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13/02/2008 | Wednesday February 13, 2008

2007 Financial Results Turnover up 7.1% Consolidated operating margin at 2.9% Results on track with CAP 2010

2007: HIGHLIGHTS

Return to significant sales volume and turnover growth
Increase in turnover: +7.1%
Increase in vehicle sales (excluding CKD units): +3.8%

Consolidated operating margin at 2.9%, up 0.9 points:
Recurring operating income up 56.6%, at €1,752 million, or 2.9% operating
margin, resulting from the positive impact of cost reductions and improvements
in price, mix and volumes.

  • Non-recurring charges total €632 million incurred to upgrade Group competitiveness and prepare the future.
     
  • Sharp increase in net income: €885 million (3.88 euros per share).
     
  • High free cash flow generation: €1,602 million.
     
  • Ramp-up of CAP 2010, our operational program to leverage growth and competitiveness.

 

2007 : KEY FIGURES

 

Turnover

Group turnover rose to €60,613 million, up 7.1 % on 2006.

The Automobile division recorded a turnover of €47,456 million, up 6.5%, thanks to an increase in the volume of vehicle sales and improvements in price and product mix.

Banque PSA Finance reported revenue corresponding to gross interest income of €1,999 million, up 13.5%, after a rise in new contracts and total credits outstanding.

Gefco turnover rose to €3,554 million, up 9.5 %.

Faurecia turned over €12,661 million, up 8.7 % on 2006.

Results

Group recurring operating income in 2007 amounted to €1,752 million representing a 2.9 % operating margin, compared to €1,119 million and 2% operating margin in 2006, i.e. an increase of 56.6%. The operating margin trend-shift noted in H1 was thus confirmed over the whole year. With an H2 consolidated operating margin of 3.1%, the Group exceeded the objective announced in July 2007.

Most of this improvement comes from the Automobile division’s €858 million operating income, or 1.8% margin, compared to €267 million and 0.6 % margin in 2006.

This tripling of income is mainly down to the first positive effects of the Cap 2010 competitiveness program: quality improvements with a drop in warranty expenses, sharp drop in fixed costs and overheads and higher productivity.

€932 million were gained through cost reductions, with business growth adding a further €355 million. These gains were offset by inflating costs (raw materials, wages, forex).

Despite a highly volatile banking environment, Banque PSA Finance’s operating income increased to €608 million, up 0.7% on 2006, thanks notably to a rise in credits outstanding and well-managed risk control.

Gefco reported recurring operating income of €155 million, corresponding to a 4.4% operating margin, compared to €151 million and 4.7 % margin in 2006.

Faurecia’s recurring operating income rose to €121 million, 1 % of turnover, compared to €69 million and 0.6 % margin in 2006.

Other non-recurring income and expenses represented a net expense of €632 million, compared to an €808 million net expense in 2006.

This mainly includes non-recurring write-downs of certain Automobile division assets in H1, rationalization costs and non-recurring write-downs at Faurecia and restructuring charges related to the voluntary separation scheme.

Net income attributable to Peugeot SA amounted to €885 million, compared to €183 million in 2006. EPS rose to €3.88, compared to €0.80 in 2006.

Net Financial Position

Cash flows from manufacturing and sales operations reached €3,515 million, compared to €3,011 million in 2006.

Lower working capital requirements contributed €920 million compared to €424 million the previous year.

Capital expenditure in 2007 was kept in check at €2,079 million versus €2,589 million in 2006.

The net financial position of the Group’s manufacturing and sales companies at the end of December 2007 stood at €1,404 million compared to €116 million at December 31 2006.

2008 OUTLOOK

 

The CAP 2010 momentum will have an even greater impact in 2008, especially through the reduction of overheads, warranty expenses, manufacturing and purchasing costs and the launching of a sales and product offensive.
In Western Europe, where the business environment is likely to see a slight decline in the automotive market, the Group expects to enjoy continued commercial success with the Peugeot 207and the Citroën C4 Picasso, and see a rising demand for the Peugeot 308 and other models launched in 2007. 2008 will witness a new phase in the Group’s range-rejuvenation strategy with the launching of the new Citroën C5, the extension of the 308 range, the launching of the Citroën Nemo and Peugeot Bipper and the new Citroën Berlingo and Peugeot Partner LUVs. Citroën also introduced a new organization in 2007 with Peugeot following suit at the beginning of 2008 to improve the performance of its sales teams.

In its strategic expansion regions (Eastern Europe, Mercosur, China and Russia) the Group forecasts double-digit market growth, slightly lower than 2007. Considering the extension of the Group’s model-range, PSA Peugeot Citroën should continue to enjoy profitable growth.

Under these conditions, the Group maintains its sales target of between 3 550 000 and 3 650 000 vehicles and CKD units in 2008, i.e. volume growth of around 5%. This growth should be stronger in the second-half of the year, considering the new vehicle launches scheduled.

Again, under these conditions, the Group is aiming to achieve a 3.5% consolidated operational margin.

These 2008 objectives are right on track with the CAP 2010 program.

  PSA PEUGEOT CITROEN

(n° vehicles) 2006 2007
Worldwide sales 3 365 922

3 428 366

 

CONSOLIDATED TURNOVER

(million euros) 2006 2007
Automobile 44 566 47 456
Banque PSA Finance 1 761 1 999
Gefco 3 245 3 554
Faurecia 11 649 12 661
Inter-activity eliminations and other activity (4 627) (5 057)
Total PSA Peugeot Citroën 56 594 60 613

  

SUMMARY OF CONSOLIDATED FINANCIAL RESULTS

(million euros) 2006 2007
Recurring operating income 1 119   1 752
Consolidated companies pre-tax income 206 1 080
Consolidated net income 70 826
Net income, group share 183 885

 

FINANCING AND FINANCIAL POSITION

(million euros) 2006 2007
Cash flow* 3 011 3 515
Capital expenditure (excl. R&D)* 2 590 2 079
Net financial position* 116 1 404
Equity 14 106 14 555

* of manufacturing and sales companies

 HEADCOUNT

Employees under contract (worldwide) 211 800 207 800

 The 2007 consolidates accounts are available on www.psa-peugeot-citroen.com

 

 


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