Fixed Income Analysts Update June 6, 2011
This presentation may contain forward-looking statements. Such forward-looking statements do not constitute forecasts regarding the Company s results or any other performance indicator, but rather trends or targets, as the case may be. These statements are by their nature subject to risks and uncertainties as described in the Company s annual report available on its Internet website (www.psa-peugeot-citroen.com). These statements do not reflect future performance of the Company, which may materially differ. The Company does not undertake to provide updates of these statements. More comprehensive information about PSA Peugeot Citroën may be obtained on its Internet website (www.psa-peugeot-citroen.com), under Regulated Information. 2
Highlights 3,6 M vehicles sold worldwide in 2010 (+13%) Strong recovery: all entities contributing in Group recurring operating income: 1 796m versus loss of 689m in 2009 Turnaround in automotive profitability: recurring operating income of 621m versus loss of 1 257m in 2009 Solid generation of Free Cash Flow of 1 110m Net Debt reduction from 1 993m at the end on 2009 to 1 236m at the end of 2010 Full repayment of the French State loan anticipated 2010 Dividend of 1.1 per share Globalization on track: sales volume outside Europe at 39% in 2010 Success of distinctive products (Citroën DS3, Peugeot RCZ, Peugeot 3008, Peugeot 508) 3
Group results Strong recovery in 2010 In million euros 2009 H1 H2 2010 Revenues 48 417 28 394 27 667 56 061 Recurring operating income (689) 1 137 659 1 796 % of revenues -1.4% 4.0% 2.4% 3.2% Non recurring operating income and (expenses) (727) (69) 9 (60) Operating income (1 416) 1 068 668 1 736 Net financial income (expenses) (520) (241) (188) (429) Income taxes 589 (227) (28) (255) Share in net income of equity affiliates 73 137 67 204 Consolidated Net Income/(loss) (1 274) 737 519 1 256 Net Income, Group share (1 161) 680 454 1 134 Earnings per share (in euros) (5.12) 3.00 2.00 5.00 4
Results by division Significant increases in all divisions Recurring operating income In million euros 2009 % margin H1 H2 2010 % margin Automotive (1 257) -3.3% 525 96 621 1.5% Faurecia (92) -1.0% 217 239 456 3.3% Gefco 102 3.5% 122 76 198 5.9% Banque PSA Finance 498-269 238 507 - Others businesses and eliminations 60-4 10 14 - PSA Peugeot Citroën (689) -1.4% 1 137 659 1 796 3.2% 5
Worldwide market share 14.2 % 13.8 % 3.3 % 3.4 % 13.5 % 2008 2009 Europe 30 2010 2009 China* 2010 5.2 % 5.4 % 2.9 % 2.8 % * Cars only 2009 2010 Latin America 2009 Russia 2010 6
Automotive recurring operating income Performance Plan delivers 1.5bn ahead of 1.1bn target Market share increase and positive net price effect In millions euros Production & procurement R&D +9 Others +52 621 2009 Market share volumes Warranty, SG&A, fixed costs, own network 2010 Market demand volume* Market mix Input costs Currency Net price effect +37 +233 12 +1 121 (1 257) +331 (142) (168) +393 *Including stock variations Operating environment +414 Performance +1 464 7
Solid financial structure Weighted average remaining maturity: 4.5 years Pro forma gross debt in nominal value at end 30.04.11 excluding BPF, undrawn credit lines, short term liabilities & other adjustments Full repayment of French State loan in February and April 2011 Renewed 2.4bn undrawn credit lines maturing July 2013 In million euros 2 093 Baa3 / Stable 1 524 129 1 100 818 1 355 92 254 600 BB+ / Stable 2011 2012 2013 2014 2015 2016 2017 2018-25 2033 8
Q1 2011 revenues: +10.2% All divisions contributing to the increase In million euros Q1-10 Q1-11 Automotive 10 619 11 262 +6.0% Faurecia* 3 202 3 963 +23.7% Gefco 842 977 +16.1% Banque PSA Finance 457 470 +2.8% Other businesses and intra-company eliminations (1 135) (1 258) - Total revenues 13 986 15 414 +10.2% * +15.1% like for like basis at constant exchange rates 9
Progress on our ambitions Globalization: On track for 50% of sales volumes outside Europe by 2015 Step ahead: Enhancing the PEUGEOT and CITROËN brand images and pricing power Operational excellence: Upgrading the automotive Performance Plan to 3.7bn ( 3.3bn) 10
Globalization on track Sales volumes outside Europe grew from 32% to 39% on track to 50% by 2015 +38% +39% +27% 375 700 477 000 272 200 232 300 294 300 +37% 342 200 40 500 55 500 2009 2010 2009 2010 2009 2010 China Latin America Russia 2009 2010 CKD 11
Globalization on track China DPCA 650m 1 of investment Record performance and first dividend payout 5% market share in 2015 First dividend by DPCA: MRMB589 paid on 28 April 2011 Vehicle sales up 38% to 375 700 in 2010 Third plant to come on stream in 2013 Full capacity of 750 000 units 2010 PEUGEOT 408 CITROËN C5 2011 1 50% Group share of c.11bn RMB@8.5/euro PEUGEOT 508 CHANG AN Final approval expected shortly 3% market share targeted 500m 2 of investment DS by CITROËN brand to be launched in 2012 Development of LCVs Production capacity of 200k vehicles p.a. at Shenzhen 2 50% Group share of c.8.4bn RMB@8.5/euro DS by CITROËN LCV 12
Globalization on track Latin America 700m* turnaround program launched 7% market share targeted in 2015 Break-even expected in 2011 8 new vehicles over next 4 years Platforms rationalised from 4 to 2 Threefold increase in volumes by model 2010 PEUGEOT HOGGAR CITROËN C3 AIRCROSS 2011 *100% Group owned PEUGEOT 408 CITROËN C3 PICASSO 13
Globalization on track Russia All Group activities present with Brands, Banque PSA Finance & Gefco 330m* investment 2 production start ups in 2010: C segment cars in April, SUVs in September Full capacity of 125 000 at Kaluga in 2012 PEUGEOT 308 CITROËN C4 2010 2011 PEUGEOT 4007 CITROËN C-CROSSER *70% Group share of 470m 14
Globalization on track India Entry to India now underway PEUGEOT brand to be launched Mid-sized sedan to be produced locally Plant location under review 2011 : location to be chosen between 2 regions PEUGEOT Mid-sized sedan 15
New model momentum (1/2) 2010 PEUGEOT RCZ Leader in Europe on its segment 17 000 units sold in 2010, 5 000 units in Q1 2011 CITROËN DS3 40% new customers 65 000 units sold in 2010, 20 000 units in Q1 2011 Average price of 19 000 vs 16 000 for C3 CITROËN C4 C4 & new C4: +31% units vs Q1 2010 2011 PEUGEOT 508 PEUGEOT 508 SW CITROËN DS4 Objective: 100 000 units sold in 2011, 200 000 units sold in 2012, of which 65 000 units in China c.21 000 units end March, well above objectives Residual value 36 months, 90 000 km of 44%, vs 35% (previous model) Second model of the DS line Launched in Q2 2011 CITROËN DS5 Third model of the DS line First world reveal in Shanghai motorshow on 18 April 16
New model momentum (2/2) Q1-09 Q1-10 Q1-11 C&D segments 36% 39% 41% A&B segments 48% 44% 41% of which distinctive models (DS4 & DS5 to come in 2011 after Q1) 2% 7% 9% Average age: LCV: 3.0 years PSA range average age (private cars) Upturn in the European light commercial vehicle market confirmed with 10% growth in Q1 11 PSA Peugeot Citroën: European leader on the LCV market with a 21.5% share 17
Step Ahead CO 2 emissions and hybrid technologies 1 million vehicles 120g CO 2 /km in 2012 vs. 789 000 in 2010 Q4 2010 Diesel 207, C3 & DS3 99g CO 2 /km Stop & Start up to -15% CO 2 /km Gasoline 1l. 3 cyl 99g CO 2 /km 85% Gasoline and diesel CITROËN C-Zero 2009 Electric vehicle Full hybrid diesel «HYbrid4 diesel» Hybrid Plug-in < 50g CO 2 /km 15% Electric and hybrid 2010 2011 2012 2020 Q3 2011 PEUGEOT i0n PEUGEOT 3008 hy4 Battery Packs Generators Power Electronics Electric Machines Chargers 50/50 joint venture to lead the way on new generation of hybrid components 18
Performance Plan delivery & upgrade 2010-2012 Performance Plan target raised to 3.7bn Performance Plan announced in 2009 New target 2.6bn 3.3bn 3.7bn Main 2010 cost savings 2009 2010 2012 Target 1.1bn 1.5bn 2.2bn Capacity utilisation in Europe 80% 90% 105% Development productivity (2009 base 100) Repeat components - 30% -11% 38% -20% 50% Procurement by key suppliers 25% 35% 50% 2010 2011 2012 19
Impact of events in Japan PSA is carefully tracking the evolving situation Disruptions controlled and prospects clarified Working closely with auto equipment OEMs to minimize consequences on our clients Events in Japan will reduce Automotive recurring operating income by an estimated 150m in H1-2011 Plants making diesel-powered vehicles partially impacted in weeks 12 and 13 Product range and production adjustments Extra-delays on some products lines 20
2011 Outlook 2011 Outlook * (as of FY 2010 results) Automotive recurring operating income in 2011 is expected to be above the level of 2010, with a 1.1 billion contribution from the Performance Plan, which should more than offset significant increases in raw material and other input costs Faurecia, Gefco and Banque PSA Finance to deliver increased recurring operating income Free Cash Flow, after higher capitalised R&D and capital expenditure of 3 billion, is expected to be positive Progress with our globalization projects in China, Latin America, Russia and India 2011 Outlook 2011 outlook confirmed Automotive H1 2011 ROC comparable with H1 2010 ROC excluding impact of Japan * Based on market assumptions as of Feb. 9 th 2011 (Europe stable, China +c. 10%, Latin America +c. 4%, Russia +c. 15%) 21
BANQUE PSA FINANCE 22
The dedicated financial services partner to Peugeot and Citroën Close and exclusive partnership with Peugeot and Citroën brands Broad range of financing products for both brands' commercial network Potential market of 3.1m assembled vehicles in 2010 Comprehensive, structured and differentiated offer to final customers: Marketed in collaboration with both brands Valued support for brands as financing increases loyalty and speeds up renewal Car dealers customer relationships structured by combined marketing approach ( EFFICAR method) Highly efficient Point of Sale IT systems, allowing dealers to quote global offers (Vehicle/Finance/Services) at high speed and with high level of automation: IT infrastructure consolidated with the brands dealer network: a key efficiency and cost reduction driver Continuous geographic expansion to support the Group s international growth 23
on arm s length terms Autonomous operational management Asset quality management: Wholesale credit management, retail acceptance policy, recovery methods Own credit scoring with different, internally-developed score cards for new and used cars, consumer and commercial customers, credit loans and leasing Price setting Marketing strategy (market studies, product plan conception) Incentivization of dealers network No buyback obligations All buyback obligations retained by dealers or brands No financing from parent company and stable dividend policy Arm s length relationship enhanced by banking status 24
Resilient asset base during the crisis return to growth in 2010 Retail loans: 78% Wholesale loans: 22% BPF offers final and fleet customers a diversified range of financing solutions and related services. BPF provides Peugeot and Citroën dealers (own network and third party network) with financing for new and used vehicles and replacement part inventories. Loan book by segment In bn Wholesale Retail 25 20 18.7 19.6 21.2 22.5 22.9 23.5 22.3 22.4 23.4 15 10 5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Outstanding loans increased by 4.3% in 2010 Increase in loan book reflects in particular the mix increase 25
Increase in retail & wholesale loan book Retail loans Wholesale loans Average duration of 42 months per contract. Strong customer selection maintained. Good control over inventory level with stable rotation rate (c.30 days). New Retail Financing nb of vehicles financed (in thousands of units) 1 000 2 500 New Wholesale Financing nb of vehicles financed (in thousands of units) 900 800 700 860 865 2 000 2 146 2 144 600 500 1 500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 26
Steady increase in penetration rates with further upside potential Steady penetration rate growth in retail financing over the years; strong H2 with 29% penetration Increasing penetration in new markets of Central & Eastern Europe and Latin America Worldwide retail penetration rates In % Retail penetration rates by geography In % 24,1 25,3 25,1 26,4 26,3 27,1 26,1 26,1 27,3 27,5 27,2 30,5 28,7 27,7 27,7 27,7 28,2 28,8 27.0 24,9 24,3 21,7 16,6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Note: Penetration rate defined as (new vehicles financed)/(psa PEUGEOT CITROEN new vehicle) 2008 2009 2010 Europe Central & Eastern Europe Latam Others(*) (*) China retail penetration rate not included. 27
Continuous geographic expansion in emerging markets OTHER WESTERN EUROPE RUSSIA Retail WORLDWIDE WORLWIDE 425 433 399 2008 2009 2010 0 0 16 848 861 865 FRANCE 1 119 1 144 1 096 2008 2009 2010 2008 2009 2010 2 056 2 144 2 146 316 320 325 2008 2009 2010 0 0 17 2008 2009 2010 2008 2009 2010 Wholesale nb of vehicles financed (in thousands of units) 2008 2009 2010 687 764 774 2008 2009 2010 Central and Eastern Europe 29 26 27 CHINA (1) 1 7 15 2008 2009 2010 LATIN AMERICA 2008 2009 2010 93 165 236 70 70 83 92 72 74 OTHER (2) 2008 2009 2010 2008 2009 2010 2008 2009 2010 8 11 14 157 165 185 2008 2009 2010 2008 2009 2010 0 0 0 2008 2009 2010 (1) Not consolidated (2) Algeria, Turkey 28
Growth supported by increasing packaging of diversified financial services Number of contracts Service contracts FINANCING (Retail credit, Leasing, Long-term rental) LOAN RELATED SERVICES (life insurance, unemployment insurance ) 1 400 000 1 200 000 1.53x 1 000 000 1.43x 1.42x 1.41x 800 000 1.34x 1.34x CAR INSURANCE VEHICLE RELATED SERVICES (warranty extension, maintenance ) 600 000 400 000 200 000 1.11x 1.13x 1.17x 00 2002 2003 2004 2005 2006 2007 2008 2009 2010 Car insurance Loan-related services Vehicles-related services Number of services sold per financing 29
Consistently high profitability Robust net banking income growth Solid operating income throughout the crisis and strong contribution of services Net banking income (in m) Operating Income (in m) 742 787 913 1 037 876 933 CAGR +3.0% 962 981 976 944 1 000 Operating Income Services contribution 412 515 607 604 608 557 498 507 249 316 133 149 157 150 161 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Note: Accounts according to French GAAP from 2000 to 2003 and IFRS standards starting in 2004. 2001, 2002 and 2003 restated from 247m, 315m and 411m respectively to exclude exceptional items. 30
Long standing best-in-class cost of risk (1/2) Cost of risk at 56bps for FY 2010 Cost of risk (as a % of average net loans) In bps Cost of Risk (total) 44 61 57 53 54 47 52 49 46 46 65 Cost of Risk (recurring) 38 35 34 36 30 31 24 12 18 22 2002 2003 2004 2005 2006 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 H2 2010 cost of risk integrates a non-recurring impact due to an adjustment of impairment rate on the Retail loan book in Southern Europe, to take into account a tougher than expected crisis. Excluding non-recurring items, recurring cost of risk was down y-o-y from 0.55% to 0.47% 31
Long standing best-in-class cost of risk (2/2) New Default Trend Retail (Individuals & small businesses) and Fleet 800 2,0% 700 Non Performing Loans ( m) 600 500 400 300 200 1,5% 1,0% 0,5% New Default (%) 100 0 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 2008 2009 2010 0,0% New Default rate down from 1.65% in 2009 to 1.04% in 2010 NPL book stabilized since H1 2010 Note: New Default (%) rate represents the amount of new non-performing instalments recorded in the month divided by total instalments collection during the period. 32
Strong capital base Consistent increase in capital ratios 40% dividend ratio maintained throughout the crisis payment of 140m in 2010 In m 5 4 12.93% 13.76% 14.21% 15% 3 2 1 1.6 1.8 2.0 2.1 2.3 2.5 2.6 2.9 3.1 10% 5% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Prudential equity European Solvency Ratio Basel II ratio 0% 33
Increasingly diversified funding sources Stand-alone financing Diversification of funding sources Access to Capital markets, securitizations, bank loans (inaugural transaction in the US bond market in March 2011), Strong support from large, well diversified group of lending banks Access to European Central Bank financing Access to a state-sponsored program put in place during the crisis to ensure liquidity for French banks ( SFEF ) Sources of External Refinancing Capital Markets 2008 2010 2008 2010 21% 16% 22% 1% 1% 40% 39% 35% 8% 54% 59% 39% 55% 6% 5% 21 541m 21 264m 8 413m 11 619m Capital Markets Securitization * Including SFEF and ECB refinancing Bank facilities Others financing* Commercial paper Other short term EMTN Other bonds Other long term Short Term Long Term 34
Prudent liquidity management Matching of maturities between assets and liabilities At December 31, 2010, 71% of total financing with original maturity over twelve months Policy to secure a minimum 6 months of activity through cash and undrawn back-up facilities At December 31, 2010, Banque PSA Finance had access to sufficient financing to cover more than 7 months of activity without requiring any further financing At December 31, 2010: 8.7bn of available liquidity Maturing in 4.1% 2011 for 21%; in 2012 for 30%; in 2013 for 29% and in 2014 for 20% 7.4% 23.5% 5% 13.6% 13.7% 22.6% 35
Investment grade ratings Current ratings: Baa1 / Stable / P2 (outlook changed from Negative to Stable in February 2011) (PSA: Baa3 / Stable / P3) Current ratings: BBB / Stable / A2 (outlook changed from Negative to Stable in September 2010) (PSA: BB+ / Stable / B) Overall sound financial profile, low credit risk appetite and strong credit culture, conservative liquidity and capital management, and status as a fully regulated bank under French law. (S&P, December 2010) Note: The rating agencies have stated that financing companies owned by automobile manufacturers should generally not be rated more than two notches above the parent. 36
Strategic objectives Drive profitable growth through significant expansion in Brazil, China and Russia Maintain cost of risk at benchmark level Continuous focus on customer base quality to drive strong profitability Increase further customer loyalty Reinforced customer management program to increase repeat sales Increase profitable contribution of Services Product diversification, geographic expansion, internalization 37
APPENDIX 38
Automotive Record 3.6 million units sold in 2010 Turnaround in Automotive recurring operating income In thousands units 2009 H1 H2 2010 Vehicles sold 3 188 1 856 1 746 3 602 In million euros 2009 H1 H2 2010 Revenues 38 265 21 174 20 231 41 405 Recurring operating income (1 257) 525 96 621 % of revenues -3.3% 2.5% 0.5% 1.5% Non recurring operating income and (expenses) (563) (66) 8 (58) Operating income (1 820) 459 104 563 % of revenues -4.8% 2.2% 0.5% 1.4% 39
China DPCA* record sales performance at +38% Contribution to Group EPS of 70 cents 2009 H1 H2 2010 Vehicles sold 272 200 176 500 199 200 375 700 2009 H1 H2 2010 Share of net income (in million euros)* 57 97 62 159 Earnings per share 0.25 0.70 * Dongfeng Peugeot Citroën Automobiles (50/50 joint venture) 40
Faurecia Turnaround confirmed with margin of 3.3% in 2010 Strategic development with Emcon & Plastal acquisitions In million euros 2009 H1 H2 2010 Revenues 9 292 6 826 6 970 13 796 Recurring operating income (92) 217 239 456 % of revenues -1.0% 3.2% 3.4% 3.3% Non recurring operating income and (expenses) (134) (2) (34) (36) Operating income (226) 215 205 420 Net financial income (expenses) (166) (62) (55) (117) Consolidated income for the period (417) 112 120 232 % of revenues -4.5% 1.6% 1.7% 1.7% Free Cash Flow (222) 257 86 343 Net financial position* (1 401) (1 363) (1 197) (1 197) * End of period 41
Gefco Strong pick-up in revenues : +16% Solid margin of 5.9% In million euros 2009 H1 H2 2010 Revenues 2 888 1 716 1 635 3 351 PSA Peugeot Citroën 1 842 1 125 1 009 2 134 Third parties 1 046 591 626 1 217 Recurring operating income 102 122 76 198 % of revenues 3.5% 7.1% 4.6% 5.9% Non-recurring operating income and (expenses) (27) 1 11 12 Operating income 75 123 87 210 42
Banque PSA Finance Net banking revenue +5.9% and rise in new contracts 2010 cost of risk maintained at benchmark level Additional risk provision for Spain taken in H2 In million euros 2009 H1 H2 2010 Net banking revenue 944 505 495 1 000 Cost of risk (in % of average loans) 0.50% 0.47% 0.65% 0.56% Recurring operating income 498 269 238 507 Number of new contracts (lease and financing) 860 509 435 043 429 627 864 670 Total outstanding loans (31.12.2010) 22.4bn 23.4bn 23.4bn 23.4bn 43
Q1 2011: New car revenues analysis Strong product mix in Q1 2011 In million euros Volumes 7 928-0.3% Price -2.0% Product mix Country mix +6.3% +0.1% FX +1.3% Others +0.5% 8 399 +5.9% New car revenues New car revenues Q1-10 Q1-11 44
Q1 2011: Sustained recovery at Faurecia, with revenues up 24% Increase driven by growth in North America and Asia Strong growth for the four business groups In million euros Q1-10 Q1-11 Automotive Seating 1 062 1 188 +11.8% Interior Systems 670 775 +15.8% Emissions Control Technologies Systems 563 716 +27% Automotive Exteriors 239 424 +77% Total Product revenues 2 534 3 104 +22.5% Monolith revenues 487 645 +32.5% Development, Tooling & Prototype revenues 181 214 +18.1% Total revenues* 3 202 3 963 +23.7% * +15.1% like for like basis at constant exchange rates 45
Q1 2011: Solid performance by Gefco Revenues up 16.1% at 977m Acquisition of Mercurio: portfolio diversification and extension of international footprint In million euros Q1-10 Q1-11 PSA Peugeot Citroën 556 642 +15.5% Third parties 286 335 +17.1% Total revenues 842 977 +16.1% 46
Q1 2011: Banque PSA Finance Revenues up +2.8% in Q1 2011 Sustained rise in new contracts up +4.1% In million euros Q1-10 Q1-11 Revenues 457 470 +2.8% Total outstanding loans (end of period) Number of new contracts (lease and financing) 23.1bn * 23.9bn +3.5% 218 000 227 000 +4.1% * 23.1bn end of period Q1 2010 (vs 22.9bn on average Q1 2010) 47