PSA: improved performance through European sales and cost cuts
Back in the Race plan yields favorable conditions
Ensuring achievement of "Back in the Race" business plan goals
PSA implemented the "Back in the Race" business plan in April 2014 in order to restructure the Group. The current goal is to generate a cumulative free cash flow for operations of EUR 2 billion for 2015-2017 (EUR 2,782 million was generated for the first half (H1) of 2015). The target operating profit margin for their automotive division is 2% in 2018, and 5% over the period 2019-2023. When announcing their third-quarter 2015 revenue figures, PSA's management team commented that the plan was proceeding ahead of schedule, and that they were sure to hit their goals.
January-September 2015 revenue up 6% with a 1% decrease in sales volume
PSA's global sales volume for the January-September period of 2015 fell 1.0% y/y to 2.163 million units. Sales expanded in Europe but shrank in regions such as China, Latin America and Eurasia (including Russia.) Total revenues in the same period were EUR 41,294 million, up 5.8% y/y, and automotive division revenue rose 3.3% y/y to EUR 27,461 million. The Group achieved positive net income of EUR 571 million for H1 2015 (compared with a net loss of EUR 114 million for H1 2014). PSA attributed the revenue growth to recovery in the European market, gains from the exchange rate, cost reductions, and new model launches.
According to LMC Automotive's forecast for the fourth quarter of 2015, PSA's global light vehicle sales are expected to be 3.18 million units in 2016, up 0.2% y/y. PSA's sales will continue to grow to 3.73 million units in 2019, an increase of 17.2% compared to 2016.