PSA Peugeot Citroen has reported consolidated operating margin of EUR1,119m or 2% of net sales and revenue for full year 2006 compared with EUR1,940m (3.4%) in 2005.
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Worldwide sales declined 0.7% to 3,365,900 units.
Consolidated net sales and revenue totaled EUR56,594m, up 0.6% over 2005. After rising 2.4% in the first three months, net sales and revenue contracted 1.6% and 1.8% respectively in the second and third quarters, before returning to growth in the fourth quarter (up 3.2%).
At EUR44,566m, automobile division sales were down 1.1%, which PSA said reflected changes in unit sales of assembled vehicles (excluding China), the net price effect, changes in product and geographic mix and currency effects. Operating margin was EUR267m compared with EUR916m in 2005, representing 0.6% of sales versus 2.0% a year previously.
Gefco’s revenue totaled EUR3,245m, up 8.2% over 2005. Revenue from services performed for other group companies was 7.1% higher at EUR1,973m, while external revenue increased 9.9% to EUR1,272m. Operating margin rose 4.1% to EUR151m from EUR145m in 2005, representing 4.7% of sales versus 4.8%.
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By GlobalDataFaurecia reported 6.1% growth in sales to EUR11,649m, led by strong performances outside Europe, in North America and Asia. Sales to other group companies eased 0.7% to EUR2,450m, while external sales were up 8.1% at EUR9,199m. Faurecia’s operating margin was EUR69m compared with EUR267m in 2005, representing 0.6% of sales versus 2.4%.
The Banque PSA Finance loan book expanded 2.5% over the year to EUR22,976m from EUR22,417m. Operating margin came to EUR604m, virtually unchanged from EUR607m in 2005. In a significantly less favourable interest rate environment, this represented 2.7% of average loans, versus 2.9% the previous year.
“Peugeot and Citroën operating margins were severely weakened by unfavourable changes in production volumes, product mix and geographic mix, the overall costs of Euro IV compliance on production costs and higher raw materials prices,” PSA said in its results statement.
“These negative effects were partly offset, however, by the initial benefits of the model renewal process and the group’s ongoing policy of protecting unit margins through selective marketing, as well as by lower production costs.”
One-off expenses of EUR855m in 2006 compared with EUR351m the previous year. The main items were impairment losses at Faurecia, in the automobile division and at Peugeot Motocycles, and rationalisation costs, primarily plant closure costs at Ryton in the UK and faster implementation of Faurecia’s restructuring programmes.
Net profit fell to EUR176m from EUR1,029m in 2005. Earnings per share were EUR0.77 versus EUR4.47.
Gross capital expenditure was cut to EUR2,520m in 2006 from EUR2,862m the previous year.
Outlook
“In 2007, the European market looks set to remain stable and the environment will continue to be shaped by rampant competition,” PSA said.
“For PSA Peugeot Citroën, 2007 will mark a new phase in the model renewal process, with the launch of the Peugeot Expert and Citroën Dispatch compact light commercial vehicles, the C4 Picasso, additions to the 207 range, and the new Peugeot 4007 and Citroën C-Crosser SUVs [built by Mitsubishi on an OEM basis].
“Combined with the ramp-up of the models introduced in 2006, such as the Peugeot 207 and the Citroën Grand C4 Picasso, these new models should drive a return to growth in the group’s European unit sales.
“Outside western Europe, the group should retain its growth momentum, helped by the launch of new models by both marques.
“In this environment, while group sales are likely to be affected by a certain slowdown in demand for models that are due to be replaced, they will be boosted by the steadily increasing product dynamic over the year, leading to a gradual improvement in the product mix.”
