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28/07/2010 | July 28th, 2010

First Half 2010 Results Strong performance across all divisions Strategic  development in China

  • Revenues increase 20,8 % driven by successful new models, market share gains and favourable demand worldwide
  • Major turnaround in recurring operating income: €1,137 million vs a loss of €826 million in H1 2009
  • Significant recovery in automotive recurring operating income: €525 million vs loss of €904 million in H1 2009
  • The Group’s performance plan contributes €854 million to recurring operating income improvement Net income, Group share: €680 million
  • China: sharp profit increase at Dongfeng Peugeot Citroën Automobile and new joint venture with Chang’an (subject to authorisation)

Summary income statement

€ million FY 2009 H1 2009 H1 2010
Revenues 48 417 23 497 28 394
Recurring operating income/(loss) (689) (826) 1 137
Recurring operating margin -1,4 % -3,5 % 4,0 %
Non-recurring operating expenses (727) (506) (69)
Operating income/(loss) (1 416) (1 332) 1 068
Net income/(loss) Group share (1 161) (962) 680
Earnings/(loss) per share (in euros) (5,12) (4,24) 3,00

Commenting on the results,  Philippe  Varin, Chairman of the Managing Board, said:

The Group is now well on track to rebuilding sustainable profitability with strong first half results driven by market share gains and the benefits of the performance plan.

The second joint venture in China represents a major step towards growing our business outside Europe. We are now confident that we will generate half of our vehicle sales outside Europe by 2015, compared to one third at the beginning of the current year.”

Outlook

The European market is expected to be down 7% in 2010. Double digit growth is expected in China, and high single digit growth in Latin America.

Despite more difficult market conditions for the remainder of the year in Europe, as well as the usual seasonality, the automotive division is expected to be close to break even in the second half. In this context, the Group expects to deliver a recurring operating income for the full year of around €1.5 billion.

 Consolidated Results in the first half of 2010

  • Revenues increased  20.8% to €28,394 million and 15.5% like for like. The change in scope resulted from Faurecia’s acquisition of Emcon and Plastal which generated €1 277 million of additional revenue.

  • Recurring operating income  recovered  strongly to €1,137 million, versus  a loss  of €826 million in H1 2009 generating a margin of 4.0%. All activities delivered strong growth in operating income.

  • Non-recurring operating expenses totalled  €69 million against €506 million in H1 2009. H1 2010 saw lower non recurring charges after significant rationalisation and impairment costs in the Automotive Division and at Faurecia in H1 2009.

  • Net financial expenses totalled  €241 million versus €226 million in H1 2009. This increase resulted from interest costs on the government loan, partially offset by reduced financing costs at Faurecia.

  • Income tax amounted  to €227 million compared  to a positive €470 million in 2009. The income tax charge results from the return to profitability of the Group.

  • Net income,  Group share amounted  to €680 million, a major swing  after the loss  of €962 incurred in H1 2009.

  • Earnings  per share amounted  to 3.00 euros versus a loss of 4.24 euros in H1 2009.

Results by Division

Automotive Division

€ million FY 2009 H1 2009 H1 2010
Revenues 38 265 18 658 21 174
Recurring operating income/(loss) (1 257) (904) 525
Recurring operating margin -3,3 -4,8 2,5
Operating income/(loss) (1 820) (1 326) 459

Automotive Division revenues rose 13.5% to €21,174 million in H1 2010.

New car revenues increased 14.7% to €15,820 million up from €13,797 million driven by record vehicle sales in the first half.  This performance illustrates the strong momentum of the Peugeot and Citroën brands with an increase in European market share to 14.5% from 13.7%.

  • The division delivered a strong rebound in recurring operating income which stood at €525 million in the first half, compared with a loss of €904 million a year earlier. The recurring operating margin recovered to 2.5%. The improved operating environment accounted for €575 million of recurring operating income..
  • The performance plan boosted recurring operating income by €854 million. This achievement is in line with our target to deliver one third of the €3.3 billion plan in 2010.
  • Inventories stood at 482,000 vehicles, an appropriate level given the production shutdowns in August and in anticipation of the seasonally strong UK market in September.

Strategic  development in China

The  operating  performance  in  China  improved  significantly  in  H1  2010.  The  accelerated performance plan at DongFeng Peugeot Citroën Automobile delivered a major increase in both sales and earnings. Vehicles sold rose 50% to 176,000 units, while net income, Group share amounted to €97 million.

The Group has recently signed a joint venture with Chang’an Automobile. This second joint venture in China, for which final approval is expected by the relevant authorities early 2011, will allow the Group to develop light commercial vehicles and Citroën to launch the DS range.

Faurecia

€ million FY 2009 H1 2009 H1 2010
Revenues 9 292 4 380 6 826
Recurring operating income/(loss) (92) (187) 217
Recurring operating margin -1,0 -4,3 3,2
Consolidated profit/(loss) (417) (361) 112
  • Faurecia confirmed its turnaround in H1 with a recurring operating margin of 3.2% at €217 million.
  • Highlights of the first half include the integration of Emcon Technologies and Plastal Germany as well as the acquisition of Plastal Spain.

 Gefco

€ million FY 2009 H1 2009 H1 2010
Revenues 2 888 1 395 1 716
Recurring operating income/(loss) 102 7 122
  • Gefco delivered strong growth in revenues and margins, consistent with the recovery in worldwide automotive markets and production levels.

 

Banque PSA Finance

€ million FY 2009 H1 2009 S1 2010
Net banking revenue 943 470 505
Revenue 1 823 915 919
 Recurring operating income 498 244 269
 
  • Banque PSA Finance delivered strong growth with net banking revenue up 7.4% to €505 million.

The benchmark cost of risk continued to decline, down to 0.47% from 0.53% at the end of 2009.

  • Banque PSA Finance enjoys a substantial liquidity position following a number of successful refinancing operations. Banque PSA Finance has raised more than €2.7 billion since 1 January 2010 under its medium-term notes programme, representing most of its capital market financing requirement for the year.

Financial Situation

  • The net debt position of Industrial and Commercial businesses was reduced further to €1,732 million at 30 June 2010, down from €1,993 million at 31 December 2009.

The reduction in debt resulted from positive Free Cash Flow of €341 million, driven by the increase in cash flow from operations of €1,771 million which more than covered capitalised R&D and Capital expenditure of €1,201 million. The Group has maintained the level of R&D and Capital expenditure throughout the crisis, to drive new model momentum and technology development.

  • Strengthened financial structure and Balance Sheet.

The balance sheet of the Industrial and Commercial business at the end of June 2010 was robust, with liquidity totalling €10.4 billion. Shareholders’ Equity increased by €1,398 million to €13,845 million at 30 June 2010, giving a gearing ratio of 12.5% compared to 16% at the end of 2009.

 

Contacts :

Media relations Investor Relations
Hugues Dufour
+33 (0) 1 40 66 53 81
hugues.dufour@mpsa.com
James Palmer
+33 (0) 1 40 66 54 59
james.palmer@mpsa.com
Pierre-Olivier Salmon
+33 (0) 1 40 66 49 94
pierreolivier.salmon@mpsa.com
Jean-Hugues Duban
+33 (0) 1 40 66 40 28
jeanhugues.duban@mpsa.com
Jean-Hugues Duban
+33 (0) 1 40 66 40 28
jeanhugues.duban@mpsa.com

 

 

 

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