Today 09/27/2016 - 05:35:14 PM
Peugeot SA 13.205€
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Within a European market in process of stabilisation at a low level, the third quarter of 2013 for the group PSA Peugeot Citroën was impacted by the pricing policy, the interruption in Citroën C3 production and pressure on market shares in Europe. In addition, the Group was affected by a sharp deterioration of exchange rates.
In this challenging environment, the Group continued to implement its turnaround plan, with:
The Group expects automotive markets to decline by some 4% in Europe in 2013; in China the market should grow by approximately 14% and by 2% in Latin America. Russia is expected to decline by 7%1.
In this environment, the Group confirms its objective to reduce its operational free cash flow2 consumption at least by half in 2013 and confirms the announced trend of very significant reduction throughout 2014.
Sales of assembled vehicles outside Europe accounted for 42% of total unit sales at the end of September 2013, compared with 36% in 2012.
Automotive Division revenues declined by 5.8% in the 3rd quarter 2013 to €8,030 million from €8,523 million in the 3rd quarter 2012. Worldwide sales of vehicles totalled 610,400 units in the third quarter, down 2.4% and 2,070,500 units in the first nine months, down 1.5% compared with the same period in 2012. This reflects volumes contractions in Europe, Brazil and Russia, partially offset by strong growth of volumes in China, Argentina and the Mediterranean basin.
Revenues from new vehicles sales amounted to €5,518 million compared with €6,125 million in third-quarter 2012. This 9.9% decline was primarily due to the sharp -7.3% drop in assembled vehicle sales outside China, reflecting an unfavourable market mix, the Group pricing policy and growing pressure on market shares from premium and low cost brands in Europe. It also reflects the -5.0% very negative currency effect, mainly attributable to the Russian rouble, Brazilian real, Argentine peso and British pound. The impact of changes in market mix was a negative by -0,3%.
Change in product mix by -0.3% in the third quarter is temporarily impacted by the replacement of the new Peugeot 308 and the progressive ramp up of the Peugeot 2008. Product mix increased by +0.4% by end of September and should also increase in the fourth quarter, particularly thanks to new product launches.
These adverse effects are partly offset by a +1.2% positive price effect, illustrating the Group policy, in a market context of increasingly aggressive competition.
New vehicle inventory amounted to 408,000 units at the end of September, down 63,000 from end of September 2012, in line with targets. The Group confirms a highly disciplined approach to inventory management.
In the third quarter, the Group launched two transactions. The first was a €600 million bond issue carried out on 10 September to coincide with the repayment of existing debt facilities, which generated net proceeds of €300 million and also extended to 2019 the maturities of facilities originally falling due in the next five years. The second transaction concerned the signature of a €300 million loan agreement with the European Investment Bank (EIB).
Capital expenditure continued to be focused on priority projects. Capital expenditure and capitalized R&D costs were down by €764 million in the first half of the year compared with the same period last year. This reduction will continue but at a slower pace in the second semester.
The European automotive markets grew by 2.5% in the third quarter of 2013, with wide country variations still apparent:
In this environment, the Group's market share in Europe narrowed to 11.9% in the first nine months compared to 12.7% in 2012, due to the Group pricing policy, to impact of interruptions in Citroën C3 production, as well as to continuous pressure from both premium and low cost brands that have benefitted from increasing market shares since 2007.
PSA Peugeot Citroën maintained its leadership in the light commercial vehicle market up by just 0.9% over the quarter, with a 20.8% share in the third quarter 2013 compared with 20.2% in 2012.
Group sales in China increased by 28.5% over the first nine months, to 403,000 units and the market expanded by 17%.
The Group market share amounts to 3.7% by end of September 2013, reflecting expansion of the distribution network and the successful launches of the Peugeot 3008 and Citroën C4L, to be continued in the fourth quarter by the Peugeot 301 and the Citroën C-Elysée.
Following inauguration of the third manufacturing facility in Wuhan on 2 July, DPCA's production capacity would reach 750,000 units in 2015.
CAPSA, the second Chinese joint venture, has been selling the DS range since the beginning of the year and a new manufacturing facility was inaugurated with the joint venture partners in Shenzhen on 27 September, starting the local production of the DS5. By 2015 the Group's production capacity in China would represent 950,000 units.
The Russian market continued to decrease, and contracted by 7.8% in the third quarter (-6.5% in nine months). In this declining market exposed to considerable competitive pressure, Group sales fell by 23.1% over nine months, representing a 2.3% market share at the end of September.
The negative change in the rouble exchange rate impacted Russian operating income.
Group sales in Latin America declined by 6.3% to 77,000 units in the third quarter, representing a 5.0% market share.
Sales for the first nine months rose by 9.4% to 222,400 units, representing a 5.0% market share.
In Argentina, the Group continued to expand its presence, launching the Peugeot 208 and Partner and the Citroën C3 and Berlingo. 38,500 units were sold in the third quarter, representing a 18% increase over the year-earlier period and a 16.0% market share. Sales for the first nine months represented 106,300 units.
The Brazilian market contracted by 10% in the third quarter and by 1% over the first nine months. Group sales in this market fell by a sharp 30% to 29,500 units in the third quarter (90,800 units sold for the first nine months). The negative variation in the real exchange rate had also a very significant impact on Brazil's operating income.
Worldwide sales of Peugeot 208 reach 253,000 units by end of September. Peugeot 208 is in the top 3 of B segment sedan in Europe. The strategy of taking the Brand upmarket had a positive impact on the product mix, with levels 3 and 4 now accounting for 30% of sales, supported by the recent range extensions with the launch of the GTi and XY versions of the Peugeot 208. The Peugeot 208 was launched during the first half of the year in Russia, Brazil and Argentina.
The Peugeot 2008 launched in May has been very well received, with 35,000 units registered and 54,400 units ordered at end-September, well ahead of objectives. To keep pace with the model's success, the Mulhouse plant has operated an additional shift since mid-September.
A total of 28,800 customers have already ordered the new five-seat and seven-seat Citroën C4 Picasso introduced in June and September respectively, with high trim level, above 60% of them choosing the 3+ versions.
The new Peugeot 308 was launched in September in France and in Germany, to coincide with the Frankfurt Motor Show. This is the second vehicle based on the new EMP2 platform. Weighing 140kg less than its predecessor and featuring the new Peugeot design, it will support the Group's aim of ranking among the three best-selling models in the segment. The Peugeot 308 will be gradually launched in other European markets by early 2014 then will be sold in Latin America, China and Russia.
The strategy to move the Peugeot and Citroën brands up market continued apace in the third quarter, with premium models accounting for 19% of consolidated sales at the end of September, versus 18% in the same period of 2012. The four diesel hybrid models (Peugeot 3008HY4, 508RXH, 508HY4 and Citroën DS5HY4) contribute to the Group's technological advance and reduction of average rate of CO2. They account for over 30% of Citroën DS5 sales, 16% of Peugeot 508 sales and more than 10% of Peugeot 3008 sales.
Faurecia reported revenues of €4,117 million for the third quarter of 2013, an increase of 0.8%. This increase is driven by revenues related to Monolith sales and to Development, Tooling & Prototype, with respectively +10.8% and 20.2%,. Revenues from product sales were down 2.7% to 3,129.9 M€, with unfavourable change in exchange rates. These revenues were down 1.4% in Europe, 13.4% in North America, and rose by 21.4% in South America and by 4.4% in Asia.
BANQUE PSA FINANCE
In a context of declining sales in Europe (-9.6% on markets where Banque PSA Finance operates), number of contracts represents 174,000 units, down -9.4%, as compared to third quarter 2012. Commercial performance remains very dynamic, with a 29.5% penetration rate on new vehicles, among the Group customer.
Banque PSA Finance's revenues is at €447 million (-5.1%) in Q3, the loan book amounts to €21.4 billion at end of September, down -9.9% (-6.7% related to final client balance).
Lastly, the success of Distingo passbook, which was launched in March 2013, is confirmed with a level of collected savings largely above targets. End of year outstanding objective should be achieved, or exceeded if momentum continues.
1vs forecasts of a 5% decline in 30-country Europe, 10% growth in China, 2% growth in Latin America and a 5% fall in Russia announced in July 2013.
2Free cash flow excluding restructuring and exceptional