PSA Peugeot Citroën has reported net income for 2002 of 1.69 billion euros, a figure virtually unchanged on 2001’s 1.691 billion euros. The figure was reported as slightly below analysts’ expectations.
During his presentation of the Group’s 2002 results, Jean-Martin Folz, Chairman of the Managing Board, highlighted the following achievements:
- Peugeot and Citroën increased their combined share of the Western European car and light commercial vehicle market to 15.5% from 15% in 2001.
- The Group continued to expand outside Western Europe, with the contribution of these markets rising 21% to 710,500 units during the year and exceeding 20% of total unit sales for the first time.
- The new models launched during the year – the Citroën C3 and C8 and the Peugeot 807, 307 SW and 206 SW – were well received by the market, while sales of the Peugeot 307 rose sharply and the Peugeot 206 and Citroën Picasso remained in strong demand.
- Sales margins rose despite competitive pressure.
- Production costs were reduced by a further 773 million euros.
- The Group met its financial targets, with Automobile Division operating margin at 5% of sales and consolidated operating margin at 2,913 million euros or 5.4% of sales.
- Free cash flow reached a high 1,771 million euros.
- The net financial position of the manufacturing and sales companies returned to a positive 594 million euros from a negative 511 million euros at December 31, 2001.
PSA reported that consolidated sales for 2002 totalled 54,436 million euros, an increase of 5.4% compared with the previous year.
Automobile Division sales climbed 5.8% to 43,951 million euros, reflecting 4.3% growth in global unit sales of Peugeot and Citroën cars and light commercial vehicles.
The Automotive Equipment business (Faurecia) reported sales up 2.7% to 9,866 million euros. Excluding the currency effect and changes in prices of the precious metals used in exhaust systems, sales rose 9.3%, contrasting sharply with the estimated 2% decline in total production output by carmakers in Europe.
Consolidated operating margin rose 9.8% to 2,913 million euros, representing 5.4% of sales versus 5.1% in 2001.
Automobile Division operating margin expanded 9.6% to 2,183 million euros, representing 5% of Division sales versus 4.8% the previous year.
Commenting on the outlook, Jean-Martin Folz stated that future business and earnings growth would be driven by:
- The cost savings to be delivered by sustained implementation of the platform strategy and the Group’s manufacturing efficiency improvement plan (estimated by PSA at more than 1 billion euros by 2006).
- The expected benefits of the cooperation strategy, which will eventually extend across nearly 20% of the Group’s business. These benefits include the ability to carry out more projects with the same resources, the sharing of costs and the development of economies of scale.
- The Group’s focus on high potential technologies, such as clean diesel engines and hybrid vehicles.
- The steady fast pace of new model introductions and the development of new automobile concepts. The Group plans to have launched 25 new models between 2001 and mid-2005, and plans to introduce 26 new models between 2003 and 2006.
- On-going international expansion, especially in China.
PSA reaffirmed its medium-term targets of selling four million units in 2006, raising Automobile Division operating margin to 6% and increasing consolidated return on capital employed, after tax, to 13.5%.
In 2003, excluding any major economic turmoil resulting from international events, PSA said it expects the European automobile market to remain flat or to contract by 2%.
Based on this projection, the Group is aiming to sell 3,350,000 cars worldwide. The Automobile Division operating margin is targeted at between 5% and 5.2% of sales, and the consolidated operating margin at between 3,000 million euros and 3,100 million euros.