Version VA Full - Groupe PSAIn 2017, Groupe PSA reported its best LCV sales ever, with 476,500 units...
Transcript of Version VA Full - Groupe PSAIn 2017, Groupe PSA reported its best LCV sales ever, with 476,500 units...
20
17ANNUAL RESULTS
Groupe PSA 2017 Annual Results - 1
2017 Annual Results
CONTENTS
I. MANAGEMENT AND SUPERVISORY BODIES AT 31 DECEMBER 2017 .................................................................... 2
II. ANNUAL MANAGEMENT REPORT .................................................. 3
1. Group activities ...................................................................................................................................3
2. Analysis of consolidated annual results .............................................................................................5
3. Financial position and cash .................................................................................................................8
4. Risk factors and uncertainties ............................................................................................................9
III. CONSOLIDATED FINANCIAL STATEMENTSAT 31 DECEMBER 2017 .................................................................. 11
Consolidated statements of income .......................................................................................................12
Consolidated statements of income and expenses recognised in equity ............................................. 14
Consolidated balance sheets .................................................................................................................16
Consolidated statements of cash flows ..................................................................................................18
Consolidated statements of changes in equity .......................................................................................20
Notes to the consolidated financial statements at 31 December 2017 ................................................. 21
IV. STATUTORY AUDITORS’ REPORT ON THE 2017 CONSOLIDATED FINANCIAL STATEMENTS ................................. 97
2 - Groupe PSA 2017 Annual Results
I. MANAGEMENT AND SUPERVISORY BODIES AT 31 DECEMBER 2017
Supervisory Board
CHAIRMAN Mr LOUIS GALLOIS
OTHER SUPERVISORY BOARD MEMBERS Mr Geoffroy ROUX DE BÉZIEUX (Vice-President and Independent Member)
ETABLISSEMENTS PEUGEOT FRERES, represented by Mrs Marie-Hélène PEUGEOT RONCORONI (entitled Vice-Chairman pursuant to the Shareholders’ Agreement)
DONGFENG MOTOR (HONG KONG) INTERNATIONAL CO. LTD., represented by Mr. LIU Weidong (entitled Vice-Chairman pursuant to the Shareholders’ Agreement)
Mrs Catherine BRADLEY
Mrs Pamela KNAPP
Mr Jean-François KONDRATIUK (employee representative member)
Mrs Helle KRISTOFFERSEN
BPIfrance Participations, represented by Mrs Anne GUERIN (entitled as Vice-Chairman pursuant to the Shareholders’ Agreement) (co-opted by the Supervisory Board of July 25, 2017)
Mr An TIECHENG (co-opted by the Supervisory Board of July 25, 2017)
Lion Participations, représentée par M. Daniel BERNARD (co-opted by the Supervisory Board of July 25, 2017)
FFP, represented by M.Robert PEUGEOT
Mr Henri Philippe REICHSTUL
Mrs Bénédicte JUYAUX (employee shareholder representative member)
NON-VOTING ADVISORS Mr Frédéric BANZET
Mr Alexandre OSSOLA (appointed by the Supervisory Board of July 25, 2017)
Mr Lv HAITAO (appointed by the Supervisory Board of July 25, 2017)
Managing Board
CHAIRMAN
Mr Carlos TAVARES
MEMBERS OF THE MANAGING BOARD
Mr. Jean-Baptiste CHASSELOUP de CHATILLON Mr. Maxime PICAT Mr. Jean-Christophe QUEMARD
Groupe PSA 2017 Annual Results - 3
II. ANNUAL MANAGEMENT REPORT
1. GROUP ACTIVITIES
1.1. Overview of sales activities
Strong acceleration in 2017: Groupe PSA worldwide sales up 15.4%
Groupe PSA sold 3,632,300 1 vehicles worldwide 4th consecutive year of improvement in Groupe PSA sales Successful SUV product offensive supporting the Group’s profitable growth Strengthening European leadership in Light Commercial Vehicles (LCV) for PEUGEOT and CITROËN, with a 20.2% market share
The Push to Pass plan’s SUV offensive accelerates and the five SUV models launched in the past 18 months have enjoyed growing success. Overall, SUV sales accounted for 23% of consolidated sales at the year-end.
PEUGEOT brand sold nearly 600,000 SUVs in 2017 worldwide and ranks 2nd in the SUV European market with a strong expansion of nearly 60%.
With 259,300 PEUGEOT 3008 SUVs sold globally in 2017, the PEUGEOT brand enjoyed sustained demand for the model, which was named Car of the Year 2017 in Europe and recognised by 38 additional awards worldwide. PEUGEOT also benefited from the success of the new PEUGEOT 5008 launched in March 2017, with 85,900 units sold, and the positive performance of the PEUGEOT 4008 in China, with 51,500 units.
In autumn 2017, CITROËN kicked off its SUV offensive in China with the C5 Aircross, launched in September, and in Europe with theC3 Aircross, launched in October. Each model sold around 22,700 and 35,400 units, respectively, and will be rolled out worldwide in 2018.
At the end of February 2017, DS Automobiles debuted its first SUV, DS 7 CROSSBACK, and opened up online reservations for the LaPremière limited edition model. In October, the brand launched its exclusive network in parallel with order taking for all the line-up’s versions. The first deliveries are set for February 2018.
In 2017, OPEL and VAUXHALL rationalized the channel mix, in line with PACE! turnaround plan and led a record-breaking product offensive in 2017, with two new SUVs, the Crossland X and Grandland X, launched in May and September with sales of 33,900 and 18,700 units, respectively.
In 2017, Groupe PSA reported its best LCV sales ever, with 476,500 units sold, up 15% on 2016. And with Passenger Car derivatives (PEUGEOT Traveler and CITROËN SpaceTourer for example) these are 658,000 units sold by the Group in 2017.
The PEUGEOT and CITROËN brands strengthened the Group’s leadership status in Europe, where it holds a market share of 20.2% in LCV (1.3 point market share gain) allowing the Group to capture more than 50% of European LCV market growth thanks to the new PEUGEOT Expert and CITROËN Jumpy.
Outside Europe, the Group’s LCV offensive also began to deliver results. In Eurasia, sales were up 55% before the start of localproduction of new PEUGEOT Expert and CITROËN Jumpy planned in the first half of 2018. In Latin America, sales increased 13% anda full range of renewed products and a complete range of services will be offered in 2018.
In Europe, consolidated sales came in at 2,378,600 units, representing a year-on-year increase of nearly 450,000 vehicles (up 23.2%), of which 376,400 OPEL and VAUXHALL units since 1 August 2017.
Groupe PSA’s market share increased in all of the Group’s main host countries, excluding the United Kingdom. For the first time since 2010, the Group added 0.3 points to its market share (11.1%) from PEUGEOT, CITROËN and DS sales alone.
On top of increased sales of SUVs and LCVs, the Group benefited from the successful launch of the PEUGEOT 308 (166,000 units sold), CITROËN C3 (217,000 units sold), and OPEL Insignia, available in three models, the Sports Tourer, Grand Sport and CountryTourer (total 40 600 units sold from August to December 2017).
In addition, the PEUGEOT 2008 and OPEL Mokka ended the year second and third, respectively, in their segment.
DS Automobiles continued to develop its network, with 150 locations now dedicated to marketing the first-ever second generation DS model, the DS 7 CROSSBACK.
In the Middle East & Africa region, consolidated sales increased by 61.4% year on year at 618,800 units, of which 26,800 for the OPEL brand.
This performance was driven by the Group’s development in Iran (444,600 units sold in 2017) and higher sales in Turkey, Israel and the French overseas departments.
1 As from 1 August 2017, the Group’s scope of consolidation includes the sales volumes of OPEL and VAUXHALL, together representing 403,900 units
sold between August and December.
4 - Groupe PSA 2017 Annual Results
Groupe PSA has continued its product offensive in the region, where it has successfully launched the new CITROËN C3 the new PEUGEOT 3008 SUV, and the new PEUGEOT Pick Up, which marks the brand’s history-making return to its legitimate place in the segment.
OPEL is in the midst of a product offensive in the region having recently launched the new Insignia and Crossland X and with the launch of the new Grandland X slated for early 2018.
For the DS brand, 2017 marked the development of a dealer network across the region ahead of the market launch of the DS 7 CROSSBACK in the coming months.
The year also saw the production start-up and market launch of the PEUGEOT 2008 SUV in Iran, and the creation of an Iranian jointventure between CITROËN and SAIPA based at the Kashan plant. The Group continued to expand its manufacturing base, breaking ground on the Kenitra plant in Morocco, starting up local production in Kenya and Ethiopia, and signing a memorandum of understanding to set up a new plant in Oran, Algeria.
In China & Southeast Asia, in a difficult economic environment, the Group sold 387,000 vehicles. Showing the first signs of a sales recovery, the Group has seen a rise in sales since July, and a market share gain of 0.3 points in second-half 2017 compared with the first half. The SUV line-up proved to be a triumph, with the successful launch in 2017 of the PEUGEOT 4008 and 5008, and the CITROËN C5 Aircross. It is worthy to note that sales volumes for the new PEUGEOT 308 and the CITROËN C5 and C6 were stable versus 2016, despite weaker demand in this market segment.
In Southeast Asia, Groupe PSA has been accelerating its development, particularly in Vietnam with the successful launch of the PEUGEOT 3008 and 5008 SUVs. The vehicles are now produced locally at THACO’s plant in Chu Lai, just nine months after a new assembly agreement was signed.
In June 2017, Groupe PSA signed an agreement to step up its cooperation with ChangAn Automobile, establishing a solid foundationfor faster expansion of the DS brand. Presented at Auto Shanghai, the DS 7 CROSSBACK will be brought to market at the start of the Beijing Motor Show.
Further rebound in Latin America, with sales climbing 12.2% to 206,300 units.
In Latin America, PEUGEOT sales rose 11.1% due to strong momentum in most of the region’s markets. The PEUGEOT 3008 and 5008 SUVs were launched very successfully in every country and sales have exceeded targets. The PEUGEOT Expert, recently launched in Brazil and Argentina and produced in Uruguay, also promises to be a success.
CITROËN’s sales were up 13.8% in most of the region’s markets. For example, sales in Chile jumped 47% thanks to the tremendous success of the new CITROËN C3 and the solid performance delivered in the LCV segment, with Berlingo leading the way. The CITROËN Jumpy, produced in Uruguay and marketed in Brazil and Argentina, has been well received, suggesting that demand for thevehicle will be strong in 2018.
DS Automobiles recorded sales growth of 21.6%, led by Argentina’s performance, where the brand ranks fourth in the premium automotive market thanks to the DS 3, the leading vehicle in its class for the fourth year in a row.
India-Pacific reports 26,100 cars sold and 31% growth.
In Japan, the Group grew by 20% and recorded its best performance in more than 20 years. A sales recovery is under way in Australiaand New Zealand, where two new importers have been appointed, resulting in sales almost tripling compared to 2016. Sales for theFrench Pacific overseas territories continued to rise sharply (up 40%) and South Korea’s performance was in line with that of 2016.
PEUGEOT contributed significantly to this growth, reporting a 37% increase in sales driven by the successful launch of the PEUGEOT3008 and 5008.
CITROËN’s sales also rose sharply (up 36%) thanks to strong demand for the new C3.
In Eurasia, sales were up 45%, outpacing the auto market. The Group made headway in the region’s major markets, including Russia (up 38%) and Ukraine (up 62%), with a total of 15,200 units sold.
Sales of the new PEUGEOT 3008 SUV were significantly ahead of the previous generation’s performance, accounting for 21% of the brand’s volumes, and helping to drive its volumes up 50.7%. The momentum in sales for CITROËN’s Grand C4 Picasso (up 126%), particularly in the BtoB segment, also pushed up the brand’s sales, by a strong 33.4% in Eurasia.
Groupe PSA’s LCV segment sales rose 55%. Local production of the PEUGEOT Expert, CITROËN Jumpy, PEUGEOT Traveller and CITROËN SpaceTourer in Kaluga, Russia as from 2018 is expected to enable the Group to achieve even faster sales growth in Eurasia.
1.2. Consolidated worldwide sales
The consolidated worldwide sales by brand, by geographical area and by model are available on the Groupe PSA website (www.groupe-psa.com).
Groupe PSA 2017 Annual Results - 5
2. ANALYSIS OF CONSOLIDATED ANNUAL RESULTS The Group's operations are organised around five main business segments described in Note 4 to the consolidated financial statements at 31 December 2017. Subsequent events are presented in Note 19 to the financial statements.
2.1. Group profit (loss) for the period
(in million euros) 31 December 2016 31 December 2017 ChangeRevenue 54,030 65,210 11,180
Recurring operating income 3,235 3,991 756 As a percentage of revenue 6.0% 6,1% Non-recurring operating income and expenses (624) (904) (280)
Operating income 2,611 3,087 476
Net financial income (loss) (268) (238) 30Income taxes (517) (701) (184)
Share in net earnings of companies at equity 128 217 89
Profit (loss) from operations held for sale or to be continued in partnership* 195 (7) (202)
Consolidated profit (loss) for the period 2,149 2,358 209Profit (loss) for the period attributable to owners of the parent 1,730 1,929 199* Including "Other expenses related to the non-transferred financing of operations to be continued in partnership"
2.2. Group revenue
The table below shows consolidated revenue by division:
(in million euros) 31 December 2016 31 December 2017 ChangeAutomotive Peugeot Citroën DS 37,066 40,735 3,669
Automotive Opel Vauxhall - 7,238 7,238
Faurecia 18,710 20,182 1,472Other businesses and eliminations* (1,746) (2,945) (1,199)
Revenue 54,030 65,210 11,180* Including the activities of Banque PSA Finance not covered by the partnership signed with Santander Consumer Finance
Peugeot Citroën DS (PCD) Automotive revenues were up 9.9% compared to 2016, mainly thanks to the favourable effect of product mix (+4.5%), of volumes and country mix (+4.9%) and of sales to partners (+1.5%) that more than compensates the negative impact of adverse exchange rate changes (-1.6%).
Opel Vauxhall (OV) Automotive revenues amounted to €7,238 M for the last 5 months of 2017.
At constant exchange rates and perimeter (excluding OV), Group revenues were up 12.9% compared to 2015, year of reference of Groupe PSA strategic plan of profitable growth Push to Pass.
2.3. Group Recurring Operating Income
The following table shows Recurring Operating Income by business segment:
(in million euros) 31 December 2016 31 December 2017 ChangeAutomotive Peugeot Citroën DS 2,225 2,965 740
Automotive Opel Vauxhall - (179) (179)
Faurecia 970 1,170 200Other businesses and eliminations* 40 35 (5)
Recurring operating income 3,235 3,991 756* Including the activities of Banque PSA Finance not covered by the partnership signed with Santander Consumer Finance
6 - Groupe PSA 2017 Annual Results
In 2017, the PCD Automotive recurring operating margin, which corresponds to the ratio of the PCD Automotive recurring operating income to the PCD Automotive revenues, stood at 7.3% compared to 6% in 2016. OV Automotive recurring operating margin stood at -2.5% for the last 5 months of 2017.
Group recurring operating margin excluding OV stood at 7.1% and Group recurring operating margin including OV stood at 6.1% compared to 6% in 2016.
The 33.3% increase in the PCD Automotive recurring operating income was due to the company's improved performance (+€1 270 million), despite an unfavourable operating environment (-€530 million):
- the negative effect of the PCD Automotive division’s operating environment stemmed from a (€492) million effect of "foreign exchange and others", associated essentially with the weakening of the pound sterling and of the Argentinian peso and higher raw material and other external costs amounting to (€358) million. These effects were partially offset by stronger markets totalling +€320 million;
- the improved performance of the PCD Automotive business was due essentially to a very positive product mix effect amounting to +€904 million, as well as lower production and fixed costs amounting to +€498 million, and improved market share and country mix for +€38 million. These effects were partially offset by a negative price and product enrichment effect of(€44) million, as well as other effects (-€134 million).
OV Automotive recurring operating income stood at (€179) million for the last 5 months of 2017.
Faurecia’s recurring operating income was €1 170 million, up €200 million.
2.4. Other items contributing to Group profit (loss) for the period
Non-recurring operating income and expenses represented a net expense of (€904) million compared to (€624) million in 2016. They primarily included PCD Automotive division restructuring costs totalling (€426) million – mainly in Europe for (€375) million, OV Automotive division totalling (€440) million – and Faurecia Group for (€86) million.
Net financial income and expenses amounted to (€238) million, an improvement of €30 million versus 2016. See Note 12 to the consolidated financial statements at 31 December 2017.
The income tax expenses amounted to (€701) million in 2017 compared to (€517) million in 2016. See Note 14 to the Consolidated Financial Statements at 31 December 2017.
The share in net earnings of companies at equity totalled €217 million in 2017, compared to €128 million in 2016.
The contribution of the Dongfeng joint ventures (DPCA and DPCS) represented (€30) million, down €272 million. Changan PSA Automobiles Co., Ltd (CAPSA) made a negative contribution of (€24) million in 2017 compared to (€292) million in 2016. See Note 11.3 to the consolidated financial statements at 31 December 2017.
The contribution of the joint ventures under the partnership between Banque PSA Finance and Santander Consumer Finance amountedto €201 million, up €20 million. See Note 11.3 to the consolidated financial statements at 31 December 2017. The contribution of the joint ventures under the partnership between Banque PSA Finance and BNP Paribas covering the financing activity of OV amounted to €8 million in 20172. See Note 11.3 to the consolidated financial statements at 31 December 2017.
The profit from operations held for sale or to be continued in partnership, including "Other expenses related to the non-transferred financing of operations to be continued in partnership", amounted to (€7) million compared to 195 million euros in 2016.
The net income, Group share, of €1,929 million was up €199 million. Basic earnings per share were €2.18 versus €2.16 in 2016. And diluted earnings per share were €2.05 up from €1.93 in 2016.
A dividend of €0.53 per share will be submitted for approval at the next Shareholders’ Meeting with an ex-dividend date considered to be on May 2nd 2018, and the payment date on May 4th 2018.
2 This contribution represents 2 months of activity of Opel Vauxhall Finance since the date of the closing on November, 1st 2017
Groupe PSA 2017 Annual Results - 7
2.5. Banque PSA Finance
The results (at 100%) of finance companies are presented below*.
(in million euros) 31 December 2016 31 December 2017 ChangeRevenue 1,405 1,476 71
Net banking revenue 1,026 1,145 119
Cost of risk** 0.24% 0.27% +0.03 pt
Recurring operating income 571 632 61Penetration rate 30.8% 30.0% (0.8) pt
Number of new contracts (leasing and financing) 767,848 845,755 77,907
* These results of BPF for 2017 include the result of 2 months of Opel Vauxhall Finance activities since November, 1st 2017.
** As a percentage of average net loans and receivables
2.6. Faurecia
(in million euros) 31 December 2016 31 December 2017 ChangeRevenue 18,710 20,182 1,472
Recurring operating income 970 1,170 200As a % of revenue 5.2% 5.8%
Operating income 864 1,075 211Net financial income (expense) (163) (133) 30
Consolidated profit (loss) for the period 706 708 2Free cash flow 1,011 129 (882)
Net financial position (475) (646) (171)
More detailed information about Faurecia is provided in its annual report which can be downloaded from www.Faurecia.com.
2.7. Outlook
Market outlook In 2018, the Group anticipates a stable automotive market in Europe and growth of 4% in Latin America, 10% in Russia, and 2% in China. Operational outlook improved The objectives of the Push to Pass plan for the Groupe PSA (excluding Opel Vauxhall) are to:
- deliver over 4.5% Automotive recurring operating margin3 on average in 2016-2018, and target over 6% by 2021;
- deliver 10% Group revenue growth by 20184 vs 2015, and target additional 15% by 20214.
The objectives for Opel Vauxhall are:
- deliver 2% Automotive recurring operating margin3 for OV by 2020, and target 6% by 2026;
- deliver positive operational Free Cash Flow by 20205.
3 Recurring operating income related to revenue 4 At constant (2015) exchange rates and perimeter 5 Defined as ROI + D&A - restructuring - capex - Capitalized R&D - change in WRC
8 - Groupe PSA 2017 Annual Results
3. FINANCIAL POSITION AND CASH
3.1. Net financial position and financial security of manufacturing and sales companies
The net financial position of manufacturing and sales companies are set out and described in Note 12 to the Group's consolidated financial statements at 31 December 2017.
The net financial position of manufacturing and sales companies at 31 December 2017 was a net cash position of €6,194 million, down €619 million compared with 31 December 2016. Within this positive net financial position, Faurecia had €646 million in net debt at 31 December 2017, compared to €475 million in net debt at end-December 2016.
The Group continued to actively manage its debt in 2017. In order to extend the average maturity of its debt, Peugeot S.A. issued a bond of 600 M€ bond maturing in March 2024 and, in May, a tap bond of 100 M€ with the same maturity. In addition, the European International Bank (EIB) granted a seven-year loan of 250 M€ to PSA Automobiles SA for the financing research and development investments on future emission requirements.
Liquidity reserves for the manufacturing and sales companies amounted to €17,522 million at 31 December 2017, versus €16,974 million at 31 December 2016, with €13,322 million in cash and cash equivalents, financial investments and current & non-current financial assets, and €4,200 million in undrawn lines of credit (see Note 12.4 to the consolidated financial statements at 31 December 2017).
3.2. Detail of Free Cash Flow of manufacturing and sales companies
The Free Cash Flow of manufacturing and sales companies is defined in Note 16 to the consolidated financial statements at 31 December 2017. The Free Cash Flow generated over the period amounted to €500 million, including a €129 million contribution from Faurecia. The Free Cash Flow over the period mainly stemmed from: - €5,823 million in cash flows generated by recurring operations of which a contribution of €(336) million of OV; - €(618) million in cash flows related to restructuring plans including €(12) million for OV; - €8 million improvement in the working capital requirement, including €1,179 million in trade payables, (€ 476) million in trade
receivables, and €(167) million in inventories. New vehicle inventory levels are presented below ; OV contribution amounts to €(610) million ;
- €(4,277) million in capitalised capital expenditure and research & development, including Faurecia's share which represented €(1,214) million and the share of OV which represented €(509) million at 31 December 2017 and of which €(436) million in exceptional investments/asset disposals, including Faurecia’s share which represented €(218) million at the end of 2017. Total research anddevelopment expenses incurred increased in 2017 compared to 2016 and are presented in Note 5 to the consolidated financial statements at 31 December 2017.
New vehicle inventory levels for PCD and in the independent PCD dealer network:
(in thousands of new vehicles) 31 December 2017 31 December 2016 31 December 2015Group 97 99 107 Independent dealer network 319 307 243
TOTAL 416 406 350
New vehicle inventory levels for OV and in the independent OV dealer network:
(in thousands of new vehicles) 31 December 2017 31 December 2016 31 December 2015Group 135 NA NA
Independent dealer network 129 NA NA
TOTAL 264 NA NA
Excluding Free Cash Flow, the changes in net financial position represented €(1,119) million. These are mainly related to dividends paid to Group shareholders in the amount of €(431) million as well as the dividends paid to Faurecia minority shareholders for €(129) million and to the exercise of warrants in the amount of €288 million as well as €(662) million of OV debt consolidation.
3.3. Liquidity and funding of finance companies
The liquidity and funding of finance companies are discussed in Notes 13.3 and 13.4 to the consolidated financial statements at 31 December 2017.
Groupe PSA 2017 Annual Results - 9
4. RISK FACTORS AND UNCERTAINTIES
Main risk factors specific to the Group and its business The Group operates in a profoundly changing environment not only in terms of technology, but also as regards modes of consumption and new entrants into the automotive industry. It is therefore exposed to risks that, if materialised, could have a significant adverse effect on its business, financial position, results or outlook. PSA Group pays close attention to ensuring that the risks inherent in its business lines are effectively managed across its various businesses. The Group's various operating units identify and assess risks and evaluate the related internal controls on an ongoing basis, in France and abroad, with annual reporting to the Executive Committee.(Faurecia has its own process). The principal specific risk factors to which the Group may be exposed are described in depth in the 2017 Registration Document (Chapter 1.5) that will be published in March 2018, and include notably:
Operational risks
They include risks related to the Group's economic and geopolitical environment, particularly in the United Kingdom where the Group is exposed to free trade agreements and currency movements (in 2017, Group sales in the UK represent up to 279,000 vehicles). A onepoint gross change in the pound sterling euro exchange rate has an impact of around €45 million on the Automotive recurring operating income. The long-term impact of the UK's exit from the European Union will depend on the exit terms and their consequences, whichare not currently known. There are also risks related to the development, launch and sale of new vehicles (for example petrol/dieselmix), risks related to the emergence of new business models driven by new forms of mobility, customer and dealer risks, raw material risks, supplier risks, industrial risks, environmental risks, workplace health and safety risks, risks associated with cooperation agreements, risks associated with the strategic partnership with Dongfeng, risks related to the non-execution of the PACE plan,information system risks as well as the risks related to climate change.
Financial market risks
The Group is exposed to liquidity risk, interest rate risk, exchange rate risk, counterparty risk, credit risk and other market risks related in particular to fluctuations in commodity prices. Note 12.7 to the consolidated financial statements at 31 December 2017 providesinformation on risk management, which is primarily carried out by Corporate Finance, identified risks and the Group policies designed to manage them.
Risks related to Banque PSA Finance
These include activity risk, credit risk, liquidity risk, counterparty risk, as well as concentration risk and operational risk. (See Note 13.4 to the consolidated financial statements at 31 December 2017).
Legal and contractual risks
These risks include notably: legal and arbitration proceedings, legal risks associated with anti-competition litigation, regulatory risks, financial covenants, risks related to pension and other post-retirement benefit obligations, risks related to intellectual property rights and off-balance sheet commitments. (See Note 17 to the consolidated financial statements at 31 December 2017).
10 - Groupe PSA 2017 Annual Results
Groupe PSA 2017 Annual Results - 11
III. CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2017
Contents
Consolidated Statements of Income ....................................................................................................... 12
Consolidated Comprehensive Income ..................................................................................................... 14
Consolidated Balance Sheets ................................................................................................................. 16
Consolidated Statements of Cash Flows .................................................................................................. 18
Consolidated Statements of Changes in Equity ........................................................................................ 20
Notes to the Consolidated Financial Statements at December 2017 ............................................................ 21
The consolidated financial statements of the PSA Group are presented for the years ended 31 December 2017 and 2016. The 2015 consolidated financial statements are included in the Registration Document that was filed with the French securities regulator (Autorité des Marchés Financiers) on 24 March 2016 under no. D.16-0204.
12 - Groupe PSA 2017 Annual Results
CONSOLIDATED STATEMENTS OF INCOME
(in million euros) Notes
Manufacturing and sales
companiesFinance
companies Eliminations TotalContinuing operations
Revenue 5.1 65,094 139 (23) 65,210
Cost of goods and services sold (53,017) (98) 23 (53,092)
Selling, general and administrative expenses (5,862) (27) - (5,889)
Research and development expenses 5.3 (2,238) - - (2,238)
Recurring operating income (loss) 3,977 14 - 3,991
Non-recurring operating income 5.4 - 8.3 202 3 - 205
Non-recurring operating expenses 5.4 - 8.3 (1,106) (3) - (1,109)
Operating income (loss) 3,073 14 - 3,087
Financial income 163 4 - 167
Financial expenses (404) (1) - (405)
Net financial income (expense) 12.2 (241) 3 - (238)
Income (loss) before tax of fully consolidated companies
2,832 17 - 2,849
Current taxes (552) (13) - (565)
Deferred taxes (139) 3 - (136)
Income taxes 14 (691) (10) - (701)
Share in net earnings of companies at equity 11.3 (9) 226 - 217
Other expenses related to the non-transferred financing of operations to be continued in partnership
- - - -
Consolidated profit (loss) from continuing operations
2,132 233 - 2,365
Attributable to equity holders of the parent 1,709 227 - 1,936
Operations held for sale or to be continued in partnershipProfit (loss) from operations held for sale or to be continued in partnership (7) - - (7)
Consolidated profit (loss) for the period 2,125 233 - 2,358Attributable to equity holders of the parent 1,702 227 - 1,929Attributable to minority interests 423 6 - 429
(in euros)
2.18
Basic earnings per €1 par value share - attributable to equity holders of the parent (Note 15.2) 2.18
2.06
Diluted earnings per €1 par value share - attributable to equity holders of the parent (Note 15.2) 2.05
2017
Basic earnings per €1 par value share of continuing operations - attributable to equity holders of the parent (Note 15.2)
Diluted earnings per €1 par value share of continuing operations - attributable to equity holders of the parent (Note 15.2)
Groupe PSA 2017 Annual Results - 13
(in million euros) Notes
Manufacturing and sales
companiesFinance
companies Eliminations TotalContinuing operations
Revenue 5.1 53,884 161 (15) 54,030
Cost of goods and services sold (43,599) (125) 15 (43,709)
Selling, general and administrative expenses (5,136) (35) - (5,171)
Research and development expenses 5.3 (1,915) - - (1,915)
Recurring operating income (loss) 3,234 1 - 3,235
Non-recurring operating income 5.4 - 8.3 117 - - 117
Non-recurring operating expenses 5.4 - 8.3 (741) - - (741)
Operating income (loss) 2,610 1 - 2,611
Financial income 298 4 - 302
Financial expenses (570) - - (570)
Net financial income (expense) 12.2 (272) 4 - (268)
Income (loss) before tax of fully consolidated companies 2,338 5 - 2,343
Current taxes (588) (8) - (596)
Deferred taxes 90 (11) - 79
Income taxes 14 (498) (19) - (517)
Share in net earnings of companies at equity 11.3 (67) 195 - 128
Other expenses related to the non-transferred financing of operations to be continued in partnership
- (10) - (10)
Consolidated profit (loss) from continuing operations
1,773 171 - 1,944
Attributable to equity holders of the parent 1,358 167 - 1,525
Operations held for sale or to be continued in partnershipProfit (loss) from operations held for sale or to be continued in partnership 174 31 - 205
Consolidated profit (loss) for the period 1,947 202 - 2,149Attributable to equity holders of the parent 1,532 198 - 1,730Attributable to minority interests 415 4 - 419
(in euros)
1.90
Basic earnings per €1 par value share - attributable to equity holders of the parent (Note 15.2) 2.16
1.70
Diluted earnings per €1 par value share - attributable to equity holders of the parent (Note 15.2) 1.93
2016
Basic earnings per €1 par value share of continuing operations - attributable to equity holders of the parent (Note 15.2)
Diluted earnings per €1 par value share of continuing operations - attributable to equity holders of the parent (Note 15.2)
14 - Groupe PSA 2017 Annual Results
CONSOLIDATED COMPREHENSIVE INCOME
Items recognised in comprehensive income correspond to all changes in equity resulting from transactions with third parties other than shareholders.
(in million euros)Before tax
Income tax benefit
(expense)After tax
Consolidated profit (loss) for the period 3,059 (701) 2,358
Items that may be recycled through profit or loss
Fair value adjustments to cash flow hedges 35 (8) 27
- of which, reclassified to the income statement (4) 4 -
- of which, recognised in equity during the period 39 (12) 27
6 (1) 5
- of which, reclassified to the income statement - - -
- of which, recognised in equity during the period 6 (1) 5
(424) - (424)
(383) (9) (392)
Items that may not be recycled through profit or loss
Actuarial gains and losses on pension obligations (104) 26 (78)
(487) 17 (470)
- of which, companies at equity 114 - 114
Consolidated comprehensive income 2,572 (684) 1,888
- of which, attributable to equity holders of the parent 1,574- of which, attributable to minority interests 314
2017
Gains and losses from remeasurement at fair value of available-for-sale financial assets
Exchange differences on translating foreign operations
Total other items of comprehensive income that may be recycled through profit or loss
Total other items of comprehensive income
Groupe PSA 2017 Annual Results - 15
(in million euros)Before tax
Income tax benefit
(expense)After tax
Consolidated profit (loss) for the period 2,666 (517) 2,149
Items that may be recycled through profit or loss
Fair value adjustments to cash flow hedges 53 (19) 34
- of which, reclassified to the income statement 63 (10) 53
- of which, recognised in equity during the period (10) (9) (19)
11 (2) 9
- of which, reclassified to the income statement - - -
- of which, recognised in equity during the period 11 (2) 9
Exchange differences on translating foreign operations (52) - (52)
12 (21) (9)
Items that may not be recycled through profit or loss
Actuarial gains and losses on pension obligations 37 (1) 36
49 (22) 27
- of which, companies at equity (78) - (78)
Consolidated comprehensive income 2,715 (539) 2,176
- of which, attributable to equity holders of the parent 1,762- of which, attributable to minority interests 414
2016
Gains and losses from remeasurement at fair value of available-for-sale financial assets
Total other items of comprehensive income that may be recycled through profit or loss
Total other items of comprehensive income
16 - Groupe PSA 2017 Annual Results
CONSOLIDATED BALANCE SHEETS ASSETS
EQUITY AND LIABILITIES
(in million euros) Notes
Manufacturing and sales
companiesFinance
companies Eliminations TotalContinuing operationsGoodwill 8.1 3,320 1 - 3,321Intangible assets 8.1 7,862 54 - 7,916Property, plant and equipment 8.2 13,275 3 - 13,278Investments in companies at equity 11 1,356 2,116 - 3,472Other non-current financial assets 12.5.A 487 23 - 510Other non-current assets 9.1 1,602 103 - 1,705Deferred tax assets 14 791 13 - 804Total non-current assets 28,693 2,313 - 31,006Operating assetsLoans and receivables - finance companies 13.2.A - 331 - 331Short-term investments - finance companies - 114 - 114Inventories 6.1 7,321 - - 7,321Trade receivables - manufacturing and sales companies 6.2 2,367 - (34) 2,333Current taxes 14 338 15 - 353Other receivables 6.3.A 2,636 85 (2) 2,719
12,662 545 (36) 13,171Current financial assets 12.5.A 1,269 - - 1,269Financial investments 12.5.B 165 - - 165Cash and cash equivalents 12.5.C 11,582 320 (8) 11,894Total current assets 25,678 865 (44) 26,499
Total assets 54,371 3,178 (44) 57,505
31 December 2017
(in million euros) Notes
Manufacturing and sales
companiesFinance
companies Eliminations TotalEquity 15
Share capital 905Treasury stock (270)Retained earnings and other accumulated equity, excluding minority interests
13,914
Minority interests 2,171Total equity 16,720Continuing operationsNon-current financial liabilities 12.6 4,778 - - 4,778Other non-current liabilities 9.2 4,280 - - 4,280Non-current provisions 10 1,596 - - 1,596Deferred tax liabilities 14 890 7 - 897Total non-current liabilities 11,544 7 - 11,551Operating liabilities Financing liabilities - finance companies 13.3 - 415 (8) 407Current provisions 10 4,658 119 - 4,777Trade payables 13,362 - - 13,362Current taxes 14 225 9 - 234Other payables 6.3.B 7,878 81 (36) 7,923
26,123 624 (44) 26,703Current financial liabilities 12.6 2,531 - - 2,531Total current liabilities 28,654 624 (44) 29,234Total liabilities of continuing operations (1) 40,198 631 (44) 40,785
Total transferred liabilities of operations held for sale or to be continued in partnership - - - -Total equity and liabilities 57,505(1) excluding equity
31 December 2017
Groupe PSA 2017 Annual Results - 17
(in million euros) Notes
Manufacturing and sales
companiesFinance
companies Eliminations TotalContinuing operationsGoodwill 8.1 1,513 1 - 1,514Intangible assets 8.1 5,393 61 - 5,454Property, plant and equipment 8.2 11,291 2 - 11,293Investments in companies at equity 11 1,487 1,527 - 3,014Other non-current financial assets 12.5.A 685 37 - 722Other non-current assets 9.1 1,368 7 - 1,375Deferred tax assets 14 574 19 - 593Total non-current assets 22,311 1,654 - 23,965Operating assetsLoans and receivables - finance companies 13.2.A - 346 - 346Short-term investments - finance companies - 103 - 103Inventories 6.1 4,347 - - 4,347Trade receivables - manufacturing and sales companies 6.2 1,560 - (19) 1,541Current taxes 14 148 16 - 164Other receivables 6.3.A 1,763 92 (4) 1,851
7,818 557 (23) 8,352Current financial assets 12.5.A 629 - (1) 628Financial investments 12.5.B 110 - - 110Cash and cash equivalents 12.5.C 11,576 530 (8) 12,098Total current assets 20,133 1,087 (32) 21,188
Total assets 42,444 2,741 (32) 45,153
31 December 2016
(in million euros) Notes
Manufacturing and sales
companiesFinance
companies Eliminations TotalEquity 15Share capital 860Treasury stock (238)Retained earnings and other accumulated equity, excluding minority interests
12,035
Minority interests 1,961Total equity 14,618Continuing operationsNon-current financial liabilities 12.6 4,526 - - 4,526Other non-current liabilities 9.2 3,288 - - 3,288Non-current provisions 10 1,429 - - 1,429Deferred tax liabilities 14 880 15 - 895Total non-current liabilities 10,123 15 - 10,138Operating liabilities Financing liabilities - finance companies 13.3 - 430 (9) 421Current provisions 10 3,249 125 - 3,374Trade payables 9,352 - - 9,352Current taxes 14 169 3 - 172Other payables 6.3.B 5,366 74 (23) 5,417
18,136 632 (32) 18,736Current financial liabilities 12.6 1,661 - - 1,661Total current liabilities 19,797 632 (32) 20,397Total liabilities of continuing operations (1) 29,920 647 (32) 30,535
Total transferred liabilities of operations held for sale or to be continued in partnership - - - -Total equity and liabilities 45,153(1) excluding equity
31 December 2016
18 - Groupe PSA 2017 Annual Results
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in million euros) Notes
Manufacturing and sales
companiesFinance
companies Eliminations TotalConsolidated profit (loss) from continuing operations 2,132 233 - 2,365Other expenses related to the non-transferred financing of operations to be continued in partnership
- - - -
Adjustments for non-cash items:• Depreciation, amortisation and impairment 16.2 2,667 13 - 2,680• Provisions 225 (5) - 220• Changes in deferred tax 137 (3) - 134• (Gains) losses on disposals and other (134) (5) - (139)Share in net (earnings) losses of companies at equity, net of dividends received
240 (88) - 152
Revaluation adjustments taken to equity and hedges of debt 28 - - 28Change in carrying amount of leased vehicles (90) - - (90)Funds from operations 5,205 145 - 5,350Changes in working capital 6.4.A 8 (82) 1 (73)Net cash from (used in) operating activities of continuing operations (1) 5,213 63 1 5,277
Proceeds from disposals of shares in consolidated companies and of investments in non-consolidated companies 81 4 - 85Capital increase and acquisitions of consolidated companies and equity interests
16.3 (840) (525) 270 (1,095)
Proceeds from disposals of property, plant and equipment and of intangible assets
323 - - 323
Investments in property, plant and equipment (2) 8.2.B (2,351) - - (2,351)Investments in intangible assets (3) 8.1.B (1,753) (16) - (1,769)Change in amounts payable on fixed assets (239) - - (239)Other 66 2 - 68Net cash from (used in) investing activities of continuing operations (4,713) (535) 270 (4,978)
Dividends paid: • To Peugeot S.A. shareholders (431) - - (431) • Intragroup - - - - • Net amounts received from (paid to) operations to be continued in partnership
- - - -
• To minority shareholders of subsidiaries (129) (6) - (135)Proceeds from issuance of shares 305 270 (270) 305(Purchases) sales of treasury stock (137) - - (137)Changes in other financial assets and liabilities 12.3.B 43 - (1) 42Other 2 - - 2Net cash from (used in) financing activities of continuing operations (347) 264 (271) (354)
Net cash related to the non-transferred debt of finance companies to be continued in partnership (4) - - - -Net cash from the transferred assets and liabilities ofoperations held for sale or to be continued in partnership (4)
(7) - - (7)
Effect of changes in exchange rates (119) (2) - (121)Increase (decrease) in cash from continuing operations and held for sale or to be continued in partnership 27 (210) - (183)
Net cash and cash equivalents at beginning of period 11,464 530 (8) 11,986
Net cash and cash equivalents at end of period 16.1 11,491 320 (8) 11,803(1) Excluding flows related to the non-transferred debt of finance companies to be continued in partnership.
(4) Details of cash flows from operations to be continued in partnership are disclosed in Note 16.5.
2017
(2) Of which for the manufacturing and sales activities, €743 million for the Automotive Equipment segment and €1,462 million for thePeugeot Citroën DS Automotive segment.(3) Of which for the manufacturing and sales activities, €134 million for the Peugeot Citroën DS Automotive segment, excluding researchand development.
Groupe PSA 2017 Annual Results - 19
(in million euros) Notes
Manufacturing and sales
companiesFinance
companies Eliminations TotalConsolidated profit (loss) from continuing operations 1,773 171 - 1,944Other expenses related to the non-transferred financing of operations to be continued in partnership
- 11 - 11
Adjustments for non-cash items:• Depreciation, amortisation and impairment 16.2 2,477 20 - 2,497• Provisions (31) (28) - (59)• Changes in deferred tax (93) 5 - (88)• (Gains) losses on disposals and other (139) (7) - (146)Share in net (earnings) losses of companies at equity, net of dividends received
355 (102) - 253
Revaluation adjustments taken to equity and hedges of debt 76 (1) - 75Change in carrying amount of leased vehicles 48 - - 48Funds from operations 4,466 69 - 4,535Changes in working capital 6.4.A 471 1,287 177 1,935Net cash from (used in) operating activities of continuing operations (1) 4,937 1,356 177 6,470
Proceeds from disposals of shares in consolidated companies and of investments in non-consolidated companies 608 202 - 810Capital increase and acquisitions of consolidated companies and equity interests
(349) (71) - (420)
Proceeds from disposals of property, plant and equipment and of intangible assets
242 1 - 243
Investments in property, plant and equipment (2) 8.2.B (2,106) (1) - (2,107)Investments in intangible assets (3) 8.1.B (1,449) (18) - (1,467)Change in amounts payable on fixed assets 237 - - 237Other 144 - 10 154Net cash from (used in) investing activities of continuing operations (2,673) 113 10 (2,550)
Dividends paid: • To Peugeot S.A. shareholders - - - - • Intragroup 434 (434) - - • Net amounts received from (paid to) operations to be continued in partnership
- 120 - 120
• To minority shareholders of subsidiaries (123) (11) - (134)Proceeds from issuance of shares 332 (5) - 327(Purchases) sales of treasury stock - - - -Changes in other financial assets and liabilities 12.3.B (1,548) - (443) (1,991)Other - - (4) (4)Net cash from (used in) financing activities of continuing operations (905) (330) (447) (1,682)
Net cash related to the non-transferred debt of finance companies to be continued in partnership (4) - (2,615) 305 (2,310)Net cash from the transferred assets and liabilities ofoperations held for sale or to be continued in partnership (4)
(255) 1,097 1 843
Effect of changes in exchange rates (93) 16 - (77)Increase (decrease) in cash from continuing operations and held for sale or to be continued in partnership 1,011 (363) 46 694
Net cash and cash equivalents at beginning of period 10,453 893 (54) 11,292
Net cash and cash equivalents at end of period 16.1 11,464 530 (8) 11,986(1) Excluding flows related to the non-transferred debt of finance companies to be continued in partnership.
(4) Details of cash flows from operations to be continued in partnership are disclosed in Note 16.5.
2016
(2) Of which for the manufacturing and sales activities, €666 million for Automotive Equipment Division and €1,440 million for theAutomotive Division.(3) Of which for the manufacturing and sales activities, €78 million for Automotive Equipment Division, excluding research anddevelopment.
20 - Groupe PSA 2017 Annual Results
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in million euros)
At 31 December 2015 808 (238) 10,090 (28) 9 (82) (4) 10,555 1,664 12,219
Income and expenses recognised in equity for the period
- - 1,730 34 9 51 (62) 1,762 414 2,176
Measurement of stock options and performance share grants
- - 8 - - - - 8 10 18
Redemption of convertible bonds - - (4) - - - - (4) (5) (9)
Effect of changes in scope of consolidation and other
- - (4) - - - - (4) 9 5
Issuance of shares 52 - 278 - - - - 330 15 345
Treasury stock - - 10 - - - - 10 (13) (3)
Dividends paid by other Group companies
- - - - - - - - (133) (133)
At 31 December 2016 860 (238) 12,108 6 18 (31) (66) 12,657 1,961 14,618
Income and expenses recognised in equity for the period
- - 1,929 22 5 (80) (302) 1,574 314 1,888
Measurement of stock options and performance share grants
- - 29 - - - - 29 11 40
Repurchase of treasury stock - (116) (18) - - - - (134) (22) (156)
Effect of changes in scope of consolidation and other
- - (6) - - - - (6) 27 21
Issuance of shares 45 - 243 - - - - 288 17 305
'Equity warrants Peugeot SA equity warrants delivered to General Motors
- - 541 - - - - 541 - 541
Treasury shares delivered to employeess
- 84 (53) - - - - 31 - 31
Dividends paid by Peugeot S.A. - - (431) - - - - (431) - (431)
Dividends paid by other Group companies
- - - - - - - - (137) (137)
At 31 December 2017 905 (270) 14,342 28 23 (111) (368) 14,549 2,171 16,720
Effect of changes in exchange
rates
Equity -Attributable
to equity holders of the parent
Treasury stock
Equity -Minority
interestsShare
capital
Retained earnings excluding
revaluationsTotal
equity
Revaluations - excluding minority interests
Cash flow hedges
Available-for-sale
financial assets
Actuarial gains and losses on
pension obligations
Groupe PSA 2017 Annual Results - 21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 2017
Note 1 - Accounting Policies and Performance Indicators....................................................... 22
Note 2 - Acquisition of the Opel Vauxhall Business ................................................................. 24
Note 3 - Scope of Consolidation ............................................................................................... 26
Note 4 - Segment Information ................................................................................................. 29
Note 5 - Operating Income ..................................................................................................... .. 31
Note 6 - Requirements in Working Capital of Manufacturing and Sales Companies .............. 35
Note 7 - Employee Benefits Expense ....................................................................................... 38
Note 8 - Goodwill and Intangible Assets – Property, Plant and Equipment ............................ 44
Note 9 - Other Non-Current Assets and Other Non-Current Liabilities ................................... 50
Note 10 - Current and Non-Current Provisions ........................................................................ 51
Note 11 - Investments in Equity-Accounted Companies ......................................................... 52
Note 12 - Financing and Financial Instruments – Manufacturing and Sales Companies ......... 58
Note 13 - Financing and Financial Instruments – Finance Companies .................................... 76
Note 14 - Income Taxes ........................................................................................................ .... 82
Note 15 - Equity and Earnings per Share ................................................................................. 85
Note 16 - Notes to the Consolidated Statements of Cash Flows ............................................. 88
Note 17 - Off-Balance Sheet Commitments and Contingent Liabilities ................................... 90
Note 18 - Related Party Transactions ....................................................................................... 91
Note 19 - Subsequent Events ................................................................................................... 92
Note 20 - Fees Paid to the Auditors ......................................................................................... 92
Note 21 - Consolidated Companies at 31 December 2017 ...................................................... 93
22 - Groupe PSA 2017 Annual Results
Preliminary note The consolidated financial statements for 2017 including explanatory notes were approved for issue by the Managing Board of Peugeot S.A. on 19 February 2018, with Note 19 taking into account events that occurred in the period up to the Supervisory Board meeting on 28 February 2018.
NOTE 1 - ACCOUNTING POLICIES AND PERFORMANCE INDICATORS
1.1. ACCOUNTING STANDARDS APPLIED
The PSA Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union on 31 December 20176. As the IFRS standards not adopted by the European Union do not have a material impact on the Group's consolidated financial statements, they are thus also compliant with the IFRS framework.
International Financial Reporting Standards include IFRSs and IASs (International Accounting Standards) and the related interpretations as prepared by the Standing Interpretations Committee (SIC) and the International Financial Reporting Interpretations Committee (IFRIC).
The main amendments applicable to the Group for the first time in 2017 are as follows:
- the amendment to IAS 12 "Recognition of Deferred Tax Assets". This amendment was applied when consolidating OPEL;
- the amendment to IAS 7 "Disclosure Initiative". This amendment requires a link to be shown between cash flows from financing activities in the Statement of Cash Flows and Changes in short-term debt in the balance sheet. This information is disclosed by the Group (see Note 12.3.B).
The new IFRS standards that will be applied in the years to come, for some subject to their adoption by the European Union are the following:
New standards and interpretations First application in the EU for annual periods beginning on or after:
Impacts
IFRIC 22 Foreign Currency Transactions and Advance Consideration 01.01.20187 Without material impact
IFRS 9 Financial Instruments 01/01/2018 See below
IFRS 15 Revenue from Contracts with Customers 01/01/2018 See below
IFRS 16 Leases 01/01/2019 See below
IFRIC 23 Uncertainty over Income Tax Treatments 01/01/2019² Without material impact
IFRS 17 Insurance Contracts 01/01/2021² Without material impact
In respect of IFRS 15, the Group reviewed its contracts. The main areas of impact are expected in the Automotive Equipment Division. In actual fact, from 2018, Faurecia will be classified as agent for monolith sales8, thereby reducing recognised revenue. The impact on Faurecia would be €3,219 million, and €2,947 million at Groupe PSA level.
IFRS 15 bases revenue recognition on the transfer of control, whereas IAS 18 “Revenue” based revenue recognition on the transfer of risks and rewards.
The bulk of automotive business revenue is from the sale of new and used vehicles, and the sale of spare parts. For these activities, the transfer of control takes place at the same time as the transfer of risks and rewards. The Group also provides its customers with services, for consideration or free of charge. They are already recognised over the
6 The International Financial Reporting Standards adopted for use in the European Union can be downloaded from the European Commission's website (http://ec.europa.eu/internal_market/accounting/ias/index_en.htm)7 Not yet adopted by the European Union 8 Precious metals and ceramics used in emission control systems.
Groupe PSA 2017 Annual Results - 23
service period under IAS 18 and will continue to be under IFRS 15 (subject to different performance obligations), except for certain services that are currently not material.
Some vehicles are sold with a buyback commitment. These transactions are already accounted for as leases under IAS 18. The income is staggered over the period from the sale of the new vehicle to the buyback of the used vehicle. The same will apply under IFRS 15.
The Group also confirmed that its Automotive business operates as principal and not as agent.
The warranties provided to end customers are designed to cover defects in the vehicles sold. Provisions are funded for them both under current standards and under IFRS 15.
The Group does not have a significant financial component that would require adjustments between revenue and net financial income (expense).
The possible impact on Opel Vauxhall's operations is being assessed.
With respect to IFRS 9, the impact on the measurement of the receivables of Manufacturing and Sales Companies is not material. Moreover, phase 3 of the new standard broadens hedge accounting to portions of raw materials, more closely aligning the accounts with economic realities.
The impact on the funding of provisions for receivables by Financial Companies is not material.
With respect to IFRS 16, the Group intends to apply the standard on a prospective basis. The Group did an inventory of leases, with the impact still being calculated. The search for an IT system is also underway. 1.2. USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions in order to determine the reported amounts of certain assets, liabilities, income and expense items, as well as certain amounts disclosed in the notes to the financial statements relating to contingent assets and liabilities.
The estimates and assumptions used are those deemed by management to be the most pertinent and accurate in view of the Group’s circumstances and past experience. Estimates and assumptions are reviewed periodically.
Nevertheless, given the uncertainty inherent in any projections, actual results may differ from initial estimates.
For the preparation of the 2017 annual financial statements, special attention was paid to the following items: Fair value of the assets acquired and liabilities assumed in the course of a business combination (see Note 2 on the acquisition of the Opel Vauxhall operations); The recoverable amount of the Peugeot Citroën DS and Opel Vauxhall Automotive Divisions intangible assets and property, plant and equipment (see Note 8.3), and the recoverable amount of investments in companies at equity (see Note 11.3); Provisions (particularly restructuring provisions, pensions, warranty provisions for new cars as well as claims and litigation) (see Note 5.4.B, Note 7.1 and Note 10); Sales incentives (see Note 5.1.A); Residual values of vehicles sold with buyback commitment (see Note 8.2.C and Note 9.2). Deferred tax assets (see Note 14).
1.3. PERFORMANCE INDICATORS In its financial communications, the Group publishes performance indicators that are not directly discernible from the summary consolidated financial statements. The main indicators defined in the notes to the financial statements are as follows:
Recurring operating income (loss) by segment (see Note 4.1 and Note 5); Free Cash Flow and Operating free cash flow (see Note 16.5); Net financial position (see Note 12.3); Financial security (see Note 12.4).
24 - Groupe PSA 2017 Annual Results
NOTE 2 - ACQUISITION OF THE OPEL VAUXHALL BUSINESS
On 6 March 2017, General Motors Co. (GM) and Groupe PSA signed an agreement for the acquisition of a majority interest in the Opel Vauxhall subsidiaries of General Motors and the European operations of GM Financial in partnership with BNP Paribas. These transactions were finalised in the second half of 2017 as follows. 2.1. ACQUISITION OF THE AUTOMOTIVE BUSINESS OF OPEL VAUXHALL On 31 July 2017, Groupe PSA completed the acquisition of Opel's and Vauxhall's automotive subsidiaries from GM. A. Description of the transaction The transaction includes the bulk of Opel/Vauxhall’s automotive business, comprising the Opel and Vauxhall brands, six assembly and five component-manufacturing facilities, one engineering centre (Rüsselsheim in Germany). Opel/Vauxhall will also continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to Groupe PSA platforms over the coming years. The purchase price paid by Groupe PSA, for the automotive business of Opel and Vauxhall was €1,018 million (see details in 2.1.F). B. Opening balance sheet
C. Allocation of the purchase price The fair value measurement of the assets acquired and liabilities assumed was done by an independent expert. (1) Property, plant and equipment The fair value of the property, plant and equipment was €1,577 million. This includes €908 million in leased vehicles (sale with buyback commitment), €201 million in land, €468 million in buildings, plant and equipment. This property, plant and equipment was measured using a combination of three approaches:
market approach: price of a comparable asset in similar circumstances; income approach: present value of future cash flows; cost approach: replacement cost.
(2) Intangible assets: Brands The fair value of the Opel and Vauxhall brands was €1,792 million. They were measured using the royalties method. These brands have indefinite useful lives. (3) Inventories The fair value of inventories was €2,970 million. Inventories were measured at the selling price less selling costs.
(in million euros) 31 July 2017Purchase price 1,018
Intangible assets acquired 1,792Property, plant and equipment acquired 1,577Other non-current assets acquired 517Current assets acquired 4,120Cash acquired 301Provisions assumed (1,390)Financial liabilities assumed (785)Trade payables assumed (3,171)Other liabilities assumed (3,753)Assest acquired and liabilities assumed (792)
Goodwill 1,810
Groupe PSA 2017 Annual Results - 25
(4) Provisions The fair value of provisions was €1,390 million, and included:
€581 million in provisions for contingencies; €494 million in provisions for warranties.
(5) Deferred taxes Deferred tax assets and liabilities were first calculated on the basis of temporary differences between the IFRS carrying amounts following the allocation of the purchase price and the tax bases of the assets acquired and liabilities assumed. In accordance with IAS 12, recognised deferred tax assets were limited to the amount of deferred tax liabilities and taxable profits expected over the life of the 2018 – 2021 medium-term plan. A total of €336 million in net deferred taxes was recognised.
In accordance with IFRS 3, this price and its provisional allocation may be adjusted within twelve months of the acquisition date. D. Goodwill Goodwill totalled €1,810 million. This relates to the synergies expected by Groupe PSA in purchasing, manufacturing and R&D. E. Opel Vauxhall's contribution to revenue and profit (loss) for 2017 The contribution to revenue and profit (loss) since 1 August 2017 is as follows:
Revenue : €6,864 million;
Profit (loss): -€674 million. The Group does not feel in a position to prepare pro-forma information for the relevant 12-months that could be audited in line with IFRS 3 for the following reasons:
PSA acquired a business cut out of General Motors Europe, excluding the historical operations of General Motors which had a material impact on this scope; the results of General Motors Europe were prepared using another accounting basis (US GAAP and General Motors specific policies) with notably internal cost-sharing rules, in particular for R&D, and a transfer pricing policy, that will no longer be employed; Given the seasonality of the automotive industry, Opel's five-month results simply cannot be extrapolated to 12 months.
Against this background, it would not be possible for us to meaningfully adjust the historical data using reasonable means in order to provide the market with useful information.
Moreover, a breakdown of the Opel Vauxhall contribution over five months is detailed in the presentation of our results by operating segment (see Note 4.1.). F. Purchase price The €1,018 million purchase price for the Opel Vauxhall automotive business breaks down as follows:
Cash payment of €477 million (see 2.1.G); Fair value of the Peugeot S.A. equity warrants. The fair value of the equity warrants subscribed by General Motors Co. or its affiliates is estimated at €541 million (see Note 15.1). This value was estimated using the Black & Scholes model, considering that the warrants are equivalent to European style options with a maturity of five years and assuming the level of historical volatility of the PSA stock observed over two years. This fair value also includes the net present value of the five years' worth of dividends that General Motors will receive on the exercise date of the warrants.
G. Cash flow analysis of the price paid upon acquisition The net cash flow of €26 million paid for the acquisition includes the €477 million in cash paid to General Motors Co. (see 2.1.F) minus the €150 million cash advance to GM and €301 million in cash on the opening balance sheets of the acquired companies.
26 - Groupe PS
H. PurchaseThe acquisitifinancial statfinal.
2.2. ACQUIS
PARIBA
A. DescriptioOn 1 NovemFinance, a wof GM FinanFinance bran
Opel Bank S.and Banque enjoy exclusmethod by P
B. AllocationAs of the cloprovisional eacquired befvalue of the
Accordingly, difference to
Under IFRS 3initial consol
The balance financing acpursuant to trading betw
NOTE 3 -
3.1. ACCOU
ConsolidaA.
(1) ConsolidThe generic n
The financialcontrol are fu
Companies infinancial stat
Pursuant to expenses conjointly contronet assets of
The securitiefeasibility resecurities are
All significan
The Group arespective owthe subsidiar
SA 2017 Annua
e price adjuston agreemen
tements prepa
SITION OF THAS
on of the tramber 2017, B
wholly-owned ncial's Europends.
.A., which is tPSA Finance. ive control in
PSA Group.
n of the purcosing date anestimate of thfore allocatioassets and lia
at 31 Decemo various asset
3 (Revised), thidation differe
sheet as of 3tivities includIFRS 3 (Revis
ween the trans
SCOPE OF
UNTING POLIC
ation policies
dation methoname PSA Gro
l statements oully consolida
n which Peugetements using
IFRS 11, jointntrolled by tholled entity. Jf the arrangem
es of companeason would e recognised a
t intragroup t
attributes thewnership intery, minority in
al Results
ment nt includes a mared under US
HE OPEL VAU
nsaction Banque PSA F
subsidiary of an operation
he parent comPSA Group ha light of the d
chase price nd for the acqe transaction n of the purcbilities was on
mber 2017, tt and liability
he Group has 1ence. This pro
31.12.2017 of des this provsed). The €16saction closing
F CONSOLID
CIES
s
ods oup refers to t
of Peugeot S.Ated.
eot S.A. directg the equity m
t operations me Group. A jooint arrangem
ment will be a
nies that meenot in aggregas equity inve
transactions a
e profit or loserests. As a renterests may b
mechanism foS GAAP as of
UXHALL AUTO
Finance, a whBNP Paribas, s, encompass
mpany of theas significant details provid
quisition of itpursuant to t
chase price. Angoing.
he Group didlines of the gr
12 months in ovisional alloc
the acquiredvisional alloca6 million profg date and the
DATION
the Group of c
A. and compa
tly or indirectmethod.
must be recogint operation
ments that areccounted for
t the criteria gate have a
estments in ac
nd internal m
ss of a subsidesult, if there be negative.
r determining31 July 2017.
OMOTIVE FIN
holly-owned sfinalised the
sing the exist
acquired groinfluence beced in Note 13
ts 50% interethe contractuaAt 31 Decemb
d a provisionroup of entitie
which to finacation may thu
d scope preseation of idenfit in 2017 pe balance she
companies of
nies in which
tly exercises a
gnised based may be conde qualified as using the equ
for consolidamaterial effe
ccordance wit
margins are eli
diary betweeis no agreeme
g the final purThis process
NANCE OPERA
subsidiary of joint acquisiting Opel Ban
oup, is owned cause it only h3.4 Opel Bank
st, BPF paid al terms. This
ber 2017 work
nal allocation es accounted
lise the fair vaus be revised
nted in Note tified assets resented in Net date.
f which Peuge
Peugeot S.A.
significant inf
on the propoducted under
joint ventureuity method.
ation and thact on the coh the general
minated in co
n the parent ent committin
rchase price bis ongoing an
ATIONS IN PA
PSA Group aion, announcek, Opel Finan
50:50 by BNPhas 50% of thek S.A. is accou
€489 million. price is less th
k on identifyi
of this estimfor by the equ
alue measuremup to end-Oct
11.4.D – BNPand liabilitie
Note 11.4.D r
ot S.A. is the p
directly or ind
fluence are in
ortion of assea contractual s because the
t aren't consonsolidated finprinciples set
onsolidation.
and minorityng the parent
based on the Od the purchas
ARTNERSHIP
and BNP Pared on 6 Marc
ncial Services
P Paribas Perse voting rightunted for und
This price rehan the shareng and meas
mated initial uity method.
ment and allotober 2018.
P Paribas agrees measured represents tw
parent.
directly exerc
ncluded in the
ets, liabilities, arrangement
e parties have
olidated for mnancial statemt out in Note 1
y interests bat to absorbing
Opel/Vauxhallse price is not
WITH BNP
ibas Personalch 2017, of alland Vauxhall
sonal Financets and doesn'tder the equity
epresents thee of net assetsuring the fair
consolidation
ocation of this
eement in theat fair value
wo months of
cises exclusive
consolidated
revenue andt or through ae rights to the
materiality orments. These12.8.
ased on theirg the losses of
l t
l l l
e t y
e s r
n
s
e e f
e
d
d a e
r e
r f
(2) ChangesBusiness comwith IFRS 3 (R
The identifiavalue, providpost-acquisitAcquisition-r
In the event adjusted agaGroup.
In accordancmore freque (3) GoodwilGoodwill attdirectly attriassets and lialevel of the e (4) Other chAny change operating incremaining in
Changes in otransactions costs, being
ConversioB.
(1) Translat
(a) Standard
The Group’s statements. in which theat the year–exchange rasubsidiaries subsidiaries i (b) Specific m
Certain subsaccordingly rat the historlosses are reThe Group dForeign Exch
s in scope of cmbinations oc(Revised) – Bu
ble assets acqded that they tion cash flowrelated costs a
of a price adjainst goodwil
ce with IAS 36ntly if events
ll on equity-atributable to ibutable acquabilities acquiequity-accoun
hanges in scoin ownership
come (loss) (iterest.
ownership int(transactionsreallocated be
on methods
tion of the fin
d method
functional cuThe functiona majority of t
–end exchangte for each mare recorded
is measured in
method
sidiaries outsirecognised as ical exchangecognised dire
does not operhange Rates.
consolidationccurring after usiness Combi
quired and liameet the acc
ws due to syneare recognised
ustment in thl. Any subseq
6 – Impairmeor changes in
accounted comacquisitions o
uisition costs, ired. It is inclu
nted companie
ope of consolip interests reif material) as
terests that ds with ownersetween the pa
nancial statem
urrency is the al currency oftheir transactige rate and tmonth. Gainsd in equity n their functio
ide the euro their function rate and monctly in profit oate in hyperin
n resulting in1 January 201
inations. bilities and coounting criter
ergies in additd as expenses
he 12 months quent adjustm
ent of Assets, n circumstance
mpanies of equity-accoover the Gro
uded in “Inveses concerned.
idation esulting in thes a disposal o
o not result i in their capaarent and the
ments of fore
euro (€), whmost foreign
ions are denotheir income and losses runder "Trans
onal currency.
zone carry onal currency. netary items aor loss. nflationary co
n exclusive co10 are accoun
ontingent liabria of IFRS 3 (rtion to the asss in the period
following thement is recog
goodwill is nes indicate th
ounted compoup’s equity stments in co.
e loss of conof the whole e
in a loss of ccity as owner
e minority inte
eign subsidia
ich is also then subsidiaries ominated. Th statements resulting fromslation reserv.
out most of Non-monetarat the year–e
ountries withi
ontrol nted for using
bilities assumerevised). The rsets and liabild in which the
e acquisition dnised as debt
not amortisedat it might be
panies is the in the acquismpanies at eq
trol of an enentity immedi
ontrol of the rs) and therefoerests.
aries
e presentatiois their local ce balance sheare translate
m the translave". Goodwil
their transacry items in thend exchange
n the meanin
Groupe
g the acquisiti
ed are measuresidual goodities recogniscosts are incu
ate, the provit or credit ag
but tested foimpaired (see
excess of theition-date faiquity” and tes
ntity is recogniately followe
subsidiary arore lead to eq
n currency in currency, correets of these ed on a montion of financl arising on
ctions in euroese subsidiarierate. The resu
g of IAS 21 –
PSA 2017 Ann
ion method, i
red at acquisidwill representsed on initial curred.
isional initial gainst profit o
or impairmene Note 8.3).
e cost of shar value of thsted for impa
nised under ned by an inves
re accounted quity, includin
the consolidaresponding tosubsidiaries a
nthly basis atcial statementhe acquisit
os or US dolles' accounts aulting translat
– The Effects o
ual Results - 27
n accordance
ition-date fairts anticipatedconsolidation.
assessment isor loss of the
nt annually or
res, includinge identifiableirment at the
non-recurringstment in the
for as equityng transaction
ated financialo the currencyare translated
the averagents of foreignion of these
lars, which isare translatedtion gains and
of Changes in
7
e
r d .
s e
r
g e e
g e
y n
l y d e n e
s d d
n
28 - Groupe PSA 2017 Annual Results
(2) Translation of transactions in foreign currencies In compliance with IAS 21, transactions in foreign currencies are translated into the subsidiary's functional currency at the exchange rate on the transaction date.
At each balance sheet date, monetary items are translated at the closing rate and the resulting translation adjustment is recognised in profit or loss, as follows:
in recurring operating income, for commercial transactions carried out by all Group companies and for financing transactions carried out by the Banque PSA Finance group; in interest income or finance costs for financial transactions carried out by the manufacturing and sales companies.
3.2. COMPOSITION OF THE GROUP The Group consists of the Peugeot S.A. holding company, listed on Euronext, and its affiliates consolidated in accordance with Note 3.1.
The Group's operations are organised around five main segments (see Note 4):
The Peugeot Citroën DS Automotive segment, covering the design, manufacture and sale of passenger cars and light commercial vehicles under the Peugeot, Citroën and DS brands. It mainly comprises wholly owned subsidiaries, as well as jointly controlled subsidiaries for the production of vehicles or subassemblies in Europe and for industrial and commercial activities in China. These jointly controlled subsidiaries are consolidated in accordance with IFRS 11 (see Note 3.1);
The Opel Vauxhall Automotive segment, covering the design, manufacture and sale of passenger cars and light commercial vehicles under the Opel and Vauxhall brands. It mainly comprises wholly owned subsidiaries;
The Automotive Equipment segment, corresponding to the Faurecia group comprising the Interior Systems, the Automotive Seating and the Clean Mobility businesses. Faurecia is listed on Euronext. Peugeot S.A. holds 46.3% of Faurecia’s capital and 63.09% of its voting rights which give exclusive control by the Group. The exercise of all the dilutive instruments issued by Faurecia would have no impact on the Group’s exclusive control;
The Finance segment, corresponding to the Banque PSA Finance group, which provides retail financing to customers of the Peugeot, Citroën and DS brands and wholesale financing to the brands' dealer networks. Banque PSA Finance is classified as a financial institution. This mainly stems from the partnership between Banque PSA Finance and Santander Consumer Finance for the Peugeot, Citroën and DS brands as well as from the partnership with BNP Paribas for the Opel and Vauxhall brands.
The Group’s other activities are housed under “Other businesses”, which notably includes the Peugeot S.A. holding company, and minority stakes in the Gefco group as well as in Peugeot Scooters (Peugeot Motocycles) both consolidated by the equity method.
31 December 2017 31 December 2016Fully consolidated companiesManufacturing and sales companies (1) 317 278Finance companies 18 18
335 296Joint operationsManufacturing and sales companies 3 3Companies at equityManufacturing and sales companies 55 50Finance companies (2) 43 29
98 79Consolidated companies 436 378
(1) 39 new companies fully consolidated, of which 34 for the Automotive Division Opel Vauxhall.(2) 14 new companies accounted at equity, of which 12 for the Finance Division Opel Vauxhall.
Groupe PSA 2017 Annual Results - 29
NOTE 4 - SEGMENT INFORMATION
In accordance with IFRS 8 – Operating Segments, segment information is presented in line with the indicators used internally by management to measure the performance of the Group's different business segments. The Group's main performance indicator on the segments is Recurring Operating Income.
The definition of operating segments is provided in Note 3.2.
For internal reporting, the full data of the Finance segment is given at 100%. It represents the consolidation of all the entities of the Finance divisions by global integration or at equity, before the impact of IFRS 5. The “Reconciliation” column provides a link with the presentation given in the consolidated income statement. 4.1. BUSINESS SEGMENTS
The columns for each segment shown in the table below are on a stand-alone basis. All intersegment balance sheet items and transactions are eliminated and, for the purposes of reconciliation with the Group's financial statements, are shown under the heading "Eliminations and reconciliations" together with unallocated amounts. Faurecia and Banque PSA Finance publish consolidated financial statements and segment information for these two businesses is therefore presented down to the level of net profit. For the other segments, as cash positions and taxes are managed jointly in some countries, only operating income and share in net earnings of equity-accounted companies are presented by segment.
All intersegment commercial transactions are carried out on an arm's length basis on the same terms and conditions as those applicable to the supply of goods and services to third parties.
The 100% column under Finance companies represents the data on full consolidation of the companies in partnership with Santander and BNP Paribas. These columns coupled with the "Reconciliation" column make it possible to piece together the consolidated contribution of finance companies, with the share in net earnings of companies at equity in partnership with Santander and BNP Paribas.
2017
(in million euros)Peugeot
Citroën DSOpel
Vauxhall 100% Réconciliation
Revenue• third parties 40,281 6,864 17,947 2 1,347 (1,231) - 65,210• intragroup, intersegment 454 374 2,235 88 129 - (3,280) -Total (2) 40,735 7,238 20,182 90 1,476 (1,231) (3,280) 65,210Recurring operating income (loss) 2,965 (179) 1,170 23 632 (618) (2) 3,991Non-recurring operating income 176 2 4 20 3 - - 205Restructuring costs (426) (440) (86) 1 (1) 1 - (951)Impairment of CGUs, provisions for onerous contracts and other (96) - - - - - - (96)Other non-recurring operating income and (expenses), net (11) (38) (13) 3 (14) 11 - (62)Operating income (loss) 2,608 (655) 1,075 47 620 (606) (2) 3,087Interest income 12 - - 30 42Finance costs (114) - - (94) (208)Other financial income - 5 (1) 121 125Other financial expenses (31) (1) - (165) (197)Net financial income (expense) - - (133) - 4 (1) (108) (238)Income taxes expense (262) (204) 194 (429) (701)Share in net earnings of companies at equity (55) - 35 11 17 209 - 217Other expenses related to the non-transferred financing of operations to be continued in partnership - - - - - - - -Consolidated profit (loss) from continuing operations 715 437 (204) 2,365Profit (loss) from operations to be sold or continued in partnership - - (7) - - - - (7)Consolidated profit (loss) for the period 708 437 (204) 2,358Capital expenditure(3) (excluding sales with a buyback commitment) 2,717 169 1,217 - 30 (13) 4,120Depreciation provision (1,877) -25 (722) - (19) 7 (2,636)
Eliminations and
unallocated (1)
Finance companies
(2) of which a turnover of €39,076 million for manufacturer's activity of the Automotive division Peugeot Citroën DS.(3) The capital expenditure of the Peugeot Citroën DS and Opel Vauxhall segments relates to capital expenditure incurred for the production of Peugeot CitroënDS and Opel Vauxhall vehicles.
(1) The "Eliminations and unallocated" column includes eliminations of intersector sales between the Finance companies and the other sectors (€106 million).
AutomotiveAutomotive Equipment
Other Businesses Total
30 - Groupe PSA 2017 Annual Results
In 2017, on a fully consolidated basis, Banque PSA Finance (Finance Companies segment) generated net banking revenue of €1,145 million. Net provision expense (cost of risk) amounted to €64 million.
In 2017, after application of IFRS 5, Banque PSA Finance (Finance Companies segment) reported net banking revenue of €46 million. Net provision expense (cost of risk) amounted to €5 million.
In 2016, on a fully consolidated basis, Banque PSA Finance (Finance Companies segment) generated net banking revenue of €1,026 million. Net provision expense (cost of risk) amounted to €52 million.
In 2016, after application of IFRS 5, Banque PSA Finance (Finance Companies segment) reported net banking revenue of €161 million. Net provision expense (cost of risk) amounted to €5 million.
4.2. GEOGRAPHICAL SEGMENTS The indicators provided by region are revenue broken down by customer marketing area and property, plant and equipment broken down by geographic location of the consolidated companies.
2016
(in million euros) Automotive 100% Réconciliation
Revenue• third parties 37,065 16,819 - 1,263 (1,117) - 54,030• intragroup, intersegment 1 1,891 112 142 - (2,146) -Total (2) 37,066 18,710 112 1,405 (1,117) (2,146) 54,030Recurring operating income (loss) 2,225 970 39 571 (570) - 3,235Non-recurring operating income 109 7 1 - - - 117Restructuring costs (456) (90) (1) - - - (547)
(143) - - - - - (143)
- (23) (28) (2) 2 - (51)Operating income (loss) 1,735 864 11 569 (568) - 2,611Interest income 10 - - 85 95Finance costs (147) - - (188) (335)Other financial income 12 (9) 13 191 207Other financial expenses (38) (1) 1 (197) (235)Net financial income (expense) - (163) - (10) 14 (109) (268)Income taxes expense (189) (206) 187 (309) (517)Share in net earnings of companies at equity (93) 20 6 15 180 - 128
- - - - (10) - (10)
532 368 (197) 1,944
- 174 - - 31 - 205Consolidated profit (loss) for the period 706 368 (166) 2,149
2,481 1,074 - 39 (20) 3,574Depreciation provision (1,895) (661) - (24) 4 (2,576)
Eliminations and
unallocated (1)
Capital expenditure (excluding sales with a buyback commitment)
(1) The "Eliminations and unallocated" column includes eliminations of intersector sales between the Finance companies and the other sectors (€127 million).(2) of which a turnover of €35,948 million for manufacturer's activity of the Automotive division.
Impairment of CGUs, provisions for onerous contracts and otherOther non-recurring operating income and (expenses), net
Other expenses related to the non-transferred financing of operations to be continued in partnershipConsolidated profit (loss) from continuing operations
Profit (loss) from operations to be continued in partnership
Automotive Equipment
Other Businesses
Finance companies
Total
(in million euros) Total
2017
Revenue 47,762 481 3,439 1,287 4,719 2,985 4,537 65,210Property, plant and equipment 11,538 143 478 123 582 73 341 13,278
2016
Revenue 38,959 339 3,191 916 3,781 2,323 4,521 54,030Property, plant and equipment 9,686 160 407 118 472 62 388 11,293
(1) of which France :
(in million euros) 2017 2016Revenue 14,954 12,992Property, plant and equipment 5,780 5,614
North America Europe (1) Eurasia
China & South-Asia
India Pacific
Latin America
Middle East & Africa
NOTE 5 -
Operating inthe Group's s
The Group ucorresponds items of incorecurring per
In practice, described in
restructuimpairmperformcontractgains on
Selling, gSelling, geneand warranty 5.1. REVEN
AccountinA.
(1) Manufac
(a) Peugeot
Revenue inclIn accordancare transferrthe delivery
Sales at costmechanical s
Sales of newoperating lea
whatevefor both
The differenover the durand equipmebasis of the vehicle markon the used v Sales incenti
The cost of cthree monthsales are reco
The Group’s The correspo
9 Consolidated continued in
OPERATIN
come correspshare in the n
uses recurringto operating
ome and experformance.
other non-rethe notes to turing and ear
ment losses (anmed on the c
ts; n disposals of
general and aderal and adminy costs.
NUE
ng policies
cturing and s
Citroën DS an
ludes mainly rce with IAS 18red. This genedate, in the ca
t of items pursub-assemblie
w vehicles witases when it iser the duratio direct sales a
ce between tration of the bent. Depreciavehicle’s cos
ket. Any additvehicle marke
ives
current and fuhs, determineognised. In ca
incentive proonding cost is
profit (loss) fromn partnership”
NG INCOM
ponds to profinet earnings o
g operating in income befo
ense that are
ecurring operathe financial sly-terminationnd subsequencash-generatin
real estate an
dministrative nistrative exp
sales compan
nd Opel Vaux
revenues from8 – Revenue, nerally correspoase of direct s
rchased on bees that are int
th a buyback s probable than of the buyb
and sales finan
the sale price buyback commation expensest less its estional gain ma
et. If the net d
uture sales incd country by
ases where the
ogrammes increcognised at
m continuing ope
E
t (loss)9 beforf equity-accou
come as its more other non
unusual in na
ating income statements whn plan costs;nt adjustmentng units (CGU
nd impairment
expenses enses corresp
nies
hall Automot
m the sale andnew vehicle saonds to the dasales.
ehalf of otheended to be b
commitment at the vehicleack commitmnced by Banqu
and the buybmitment. The e is calculatedimated residu
ade on the findifference is a
centive progrcountry, and e cost of the p
clude retail fint the time of t
erations, excludin
re net financiaunted compan
main business-recurring inc
ature or infre
and expensehere appropri
ts) recognisedUs) to which
t of real estat
pond to gener
tive segments
d leasing of veales are recogate when the
r parties and bought back a
are not reco will be bough
ment; ue PSA Financ
back price is vehicle is init
d over the terual value, rep
nal sale of theloss, an allow
rammes is acccharged agai
programme va
nancing grantthe sale.
ng “other expen
al income or enies.
s performancecome and expquent in occu
es consist maiate (see Note
on (i) non-cuh they belong
e held for sale
ral administra
s
ehicles and thenised on the d
e vehicles are
sales to subct cost are not
ognised at theht back. This p
ce and its subs
recognised astially recognisrm of the leapresenting th
vehicle is recwance is booke
crued on the binst profit foraries accordin
ted at a signif
ses related to th
Groupe
expense, curre
e indicator. Repenses, defineurrence and n
ainly of the fe 5.4):
urrent assets fg, and (ii) th
e.
ative expenses
e sale of othedate the risks made availab
contractors ot included in re
e time of deliprinciple appli
sidiaries.
s rental revened at productse by the stre anticipated
cognised in thed when the b
basis of historthe period in
ng to sales, it i
ficant discoun
he non-transferre
PSA 2017 Ann
ent and defer
ecurring opered restrictive
not included in
following item
following imphe correspond
s, indirect sel
r goods and s and rewards
ble to non-gro
of raw materiaevenue.
ivery but accoies:
nue on a straition cost in prraight-line med resale price he period in wbuyback contr
rical costs forn which the cis deducted fr
nt to market i
ed financing of o
ual Results - 31
red taxes and
rating incomely as materialn the Group’s
ms which are
pairment testsding onerous
ling expenses
ervices. of ownership
oup dealers or
als, parts and
ounted for as
ght-line basisroperty, plantethod, on the
on the usedwhich it is sold
ract is signed.
r the previouscorrespondingrom revenue.
nterest rates.
operations to be
d
e l s
e
s s
s
p r
d
s
s t e d d
s g
.
e
32 - Groupe PS
(b) Automot
The Automoproduce part
The revenuepaid in propminimum levconsidered atooling in pro
If the contrawork-in-prog (2) Finance The Group’s to dealer neNovember 2the dealer netake the formare recordedloan.
Most of the operations ismethod (see
Key figureB.
Sales of good
Service revedescribed in
Financial serrevenues.
5.2. RECUR
Broken downand propertsegment at ilevel. Staff costs Group staff c
(in million euSales of vehiService revenFinancial serTotal
SA 2017 Annua
tive Equipmen
tive Equipmets or modules
recognition cportion to pavel of orders pas having beioperty, plant
act includes a gress. The cor
companies finance comp
etworks and 017, the finanetworks and rm of conventid using the yi
finance activs not included
e Note 11.4). T
es
ds consist mai
nues primariNote 8.2.C.
rvices revenue
RING OPERA
n by type, opey, plant and its own appro
costs included
uros)cles and other
nuervices revenue
al Results
nt segment
ent segment ps for programm
criteria providrts delivered placed by the ing sold. The and equipme
payment guaresponding re
panies and theretail financ
nce companieretail financinional loans, fiield-to-matur
vities are mand in the GrouThe revenue o
inly of sales of
ly comprise a
e correspond
ATING EXPENS
erating expenequipment,
opriate level w
d in the Recurr
r goods
performs devemes covered b
ded for in IAS to the custocustomer. Undevelopmen
nt (see Note 8
arantee, the devenue is reco
e finance coming to customes in partnersng to the custonance leases,ity method, s
naged in partp's consolidat
of all financing
f vehicles and
auto repairs a
s for the mo
SES ANALYSE
ses include stexplained bewith the resu
ring Operating
elopment worby specific cus
18 are not momer, with thnder such circt costs are r
8.2.A).
development ognised when
mpanies in parmers of the ship with BNPomers of the , buyback conso as to recog
tnership withted revenue
g activities at 1
d automobile p
and servicing
ost part to int
ED BY NATUR
taff costs and elow. Other rult that they c
g Income are
rk and manufstomer orders
et in cases whheir full recovumstances, decognised in
and tooling cthe customer
rtnership withPeugeot Citr
P Paribas haveOpel – Vauxh
ntracts or longgnise a consta
Santander aas these com100% is prese
parts, sub-ass
by captive d
terest income
RE
the depreciatrecurring opecannot be pre
as follows:
factures or pus.
here developmvery being suevelopment wintangible as
costs are recor signs off on e
h Santander proën DS autoe been providhall automotivg-term leasingant rate of in
nd BNP Paribpanies are acnted in Note
emblies and c
dealers, and v
e, insurance p
tion or amortrating expensesented on a
urchases spec
ment and toobject to an u
work and toolssets (see No
ognised in inveach technica
rovide wholeomotive businding wholesaleve business. Fg. Sales financnterest over t
bas. The reveccounted for 4.1.
components.
vehicle leasin
premiums and
tisation of intases are analyconsistent b
201763,4441,650
11665,210
ific tooling to
oling costs areunguaranteeding cannot be
ote 5.3.A) and
ventories andal phase.
sale financingness. Since 1e financing toFinancing maycing revenueshe life of the
enue of theseby the equity
ng services as
d other gross
angible assetsysed by eachasis at Group
201652,5261,358
14654,030
o
e d e d
d
g 1 o y s e
e y
s
s
s h p
The Competi€103 million
Details of pe DepreciatioDepreciation
5.3. RESEAR
AccountinA. Research andeducation ansubstantially
Under IAS 38demonstrate
its intenfinancialthat it isentity; that the
Capitalised dExpenses forand the amo (1) PeugeotDevelopmenproject launrecognised irepresentingamount maincost of exteractivities are
(in million euAutomotive DAutomotive DAutomotive EFinance comOther busineTotal
(1) Including(€4,109 millio
(2) In 2016, €
(3) in 2016, €
(in million euCapitalised dOther intangiSpecific tooliOther propertTotal
itiveness and (€96 million i
nsion costs ar
on and amorn and amortisa
RCH AND DEV
ng policies d developmennd training n
y improved ma
8 – Intangible in particularntion to compl and other re
s probable tha
cost of the as
development cr the year inc
ortisation of ca
t Citroën DS ant expenditurench (correspoin intangible
g up to seven nly comprisesrnal services re included, su
uros)Division PeugeDivision Opel VEquipment Divi
mpanies (3)
esses
€4,030 millionon in 2016).
€225 million rep
€17 million repre
uros)development exible assetsingty, plant and e
Employment in 2016).
re disclosed in
rtisation expation expense
VELOPMENT
nt expenses innecessary for aterials, meth
le Assets, dev:
plete the intanesources for that the future e
sset can be m
costs include lude researchapitalised dev
and Opel Vaue on vehicles nding to theassets. It is
years for vehs payroll costsrelated to theuch as rent, b
ot Citroën DS Vauxhallision (2)
representing s
presenting staff
esenting staff co
xpenditure
equipment
Tax Credit (CI
n Note 7.
ense e included in r
EXPENSES
nclude the cothe develop
ods, products
velopment ex
ngible asset ahis purpose; economic ben
easured reliab
related borroh costs, non-cvelopment cos
uxhall Automand mechanic
e styling deciamortised f
icles and ten ys of personnee project. No building depre
(1)
staff costs of m
f costs were recl
osts were recla
Of which
ICE) has been
recurring oper
st of scientificment, producs, processes, s
xpenditure is
and use or sel
nefits attributa
bly.
wing costs (secapitalised stusts.
motive segmecal sub-assemision for vehfrom the stayears for mec
el directly assoverheads or
eciation and
anufacturing ac
lassified in activ
ssified in activit
Opel Vauxhall
deducted fro
rating income
c and technicaction or implsystems or ser
recognised a
ll it, as well a
able to the de
ee Note 12.2.Audy and devel
nt mblies (engine
icles) and thart-of-productchanical sub-aigned to the
r indirect costinformation s
ctivities of the P
vities to be sold
ties to be sold o
Automotive se
Groupe
om personnel
e breaks down
al activities, inlementation arvices.
as an intangib
s the availabi
evelopment ex
A). opment costs
es and gearboe start-up ofion date ove
assemblies andproject, the c
ts related to rsystem utilisat
Peugeot Citroë
d or continued i
or continued in
egment
PSA 2017 Ann
expenses in t
n as follows:
ndustrial propand marketin
ble asset if th
ility of adequ
expenditure w
s under the a
oxes) incurredf pre-series per the asset’d modules. Th
cost of prototresearch and tion costs. Th
2017(4,537)(1,101)(3,177)
(7)(98)
(8,920)
ën DS Automoti
in partnership.
partnership.
2017(845) (98)
(636) (1,057) (2,636)
(24)
ual Results - 33
he amount of
perty, and theng of new or
he entity can
ate technical,
will flow to the
bove criteria,
between theproduction iss useful life,he capitalisedtypes and thedevelopment
he capitalised
2016(4,641)
-(3,059)
(9)(70)
(7,779)
tive segment
2016(825) (100) (650)
(1,001) (2,576)
-
3
f
e r
n
,
e
,
e s ,
d e t d
34 - Groupe PS
amount alsoagreements cooperation expenditure a project-by- (2) AutomotDevelopmenare paid in pminimum levacceptance intangible asthat accumuthe asset wedevelopmen
Research B.
The amounts 5.4. NON-R
ImpairmeA.
The detail of
RestructuB. Restructuring
(in million euTotal expendCapitalised dNon-capitalAmortisationTotal
(1) Including €Vauxhall auto(2) In addition12.2.A).
(in million euNet gains on
Other non-recTotal non-re
Impairment loRestructuringOther non-recTotal non-re
Reversal of imonerous contReversal of imonerous cont
Impairment locontracts of tImpairment locontracts of t
SA 2017 Annua
o includes thethat is not biagreements
incurred to d-project basis
tive Equipment work is undproportion to vel of ordersof the comm
ssets. The intalated amortis
ere amortisedt expenditure
and develop
s presented in
RECURRING O
ent test on CGf impairment t
uring costs g costs consis
uros)diture (1)
development exised expendi of capitalised
€2,055 million fomotive segmenn to this expen
uros) disposals of r
curring operatiecurring oper
oss on Faurecg costscurring operatiecurring oper
mpairment losstracts of the Pmpairment losstracts of the O
oss on CGUs,the Peugeot Coss on CGUs,the Opel Vaux
al Results
e portion of qlled to the pa
are also cadevelop mecha
and capitalise
ent Division dertaken for a
parts delivers placed by t
mercial offer aangible asset isation at eachd on a straighte is recognised
pment expen
n the above ta
OPERATING IN
GU, provisiontesting, provis
st mainly of wo
xpenditure (2)
iture development
for the Peugeont and €469 miditure, borrowi
real estate ass
ing income on rating income
cia CGUs and o
ing expenses orating expens
s on CGUs, oteugeot Citroëns on CGUs, ot
Opel Vauxhall A
other assets Citroën DS Aut other assets
xhall Automotiv
qualifying devartner. Generapitalised, whanical sub-assed.
ll programmeed to the cushe customer,and the starts amortised b year-end doet- line basis o
d in inventorie
ses, net
able are stated
NCOME AND
ns for onerousions for oner
orkforce redu
expenditure
ot Citroën DS Aillion for Faurecing costs are c
sets
other CGUse
other Faurecia
on other CGUsses
ther assets ann DS Automotther assets anAutomotive seg
and provisionsomotive segmand provisionsve segment
velopment exprally, developmhen they aresemblies com
es covered bystomer, with t, the costs int-of-productiobased on the qes not represeover five yeares and work-in
d net of resea
D EXPENSES
us contracts rous contracts
uctions.
Automotive segmcia (€437 milliocapitalised purs
a assets
s
nd provisions foive segment
nd provisions fogment
s for onerous ent
s for onerous
penditure incment costs bie meeting capliant with ne
specific custotheir full reconcurred durinon date of thquantity of paent less than s. If the contrn-progress.
arch funding re
and other des and other im
ment (€1,924 mn in 2016).suant to IAS 23
or
or
urred by the lled to the Grapitalisation ew emissions
omer orders. overy being sung the periodhe parts or marts delivered the amount tract includes
eceived by the
epreciations mpairment is d
Notes
8.1
million in 2016)
3 - Borrowing
Notes
8.3.B
8.3.B
8.3.C5.4.B
Group underroup by its pacriteria. All standards is m
Where develubject to an ud between thmodules are r
to the customhat would bea payment gu
e Group.
disclosed in No
2017(2,932)
1,536(1,396)
(842)(2,238)
6), €408 million
costs (Revised
2017164
12
128
205
(107)
(38)-
(951)(13)
(1,109)
r cooperationartners underdevelopment
monitored on
opment costsunguaranteedhe customer'srecognised inmer, provided recognised ifuarantee, the
ote 8.3.
2016(2,361)
1,267(1,094)
(821)(1,915)
for the Opel
d) (see Note
2016101
10
-6
117
(143)
--
(547)(51)
(741)
n r t n
s d s n d f e
Groupe PSA 2017 Annual Results - 35
Peugeot Citroën DS Automotive segment
In 2017, Peugeot Citroën DS Automotive segment restructuring costs amounted to €426 million. They relate chiefly to the recognition of the restructuring plans covering the Group’s industrial sites in Europe (Jobs and Skills Matching System –DAEC–, Jobs and Skills Reallocation Plan –PREC–, Employment Safeguarding Plan –PSE– and older employee plans) in the amount of €375 million and the reorganisation of its commercial operations in Europe in the amount of €32 million. Other restructuring costs relate mainly to the Group’s subsidiaries in Latin America in the amount of €16 million. Opel Vauxhall Automotive segment In 2017, Opel Vauxhall Automotive segment restructuring costs amounted to €440 million. Automotive Equipment segment (Faurecia Group)
In 2017, Faurecia group restructuring costs totalled €86 million, including €78 million in provisions for redundancy costs, mainly in Germany, France, the United States and in the Netherlands.
NOTE 6 - REQUIREMENTS IN WORKING CAPITAL OF MANUFACTURING AND SALES COMPANIES
6.1. INVENTORIES
Inventories are stated at the lower of cost and net realisable value, in accordance with IAS 2 - Inventories.
Cost is determined by the first-in-first-out (FIFO) method and includes all direct and indirect variable production expenses, plus fixed production expenses based on the normal capacity of each production facility.
The net realisable value of inventories intended to be sold corresponds to their selling price, as estimated based on market conditions and any relevant external information sources, less the estimated costs necessary to complete the sale (such as variable direct selling expenses, refurbishment costs not billed to customers for used vehicles and other goods).
The Automotive Equipment segment performs development work and manufactures or purchases specific tooling to produce parts or modules for programmes covered by specific customer orders. When the contract includes a payment guarantee, the development costs are recognised in inventories and work-in-progress and the corresponding revenue is recognised when the customer signs off on each technical phase.
(in million euros) 2017 2016Peugeot Citroën Automotive segment (426) (456)Opel Vauxhall Automotive segment (440) -Automotive Equipment segment (86) (90)Other businesses segment 1 (1)Total (951) (547)
(in million euros) Gross Allowance Net Gross Allowance NetRaw materials and supplies 1,272 (153) 1,119 807 (140) 667Semi-finished products and work-in-progress 1,049 (30) 1,019 949 (31) 918Goods for resale and used vehicles 1,204 (83) 1,121 911 (110) 801Finished products and replacement parts 4,289 (227) 4,062 2,107 (146) 1,961Total 7,814 (493) 7,321 4,774 (427) 4,347
Of which Opel Vauxhall Automotive segment 2,862
31 December 2017 31 December 2016
36 - Groupe PS
6.2. TRADE
A provision believes thatexistence of
In accordancflows have btransfer of rithe risk of laCosts incurre
In segment rtransferred t
Assignments
6.3. OTHER
Other recA.
(in million eur
Trade receivaAllowances foTotal - manuElimination ofTotal
(in million eurState, regionaPersonnel-relDue from supDerivative instPrepaid expeMiscellaneouTotal
(1) In 2017, themployment ta
SA 2017 Annua
RECEIVABLE
for impairmet there is a risunresolved cl
ce with IAS 39been transferisks, dilution te payment. T
ed in transferr
reporting, thisto the Group’s
s of trade rece
R RECEIVABLE
ceivables
ros)
blesor doubtful accoufacturing andf transactions w
ros)al and local taxated payables
pplierstruments
ensess other receiva
he Group sold €ax credits (see N
al Results
ES
ent is recordesk that the recaims or litigat
9, the Group rred along wrisk is not incTransferred rering a receivab
s rule also apps finance com
eivables to fina
ES AND OTHE
ountsd sales compawith the finance
xes excluding i
ables
€43 million worNote 12.6.E).
ed on the maceivables will tion, the age o
derecognisesith substantia
cluded inasmueceivables areble are recogn
plies to the Pepanies and to
ancial institut
ER PAYABLES
aniese companies
Of which
ncome tax (1)
Of which
rth of French re
nufacturing anot be recove
of the receiva
s receivables ally all of theuch as it has e not derecognised in financ
eugeot Citroëo the finance c
tions are discl
S
h Opel Vauxha
h Opel Vauxha
esearch tax cred
and sales comered. Indicatiobles and the o
for which thee risks and rebeen defined
gnised when tcial expense.
n DS and Opecompanies in
osed in Note
all Automotive s
all Automotive s
dits and €94 mi
mpanies’ tradeons of probabobligor’s signi
e contractual ewards of ow
and correctlyhe default risk
el Vauxhall Aupartnership.
12.6.E.
31
segment
31
segment
illion worth of F
e receivables ble impairmenificant financi
rights to recwnership. In ay segregated k is retained b
utomotive seg
December 2017
3
2,674(307)2,367
(34)2,333
724
December 2017
3
1,19841
195274444484
2,636
434
French competi
if the Groupnt include theal difficulties.
eive the cashanalysing thenotably from
by the Group.
gments’ debts
31 December 2016
1,726(166)1,560
(19)1,541
-
31 December 201690838
19641
361219
1,763
-
itiveness and
p e
h e
m .
s
Other payB.
6.4. CHANG
Analysis oA.
Analysis oB.
(1) Analysis
(in million eurTaxes payablPersonnel-relPayroll taxesPayable on fixCustomer preDerivative instDeferred incoMiscellaneouTotal
(1) This item coperating rece
(in million eur(Increase) de(Increase) deIncrease (decChange in incOther change
Net cash flowTotal
2017(in million eurInventories (1)
Trade receivaTrade payableIncome taxesOther receivaOther payable
Net cash flowTotal
yables
GE IN WORKI
of the change
of the change
by type
ros)le other than inated payables
xed asset purcepaymentstruments (1)
ome s other payable
corresponds toeivables and pa
ros)crease in invencrease in trade
crease) in tradecome taxeses
ws with Group f
ros)
bleses (2)
sbleses (3)
ws with Group fi
O
NG CAPITAL
e in working
e in balance s
ncome taxes
chases
es
the fair value oyables. These i
ntoriese receivablese payables
finance compan
finance compan
Of which Opel V
REQUIREME
capital
sheet items
Of which
of instruments pinstruments are
nies
nies
Vauxhall Autom
NTS OF MAN
h Opel Vauxha
purchased by tanalysed by m
motive segment
NUFACTURIN
all Automotive s
the Group to heaturity in Note 1
t at 31 Decemb
Groupe
G AND SALES
31
segment
edge currency12.7.A, "Manage
ber 2017(1
(2
(3
PSA 2017 Ann
S COMPANIE
December 2017
3
1,1081,207
3581,6252,004
203943430
7,878
2,058
risks on currenment of financia
2017(167)(476)1,179(124)(404)
81725
(4,347)(1,560)
9,35221
(1,763)5,3667,069
(15)7,054
1) €(2 863) millio2) €2 906 million3) €2 099 million
At1 January 3
ual Results - 37
ES
31 December 2016660
1,019354597
1,56917
800350
5,366
-
nt or forecastal risks".
2016(365)
291389
4152471(38)433
(7,321)(2,367)13,362
(113)(2,636)
7,8788,803
18,804
onnn
At31 December
7
38 - Groupe PSA 2017 Annual Results
(2) Movements of the year
The change in working capital in the consolidated statement of cash flows at 31 December 2017 (€8 million positive effect) corresponds to cash flows from operating activities (€41 million negative effect), exchange differences (€15 million positive effect), change in the ineffective portion of currency options (€28 million positive effect) and other movements (€6 million positive effect).
NOTE 7 - EMPLOYEE BENEFITS EXPENSE
7.1. PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS
In addition to pension benefits paid in accordance with the laws and regulations of the countries in which they operate, Group companies are liable for the payment of supplementary pensions and retirement bonuses. These benefits are paid under defined contribution and defined benefit plans.
For defined contribution plans, contributions made during the year are expensed.
In accordance with IAS 19 - Employee Benefits, obligations under defined benefit plans are measured by independent actuaries using the projected unit credit method. The main assumptions underpinning the measurement of the commitment are the retirement date, wage increases and staff turnover, and a discount rate and an inflation rate.
The projected benefit obligation is measured twice a year for the main plans, at mid-year and at year-end, and every three years for the other plans, except when more frequent valuations are necessary to take into account changes in actuarial assumptions or significant changes in demographic statistics.
Changes in actuarial assumptions and experience adjustments – corresponding to the effects of differences between previous actuarial assumptions and what has actually occurred – give rise to actuarial gains and losses. These actuarial gains and losses are recorded under “consolidated comprehensive income”, and are not recyclable in the income statement.
In the event of change in the benefits conferred by a pension plan, the effects of changes are recognised in full in the income statement of the period in which they are incurred, in “operating income” under “past service cost”.
As a result, for each defined benefit plan, the Group records a provision in an amount equal to the projected benefit obligation less the fair value of the plan assets.
These pension surpluses constituted by the Group are recognised in the balance sheet according to the IFRIC 14 interpretation.
(in million euros) 2017 2016 At 1 January 7,069 6,379
Cash flows from operating activities (41) 484Cash flows from investing activities (144) 400Changes in scope of consolidation and other (1) 1,920 1Translation adjustment 28 (164)Revaluations taken to equity (29) (31)
At 31 December 8,803 7,069
(1) of which €1,785 million related to the acquisition of Opel Vauxhall in 2017.
2017 2016Cash flows from operating activities of manufacturing and sales companies (41) 484Exchange differences 15 51Change in the ineffective portion of currency options 28 (45)Other changes 6 (19)
8 471Change in working capital in the statement of cash flows
The net cost The servThe accrexpensecommitm
Other emplolong-serhealthca
Plan descA.
Group emploretirement bunder defineto pay fixedPayments un
In France, ththe retirthe portan exteremployethe pensnew entthe close
In the Unitedto new entra500 active emreplacement
In Germany,companies a
the retirthe supp
The supplemgranting a rewho have annew schemeguarantees approved by
AssumptiB.
At each peribonds with a
Prime corpoexample, bon
Discount Rat20172016Inflation Rate20172016Average Dur20172016
of defined bevice cost and pretion expenses). These twoments.
oyee benefit ovice awards p
are costs paid
criptions oyees in certabonuses repreed contributiod contributionnder defined b
e existing defrement bonustion of the toprnal fund in ee's final salarsion plan set
trants in 1981 ed Citroën sup
d Kingdom, thants since Mamployees, 6,7t rate of up to
, the main dt 1 August 20
rement bonusplementary pe
mentary pensioent relating ton employmene, defined ban annuity b the Board of
ions
od-end, the da life that app
rate bonds arnds rated AA
te
e
ration (in years
enefit pensionpast service coe of the net c
o components
obligations recpayable by Fre
by certain su
ain countries aesenting one-on or defined ns into the fubenefit plans c
fined benefit pses provided fp-hat pension2002 and guary (currently cup by the foand covers 1
pplementary
he Group has ay 2002. At 31700 former em 66% of the e
defined bene17 in the form
ses provided fension plan co
on scheme fo salary trancht contract wienefit plan f
based on theDirectors.
discount rate roximates the
re defined as or AAA by Mo
s)
n plans for theost (recognise
commitment os (accretion an
cognised in thench and foreibsidiaries in t
are entitled tooff paymentsbenefit plans
und concerneconcern prima
plans concernor by collectiv scheme for earantees an a
covering 2,500rmer subsidia2,000 retired plan (ACC) tha
four trustee-a1 December 2mployees notmployee's fin
fit plan relatm of: or by collectivovering 20,000
r all Faurecia he C. A specificth Faurecia Sfor French m
e reference s
is determinee duration of t
bonds awardoody's or Stan
Euro
11
11
e period thereed in "Recurrinof the return ond return on a
e balance sheign subsidiariehe United Sta
o supplements made at thes. The Group’ed. The paymarily France, t
: ve bargaining engineers andaggregate rep0 retired empary of the Chemployees atat covered 4,1
administered 2017, 18,200 t yet retired aal salary.
tes to Opel
ve bargaining 0 employees.
managerial ec pension sch.A. or any of
members andsalary, the Fa
ed based on tthe benefit ob
ded one of thndard & Poor's
zone Un
1.60 %.50 %
1.80 %.80 %
1712
efore correspong income");on plan hedgiassets) are de
eet concern: es;
ates.
tary pension be time of retis only obligat
ments are recthe United Kin
agreements;d managemenplacement raloyees); rysler group it end-2017; 100 retired em
defined benebeneficiaries nd 11,000 ret
Automobile
agreements;This plan was
mployees in Feme dedicateits subsidiarie
d defined coaurecia group
the most reprbligation.
e top two rats).
nited-Kingdom
2.60 %2.80 %
3.20 %3.25 %
1514
Groupe
onds to the su
ng assets (in oetermined bas
benefits payabrement. Thes
tion under deognised in in
ngdom and Ge
nt personnel tte from all p
in France (Tal
mployees at e
efit plans. Thewere coveredtired employe
GmbH coveri
s fully funded
France compred to the execes has been intribution pla
p’s operating
resentative re
tings by a rec
m
%%
%%
54
PSA 2017 Ann
um of the follo
other financiased on the dis
ble annually tse benefits eiefined contribncome (loss) ermany.
that was not tplans of up to
lbot), which w
nd-2017.
ese plans haved by these plaees. The plans
ing beneficia
at 1 August 2
rises a definedcutive commitmplemented an for foreigincome, and
eturns on prim
cognised ratin
ual Results - 39
owing:
al income andscount rate of
to retirees, orther are paidution plans isfor the year.
transferred too 60% of the
was closed to
e been closedans, includings guarantee a
ries in these
2017.
d benefit planttee members
in 2015. Thisgn members,d the budget
me corporate
g agency (for
9
d f
r d s .
o e
o
d g a
e
n s s , t
e
r
40 - Groupe PS
The assumptcountry. Theassumption ffor hourly em
Mortality and Sensitivity ofthe United K
A 1-point incthe investmeand €12 milli
In 2012, the to vary hedg
InformatiC. The projecte
The breakdo
The fair value
In 2017, the the United Kfunds. In Frawhile bond fand in Europ
In the Unitedinflation-linkcorporate bo
In Germany, (minimum in
In France, thdecision had
In the United2017. It is esplanned for 2
In Germany,million for 20
FranceUnited KingdoGermany
FranceUnited KingdoGermany
SA 2017 Annua
tions regardine assumption for the United
mployees and
d staff turnov
f assumptionsingdom would
crease or decrent income reion for the Ge
Group arranging assets in r
ion on externed benefit obli
wn of externa
e of shares an
actual return Kingdom was +ance, equity ffunds are invepean inflation-
d Kingdom, allked governmeonds rated A o
bond investmnvestment gra
e Group is fre been made a
d Kingdom, thstimated at £32018.
, the Group’s018.
om
om
al Results
ng future salarfor French p
d Kingdom pl0.75% for sal
ver assumptio
s: a 0.25-poind lead to the f
rease in the eecognised in 2erman plans.
ged an interesresponse to ch
nal funds igation is part
al funds is as f
nd bonds was
on external f+4 % for the Ffunds consist ested in prime-linked govern
l the equities ent bonds deor higher.
ments are 80%ade) and 8% in
ee to decide tas to the amou
he Group's an33 million (€3
s annual cont
ry increases talans is inflatioans is inflatioaried employ
ns are based o
nt increase or following incr
expected retu2017 of €9 m
st rate swap fohanges in the
ially covered
follows:
at level 1 in 2
unds manageFrench funds,of MSCI EMU
e European gonment bonds.
are invested inominated in
% in corporaten short-term m
he amount ofunt of contrib
nual contribu37 million) for
tribution (exc
Discount rat
Eq11
31
ake into accoon plus indivi
on plus 1 %. Inyees.
on the specifi
decrease in treases or decr
rn on externamillion for Fren
or the United liability at the
by dedicated
2016 and 2017
ed by the Grou, +2.8 % for thU Euro index overnment bo
in global equin pounds ster
e bonds with amoney market
f its contributbutions to be p
ution (excludinr 2018, althou
luding Faurec
-2.75%-4.17%-4.94%
e +0.25 PT
quities Bond19 % 81 %12 % 88 %0 % 100 %
1 December 20
unt inflation aidual pay risen Germany, th
c economic co
he discount rareases in proje
al funds wouldnch plans, €2
Kingdom wite discount rat
external fund
7.
up in France, ihe German futracker funds
onds, in Europ
ty funds. 69 %rling. The rem
an average ratt instruments
tions to the expaid in 2018.
ng Faurecia) augh this sum
cia) amounte
Inflation rate
ds Equities% 17 %% 19 %% -
017 31 Decem
and forecast ie according tohe assumptio
onditions of e
ate and in theected benefit
d have led to 8 million for
hin the pensioe.
ds.
in Germany ands and +5.6
s and internatpean corporat
% of the bond maining 31 %
ting of A-, 12%.
xternal funds.
amounted to £may change i
d to €12 mill
1.91%3.70%1.13%
e +0.25 PT
s Bonds83 %81 %
-
mber 2016
individual payo the employ
on is for inflat
each host coun
e inflation rateobligations:
an increase othe United K
on fund, maki
nd by the pen% for the Un
tional index tte bonds rate
portfolio are % are compris
% in EU gover
. At 31 Decem
£34 million (€in light of the
lion. It is est
y rises in eachee’s age. Theion plus 0.5%
ntry.
e in France or
or decrease iningdom plans
ing it possible
nsion trusts inited Kingdom
tracker funds,ed A or higher
comprised ofsed mainly of
rnment bonds
mber 2017, no
€39 million) ine negotiations
imated at €4
h e
%
r
n s
e
n m
, r
f f
s
o
n s
4
MovemeD.
Excludin
ReconciliaE.
Expenses F.
These expenservice cthe impexpenseinterest “Other f
(in million eurosProjected bene
At beginning oService costInterest costBenefit paymenUnrecognised a - amount - as a % of projeperiod (1)
Effect of changeEffect of changeEffect of curtailmAt period-end:External fund
At beginning oNormative returnActuarial gains - amount - as a % of projeperiod (1)
Translation adjuEmployer contrBenefit paymenEffect of changeAt period-end:
'(1) The percentaGermany include
(in million eurosPresent value Fair value of extNet (liability) asheet before m(IFRIC 14)Minimum fundin
Net (liability) asheetOf which, liabilitOf which, assetOf which, unfund
nt for the yeng minimum f
ation of bala
recognised ises are record
cost is recordepact of restrues";
cost and thefinancial incom
s)efit obligation
of period: Prese
nts for the yearactuarial gains and
ected benefit ob lig
es in exchange raes in scope of coments and settlem: Present value
of period: Fair vn on external fundand (losses):
ected benefit ob lig
ustmentibutions
nts for the yeares in exchange ra: Fair value
age actuarial gaines the effect of the
s)of projected be
ternal fundsasset recognisedminimum fundin
ng requirement lia
asset recognised
ty (Note 10)tded plans
ar funding requi
nce sheet ite
n the incomeded as followsed under "Selcturing is rep
e normative rme” respectiv
nt value
d (losses):
gation at beginning
atesnsolidation and oments
valueds
gation at beginning
ates and other
ns and (losses) ischange in scope o
nefit obligation
d in the balanceg requirement
ability (IFRIC 14)
d in the balance
rement (IFRIC
ems
e statements: ling, general aported under
return on extely.
France
(1,620)(49)(24)111
-86
g of 5.3 %
-other (3)
1(1,498)
89913
-20
g of 2.2 %
-45
(118)-
859
calculated on theof consolidation du
France(1,498)
859e
(639)
-
e (639)
(663)24
0.3 %
C 14)
and administrr "Non-recurr
ternal funds a
United Kingdom Ge
(2,098)(62)(56)114
-(187)
8.9 %
75(60) (
-(2,274) (
2,77775
-81
2.9 %
(97)42
(114)-
2,764
201
basis of the obligue to the acquisitio
United Kingdom Ge
(2,274) (2,764
490
(37)
453
(134)587
0.0 %
2017
rative expenseing operating
are recorded
ermany Other
(425) (270)(48) (14)(26) (7)
11 35- -
(151) 3
5.4 % 1.1 %
- 15(2,385) (316)
- -(3,024) (554)
130 14022 4
- -46 (3)
1.7 % 2.1 %
- (8)15 7
(11) (25)2,502 1822,704 297
7
gations and the exton of Opel Vauxhal
ermany Other(3,024) (554)
2,704 297
(320) (257)
- -
(320) (257)
(320) (276)- 19
0.0 % 15.4 %
7
Groupe
es"; g income" or
under "Othe
Total Franc
(4,413) (1,564(173) (43(113) (36
271 8
(249) (95
5.6 % 6.1 %
90(2,764)
1 2(7,350) (1,620
3,946 93114 2
144 1
3.6 % 1.9 %
(105)109 2
(268) (942,6846,624 89
ternal fund at the bll in 2017.
Total France(7,350) (1,620
6,624 899
(726) (721
(37)
(763) (721
(1,393) (747630 26
1.2 % 0.0 %
PSA 2017 Ann
"Non-recurri
er financial ex
eUnited
Kingdom O
4) (2,096) (3) (10)6) (71)9 82- -
5) (316)
% 15.1 % 6.
- 313- -9 -
0) (2,098) (
2 2,6573 94- -8 475
% 17.9 % 2.
- (403)0 36
4) (82)- -9 2,777
2016
beginning of the p
eUnited
Kingdom O0) (2,098) (69 2,777
) 679 (4
- (39)
) 640 (4
7) (63) (46 703
% 0.0 % 9.
2016
ual Results - 41
ing operating
xpenses" and
Other Total
670) (4,330)(16) (69)(17) (124)
46 217-
(43) (454)
.4 % 10.5 %
1 314- -4 33
695) (4,413)
285 3,8747 124-7 500
.5 % 12.9 %
- (403)12 68
(41) (217)- -
270 3,946
period, which for
ther Total695) (4,413)270 3,946
425) (467)
- (39)
425) (506)
425) (1,235)- 729
6 % 1.5 %
g
d
42 - Groupe PS
Pension expe
7.2. SHARE-
Stock optionshare-based
EmployeeA. No plan was
PerformaB.
(1) Peugeot
(a) 2015 perf
A performantreasury stocpotentially aexpenses asspayroll taxes
(b) 2016 perf
A performanstatements).the vesting subject to cpotentially aaccordance w
(c) 2017 perf
Plan charFollowing thBoard at its m2017. This plof presence w
Vesting is susegment's av2016 and 20
In light of th2020 and 14
(in million eurosService costInterest costNormative returnEffect of curtailm
Total (before mliability) Change in minim(IFRIC14)Total
SA 2017 Annua
enses break d
-BASED PAYM
s and performpayment plan
e stock optioawarded betw
ance share pla
t S.A. perform
rformance sha
nce share plancks were deliattributable tsociated with
s.
rformance sha
nce share pl The allocatioperiod. Takin
continued emttributable towith IFRS 2, w
formance sha
racteristics e authorisatiomeeting of 27lan covers a mwithin the Gro
ubject to two verage recurr19 at constan
he objectives, April 2021.
s)
n on external fundments and settlem
minimum fundin
mum funding requ
al Results
own as follow
MENT
mance shares ns. These plan
ons ween 2009 an
ans
mance share p
are plan
n was establivered to Freno foreign res
h this plan, m
are plan
an was estaon of performang into considmployment ono the beneficiawas €7.1 millio
are plan
on given by t7 April 2016, tmaximum of 2oup at the en
performanceing operatingt exchange ra
the shares w
dsments
ng requirement
uirement liability
ws:
are granted tons are recogni
nd 2017. The l
plan
shed in 2015nch tax residesidents; the r
measured in a
blished in 20ance shares is
deration the pn 3 June 201aries of the plan for 2017, ex
he Extraordinhe Peugeot S.
2,693,000 shad of the vestin
e conditions r income (ROI
ates.
will vest in two
France(49)(24)
13
1
(59)
-
(59)
o Group mansed in accord
last plan expir
5. At the end ent beneficiarrelevant vesticcordance wi
016 (see Nots subject to a performance
19 and 3 Junan. The persoxcluding payro
nary Sharehol.A. Managing res. The allocng period.
elating to the) over the 20
o equal parts
United Kingdom Ge
(62)(56)
75
-
(43)
-
(43)
201
agement and ance with IFR
red on 19 Aug
of the vestinries. As of 31ng period enith IFRS 2, wa
te 6.2.B.(1).(bcondition of ptargets, the e 2020. At y
onnel expenseoll taxes.
lders’ MeetinBoard adopteation of perfo
e percentage 17-2019 perio
subject to pr
ermany Other(48) (14)(26) (7)
22 4
- -
(52) (17)
- -
(52) (17)
7
certain emploRS 2 – Share-b
gust 2016.
g period on 3 December 2
nds on 31 Maas €4.4 millio
b) to the 20presence withshares will v
year-end 2017s associated w
g of 27 April ed a performaormance share
of the Peugeod and Group
resence withi
Total Franc(173) (43(113) (36
114 21 2
(171) (27
-
(171) (27
oyees under ebased Paymen
31 March 2012017, 379,124arch 2019. T
on for the 20
016 consolidahin the Groupvest in two eq7, 1,907,491 with this plan
2016 and theance share plaes is subject t
eot Citroën DSp revenue gro
n the compan
eUnited
Kingdom O3) (10)6) (71)3 949 -
7) 13
- 4
7) 17
2016
equity-settlednt.
17, 2,019,0004 shares werehe personnel17, excluding
ated financialat the end of
qual portionsshares were
, measured in
e Supervisoryan on 10 Aprilto a condition
S Automotivewth between
ny at 14 April
Other Total(16) (69)(17) (124)
7 1244 33
(22) (36)
- 4
(22) (32)
d
0 e l
g
l f s e n
y l
n
e n
l
Groupe PSA 2017 Annual Results - 43
Personnel costs arising from the performance share plan characteristics At year-end 2017 the plan covers a maximum total of 2,334,942 shares, resulting in the delivery of treasury shares.
For the purposes of calculating personnel costs, the weighted average fair value of the shares notified is €15.38.
The personnel expenses associated with this plan, measured in accordance with IFRS 2, was €7.5 million for 2017, excluding payroll taxes. (2) Faurecia performance share plan In 2010, Faurecia established a performance share plan for executives of group companies. These shares are subject to service and performance conditions.
The amount recognised in income for the period is an expense of €21.1 million (compared with an expense of €17.8 million in 2016).
The details of performance share plans at year-end 2017 are provided in the following table:
Following achievement of the performance target in the plan awarded by the Board on 24 July 2013, 947,050 shares were delivered in July 2017. In light of the achievement of the performance targets in the plan awarded by the Board on 28 July 2014, 761,865 shares will be delivered in July 2018. 7.3. MANAGEMENT COMPENSATION
The Group is managed by the Managing Board. The Group’s management bodies correspond to the Group Executive Committee, which includes the members of the Managing Board and other members of executive management.
The compensation details provided in the table above do not include payroll taxes. The amount of compensation paid to members of management bodies, including accrued variable compensation, is provisional.
The fixed compensation of the Managing Board members was constant in 2017.
Furthermore, the expense recognised in 2017 for the contribution to the new defined contribution pension plan totalled €4.8 million for the members of the Managing Board and the other members of the Executive Committee and breaks down into €2.4 million paid to a pension fund and €2.4 million paid in cash to the beneficiaries (taking into account a scheme based on taxation upon first deposit).
Details of the performance shares granted in 2015, 2016 and 2017 granted to members of the managing bodies and still exercisable at period-end, can be found in the following table:
Date of Managing Board decision: (number of shares) - objective achieved
23/07/2015 570,122 741,08125/07/2016 687,711 894,66520/07/2017 617,595 802,830
ables radiées(1) Net of free shares granted cancelled.
- objective exceeded
Maximum number of performance shares(1) due if:
(in million euros) Notes 2017 2016Number of Executive Committee members at 31 December 18 18Fixed & variable compensation and other short-term benefits (excluding pensions) 22.2 17.2Stock option and performance share costs (1) 7.2 4.8 6.9
(1) This is the portion of the IFRS 2 expense for the period relating to the Managing Board's members and other members of theExecutive Committee.
(number of options) 2017 20161,670,000 1,585,000Performance shares held at 31 December
44 - Groupe PS
Besides, membenefits andor any comp
NOTE 8 -
Property, plalosses, pursu 8.1. GOODW
AccountinA. Accounting developmen
Other intThe portion internal or easset when iover the estdevelopmenOther intangthe estimate
Change inB.
31 Decembe
(in million eurAt beginningPurchases/adAmortisation Impairment loDisposalsChange in scTranslation a
(2) including 1,
At period-en(1) Including b12.2.A).
31 Decembe
(in million euAt beginninPurchases/aAmortisation Impairment loDisposalsChange in scTranslation aAt period-en(1) Including b12.2.A).
SA 2017 Annua
mbers of the the performaensation for l
GOODWIL
ant and equipuant to IAS 36
WILL AND INT
ng policies policies relatt expenses in
ternally-develof developm
external costs t is probable
timated usefut costs are ex
gible assets (ced period of be
n carrying am
er 2017
ros)g of perioddditions (1)
for the yearosses
cope of consoliadjustment
,810 million in gOf which O
ndorrowing costs
er 2016
ros)g of perioddditions (1)
for the yearosses
cope of consoliadjustmentndborrowing costs
al Results
Group's manance shares uoss of office.
LL AND INT
pment and in(see Note 8.3
TANGIBLE AS
ting to goodNote 5.3.(A).
loped or purcment costs re
necessary to that these co
ul life of the pensed as inc
consisting prinenefit, not to
mount
idation and oth
goodwill for the Opel Vauxhall A
of €88 million c
idation and oth
of €92 million c
agement bodunder the plan
TANGIBLE
ntangible asse3).
SSETS
dwill are des
chased intanglating to softcreate the so
osts will genersoftware, ranurred.
ncipally of patexceed twent
her (2)
Opel acquisitioAutomotive seg
capitalised in ac
her
capitalised in ac
dies are not enns referred to
ASSETS – P
ets are carrie
scribed in N
gible assets, extware for intoftware or imrate future ecnging from fo
tents and tradty years.
on.gment
ccordance with
Go
ccordance with
Go
ntitled to anyo above, or an
PROPERTY
ed at amortis
ote 3.1.A.(3)
xcluding reseternal use thaprove its perf
conomic beneour to twelve
demarks) are
1,514----
1,829(22)
3,321IAS 23 (Revis
Develoexpeoodwill
1,382----
1275
1,514IAS 23 (Revis
oodwillDevelo
expe
y long-term bey other forms
Y, PLANT A
ed cost less d
and those
arch and deveat correspondformance is refits. The capityears. Other
amortised on
4,8601,619(845)(80)(1)
8(70)
5,491
40
ed) - "Borrowin
sofother opment
nditure
4,3521,365(825)(47)(19)
1321
4,860sed) - "Borrowin
opment enditure
sofother
enefits apart s of share-bas
AND EQUIP
deductions o
related to r
velopment expds to directly
recognised as talised costs ar software ac
n a straight- li
594150(98)
-(46)
1,8241
2,425
1,795
ng Costs" (see
Brands, ftware and intangible
assets
417102
(100)2
(2)176(1)
594ng Costs" (see
Brands, ftware and intangible
assets
from pensionsed payments
MENT
f impairment
research and
penditure y attributablean intangible
are amortisedcquisition and
ne basis over
5,4541,769(943)(80)(47)
1,832(69)
7,916
1,835
e Note
Intangible assets
4,7691,467(925)(45)(21)18920
5,454e Note
Intangible assets
n s
t
d
e e d d
r
BreakdowC.
Impairment t 8.2. PROPE
AccountinA.
(1) Cost In accordancor productio
Capitalised cagreements t
The cost of iuse includes
Government
Maintenance
Leased assetcommitment
Assets acquivalue of the is recognised (2) Deprecia
(a) Standard
Depreciationresidual valuexcept for re
Buildings Material anComputer eVehicles anFixtures and
(b) Specific t
In the Peugelives of the cthe frequenc
(in million eurNetAutomotive OFaurecia CGFaurecia CGAutomotive PFinancing acTotal
wn of goodwi
tests on good
RTY, PLANT A
ng policies
ce with IAS 16n cost. They a
costs includethat is not bil
tems of proprelated borro
t grants are re
e costs are exp
ts include veht, which are re
red under finfuture lease p
d in the same
ation
d method
n is calculatedue, over theirental vehicles.
nd tooling equipment d handling eqd fittings
tooling
eot Citroën DScorrespondingcy of model ch
ros)
Opel Vauxhall CUsU
Peugeot Citroëtivities Peugeo
ill at end of p
dwill allocated
AND EQUIPM
6 - Property, Pare not revalu
e the portionled to its part
perty, plant anowing costs (s
ecognised as a
pensed as inc
hicles leased tecognised acc
ance leases, apayments, or amount. The
on a straightr estimated u The main use
quipment
S and Opel Vag models, whhanges.
CGU
n DS CGUot Citroën DS C
period
to the Autom
MENT
Plant and Equed.
n of specific ners.
nd equipmentee Note 12.2.
a reduction in
urred.
o retail custocording to the
as defined in Ito the fair vaassets are de
t-line basis to useful lives. Peful lives of pr
(in years)20 - 304 - 163 - 44 - 7
10 - 20
uxhall Automich are gener
CGU
motive Equipm
uipment, pro
c tooling exp
t that take at .A).
the cost of th
omers by the method desc
IAS 17 - Leasealue of the leapreciated by a
write off the Property, planroperty, plant
motive segmenrally shorter t
ment CGUs are
perty, plant a
penses incurr
least twelve
he correspond
Group's compcribed in Note
es, are recognased propertyapplying the m
acquisition ont and equipmt and equipme
nts, specific tohan the usefu
Groupe
e discussed in
and equipmen
ed by the G
months to ge
ding assets.
panies and vee 5.1.A.(1)(a).
nised at an am, whichever is
method and ra
r production ment generallent are as follo
ooling is depreul lives of the
PSA 2017 Ann
Note 8.3.
nt are stated
Group under
et ready for t
ehicles sold w
mount equal ts lower. A finaates indicated
cost of the asly have no reows:
eciated over te tooling conc
2017
1,8101,216
172122
13,321
ual Results - 45
at acquisition
cooperation
heir intended
ith a buyback
o the presentancial liabilityd below.
ssets, less anyesidual value,
the estimatedcerned due to
2016
-1,218
172124
-1,514
5
n
n
d
k
t y
y ,
d o
46 - Groupe PS
In the Automcustomer, prwould be rec
The estimatedecision is m
BreakdowB. The carrying
Leased veC.
Leased vehicretail customaccording to
31 December
(in million euroNetAt beginning Purchases/addDepreciation foImpairment losDisposalsTransfers and rChange in scoand other (2)
Translation adjAt period-endGross valueAccumulated dimpairmentOf which Opel Vsegment (carryi(1) Including pro(Revised) - "Bo(2) Change in sc
31 December
(in million euroNetAt beginning Purchases/addDepreciation foImpairment losDisposalsTransfers and rChange in scoand other (2)
Translation adjAt period-endGross valueAccumulated dimpairment
(2) Change in sc
(1) Including pro(Revised) - "Bo
SA 2017 Annua
motive Equipmrovided that cognised if the
ed useful livemade to halt pr
wn of propertamount of pr
ehicles cles totaling amers by the G
the method d
2017
os)
of periodditions (1)
or the yearsses
reclassificationspe of consolidati
ustmentd
depreciation and
Vauxhall Automoting amount)
operty, plant andorrowing Costs"cope of consolida
2016
os)
of periodditions (1)
or the yearsses
reclassificationspe of consolidat
ustmentd
depreciation and
cope of consolida
operty, plant andorrowing Costs"
al Results
ment segmentaccumulated e asset were d
es of propertroduction of a
ty, plant androperty, plant
an amount of Group's compdescribed in N
2,116121
(25328
(10724
ion 408(28
2,3096,766
d(4,457)
tive 345
equipment acquiamounted to €31tion and other" m
Land andbuildings
2,174127
(218(4
(5518
ion 704
2,1166,897
d(4,781)
tion and other" m
equipment acquamounted to €35
Land andbuildings
t, specific toodepreciation
depreciated o
ty, plant anda vehicle or m
d equipmentand equipme
€3,299 milliopanies and veNote 5.1.A.(1)(
6 5,1221 1,052
3) (1,343)8 8
7) (38)4 205
8 8058) (97)9 5,7146 31,978
) (26,264)
5 317
ired under financ1 million (see Not
movements in "Lea
ds
Plant and equipment
4 4,7127 787
8) (1,352)4) 1205) (44)8 521
0 3574 216 5,1227 31,285
) (26,163)
movements in "Lea
ired under financ5 million (see Not
ds
Plant and equipment
ling is deprecat each year
on a straight-li
d equipment mechanical sub
ent can be ana
on at year-endehicles sold w(a).
2,475-
(12)---
850(14)
3,2993,537
(238)
629
ce leases for €14te 12.2.A). ased vehicles" inc
Leased vehicles (2)
V
2,570-
(6)---
(8)(81)
2,4752,799
(324)
ased vehicles" inc
ce leases for €21te 12.2.A).
Leased vehicles (2)
V
iated based or-end does none basis over
are reviewedb-assembly.
alysed as follo
d include vehwith a buyba
228
(4)-
(2)1
-1
2682
(56)
-
4 million. Borrowi
cludes net chang
Vehicles and handling
equipment
218
(4)-
(3)-
--
2281
(59)
cludes net chang
1 million. Borrowi
Vehicles and handling
equipment
on the quantitot represent lfive years.
d periodically
ows:
icles leased uck commitme
30523
(81)-
(5)31
44(3)
314958
(644)
14
ing costs capitalis
es for the year (a
Fixtures, fittings
and other
26922
(71)-
(9)56
38-
305905
(600)
ges for the year (a
ing costs capitalis
Fixtures, fittings
and other
ty of parts deless than the
y, particularly
under short-teent, which ar
1,2531,202
-7-
(261)
(551)(34)
1,6161,647
(31)
143
sed in accordanc
dditions less disp
Assets under
construction
1,1481,190
-4-
(595)
(497)3
1,2531,296
(43)
dditions less disp
sed in accordanc
Assets under
construction
livered to theamount that
y whenever a
erm leases tore recognised
Total
11,2932,406
(1,693)43
(152)-
1,556(175)
13,27844,968
(31,690)
1,448
ce with IAS 23
posals).
Total
10,8942,134
(1,651)120
(111)-
(40)(53)
11,29343,263
(31,970)
posals).
ce with IAS 23
e t
a
o d
8.3. ASSET
AccountinA. In accordancintangible asindefinite usfall in volumbusiness. Timpairment present value
For the purpwhich the asdefined as thcash inflows
If a CGU’s reto the extent
The two Peucorrespondinequipment u5.3.A.(1)). Thhigher CGU and both bra
In terms of plants (incluGroup may dagreements
In the Automrelated intanSeating, InteEquipment srecognised in
ImpairmeB. segment
The projectioassets in thprojections a(MTP) and tGroup's mos VEHICLE CGU
The Vehicle CThese flows The flows are
At 31 Decemand Opel Vau Individual as
Specific tests2022 MTP. Ttests identifiRussia. It waimpairment million.
IMPAIRMENT
ng policies ce with IAS 3ssets is testedeful lives, wh
mes, deteriorhe recoverabtest usually ce of estimated
poses of impassets belong, he smallest idfrom other as
ecoverable amt possible, as
ugeot Citroënng to a vehicleused to manhe assets belolevel, respect
ands are alloca
individual assding propertydo impairmenwith joint-ven
motive Equipmngible assets aerior Systems egment CGU n the PSA Gro
ent test on thts
ons used to dhe Peugeot Care taken fromake into acco
st recent estim
Us
CGU tests areare projectede discounted
mber 2017, thuxhall Automo
ssets
s performed oThe discount ed an additioas recognisedrecognised pr
T
6 "Impairmend whenever tich is primari
rating profitale amount of
consists of estd future cash
airment testinexcept where
dentifiable Grssets or group
mount is less tan adjustmen
n DS and Opee model. The
nufacture theonging to the tively, Peugeoated to Opel V
sets, where ty, plant and ent tests on asntures) or asse
ment segmentand property,
and Clean Mcomprises the
oup’s consolid
he CGU and in
determine futCitroën DS Am the last meount the mainmates, which a
e taken from cd out over theusing an after
e tests on theotive segmen
on the Latin Arates used wenal annual imd under non-reviously, tota
nt of Assets"there are indly goodwill anbility, technoan asset is thtimating the flows.
ng, the recovee the recoveraroup of assetsps of assets.
han its carryint to the carry
el Vauxhall Aassets include
e model, as wvehicule CGU
ot Citroen DS Vauxhall Auto
here are indiequipment anssets dedicateets dedicated
t, each CGU coplant and equ
Mobility) to we assets of theated financial
ndividual ass
ture cash flowAutomotive Aedium-term pn risks pertainare based on e
cash flow proj estimated lif
r-tax rate of 9
e assets dedicts did not iden
American planere 16.5% forpairment cha-recurring opal impairment
, the recoverdications of imnd brands. Indological or rehe higher of itasset’s value
erable amounable amount s that genera
ng amount, aying amount o
Automotive seed in a Vehiclwell as capit
Us and all the and Opel Vau
omotive CGU.
ications of imnd intangible ed to specific to a single te
orresponds touipment. The
which support e CGUs in thel statements.
sets of the Pe
ws for the purAutomotive splan presentedning to this pexternal forec
ections for eafe cycle of the.5%.
cated to the Vntify any impa
nts and the Rr the Latin Amarge of €17 miperating incomt charges for
rable amount mpairment andications of imegulatory devts value in use
in use. Value
nt is determinof the individtes cash inflo
n impairmentof any goodwil
egments comle CGU consistalised mode
other assets uxhall Automo
mpairment theassets) in La
c contracts (inechnology.
o a programmse CGUs are cassets and g
e above four B
eugeot Citroë
rposes of impegment wered to the Supeplan. The autocasts.
ach vehicle moe vehicle mode
Vehicle CGUsairment.
ussian plant wmerican plantillion related tme. As of 31the Latin Am
Groupe
of property, nd at least onmpairment arevelopments the and its fair ve in use is usu
ned for a cashdual asset canows that are l
t loss is recogll allocated to
prise a numbt of tooling anl developmenare combined
otive CGUs. T
e Group doestin America a
n particular co
me and comprcombined in Bgoodwill are aBusiness Units
ën DS and Op
pairment testie updated inervisory Boardomotive mark
odel showing el and of the c
in the Peuge
were updateds and 13% foto capital expe
1 December 2erican and Ru
PSA 2017 Ann
plant and eqnce a year foe in particulahat adverselyvalue less cosually measure
h-generating n be determinargely indepe
gnised in profio the CGU.
ber of Vehiclend other specnt expenditud and tested
The Opel Vaux
s impairmentand Russia. Mooperation ag
rises all customBusiness Unitsallocated. Thes and the Faur
pel Vauxhall A
ing of CGUs an December d, which coveket forecasts
indications ofcorrespondin
eot Citroën DS
d on the basisor the Russianenditure duri2017, taking ussian plants
ual Results - 47
quipment andor assets withr a significanty impact thets to sell. Theed as the net
unit (CGU) toned. CGUs areendent of the
it or loss and,
e CGUs, eachcific plant andre (see Notetogether at a
xhall goodwill
tests on theMoreover, thegreements or
mer contract-s (Automotivee Automotiverecia goodwill
Automotive
and individual2017. These
ers 2018-2022used are the
f impairment.g spare parts.
S Automotive
s of the 2018-n plant. Theseng the year ininto accounttotalled €378
7
d h t e e t
o e e
,
h d e a l
e e r
-e e l
l e 2 e
.
.
e
-e n t 8
48 - Groupe PS
The researchAutomotive s Peugeot Citr
The profitabperformance
The after-taxgrowth rate test the asse
As of 31 DePeugeot Citr
Following ththe net carrymillion.
Sensitivities than that recapped at 0.€1,461 millioIn the absenAutomotive C
ImpairmeC.
FAURECIA G
The carrying use is defineunit based o
The main assof terminal vof the Mediuunchanged a
The test perbalance shee
The test resuincrease in treduction in FAURECIA CG
The stock maa share priceleading to thvalued at €1these values
(in million eur • Automotive • Clean Mob • Interior SysTotal
SA 2017 Annua
h and developsegment and
roën DS and O
bility assumede of the Peuge
x discount ratof 1%. These
ets of the Peug
ecember 2017oën DS Autom
e impairmentying amount o
to the main csulting from t5%, €1,106 m
on if the threence of indicatCGU was not
ent test on Fa
ROUP CGUs
amount of eaed as the presn the latest pr
sumption affevalue. The calcum-Term Planafter-tax rate o
rformed at enet. The balanc
ults are largehe discount rthe perpetua
GU IN THE AC
arket value ofe of €65.13, rehe acquisition1,624 million (
no impairme
ros)e Seatingbilitystems
al Results
pment individdedicated to
Opel Vauxhall
d for the pueot Citroën DS
te applied warates are unchgeot Citroën D
7, taking intomotive CGU to
t of the Peugof all property
changes in assthe base test
million with ane factors wereions of impaitested for imp
aurecia group
ach group of ent value of erojections fro
ecting value inculation was
n (2020) usingof 9.0% (9.0%
nd-2017 confce sheet value
ely positive, arate, 0.5 percel recurring op
CCOUNTS OF P
f the Faureciaepresenting thn of control. T(including thent loss was re
ual assets hethe Chinese a
Automotive
urposes of deS Automotive
as 9.5% for 20hanged compDS Automotive
o account impotalled €604 m
eot Citroën Dy, plant and e
sumptions aret with a discon operating m combined. irment and gipairment.
p CGUs and o
assets was coestimated futm the Medium
n use is the leperformed by a growth rate
% in 2016), pro
irmed that ths are presente
nd the combentage point
perating incom
PSA GROUP
shares held bhe price that wThe Group's se goodwill of €ecognised on t
ld by the fullyactivities have
CGU
etermining thbusiness.
018–2022 andpared with thoe CGU.
pairment recmillion.
DS Automotiveequipment an
e as follows: ount rate 0.5%
margin 0.5% lo
iven the prov
other assets
ompared withure cash flowm-Term Plan
evel of recurry extrapolatine of 1.4% (1.4
ovided by an in
he goodwill aed in the tabl
ined sensitivireduction in
me) does not c
by Peugeot S.Awould be paidhare of Faure€172 million the Faurecia g
y consolidatede been impaire
he terminal v
d 10.5% for those used for th
ognised prev
e CGU and ofd intangible a
the fair value% higher, €23ower in the re
visional purch
the higher ofws expected to
(2018–2020 p
ing operatingg to perpetui
4% in 2016). Fndependent e
llocated to the below:
ty to changesthe perpetua
call into quest
A. at 31 Deced in a transactecia's net asserecognised b
goodwill at 31
d companies ed ion the am
value is cons
he terminal vahe periods en
iously, net im
f individual asassets include
e of assets wo1 million withference year
ase price allo
f its fair valueo be generateplan revised at
income, partty projected c
Future cash floexpert.
he three CGU
s in assumptil growth rate
tion the carryi
mber 2017 wtion between ets in the cony Peugeot S.A December 20
31 De
of the Peugemount of €78 m
sistent with t
alue based oded 31 Decem
mpairment ch
ssets includeded in this CGU
ould be €275 h a perpetuafor the termi
ocation, the O
e and value ined by each cast mid-2017).
ticularly for thcash flows forows were disc
Us was fairly
ions (0.5 perce and 0.5 percing amount of
was €4,166 mil minority sha
nsolidated balA. at that dat017.
ecember 2017
31
79435567
1,216
ot Citroën DSmillion.
the historical
n a perpetualmber 2016, to
harges of the
d in this CGU, was €11,516
million lowerl growth ratenal value and
Opel Vauxhall
use. Value insh-generating
he calculationr the last yearcounted at an
stated in the
centage pointcentage pointf goodwill.
lion based onreholders notance sheet is
te). In light of
1 December 201679437648
1,218
S
l
l o
e
, 6
r e d
l
n g
n r n
e
t t
n t s f
D. ImpairmeThe companCompany Gr
The non-currto the Automassets that aspecific to th
At 31 Decemin the recogn
At 31 Decemnot identify recognised binvestments in 2017. The
In addition, Gindications orecoverable taken from tventures. Thto a perpetu2022 and 13
At 31 Decemnot identify a
8.4. OFF-BA
MinimumA.
In order to scarmakers foarrangementadvantage.
Under the teand specificarrangementto cover the
Any adverse they are con
For contractsfor as off- ba
(in million euCapital commOrders for resMinimum purNon-cancellaTotal
ent of investmnies at equity oup and the c
rent assets of motive busine
are specific to he models) are
mber 2017, imnition of RMB
mber 2017, impany addition
by this compain companiestwo partners
Groupe PSA dof impairmentamount is dethe most recee terminal va
ual growth rat.5% for the te
mber 2017, thany impairme
ALANCE SHEE
m purchase cospeed up its or the joint ts enable the
erms of these c tooling andts. If it fails torelated produ
consequencesidered proba
s where the palance sheet c
ros)mitments for thsearch and derchase commitable lease com
ments in comin the autom
company in pa
these compaess of Groupethe vehicle m
e tested in agg
pairment test1,515 million
pairment testal impairmenny was €263
s at equity an agreed to car
oes additionat losses, suchetermined by ent medium-tlue is determte of 3.0%. Th
erminal value.
e impairmentent losses on t
ET COMMITM
ommitmentsgrowth and rdevelopmentpartners to sh
agreements, d to taking o honour this uction costs b
es of these coable, in the fo
products are mommitments
he acquisition ovelopment wortments
mmitments
mpanies at eqmotive busineartnership wit
nies are testee PSA (see N
models are tesgregate at the
ting at the con in impairmen
ing by Changant losses. At 3million. Accod a €190 millirry out a capit
al impairment as for examlooking at th
term plan forined with refe
he future cash
t testing of intop of those a
MENTS AND C
s reduce costs,
and/or manhare project c
the Group is delivery of aminimum puorne by the p
ommitments rm of asset im
manufacturednet of any pro
of non-current rk
Of which O
quity in the aess include thth Changan G
ed for impairmote 8.3). Whsted by the Ve level of each
mpanies in pant losses (the
an PSA Autom31 Decemberrdingly, Grouion provision tal increase fo
t testing of theple a significa
he value in usr 2018-2022 aerence to theh flows are d
vestments in lready recogn
CONTINGENT
the Group hnufacture of costs, deliverin
committed ta minimum rchase comm
partner.
are reflected mpairments o
d by the Grouovisions.
assets
Opel Vauxhall A
automotive bhe companiesroup, based in
ment on the ben there are ehicle CGU an
h partnership.
artnership witGroup's share
mobile Co, Ltd r 2016, the Gpe PSA retainfor contingen
or circa €230 m
e investmentsant fall in volse based on capproved by te data in the fiscounted usi
companies anised for the a
T LIABILITIES
as entered inmechanical sng economies
o financing inquantity of
mitment, it wil
in the consor, if necessary
up's partner, c
Automotive se
Groupe
business in partnersh
n China.
asis of the samindications o
nd all assets (
th the Dong Fe was RMB 75
in cooperatioGroup's share ned €51 millioncies after incmillion each in
s in companieumes or deteash flow forethe partners oinal years of tng an after-ta
t equity in thassets of these
RELATED TO
nto cooperatioub-assemblies of scale that
vestment in rproducts ma
l be required
lidated financy, provisions fo
capacity reser
31 D
egment
PSA 2017 Ann
hip with Dong
me principlesof an impairmincluding tho
Feng Motor G58 million, i.e.
on with Changof the impa
on in impairmclusion of a €2n the first half
es at equity weriorating proecasts. These of each of ththe plan and hax rate of 12.
e automotivee companies.
OPERATING
on agreemenes or vehiclest translate into
research and anufactured to pay a pen
cial statemenor contingenc
rvation fees a
ecember 2017
3
1,28422
1731,8673,346
475
ual Results - 49
g Feng Motor
as applicablement loss, the
se that aren't
roup resulted €97 million).
gan Group didirment lossesent losses for
24 million lossf of 2018.
hen there arefitability. Theforecasts areese two jointhaving regard.5% for 2018-
e business did
ACTIVITIES
ts with others. These jointo competitive
developmentby the jointalty designed
ts as soon ascies.
are accounted
31 December 20168543353
1,4732,413
-
9
r
e e t
d
d s r s
e e e t d -
d
r t e
t t d
s
d
50 - Groupe PS
Capital coB. This item coGroup's comautomotive December 20
Non-cancC.
Non-cancellaproperty and
NOTE 9 -
9.1. OTHER
The Group h€204 million "available-foreported as n
9.2. OTHER
Periods
(in million eu2017201820192020202120222023Subsequent yTotal non-ca
(in million euExcess of paInvestments Derivative insGuarantee deTotal
(1) Correspond
(in million euLiabilities relOtherTotal
SA 2017 Annua
ommitments orresponds m
mmitment towequipment m
017, the Grou
cellable lease
able leases ard vehicles. The
OTHER NO
R NON-CURRE
has invested into these two
or-sale" in acconon-current a
R NON-CURRE
ros)
yearsancellable le
uros)ayments to exin non-consoli
struments (1)
eposits and ot
ding to the non
uros)ated to vehicle
al Results
for the acqumainly to comwards the two manufacturersup had already
e commitmen
e entered inte lease terms
ON-CURRE
ENT ASSETS
n the two "Foo funds, €145ordance with
assets because
ENT LIABILITI
ase commitm
ternal funds ovidated compan
ther
-current portion
es sold with a
uisition of nonmmitments to
Fonds d’Avens. The Groupy paid €145 m
nts
o in the normreflect local p
ENT ASSETS
onds d’Avenir5 million of w
IAS 39 and are of the lock-u
ES
ments
ver pension obnies and units
Of which Open of derivative in
buyback com
Of which Ope
n-current asso purchase prnir Automobilep's total comm
million into the
mal course of practices in ea
S AND OTH
r Automobile"which has beere therefore mup applicable
bligationsin the FAA fun
el Vauxhall Aunstruments hed
mitment
el Vauxhall Au
sets roperty, plane (FAA - tier 1mitment to F
ese two funds
business and ach country.
HER NON-C
" (FAA - tier 1en paid to dameasured at fto the Group'
nds
tomotive segmdging commod
5.1.A
utomotive segm
t and equipmand tier 2), tw
FAA amounte.
consist mainl
CURRENT L
1 and tier 2). Tte. These uni
fair value (sees investment.
31 De
Notes31 De
7.1.E
mentdity risks.
Notes31 De
A.(1).(a)
ment
ment. It also wo funds set ed to €204 m
ly of leases o
LIABILITIES
The Group haits have been
e Note 12.8.C..
ecember 2017
3
-446272242175129112491
1,867
ecember 2017
3
630462
6607
1,705
118
ecember 2017
3
4,180100
4,280
863
includes theup to support
million. At 31
n commercial
S
as committedn classified as(3)). They are
1 December 2016263209172148130107
-444
1,473
1 December 201672925428
3641,375
-
31 December 2016
3,126162
3,288
-
e t 1
l
d s e
Groupe PSA 2017 Annual Results - 51
NOTE 10 - CURRENT AND NON-CURRENT PROVISIONS
ACCOUNTING POLICIES In accordance with IAS 37 – Provisions, Contingent Liabilities and Contingent Assets, a provision is recognised when, at the balance sheet date, the Group has a present obligation towards a third party, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and no inflow of resources of an equivalent amount is expected. Provisions for restructuring costs are recognised only when the restructuring has been announced and the Group has drawn up or has started to implement a detailed formal plan.
In application of IFRIC – 21 Levies charged by public authorities, taxes levied by public authorities are recognised as of the date of their tax generating event.
Provisions are discounted only when the effect is material. In this case, the discount rate is based on a risk-free rate.
Warranties
A provision is recorded to cover the estimated cost of vehicle and spare parts warranties at the time of sale to independent dealer networks or end-customers. Revenues from the sale of extended warranties or maintenance contracts are recognised over the period during which the service is provided.
The provision for warranties mainly concerns sales of new vehicles, where the contractual obligations generally cover two years.
It corresponds to the expected cost of warranty claims related to vehicles and replacement parts. The amount expected to be recovered from suppliers is recognised as an asset, under "Miscellaneous other receivables" (Note 6.3.A).
Provisions for tax claims concern a number of claims primarily outside France, and notably in Brazil.
31 December 2016 Additions
Releases (utilisations)
Releases (unused
provisions)
Recognised in equity during
the period
Change in scope of consolidation
and other31 December
2017Pensions (Note 7.1.E) - - - - - - -Other employee benefit obligations and other 187 - - - - - 187Total non-current provisions 187 - - - - - 187Warranties 42,735 42,735Commercial and tax claims and litigations 1,235 172 (112) (1) 104 (5) 1,393Restructuring plans (1) 194 36 (30) - - 3 203Long-term and operating contract losses 1,429 208 (142) (1) 104 (2) 1,596Other 924 679 (548) (82) - 473 1,446
Total current provisions 46,517 1,095 (832) (84) 208 469 47,373
Of which Opel Vauxhall Automotive segment 1,384 1,857(1) The main additions for restructuring plans in 2017 are discussed in Note 5.4.B.
52 - Groupe PSA 2017 Annual Results
NOTE 11 - INVESTMENTS IN EQUITY-ACCOUNTED COMPANIES
The share in earnings of equity-accounted companies represents the Group’s share of the earnings of those companies, plus any impairment of investments in equity-accounted companies.
Gains on disposals of investments in equity-accounted companies are recorded in operating income.
Companies accounted for by the equity method include: joint ventures with Dong Feng Motor Group (see Note 11.4.A) and Changan (see Note 11.4.B), located in China; finance companies in partnership with: o Santander Consumer Finance covering the financing of the Peugeot, Citroën and DS brands’ operations in the
following countries: France, the United-Kingdom, Malta, Spain, Switzerland, Italy, the Netherlands, Belgium, Germany, Austria, Brazil and Poland (see Note 11.4.C);
o BNP Paribas covering the financing of the Opel and Vauxhall brands’ operations in the following countries: Germany, France, the Netherlands, the United-Kingdom, Sweden and Switzerland (see Note 11.4.D);
o as well as the joint company with Dongfeng Motor Group in China; the companies over which the Group has significant influence, mainly Gefco and since 2015 Peugeot Scooters.
11.1. CHANGES IN THE CARRYING AMOUNT OF INVESTMENTS IN EQUITY-ACCOUNTED COMPANIES
(in million euros) 2017 2016
At beginning of period 3,014 2,637Dividends and profit transfers (1) (369) (381)Share of net earnings 217 128Newly consolidated companies (2) 555 484Capital increase (reduction) (3) 57 42Changes in scope of consolidation and other 108 188Translation adjustment (110) (84)At period-end 3,472 3,014O/w Dongfeng Peugeot Citroën Automobile goodwill 75 82O/w Dongfeng Peugeot Citroën Automobile Finance Company Ltd goodwill 2 3O/w Saipa Citroën Company goodwill 90 -O/w Gefco goodwill 57 57
(2) Concerns mainly companies in partnership with BNP Paribas(3) Concerns mainly companies in partnership with Santander
(1) Dividends and profit transfers in 2017 included €200 million in net dividends paid to the Group by the companies in partnershipwith DPCA, of which €10 million withheld.
Groupe PSA 2017 Annual Results - 53
11.2. SHARE IN NET ASSETS OF EQUITY-ACCOUNTED COMPANIES
The share in net assets of equity-accounted companies breaks down into €3,472 million (€3,014 million at 31 December 2016) for companies with positive net equity, reported under “Investments in equity-accounted companies” less €206 million (€193 million at 31 December 2016) for companies with negative net equity.
11.3. SHARE IN NET EARNINGS OF EQUITY-ACCOUNTED COMPANIES
(in million euros)Latest %
interest 31 December
201731 December
2016Dongfeng Motor Company cooperation agreement : 897 1,192
• Dongfeng Peugeot Citroën Automobile (1) 50 % 868 1,043• Dongfeng Peugeot Citroën Automobile Sales Co 50 % 17 143• Dongfeng Peugeot Citroën International Co 50 % 12 6
Changan cooperation agreement : Changan PSA Automobiles Co., Ltd 50 % (190) (177)Other 151 10
Automotive 858 1,025Automotive equipment 136 115
Gefco (1) 25 % 156 153Peugeot Scooters 49 % - 1
Other activities 156 154
Manufacturing and sales activities 1,150 1,294Finance companies in partnership with Santander Consumer Finance 50 % 1,535 1,450Finance companies in partnership with BNP Paribas 50 % 493 -Dongfeng Peugeot Citroën Automobile Finance Company Ltd (1) 25 % 88 77
Finance activities 2,116 1,527Total 3,266 2,821(1) Including goodwill (see Note 11.1)
(in million euros)Latest %
interest 31 December
201731 December
2016Dongfeng Motor Company cooperation agreement : (30) 242
• Dongfeng Peugeot Citroën Automobile (1) 50 % (14) 129• Dongfeng Peugeot Citroën Automobile Sales Co 50 % (16) 113• Dongfeng Peugeot Citroën International Co 50 % - -
Changan cooperation agreement : Changan PSA Automobiles Co., Ltd 50 % (24) (292)Other (1) (43)
Automotive (55) (93)Automotive equipment 35 20
Gefco (1) 25 % 17 14Peugeot Scooters 49 % (6) (8)
Other activities 11 6
Manufacturing and sales activities (9) (67)Finance companies in partnership with Santander Consumer Finance 50 % 201 181Finance companies in partnership with BNP Paribas 50 % 8 -Dongfeng Peugeot Citroën Automobile Finance Company Ltd (1) 25 % 17 14
Finance activities 226 195Total 217 128(1) Including goodwill (see Note 11.1)
54 - Groupe PS
11.4. KEY F
The detailed
DongfengA. PSA Group a
Dongfenfor accoDongfenDongfeninfluencDongfensignifica
Another join
The amounts
Earnings item
The amount depreciation
RevenueRecurring opeOperating incOf which depNet financial Income taxesProfit (loss) frProfit (loss) frProfit (loss) o
Income and e
Other informNet dividend Group
Group's share(Share in net
SA 2017 Annua
INANCIAL DA
data about th
g Motor Ground Dongfeng
ng Peugeot Ciounting purpong Citroën brang Peugeot Cie. It markets i
ng Peugeot Cint influence.
tly controlled
s below repre
ms at 100%
of depreciat of assets as i
erating incomecome (loss)preciation and iincome (loss)
srom continuingrom discontinuof the period
expenses reco
mationreceived from t
e in the profit (earnings of co
al Results
ATA OF EQUI
he equity-acco
up cooperatioMotor Grouptroën Automo
oses as a joinands in China aitroën Automin China the vitroën AutomIt markets out
company is b
sent the com
tion and impadentified by t
e (loss)
impairment
g operationsued operations
gnised in equit
the joint ventur
loss) of the peompanies at eq
TY-ACCOUNT
ounted compa
on agreemen have three joobile (DPCA),
nt venture. It and Fengshenobile Sales Co
vehicles produmobile Interna
tside China, in
being created
bined financia
airment recorthe two partne
ty, net
re(s) by PSA
eriod quity)
TED COMPAN
anies are the
nt in the autooint ventures:based in Wumanufacture
n; o (DPCS), bas
uced by DPCA;ational Co (DPn the ASEAN z
in charge of r
al statements
rded in 2017 ers for 1,515
In
NIES
following.
omotive activ han, which is
es motor veh
sed in Wuhan; PCI), based inzone the vehic
research and d
of DPCA and
for 4,172 mimillion yuan.
20175,404
59(138)(548)
5126
(61)-
(61)
(30)
-
200
n million euros
vities
subject to joicles under th
n, over which
n Singapore, ocles produced
development.
DPCS.
llion yuan inc
20167,455
524568
(299)55
(138)485
-485
242
-
260
oint control anhe Dongfeng
the Group h
over which thd by DPCA.
.
cludes notab
201741,355
498(1,060)(4,172)
384211
(465)-
(465)
In million yu
nd is qualifiedPeugeot and
has significant
he Group has
ly the overall
201654,7953,8584,181
(2,202)402
(1,015)3,568
-3,568
uans
d d
t
s
l
Balance shee
Changan B. Since 2011, PShenzhen, sumarkets mot Earnings item
AssetsNon-current aCurrent assetOf which cas
LiabilitiesNon-current lOf which nonCurrent liabiliOf which currEquity
Transition taEquity% of interestGroup's shareGoodwillInvestments i
RevenueRecurring opeOperating incOf which depNet financial Income taxesProfit (loss) frProfit (loss) frProfit (loss) o
Income and e
Other inform
Group's share(Share in net
Net dividend Group
et items at 10
cooperation PSA Group anubject to jointor vehicles un
ms at 100%
assetsts
sh and cash eqsiabilities (exclu
n-current financtiesrent financial li
able
e in equity
in company at
erating incomecome (loss)preciation and imincome (loss)
srom continuingrom discontinuof the period
expenses recog
mation
e in the profit (earnings of co
received from t
00%
agreement d Changan ha
nt control andnder the DS b
quivalents
uding equity)cial liabilities
iabilities
equity
e (loss)
impairment
g operationsued operations
gnised in equit
loss) of the peompanies at eq
the joint ventur
ave owned a jod classified forand in China
ty, net
riod quity)
re(s) by PSA
oint venture kor accounting. The newly b
31 DeceIn
In
known as Chag purposes asuilt plant beg
ember 2017
31 Dec
2,9542,6681,691
269269
3,731511
1,622
1,62250%81175
886
n million euros
2017133(11)(14)(8)
(28)(6)
(48)-
(48)
(24)
-
-
n million euros
Groupe
ngan PSA Auts a joint ventan production
cember 2016
31 De
3,3802,8261,224
287287
3,71122
2,208
2,20850%
1,10482
1,186
2016368(22)
(488)(464)
(24)(72)
(584)-
(584)
(292)
-
-
PSA 2017 Ann
tomobile (CAPture. It manun in 2013.
ecember 2017
3
23,05720,80613,196
2,1002,100
29,1063,985
12,657
In million yu
20171,014
(83)(104)(63)
(213)(44)
(361)-
(361)
In million yu
ual Results - 55
PSA), based inufactures and
1 December 2016
24,74620,7008,957
2,1032,103
27,166164
16,177
ans
20162,702(161)
(3,561)(3,383)
(177)(529)
(4,267)-
(4,267)
ans
5
n d
56 - Groupe PS
Balance shee
SantandeC.
The combinetables below
The scope oBrazil. Earnings item
AssetsNon-current aCurrent assetOf which cas
LiabilitiesNon-current lOf which nonCurrent liabiliOf which currEquity
Transition taEquity% of interestGroup's share
In million euroNet banking General operaGross operatCost of riskOperating inNon operatingIncome taxesProfit (losss)
Income and e
Other informNet dividend r
Group's shareequity)
SA 2017 Annua
et items at 100%
er agreement
ed financial sw.
of the partner
ms at 100%
assetsts
sh and cash eqsiabilities (exclu
n-current financtiesrent financial li
able
e in equity
osrevenue
ating expenses ting income
ncomeg items
for the period
expenses recog
mationreceived from th
e in the profit (lo
al Results
%
t in the financ
tatements of
rship with San
quivalents
uding equity)cial liabilities
iabilities
and others
d
nised in equity,
he joint venture(
oss) of the perio
cing activitie
all the joint
ntander inclu
, net
(s) by PSA Gro
od (Share in net
es
ventures wit
udes at 31 De
31 DeceIn
oup
t earnings of co
h Santander
ecember 2017
ember 2017
31 Dec
44214162
272272691379
(380)
(380)50%(190)
n million euros
ompanies at
are presented
7 eleven Euro
cember 2016
31 D
38819291
408408525250
(353)
(353)50%(177)
d in summary
opean countri
December 2017
3
3,4421,100
480
2,1202,1205,3902,954
(2,968)
In million yu
20171,041(380)
661(58)603(12)
(190)401
201
(3)
136
y form in the
ies as well as
31 December 2016
2,8471,408
665
2,9902,9903,8451,832
(2,580)
uans
2016895
(330)565(28)537
-(176)
361
181
(3)
(92)
e
s
Balance shee
BNP ParibD.
The combinetables below
The scope of
Earnings item
Balance shee
In million eurCustomer loaOther assetsTotal assetsFinancing liabOther liabilitieEquityTotal liabilit
In million euroNet banking General operaGross operatCost of riskOperating in
Non operatingIncome taxesProfit (losss)
Income and e
Other informNet dividend r
Group's shareequity)
In million euroCustomer loaOther assetsTotal assetsFinancing liabOther liabilitieEquityTotal liabiliti
et items at 10
bas agreeme
ed financial stw.
f the partners
ms at 100%
et items at 10
rosans and receiva
sbilitieses
ties
osrevenue
ating expenses ting income
ncome
g items
for the period
xpenses recog
mationreceived from th
e in the profit (lo
osns and receivab
bilitieses
ies
00%
ent in the fina
tatements of
hip with BNP
00%
ables
and others
d
nised in equity,
he joint venture(
oss) of the perio
bles
ancing activit
all the joint v
Paribas includ
, net
(s) by PSA Gro
od (Share in net
ties
ventures with
des at 31 Dece
up
t earnings of co
h BNP Paribas
ember 2017 s
ompanies at
Groupe
are presente
ix European c
31 D
31 Dece
1
1
PSA 2017 Ann
ed in summar
countries.
December 2017
3
24,6052,639
27,24418,9785,1993,067
27,244
201766
(43)23(1)22
-(6)16
8
-
-
mber 2017
9,1571,0200,1777,1332,057
9870,177
ual Results - 57
ry form in the
31 December 2016
22,4502,481
24,93117,6354,3962,900
24,931
7
e
58 - Groupe PS
11.5. RELAT
Transactions
Sale and puaccounted co
Receivables a
Dealings betthe joint ven
NOTE 12
12.1. ACCO
The principleare described 12.2. NET F
Finance costs
Finance cA. Finance costs
(in million eurSales to manSales and asPurchases (2)
(2) of which €1
(1) of which €5(€33 million in
(in million eurLong-term loaLoans - due wAccounts recAccounts pay
(in million eurInterest incomFinance costsOther financiaOther financiaNet financia
(1) Including €3
SA 2017 Annua
TED PARTY T
s with equity-a
rchase transaompanies are
and payables
ween PSA Grtures.
- FINANCICOMPAN
OUNTING POL
es governing td in Note 12.8
FINANCIAL IN
s include in 20
costs s are actual ex
ros)nufacturing andssignments to 2)
,856 million in p
546 million in sn 2016).
ros)answithin one yeaceivableybale
ros)me (1)
sal incomeal expensesl income (exp
30 million for the
al Results
TRANSACTION
accounted com
actions carrieas follows:
with equity-a
oup and the f
NG AND FNIES
LICIES
the measurem8.
NCOME (EXPE
016 an except
xpense less th
d sales compancompanies in p
purchases from
ales to compan
r
pense)
e Automotive div
NS – EQUITY-
mpanies are b
ed out by the
accounted com
financial com
INANCIAL
ment of finan
ENSE)
tional charge
he capitalised
nies (1)
partnership wit
m Gefco (€1,684
nies in partners
vision and Other
-ACCOUNTED
billed on arm'
e consolidate
mpanies are a
panies are lar
INSTRUM
cial assets an
of €65 million
portion of as
th Santander
4 million in 2016
hip with DCPA
r Businesses (€8
D COMPANIE
s length term
d manufactu
s follows:
rgely unchang
ENTS – MA
nd liabilities w
n for the early
sets in develo
6).
(€735 million in
85 million in 201
S
s.
ring and sale
ged following
ANUFACTU
within the mea
redemption o
opment.
n 2016) and €2
31 D
16).
es companies
Santander's i
URING AND
aning of IAS 3
of bonds by P
2017675
5,171(2,257)
23 million in sal
December 2017
3
48116318
(364)
201742
(208)121
(196)(241)
with equity-
investment in
D SALES
32 and IAS 39
Peugeot S.A.
2016857
5,172(2,043)
es to CAPSA
31 December 2016
5127
315(325)
201695
(335)203
(235)(272)
-
n
9
CapitaliseBorrowing coplant and eqcapitalised aqualifying ascosts.
When funds eligible for cincome on th
When funds costs eligibleborrowing co Finance cos
Other finaB.
12.3. NET F
Net financialAccording tothat may be and sales coshare of themanufacturinFinancial asscurrent. All o
(in million eurFinancial costForeign exchaFinance costs
Of which AutCapitalised boTotal
(in million eurFinance costs
Of which Aut
Interest incomOf which Aut
TotalOf which Aut
(in million eurExpected retuOther financiaFinancial incInterest cost oIneffective porOther financiaFinancial ex
ed borrowingosts that are quipment or as part of the sets under IA
are borrowedcapitalisation he temporary
borrowed fore for capitalosts for the pe
sts incurred,
ancial incom
FINANCIAL PO
l position (neto the Group's
utilised to reompanies. Thiese financial ang and sales c
sets and liabilother assets a
ros)tsange gain (losss incurredtomotive Divisioorrowing Costs
ros)s incurredtomotive Divisio
metomotive Divisio
tomotive Divisio
ros)urn on pension al incomecomeon employee bertion of the chanal expensesxpenses
g costs directly attrib
an intangible cost of that aS 23 – Borrow
d specifically corresponds investment o
r general corpisation is deteriod of the o
net of inter
e and expen
OSITION (NET
t debt) of the definition, it
edeem these s definition rassets not reacompanies (seities with matnd liabilities a
) on financial tr
n and Other Bus
on and Other Bus
on and Other Bus
on and Other Bus
funds
enefit obligationnge in fair value
butable to thasset that ta
asset (the “quwing Costs an
for the purpoto the actual
of any borrowe
porate purpostermined by perating segm
est income
ses
T DEBT) OF M
manufacturinis equal to th
liabilities, as emains unchaadily available
ee Note 12.4).turities of mo
are reported a
ransactions and
sinesses
sinesses
sinesses
sinesses
nse of financial ins
e acquisition,akes at least tualifying assed their carryin
ose of obtaini borrowing ced funds not y
ses are used tapplying a
ment that obta
MANUFACTU
ng and sales che financial liwell as thoseanged from te is not take. ore than one as current.
d other
struments
, constructiontwelve montht”). Group invng amount do
ng a qualifyinosts incurredyet used.
o obtain a qucapitalisation ains the qualif
RING AND SA
companies is aiabilities net o
e assigned to the date of fin into consid
year at the b
Groupe
n or productiohs to get readventories do oes not theref
g asset, the aduring the p
alifying asset,rate equal
fying asset.
ALES COMPA
a financial indof financial asspecific expenrst adoption eration in th
alance sheet
PSA 2017 Ann
on of an itemdy for its intenot meet thefore include a
amount of boperiod less an
, the amount to the weigh
ANIES
dicator not dessets used as nses of the mof IFRS in the financial se
date are clas
2017(337)
2(335)(216)
127(208)
2017(335)(216)
4231
(293)(186)
201721
100121(20)(28)
(148)(196)
ual Results - 59
m of property,nded use are
e definition ofny borrowing
rrowing costsny investment
of borrowinghted average
fined by IFRS.collateral, or
manufacturinge Group. Theecurity of the
sified as non-
2016(447)(15)
(462)(311)
127(335)
2016(462)(311)
9585
(367)(226)
201626
177203(27)(45)
(163)(235)
9
, e f g
s t
g e
. r g e e
-
60 - Groupe PS
CompositA.
Change inB. In 2017, the12.7.A.
In 2017, the
Net cash fro€5,205 milliodiscussed in
Investments net investmepayment of Groupe PSA equity intere
Other cash iwarrants, for
These varioumillion, whic
cash resnet debvariatio
The €1,046 mmillion and €S.A. from the
Debt repaym€304 million
Furthermore
(in million eurosNon-current finaCurrent financiaOther non-curreCurrent financiaFinancial investCash and cash (Net debt) Net Of which externOf which financwith finance com(1) Of which PeuVauxhall AutomOther Business
(in million eurIncrease in boRepayment o(Increase) dec(Increase) decIncrease (dec
Net cash flowTotal
SA 2017 Annua
tion of net fin
n net financiae Group kept
manufacturin
m operating aon plus the poNote 6.4.A.
for the perioent and finan€431 million subsidiaries,
ests.
inflows for thr €288 million
us cash inflowch breaks dowerves increasebt before cans:
million increa€100 million be European In
ments in the ain 2012 bond
e, the non-cas
s)ancial liabilitiesal liabilitiesent financial asseal assetstmentsequivalentsfinancial positi
nal loans and borrcial assets and liampanies
ugeot Citroën DS,motive segments ases
ros)orrowingsf borrowings ancrease in non-ccrease in curre
crease) in curre
ws with Group fin
al Results
nancial posit
al position (nup the proa
ng and sales co
activities for tositive impact
d in property,ncing needs fin dividends as well as €7
he period comn.
ws and outflowwn as follows:
ed by €153 mash and cas
se in borrowby Peugeot S.Avestment Ban
amount of €73ds upon matur
h changes rep
31 Dece
((
ets
1onrowingsabilities
Opel and
nd conversion ocurrent financialnt financial assnt financial liab
nance compani
ion (net debt
net debt) ctive refinanc
ompanies hav
the year totalof a €8 millio
, plant and eqfor the year to Peugeot S74 million in
mprised the c
ws have result
illion; sh equivalen
ings mainly reA., and the €2nk (see Note 1
31 million incrity in July 201
presented an
ember 2016
Net decrein cash
cequivale
(4,526) (9(1,661)
685629110
11,5766,8136,804
9
7,288
of bondsl assets
setsbilities
ies
t)
cing strategy
ve slightly dec
led positive €on slight increa
quipment andstood at €1,
S.A. shareholdcapital increa
capital increa
ted in a cont
nts increase
esulted from 250 million lo12.6.A).
clude notably 17.
increase of €7
ease and
cash ents
Change scope
consolidatio960) (82604 (812(19) (157344 30556
30 (750
and conserva
reased their n
€5,213 millionase in working
d intangible as253 million. T
ders, €129 miases and acqu
ses following
rolled reducti
ed by €43 m
the 23 Marchan arranged o
(see Note 12
729 million in
in of
onRemeasurement of equity
2) -2) (1)7) (10)01 1
- -- -
0) (10)
ative liquidity
net financial p
, representingg capital. Cha
ssets amounteThis amount llion to non-c
uisitions of co
in particular
on in the net
million as a
h 2017 issuanon 2 February
.6.A) the repa
the net debt
Exchange rate fluctuations
2391
(11)(17)
--
86
y policy descr
position.
g funds from nges in worki
ed to €4,020 mincludes in p
controlling shonsolidated co
r the convers
t financial pos
result of th
nce of two boy 2017 by PSA
ayment by Pe
of the Group.
Other changes767
(752)(1)11
--
25
20171,046(731)
169(548)
10743(1)42
ribed in Note
operations ofng capital are
million. Otherparticular theareholders of
ompanies and
sion of equity
sition of €619
he following
onds for €600A Automobiles
eugeot S.A. of
.
31 December 2017
(4,778)(2,531)
4871,269
16511,5826,1946,186
8
6,840
20161,262
(2,921)(70)16021
(1,548)(443)
(1,991)
e
f e
r e f d
y
9
g
0 s
f
12.4. FINAN
Financial sec
€1,241 millionon-current €1,575 millio
UNDRAW
The Group's lines of credi
The Peugeotrespectively,
This credit fa
This facility isa level oa ratio o
The net debtlisted under
All of these c
Faurecia’s adarranged on credit was reThis credit fa
12.5. BREA
Other nonA.
(in million eurCash and casFinancial inveCurrent & nonTotalLines of creditLines of creditTotal financi
of which Fa(1) of which €43
(in million eurPeugeot S.A.FaureciaUndrawn con
(in million eurLoans and recFinancial assDerivative instTotal financi
NCIAL SECUT
curity is made
on (€585milliofinancial asse
on (€1,088 mil
WN SYNDICAT
manufacturiit expiring at v
t S.A. and GIE both falling d
acility was und
s subject to thof net debt of of the net debt
t of manufact“Total Equity”
clauses were c
dditional borr15 Decembe
enegotiated oacility was und
KDOWN OF F
n-current an
ros)sh equivalents (
estmentsn current financ
t (undrawn) – et (undrawn) – Fial security
aurecia3 million in Arge
ros) and GIE PSA
nfirmed lines
ros)ceivablesets classified atrumentsial assets, net
ITY
up of availab
on at 31 Decemets respectivellion at 31 Dec
TED LINES OF C
ng and sales various dates
PSA Trésoreridue in Novem
drawn at the p
he respect of: manufacturint of manufact
turing and sal” in liabilities.
complied with
owing capacitr 2014. It com
on 24 June 20drawn at the p
FINANCIAL A
d current fin
(1)
ial assets
excluding FaureFaurecia
entina (€12 millio
Trésorerie
of credit
as "at fair value
le cash, other
mber 2016) anly were includcember 2016)
CREDIT
companies hthrough to 20
ie credit line iber 2020.
period-end.
ng and sales coturing and sale
es companies
h at 31 Decem
ty, other thanmprises only o016 to extendperiod-end.
ASSETS
ancial assets
cia
on at 31 Decemb
through profit o
r readily availa
nd €334 millioded in the ca).
have the follo021:
s comprised o
ompanies of les companies
s is defined a
mber 2017.
n trough Peugone €1,200 md the maturity
s
ber 2016).
N
or loss"
able financial
on (€503 milliolculation of fi
owing addition
of two tranche
ess than of €6 to consolidat
nd disclosed i
geot S.A., resuillion tranche y to five years
Non-current255223
9487
31 Decembe
Groupe
assets and un
on at 31 Decenancial secur
nal borrowing
es for €2,000
6 billion; ted equity of l
in Note 12.3.
ults from a neexpiring in De
s from that da
Notes31 D
12.5.C12.5.B
31
Current1,261
-8
1,269
er 2017
PSA 2017 Ann
ndrawn credit
ember 2016) irity, represent
g capacity un
million and €
less than 1.
The Group’s
ew syndicatedecember 201ate, namely 2
December 2017
3
11,582165
1,57513,3223,0001,200
17,5222,849
December 2017
3
3,0001,2004,200
Non-current28538020
685
31 Decembe
ual Results - 61
lines.
n current andting a total of
der revolving
1,000 million,
equity is that
line of credit9. This line of
24 June 2021.
31 December 2016
11,576110
1,08812,7743,0001,200
16,9742,840
31 December 2016
3,0001,2004,200
Current627
-2
629
er 2016
d f
g
,
t
t f .
62 - Groupe PS
Financial B.
Short-term ihorizon is les
Cash and C. Cash primarprimarily of subject to anoriginal matu
Cash and cas
Cash include
At 31 Decemovernight mo
All of these Term Money
12.6. BREA
Main finaA.
The financial
The main tra
Bond issu
On 23 Marchan annual co
On 2 Februarepaid in Ma
In July 2017,
(in million eurMutual fund uCash and curTotal - manuo/w deposits Total
(in million eurOther bondsFinance leaseOther long-terOther short-teDerivative instTotal financi
SA 2017 Annua
investmentsinvestments ass than 12 mo
cash equivalily representscash investmn insignificanturity of three
sh equivalents
s the proceed
mber 2017, caoney market n
instruments cy Market Fund
KDOWN OF F
ancing transal risk managem
ansactions dur
ues by manuf
h 2017, Peugeoupon of 2%.
ary 2017, PSAarch 2024 bea
Peugeot S.A.
ros)units and moneyrrent account baufacturing andwith finance co
ros)
e liabilitiesrm borrowingserm financing atruments and oial liabilities
al Results
s are investme
onths. They to
lents s cash in banents and negt risk of chanmonths or les
s include:
ds from borrow
ash equivalentnotes in the a
comply with ds.
FINANCIAL LI
actions duringment policy is
ring the year w
facturing and
eot S.A. issued
Automobilesring interest a
repaid at mat
y market securalances
d sales compaompanies
nd overdraft facother
nts of surplutal €165 millio
nk current acotiable debt sge in value a
ss according to
wings arrange
ts mainly inclmount of €1,4
the 'Committ
IABILITIES
g the year s set out in No
were as follow
sales compan
d two bonds f
s S.A. arrangeat an annual r
turity the €30
rities
anies
cilities
us cash flows on (€110 milli
ccounts, and securities tha
and held in oro IAS 7.
ed to meet fut
luded money 489 million, a
tee of Europe
ote 12.7.A.
ws:
nies (excludin
for €600 millio
ed a €250 milrate of 1.5%.
04 million bon
NAm
for which thion as of 31 D
excludes banat are readily rder to meet
ture financing
market fundnd commerci
ean Securities
ng Faurecia)
on and €100 m
lion loan from
d.
Non-current3,835
147795
-1
4,778
Carrying amo31 Decembe
mortised cost o
he remaining ecember 2016
nk overdrafts.convertible toshort-term ca
g needs (see n
s for €4,610 mal paper for €
Regulators' (
million maturi
m the Europe
31
Current65127
4521,399
22,531
ount at er 2017or fair value A
maturity an6).
. Cash equivao known amoash commitm
note 12.3.A).
million, bank €104 million.
(CESR) definit
ing in March 2
ean Investmen
December 2017
8,7192,863
11,582(8)
11,574
Non-current3,706
143674
-3
4,526
Amortised cost
Carrying am31 Decemb
d investment
alents consistounts of cash,ments with an
deposits and
tion of Short-
2024, bearing
nt Bank to be
31 December 2016
8,3893,187
11,576(8)
11,568
Current39323
25198113
1,661
or fair value
mount at er 2016
t
t ,
n
d
-
g
e
CharacterB.
CharacterC.
(in million eurManufacturin2003 bond iss2013 bond iss2013 bond iss2016 bond iss2017 bond iss2017 bond issFaurecia2015 bond iss2016 bond iss
Total bond is
EIB loan (1)- €EIB loan - €25EIB loan - €30FDES loan (1)
Borrowings - MBorrowings - Borrowings - SBorrowings - RBorrowings - OBorrowings - O
Borrowings - BBorrowings - ROther borrowiFaurecia Other borrowi
Total other l
(1) EIB: Europe(2) Concerns th
Manufacturin – euro-deno
Manufacturin– foreign cur
(in million eurCommercial pShort-term loaBank overdrafPayments iss
Total
(1) This item co
Factoring liabderecognised
ristics of bon
ristics of othe
ros)ng and sales csue - €600msue - €559msue - €430msue - €500msue - €596msue - €100m
sue - €700msue - €700m
ssues
€65m (€125m)50m00m) - Zero couponMoroccoIranSpainRussiaOther FranceOther (2)
BrazilRussiangs
ngs
ong-term borr
ean Investment Bhe Automotive D
ng and sales cominated loan
ng and sales crrency loans
ros)paperansftssued (1)
orresponds to pa
bilities on asset
nds and other
er short-term
companies (ex
rowings
Bank; FDES: FreDivision Opel Vau
companies (exns
companies (ex
ayments issued b
s that have not
r borrowings
m financing a
xcluding Faur
ench social and uxhall
xcluding Faur
xcluding Faur
but not yet deb i
t been
nd overdraft
N
recia)
economic deve
recia)
recia)
Issuingcurrency
EURN/AN/AN/A
N/A
ted from the ban
t facilities
Non-current
825-
429497
596101
694693
3,835
-241
-2413
-119
135622
10326
196
795
elopment fund.
Carrying amo31 Decembe
nk accounts, as
Carrying a31 Decem
Groupe
Current
10592
279
92
11
651
--
59--5
1912
-193
485
62
49
452
ount at er 2017
8046433293
430
1,399
the due date wa
amount atmber 2017
PSA 2017 Ann
Issuingcurrency
EUREUR
EUREUR
EUREUR
EUREUR
EUREUR
EUREUREUREUREUREUREUREUR
BRLRUB
na
EUR
as not a bank bu
Carryi31 De
ual Results - 63
Due
Q3/2033Q1/2018
Q1/2019Q2/2023
Q1/2024Q1/2024
Q2/2022Q2/2023
Q4/2017Q1/2024
2014 to 2018Q1/2020
2021Q1/2017
2017 to 20262017 to 2019
2018 to 2024Q2/2019
na
2017 to 2023
-363356112
150
981
usiness day.
ng amount atecember 2016
3
64 - Groupe PS
Finance leD.
The present
FinancingE. The AutomotThe financingSantander an
The sold rece
Other financ
Furthermorecompetitivenmillion. The c
Besides, Faufor competitamounted to
The sale of re
No transactio
12.7. MANA
Financial A. In the courseand other marisk managem
(in million eurLess than 1 y1 to 5 yearsSubsequent y
Less interest Present valuOf which shorOf which long
(in million eur
Portion finanFinanced port- of which Faur
(1) The finance
SA 2017 Annua
ease liabilitievalue of futur
g by the assigtive sectors ag of receivablnd BNP Pariba
eivables are d
ing through th
e, Peugeot S.Aness and empcash proceeds
recia sold andtiveness and eo €57 million.
eceivables con
on was carried
AGEMENT O
Risk Managee of its businearket risks ariment policy w
ros)year
years
portionue of future leart-term
g-term
ros)
nced by third tion (1)
recia group
ed portion of the
al Results
es re payments u
gnment of recnd Faurecia mles in the Autas totalled €6,
erecognised w
he sale of rece
A. sold and dployment (crés received in t
d derecogniseemployment,
nstitutes usua
d out in Decem
F FINANCIAL
ement Policyess, PSA Grousing, in partic
will apply in fu
ase payments
party financia
receivables cor
under finance
ceivables meet part of tomotive divis,982 million (€
when they me
eivables is as
derecognised édit d’impôt pthe twelve mo
ed its French rfor a total o
al short-term f
mber 2017 ou
RISKS
y up is exposedcular, from chall in 2018 to th
s
al institution
rresponds to the
leases can be
heir financingsion's dealer n€4,619 million
eet the criteri
follows:
in 2017 its cpour la compéonths to 31 De
research tax cof €57 million
financing.
utside of the s
d to liquidity ranges in commhe operations
rs
e portion that giv
e analysed as f
g needs by selnetworks by fn in 2016).
a specified in
claim on the étitivité et l’emecember 2017
credits (credit. The cash pr
sale of receiva
risks, as well amodity pricess of the Opel V
Total receivables sold to non-
Group financial
institutions
P
der
3,094833
ves rise to a cash
31 Decembe
follows by ma
ling receivablinancing com
Note 6.2.
French Statemploi – CICE),7 amounted to
d’impôt rechroceeds receiv
ables program
as interest raand equity pr
Vauxhall entit
31 D
Portion sold but not
recognised
rs
45668
h inflow.
er 2017
aturity:
les to financiampanies in par
e under the t, in a total amo €80 million.
herche – CIR) aved at 31 De
mme.
te, counterparices. The Groties.
December 2017
3
317677
184(10)17427
147
Total receivables sold to non-
Group financial
institutions
Po
2,266864
31 Decembe
al institutions.rtnership with
tax credit formount of €80.
and tax creditcember 2017
arty, currencyoup's financial
31 December 2016
454979
173(7)
16623
143
ortion sold but not
derecognised
8327
er 2016
. h
r 0
t 7
y l
Groupe PSA 2017 Annual Results - 65
(1) Liquidity risk In the prevailing economic environment, the Group continued with its diversified, proactive financing strategy and conservative liquidity policy in order to meet its general financing needs, particularly the financing of its business and of its development projects. The financing strategy is defined by the Managing Board, and implemented under the direction of the Chief Financial Officer with the Corporate Finance & Treasury Department and submitted to the Supervisory Board’s Finance and Audit Committee. The Group's cash forecasts, financing needs and interest income and expenses, as well as the level of financial security are reviewed at monthly meetings of the Treasury and Foreign Exchange Committee chaired by the Chief Financial Officer. The financing plan is implemented by the Corporate Finance & Treasury Department.
Pursuant to this policy, the Group: issues bonds under an EMTN programme; has recourse to bank borrowings in France and abroad; sells receivables; arranges confirmed lines of credit for its financial security; and, where necessary, issues convertible bonds.
The Group could also raise funds by a capital increase.
This financing policy allows it to seize market opportunities to pre-finance itself and to thereby optimise its financial security.
At 31 December 2017, the net financial position of the manufacturing and sales companies was €6,194 million compared to a €6,813 million net financial position at 31 December 2016. The breakdown of the net financial position can be found in Note 12.3.A, and changes thereto in Note 12.3.B. The repayment schedule of financial liabilities is set out in the table below. In June 2010, Peugeot S.A. put in place a €5 billion EMTN programme, €2.2 billion of which had been drawn down at end-December 2017.
At 31 December 2017, the manufacturing and sales companies had financial security of €17,522 million (see Note 12.4) compared to €16,974 million at end-December 2016.
It covers all currently anticipated financing needs for the manufacturing and sales companies over the coming 12 months. Contractual repayment schedule of financial liabilities and derivative instruments: manufacturing and sales companies
The following table shows undiscounted cash flows from financial liabilities and derivative instruments. They include principal repayments as well as future contractual interest payments. Foreign currency cash flows and variable or indexed cash flows have been determined on the basis of market data at the year-end.
31 December 2017(in million euros) 2018 2019 2020 2021 2022 > 5 yearsFinancial liabilities Bonds - principal repayments
(3,006) (776) (430) - - - (1,800)Faurecia (1,436) (36) - - - (700) (700)Other long-term debt - principal repayments
(1,002) (384) (72) (75) (110) (42) (319)Faurecia (196) (40) (7) (132) (7) (5) (5)Total bonds and other borrowings
(4,008) (1,160) (502) (75) (110) (42) (2,119)Faurecia (1,632) (76) (7) (132) (7) (705) (705)
(91) (91) - - - - -Faurecia (2) (2) - - - - -Finance lease liabilities (147) (147) - - - - -Employee profit-sharing fund (1) (1) - - - - -Derivative instruments Total derivative instruments 297 (210) 87 - - - - -
TOTAL 297 (6,091) (1,390) (509) (207) (117) (747) (2,824)
Total interest on bonds and other borrowings
Undiscounted contractual cash flowsLiabilitiesAssets
Manufacturing and sales companies - excl. Faurecia
Manufacturing and sales companies - excl. Faurecia
Manufacturing and sales companies - excl. Faurecia
Manufacturing and sales companies - excl. Faurecia
66 - Groupe PSA 2017 Annual Results
Covenants None of the borrowings of the manufacturing and sales companies excluding Faurecia are subject to specific acceleration clauses based on minimum credit ratings. In some cases, the borrowings of manufacturing and sales companies are subject to clauses whereby the borrower gives the lenders certain guarantees that are commonly required within the automotive industry.
They include: Negative pledge clauses whereby the borrower undertakes not to grant any collateral to any third parties. These clauses nevertheless carry certain exceptions; “material adverse changes” clauses, which apply in the event of a major negative change in economic conditions; ”pari passu” clauses, which ensure that lenders enjoy at least the same treatment as other creditors; ”cross-default” clauses, whereby if one loan goes into default other loans become repayable immediately; clauses whereby the borrower undertakes to provide regular information to the lenders; clauses whereby the borrower undertakes to comply with applicable legislation; change of control clauses.
In addition, EIB loans are dependent on the Group carrying out the projects being financed and, in some cases, require the Group to pledge a minimum amount of financial assets.
All of these clauses were complied with in 2017.
Drawing on the €3 billion syndicated credit facility established in April 2014 and amended in November 2015 (see Note 12.4) is subject to compliance with:
a level of net debt of manufacturing and sales companies of less than of €6 billion; a ratio of the net debt of manufacturing and sales companies to consolidated equity of less than 1.
The net debt of manufacturing and sales companies is defined and disclosed in Note 12.3. The Group's equity is that listed under "Total Equity" in liabilities.
The €1,200 million syndicated line of credit arranged on 15 December 2014 by Faurecia and comprising only one €1,200 million tranche expiring in June 2021 (see Note 12.4) contains only one covenant setting limits on debt.
The compliance with this ratio is a condition to the availability of this credit facility. As of 31 December 2016, Faurecia complied with this ratio. (2) Interest Rate Risks Trade receivables and payables are due within one year and their value is not affected by the level of interest rates.
Cash reserves and short-term financing needs of manufacturing and sales companies - excluding Automotive Equipment companies - are mainly centralised at the level of GIE PSA Trésorerie, which invests net cash reserves on the financial markets. These short-term instruments are indexed to variable rates or at fixed rates.
The gross borrowings of manufacturing and sales companies - excluding Automotive Equipment companies - consist mainly of fixed-rate long-term loans. The proportion of the manufacturing and sales companies' borrowings - excluding Automotive Equipment companies - at variable rates of interest is now 2.1 %, based on the principal borrowed.
Faurecia independently manages hedging of interest rate risks on a centralised basis. Such management is implemented through Faurecia's Finance and Treasury Department, which reports to its executive management. Hedging decisions are made by a Market Risk Committee that meets on a monthly basis. A significant part of the gross borrowings (syndicated credit facility, sale of receivables, short-term loans, commercial paper as applicable) are at variable or renewable rates. The aim of the Group’s interest rate hedging policy is to reduce the impact of changes in short-term rates on earnings. The hedges arranged comprise mainly euro-denominated interest rate swaps. In order to benefit from historically low interest rates, 2- and 3-year maturity hedges have been set up. These hedges cover a part of the interest on variable rate borrowings, due in 2018 and first quarter of 2019, against a rise in interest rates.
Some of Faurecia's derivative instruments have qualified for hedge accounting under IAS 39 since 2008. The other derivative instruments purchased by Faurecia represent economic hedges of interest rate risks on borrowings but do not meet the criteria in IAS 39 for the application of hedge accounting.
Faurecia is the only entity that holds cash flow hedges of interest rate risks.
Adjusted net debt* / EBITDA*** Consolidated net debt
** EBITDA: Faurecia's Earnings Before Interest, Tax, Depreciation and Amortisation for the last 12 months.
2.50maximum
Groupe PSA 2017 Annual Results - 67
The net interest rate position of manufacturing and sales companies is as follows:
(3) Counterparty and credit risks The Automotive Division places significant emphasis on guaranteeing the security of payments for the goods and services delivered to customers. Relations with Peugeot and Citroën dealers are managed within the framework of the Banque PSA Finance sales financing system described below. Payments from other customers are secured by arrangements with leading counterparties that are validated by the Group Treasury Committee.
At Faurecia, the main counterparties are leading carmakers whose creditworthiness is tracked customer-by-customer.
Other counterparty risks concern investments of available cash and transactions involving currency, interest rate and commodity derivatives. These two types of transactions are carried out solely with leading financial partners approved by the Group Treasury Committee. The related counterparty risks are managed through a system of exposure limits by amount and by commitment duration. The limits are determined according to a range of criteria including the results of specific financial analyses by counterparty, the counterparty's credit rating and the amount of its equity capital.
Available cash is invested either in money market securities issued by approved counterparties, or in mutual funds or deposit accounts. The bulk of money market securities in the portfolio are issued by leading banks and the remainder by non-financial sector issuers. Mutual funds are selected according to guidelines specifying minimum fund credit ratings and maximum maturities of underlying assets. In addition, the amount invested in each fund is capped based on the fund's total managed assets.
Derivatives transactions are governed by standard ISDA or Fédération Bancaire Française (FBF) agreements and contracts with the most frequently used counterparties provide for weekly margin calls.
(4) Currency risk The manufacturing and sales companies manage their foreign exchange positions on transactions denominated in foreign currencies with the objective of hedging the risk of fluctuations in exchange rates. Automotive Division currency risks are managed centrally, for the most part by PSA International S.A. (PSAI) under the supervision of executive management. All products used by PSAI are standard products covered by International Swaps and Derivatives Association (ISDA) master agreements.
The goal is to minimise Automotive Division exchange differences by systematically hedging as soon as the foreign currency invoice is booked.
At Group level, currency risks are managed by requiring manufacturing companies to bill sales companies in the latter's local currency (except in rare cases or where this is not allowed under local regulations). Currency risks on these intragroup billings are also hedged using forward foreign exchange contracts. In most cases, foreign currency intragroup loans of Automotive Division companies are also hedged.
31 December 2017 (in million euros) TotalFixed rate 1,484 90 241 1,815Variable rate 11,565 - - 11,565Fixed rate (2,405) (1,403) (3,015) (6,823)Variable rate - (213) - (213)Fixed rate (921) (1,313) (2,774) (5,008)Variable rate 11,565 (213) - 11,352Fixed rate (415) 383 - (32)Variable rate 415 (383) - 32Fixed rate (1,336) (930) (2,774) (5,040)Variable rate 11,980 (596) - 11,384
Intraday to 1 year 2 to 5 years
Total assets
Total liabilities
Beyond 5 years
Net position before hedging
Derivative financial instruments
Net position after hedging
31 December 2016 (in millions euros) TotalFixed rate 824 109 - 386 1,319Variable rate 11,490 - - 50 11,540Fixed rate (736) (1,351) - (2,806) (4,893)Variable rate (1,077) (36) - - (1,113)Fixed rate 88 (1,242) (2,420) (3,574)Variable rate 10,413 (36) 50 10,427Fixed rate (79) - (436) - - (515)Variable rate 79 - 436 - - 515Fixed rate 9 (1,678) (2,420) (4,089)Variable rate 10,492 400 50 10,942
Intraday to 1 year
Net position before hedging
Beyond 5 years2 to 5 years
Total assets
Derivative financial instruments
Net position after hedging
Total liabilities
68 - Groupe PSA 2017 Annual Results
The foreign currency policy includes the hedging of future flows for the Automotive Division. It consists of hedging the main net exposures to G10 currencies. These hedges are underpinned by governance rules and a strict decision-making process. They are classified as cash flow hedges under IAS 39. The maximum horizon for these hedges is two years. The hedging ratios depend on the maturity.
At 31 December 2017, the Automotive Division had cash flow hedges on the following currencies: GBP, CHF, PLN, CNY, KRW and JPY.
The Group does not hedge its net investment in foreign operations.
PSAI also carries out proprietary transactions involving currency instruments. These transactions are subject to very strict exposure limits and are closely monitored on a continuous basis. They are the only non-hedging transactions carried out by companies in the PSA Group and have a very limited impact on consolidated profit.
The historical Value at Risk (VaR) method is used to identify and manage market risks. The historical VaR uses volatilities and exchange rates for the various currencies since the beginning of 2011. VaR represents the maximum possible loss on the portfolio, based on the confidence level. The confidence levels measured are 95% and 99%. For both of these confidence levels, applying historical VaR to the portfolio at 31 December 2017 would not have had a material impact on Group earnings. This method assumes that future VaR will follow the same trend as historical VaR. It does not provide an indication of the losses that would be incurred under an extreme stress scenario.
Currency risks relating to the commercial transactions of the Faurecia’s subsidiaries are managed independently and centrally by Faurecia using forward purchase and sale contracts and options as well as foreign currency financing. Faurecia manages the hedging of currency risks on a central basis, through its Group Finance and Treasury department, which reports to the executive management. Hedging decisions are made by a Market Risk Management Committee that meets on a monthly basis. Currency risks on forecasted transactions are hedged on the basis of estimated cash flows determined when budgets are prepared, validated by executive management. The related derivatives are classified as cash flow hedges when there is a hedging relationship that satisfies the IAS 39 criteria. Subsidiaries located outside the euro zone receive intragroup loans in their functional currency. These loans are refinanced in euros, and the related currency risk is hedged by swaps. Net position of the manufacturing and sales companies in the main currencies (open positions at 31 December)
The net position of the manufacturing and sales companies in the main foreign currencies is as follows:
A 5% increase or decrease in the year-end exchange rate of the main currencies in which the manufacturing and sales companies had open balance sheet positions at 31 December 2017 (see table below) would have the following direct impact on income before tax and equity :
31 December 2017 (in million euros) GBP JPY USD PLN CHF RUB CZK Other TotalTotal assets 225 81 859 29 260 62 140 469 2,125Total liabilities (84) (39) (38) (7) (3) (23) (215) (36) (445)Future transactions 1,775 (241) 30 5 388 13 (53) (448) 1,469Exposure to fixed charge coverage commitments - - - - - - - - - Net position before hedging 1,916 (199) 851 27 645 52 (128) (15) 3,149Derivative financial instruments (1,882) 197 (773) (30) (645) (35) 67 (73) (3,174)Net position after hedging 34 (2) 78 (3) - 17 (61) (88) (25)
31 December 2016 (in million euros) GBP JPY USD PLN CHF RUB CZK Other TotalTotal assets 233 50 534 19 284 50 117 218 1,505Total liabilities (70) (12) (7) (19) (1) (53) (193) (15) (370)Future transactions (34) (105) 89 (60) 289 13 (50) (104) 38Exposure to fixed charge coverage commitments - (55) - - - - - - (55) Net position before hedging 129 (122) 616 (60) 572 10 (126) 99 1,118Derivative financial instruments (148) 67 (588) 55 (572) 6 43 (112) (1,249)Net position after hedging (19) (55) 28 (5) - 16 (83) (13) (131)
(in million euros) JPY / EUR PLN / EUR CNY / EUR USD / CAD CZK / EUR USD / DZD CNY / USD OtherHypothetical fluctuation against the euro 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0%Impact on income before tax - 1 - - 3 3 - 1Impact on equity 5 3 - - 3 - - -
Groupe PSA 2017 Annual Results - 69
The following table shows the net position of the manufacturing and sales companies in the main foreign currencies versus the other currencies:
(5) Commodity risk The Automotive Division's exposure to commodity risks is tracked jointly by the Purchasing Department and PSA International S.A. (PSAI) which is responsible for hedging the Group's currency and commodity risks, while Faurecia's risks are managed independently. The Automotive Division’s commodity risks are reviewed at quarterly intervals by a Metals Committee chaired by the Group’s Chief Financial Officer. This Committee monitors hedging gains and losses, reviews each quoted commodity that may have a material impact on the Group’s operating income and sets hedging targets in terms of volumes and prices over periods of up to three years. The hedging ratios depend on the maturity. Cash flow hedges are used only when they qualify for hedge accounting under IAS 39, except in certain cases signed-off by the Managing Board and referred to the Supervisory Board.
The production costs of the Automotive Division and Faurecia are exposed to the risk of changes in certain raw materials prices, either as a result of their direct purchases or indirectly through the impact of these changes on their suppliers' costs. These raw materials are either industrial products such as steel and plastics whose prices and related adjustments are negotiated between buyers and vendors, or commodities traded on organised markets, such as aluminium, copper, lead or precious metals, for which the transaction price is determined by direct reference to the prices quoted on the commodity market.
Part of the Automotive Division's exposure to fluctuations in commodity prices is hedged using derivative instruments traded on regulated markets. The aim of these hedges is to minimize the impact of changes in commodity prices on physical deliveries for the Group's production needs.
In 2017, commodity hedges concerned purchases of aluminium, copper, lead, platinum and palladium.
For the Automotive Division, in the event of a 23% rise (fall) in base metal prices (aluminium, copper and lead) and a 24% rise (fall) in precious metal prices (platinum and palladium), the impact of the commodity hedges held at 31 December 2017 would have been a €59 million increase (decrease) in consolidated equity at 31 December 2017 (versus €75 million at 31 December 2016). As all commodity hedges qualified as cash flow hedges under IAS 39, changes in the fair value of these instruments resulting from changes in the prices of the hedged commodities would not have had any impact on 2017 profit.
The commodity price trend assumptions were determined based on the average historical and implicit volatilities observed on the relevant commodity markets in the reporting year.
Faurecia's sales contracts with customers do not include any indexation clause based on commodity prices. The risk of an unfavourable change in commodity prices is attenuated through a policy of regular price negotiations with customers and tight inventory management. Faurecia does not use derivative instruments to hedge its commodity and energy purchases.
31 December 2017 (in million euros) UAH / USD USD / CAD USD / BRL USD / ARS USD / DZD CNY / USDTotal assets - - 72 18 - 5
Total liabilities (11) - (58) (197) - - Net position before hedging (11) - 14 (179) - 5Derivative financial instruments - - (19) 180 - -Net position after hedging (11) - (5) 1 - 5
31 December 2016 (in million euros) UAH / USD USD / CAD USD / BRL USD / ARS USD / DZD CNY / USDTotal assets - - 91 23 - 25Total liabilities (4) - (36) (174) (83) - Net position before hedging (4) - 55 (151) (83) 25Derivative financial instruments - - (54) 153 - -Net position after hedging (4) - 1 2 (83) 25
70 - Groupe PS
Hedging iB. Derivative in
at the inthe effehedge is
The Group ufair valu
The hedand loseffectiv
cash flow The effe
recognisportion recognisthe hedgvalue of inventor
Besides, the denominatedoffsetting thcases whereincome.
Derivative inbenchmarks Derivative co (1) Details o
31 December(in million euroCurrency riskFair value hed
• Cross-currCash flow hed
• Cross-curr Trading instruTotal currencInterest rate Cash flow hed
• Interest raTotal interestCommodity rCash flow hed
• Swaps Total commoTOTALOf which:Total fair valuTotal cash flo
• Currency ocontracts
(1) Currency tradpayables denoincome, the Groimpact on incom
• Currency sforeign excha
SA 2017 Annua
instruments struments are
nception of thectiveness of t
s designated.
ses two hedgiue hedges: dged portion sses arising frve portion of tw hedges:
ective portionsed directly inof the under
sed in profit oged item affechedges of raw
ry.
Group impled in foreign cue change in r
e the Group h
nterest rate interbank rat
ommodity hed
of values of h
r 2017os)kdges:
rency swapsdges:
rency swapsments (1)
cy risksrisk
dges:ate swaps and int rate risksriskdges:
dity risks
ue hedgesow hedges
options and forw
ding instrumentsminated in foreigoup has electedme is the same.
swaps, currencyange contracts
al Results
e stated at faie hedge therethe hedge is d
ing relationsh
of the asset orom remeasuthe loss or gai
n of the gain on equity, sincrlying future tr loss. Cumulacts profit or low materials p
ments currenurrencies. Chareceivables anhas documen
and currencytes (such as Edging instrum
hedging instru
nterest rate optio
ward foreign exch
s: derivative instrugn currencies tonot to designate
y options and for
r value. They e is formal desdemonstrated
ips:
or liability is rurement at fan arising from
or loss arisingce the gain otransaction isative gains anoss. The effecurchases doe
ncy hedges to ange in the fand payables dnted a hedgin
y hedging inuribor, etc) anents are value
uments and n
Asse
ons
hange
Ca
uments not qualibe systematicalthese receivable
rward
may be classisignation and
d at inception
recognised in air value are
m remeasurem
g from remeaor loss arisings not recogni
nd losses recogctive portion os not affect th
protect againair value of thdenominated ng relationshi
struments arnd daily foreiged by externa
notional amo
ets Liabilitie
53 (29
194--
256 (2
- (17- (17
4141
297 (21
62 (2235 (18
arrying amount
ifying for hedge ally remeasured aes and payables
ified as hedgindocumentatiand in each f
the balance srecognised in
ment at fair va
asurement at g from remeased in the bagnised in equiof the gain or he value at wh
nst changes inese derivativein foreign curp, the ineffe
re measured gn exchange l experts.
ounts hedged
s
26) 278- -
- 601- 13- 6,184
26) 7,076
76) 276) 2
(8) 254(8) 25410) 7,332
26) 27884) 870
Notional amount
accounting undeat the closing excs as part of a doc
ng instrumenton of the hedfinancial repo
sheet and men profit or lolue of the hed
fair value of asurement at alance sheet. ity are reclassloss arising frhich the raw m
n the value ofes is recordedrrencies, recoctive portion
by using a rates set by th
d
< 1 year
278-
495-
5,5306,303
--
173173
6,476
278668
r IAS 39. As IASchange rate withcumented hedgin
ts if: dging relationsorting period
easured at faiross, and are dging instrum
the hedging t fair value o
The ineffectisified to profitrom remeasurmaterials are
f receivables d in the incomognised in pro
is recognise
valuation tehe European
Maturityr 2 to 5 years
8 -- -
5 106- 130 6543 773
- 2- 2
3 813 816 856
8 -8 202
S 21 requires recany gains or los
ng relationship, a
ship; for which the
r value. Gainsoffset by theent;
instrument isf the hedgedive portion ist or loss whenrement at fairrecognised in
and payablesme statement,ofit or loss. Ind in financial
chnique thatCentral Bank.
> 5 years
--
----
--
---
--
ceivables andsses taken toalthough their
e
s e
s d s n r n
s ,
n l
t .
Groupe PSA 2017 Annual Results - 71
Hedging instruments that are not subject to compensation clauses in case of default by either party do not represent a significant amount for the Automotive Division.
(2) Impact of hedging instruments on income and equity
(a) Impact of cash flow hedges
(b) Impact of fair value hedges
The “Net gain (loss) on hedges of borrowings” presented in Note 12.2.A also includes gains and losses on economic hedges that do not qualify for hedge accounting under IAS 39.
31 December 2016 Maturity(in million euros) Assets Liabilities < 1 year 2 to 5 years > 5 yearsCurrency riskFair value hedges:
65 (41) 820 820 - -Cash flow hedges:
3 (7) 561 445 116 -• Cross-currency swaps - - 22 - 22 -
Trading instruments (1) - - 2,048 2,040 8 -Total currency risks 68 (48) 3,451 3,305 146 -Interest rate riskCash flow hedges:
• Interest rate swaps and interest rate options 1 (2) 7 - 7 -Total interest rate risks 1 (2) 7 - 7 -Commodity riskCash flow hedges:
• Swaps 22 (3) 324 210 114 -Total commodity risks 22 (3) 324 210 114 -TOTAL 91 (53) 3,782 3,515 267 -Of which:Total fair value hedges 65 (41) 820 820 - -Total cash flow hedges 26 (12) 914 655 259 -
• Currency options and forward foreign exchange contracts
• Currency swaps, currency options and forward foreign exchange contracts
Carrying amount Notional amount
(1) Currency trading instruments: derivative instruments not qualifying for hedge accounting under IAS 39. As IAS 21 requires receivables andpayables denominated in foreign currencies to be systematically remeasured at the closing exchange rate with any gains or losses taken toincome, the Group has elected not to designate these receivables and payables as part of a documented hedging relationship, although their
(in million euros)Change in effective portion recognised in equityChange in ineffective portion recognised in profit or loss
Effective portion reclassified to the income statement under "Finance costs"
201739
(9)
Effective portion reclassified to the income statement under "Cost of goods and services sold"
2016
(13)(36)(27)
(10)(5) (8)
(in million euros)Change in ineffective portion recognised in profit or lossNet impact on income (23) (37)
2017 2016(37)(23)
72 - Groupe PS
12.8. FINAN
Financial A. Financial assThe event gedate.
TranslatioB. In compliancthe exchangerate and the
in recurrtransactin interecompan
RecognitiC.
IAS 39 provid
(1) FinanciaThese assetsloss for the p
(2) Loans an“Loans and maturities ar
(3) Available“Available-foare recognisrecognised dfair value areprofit or lossFurthermorecost or withi
“InvestmentGroup consid
“Other non-FAA is a funFrance's Autto their net a
RecognitiD. Borrowings amethod.
When the Gthrough an related eithe
SA 2017 Annua
NCIAL INSTRU
assets and liets and liabilit
enerating the
on of transacce with IAS 21e rate on the resulting exch
ring operatingtions carried oest income oies.
on and measdes for differe
al assets at fas are recognisperiod.
nd receivablereceivables” re very short,
le-for-sale finor-sale financised in the badirectly in come recognised s where the ve, a special linn a minimum
ts in non-conders to be rep
-current assetd to support omotive Induasset value at
ion and measand other fina
Group obtains effective inte
er to assets or
al Results
UMENTS
iabilities - deties within thebalance shee
ctions in fore1, transactions
transaction dhange differeg income, for out by the Banor finance co
surement of ent methods o
air value throed in the bala
es are carried atheir fair valu
nancial assetsial assets” arelance sheet a
mprehensive iin the incom
value falls by ne-by-line ana
of 1 year.
solidated compresentative o
ts” classified aautomotive
ustry Pact signthe balance s
surement of ancial liabilitie
government erest rate basr to income, d
finitions e meaning of
et recognition
ign currencies in foreign cudate. At each nce is recognicommercial t
nque PSA Finaosts for finan
financial asseof measureme
ough profit orance sheet at
at amortised ue correspond
s e securities that fair value. ncome. Only e statement over 50% comlysis is carried
mpanies” are of fair value, ex
as “available-fequipment m
ned on 9 Febrsheet date.
financial liabes are genera
loans at belosed on markeepending on t
IAS 39 includeis the transac
es urrencies are t
balance sheeised in profit otransactions c
ance Group; ncial transact
ets ent depending
r loss fair value. An
cost measureds to their carr
hat may be heGains and loimpairment lof the period
mpared to thed out where t
carried on thxcept in cases
for-sale” corrmanufacturersruary 2009. Th
bilities ally stated at a
ow-market inet rates. The the purpose f
e the items lisction (i.e. com
translated intet date, moneor loss, as follcarried out by
tions carried
g on the natur
ny change in t
ed using the rying amount,
eld on a lastinosses arising losses reflecti
d. An impairme acquisition cthe value falls
he balance shs of impairme
espond to un set up at th
he units are m
amortised cos
terest rates, subsidy is reor which the f
sted in the tabmmitment) da
o the subsidiaetary items arows:
y all Group co
out by the
re of the finan
their fair valu
effective inte, including any
ng basis or sofrom remeasng a prolonge
ment loss is sycost or over as over 30% co
eet at their ant.
its in Fonds de French gov
measured at fa
st measured u
the loans’ amcognised in afunds are use
ble in Note 12te, and not th
ary's functionre translated
ompanies and
manufacturi
ncial assets.
e is recognise
erest methody impairment
old in the shosurement at fed or significa
ystematically a minimum oompared to th
acquisition co
d’Avenir Autovernment's inair value. This
using the effe
mortised costaccordance w
ed.
2.8.E. he settlement
al currency atat the closing
for financing
ng and sales
ed in profit or
. When their
.
rt term. Theyfair value areant decline inrecognised inf three years.he acquisition
ost, which the
mobile (FAA).itiative unders corresponds
ective interest
is calculatedwith IAS 20 as
t
t g
g
s
r
r
y e n n .
n
e
. r s
t
d s
Financial E.
The fair valubasis of mainstruments for financial
(in million euros)
Other non-curreOther non-curreTrade receivableOther receivableCurrent financiaFinancial investmCash and cash Assets
Non-current finaOther non-curreTrade payablesOther payablesCurrent financiaLiabilities
(1) Other non-curr(2) Excluding liab
(in million euros
Other non-curreOther non-curreTrade receivableOther receivableCurrent financiaFinancial investmCash and cash Assets
Non-current finaOther non-curreTrade payablesOther payablesCurrent financiaLiabilities
(1) Other non-curr(2) Excluding liab
instruments
ue of financialrket data fortraded on an assets held by
)
nt financial assetsnt assets (1)
esesl assetsmentsequivalents
ancial liabilitiesnt liabilities (2)
l liabilities
rent assets excludeilities related to veh
s)
nt financial assetsnt assets (1)
esesl assetsmentsequivalents
ancial liabilitiesnt liabilities (2)
l liabilities
rent assets excludeilities related to ve
reported in t
l instruments r assets consactive marke
y the Group is
s
e the amount of penhicles sold with a b
s
e the amount of pehicles sold with a b
the balance s
held by the Gsidering that t is based on
s the bid price
Carrying amount
487972
2,3672,6361,269
16511,58219,478
4,778100
13,3627,8782,531
28,649
nsion plan surplusbuyback commitm
31 Decem
Carrying amount
685639
1,5601,763
629110
11,57616,962
4,526162
9,3525,3661,661
21,067
nsion plan surplusbuyback commitm
31 Decem
sheet
Group is calcthey are no
the market pe on the marke
Fair value
at f
487972
2,3672,6361,269
16511,58219,478
4,906100
13,3627,8782,505
28,751
ses (see Note 9.1), ent.
mber 2017
Fair value
Instat
685639
1,5601,763
629110
11,57616,962
4,528162
9,3525,3661,667
21,075
ses (see Note 9.1), ment.
mber 2016
ulated wheneot intended trice at the baet at the mea
fair value through profit or
loss
Avf
fi
223----
16511,58211,970
---
--
which are not finan
A
truments fair value through profit or
Av
f
380----
11011,57612,066
---
--
which are not finan
A
Groupe
ever it can beo be sold. Tlance sheet dasurement dat
vailable-for-sale nancial assets
Lreceiv
and liab
-460
-----
460
--- 1--- 2
ncial assets as defi
Analysis by class
vailable-for-sale
financial assets
Lreceiv
andliab
-249
-----
249
------ 1
ncial assets as def
Analysis by class
PSA 2017 Ann
e estimated reThe fair valueate. The markte.
Loans, vables other
bilities
Borrowinga
amortisecos
255506
2,3672,3621,261
--
6,751
- 4,7795
3,3627,675
- 2,5221,132 7,30
ined by IAS 39.
of instrument
Loans, vables
d other bilities
Borrowing
amortiseco
285362
1,5601,722
627--
4,556
- 4,52140
9,3525,349
- 1,6414,841 6,17
fined by IAS 39.
of instrument
ual Results - 73
eliably on thee of financialket price used
gsatedst
Derivative instruments
- 9- 6- -- 274- 8- -- -- 297
78 -- 5- -
20329 207 210
gsat edst
Derivative instruments
- 20- 28- -- 41- 2- -- -- 91
24 2- 22- -
1749 1273 53
3
e l
d
74 - Groupe PS
InformatiF.
The change i
InformatiG.
(en millions d'eurLevel 1 fair valuOther non-currenFinancial investmCash and cash e
Level 2 fair valuOther non-currenOther non-currenOther receivablesCurrent financial
Level 3 fair valuOther non-currenOther non-curren
Total financial a
(in million euros)Level 1 fair val
Level 2 fair valNon-current finaOther non-currenOther payablesCurrent financial
Level 3 fair valTotal financial
(in million eur
LiabilitiesNon-current fCurrent financ
(in million eur
LiabilitiesNon-current fCurrent financ
SA 2017 Annua
on about fin
n level 3 fair v
ion about fin
ros)ue inputs: quoted
nt financial assets mentsequivalents
ue inputs: based nt financial assets nt assetssassets
ue inputs: not bant financial assets nt assets
assets measured
)lue inputs: quote
lue inputs: basencial liabilitiesnt liabilities
l liabilities
lue inputs: not b liabilities meas
ros)
financial liabilitcial liabilities
ros)
financial liabilitcial liabilities
al Results
ancial assets
value does no
nancial assets
d prices in active
on observable m
sed on observab
at fair value
ed prices in activ
d on observable
based on observasured at fair valu
ies
ies
s and liabilitie
ot contain any
s and liabilitie
Dins
markets
market data
le market data
ve markets
e market data
able market dataue
es measured
y material item
es not measu
Derivative struments
Instrumeat fair va
throprofit or l
--- 11,
96
2748
--
297 11,
31 Decem
Derivative instruments
Instat f
profi
-(5)
(203)(2)
a
(210)
31 Dec
Carrying amount
4,7782,529
31 Decemb
Carrying amount
4,5241,649
31 Decemb
at fair value
ms.
ured at fair v
ents alue
oughoss
Available-fosale financi
asset
223165582
----
- 39- 6
970 46
ber 2017
truments fair value
through it or loss Other lia
----
-
cember 2017
Fair value
4,9062,503
er 2017
Fair value
4,5261,655
er 2016
value
oralts
Derivative instruments
- -- -- -
- 20- 28- 41- 2
91 -69 -
60 91
31 D
abilitiesDeriv
instrum
----
-
Level 1
3,881625
Fai
Level 1
3,702395
Fai
Instruments at fair value
through profit or loss
Avasale
380110
11,576
----
--
12,066
December 2016
vative ments
Instrumentsat fair value
throughprofit or loss
(2)(22)(17)(12)
(53)
31 December 2
Level 2
1,0251,878
r value level
Level 2
8241,260
r value level
ilable-for financial
assets
---
----
18564
249
sehs
Other liabilities
- -- -- -- -
- -
2016
Level 3
--
Level 3
--
Effect of fH.
12.9. OFF-B
(in million euroManufacturinTotal interest iTotal interest eRemeasuremeDisposal gainsNet impairmenTotal - manuf
(1) For instrumen
(in million euroManufacturinTotal interest iTotal interest iRemeasuremeDisposal gainsNet impairmenTotal - manuf
(1) For instrumen
(in million eurGuarantees gPledged or m
financial inst
BALANCE SHE
os)g and sales concomeexpenseent (1)
s and dividendsntfacturing and s
nts classified as "
os)g and sales concomencome
ent (1)
s and dividendsntfacturing and s
nts classified as "
ros)given
mortgaged asse
truments on
EET COMMIT
ompanies
sales companie
"at fair value throu
ompanies
sales companie
"at fair value throu
ets
profit or loss
TMENTS AND
201
InState
Im
es
ugh profit or loss"
201
IncState
Im
es
ugh profit or loss"
Of which
s
D CONTINGEN
17
come ement mpact
at fair vathrouprofit
lo
10(210)
(3)14
(123)(312)
", remeasuremen
16
come ement mpact
at fair valthrouprofit
lo
11(320)
81(138)
-(366)
", remeasuremen
h Opel Vauxha
NT LIABILITIES
lue ugh t or oss
Available-forsale
financialassets
- -- -
32 -- 15- (6)
32 9
nt includes interes
Analy
ueugh
or oss
Available-for sale
financial assets
- -- -
84 -- 35- (4)
84 31
nt includes interes
Analys
all Automotive s
Groupe
S
rel
s
Loansreceivables
and otheliabilities
- 10-- (145 (1) (1179 (122
st and dividends
sis by class of i
Loans,receivables
and otherliabilities
11-1
(173)4
(157)
st and dividends r
sis by class of in
31 D
segment
PSA 2017 Ann
,srs
Borrowings atamortised
cost
0 -- (210) 18) -) -) (192)
received.
nstrument
rBorrowings at
amortised cost
-- (320)
1) -4 -) (319)
received.
nstrument
December 2017
31
406478884
128
ual Results - 75
tdt
Derivative instruments
- -) -8 (39)- -- -) (39)
Derivative instruments
--
(5)--
(5)
1 December 2016325538863
5
76 - Groupe PS
Pledged o
This item incBank (EIB). Wcovered in caThe following
NOTE 13
13.1. ACCO
Financial A. The assets an
RecognitiB.
(1) FinanciaMarketable sChanges in tchange fair v (2) Loans anLoans and rerespect of thaccounting:
outstandaccrued unamortwith thirunamortunamortdeposits
Interest incoexactly disco
Loans and rremeasured at fair value remeasurem
Loans and resingle instalmvalue of estim
Pledges or m
(in million eur20172018201920202021Subsequent yTotal pledgeTotal assetsPercentage o
SA 2017 Annua
or mortgaged
cludes the FreWhen the matash. g table analys
- FINANCI
OUNTING POL
assets and lind liabilities o
ion and meas
al assets at fasecurities are he fair value o
value of the ec
nd receivableeceivables rephe loans and
ding principal;interest;
tised commissrd parties on itised contributised loan sets received at t
ome is allocatounts estimate
receivables aat fair value iare recognis
ment at fair val
eceivables arement. Impairmmated future
mortgages ex
ros)
yearsed or mortgag
of total assets
al Results
d assets
ench governmturities of Fre
ses pledged an
NG AND F
LICIES
iabilities - deof finance com
surement of
air value throcarried at fairof the hedgedconomic hedg
es ported in the b
receivables. T
;
sions paid to inception of loutions receive-up costs, wh
the inception
ted by the efed future cash
are generally in accordanceed in profit olue of the hed
e tested for imment is measu
cash flows dis
xpiring in the
ged assets
ment bonds (Onch governm
nd mortgaged
INANCIAL
finitions mpanies mainly
financial asse
ough profit orr value througd securities arges.
balance sheetTheir carrying
referral agentoans and reced from the brich are deducof finance lea
ffective intereh receipts thro
hedged agae with hedge aor loss and ardging instrume
mpairment whured by compscounted at th
years indicat
OATs) given aent bonds do
d assets by co
INSTRUM
y include loan
ets
r loss gh profit or lore recognised
t correspond tg amount incl
ts as well as deivables, whicrands, which acted from the ases, which are
est method, ough the expe
inst interest accounting pore offset by tent. (see Note
hen a loss evearing the carrhe effective in
ted
s collateral foo not correspo
mmitment pe
ENTS – FIN
ns and receiva
ss if they benedirectly in pr
to Banque PSAudes the follo
directly attribuh are added t
are deducted foutstanding pe deducted fr
with the effeected life of th
rate risks, wolicies. Gains he effective pe 12.7.B).
ent occurs, corying amount nterest rate.
or loans from ond to those o
eriod:
NANCE COM
ables, marketa
efit from interofit or loss, to
A Finance's neowing items b
utable adminio the outstanfrom the outsprincipal; om the amou
ective interesthe loan.
with the hedand losses ariportion of the
orresponding of the loan o
31 D
the Europeaof loans, com
MPANIES
able securities
rest rate hedgogether with t
et financial cobefore the eff
istrative expending principastanding princ
unt financed.
t rate being
dged portion ising from reme loss or gain
in practice tor receivable t
December 2017
3
-391
638
-43
47857,505
0.8%
n Investmentmitments are
s and debts.
ges. the offsetting
ommitment infect of hedge
nses incurredl; cipal;
the rate that
of the loanmeasurementn arising from
o default on ao the present
1 December 20164351644
--
43538
45,1531.2%
t e
g
n e
d
t
n t
m
a t
For retail loaan impais assessdiscountimpairmloans’ edoubtfu
For other lodetermined onon-performof 451 days ibe reclassifie
RecognitiC. See Note 12.
13.2. CURR
Loans andA.
(1) Analysis
Retail, CorpoCitroën and D
Wholesale ficertain Europrovided by t
(2) Maturiti
(in million eurTotal net "Ret
TotalTotal net "Cor
31 Decembe(in million eurUnallocated Less than oneTwo to five yeBeyond five yTotal gross lGuarantee deDepreciationTotal net loa
ns and receivirment loss issed based onted average lo
ment losses oneffective interl loans.
oans and recon a case-by-c
ming. Reclassiff it can be de
ed as non-perf
on and meas.8.D.
RENT FINANC
d receivables
orate and EquDS customers
inance receivopean importethe finance co
ies of loans a
ros)tail, Corporate rporate Dealers
er 2017ros)
e yearearsyearsoans and rece
eposits on lease
ans and receiv
vables: s recognised on the probaboss ratio; n non-performrest rate, wh
ceivables (cocase basis, whfication occursmonstrated thforming befor
surement of
IAL ASSETS
s - finance co
uivalent financs to purchase o
vables represeers which havompanies to t
and receivabl
and Equivalents"
eivables outstes
vables outstan
on sound loanbility of the o
ming loans arich is used t
nsisting mainhen the first ins when at leahat there is nore the 91-day
financial liab
mpanies
ce receivablesor lease vehic
ent amounts ve been tran
the dealer net
les
"
tanding
nding
ns when the boutstanding lo
re determinedto calculate p
nly of wholenstalment is m
ast one instalmo counterpartperiod has ex
bilities
s represent locles.
due to Peugnsferred to Gtworks.
Net "Retail,and E
borrower defaoan being cla
d based on thprovisions for
sale loans), missed or at thment is over 9ty risk. In the cxpired.
oans provided
geot, Citroën roup finance
9181117
-307(1)(7)
299
Corporate Equivalent"
Groupe
aults on a singassified as no
he average lor credit losse
provisions fohe latest whe91 days past dcase of an agg
d by the finan
and DS by tcompanies, a
31
Net "Corpora
PSA 2017 Ann
gle instalmenton-performing
oss ratio discoes on non-pe
or known cren the loan is rdue, or withingravated risk,
nce companie
their dealer nand working
December 2017
3
27061
331
(25)62
--
37-
(5)32
ate Dealers"
ual Results - 77
t. Impairmentg and on the
ounted at therforming and
edit risks arereclassified asn a maximumthe loan may
s to Peugeot,
networks andcapital loans
31 December 201628660
346
Total(16)243117
-344(1)
(12)331
7
t e
e d
e s
m y
,
d s
78 - Groupe PS
(3) Allowan
Short-terB. Short-term in
Cash and C. Cash and caincluding ter
13.3. FINAN
Analysis bA.
Analysis bB.
All bonds are
(in million eurPerforming lo
Total gross l
DepreciationTotal net loa
Items taken inguarantee dep
Performing lo
(in million eurOther debt seBank borrowin
Customer dep
Amounts dueTotal
(in million eur• Less than o• Two to five y• Beyond five Total
(in million eurEURUSDARSOther currencTotal
SA 2017 Annua
ces for credit
m investmennvestments co
cash equivalsh equivalent
rm loans, cent
NCING LIABIL
by maturity
by repaymene mainly repay
ros)ans with no pa
oans and rece
ans and receiv
nto account in posits
ans with past d
ros)ecurities and bongs
posits
e to Group man
ros)one yearyearsyears
ros)
cies
al Results
t losses
nts – Finance onsist primari
lents ts amounted tral bank depo
LITIES – FINA
nt currency yable in euros
st due balance
eivables outst
vables outstan
amortised cost
due balances a
ond debt
nufacturing and
companiesily of certificat
to €320 millosits, French t
NCE COMPA
s. Other financ
es
tanding
nding
t calculations a
and non-perform
sales compan
tes of deposit
lion at 31 Detreasury bond
NIES
cial liabilities
Cor
and
ming loans
ies
t held by the s
ecember 2017s and investm
can be analys
31 DeceRetail,
rporate and Equivalent
28817
305
(28)(7)
270
securitisation
7 (€530 millioments in mutu
ed as follows
mber 2017
Corporate Dealer
Co
642
66
-(5)61
31
31
31
funds.
on at 31 Deceal funds.
by repaymen
31 DecRetail,
orporate and Equivalent
29023
313
(20)(7)
286
1 December 2017
3
257150407
8415(8)
407
December 2017
3
150257
-407
December 2017
31
220914254
407
ember 2016),
nt currency:
cember 2016
Corporate Dealer
638
71
-(11)
60
31 December 2016301125426
4430(9)
421
1 December 2016165261
-426
1 December 2016
2123710860
426
,
Credit lineC.
At 31 Decem
€28€21
13.4. MANA
Financial A. Most of the ventures witto them. The risk man (1) LiquidityThe financingFinance.
Banque PSA quality of the
Its financingliabilities. ThCommittee omonitoring o
Since the esfinancing the
Financing str
At 31 DecemThe bank als
Renewal of b
Details of ba
Covenants
The revolvingthe first half
In addition tretention of
(2) Interest Banque PSA impact of chthe related r
The implemeBanque PSA
(3) CounterpBanque PSA failure to fulthe dealers' vehicle and s
(in million eurUndrawn co
es
mber 2017, the80 million in un
million in und
AGEMENT O
risk managefinancing act
th Santander a
nagement disc
y risk g strategy of
Finance's cape bank's asset
is ensured bhe implemenof Banque PSof financing pl
stablishment ese entities.
rategy implem
mber 2017, theo has cash res
bank facilities
nk facilities ar
g bilateral lineof 2016, have
to these covebank status, a
rate risks Finance's pol
hanges in inteefinancing.
entation of tFinance.
party and creFinance's expfill their contretail custom
sell it on the
ros)nfirmed lines
e credit lines tndrawn revolvdrawn various
F FINANCIAL
ment policy ivities for theand with BNP
cussed below
Banque PSA
pital structurets.
by the broadntation of thiSA Finance wans drawn up
of local part
mented in 201
e only financinserves of €572
s
re provided in
es of credit (foe the customa
enants represand the comp
icy aims to merest rates usi
his policy is
edit risks posure to cretractual obliga
mers. In the eused vehicle
of credit
totalling €301 ving bilateral s bank lines o
RISKS
e networks anP Paribas, whic
relates to the
Finance is de
and equity ra
est possible ris policy is mith in particu
p by coherent
tnerships with
16
ng of Banque 2 million.
n Note 13.3.C.
or a total outsary acceleratio
senting markliance with a
easure, ring feng appropriat
monitored by
dit risk corresations. The covent of defaumarket. The r
million are delines; f credit.
nd customers ch provide th
e activities of B
efined under t
atio comply w
range of liqumonitored byular monitorin
region.
h Santander,
PSA Finance i
.
standing amoon clauses for
ket practices, "Common Eq
ence in the cote financial in
y the ALM Co
sponds to theounterparties ult, Banque Prisk that the v
etailed as follo
of PSA Groupe financing an
Banque PSA F
the direction
with the latest
idity sources,y the ALM Cng and foreca
Banque PSA
s derived from
unt of €301 m such arrange
the syndicatuity Tier One"
ontext of stresnstruments to
ommittee and
e risk of losseconcerned ar
PSA Finance gvehicle's sellin
Groupe
ows:
p brands are nnd apply their
inance itself.
of the govern
regulatory re
, matching ofCommittee anasting of regu
A Finance is n
m the bond iss
million) signedements.
ed credit fac" capital ratio
ss scenarios ao match intere
d the Risk M
es due to borrre Peugeot, Cenerally has t
ng price on th
31
PSA 2017 Ann
now managedr risk manage
ning bodies of
equirements,
f maturities ond the Risk ulatory liquidi
no longer re
sues.
d by Banque P
cilities continuof at least 11
and if necessaest rates on t
Management C
rower defaultCitroën and DS
the right to rhe used vehicl
December 2017
3
301
ual Results - 79
d by the jointment policies
f Banque PSA
reflecting the
of assets andManagementity ratios and
sponsible for
PSA Finance in
ue to require1%.
ry reduce thethe loans and
Committee of
t or borrowerS dealers andrepossess thele market will
31 December 2016365
9
t s
A
e
d t d
r
n
e
e d
f
r d e l
80 - Groupe PS
be less than Note 13.1.B)
Wholesale leaccordance wGroup creditlastly the gepartner, Banand risk-mon
Retail loan asystem is adaselection is tthe teams aton-going bas
Defaults with
Corporate loone or moredue to paym
Concerning cthey remain
Banque PSA the liquidity interest rate
Available casor in moneta (4) CurrencyGroup policysame currencross currenc
The Group d
In view of ththe finance c
Hedging iB. The different
Impact of
Impact of fai
The hedging
(in million eurGains and losGains and losNet impact oGains and losGains and losNet impact o
SA 2017 Annua
the outstand.
ending decisiwith strict rut committee. T
eneral level ofque PSA Fina
nitoring proce
cceptance proapted accordihe responsibit Banque PSAsis, as well as t
h no impairme
oans with one e installmentsent incidents
concentrationat reasonable
Finance’s expreserve and orisks.
sh is invested ary mutual fun
y risk y consists of nncy, entity-by-cy swaps, curr
oes not hedge
e Group's hedcompanies wo
instruments: t types of hed
f hedging inst
ir value hedge
has no effect
ros)sses on remeassses on remeason income sses on remeassses on remeason income
al Results
ding debt is t
ions for fleetles on lendingThe level of cf risk borne bnce has contr
ess.
ocesses are bing to the speility of the par
A Finance’s hethe character
ent concern o
or more instas that are ove
or claims, and
n of credit riske levels and do
posure to finaof any excess
in money mands.
ot entering in-entity, using rency swaps a
e its net inves
dging policy oould not have
Finance comdges and their
truments on i
es
on equity (ot
surement of hesurement of he
surement of finsurement of he
aken into acc
t customers ag limits, eithe
credit lines is by the approvractual mecha
ased on a loccific charactertner which useadquarters mistics of files w
only corporate
allments that er 270 days pad do not refle
s, Banque PSAo not exceed t
ancial countercash, and (ii)
arket securitie
nto any operatappropriate
and forward fo
stment in fore
of the operatioany material
mpanies accounting tr
income and e
ther compone
edged customeedges of custom
ancial liabilitiesedges of financi
count in dete
and dealers er by the locadependent on
ving Credit Coanisms to ensu
cal credit scorristics of eachses the decisio
monitor the lewith past due
e loans.
are over 90 dast due are n
ect a default ri
A Finance conthe limits set
rparties is limthe use of de
es issued by le
tional currencfinancial instroreign exchan
eign operation
onal currencyimpact on co
reatment are
equity
ents of compre
r loans recognimer loans recog
s recognised inal liabilities rec
rmining the a
are made baal Banque PSAn the item to ommittee. Foure that it is p
ring system. Th local marketon-making to
evel of risk of instalments.
days past dueot classified aisk.
ntinually moniin banking reg
mited to (i) theerivatives (swa
eading banks,
cy positions. Lruments if nenge contracts.
ns.
y positions, a cnsolidated pro
described in N
ehensive inco
sed in profit or gnised in profit
n profit or losscognised in pro
amount of the
ased on a deA Finance crebe financed,
r its companiproperly involv
o enhance itst. For partnersols that it hasrequests and
and loans to as non-perfor
tors its largesgulations.
e investment aps and optio
in deposit ac
Liabilities are mecessary. The
change in excofit or equity.
Note 12.7.B.
ome).
lossor loss
fit or loss
e related imp
etailed risk aedit committe
the client’s ries operated jved in the dec
s effectivenesship subsidiars developed. d acceptance
o local adminisrming when t
st exposures t
of funds corrons) to hedge
ccounts with l
matched withhedging is ac
change rates a.
2017---6
(12)(6)
pairment (see
ssessment inees, or by theisk rating andjointly with acision-making
s, the scoringries, customerIn both cases,closely on an
strations withhe delays are
to ensure that
responding tocurrency and
leading banks
h assets in thechieved using
at the level of
20161
(2)(1)10
(10)-
e
n e d a g
g r ,
n
h e
t
o d
s
e g
f
13.5. FINAN
Financial A.
InformatiB.
The fair value
InformatiC.
Effect of fD.
Concerning trecognised in
(in million euros
Other non-curreOther non-curreLoans and rececompaniesShort-term invecompaniesOther receivablCash and cashAssets
Financing liabilOther payablesLiabilities
(in million eur
AssetsLoans and recLiabilitiesFinancing liab
(in million eurFinance comTotal interest Total interest RemeasuremNet impairmeTotal - finan
(1) For instrume
NCIAL INSTRU
instruments
ion about fines of the mar
ion about fin
financial inst
the Finance con “recurring o
s)
ent financial asseent assetseivables - finance
estments - finance
esh equivalents
ities - finance cos
ros)
ceivables - fina
bilities - finance
ros)mpanies
incomeexpenseent (1)
entce companies
ents classified a
UMENTS
reported in
nancial assetsketable secur
ancial assets
truments on
ompanies, theoperating inco
Caram
ets
e
ompanies
31 D
ance companies
e companies
S
s
s "at fair value th
the balance s
s and liabilitieities held by f
s and liabilitie
profit or loss
e impact on thme”.
rrying mount
Faval
23 2103 10
331 33
114 185 8
320 32976 97
415 481 8
496 49
December 2017
s
2017
Income Statement
Impact
Insat
thro
72(47)
3(5)23
hrough profit or
sheet
es measuredfinance compa
es not measu
s
he income sta
air ue
Instruments afair valu
through profor los
23 203 10
31
14 118520 3276 55
158196
Carrying amount
331
406
31 Decembe
struments t fair value ough profit
or loss
Asa
--9-9
loss", remeasur
at fair valueanies are at le
ured at fair v
atement of as
atuefit
ss
Available-for-sale financial
assets
23 -01 2
- -
4 -- -
20 -58 2
- -- -- -
Analys
Fair value
331
406
er 2017
Available-for le financial
assets
-----
rement includes
Analysis by
Groupe
e evel 2.
alue
ssets and liabi
-l
s
Loans, receivables
and other liabilities
- -2 -
- 331
- -- 83- -2 414
- -- 80- 80
is by class of ins
Level 1
-
256
Fai
Loans, receivables
and other liabilities
a
72-6
(5)73
s interest and div
y class of instru
PSA 2017 Ann
ilities pursuan
Borrowings at amortised
cost
--
-
----
415-
415
strument
Level 2
-
-
ir value level
Borrowings at amortised
cost
-(47)
--
(47)
vidends receive
ument
ual Results - 81
nt to IAS 39 is
Derivative instruments
--
-
-2-2
-11
Level 3
331
150
Derivative instruments
--
(12)-
(12)
d.
s
82 - Groupe PS
13.6. OFF-B
NOTE 14
In accordancbase of assedeferred tax
A deferred taand equity-a
the Grouit is prob
In practice: for subsdividendfor equitbetweencurrent liabilitiesthe subs
14.1. INCOM
Current taA.
Current taxewith the tax
In France, PeFrench incom
The Group h
When withhappropriately
Tax rate iB. The French s
The Amendinoffsetting tax
The 2017 Fcontribution
The deferred
(in million eurFinancing com
(in million eurCurrent taxeCorporate incDeferred taxDeferred taxeTotal
SA 2017 Annua
BALANCE SHE
- INCOME
ce with IAS 12ets and liabilit
assets are rec
ax liability is rccounted comup is able to cbable that the
sidiaries fully ds that will bety-accounted n the tax basetax benefits gs, except whesidiary.
ME TAXES OF
axes s represent thregulations an
eugeot S.A. anme taxes on a
as also electe
holding taxesy in current ta
n France statutory inco
ng Finance Acx loss carryfor
inance Act c. From 2022, t
d tax assets an
ros)mmitments to c
ros)escome taxesxeses arising in the
al Results
EET COMMIT
E TAXES
2 - Income Taxties and theircognised only
recognised fompanies, excecontrol the time temporary d
consolidated, paid by the scompanies, a
e of the sharesgenerated by
en the differen
F FULLY-CON
he amounts pnd rates in eff
nd its French sconsolidated
d to file a con
s on manageaxes.
me tax rate is
ct of 29 Decemrwards agains
changed the this rate will b
nd liabilities h
customers
e year
TMENTS AND
xes, deferred r carrying amoy when there i
or all taxable tpt to the exte
ming of the revifference will
, a deferred tubsidiary in th
a deferred taxs and their carintragroup p
nce is conside
NSOLIDATED C
aid or currentfect in the var
subsidiaries thbasis in accor
nsolidated tax
ement fees a
s 34.43%, inclu
mber 2013 rait taxable prof
income tax be reduced to
ave been rem
D CONTINGEN
taxes are calcount. Deferreis a reasonabl
temporary difent that both oversal of the tnot reverse in
tax liability ishe following yx liability on drrying amoun
provisions andered to be tem
COMPANIES
tly due to the rious countrie
hat are at leasrdance with A
return in oth
are used by
uding supplem
sing this tax rfit for the yea
rate in Franco 25.83%.
measured to re
NT LIABILITIES
culated for all ed tax liabilitie expectation
fferences assoof the followitemporary difn the foreseea
s recognised oyear by decisiodividend distrit;
d sales are nomporary, for e
tax authoritie
es.
st 95%-ownedArticle 223 A o
er countries t
the recipien
mentary contr
rate to 38% apr is maintaine
ce to 28.92%
eflect the new
S
temporary dies are system
n that they wil
ociated with ing conditions ference; and able future.
only in respecon of the Groubutions is rec
t cancelled byxample, when
es for the yea
d maintained tof the French T
that have Grou
nts to pay ta
ributions.
pplies up to Ded at 50% in 20
% from 2020,
w rates.
31
ifferences betmatically recoll be recovere
nvestments is are satisfied:
ct of distribuup; cognised for a
by recognisingn the Group p
r, calculated i
their election Tax Code.
up relief sche
ax, income i
December 201017.
, including th
December 2017
3
12
2017
(565)
(136)(701)
tween the taxognised, whileed.
n subsidiaries:
tion taxes on
all differences
g deferred taxplans to divest
in accordance
to determine
mes.
is recognised
5. The cap on
he additional
31 December 2016
10
2016
(596)
79(517)
x e
s
n
s
x t
e
e
d
n
l
ImpairmeC. Deferred taxyear tax estim
Tax loss carr(subject to th 14.2. RECO
CONS
This reconcilof income.
Tax credits in
The IAS 12 tsubsidiaries fcredits for €4 14.3. CHAN
Analysis bA.
(in million eurPre-tax profit Pre-tax profit Pre-tax profit Income (lossFrench statutTheoretical Tax effect of• Permanent • Income taxa• Tax credits• Effect of diffIncome tax
• Other impaiIncome tax e
• of which t• of which t• of which t
(1) of which €(2
• Assets on Funrecognised
(in million eurCurrent TaxAssetsLiabilities
Defered TaxAssets beforOffsetting of Net assetsLiabilities
ent losses on xes are determmates, consist
ryforwards rehe 50% cap) a
NCILIATION SOLIDATED S
iation covers
nclude researc
test resulted for €1,031 m48 million.
NGE IN TAX IT
by nature
ros)(loss) from con(loss) before ta(loss) from ope
s) before tax otory income taxtax expense ff the followingdifferences (1)
able at reduced
ferences in forebefore impair
rment lossesexpenseax expense onax expense onax expense on
219) million in 2
French tax cond or impaired
ros)es
xesre offsetting of French tax gro
deferred taxmined as desctent with the
elating to theare recognised
BETWEEN THTATEMENT O
the full resul
ch tax credits
in the impaillion and the
TEMS ON THE
ntinuing operatax on expenseserations to be cof fully-consolx rate for the pefor the periodg items :
d rates
eign tax rates arment losses o
n continuing opn expenses relan operations to
2017 in respect o
solidation defic
French tax grooup loss
xes cribed above.impairment t
e French tax d are the balan
HEORETICAL IOF INCOME
ts of consolid
that do not m
irment of thedeferred tax
E BALANCE S
ionss related to opecontinued in palidated compaeriodd based on the
and otheron the French
erationsated to operatiobe continued i
of the tax loss ca
cits of Peugeot
oup loss
Deferred taxtesting of the
group availabnce sheet.
INCOME TAX
dated compan
meet the defin
e deferred tax assets on tem
HEET
erations to be cartnershipanies
e French statu
h tax group
ons to be continn partnership
arryforwards of O
S.A. generate
xes were testeAutomotive D
ble for offset
X IN FRANCE A
nies regardless
nition of gover
ax assets on mporary diffe
continued in pa
utory income t
nued in partner
Opel Vauxhall.
d during the ye
Groupe
ed for impairmDivision CGU.
ting against n
AND INCOM
s of their clas
rnment grants
tax loss carryerences for €1
artnership
tax rate
rship
ear and
31
PSA 2017 Ann
ment on the
net deferred
E TAX IN THE
ssification in t
s.
yforwards of 1,062 million
20172,849
--
2,84934.4%
(981)
(102)8027
133(843)
1348
(701)(701)
--
December 2017
3
353(234)
119
1,421(617)
804(897)(93)
ual Results - 83
basis of four-
tax liabilities
E
he statement
Opel and itsas well as tax
20162,343
(16)248
2,57534.4%
(887)
114702783
(593)
76(37)
(554)(517)
6(43)
31 December 2016
164(172)
(8)
1,170(577)
593(895)(302)
3
-
s
t
s x
84 - Groupe PS
MovemenB.
14.4. DEFER
Tax loss carry
The IAS12 tethe deferred
(in million eurCurrent taxeAt beginningExpensePaymentsTranslation adAt end of peDeffered TaxAt beginningExpenseEquityTranslation adAt end of pe
(in million eurTax credits
Other deferr
Deferred tax
Deferred tax lDeferred tax lDeferred tax
Deferred taxcarryforward
(1) The gross atax losses that(2) Of the impa€781 million a(3) Offsetting cotax assets cov14.1).(4) The main teand difference
SA 2017 Annua
nts for the ye
RRED TAX AS
yforwards rela
est led to the tax assets on
ros)esg of period
djustments anderiodxesg of period
djustments anderiod
ros)
red tax assets
x assets
liabilities beforeliabilities offsetx liabilities
x assets on taxds
amount of deferrt can be carried
aired unrecogniare related to the
onsists of presenvered by deferre
emporary differees in amortisatio
al Results
ear
SSETS AND LI
ating to the F
impairment on temporary d
d other charges
d other charges
GrosVaPreDeOth
Tota
s
e offsetting of th (French tax gr
x loss
red tax assets coforward, regard
ised deferred tae French tax gro
nting on the faced tax liab ilities
ences that generon or depreciatio
ABILITIES
rench tax grou
of Opel and itifferences for
s
s
ss (1)
aluation allowaneviously unreco
eferred tax asseher deferred taxl deferred tax
he French tax roup) (3)
orresponding todless of whether
ax assets, €671oup (€1,883 mill
ce of the balancs, taking into ac
rate deferred taxon methods or p
up totalled €1
ts subsidiariesr € 1,062 millio
ncesognised deferreet offset (Frencx assets offsetx assets on tax
group (4)
o tax loss carryfothey were recog
million (€722 mion at 31 Decem
e sheet the netcount the legal
x liab ilities ariseperiods.
11,788 million
s' deferred taon, as well as
ed tax assets (2
h tax group) (3)
tx loss carryfo
orwards represegnised on the ba
million at 31 Dember 2016).
deferred tax porestrictions on
e from the capita
n at 31 Decem
x assets on lothe tax credit
31
31
2)
)
rwards
ents all deferredalance sheet at
ecember 2016)
osition of the Frethe use of tax lo
alisation of rese
mber 2017.
oss for € 1,03ts for € 48 mil
December 2017
3
(8)(565)
6875
119
(302)(136)
21324(93)
December 2017
3
13
5,007(2,649)(1,741)
(534)(31)
52
739
804
(1,431)534
(897)
d tax assets corrt 31 December 2
are related to F
ench tax group,oss carryforward
arch and develo
31 million andlion.
31 December 2016
(45)(596)
59934(8)
(388)79
(20)27
(302)
31 December 2016
-
5,190(1,719)(2,894)
(453)(9)
115
478
593
(1,348)453
(895)
responding to2017.
Faurecia, and
with deferredrds (see Note
opment costs
d
NOTE 15
15.1. EQUIT
Capital mA. The capital mcapital and elevel of capit
Equity break
Equity attribplus reserves
Minority intevaries in linetranslation reby Peugeot S
There are noPeugeot S.A.
Banque PSA regulations.
Peugeot S.A.to awaraffiliatedto reduc
Analysis oB.
Rights issues
Capital in
As part of tshareholdersof a total of inflow of €28
Employee
In Q4 2017, "Accelerate"
Grants of
The perform Analysis of s
Issuance of e
As part of thwere issued The equity weuro each, w
The exercise the date of tamount of th
(in euros)Share capitalEquity warranShare capita
- EQUITY A
TY
management management ensure that ittal to be held
s down into p
utable to equs and retained
erests mainlye with changeserves) and
S.A. in respect
o financial co and GIE PSA
Finance comp
shares are hed shares to ed with it whence the compan
of share capits
ncrease conse
the capital ins, exercisable 342,060,365 w
88 million. The
es shareholdi
the Group u offer. It resu
f performance
ance share pl
share capital
equity warran
he purchase oto Adam Ope
warrants entitwith one share
price of eachtheir issue. Thhe capital inc
l at beginning onts converted inal at end of pe
AND EARN
policy policy relates
t has secure lcurrently or in
portions attrib
uity holders ofd earnings of t
y represent nges in the Fau- exceptional
t of Faurecia.
venants baseTrésorerie is s
plies with the
eld in treasuryemployees, dn the stock opny's share cap
tal and chang
ecutive to the
ncreases carrfrom the secwarrants issue equity warra
ing plan
ndertook a clted in the de
e shares by Pe
ans establishe
nts
of a majority il GmbH, a sub
tle the holder e per warrant.
h warrant will he issue of thcrease liable t
of periodnto shareseriod
NINGS PER
s to equity as ong-term capn the future a
butable to min
f the parent isthe Group's va
on-Group shaurecia group'ly - in the eve
d on consolidsubject to com
e capital adeq
y for the followirectors and
ptions are exepital.
ges in the ye
exercise of e
ried out in tond year. Dured. Their exerants (BSA) we
capital increaslivery of 1,508
eugeot S.A.
ed in 2015, 20
nterest in thebsidiary of the
to subscribe
be €1, and these warrants to arise from
SHARE
defined undepital resourceand setting div
nority interest
s equal to thearious busine
areholders of's consolidateent of a sale,
dated equity. mpliance with
uacy ratio and
wing purposeofficers of thrcised or whe
ear
equity warran
the first half ring the year rcise resulted
ere exercisable
se reserved f8,515 treasury
016 and 2017
e Opel Vauxhe General Mot
for up to 39,
hey will only bdoes not immthis issue is €
er IFRS. It is ds. Managing cvidend policie
ts and to equi
share capitalss segments.
f Faurecia. Eqed equity (in purchase or a
The drawdowh an equity-ba
d other capita
es: he Company oen performanc
nts
of 2014, eq2017, 128,29
d in the delivee until 29 Apr
or employeesy shares.
are described
all automotivtors Group, fo727,324 shar
be exercisablemediately imp€39,727,324 f
Groupe
esigned to opcapital essents.
ty holders of t
of Peugeot S
quity attributparticular ne
any other equ
wn on the cosed financial
al requiremen
or of compance plans’ share
quity warrant5,194 warrantry of 44,903,3il 2017.
s. Over 11,00
d in Note 7.2.B
ve business, 3or a total fair ves in Peugeot
between thepact consolidafor 39,727,32
854
90
PSA 2017 Ann
ptimise the Grtially involves
the parent co
S.A. less any tr
table to minoet earnings auity transactio
onfirmed credratio (see Not
nts imposed u
nies or groupes are allocat
ts were issuets had been e318 new shar
00 employees
B.
9,727,324 eqvalue of €541 t S.A. with a p
e 5th and 9th yeated equity. T
24 new shares
201759,924,89544,903,31804,828,213
ual Results - 85
roup's cost ofs deciding the
ompany.
reasury stock,
ority interestsnd change in
on carried out
dit facilities ofte 12.4).
under banking
pings that areed ;
ed to formerexercised, outes and a cash
took up this
uity warrantsmillion.
par value of 1
ears followingThe maximums. In addition,
2016808,597,33651,327,559
859,924,895
5
f e
,
s n t
f
g
e
r t h
s
s
1
g m
,
86 - Groupe PS
General Motand are oblig
Situation at
Share capitafully paid-upincreases caron 19 June 2at 12.23% (accounted fotreasury stocand for 17.45the voting rig
The share pr
Treasury C. All Peugeot treasury stoc
The Group m
Changes in tr
(1) Number
No cancellati (2) Change i
The purchaseThe share pr
(number of shAt beginningPurchases ofShares deliveShares deliveAt period-enAllocation• Shares held• Coverage of• Coverage of• Coverage of
(in million eurAt beginningPurchases duShares deliveShares deliveAt period-enAverage price
SA 2017 Annua
tors and its afged to sell the
31 December
l amounted tp. Shares mayrried out in th
2017, Dongfen12.86% at 31or 19.94% of ck. For the Pe5% of the votght, including
ice on 31 Dec
stock S.A. shares hck are taken to
may use the bu
reasury stock
of shares he
ion of shares
in value
e price of treaice on 31 Dec
hares)g of periodf treasury shareered under the 2ered as part of tnd
d for allocation f the 2015 perfof the 2016 perfof the 2017 perfo
ros)g of perioduring the periodered under the ered as part of nde per share (in
al Results
ffiliated compe PSA shares re
r 2017
o €904,828,2 be held in rehe first-half ong Motor Gro1 December
the voting reugeot familyting rights, exc
treasury stoc
cember 2017 w
eld by the Gro equity, so th
uyback author
are presented
eld
was made ne
asury shares iscember 2017 w
es2015 free sharethe employees
on exercise oformance shareormance shareormance share
d2015 free sharthe employees
euros)
anies do not heceived withi
13 at 31 Deceegistered or bf 2017, the stup and the Pe2016) i.e. 11ight, includin, this stake accluding treasu
ck, and for 9.8
was €16.96.
roup are recohat any dispos
risations given
d in the follow
ither in 2016
s deducted frowas €16.96.
e plans' shareholding
f future performe plane plane plan
re plans' shareholding
have any goven a period of
ember 2017, bearer form, atakes of Lionseugeot family10,622,220 shg treasury stccounted for ury stock. For87% of the vot
orded at cost sal gains or lo
n at Sharehold
wing table:
nor in 2017. N
om equity.
plan
ance share pla
plan
ernance or vo35 days from
divided into sat the sharehs Participation (FFP and Eta
hares each. Fock, and for 17.63% of thLion Participa
ting rights, exc
as a deductiosses have no
ders' Meeting
No purchases
ans or stock op
oting rights in the date of ex
shares with a older’s discre
n (BPI France) blissements P
For Dongfeng 19.74% of the voting rightation, this stacluding treasu
on from equitimpact on pro
gs to buy bac
were made in
Notes Tra
5 (2 (1 11
ptions 6 7.2.B 7.2.B 2 7.2.B 2
11
respect of thxercise of the
par value of etion. Followin which entere
Peugeot Frère Motor Grou
he voting right, including tr
ake accountedury stock.
ty. Proceeds ofit (loss) for t
ck Peugeot S.A
n 2016.
2017ansactions T9,113,263
5,729,9872,019,000) 1,508,515) 1,315,735
6,033,735 389,000
2,200,000 2,693,000 1,315,735
2017(238)(116)
5331
(270)19.58
ese warrants, warrants.
€1 each. It isng the capitaled the capital
es) each stoodup, this stakehts, excludingreasury stock,d for 9.97% of
from sales ofthe period.
A. shares.
2016Transactions
9,113,263
- -
9,113,263
4,448,263 2,465,000 2,200,000
- 9,113,263
2016(238)
---
(238)
,
s l l
d e g , f
f
Reserves D.
Reserves and
Other Peuge
Minority E.
Minority inte
15.2. BASIC
Basic earningcalculated as
Basic earnA. Basic earningperiod.
The averagecancelled du
Diluted eaB.
Diluted earnexercise of st
The performeffect on 31
(in million eurPeugeot S.AOther PeugeoReserves andTotal
(in million eurReserves avWithout any aAfter deductioTotalTax on distr
(1) Correspond
Consolidated Average num
Consolidated parent (in mil
Basic earningof the parent Basic earning
and retainedd retained ear
ot S.A. statuto
interests erests corresp
C EARNINGS P
gs per share as follows:
nings per shags per share a
e number of sring the perio
arnings per snings per shatock options,
mance share gDecember 20
ros). legal reserveot S.A. statutod retained earn
ros)vailable for disadditional corpon of additiona
ributed earnin
ding to the portio
basic earningsber of €1 par va
basic earningslion euros)
gs per €1 par v(in euros)
gs per €1 par v
d earnings, ernings, includi
ory reserves a
pond mainly to
PER SHARE
and diluted ea
are - Attributare calculated
shares outstaod and change
share - Attribre are calculaperformance
grants (see No017.
ory reserves anings of subsidi
stribution:orate tax beingl tax (1)
ngs
on of the long-te
s - attributable alue shares ou
s of continuing
value share of c
value share (in e
xcluding minng profit for t
and retained e
o the interests
arnings per sh
table to equiton the basis
anding is calces in the numb
butable to eqated by the tshare grants
ote 7.2.B) an
d retained earnaries, excludin
g due
erm capital gain
to equity holdetstanding
operations - at
continuing oper
euros) - attribu
nority interesthe year, can
earnings inclu
s of other sha
hare are prese
ty holders ofof the weight
ulated by takber of shares
uity holders treasury stocto employees
d the equity
ningsng minority inte
s reserve that r
ers of the paren
ttributable to eq
rations - attribu
utable to equity
sts be analysed a
de:
areholders of F
ented at the f
f the parentted average n
king into accoheld in treasu
of the parenk method. Th
s and equity w
warrants (se
erests
remains subject
nt (in million eu
quity holders o
utable to equity
y holders of the
Groupe
s follows:
Faurecia.
oot of the inc
umber of sha
ount the numury stock.
t his consists o
warrants.
e Note 15.1.B
31 D
31 D
t to additional ta
uros)88
of the
y holders
e parent
PSA 2017 Ann
come stateme
res outstandi
mber of share
of taking into
B) had a pote
December 2017
3
8613,631
19713,914
December 2017
3
12,5621,069
13,631149
ax.
2017
1,9361,929
86,113,459
2.182.18
ual Results - 87
ents. They are
ng during the
es issued and
o account the
ential dilutive
31 December 2016
8013,650(1,695)12,035
31 December 2016
12,5821,068
13,650198
2016
1,5251,730
802,566,768
1.902.16
7
e
e
d
e
e
88 - Groupe PSA 2017 Annual Results
The following tables show the effects of the calculation:
(1) Effect on the average number of shares
(2) Effect of Faurecia dilution on consolidated earnings of continuing operations - attributable to equity holders of the parent
(3) Effect of Faurecia dilution on consolidated earnings - attributable to equity holders of the parent
The performance share grants of Faurecia have a potential impact on the total number of Faurecia shares outstanding without affecting the number of shares held by the PSA Group. Consequently, they have a potential dilutive effect on consolidated profit attributable to the PSA Group.
Due to their terms, the Faurecia stock options’ plans do not have any material dilutive impact in 2016 and 2017.
NOTE 16 - NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
The statement of cash flows is partitioned into cash flows from operating activities, cash flows from investing activities and cash flows from financing activities depending on the nature of the transactions.
The Group’s main choices as regards presentation were as follows: Interest flows were kept under cash flows from operating activities; Payments received in connection with grants were allocated by function to cash flows from investing activities or cash flows from operating activities depending on the nature of the grant; The conversion options of convertible bonds (involving both optional and mandatory conversion) are presented on a capital increase line under cash flows from financing activities; Voluntary contributions paid into pension funds are recognised under cash flows from operating activities; Payments made on the deferred portion of a fixed asset purchase are presented under cash flows from investing activities for the period (“Change in amounts payable on fixed assets”); Tax payments are classified under cash flows from operating activities; Bonds’ redemptions are classified under cash flows from financing activities.
Notes 2017 2016Average number of €1 par value shares outstanding 886,113,459 802,566,768Dilutive effect, calculated by the treasury stock method, of: • Equity warrants (2014 capital increases) 15.1.B 10,763,952 91,404,878• Equity warrants delivered to General Motors Group 15.1.B 39,727,324 -• Performance share plans 7.2.B 4,350,427 4,115,300
940,955,162 898,086,946Diluted average number of shares
(in million euros) 2017 20161,936 1,525
- -Consolidated profit (loss) from continuing operations (after Faurecia dilution effect) 1,936 1,525
2.06 1.70
Consolidated profit (loss) from continuing operations - attributable to equity holders of the Dilutive effect of Faurecia (performance share grants and equity warrants exercise)
Diluted earnings of continuing operations - attributable to equity holders of the parent per €1 par value share (in euros)
(in million euros) 2017 2016Consolidated profit (loss) attributable to equity holders of the parent 1,929 1,730
- -Consolidated profit (loss) after Faurecia dilution 1,929 1,730Diluted earnings attributable to equity holders of the parent per €1 par value share (in euros) 2.05 1.93
Dilutive effect of Faurecia (performance share grants and equity warrants exercise)
Groupe PSA 2017 Annual Results - 89
16.1. ANALYSIS OF NET CASH AND CASH EQUIVALENT REPORTED IN THE STATEMENTS OF CASH FLOWS
16.2. NET CHARGES TO DEPRECIATION, AMORTISATION AND IMPAIRMENT IN THE STATEMENT OF CASH FLOWS
16.3. CAPITAL INCREASE AND ACQUISITIONS OF CONSOLIDATED COMPANIES AND EQUITY INTEREST
The capital increases and acquisitions of consolidated companies and of equity interests during the year for €1,095 million mainly involved the following transactions:
the acquisition of Opel Automobile GmbH for a net cash impact of €26 million (see Note 2.1);
the acquisition of 50% of Opel Bank SA by Banque PSA Finance, a finance company in partnership with BNP Paribas for €489 million (see Note 2.2);
Faurecia's acquisition of Coagent for €192 million;
the €148 million capital increase by Automobiles Citroën and PSA Automobiles at Saipa Citroën Automobiles Company.
16.4. INTEREST RECEIVED AND PAID BY THE MANUFACTURING AND SALES COMPANIES
Interest received and paid by manufacturing and sales companies is included in working capital provided by operations, and is as follows:
(in million euros) Notes31 December
201731 December
2016Cash and cash equivalents 12.5.C 11,582 11,576Payments issued 12.6.C (93) (112)Other 2 -Net cash and cash equivalents - manufacturing and sales companies 11,491 11,464Net cash and cash equivalents - finance companies 13.2.C 320 530Elimination of intragroup transactions (8) (8)Total 11,803 11,986
(in million euros) Notes 2017 2016Depreciation and amortisation expense 5.2 (2,636) (2,576)Impairment of:• capitalised development costs 8.1.B (80) (47)• intangible assets 8.1.B - 2• property, plant and equipment 8.2.B 43 120Other (7) 4Total (2,680) (2,497)
(in million euros) 2017 2016Interest received 32 86Interest paid (287) (377)Net interest received (paid) (255) (291)
90 - Groupe PSA 2017 Annual Results
16.5. DETAIL OF CASH FLOW FROM OPERATIONS TO BE CONTINUED IN PARTNERSHIP
16.6. DETAIL OF FREE CASH FLOW FROM MANUFACTURING AND SALES OPERATIONS
Operational free cash flow includes cash flows generated by operations net of investing activities excluding non-recurring items. It is determined as follows:
Non-recurring operational cash flows mainly include cash flows from restructuring and changes in equity investments.
NOTE 17 - OFF-BALANCE SHEET COMMITMENTS AND CONTINGENT LIABILITIES
Off-balance sheet commitments given in the normal course of business were as follows at 31 December 2017:
(in million euros) 2017 2016
- (11)Change in liabilities related to the financing of operations to be continued in partnership - (2,299)
- (2,310)
Profit (loss) from operations to be continued in partnership (7) 204Change in assets and liabilities of operations to be continued in partnership - 759Net dividends received from operations to be continued in partnership - (120)
(7) 843
Other expenses related to the non-transferred financing of operations to be continued in partnership
Net cash related to the non-transferred debt of finance companies to be continued in partnership
Net cash from the transferred assets and liabilities of operations to be continued in partnership
(in million euros) 2017 2016Net cash from (used in) operating activities of continuing operations 5,213 4,937Net cash from (used in) investing activities of continuing operations (4,713) (2,673)Dividends received from Banque PSA Finance - 434Free Cash Flow 500 2,698Minus, net cash from non-recurring operating operations (1,054) 164Operational Free Cash Flow from manufacturing and sales operations 1,554 2,534
(in million euros) Notes31 December
201731 December
2016Manufacturing and sales companies
Financing commitments 12.9 884 863
Operating commitments 8.4 3,346 2,413(1) 4,230 3,276
Finance companies 13.6 12 10
(1) of which Opel Vauxhall Automotive segment 475
Groupe PSA 2017 Annual Results - 91
17.1. CONTINGENT LIABILITIES
Automotive equipment
On March 25, 2014, the European Commission and the Department of Justice of the United States of America and on November 27, 2014, the Competition Commission of South Africa, initiated an enquiry covering certain suppliers of emission control systems on the basis for suspicions of anti-competitive practices in this segment. Faurecia is one of the companies covered by these enquiries. On 28 April 2017 the European Commission decided to terminate the investigation of certain suppliers of emission control systems initiated on 25 March 2014. The other inquiries are ongoing. On 19 May 2017, the Brazilian Competition Authority (CADE) initiated a survey of Faurecia Emissions Control Technologies do Brasil and some of its former employees, alleging anti-competitive practices in the Brazilian emission control market. Faurecia agreed settlements with claimants in the three ongoing class actions, which had been filed in the United States District Court for the Eastern District of Michigan against a number of suppliers of emission control systems, including various Faurecia Group companies, claiming anti-competitive practices involving exhaust systems. These settlements, for non-material amounts, for the amount of the defence legal fees, brought these class actions to an end.
Two class actions involving similar claims were also filed in Canada but are at a very preliminary stage.
In the event that anti-competitive practices are proven, possible sanctions include fines, criminal charges or civil damages. Faurecia is at present unable to predict the consequences of such inquiries and class actions including the level of fines or sanctions that could be imposed : therefore, no accruals were accounted for as of December 31, 2017.
Automotive business
The customs agreement governing the automotive industry between Brazil and Argentina provides for the payment of penalties by the Argentine automotive industry should the average ratio of imports to exports vis-à-vis Brazil exceed a certain threshold over the 2015–2020 period. Penalties may be payable by the Group should the automotive industry as a whole and the Group not hit the required ratio. No provision has been funded due to the uncertainties surrounding developments in the automotive markets in Argentina and Brazil between now and 2020 and the steps that the Group could take.
17.2. COMMITMENTS CONNECTED WITH THE GEFCO GROUP
Representations and warranties were made to JSC Russian Railways (RZD) as part of its acquisition of the Gefco Group from PSA in December 2012. At 31 December 2017, the Group had not identified any material risks associated with these representations and warranties.
Under the logistics and transportation service agreements entered into by the PSA and Gefco groups, the Group gave guarantees regarding the satisfactory performance of the logistics contracts and a five-year exclusivity clause. An amendment signed in November 2016 supplemented these logistics and transportation service agreements. This amendment, which came into effect on 1 January 2017, extends the exclusivity clause until the end of 2021 and confirms the guarantees regarding the satisfactory performance of the logistics contracts given by PSA Group. At 31 December 2017, the Group had not identified any material risks associated with these guarantees.
NOTE 18 - RELATED PARTY TRANSACTIONS
Related parties are companies subject to significant influence consolidated by the equity method, members of the managing bodies and shareholders holding more than 10% of Peugeot S.A. capital.
Transactions with companies accounted for by the equity method are disclosed in Note 11.5. Other than these transactions, there were no significant transactions with other related parties.
92 - Groupe PSA 2017 Annual Results
NOTE 19 - SUBSEQUENT EVENTS
Between 31 December 2017 and 28 February 2018, the date on which the financial statements were approved by the Supervisory Board, no event likely to significantly impact the economic decisions made on the basis of these consolidated financial statements occurred.
NOTE 20 - FEES PAID TO THE AUDITORS
Faurecia’s Statutory Auditors are PricewaterhouseCoopers and EY.
(in million euros) 2017 2016 2017 2016 2017 2016
AuditStatutory and contractual audit services• Peugeot S.A. 0.7 0.2 0.7 0.3 - -• Fully-consolidated subsidiaries 2.1 2.3 7.6 7.7 4.4 4.5 o/w France 1.3 1.4 2.5 2.8 1.1 1.2 o/w International 0.8 0.9 5.1 4.9 3.3 3.3
Sub-total 2.8 2.5 8.3 8.0 4.4 4.5o/w Faurecia - - 4.1 4.1 4.4 4.5Excluding Faurecia 2.8 2.5 4.2 3.9 - -
97% 100% 89% 94% 83% 82%
Other services provided to subsidiaries• Peugeot S.A. - - - - - -• Fully-consolidated subsidiaries 0.1 - 1.0 0.5 0.9 1.0 o/w France 0.1 - 0.8 0.5 0.9 1.0 o/w International - - 0.2 - - -Sub-total 0.1 - 1.0 0.5 0.9 1.0o/w Faurecia - - 0.5 0.5 0.9 0.8Excluding Faurecia 0.1 - 0.5 - - 0.2
3% 11% 6% 17% 18%
TOTAL 2.9 2.5 9.3 8.5 5.3 5.5
o/w Faurecia - - 4.6 4.6 5.3 5.3Excluding Faurecia 2.9 2.5 4.7 3.9 - 0.2
Mazars EY PWC
Groupe PSA 2017 Annual Results - 93
NOTE 21 - CONSOLIDATED COMPANIES AT 31 DECEMBER 2017
The Companies listed below are fully consolidated, except those marked with an asterisk (*), which are consolidated by the equity method, and those marked with two asterisks (**), which are consolidated as joint operations and recognised in proportion to the share of assets, liabilities, revenue and expenses controlled by the Group.
Company Country%
interestCompany Country
% interest
Other businesses Automotive Peugeot Citroën DS
Peugeot S.A. France 100 Pièces et Entretien Automobile Bordelais France 100GIE PSA Trésorerie France 100 Citroën Deutschland GmbH Germany 100Grande Armée Participations France 100 PSA Retail GmbH Germany 100Financière Pergolèse France 100 Peugeot Deutschland GmbH Germany 100PSA Ventures France 100 Peugeot Citroën Deutschland GmbH Germany 100SARAL Luxembourg 100 Peugeot Citroën Retail Italia S.p.A. Italy 100PSA International S.A. Switzerland 100 Peugeot Automobili Italia S.P.A. Italy 100Groupe GEFCO France 25 * Citroën Italia S.p.A. Italy 100Groupe PMTC - Peugeot Motocycles France 49 * PSA Services SRL Italy 100
Peugeot Citroën Japon Co. Ltd. Japan 100
Automotive Peugeot Citroën DS Peugeot Citroën Tokyo, Co Ltd Japan 100Peugeot Mexico S.A. de C.V. Mexico 100
PSA Automobiles S.A. France 100 Servicios Automotores Franco-Mexicana S de RL de CV Mexico 100Peugeot Algérie Algeria 100 Peugeot Citroën Automobiles Maroc Morocco 95PCA Asesores de Seguros S.A. Argentina 98 Peugeot Citroën DS Maroc Morocco 100Circulo de Inversores S.A.U. de Ahorro parafines de Argentina 100 Peugeot Polska Sp. Zo. O. Poland 100Peugeot Citroën Argentine S.A. Argentina 100 Citroën Polska Sp.ZO.O. Poland 100Peugeot Austria GmbH Austria 100 Peugeot Citroën Automoveis Portugal S.A. Portugal 99Peugeot Autohaus GmbH Austria 100 Automoveis Citroën S.A. Portugal 100Citroën Osterreich GmbH Austria 100 Peugeot Portugal Automoveis Distribuçao Portugal 100Peugeot Belgique Luxembourg Belgium 100 Peugeot Portugal Automoveis S.A. Portugal 100Peugeot Distribution Service Belgium 100 Peugeot Citroën Russie Russia 100Citroën Bélux Belgium 100 PCA Slovakia s.r.o. Slovakia 100PCI do Brasil Ltda Brazil 100 Psa Services Centre Europe s.r.o. Slovakia 100PSA ventures serviços de mobilidade urbana Ltda Brazil 100 Plataforma Comercial de Retail, S.A.U. Spain 97Peugeot Citroen do Brasil Automoveis Ltda Brazil 100 PSAG Automóviles comercial España, S.A. Spain 100Automores Franco Chilena SA Chile 100 Peugeot Citroën Automóviles España, S.A. Spain 100Peugeot Chile Chile 100 Placas de Piezas y Componentes de Recambios, S.A. Spain 100Peugeot Citroën (CHINA) Automotive Trade Co China 100 Peugeot Suisse S.A. Switzerland 100PSA (Shanghai) Management Co. Limited China 100 Citroën Suisse S.A. Switzerland 100PSA (Wuhan) Management Co. Limited China 100 PCR Retail Suisse SA Switzerland 100PCA Logistika cz Czech Republic 100 Peugeot Citroën Gestion International SA Switzerland 100Technoboost France 60 PCMA Holding B.V. The Netherlands 70Aramis SAS France 70 Peugeot Nederland N.V. The Netherlands 100Celor France 70 Citroën Nederland B.V. The Netherlands 100Société Industrielle Automobile de Provence France 100 PSA Retail Nederland BV The Netherlands 100Véhicules d'occasion Citroën et DS France France 100 Peugeot Otomotiv Pazarlama A.S. Turkey 100Peugeot Citroën Poissy S.N.C. France 100 Peugeot Citroën Ukraine LLC Ukraine 100PSA Retail France SAS France 100 Melvin Motors Ltd United Kindom 100Société Mécanique Automobile de l'Est France 100 Peugeot Citroën Retail UK Ltd United Kindom 100Peugeot Citroën Mécanique de l'Est S.N.C. France 100 Robins and Day Ltd United Kindom 100Peugeot Citroën Mécanique du Nord-Ouest S.N.C. France 100 Warwick Wright Motors Chiswick Ltd United Kindom 100Peugeot-Citroën Mulhouse SNC France 100 Peugeot Citroën Automobile UK Ltd United Kindom 100Peugeot-Citroën Rennes SNC France 100 Peugeot Motor Company PLC United Kindom 100Peugeot-Citroën Sochaux SNC France 100 Rootes Ltd United Kindom 100Automobiles Peugeot France 100 Citroën UK Ltd United Kindom 100Automobiles Citroën France 100 Wuhan Shenlong Hongtai Automotive Co. Ltd China 10 *Car On Way France 100 Changan PSA Automobile Limited China 50 *Citroën Argenteuil France 100 Dongfeng Peugeot Citroën Automobiles Ltd China 50 *
Citroën Dunkerque France 100Dongfeng Peugeot Citroën Automobiles International PTE China 50 *
Conception d'Equipements Peugeot Citroën France 100Dongfeng Peugeot Citroën Automobiles Sales Company Ltd China 50 *
DJ 56 France 100 Iran Khodro Automobiles Peugeot Iran 50 *Française de Mécanique France 100 Saipa Citroën Company Iran 50 *GEIE Sevelind France 100 Peugeot Citroën South Africa Ltd South Africa 49 *Mécanique et environnement SAS France 100 STAFIM-GROS Tunisia 34 *
Mister Auto France 100Société Tunisienne Automobile Financière Immobilière et Maritime - STAFIM Tunisia 34 *
Peugeot Citroën Pièces de Rechange France 100 Toyota Peugeot Citroën Automobiles Czech s.r.o. Czech Republic 50 **Peugeot Média Production France 100 Societa Europea Veicoli Leggeri S.p.a. Italy 50 **Peugeot Saint-Denis Automobiles France 100 PCMA Automotiv Rus Russia 70 **Prince Garage des Petits Ponts France 100
PSA ID France 100 Automotive Opel -VauxhallSabrié France 100Société Commerciale Distribution Pièces de Rechange et France 100 Opel Automobile GmbH Germany 100Société Européenne de Véhicules Légers du Nord - France 100 Opel Austria GmbH Austria 100Société de Pièces et Services Automobile de l'Ouest France 100 Opel Wien GmbH Austria 100Société Lilloise de Services et de Distribution de Pièces France 100 Opel Automotive Services Belgium N.V. Belgium 100Société Lyonnaise de Pièces et Services Automobile France 100 Opel Belgium N.V. Belgium 100Société Nouvelle Armand Escalier France 100 Opel Danmark A/S Denmark 100
94 - Groupe PSA 2017 Annual Results
Company Country%
interestCompany Country
% interest
Automotive Opel -Vauxhall Automotive Equipment
Opel Finland Oy Finland 100 Faurecia NHK (Xiangyang) Automotive seating Co Ltd China 46Opel France S.A.S. France 100 Faurecia Tongda Exhaust System (Wuhan) Company Ltd China 46Opel Group Warehousing GmbH Germany 100 Faurecia-GSK Automotive seating co Ltd China 46Opel Hellas S.A. Greece 100 Foshan Faurecia Xuyang Interior Syst. Cny Limited China 46GBS Hungary Kft Hungary 100 Nanchang China 46Opel Southeast Europe LLC Hungary 100 Ningbo China 46Opel Szentgotthard Automotive Manufacturing Ltd Hungary 100 PowerGreen Emissions Control Technologies Co. Ltd China 46Opel Automobile Ireland Limited Ireland 100 Shanghai Faurecia Automotive Seating Co Ltd China 46Opel Italia S.r.l. Italy 100 Tianjin Faurecia Xuyang Automotive Seat Co. Ltd China 46Opel Norge AS Norway 100 Emcon Tech. Czech Republic Czech Republic 46Opel Manufacturing Poland Sp.z o.o. Poland 100 Faurecia Automotivr Czech Republic Czech Republic 46Opel Poland Sp.z o.o. Poland 100 Faurecia Components Pisek s.r.o Czech Republic 46Opel Portugal, Lda Portugal 100 Faurecia Exhaust Systems Moravia S.r.o Czech Republic 46Opel Sibiu SRL Rumania 100 Faurecia Exhaust Systems S.R.O. Czech Republic 46Opel CIS LLC Russia 100 Faurecia Interior Systems Bohemia S.r.o. Czech Republic 46Opel España , SLU Spain 100 Faurecia Interiors Pardubice S.r.o Czech Republic 46Opel Europe Holdings, SLU Spain 100 Etud. et Constr. sièges pr l'Automobile France 46Opel Sverige AB Sweden 100 Faurecia ADP Holding France 46Opel Suisse S.A. Switzerland 100 Faurecia automotive Holdings Inc France 46Opel Nederland B.V. The Netherlands 100 Faurecia Automotive Industrie France 46Opel Türkiye Otomotiv Ltd. Sirketi Turkey 100 Faurecia Automotives Composites France 46Baylis (Gloucester) Ltd United Kindom 93 Faurecia Exhaust International France 46Go Motor Retailling Ltd United Kindom 95 Faurecia Exteriors International France 46Automotive UK No. 1 United Kindom 100 Faurecia Industrie France 46Holdings UK No.3 Limited United Kindom 100 Faurecia Intérieur Industrie France 46IBC Vehicles LTD United Kindom 100 Faurecia Intérieurs Mornac France 46Vauxhall Motors Limited United Kindom 100 Faurecia Intérieurs Saint Quentin France 46VHC Sub-Holdings (UK) United Kindom 100 Faurecia investissement France 46
Faurecia Metalloproduckia Holding France 46
Automotive Equipment Faurecia Seating Flers France 46Faurecia Services Groupe France 46
Faurecia France 46 Faurecia Sièges d'Automobiles SAS France 46Faurecia Argentina SA Argentina 46 Faurecia Systèmes d'Echappements France 46Faurecia Sistemas de Escape Argentina Argentina 46 Faurecia Ventures France 46Faurecia Automotive Belgium Belgium 46 Hambach Automotive Exteriors SAS France 46Faurecia Industrie N.V. Belgium 46 Hennape Six France 46FMM Pernambuco Componentes Automotivos Ltda Brazil 24 SIEBRET France 46Faurecia Automotive do Brasil Brazil 46 SIEDOUBS France 46Faurecia Emissions Control Technologies do Brasil Brazil 46 SIELEST France 46Faurecia Emissions Ctrl Techn. Canada Ltd Canada 46 SIEMAR France 46CSM Faurecia Automotive Parts Co. Ltd China 23 TRECIA SAS France 46Dongfeng Faurecia Emissions Control Technologies Co., China 23 Faurecia Abgastechnik GmbH Germany 46Faurecia Liuzhou Automotive Seating Co., Ltd China 23 Faurecia Angell - Demmel GmbH Germany 46Faurecia (Tianjin) Automotive Systems Co. Ltd China 24 Faurecia Automotive Gmbh Germany 46Faurecia Yinlun Emissions Control Technology (Weifang) China 24 Faurecia Autositze Gmbh Germany 46Changchun Faurecia Xuyang Automotive Seat CO China 46 Faurecia Emissions Control Technologies Germany GmbH Germany 46Changsha Faurecia Emissions Control Technologies Co. China 46 Faurecia Innenraum Systeme GmbH Germany 46Chengdu Faurecia Limin Automotive Systems Company China 46 Emcon Technologies KFT Hungary 46Chongqing Faurecia Changpeng Automotive Parts Co. Ltd China 46 Emcon Technologies India PVT Limited India 46Cummings Beijing China 46 Faurecia Automotiv Seating India Private India 46Dongfeng Faurecia Automotive Interior Systems Co. Ltd China 46 Faurecia Emissions Control Tec India 46Emcon Emmi Tech. Chongqing Co Limited China 46 Faurecia Technology Center India Pty Ltd India 46Emcon Env Tech. Yantai Co Limited China 46 PFP Acoustic and Soft Trims India Private Limited India 46Emissions Control Technologies (Shangaï) Co Limited China 46 Faurecia Azin Pars Company Iran 46Emissions Control Technologies Foshan Company China 46 Faurecia Emissions Control Technologies Italy SRL Italy 46Emissions Control Technologies Ningbo Hangzhou Bay China 46 Faurecia Japan K.K. Japan 46Faurecia (changchun) Automotive Systems China 46 Howa Interior's - Japon Japan 46Faurecia (Changshu) Automotive Systems Co.,Ltd China 46 Faurecia AST Luxembourg SA Luxembourg 46Faurecia (China) Holding Co. Ltd China 46 Faurecia Automotive Luxembourg Luxembourg 46
Faurecia (Guangzhou) Automotive Systems Co China 46Faurecia Hicom Emissions Control Technologies (M) Sdn Bhd Malaya 46
Faurecia (Jimo) Emissions Control Technologies Co. Ltd China 46 Emcon Tech. Hldgs 2 S. de RL Mexico 46Faurecia (Nanjing) Automotive Systems Co China 46 Exhaust Services Mexicana sa Mexico 46Faurecia (Quingdao) Exhaust Systems Co Ltd China 46 Faurecia Howa Interiors de Mexico SA de CV Mexico 46Faurecia (Shangai) Automotive Systems China 46 Faurecia Sistemas Automotrices de Mexico Mexico 46Faurecia (Shenyang) Automotive Systems Co Ltd China 46 Servicios Corporativos de Personal Especializado Mexico 46Faurecia (Tianjin) Clean Mobility Co. Ltd China 46 Faurecia Automotive Industries Morocco Morocco 46Faurecia (Wuhan) Automotive Components Systems Co China 46 Faurecia Automotive Systems Technologies Morocco 46Faurecia (Wuxi) Seating Components Co Ltd China 46 Faurecia Equipements Automobiles Maroc Morocco 46Faurecia (Yancheng) Automotive Systems Company China 46 Faurecia Automotive Polska Spolka Akcyjna Poland 46Faurecia Changchung Xuyang Interiors Systems Co China 46 Faurecia Gorzow Sp Zoo Poland 46Faurecia Emiss. Ctrl Tech. Develop. (Shanghai) Cy Ltd China 46 Faurecia Grojec R&D Center Sp Z.o.o. Poland 46Faurecia Emissions Ctrl Technologies (Chengdu) Co China 46 Faurecia Legnica Sp Z.O.O. Poland 46Faurecia Exhaust Systems Changchun Company Ltd China 46 Faurecia WALBRZYCH Spz.o.o. Poland 46Faurecia Exhaust Systems Qingpu Co. Ltd China 46 EDA Estofagem de Assentos Portugal 46Faurecia Honghu Exhaust Systems Shangai Company Ltd China 46 Faurecia Assentos de Automovel Portugal 46
Groupe PSA 2017 Annual Results - 95
Company Country%
interestCompany Country
% interest
Automotive Equipment Automotive Equipment
Faurecia Sistemas de Escape Portugal 46 SAS Automotiv France France 23 *Faurecia Sistemas de Interior de Portugal Portugal 46 SAS Autosystemtechnik Gmbh and Co KG Germany 23 *SASAL Portugal 46 SAS Autosystemtechnik Verwaltung Gmbh Germany 23 *Euro Automotive Plastic Systems Rumania 46 NHK F. Krishna India Automotive Seating Private Limited India 9 *Faurecia Seating Talmaciu S.R.L. Rumania 46 Basis Mold India Private Limited India 18 *Faurecia Autocomponent Exterior Systems Russia 46 Azin Faurecia Interior Systems Company Iran 23 *Faurecia Automotive Development Russia 46 Faurecia LIGNEOS Italy Srl Italy 23 *Faurecia Metallo Produckcia Exhaust Systems Russia 46 Faurecia NHK Co Limited Japan 23 *OOO Faurecia Automotiv Russia 46 Faurecia SAS Automotive Systems & Services SA de CV Mexico 23 *Faurecia Automotive Slovakia Sro Slovakia 46 Faurecia SAS Automotive Systems SA de CV Mexico 23 *E.C.T. South Africa (Cape Town) (Pty) Ltd South Africa 46 SAS Autosystem de Portugal Unipessoal ltda Portugal 23 *Faurecia Exhaust Systems South Africa Ltd South Africa 46 Vanpro Assentos Limitada Portugal 23 *Faurecia Interior Syst. Pretoria (Proprietary) Ltd South Africa 46 Faurecia Automotive Sro Slovakia 23 *Faurecia Interior Systems South Africa (PTY) Ltd South Africa 46 SAS Automotive RSA (Proprietary), Ltd South Africa 23 *Faurecia Emissions Control Systems Korea South Korea 46 Componentes de Vehiculos de Galicia Spain 23 *Asientos de Castilla Leon Spain 46 COPO Iberica Spain 23 *Asientos de Galicia S.L. Spain 46 Industrias Cousin Frères S.L. Spain 23 *Asientos del Norte Spain 46 SAS Autosystemtechnik SA Spain 23 *Emcon Technologies Spain SL Spain 46 SAS Otosistem Tecknit Ticaret ve Limited Turkey 23 *Faurecia Asientos para Automovil Espana Spain 46 Teknik Malzeme Ticaret ve Sanayi A.S. Turkey 23 *Faurecia Automotive Espana Spain 46 FAURECIA DMS Leverage Lender LLC United States 21 *Faurecia Holding Espana S.L. Spain 46 Faurecia JV in Detroit United States 21 *Faurecia Interior Systems Espana Spain 46 SAS Automotive USA Inc United States 23 *Faurecia Interior Systems Salc Espana S.L. Spain 46
Faurecia Sistemas de Escape Espana Spain 46 Peugeot Citroën DS FinanceIncalplas S.L. Spain 46Tecnoconfort Spain 46 Banque PSA Finance France 100Valencia Modulos de Puerta SL Spain 46 BPF Algérie Algeria 100Faurecia Interior Systems Sweden AB Sweden 46 PSA Finance Argentina Compania Financiera S.A. Argentina 50E.C.T. Co Limited Thailand 46 PCA Compañía de Seguros S.A Argentina 70Faurecia & Summit Interior Systems Thailand 46 PSA Factor Italia S.p.A. Italy 100Faurecia Interior Systems Thailand Thailand 46 PSA Renting Italia S.p.a Italy 100Emcon Technologies Dutch Hldgs BV The Netherlands 46 PSA Insurance Ltd Malta 100Faurecia Automotive Seating B.V. The Netherlands 46 PSA Insurance Manager Ltd Malta 100Faurecia Emissions Control Technologies Netherlands B.V. The Netherlands 46 PSA Insurance Solutions Ltd Malta 100Faurecia Informatique Tunisie Tunisia 46 PSA Life Insurance Ltd Malta 100Sté Tunisienne d'Equipements Automobiles Tunisia 46 PSA Services Ltd Malta 100Faurecia Polifleks Otomotiv Sanayi Ve Ticaret Anonim Sirketi Turkey 46 Banque PSA Finance Mexico SA de CV SOFOM Mexico 100Emcon Technologies UK Limited United Kindom 46 Bank PSA Finance Rus Russia 100Faurecia Automotiv Seating UK Ltd United Kindom 46 Peugeot Citroen Leasing Russie Russia 100Faurecia Midlands Ltd United Kindom 46 PSA Finance Nederland B.V. The Netherlands 100SAI Automotive Fradley United Kindom 46 PSA Financial Holding B.V. The Netherlands 100SAI Automotive Washington Limited United Kindom 46 BPF Pazarlama A.H.A.S. Turkey 100Faurecia Automotiv Seating Inc United States 46 Economy Drive Cars Limited United Kindom 100Faurecia E.C.T. USA LLC United States 46 PSA Finance Belux Belgium 50 *Faurecia Exhaust Systems INC United States 46 Banco PSA Finance Brasil S.A. Brazil 50 *Faurecia Interior Louisville LLC United States 46 PSA Corretora de Seguros e Serviços Ltda Brazil 50 *Faurecia Interior Systems Holdings LLC United States 46 Dongfeng Peugeot Citroën Auto Finance Company Ltd China 25 *Faurecia Interior Systems INC United States 46 Auto ABS DFP Master Compartment France 2013 France 50 *Faurecia Interior Systems Saline LLC United States 46 Auto ABS FCT2 2013-A France 50 *Faurecia Madison Automotive Seating Inc United States 46 Cie pour la Location de Véhicules - CLV France 50 *FAURECIA North America Holdings LLC United States 46 CREDIPAR France 50 *FAURECIA USA Holdings, Inc United States 46 FCT Auto ABS - Compartiment 2013-2 France 50 *Fnk North America United States 46 FCT Auto ABS French Leases Master France 50 *Faurecia Automitive del Urugay Uruguay 46 FCT Auto ABS French Loans Master France 50 *SAS Automotriz Argentina SA Argentina 23 * FCT Auto ABS LT Leases Master France 50 *SAS Automotive Belgium Belgium 23 * FCT Auto ABS3 - Compartiment 2014-01 France 50 *SAS Automotive do Brasil Brazil 23 * PSA Banque France France 50 *Faurecia Changchun Xuyang Faurecia Acoustics & Soft Trim Co Ltd China 19 * PSA Bank Deutschland GmbH Germany 50 *Changchun Faurecia Xuyang Automotive Components Technologies R&D China 21 * Auto ABS German Loans Master Germany 50 *Beijing WKW FAD Automotive Parts Co. Ltd China 23 * ABS Italian Loans Master S.r.l. Italy 50 *Chongqing Guangneng Faurecia Interior Syst. Company Ltd China 23 * Banca Italia S.P.A. Italy 50 *Dongfeng Faurecia (Xiangyang) Emissions Systems Co., Ltd China 23 * PSA Insurance Europe Ltd Malta 50 *Dongfeng Faurecia Automotive Exterior Systems Co. Limited China 23 * PSA Life Insurance Europe Ltd Malta 50 *Dongfeng Faurecia Automotive Parts Sales Co. Ltd China 23 * PSA Consumer Finance Polska Sp. z o.o Poland 50 *Faurecia Liuzhou Automotive Seating Sales Co., Ltd China 23 * PSA Finance Polska Sp.z.o.o. Poland 50 *Jinan Faurecia Limin Interior & Exterior Systems Company Limited China 23 * Auto ABS Spanish Loans 2016, FT Spain 50 *Lanzhou Faurecia Limin Interior & Exterior Systems Company China 23 * FTA Auto ABS - Compartiment 2012-3 Spain 50 *SAS (Wuhu) Automotive Systems Co Ltd China 23 * PSA Financial Services Spain E.F.C. S.A. Spain 50 *Xiangtan Faurecia Limin Interior & Exterior Systems Cny Ltd China 23 * Auto ABS Swiss Lease 2013 GmbH Switzerland 50 *Zhejiang Faurecia Limin Interior & Exterior Systems Cny Ltd China 23 * PSA Finance Suisse S.A. Switzerland 50 *SAS Autosystemtechnik SRO Czech Republic 23 * PSA Financial Services Nederland B.V. The Netherlands 50 *Parrot Faurecia Automotive France 9 * Auto ABS UK Loans PLC - Compartiment 2012-5 United Kindom 50 *Automotive Performance Materials (APM) France 23 * FCT Auto ABS UK Loans United Kindom 50 *Cockpit Automotive Systems DOUAI France 23 * PSA Finance UK Ltd United Kindom 50 *
96 - Groupe PSA 2017 Annual Results
Company Country%
interestCompany Country
% interest
Opel - Vauxhall Finance
Opel Bank S.A France 50 *Opel Finance Germany Holdings GmbH Germany 50 *Opel Bank GmbH Germany 50 *Opel Leasing GmbH Germany 50 *Opel Finance SpA Italy 50 *Opel Finance AB Sweden 50 *Opel Finance SA Switzerland 50 *Opel Finance International B.V. The Netherlands 50 *Opel Finance N.V. The Netherlands 50 *OPVF Holdings U.K. Limited United Kindom 50 *Vauxhall Finance plc United Kindom 50 *OPVF Europe Holdco Limited United Kindom 50 *
Groupe PSA 2017 Annual Results - 97
IV – STATUTORY AUDITORS’ REPORT ON THE 2017 CONSOLIDATED FINANCIAL STATEMENTS
A l’Assemblée Générale de la société Peugeot S.A.,
Opinion
En exécution de la mission qui nous a été confiée par votre Assemblée Générale, nous avons effectué l’audit des comptes consolidés
de la société Peugeot S.A. relatifs à l’exercice clos le 31 décembre 2017, tels qu’ils sont joints au présent rapport.
Nous certifions que les comptes consolidés sont, au regard du référentiel IFRS tel qu’adopté dans l’Union européenne, réguliers et
sincères et donnent une image fidèle du résultat des opérations de l’exercice écoulé ainsi que de la situation financière et du
patrimoine, à la fin de l’exercice, de l'ensemble constitué par les personnes et entités comprises dans la consolidation.
L’opinion formulée ci-dessus est cohérente avec le contenu de notre rapport au Comité Financier et d’Audit.
Fondement de l’opinion
Référentiel d’audit
Nous avons effectué notre audit selon les normes d’exercice professionnel applicables en France. Nous estimons que les éléments que
nous avons collectés sont suffisants et appropriés pour fonder notre opinion.
Les responsabilités qui nous incombent en vertu de ces normes sont indiquées dans la partie « Responsabilités des commissaires aux
comptes relatives à l’audit des comptes consolidés » du présent rapport.
Indépendance
Nous avons réalisé notre mission d’audit dans le respect des règles d’indépendance qui nous sont applicables, sur la période du 1er
janvier 2017 à la date d’émission de notre rapport, et notamment nous n’avons pas fourni de services interdits par l’article 5,
paragraphe 1, du règlement (UE) n° 537/2014 ou par le code de déontologie de la profession de commissaire aux comptes.
Justification des appréciations - Points clés de l’audit En application des dispositions des articles L. 823-9 et R. 823-7 du code de commerce relatives à la justification de nos appréciations,
nous portons à votre connaissance les points clés de l’audit relatifs aux risques d'anomalies significatives qui, selon notre jugement
professionnel, ont été les plus importants pour l’audit des comptes consolidés de l’exercice, ainsi que les réponses que nous avons
apportées face à ces risques.
Les appréciations ainsi portées s’inscrivent dans le contexte de l’audit des comptes consolidés pris dans leur ensemble et de la
formation de notre opinion exprimée ci-avant. Nous n’exprimons pas d’opinion sur des éléments de ces comptes consolidés pris
isolément.
Allocation du prix d’acquisition d’Opel Vauxhall (note 2 de l’annexe aux comptes consolidés)
Risque identifié
Le 31 juillet 2017, le Groupe PSA a acquis la majorité des filiales automobiles du groupe américain General Motors en Europe,
représentée par les marques Opel et Vauxhall (ci-après « Opel Vauxhall »). Le prix d’acquisition s’est élevé à 1 018 millions
d’euros hors ajustement de prix éventuel.
98 - Groupe PSA 2017 Annual Results
Cette opération se traduit par la constatation d’un écart d’acquisition d’un montant de 1 810 millions d’euros après allocation du
prix d’acquisition.
Cette allocation du prix d’acquisition est provisoire et sera finalisée dans les douze mois suivants la date de prise de contrôle ;
elle repose sur des estimations relatives à la détermination de la juste valeur des actifs et des passifs acquis. Le Groupe PSA a
mandaté un expert indépendant afin de l’assister dans l’exercice d’identification et d’évaluation des principaux actifs incorporels
et corporels d’Opel Vauxhall.
L’allocation du prix d’acquisition d’Opel Vauxhall est considérée comme un point clé de l’audit eu égard à la matérialité de cette
acquisition et parce que la direction est amenée à exercer un certain nombre de jugements pour identifier les actifs et les
passifs acquis, évaluer leur juste valeur et présenter cette information en annexe.
Notre réponse
Dans le cadre de notre audit des comptes consolidés, nos travaux ont notamment consisté à :
prendre connaissance et apprécier le périmètre et l’étendue des travaux menés par le groupe PSA et son expert
indépendant pour identifier et évaluer la juste valeur des actifs et des passifs acquis ;
avec l’aide de nos spécialistes en évaluation, analyser la méthodologie de valorisation appliquée aux actifs et aux
passifs acquis les plus significatifs et apprécier les principales hypothèses et les paramètres retenus pour la
détermination de la juste valeur et, notamment :
- la cohérence des flux de trésorerie futurs retenus dans la valorisation de certains actifs et passifs avec le
business plan de tout acquéreur potentiel (ou market participant selon la norme IFRS 3) ;
- la cohérence des estimations de juste valeur des actifs corporels avec les données de marché ou des
valeurs de transactions similaires ;
- les éléments justifiant l’estimation de la valeur des contrats onéreux ;
- pour l’évaluation des marques, la cohérence des taux de redevances appliquées aux projections de chiffres
d’affaires par rapport aux benchmarks sectoriels;
analyser le caractère approprié des informations fournies dans l’annexe aux comptes consolidés au titre de
l’allocation du prix d’acquisition.
Evaluation de la valeur recouvrable des actifs immobilisés du Groupe (notes 8.3 A, 8.3 B et 8.3 C de l’annexe aux comptes consolidés)
Risque identifié
Au 31 décembre 2017, la valeur nette comptable des actifs immobilisés du Groupe s’établit à 3 320 millions d’euros pour les
écarts d’acquisition, 7 916 millions d’euros pour les immobilisations incorporelles et 13 278 millions d’euros pour les
immobilisations corporelles. Ces actifs sont rattachés à des unités génératrices de trésorerie (« UGT »).
La valeur recouvrable des actifs immobilisés est testée dès l’apparition d’indices de perte de valeur et au minimum une fois par
an pour les actifs à durée de vie indéfinie (essentiellement les écarts d’acquisition et les marques).
Une dépréciation est constatée lorsque la valeur recouvrable de ces actifs est inférieure à leur valeur nette comptable. La valeur
recouvrable est la valeur la plus élevée entre la valeur d’utilité et la valeur de marché. La valeur d’utilité est déterminée par
référence à des flux de trésorerie nets actualisés et implique des jugements importants de la direction notamment sur
l’établissement des prévisions et sur le choix des taux d’actualisation et de croissance à l’infini.
Compte tenu du poids de ces actifs dans les comptes consolidés du Groupe, du niveau de jugement de la direction et des
incertitudes inhérentes aux hypothèses utilisées, nous considérons l’évaluation de la valeur recouvrable des actifs immobilisés
du Groupe comme un point clé de notre audit.
Groupe PSA 2017 Annual Results - 99
Notre réponse
Nous avons effectué un examen critique des modalités mises en œuvre par la direction pour déterminer la valeur recouvrable
des actifs immobilisés du Groupe. Nous avons obtenu les derniers plans à moyen terme (« PMT ») de la direction ainsi que les
tests de perte de valeur de chacune des UGT et des actifs présentant des indices de perte de valeur.
Sur la base de ces informations, nos travaux ont essentiellement consisté à :
rapprocher des comptes les valeurs nettes comptables des UGT et des actifs pris individuellement faisant l’objet d’un
test de perte de valeur ;
examiner les projections des flux de trésorerie, notamment la cohérence des données sur les marges et les volumes
utilisés dans les tests avec les sources externes ou les dernières estimations de la direction présentées aux organes
de gouvernance ;
examiner les prévisions par comparaison avec les données utilisées dans les précédents tests de perte de valeur et
la performance historique du Groupe ;
comparer les taux d’actualisation retenus aux données de marché disponibles ;
vérifier, par sondages, l’exactitude arithmétique du modèle de valorisation utilisé par la direction;
procéder à l’analyse de sensibilité de la valeur recouvrable des UGT testées et à une variation des principales
hypothèses retenues (taux de croissance long terme, taux de marge retenu en année terminale, taux d’actualisation).
Evaluation des titres mis en équivalence des activités automobiles (notes 8.3 D et 11 de l’annexe aux comptes consolidés)
Risque identifié
Au 31 décembre 2017, les titres mis en équivalence des activités automobiles du Groupe PSA sont comptabilisés au bilan pour
un montant de 858 millions d’euros. Ces titres comprennent essentiellement les participations du Groupe dans les sociétés en
partenariat avec Dong Feng Motor Group et avec Changan pour les activités situées en Chine.
Le résultat des sociétés mises en équivalence inclut des dépréciations d’actifs résultant de tests de dépréciation réalisés selon
les mêmes principes que ceux applicables à l’actif immobilisé des activités automobiles du Groupe PSA. Lorsqu’un indice de
perte de valeur est identifié, les actifs spécifiques aux modèles de véhicules sont testés par UGT Véhicules et l’ensemble des
actifs (y compris ceux qui ne sont pas spécifiques aux modèles) sont testés au niveau global de chaque partenariat. Par
ailleurs, le Groupe PSA réalise un test de perte de valeur complémentaire lorsqu’il existe un indicateur de perte de valeur.
Au 31 décembre 2017, la réalisation de tests de perte de valeur a conduit les sociétés en coopération avec le groupe Dong
Feng Motor à constater une dépréciation de 1 515 millions de RMB (758 millions de RMB en quote-part PSA, soit 97 millions
d’euros).
Au 31 décembre 2017, la réalisation de tests de perte de valeur par la société Changan PSA Automobile Co., Ltd en
coopération avec le groupe Changan n’a pas conduit à constater de dépréciation complémentaire. Au 31 décembre 2016, cette
société avait constaté une perte de valeur de 263 millions d’euros en quote-part PSA. Ainsi, le Groupe PSA maintient une
dépréciation des titres mis en équivalence de 51 millions d’euros et une provision pour risques de 190 millions d’euros après
prise en compte d’une perte de 24 millions d’euros pour l’exercice 2017.
Compte tenu de la baisse significative des ventes et de la dégradation de la rentabilité intervenue dans les activités des
partenariats en Chine et du niveau de jugement de la direction sur les hypothèses sous-tendant l’évaluation des actifs de ces
sociétés, nous considérons l’évaluation des titres mis en équivalence comme un point clé de notre audit.
100 - Groupe PSA 2017 Annual Results
Notre réponse
Dans le cadre de notre audit des comptes consolidés, nos travaux ont notamment consisté à :
analyser l’existence d’indicateurs de perte de valeur, comme par exemple une baisse significative des volumes et une
dégradation de la rentabilité ;
prendre connaissance des travaux d’audit réalisés par les auditeurs des sociétés en partenariat avec Dong Feng
Motor Group en Chine, et de leurs conclusions sur les modalités de mise en œuvre des tests de dépréciation des
actifs au niveau des sociétés en partenariat et sur le caractère raisonnable des hypothèses retenues par la direction ;
évaluer la cohérence et la pertinence des principales hypothèses utilisées dans la réalisation du test de perte de
valeur des actifs de la société en partenariat avec le groupe Changan, notamment par référence au plan moyen
terme examiné par les organes de gouvernance des sociétés en partenariat.
Vérification des informations relatives au groupe données dans le rapport de gestion
Nous avons également procédé, conformément aux normes d'exercice professionnel applicables en France, à la vérification
spécifique prévue par la loi des informations relatives au groupe, données dans le rapport de gestion du Directoire.
Nous n'avons pas d'observation à formuler sur leur sincérité et leur concordance avec les comptes consolidés.
Informations résultant d'autres obligations légales et réglementaires
Désignation des commissaires aux comptes
Nous avons été nommés commissaires aux comptes de la société Peugeot S.A. par l’Assemblée Générale du 25 mai 2005
pour le cabinet Mazars et du 31 mai 2011 pour le cabinet ERNST & YOUNG et Autres.
Au 31 décembre 2017, le cabinet Mazars était dans la douzième année de sa mission sans interruption et le cabinet ERNST &
YOUNG et Autres dans la sixième année.
Responsabilités de la direction et des personnes constituant le gouvernement d’entreprise relatives aux comptes consolidésIl appartient à la direction d’établir des comptes consolidés présentant une image fidèle conformément au référentiel IFRS tel
qu’adopté dans l’Union européenne ainsi que de mettre en place le contrôle interne qu'elle estime nécessaire à l'établissement
de comptes consolidés ne comportant pas d'anomalies significatives, que celles-ci proviennent de fraudes ou résultent
d'erreurs.
Lors de l’établissement des comptes consolidés, il incombe à la direction d’évaluer la capacité de la société à poursuivre son
exploitation, de présenter dans ces comptes, le cas échéant, les informations nécessaires relatives à la continuité d’exploitation
et d’appliquer la convention comptable de continuité d’exploitation, sauf s’il est prévu de liquider la société ou de cesser son
activité.
Il incombe au Comité Financier et d’Audit de suivre le processus d’élaboration de l’information financière et de suivre l'efficacité
des systèmes de contrôle interne et de gestion des risques, ainsi que le cas échéant de l'audit interne, en ce qui concerne les
procédures relatives à l'élaboration et au traitement de l'information comptable et financière.
Les comptes consolidés ont été arrêtés par le Directoire.
Groupe PSA 2017 Annual Results - 101
Responsabilités des commissaires aux comptes relatives à l’audit des comptes consolidés
Objectif et démarche d’audit
Il nous appartient d’établir un rapport sur les comptes consolidés. Notre objectif est d’obtenir l’assurance raisonnable que les
comptes consolidés pris dans leur ensemble ne comportent pas d’anomalies significatives. L’assurance raisonnable correspond
à un niveau élevé d’assurance, sans toutefois garantir qu’un audit réalisé conformément aux normes d’exercice professionnel
permet de systématiquement détecter toute anomalie significative. Les anomalies peuvent provenir de fraudes ou résulter
d’erreurs et sont considérées comme significatives lorsque l’on peut raisonnablement s’attendre à ce qu’elles puissent, prises
individuellement ou en cumulé, influencer les décisions économiques que les utilisateurs des comptes prennent en se fondant
sur ceux-ci.
Comme précisé par l’article L.823-10-1 du code de commerce, notre mission de certification des comptes ne consiste pas à
garantir la viabilité ou la qualité de la gestion de votre société.
Dans le cadre d’un audit réalisé conformément aux normes d’exercice professionnel applicables en France, le commissaire aux
comptes exerce son jugement professionnel tout au long de cet audit. En outre :
il identifie et évalue les risques que les comptes consolidés comportent des anomalies significatives, que celles-ci
proviennent de fraudes ou résultent d’erreurs, définit et met en œuvre des procédures d’audit face à ces risques, et
recueille des éléments qu’il estime suffisants et appropriés pour fonder son opinion. Le risque de non-détection d’une
anomalie significative provenant d’une fraude est plus élevé que celui d’une anomalie significative résultant d’une
erreur, car la fraude peut impliquer la collusion, la falsification, les omissions volontaires, les fausses déclarations ou
le contournement du contrôle interne ;
il prend connaissance du contrôle interne pertinent pour l’audit afin de définir des procédures d’audit appropriées en
la circonstance, et non dans le but d’exprimer une opinion sur l’efficacité du contrôle interne ;
il apprécie le caractère approprié des méthodes comptables retenues et le caractère raisonnable des estimations
comptables faites par la direction, ainsi que les informations les concernant fournies dans les comptes consolidés ;
il apprécie le caractère approprié de l’application par la direction de la convention comptable de continuité
d’exploitation et, selon les éléments collectés, l’existence ou non d’une incertitude significative liée à des événements
ou à des circonstances susceptibles de mettre en cause la capacité de la société à poursuivre son exploitation. Cette
appréciation s’appuie sur les éléments collectés jusqu’à la date de son rapport, étant toutefois rappelé que des
circonstances ou événements ultérieurs pourraient mettre en cause la continuité d’exploitation. S’il conclut à
l’existence d’une incertitude significative, il attire l’attention des lecteurs de son rapport sur les informations fournies
dans les comptes consolidés au sujet de cette incertitude ou, si ces informations ne sont pas fournies ou ne sont pas
pertinentes, il formule une certification avec réserve ou un refus de certifier ;
il apprécie la présentation d’ensemble des comptes consolidés et évalue si les comptes consolidés reflètent les
opérations et événements sous-jacents de manière à en donner une image fidèle ;
concernant l’information financière des personnes ou entités comprises dans le périmètre de consolidation, il collecte
des éléments qu’il estime suffisants et appropriés pour exprimer une opinion sur les comptes consolidés. Il est
responsable de la direction, de la supervision et de la réalisation de l’audit des comptes consolidés ainsi que de
l’opinion exprimée sur ces comptes.
102 - Groupe PSA 2017 Annual Results
Rapport au Comité Financier et d’Audit
Nous remettons un rapport au Comité Financier et d’Audit qui présente notamment l’étendue des travaux d'audit et le
programme de travail mis en œuvre, ainsi que les conclusions découlant de nos travaux. Nous portons également à sa
connaissance, le cas échéant, les faiblesses significatives du contrôle interne que nous avons identifiées pour ce qui concerne
les procédures relatives à l’élaboration et au traitement de l’information comptable et financière.
Parmi les éléments communiqués dans le rapport au Comité Financier et d’Audit figurent les risques d’anomalies significatives
que nous jugeons avoir été les plus importants pour l’audit des comptes consolidés de l’exercice et qui constituent de ce fait les
points clés de l’audit, qu’il nous appartient de décrire dans le présent rapport.
Nous fournissons également au Comité Financier et d’Audit la déclaration prévue par l’article 6 du règlement (UE) n° 537-2014
confirmant notre indépendance, au sens des règles applicables en France telles qu’elles sont fixées notamment par les articles
L. 822-10 à L. 822-14 du code de commerce et dans le code de déontologie de la profession de commissaire aux comptes. Le
cas échéant, nous nous entretenons avec le Comité Financier et d’Audit des risques pesant sur notre indépendance et des
mesures de sauvegarde appliquées.
Courbevoie et Paris-La Défense, le 1er mars 2018
Les Commissaires aux Comptes
MAZARS ERNST & YOUNG et Autres
Thierry Blanchetier Jérôme de Pastors Laurent Miannay Ioulia Vermelle
Photo credits:PEUGEOT COMMUNICATION
CITROËN COMMUNICATION / William CROZES / Continental ProductionsMARQUE DS
GROUPE PSA / Communications Department
PEUGEOT S.A.Incorporated in France with issued capital of €904,828,213
Governed by a Managing Board and a Supervisory Board
Registered Offi ce: 7, rue Henri Sainte-Claire Deville
92563 Rueil-Malmaison - France
B 552 100 554 R.C.S. Nanterre – Siret 552 100 554 00021
Phone:+ 33 (0)1 55 94 81 00
groupe-psa.com