Groupe PSA remains profitable in H1 2020 despite Covid

• €25.1 billion Group revenue
• 3.7% Automotive division [1] adjusted operating margin [2] at €731 million
• Net result group share at €595 million
• €153 million Automotive positive free cash flow excluding working capital
• Strong financial security at €23.2 billion

Carlos Tavares, Chairman of Groupe PSA Managing Board said: “This H1 result proves the Group’s resilience, as a reward of 6 consecutive years of intense work to increase our agility and lower our breakeven point. The Group is also weathering this crisis thanks to the commitment of the teams, focused to deliver a clean, safe and affordable mobility for our customers. We are determined to achieve solid rebound in the second half of the year, while finalizing the birth of Stellantis before the end of Q1 2021.”

Group revenue amounted to €25,120 million in H1 2020, down by 34.5% compared to H1 2019. Automotive division revenue amounted to €19,595 million down by 35.5% versus H1 2019, mainly driven by the negative impact of volumes and country mix (-40.5%), the decrease of sales to partners (-0.5%) and the impact of exchange rates (-0,6%) ; conversely, revenues benefited from the positive effect of product mix (+3.4%) and price (+0.4%), as well as others (+2.3%).

Group adjusted operating income [3] amounted to €517 million, down 84.5% with Automotive adjusted operating income down 72.5% at €731 million. This 3.7% profitability level was reached despite the sharp decline of automotive markets and thanks to a positive product mix and cost reductions.

Group adjusted operating margin reached 2.1%, down 6.6 pts versus H1 2019.

Other operating income and expenses amounted to -€35 million, compared to -€847 million in H1 2019.

Group net financial income and expenses improved to €52 million compared to -€166 million in H1 2019.

Consolidated net income reached €376 million, a decrease of €1,672 million compared to H1 2019. Net income, Group share, reached €595 million, down €1,237 million compared to H1 2019.

Banque PSA Finance reported adjusted operating income of €463 million [4], down 9.7%.

Faurecia adjusted operating income was a loss at -€159 million.

Free cash flow of manufacturing and sales companies was -€4,704 million of which -€3,601 million for the Automotive division.

Automotive free cash flow was positive at €153 million excluding working capital.

Total inventory, including independent dealers and importers [5], stood at 505,000 vehicles at 30 June 2020, down 24% compared to 30 June 2019.

Net financial position of manufacturing and sales companies was €2,886 million at 30 June 2020 of which €6,957 million for the Automotive division.

Market outlook: in 2020, the Group anticipates a decrease by 25% of the automotive market in Europe, by 30% in Russia and Latin America, and by 10% in China. 

Operational outlook: Groupe PSA has set the target to deliver over 4.5% Automotive adjusted operating margin [6] on average for the period 2019-2021.

[1] Automotive Division (PCDOV)

[2] Adjusted operating income related to revenue

[3] Adjusted operating income (loss) excludes from Operating income certain adjustments comprising Restructuring costs, Impairment of CGU’s and Other operating income (expense) considered rare or discrete events and are infrequent in nature.

[4] 100% of the result of Banque PSA Finance. In the financial statements of Groupe PSA, joint ventures are consolidated using the equity method.

[5] Including Peugeot importers outside Europe

[6] Automotive Division (PCDOV) adjusted operating income related to revenue

35 Years Ago: Opel Ascona 1.8i First German Car with Catalytic Converter Engineered for Europe

• Forerunner: after the Ascona the whole Opel model range got catalytic converters
• Complicated operation: Opel Ascona significantly modified for three-way catalytic converter
• Eye for detail: even fuel tank filler neck redesigned for unleaded petrol
• Major commitment: Opel invested DM 1.0 billion in catalytic converter development

Opel Ascona 1.8i GT

Thirty-five years ago, the era of the catalytic converter began at Opel. In 1985, the Opel Ascona 1.8i was the first German car with a catalytic converter developed especially for the European market, instead of merely modified for export from the USA.

Opel Ascona 1.8i  for Rhineland-Palatinate Police

Rhineland-Palatinate Police force took delivery of the first Opel Ascona 1.8i with three-way catalytic converter actually produced, on December 7, 1984. During the course of the following year, Opel introduced catalytic converters across the model range – from Corsa, Kadett and Ascona, to Rekord, Monza and Senator. German manufacturer was the first European brand to offer three-way catalytic converters standard.

Catalytic converters are not all the same

Opel’s engineers were well aware that European traffic conditions necessitated the appropriate technology and quality. They therefore developed a catalytic converter especially for European driving conditions – just as they would when it came to bodywork, suspension, engines and brakes. For Opel, it was about more than just installing a catalytic converter in the exhaust system; reducing emissions via catalytic converter represented a complicated operation on the “internal organs” of the automobile.

Compared with a conventional car, the design of a vehicle with catalytic converter required numerous alterations. For example, the converter radiates a lot of heat when it has reached its operating temperature (600 degrees Celsius). Heat-sensitive components and the passenger compartment therefore needed protection from reflective shields.

In order for the catalytic converter to operate at optimum efficiency, it required an electronic mixture preparation system and a multitude of controls, which in turn made further modifications necessary. Even the filler neck of the fuel tank needed a redesign to prevent drivers from mistakenly filling the tank with leaded instead of unleaded petrol.

One billion Deutsche Mark for the environmentally friendly automobile

Opel committed more than one billion Deutsche Mark (DM) as well as hundreds of engineers to the development of catalytic converters and the environmentally friendly automobile. Company invested DM 100 million alone in new test rigs and test equipment for durability and high-speed testing.

New facilities also included a 13-storey-high “soak tower”. In this insulated building, more than 130 cars could be prepared simultaneously for emissions testing. The standards required that, before the emissions test, each car had to be stored for at least 12 hours at a temperature of 20 to 25 degrees Celsius.

As well as offering cars with a three-way catalytic converter installed at the factory, Opel offered customers a kit for retrofit. However, the carmaker was not content to innovate only in technology. Opel also took new paths in Public Relations. Company offered people the opportunity to inform themselves actively about catalytic converters and retrofitting. For a few hours every day, motorists and interested parties could call a telephone “hotline” and get answers to their questions first-hand from the company’s experts.

Opel Ascona 1.8i GT

Today, 35 years after introducing the three-way catalytic converter on the Ascona 1.8i, Opel continues to take its responsibility for the environment seriously. Following the Opel Grandland X as plug-in hybrid and the battery powered Opel Corsa-e, the brand recently unveiled all-new Mokka-e, the Vivaro-e and the Zafira-e Life, all with pure electric drive and therefore locally emission-free.

New Timetable for Electric ADAC Opel e-Rally Cup

• Opel Corsa-e Rally: Delivery of customer vehicles as planned from October 2020
• Dress rehearsal: All Cup participants test at the Rally Sulingen in November 2020
• From spring 2021: the world's first electric rallye one-make cup begins

Opel Corsa-e Rally

Corona pandemic has also affected preparations for the ADAC Opel e-Rally Cup. Cancellations of events and the German Rally Championship 2020 have forced those responsible at Opel and ADAC to revisit their calendar planning. In the current year, an attractive programme of test and promotional events will be the starting signal for the world's first electric rally one-make cup, before points and prize money will be on offer for the first time from the spring of 2021.

Rally fans will still see the 136 hp Opel Corsa-e Rally in action in 2020. Opel Motorsport is testing two development vehicles in several test runs. All registered Cup participants also have the opportunity to test their cars on the “ADAC Rallye Rund um die Sulinger Bärenklaue” on November 20 and 21 under competitive conditions. Delivery of customer cars is scheduled for the end of October 2020.

“We have adjusted the ADAC Opel e-Rally Cup calendar again because many of the events planned for testing and competition this year could not take place. Our participants not only have to familiarize themselves with a new vehicle, but also with a new technology and therefore need a solid preparation time. A regular season with eight events is planned between spring and autumn 2021”, said ADAC Motorsport Director Thomas Voss.

Opel Motorsport Director Jörg Schrott adds: “Preparations for the ADAC Opel e-Rally Cup are still in full swing. Our programme consists of test runs at national and international rallies as well as various test options for our customer teams in order to start the first complete cup season fully prepared in spring 2021. First test drives on 'real' special stages show that we are on the right track. Opel Corsa-e Rally has strong driving characteristics and is a lot of fun – for spectators as well as drivers. We are looking forward to the upcoming dates and the official start next year. ”