Stellantis N.v. · EURONEXT:STLAP
Stellantis — PSA Peugeot Citroën — FY2013 Earnings Presentation
69 slides from Stellantis's earnings presentation, Feb 19, 2014
Slide 1: Full Year Results 2013
FULL YEAR RESULTS 2013 February 19th, 2014
Slide 2: Disclaimer
This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, PEUGEOT SA (“Company”) shares. This presentation may contain forward-looking statements. Such forward-looking statements do not constitute forecasts regarding the Company’s results or any other performance
Slide 3: Agenda
Agenda ▐ Highlights Philippe Varin ▐ Financial results Jean-Baptiste de Chatillon ▐ Fit for growth Philippe Varin ▐ Back in the race Carlos Tavares Full year results 2013 – February 19th, 2014 3
Slide 4: Highlights
Highlights 2013 results above target and fit for growth ▐ 2013: results on Operational Free Cash Flow* above target ► Group Recurring Operating Income: -€177m, with -€1,042m on Automotive division ► Strong improvement of Operational Free Cash Flow at -€426m, reduced by more than half versus 2012 ► I
Slide 5: Major strategic partnership with Dongfeng Motor
Major strategic partnership with Dongfeng Motor 20 years partnership enters a new phase ▐ Reinforce the competitiveness of DPCA: target 1.5m vehicles produced per year by early 2020s ▐ Creation of a joint R&D center in China ▐ Creation of an export JV for ASEAN countries ► c.€400m synergies for PSA
Slide 6: Long term partnership with Santander
Long term partnership with Santander A global partnership between Banque PSA Finance and the largest bank in the Eurozone ▐ Creation under way of a 50/50 partnership to develop future loans portfolio of Banque PSA Finance, expected start of the business mid-2015 ► Accelerate the dispense from the us
Slide 7: €3bn capital increase
€3bn capital increase To strengthen investment capacity and balance sheet ▐ €3bn capital increase: ► €1.05bn reserved capital increase to Dongfeng and the French State ► Then €1.95bn right issue with free warrants to current shareholders ► Equal ownership of FFP/EFP, Dongfeng and the French State: 1
Slide 8: Financial Results
FINANCIAL RESULTS Jean-Baptiste de Chatillon CFO and Member of the Managing Board
Slide 9: Group results
Group results ► Group ROI of -€177m, up €383m vs 2012 despite tough market conditions ► Net result -€2,317m after impairment IAS 36 In million euros** 2012* 2013 Change Revenues 55,446 54,090 -2.4% Recurring operating income (560) (177) 383 % of revenues -1.0% -0.3% +0.7pt Non–recurring operating in
Slide 10: Automotive: worldwide unit sales in 2013
Automotive: worldwide unit sales* in 2013 ► 42% sales volumes* outside Europe vs 38% in 2012, on track for 50% sales volumes outside Europe by 2015 ► Development of international markets +12% ► Europe volumes* +4% in Q4 2013 vs Q4 2012 Worlwide unit sales* 3,000 In thousands of units 2,820 2,818 2,5
Slide 11: Group Revenues: €54.1bn
Group Revenues: €54.1bn ► Group revenues -2.4%, driven by sales volumes and change in exchange rate on Automotive division In million euros 2012 2013 Change Automotive 38,299 36,461 -4.8% Faurecia 17,365 18,029 3.8% Banque PSA Finance 1,910 1,773 -7.2% Others businesses and eliminations (2,128) (2,1
Slide 12: Automotive: new car revenue analysis
Automotive: new car revenue analysis ► New launches positive impact on product mix and strong pricing policy… ► …only partially offsetting negative exchange rate and unfavorable European volumes In million euros 27765 Volumes Price Country mix Product mix Forex Others* 25533 -5.4% +0.7% -0.3% +0.8%
Slide 13: Group: recurring operating income
Group: recurring operating income ► Group ROI: -€177m in 2013, up €383m vs 2012, with -€1,042m on Automotive division, improving by €454m vs 2012 In million euros** 2012* 2013 Change Automotive*** (1,496) (1,042) 454 % of revenues -3.9% -2.9% Faurecia 516 538 22 % of revenues 3.0% 3.0% Banque PSA Fi
Slide 14: Market trends
Market trends ► Europe on the path to stabilization, with H2 2013 +4% vs H2 2012 ► China: acceleration of growth ► Strong deterioration of Russian market in 2013 Cars and light commercial vehicles – market evolution ∆ vs previous year 2012 2013 2012 2013 Europe 30 -9% -2% China* +7% +19% Italy -21%
Slide 15: Automotive: market share
Automotive: market share ► Europe: 11.9% market share reflecting Citroën C3 manufacturing disruption, country mix and our pricing policy ► China: 3.6% market share ► LCV: European leader with 20.7% market shares Cars and light commercial vehicles – market share 12.7% 11.9% 4.8% 4.9% 3.6% 3.5% 2,6% 2
Slide 16: Automotive: recurring operating income analysis
Automotive: recurring operating income analysis ► Strong performance of product mix, pricing policy and significant cost reduction ► Significant negative impact of Forex In million euros Fixed Production & marketing R&D Other Input costs & procurement cost Market o.w. demand (46) (14) +140* (148) (1
Slide 17: Faurecia: recurring operating income
Faurecia: recurring operating income ► ROI at €538m in 2013, up 4.5% vs 2012 In million euros 2012** 2013 Change Revenues 17,365 18,029 664 Recurring operating income 516 538 22 % of revenues 3.0% 3.0% Non–recurring operating income (88) (107) (19) (and expenses) Operating income 428 431 3 Net finan
Slide 18: Banque PSA Finance
Banque PSA Finance ► Penetration rate maintained at a high level (29.1%) ► Profitability hit by higher cost of funding ► Confirmed success of Distingo saving book with €955m of outstanding at year-end In million euros 2012 2013 Change Revenues 1,910 1,773 -7.2% Net banking revenue 1,075 891 -17.1% C
Slide 19: Group: non recurring operating income & expenses
Group: non recurring operating income & expenses ► Impairment charge of €1.1bn on Automotive assets mainly in Russia and Latin America (€1,009m) ► Restructuring charges for -€460m In million euros 2012 2013 Change Non recurring operating income 406 413 7 Impairment charge (3,980) (1,101) 2,879 Net r
Slide 20: Group: consolidated net income
Group: consolidated net income ► Financial expenses up €228m impacted by the rating In million euros** 2012* 2013 Change Operating income (4,682) (1,346) 3,336 Net financial income (expenses) (430) (658) (228) Income taxes (774) (387) 387 Share in net earnings of companies at equity 160 176 16 Profi
Slide 21: Net debt and cash flow analysis
Net debt and cash flow analysis* ► Operational Free Cash consumption** strongly reduced at -€426m vs -€3bn in 2012 In million euros Change in working capital: +397 Other Cash Trade Trade change Capex Flow Retruct. Inventories receivables payables in WCR & Capitalized R&D +9 +77 (12) (588) +323 Net (
Slide 22: Inventories
Inventories ► Inventories down 32k vehicles vs 2012 and 62 days* of sales In thousands of new vehicles 493 416 384 259 232 215 234 184 169 31.12.11 31.12.12 31.12.13 Independant dealership inventory Group inventory * World figures, based on forward 3 months delivery expectations, excluding China Ful
Slide 23: CAPEX & capitalized R&D
CAPEX & capitalized R&D ► Productivity gains through worldwide models, carry-over and modular policy, R&D efficiency and cost sharing through cooperations ► CAPEX & capitalized R&D: 4.6% of 2013 revenues In million euros 3,713 3,814 2,784 2,804 2,397 2009 2010 2011 2012 2013 Faurecia Auto Capex and
Slide 24: Financial security
Financial security* ► Financial security maintained above €10bn ► Total equity reflecting impairments impacts In million euros End 2012 End 2013 Cash and cash equivalents 5,421 6,161 Current & non current financial assets 1,903 410 Total 7,324 6,571 Back-up facility (undrawn) – excluding Faurecia 2,
Slide 25: Financial structure & financing targets
Financial structure & financing targets ► €1bn bond issue with 5 year maturity successfully realized on February 28th, 2013 ► Liability management in September 2013: a 5.3 year new issue for €600m and a tender offer for €300m simultaneously launched ► Average maturity of 4.0 years at end of 2013 ► E
Slide 26: Fit for growth
Fit for growth Philippe Varin Chairman of the Managing Board
Slide 27: Fit for growth
Fit for growth 1 Brands differentiated ▐ 2 European restructuring well advanced ▐ 3 Globalization accelerated with Dongfeng Partnership ▐ 4 Financing arm strengthened with Santander Partnership ▐ 5 Strengthened balance sheet ▐ 6 New leadership ▐ Full year results 2013 – February 19th, 2014 27
Slide 28: Fit for growth
Fit for growth 1 Brands differentiated ▐ 2 European restructuring well advanced ▐ 3 Globalization accelerated with Dongfeng Partnership ▐ 4 Financing arm strengthened with Santander Partnership ▐ 5 Strengthened balance sheet ▐ 6 New leadership ▐ Full year results 2013 – February 19th, 2014 28
Slide 29: Brands differentiated
1 Brands differentiated New Brands positioning and profit upscale Relative share ASPIRING VALUING of Profit Higher price positioning & increased margins Pool TO MODERNITY TRADITION + CAR FOR IMAGE Strong mix on new models + EXPERIENCE CAR FOR Average age at 3.1 in 2014 + CAR FOR Premiums 19% of the
Slide 30: Peugeot brand: move up-market
1 Brands differentiated Peugeot brand: move up-market with strong mix, improving residual values and TCO 2013 2014 • 41,800 sales • Levels 3 & 3+ > 50% • Capitalizing on Peugeot 308 • 2nd car on EMP2 • TCO excellent positioning • Launch in April 2014 in Europe NEW PEUGEOT 308 • Target: Top 3 of the
Slide 31: Citroën C range: renewal
1 Brands differentiated Citroën C range: renewal with Citroën C4 Picasso and Citroën C4 Cactus, and acceleration in China 2013 2014 • Launch in June 2014 in Europe • 58,400 sales CITROËN C4 PICASSO CITROËN C4 CACTUS • Levels 3 & 3+: 70% • TCO best in class • Launch in June 2014 in Europe GRAND CITRO
Slide 32: DS line: launched in China
1 Brands differentiated DS line: launched in China 2013 2014 • Launch in March 2014 in China NEW DS5 LS • 122,700 sales in 2013 • 2/3 of buyers are new customers • Launch of the DS3 Cabrio • Launch in H2 2014 NEW DS CUV • Acceleration in China 2014 • Sales: up to 50,000 units ambitions • Network x2
Slide 33: New technologies and low CO2 emission leadership
1 Brands differentiated New technologies and low CO2 emission leadership ▐ EMP2 global modular platform implemented in 2013 in Vigo (New Citroën C4 Picasso) and Sochaux (Peugeot 308) then in Wuhan in 2014 ▐ Motorization EB 3 cylinder including Turbo Pure Tech 110 and 130 hph end of October ▐ Exclusi
Slide 34: Fit for growth
Fit for growth 1 Brands differentiated ▐ 2 European restructuring well advanced ▐ 3 Globalization accelerated with Dongfeng Partnership ▐ 4 Financing arm strengthened with Santander Partnership ▐ 5 Strengthened balance sheet ▐ 6 New leadership ▐ Full year results 2013 – February 19th, 2014 34
Slide 35: European restructuring well advanced: Rebound Plan
2 European restructuring well advanced Rebound Plan ahead of schedule Product costs Restructuring CAPEX Total annual including project reduction savings GM Alliance Objective Signed Depart. 8,000 7,300 2,250 End 2013 €160m + €645m + €120m = €0.9bn €1.5bn + + = 2015 €600m €550m €350m additional in 20
Slide 36: European restructuring: New Social Contract
2 European restructuring well advanced New Social Contract Flexibility and wage restraint Additional agreements Total confirmed Part time working, simplification Move to one production line in Poissy, & adaptation of reduced workweek day and one production line Mulhouse during modernization in 2
Slide 37: New Social Contract commitments and industrial footprint
2 European restructuring well advanced New Social Contract commitments and industrial footprint ▐ Commitments for French manufacturing footprint ► One million vehicles produced in France in 2016 ► Announcement of at least one new model in each assembly plant over the 2014-2016 period ► €1.5bn capita
Slide 38: GM Alliance: annual synergies
2 European restructuring well advanced GM Alliance: annual synergies of c.$1.2bn by 2018 ▐ Joint Purchasing Organization (JPO) in Europe ► €60m of savings in 2013 ► More than 90% of 2014-2015 savings now secured ▐ 3 joint products Opel, Peugeot and Citroën on PSA platforms: 700,000 p.a. vehicles for
Slide 39: Fit for growth
Fit for growth 1 Brands differentiated ▐ 2 European restructuring well advanced ▐ 3 Globalization accelerated with Dongfeng Partnership ▐ 4 Financing arm strengthened with Santander Partnership ▐ 5 Strengthened balance sheet ▐ 6 New leadership ▐ Full year results 2013 – February 19th, 2014 39
Slide 40: China: the world's largest and a fast-growing market
3 China: the world’s largest and a fast-growing market The 1st market for PSA by 2015 Chinese passenger vehicles market Market share In million units In million units, 2012 25 SAIC 4.5 Dongfeng Degas 3.1 20 FAW 2.6 Changan 2.0 15 BAIC 1.7 GAC 0.7 10 Brilliance 0.6 5 GWM 0.6 Dongfeng Motor Chery 0.6
Slide 41: DPCA: 20 years cooperation
3 Globalization accelerated with Dongfeng Partnership DPCA: 20 years cooperation strengthened in 2010 ▐ Sales: from 272k units in 2009 to 550k units in 2013 (+26% vs 2012, x2 since 2009) ▐ Part of Group volumes: from 9% in 2009 to 20% in 2013 ▐ Dealership: from 395 in 2009 to 746 in 2013 ▐ Productio
Slide 42: Rationale for deeper cooperation with Dongfeng
3 Globalization accelerated with Dongfeng Partnership Strong rationale for a deeper industrial and commercial cooperation with Dongfeng ▐ Accelerate development of JV own brand and Peugeot / Citroën Reinforce the with PSA technologies competitiveness of DPCA ▐ Improve DPCA competitiveness through sc
Slide 43: Synergies of €400m run rate
3 Globalization accelerated with Dongfeng Partnership Synergies initial estimate for €400m run rate for PSA p.a. ▐ Strong synergy potential by 2020 ► Revenues: sales volumes, royalties and better performance of fast growing markets ► Purchasing: global sourcing / and access to competitive cost base
Slide 44: CAPSA: successful launch with DS brand
3 Globalization CAPSA: successful launch with DS brand 2013 2014 ▐ Complete DS Line range imported Launch of DS5-LS in Q2 and DS-SUV in Q4 2014 ▐ Local DS5 production in September 2013 in Shenzhen ▐ Points of sale: 52 dealerships 100 dealers end 2014, end of 2013 covering 70 cities NEW DS5 LS Full y
Slide 45: Latam, Russia: areas to be transformed
3 Globalization Latam, Russia: areas to be transformed LATIN AMERICA RUSSIA ▐ Sales performance in 2013: ▐ Decline in Russia: 61k units (-22%) 303k units (+7%), 4.9% market share ▐ Sales impacted strongly by FX with contrasted situation and market structure, 2.3% market ▐ Growth in Argentina: share
Slide 46: Fit for growth
Fit for growth 1 Brands differentiated ▐ 2 European restructuring well advanced ▐ 3 Globalization accelerated with Dongfeng Partnership ▐ 4 Financing arm strengthened with Santander Partnership ▐ 5 Strengthened balance sheet ▐ 6 New leadership ▐ Full year results 2013 – February 19th, 2014 46
Slide 47: Financing arm strengthened with Santander Partnership
4 Financing arm strengthened with Santander Partnership BPF new partnership closing the gap on cost of sales financing ▐ Create a 50/50 partnership underway to develop future loans portfolio of Banque PSA Finance, expected start of the business mid-2015: ► BPF enters a partnership with a European le
Slide 48: Fit for growth
Fit for growth 1 Brands differentiated ▐ 2 European restructuring well advanced ▐ 3 Globalization accelerated with Dongfeng Partnership ▐ 4 Financing arm strengthened with Santander Partnership ▐ 5 Strengthened balance sheet ▐ 6 New leadership ▐ Full year results 2013 – February 19th, 2014 48
Slide 49: A strategic €3.0bn capital increase
5 Strengthened balance sheet A strategic €3.0bn capital increase Reserved ▐ €1.05bn reserved capital increase subscribed by Dongfeng and the French State ► Subscription price per share: €7.5 Capital ► Equal subscription by Dongfeng and the French State (€0.5bn / €0.5bn) Increase ► Proforma ownership
Slide 50: Evenly balanced corporate governance
5 Strengthened balance sheet Evenly balanced corporate governance supportive of new management strategy ▐ Current structure maintained: Supervisory Board and Management Board ▐ Management Board sole responsible for operations ▐ Independent Supervisory Board Chairman ▐ 50% of Independent members ▐ Ba
Slide 51: Renewal of Revolving Credit Facility
5 Strengthened balance sheet Renewal of Revolving Credit Facility (RCF) ▐ Fully underwritten RCF of €2.7bn ▐ Maturity extended to 5 years ▐ Firm commitment of a pool of 9 banks demonstrating confidence in PSA’s strategy ▐ Execution expected mid-April 2014 Full year results 2013 – February 19th, 2014
Slide 52: Value creation for PSA shareholders
Value creation for PSA shareholders ▐ Secure future for the Group €3bn recapitalization to finance an ambitious plan, improving PSA financial and credit profile Renewal of RCF for €2.7bn strengthening financial security for the next 5 years ▐ Taking advantage of warrants, an attractive financial
Slide 53: Use of proceeds
Use of proceeds ▐ Debt reduction ▐ Cost competitive product portfolio and in depth localization to restore competitiveness in Latam and Russia ▐ Technology including the next generation Hydrid Powertrain ▐ CAPEX in capacities: NCS commitment in Europe with €1.5bn capital expenditure in France Ex
Slide 54: Outlook
OUTLOOK Philippe Varin Chairman of the Managing Board
Slide 55: Outlook
Outlook ▐ 2014 market assumptions: Europe: c.+2%, China: c.+10%, Latin America: -2%, Russia: c. neutral ▐ Continuing the trend of 2013, we will pursue our active cash management to target positive operational free cash flow* in 2016 at the latest. Beyond, the operating free cash flow generation shou
Slide 56: Conclusion
CONCLUSION Full year results 2013 – February 19th, 2014 56
Slide 57: Back in the Race
Back in the Race Carlos Tavares
Slide 58: Back in the Race: PSA strategic plan for 2014-2018
Back in the Race: PSA strategic plan for 2014-2018 ▐ Direction: Pursue & strengthen PSA transformation to become a “Global Car Maker” with a stronger business focus Ensure recurrent positive operational free cash flow* in 2016 at the latest ▐ Timing: Back in the Race is engaged since January 2
Slide 59: Strategic plan structured around 4 main pillars (1/2)
A strategic plan structured around 4 main pillars (1/2) ▐ 1. Differentiate Brands and improve net pricing Accelerate DS development as an autonomous premium brand Improve net price positioning of our three brands Leverage quality, appeal and “fit & finish” to improve residual values ▐ 2. Focus
Slide 60: Strategic plan structured around 4 main pillars (2/2)
A strategic plan structured around 4 main pillars (2/2) ▐ 3. Move globalization forward and insure profitable growth overseas Turn around Russia and Latin America with a deeper accelerated local integration and an appropriate product range Re-enforce ambitious development plan in China leveragin
Slide 61: PSA is now Back In the Race!
PSA is now “Back In the Race”’ !
Slide 62: Appendix
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Slide 63: Worldwide unit sales
Worldwide unit sales In thousands of units* 2012 2013 Change Peugeot 947,583 878,950 -7.2% Europe** Citroën 810,590 749,714 -7.5% Total PSA 1,758,173 1,628,664 -7.4% Peugeot 44,868 32,640 -27.3% Russia Citroën 33,604 28,502 -15.2% Total PSA 78,472 61,142 -22.1% Peugeot 172,855 182,943 5.8% Latin Ame
Slide 64: Group results
Group results In million euros 2012 H1 H2 2013 Revenues 55,446 27,710 26,380 54,090 Recurring operating income (560) (65) (112) (177) % of revenues -1.0% -0.2% -0.6% -0.3% Non–recurring operating income (4,122) 30 (1,199) (1,169) (and expenses) Operating income (4,682) (35) (1,311) (1,346) Net finan
Slide 65: Group results by division
Group results by division BANQUE OTHERS BUSINESSES AUTOMOTIVE FAURECIA PSA FINANCE & ELIMINATIONS TOTAL In million euros 2012 2013 2012 2013 2012 2013 2012 2013 2012 2012 Revenues 38,299 36,461 17,365 18,029 1,910 1,773 (2,128) (2,173) 55,446 54,090 PEUGEOT 508 Recurring operating (1,496) (1,042) 51
Slide 66: Group: IAS 36 impairment
Group: IAS 36 impairment ► Impairment charge of €1.1bn mainly on Automotive assets in Latin America and Russia ▐ Worsening automotive markets and unfavorable forex in Latin America and Russia ▐ Net assets after impairment: €7.8bn ▐ Group balance sheet €59.7bn Impact is: ▐ Non-cash ▐ Reversible Full
Slide 67: Decline in the European utilization rate
Decline in the European utilization rate 2009 2011 2012 2013 Utilization rate* 80% 86% 75% 72% o/w A&B 87% 76% 72% 65% * 100% = 2 shifts working 8 hours / day, 235 days / year Full year results 2013 – February 19th, 2014 67
Slide 68: Automotive ROI: reconciliation table on IAS 36 impact
Automotive ROI: reconciliation table on IAS 36 impact In million euros 2013 IAS 36 Impact 2013 incl. IAS 36 Impact Automotive ROI 2012* (1,496) Input costs (226) (13) (239) Operating environment (899) (13) (886) Product mix 406 406 Price & product enrichment 287 287 Market Share (264) (264) Producti
Slide 69: Innovation and CO2 new technologies
Innovation and CO2 new technologies ► Compliant with 2015 European regulation 2 years in advance ► Lower investment costs in the future ► New stop & start ► 3008 Hy4 ► Gasoline model ► Improve in technology and lighter vehicles ► Electric EV iOn & 1st to market ≤ 99g CO2/km (new platform EMP2) C-Zer