the year1 • Recurring Operating Income of €905 million, up €1.3 billion, from a loss of €-364 million in 2013 • Favourable swing attributable to the Automotive division, which ended the year with recurring operating income at €63 million, up €1.1 billion from a loss of -€1,039 million in 2013 "Our 2014 results show evidence that the process of rebuilding the Group's financial fundamentals is underway," said Carlos Tavares, Chairman of the PSA Peugeot Citroën Managing Board. “By generating €2.2 billion in operating Free Cash Flow2 during the year, and becoming net debt free, we are ahead of our reconstruction plan. I would like to thank all of our teams for their achievements in a sometimes difficult environment. More than ever, we remain focused on fully meeting our objectives and achieving a 2% operating margin for the Automotive division." Consolidated net revenue came to €53,607 million in 2014, up 1% over 2013. Automotive division revenue dipped 0.9% to €36,085 million, with favourable changes in the product mix and in prices offsetting a very negative currency effect. The Group ended the year with a Recurring Operating Income ok €905 million, representing a positive swing of €1,269 million from a loss of -€364 million in 2013. The Automotive division reported Recurring Operating Income of €63 million in 2014, up €1,102 million from a loss of €1,039 million the year before. The return to profit was attributable to the positive product and price mix resulting from the success of recent launches by the brands and from the pricing power policy. It was also supported by further reductions in fixed costs. Including its pro forma share of the 2014 income of the DPCA and CAPSA joint ventures, the Division's recurring operating income came to €366 million, an improvement of €1,246 million over the previous year. Non-recurring operating income and expenses represented a net expense of -€682 million, primarily due to restructuring costs incurred by the Automotive division. Financial income and expenses represented a net financial expense of -€763 million compared with- €664 million in 2013, with the year-on-year change corresponding mainly to the non-recurring gain realised in 2013 on the sale of BNP Paribas shares. The Group's net loss eased to -€555 million in 2014 up €1,672 million from -€2,227 million the year before. Banque PSA Finance's recurring operating income came to €337 million, a decline of -€31 million year-on-year that was due to changes in the Bank's refinancing situation. In February 2015, the first two joint ventures with Santander Consumer Finance were launched, one in France and the other in the United Kingdom. These new entities will enable Banque PSA Finance to offer competitive interest rates to customers of the Peugeot, Citroën and DS brands while at the same time improving its margins. The start-up of operations by these new ventures also enabled Banque PSA Finance to announce that it would no longer be using the French State's guarantee for its future bond issues. 1 Income statement figures for 2013 and 2014 have been restated to exclude the impact of applying IFRS 5,10 and 11 and IFRIC 21. 2 Free cash flow of manufacturing and sales companies Communications Division - 75 avenue de la Grande-Armée - 75116 Paris, France +33 1 40 66 42 00 – psa-peugeot-citroen.com – @PSA_news Faurecia's recurring operating income amounted to €673 million, up 25% on 2013. Free cash flow of manufacturing and sales companies for the year amounted to €1,792 million, lifted by the improvement in funds from operations and working capital requirement (up €1,752 million over the period) thanks mainly to the inventory reduction action plans and supply chain optimisation. Excluding restructuring costs of €583 million and net non-recurring income of €193 million (mainly corresponding to gains on sales of property assets), operating Free Cash Flow was a positive €2,182 million. Total inventory, including independent dealers, stood at 339,100 vehicles at 31 December 2014, down 44,800 units from end-2013. The manufacturing and sales companies' net financial position at 31 December 2014 was a positive €548 million, versus a negative €4,181 million at the previous year-end, reflecting the €2,995-million proceeds from the April and May 2014 share issues as well as the increase in Free Cash Flow. As the rebuilding of the Group's financial fundamentals is not achieved, no dividend payment will be proposed for the financial year 2014. Outlook In 2015, PSA Peugeot Citroën expects to see automotive demand increase by a modest 1% in Europe and by approximately 7% in China, but decline by some 10% in Latin America and by around 30% in Russia. The Group aims to generate operating free cash flow of around €2 billion over the period 2015-2017. It is also targeting an operating margin3 of 2% in 2018 for the Automotive division, with the objective of reaching 5% over the period of the next medium-term plan, covering 2019-2023. Contacts Media Relations Investor Relations Jean-Baptiste Thomas +33 (0) 1 40 66 47 59 jean-baptiste.thomas@mpsa.com Frédéric Brunet +33 (0) 1 40 66 42 59 frederic.brunet@mpsa.com Pierre-Olivier Salmon +33 (0) 1 40 66 49 94 pierreolivier.salmon@mpsa.com Anne-Laure Desclèves +33 (0) 1 40 66 43 65 annelaure.descleves@mpsa.com Antonia Krpina +33 (0) 1 40 66 58 54 antonia.krpina@mpsa.com Karine Douet +33 (0) 1 40 66 57 45 karine.douet@mpsa.com Financial Calendar • 29 April 2015: First-quarter 2015 revenues The PSA Peugeot Citroën Group's consolidated financial statements for the year ended 31 December 2014 were approved by the Managing Board on 10 February 2015 and reviewed by the Supervisory Board on 17 February 2015. The Group's Statutory Auditors have completed their audit and are currently issuing their report on the consolidated financial statements. About PSA Peugeot Citroën With its three world-renowned brands, Peugeot, Citroën and DS, PSA Peugeot Citroën sold 3 million vehicles worldwide in 2014. The second largest carmaker in Europe, PSA Peugeot Citroën recorded sales and revenue of €54 billion in 2014. The Group confirms its position of European leader in terms of CO2 emissions, with an average of 110.3 grams of CO2/km in 2014. PSA Peugeot Citroën has sales operations in 160 countries. It is also involved in financing activities (Banque PSA Finance) and automotive equipment (Faurecia). For more information, please visit psa-peugeot-citroen.com 3 Recurring operating income relating to revenues Communications Division - 75 avenue de la Grande-Armée - 75116 Paris, France +33 1 40 66 42 00 – psa-peugeot-citroen.com – @PSA_news Appendices Comparative information has been restated to reflect the application of IFRS 5, 10 and 11 and IFRIC 21. Recurring Operating Income including Banque PSA Finance* 2013. 2014. (in millions of euros) Manufacturing and Sales Companies Finance Companies Eliminations TOTAL Manufacturing and Sales Companies Finance Companies Eliminations TOTAL Revenues 52,459 1,773 (310) 53,922 53,019 1,703 (363) 54,359 Recurring operating income/(loss) (516) 369 - (147) 779 337 - 1,116 Non-recurring operating income/(expense) (1,165) - - (1,165) (679) (2) (0) (681) Operating Income/(loss) (1,681) 369 - (1,312) 100 335 0 435 *Following the announcement of the partnership with Santander, the Banque PSA Finance operations intended to be transferred to the partnership vehicles have been excluded from consolidated recurring operating income for 2014. This table shows consolidated recurring operating income as if all Banque PSA Finance operations were still fully consolidated. Consolidated Income Statement 2013 2014 (in millions of euros) Manufacturing and Sales Companies Finance Companies Eliminations TOTAL Manufacturing and Sales Companies Finance Companies Eliminations TOTAL Revenues 52,459 668 (48) 53,079 53,019 628 (40) 53,607 Recurring operating income/(loss) (516) 152 - (364) 779 126 - 905 Operating Income/(loss) (1,681) 152 - (1,529) 100 123 - 223 Net financial expense (664) - - (664) (755) (8) - (763) Income taxes (266) (40) - (306) (226) (87) (313) Share in net earnings of companies at equity 165 8 - 173 270 12 - 282 Net income/(loss) from operations intended to be transferred to new joint ventures (19) 118 - 99 (34) 50 - 16 Consolidated profit/(loss) (2,465) 238 - (2,227) (645) 90 - (555) Group share (2,556) 223 6 (2,327) (787) 86 (5) (706) Attributable to minority interests 91 15 (6) 100 142 4 5 151 (in euros) Basic earnings per €1 par value share Group share (6,80) (1,15) Consolidated Balance Sheet Assets 31 December 2013 31 December 2014 (in millions of euros) Manufacturing and Sales Companies Finance Companies Eliminations TOTAL Manufacturing and Sales Companies Finance Companies Eliminations TOTAL Total non-current assets 19,709 389 (1) 20,097 20,331 279 (5) 20,605 Total current assets 15,524 24,668 (568) 39,624 16,526 6,209 (704) 22,031 Total assets intended to be transferred to new joint ventures 43 - - 43 167 18,529 (120) 18,576 TOTAL ASSETS 35,276 25,057 (569) 59,764 37,024 25, 017 (829) 61,212Communications Division - 75 avenue de la Grande-Armée - 75116 Paris, France +33 1 40 66 42 00 – psa-peugeot-citroen.com – @PSA_news EQUITY AND LIABILITIES 31 December 2013 31 December 2014 (in millions of euros) Manufacturing and Sales Companies Finance Companies Eliminations TOTAL Manufacturing and Sales Companies Finance Companies Eliminations TOTAL Total equity 7,837 10,418 Total non-current liabilities 12,622 364 (1) 12,985 11,637 2 (1) 11,638 Total current liabilities 18,109 21,401 (568) 38,942 18,071 13,368 (537) 30,903 Liabilities intended to be transferred to new joint ventures - - - - 37 8,508 (292) 8,253 TOTAL EQUITY & LIABILITIES 59,764 61,212 Consolidated Statement of Cash Flows 2013 2014 (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 (2,446) (128) - (2,547) (611) (211) - (822) Funds from operations 804 (21) - 783 2,126 13 - 2,139 Net cash from/(used in) operating activities 1,244 (478) (9) 757 3,878 448 (262) 4,064 Net cash used in investing activities of continuing operations (2,474) (33) - (2,507) (2,314) (22) - (2,336) Net cash from/(used in) financing activities of continuing operations 2,058 (153) - 1,905 675 3 334 1,012 Net cash used by new borrowings and repayments of borrowings of finance operations not transferred to new joint ventures - (2,294) - (2,294) - (1,448) - (1,448) Net cash from/(used by) changes in assets and liabilities of finance operations intended to be transferred to new joint ventures (72) 3,099 74 3,101 (20) 1,817 10 1,807 Effect of changes in exchange rates (91) (6) 4 (93) 47 1 - 48 Increase/(decrease) in cash and cash equivalents of continuing operations and operations intended to be transferred to new joint ventures 665 135 69 869 2,266 799 82 3,147 Net cash and cash equivalents at beginning of period 5,496 1,669 (279) 6,886 6,161 1,804 (210) 7,755 Net cash and cash equivalents at end of period – continuing operations 6,161 1,804 (210) 7,755 8,427 2,603 (128) 10,902

Original source: http://www.psa-peugeot-citroen.com/en/media/press-releases/2014-annual-results-group-net-debt-free