- €53.6 billion in revenue for the year1
- Recurring Operating Income of €905 million, up €1.3 billion, from a loss of €-364 million in 2013
- Favourable swing attributable to the Automotive division, which ended the year with recurring operating income at €63 million, up €1.1 billion from a loss of -€1,039 million in 2013
“Our 2014 results show evidence that the process of rebuilding the Group’s financial fundamentals is underway,” said Carlos Tavares, Chairman of the PSA Peugeot Citroën Managing Board. “By generating €2.2 billion in operating Free Cash Flow2 during the year, and becoming net debt free, we are ahead of our reconstruction plan. I would like to thank all of our teams for their achievements in a sometimes difficult environment. More than ever, we remain focused on fully meeting our objectives and achieving a 2% operating margin for the Automotive division.”
Consolidated net revenue came to €53,607 million in 2014, up 1% over 2013. Automotive division revenue dipped 0.9% to €36,085 million, with favourable changes in the product mix and in prices offsetting a very negative currency effect.
The Group ended the year with a Recurring Operating Income ok €905 million, representing a positive swing of €1,269 million from a loss of -€364 million in 2013. The Automotive division reported Recurring Operating Income of €63 million in 2014, up €1,102 million from a loss of €1,039 million the year before. The return to profit was attributable to the positive product and price mix resulting from the success of recent launches by the brands and from the pricing power policy. It was also supported by further reductions in fixed costs.
Including its pro forma share of the 2014 income of the DPCA and CAPSA joint ventures, the Division’s recurring operating income came to €366 million, an improvement of €1,246 million over the previous year.
Non-recurring operating income and expenses represented a net expense of -€682 million, primarily due to restructuring costs incurred by the Automotive division.
Financial income and expenses represented a net financial expense of -€763 million compared with- €664 million in 2013, with the year-on-year change corresponding mainly to the non-recurring gain realised in 2013 on the sale of BNP Paribas shares.
The Group’s net loss eased to -€555 million in 2014 up €1,672 million from -€2,227 million the year before.
Banque PSA Finance’s recurring operating income came to €337 million, a decline of -€31 million year-on-year that was due to changes in the Bank’s refinancing situation. In February 2015, the first two joint ventures with Santander Consumer Finance were launched, one in France and the other in the United Kingdom. These new entities will enable Banque PSA Finance to offer competitive interest rates to customers of the Peugeot, Citroën and DS brands while at the same time improving its margins. The start-up of operations by these new ventures also enabled Banque PSA Finance to announce that it would no longer be using the French State’s guarantee for its future bond issues.
Faurecia’s recurring operating income amounted to €673 million, up 25% on 2013.
Free cash flow of manufacturing and sales companies for the year amounted to €1,792 million, lifted by the improvement in funds from operations and working capital requirement (up €1,752 million over the period) thanks mainly to the inventory reduction action plans and supply chain optimisation. Excluding restructuring costs of €583 million and net non-recurring income of €193 million (mainly corresponding to gains on sales of property assets), operating Free Cash Flow was a positive €2,182 million.
Total inventory, including independent dealers, stood at 339,100 vehicles at 31 December 2014, down 44,800 units from end-2013.
The manufacturing and sales companies’ net financial position at 31 December 2014 was a positive €548 million, versus a negative €4,181 million at the previous year-end, reflecting the €2,995-million proceeds from the April and May 2014 share issues as well as the increase in Free Cash Flow.
As the rebuilding of the Group’s financial fundamentals is not achieved, no dividend payment will be proposed for the financial year 2014.
Outlook
In 2015, PSA Peugeot Citroën expects to see automotive demand increase by a modest 1% in Europe and by approximately 7% in China, but decline by some 10% in Latin America and by around 30% in Russia.
The Group aims to generate operating free cash flow of around €2 billion over the period 2015-2017. It is also targeting an operating margin3 of 2% in 2018 for the Automotive division, with the objective of reaching 5% over the period of the next medium-term plan, covering 2019-2023.
1 Income statement figures for 2013 and 2014 have been restated to exclude the impact of applying IFRS 5,10 and 11 and IFRIC 21.
2 Free cash flow of manufacturing and sales companies
3 Recurring operating income relating to revenues
