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24/10/2012 | Paris
  • Third-quarter 2012 Group revenues of €12.93 billion, down 3.9% compared with the previous year
    • Automotive Division revenues down 8.5% year-on-year, within a European market down 7.8% at end September and impacted by ongoing pricing pressure
    • Revenue growth of 7.9% at Faurecia and slight 4.5% decline at Banque PSA Finance, reflecting lower volumes in Europe
  • Alliance with GM1: key stages executed, with four projects selected and the confirmation of next steps in the creation of a joint purchasing organization. Synergy target confirmed by both Groups
  • Banque PSA Finance1: new financing
  • Restructuring program progressing according to social consultation process underway
  • Opening of the capital of Gefco: exclusive negotiations underway with RZD for the sale of 75% of the capital for €800 million plus €100 million in dividends
  • 2012 cost reduction target of €1 billion confirmed

Alliance with GM1

PSA Peugeot Citroën and General Motors today confirm important key steps in their Global Strategic Alliance consistent with the terms of the Master Agreement signed on 29 February 2012, the Alliance partners have selected four vehicle Projects as well as confirmed next steps in the creation of a joint purchasing organization. The aim is to sign the detailed contracts no later than 31 December 2012, so that the Alliance can be implemented. Both companies confirm the previously stated synergy target of $2 billion annually achievable within five years.

Banque PSA Finance1

PSA Peugeot Citroën announces that the financing of the Banque PSA Finance should be reinforced. The Banque PSA Finance banking pool has been requested to provide a total of €11.5 billion in cash facilities, of which €1 billion in additional liquidity. At the same time, the French State has announced its intention to provide up to €7 billion in refinancing guarantees for new bond issues, utilisable over the next three years. These steps complete the other measures already taken by the Group to strengthen Banque PSA Finance's funding capacity, which include an increase in the securitization programme to 30% of total assets and the early-2013 introduction in France of a passbook savings account for retail customers.

2012 Outlook

The Group now expects the European automotive market to contract by 9%, while the Chinese market should grow by around 7%, the Latin American market by around 5% and the Russian market by some 11%.

The competitive environment is getting tougher, with increased pricing pressure and ongoing deterioration in the markets of Southern Europe.

In this context, the Group's net debt is expected to stand at around €3 billion at 31 December 2012 with favourable elements, the asset disposals and unfavourable elements, production adjustments to be undertaken in the fourth quarter and change in Faurecia's cash flow.3

The cost reduction measures undertaken in 2012 are on track to meet the target of €1 billion. The asset disposals plan was pursued during the third quarter with the entry into exclusive negotiations with RZD for the opening of the capital of Gefco, and will be completed with the disposal of the remaining real estate assets by the end of the year. The target of raising €1.5 billion from asset disposals will therefore be fully met.

AUTOMOTIVE DIVISION
 

Automotive Division revenues fell by 8.5% in the third quarter of 2012 to €8,523 million from €9,310 million in the third quarter of 2011. This reflected the suspension of CKD deliveries to Iran in February 2012 and contractions in Europe and Latin America, partially offset by the increase of unit sales in China and Russia. Worldwide sales of assembled vehicles totalled 625,267 units, down 6.3% year-on-year excluding CKD units.

Revenues from new vehicle sales amounted to €6,125 million compared with €6,689 million in third-quarter 2011. The 8.4% decline was attributable mainly to a sharp fall of 8.7% in assembled vehicle volumes excluding China, reflecting the unfavourable country mix in Europe. The pressure on prices was maintained in a highly competitive commercial environment.

These adverse factors were partially offset by a further 2% improvement in the product mix, driven by successful new launches and the development of sales of the Peugeot 208, following the introduction of petrol engines in July and October.

New vehicle inventories at 30 September totalled 471,000 units, a decline of 20,000 units. The target of reducing inventories by the end of the year to a level ca. end of December 2010 level is confirmed.

GEOGRAPHICAL HIGHLIGHTS

Europe4:
The European automotive markets contracted sharply, down by 9.4% in the third quarter.  
Markets in Western Europe were down by 9.3%, with wide variations by country. The markets in Southern Europe, to which the Group is heavily exposed with 53% of its European sales, saw further sharp declines, with decreases of 11.7% in France, 23.2% in Italy and 18.8% in Spain. The German market contracted by 7%, while the United Kingdom market grew by 6.8%.

In Central and Eastern Europe, markets fell by 11.4% overall during the quarter.

Reflecting this unfavourable market mix for the Group, its market share in Europe narrowed slightly to 12.3% from 12.5% in the third quarter of 2011. At comparable country mix, market share in the third quarter would have been 12.5%.

PSA Peugeot Citroën maintained its leadership in the light commercial vehicle market with a 20.6% share at the end of September. The market itself was down 10% over the quarter.

China:
The Chinese market grew again on an invoice basis in the third quarter. The Group increased its sales by 7.6%, with a successful program of model launches including the Peugeot 308 and the new C Quatre helping to deliver a market share of 3.4%. DPCA will expand its model line-up in the fourth quarter, with the addition of the Citroën C4L and another C segment vehicle, while at the same time continuing to develop its dealer network.

Russia:
The Russian market continued to improve, and grew by 13% in the third quarter. The Group's sales in this country rose 9.4% over the first nine months of the year. Its market share stood at 2.7% at the end of September, reflecting the launch of the Peugeot 408 and a 37.5% increase in the light commercial vehicles segment.

Latin America:
In Argentina, the automotive market contracted slightly over the first nine months of the year, with demand in the third quarter down sharply by 9%. In Brazil, tax incentives helped to drive a 5.5% increase in the market over the first nine months, led by the popular B segment in which the Group has traditionally had only a limited presence. Its market share in Latin America at the end of September stood at 5.0% compared with 5.8% a year earlier. Unit sales for the first nine months totalled 203,265 vehicles, following the successful launches of the Citroën C3 and Peugeot 308 and before the launch of the Peugeot 208.

CKD units:
The virtual absence of CKD sales in the third quarter was due to the suspension of CKD sales in Iran since February following tighter international sanctions and the attendant financing difficulties affecting payments.

PRODUCT HIGHLIGHTS

With over 130,000 orders, the Peugeot 208 is a success and the segment leader in diesel in Europe since July. The launch of models powered by the latest three-cylinder engines reinforces the range. More compact than the Peugeot 207 and 110 kg lighter, the Peugeot 208 offers fuel consumption of 3.4 litres per 100 km with CO2 emissions of just 87g per km.

Brand upscaling continued in the third quarter, with premium models accounting for 18% of consolidated Group sales in the first nine months of 2012, versus 17% in the same period of 2011. The trend will continue with the ramp-up of deliveries of the DS line, which already accounts for 15% of Citroën sales, and with the upcoming launch of the new Citroën DS3 Cabrio. The four diesel hybrid models (Peugeot 3008HY4, 508RXH, 508HY4 and Citroën DS5HY4) underscore the Group's technological advance. These models account for over 20% of Citroën DS5 sales and 10% of sales of the Peugeot 3008 and 508.

FAURECIA
 

Faurecia reported revenues of €4,086 million for the third quarter of 2012, an increase of 7.9%. Revenues declined by 2.4% in Europe but increased in all other regions, with gains of 51.4% in North America, 2.9% in South America and 23.2% in Asia. Revenues from product sales were up 12.3% at €3,217 million. Across the business base, automotive seats gained 6.8%, interior systems 30.1%, emissions control technologies 8.0% and automotive exteriors 3.6%.

GEFCO
 

At €852 million, Gefco's revenues were stable compared with the third quarter of 2011. Two key stages were passed during the third quarter:

  • The logistics agreement with GM announced on 2 July
  • Entry into exclusive negotiations with RZD on 20 September to form a strategic partnership. The agreement will accelerate the development of Gefco with clear operational synergies with RZD and new opportunities in high growth markets that will drive revenue growth. In accordance with IFRS 5 relating to non-current assets held for sale, Gefco's activities have been reclassified (see table in appendix).

BANQUE PSA FINANCE
 

Banque PSA Finance's revenue decreased slightly, by 4.5% to €471 million in the third quarter. A total of 192,000 new loans were originated, down 4%. This was due to the slowdown in Group vehicle sales in Europe over the period, the effects of which were partially offset by strong commercial performance (global penetration of 30.9%, +1.1pt compared to third quarter of 2011). At the end of September, Banque PSA Finance had €7 billion in available liquidity, covering over six months of financing, as well as a solid capital base, with a core tier one ratio of 13%.

---
1 See press releases published today.
2 Versus  -8% for Europe 30, +2% for Latin America and +9% for Russia announced in July 2012.
3 Versus the target announced in July 2012 of stabilizing net debt at December 2012 around the June 2012 level.
4 Europe = EU + EFTA + Albania + Bosnia + Croatia + Kosovo + Macedonia + Montenegro + Serbia


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