Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Stellantis Bloomberg web_0.jpg
      U.S. indicts two Stellantis managers from Italy on emissions fraud charges
      NUteslaprotest.jpg
      Tesla disquiet in China mounts after driver protest in Shanghai
      autopilot-logo.jpg
      Musk says Autopilot was off in U.S. Tesla crash
      Hypercar styled by VW's former design boss de Silva unveiled by FAW, U.S. startup
    • BMW headquarters
      BMW's Q1 earnings boosted by China demand, higher prices
      Polestar goes for gold with final run of debut model
      BMW batteries
      BMW joins VW in race for next-level EV batteries
      Mercedes badge_1.jpg
      Daimler to add 1,000 programmers in software push
    • The cockpit of the future: Science fiction or a road map to profit?
      Faurecia foresees robust Q2 growth on strong China demand
      8STELLANTIS-MAIN_i.jpg
      U.S. judge denies Stellantis supplier bid to compel chip supply for Jeep plant
      AUTOMOTIVE NEWS EUROPE PODCAST: April 15, 2021 | CLEPA exec explains why supplier bullishness is on the rise
    • view gallery
      7 photos
      Nissan X-Trail (2021)
      Nissan delays Europe launch of X-Trail
      view gallery
      15 photos
      Mercedes EQB
       audi_a6_e-tron_13.jpg
      view gallery
      14 photos
      Audi A6 e-tron concept
    • Car exhasut Berlin.jpg
      German automakers react positively to weaker Euro 7 regulations
      Audi's plant in Gyor, Hungary, VW Group's biggest engine factory, built 1.6 million engines in 2020.
      VW brand will phase out combustion engines, CEO says
      The sales rollout of the ID4 is starting in Europe, the U.S. and China
      The UK's conflicting stance on EVs
      Valeo joins Bosch, GM, others in pledge for carbon neutrality
    • Europe sales surge 63% in March as market slowly recovers
      With Opel profitable again, CEO looks to international expansion
      Spain offers EV subsidies
      Stellantis brands dominated van sales in EU in 2020, figures show
    • Photo of Alejandro Mesonero-Romanos
      Alfa Romeo to get new design boss as brand heads for latest turnaround
      Song Chang-hyeon will lead Hyundai's new Transportation-as-a-Service division.
      Hyundai names chief for new mobility division
      VW Diess.jpg
      How Tesla's Musk tried and failed to tempt VW's Diess to run EV maker
      Volvo CFO Bjorn Annwall
      Volvo promotes Europe boss Annwall to finance chief
    • Geneva Auto Show
    • Frankfurt Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Mobility
    • Segment Analysis
    • Latest Launches
    • Supplier Spotlight
    • Europe By The Numbers
    • Path out of chip shortage: New capacity, new thinking -- and patience
      Apple, Nio, other auto newcomers get creative to avoid Tesla's 'production hell'
      Photo illustration for cloud computing
      How Amazon, Google are transforming the auto industry
      EV-only future looks closer than ever in Europe
    • Opel CEO explains what's next for the brand after 'challenging' 2020
      Ford of Europe plans more changes to reposition business for EV-focused future
      Renault CEO bets on 'winning horses' for turnaround
      Nvidia CEO says software will soon define the car, drive profit
    • Why Polestar's CEO is baffled by current state of the EV sector
      Genesis G80.jpg
      Genesis says first EV will have sporty acceleration and a generous range
      Audi A6 e-tron concept front
      Audi previews long-range EV based on shared Porsche electric platform
      Instead of a grille, the front of the bZ4X has sensors, lights and aerodynamic elements in a distinctive "hammerhead" form.
      Toyota takes on VW, Tesla with 'human-centric' EV
    • Volvo XC90 with DiDi autonomous test car
      Volvo will provide cars for Didi's self-driving test fleet
      BlueCruise-MAIN_i.jpg
      Ford answers Tesla's Autopilot with 'BlueCruise' hands-free system
      How a U.S. tech firm aims to save 1 million lives
      WeRide robotaxi fleet in China
      Nissan-backed startup to test driverless vehicles
    • Smart EQ ForTwo electric being charged
      Minicars race toward electric future
      EVs make huge gains helped by incentives, tougher CO2 rules
      EVs, surging SUVs to hit Europe's biggest segment
      Wagons hold market share, but costly EV shift looms
    • Mercedes EQS to offer hands-off self-driving tech
      Ferrari shunned electrification until it launched the SF90 Stradale plug-in hybrid in 2019.
      Ferrari brings forward launch of first EV
      Mercedes EQS camouflaged
      Mercedes enters new era with flagship sedan going electric
      The Audi Q4 e-tron quattro has a prominent grille, big wheels and defined wheel arches. Shown is the Audi Q4 Sportback 50 e-tron quattro.
      Audi attacks EV mass market with Q4 e-tron
    • The cockpit of the future: Science fiction or a road map to profit?
      Vitesco's optimism about EV shift grows as spinoff nears completion
      How GKN is transforming to gain from e-powertrain shift
      Marelli CEO expects e-powertrains to provide long-term boost
    • Europe sales by model, February: Tesla, Ferrari, Lotus, Aston Martin rise despite down market
      Top 10 sellers by market, 2 months: Skoda Octavia makes the cut in 18 out of 27 countries
      Nissan Qashqai
      Turkey sales, February: Nissan, Fiat, Skoda report strong gains
      Russia sales, February: Market bounces back with small increase
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
    • Why Polestar's CEO is baffled by current state of the EV sector
      For the EQS, Mercedes likes what it sees in the mirror
      Sales of the New 500 have been slow since the vehicle's launch last year.  The three-door New 500 hatchback is shown.
      Fiat's New 500 is zippy, agile but pricey
      How a U.S. tech firm aims to save 1 million lives
    • Understanding the impact of design on marketing, brand and user experience
      Ex-Aston Martin CEO Palmer calls on UK to intensify battery commitment
      Why Apple must target the $230B luxury car market
      Apple car: Who will build it? Magna Steyr possible candidate
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
    • 01-mb-eqs-front-full-moving.jpg
      view gallery
      16 photos
      Mercedes EQS
      view gallery
      9 photos
      Rimac's Croatian campus
      mercedes_eqs_int_6.jpg
      view gallery
      12 photos
      Mercedes EQS Interior
      Green Peugeot 308 1.jpg
      view gallery
      17 photos
      Peugeot 308
    • koenigsegg-gemera-front-quarter-passenger-01.jpg
      view gallery
      14 photos
      Koenigsegg Gemera
      view gallery
      21 photos
      Fiat New 500
      view gallery
      11 photos
      Aston Martin V12 Speedster
      view gallery
      13 photos
      Audi A3 Sportback 2020
    • At the Beijing show, sales rebound and EV boom mix with murky outlook
      3BEIJING-MAIN_i.jpg
      Beijing show to highlight competition for local EV makers
      Beijing auto show delayed due to coronavirus
      Maserati will unveil Ghibli hybrid at Beijing show
    • view gallery
      11 photos
      Mercedes-Benz Vision EQS
      view gallery
      11 photos
      Renault Captur
      view gallery
      5 photos
      Mercedes-Benz AMG GLB 53
      view gallery
      10 photos
      Mercedes-AMG GLE 53 Coupe
    • view gallery
      8 photos
      VinFast Lux A2.0 sedan
      view gallery
      8 photos
      VinFast Lux SA2.0 SUV
      view gallery
      9 photos
      Seat Tarraco
      view gallery
      7 photos
      Toyota Corolla station wagon
    • view gallery
      7 photos
      Nissan X-Trail (2021)
      view gallery
      15 photos
      Mercedes EQB
      view gallery
      7 photos
      Toyota bZ4X Concept
       audi_a6_e-tron_13.jpg
      view gallery
      14 photos
      Audi A6 e-tron concept
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress Conversations
    • ANE Shift
    • ANE Rising Stars
    • ANE Eurostars
    • ANE Leading Women
    • Watch Again
      • July 9: EU green deal in the COVID-19 new normal
      • July 16: Assisted or Autonomous Driving
      • July 23: Challenges in Electrification
      • July 30: The Road Ahead for Europe
    • Meet the 2020 winners
    • Watch the 2020 Rising Stars awards again
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: Cloud: A springboard for future competitiveness
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automotive News Europe
February 18, 2015 12:00 AM

PSA reports first profit in 3 years after cutting costs

Staff and wire reports
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    PARIS -- PSA/Peugeot-Citroen took a step toward its recovery goals, raising its key cash-flow objective after strong China sales and a recovering Europe helped the automaker post its first annual operating profit in three years.

    PSA's vehicle manufacturing division swung to a 63 million euro operating profit from a 1.04 billion loss in 2013. Group operating income was 905 million euros after a loss of 364 million euros a year earlier. The automaker's overall net loss narrowed to 555 million euros from 2.23 billion.

    "Our 2014 results show evidence that the process of rebuilding the group's financial fundamentals is underway," CEO Carlos Tavares said in a statement today. "We are ahead of our reconstruction plan," he said, announcing the automaker's 2014 financial results.

    PSA today pledged to deliver 4.2 billion euros in cumulative operating cash flow by 2017, more than double its earlier 2018 target.

    Operating free cash flow, excluding one-time gains and charges, was 2.18 billion euros last year, PSA said. The company was net debt free, it said.

    The group's net revenue increased by 1 percent to 53.6 billion euros in 2014 but automotive division revenue fell by 0.9 percent 36.1 billion euros as favorable changes in the product mix and in prices offset a very negative currency effect, PSA said.

    Analysts had expected group operating cash flow of just 500 million euros for 2014, according to a consensus published by Exane BNP Paribas.

    PSA shares have already risen 32 percent so far this year, buoyed by recovering demand in Europe, which still accounts for about 60 percent of the automaker's global sales.

    'Strong numbers'

    Kristina Church, a London-based analyst for Barclays, said: "It’s great that they are generating some cash, but they need to start showing that cash is sustainable.”

    Dominic O'Brien, an analyst at Exane BNP Paribas, said the big surprise was the auto division's continued profitability in the seasonally weaker second half of 2014. "This is a very strong set of free cash-flow numbers," O'Brien said. "Pursuing profitability over sales volumes is starting to reap some rewards."

    PSA today reported progress on several benchmarks.

    • Labor costs, which Tavares has pledged to reduce to 12 percent of revenue by 2016, fell to 13.4 percent from 14.5 percent.
    • Savings per vehicle reached 730 euros, outstripping a 600 euro target set for 2016. Tavares aims to save another 600 euros per vehicle by 2018.
    • The utilization rate in its European plants rose to 79 percent from 72 percent.

    Heavily reliant on Europe for sales and production, PSA survived the region's six-year market slump only after a 3 billion euro share issue that saw the French state and China's Dongfeng take 14 percent stakes in 2014.

    Tavares, who took over as CEO a year ago, is implementing a business plan called Back in the Race. The plan calls for the automaker to trim the model lineup by almost half, cut capacity, raise pricing and reduce wage and component costs to lift the automotive operating margin to 2 percent in 2018 and 5 percent by 2023.

    In addition, Tavares aims to better position PSA's three brands including the new luxury DS nameplate and continue his predecessor Philippe Varin’s efforts to restructure, in particular in Russia and Latin America.

    PSA’s total deliveries rose 4.3 percent to 2.94 million cars and light commercial vehicles last year. That’s still about 18 percent fewer than in 2010, when PSA, Europe’s second-biggest automaker, reported its last full-year growth with record sales of 3.6 million autos.

    Market forecasts

    Industrywide demand for cars will probably plunge by about 30 percent this year in Russia and about 10 percent in Latin America, PSA said today.

    In China, the carmaker said it expects demand to rise by about 7 percent. In Europe, it said it expects a 1 percent increase.

    PSA now sells more cars in China than in its home country and is betting on further expansion in the region. Together with Dongfeng, it aims to sell 1.5 million vehicles annually in China by 2020.

    The automaker's vehicle sales in the country surged 32 percent to 734,100 vehicles last year, with the market accounting for 22 percent of the new DS brand’s global deliveries. PSA forecasts 850,000 vehicle sales in China this year.

    Reuters and Bloomberg contributed to this report

    RECOMMENDED FOR YOU
    2020 Eurostar winner Frank Bekemeier
    Recommended for You
    2020 Eurostar winner Frank Bekemeier
    2020 Eurostar winner Frank Bekemeier
    2020 Eurostar winner Jürgen Weissinger
    2020 Eurostar winner Jürgen Weissinger
    2020 Eurostar winner Nicolas Racquet
    2020 Eurostar winner Nicolas Racquet
    Cloud: A springboard for future competitiveness
    Sponsored Content: Cloud: A springboard for future competitiveness
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • 2020 Media Kit
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Geneva Auto Show
        • Frankfurt Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Mobility
      • Segment Analysis
      • Latest Launches
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress Conversations
        • Watch Again
          • July 9: EU green deal in the COVID-19 new normal
          • July 16: Assisted or Autonomous Driving
          • July 23: Challenges in Electrification
          • July 30: The Road Ahead for Europe
      • ANE Shift
      • ANE Rising Stars
        • Meet the 2020 winners
        • Watch the 2020 Rising Stars awards again
      • ANE Eurostars
      • ANE Leading Women
    • More
      • Publishing Partners
        • Capgemini: Cloud: A springboard for future competitiveness
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us