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PSA Group looks forward to 'new era' after record 2019 financial results

Carlos Tavares

PSA Group chairman Carlos Tavares has said that he is “eager to enter a new era” following the merger with FCA Group after revealing details of record financial results in 2019.

The French carmaker, which claimed the Manufacturer of the Year accolade at the recent AM Awards 2020 in Birmingham, published details of a 1% rise in group revenue to €74.7 billion (£62.9bn) in its annual accounts today (February 26).

PSA’s automotive division delivered an 8.5% rise in adjusted operating margin, meanwhile, rising 0.9ppt to €5bn (£4.21).

The result has seen the OEM achieve the targets set by its PACE! turnaround plan, with Opel Vauxhall achieving a 6.5% adjusted operating margin after returning to profit in 2018.

Tavares said: “Our skilled and committed teams made the difference once again and we have achieved record results in 2019, driven by our agile, customer focused and socially responsible approach.

“We are ready for the energy transition and all teams are focused to offer a clean, safe and affordable mobility for customers.

“Based on our business model and fighting spirit which has proved to be efficient, we are eager to enter a new era with the projected merger with FCA.”

In December PSA Group and Fiat Chrysler Automobiles (FCA) signed a binding “combination agreement” to begin the process of merging to create the world’s fourth largest car manufacturer by volume.

The French and Italian manufacturing giants will come together to create what will also be the third largest automotive OEM by revenue with annual sales of 8.7 million units and combined revenues of nearly €170 billion following completion of the new 50/50 partnership.

AM took a closer look at the possible implications of repercussions of the new partnership in its December edition of the magazine following coverage of the initial talks between the two companies back in October.

PSA’s turnaround maintained momentum in 2019 thanks to automotive division revenues which it said had been driven by product mix (4.3%) and price (1.2%), which offset the decrease of sales to partners (down 1.7%), the negative impact of exchange rates (down 0.5%), volumes and country mix (down 2.4%) as well as others (down 0.2%).

The manufacturing group stated that its total inventory, including independent dealers and importers, stood at 606,000 vehicles at December 31, 2019 – down 74,000 vehicles compared to a year earlier.

Detailing its market outlook for the year ahead, PSA Group said: “In 2020, the Group anticipates a decrease by 3% of the automotive market in Europe and by 2% in Russia as well as a stable automotive market in Latin America.”

Despite this, the OEM has set the target to deliver over 4.5% automotive adjusted operating margin on average for the period 2019t to 2021.

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