CREATION OF VALUE FOR STAKEHOLDERS …...momentum for Groupe PSA and can be summed up in three words: performance, accountability, transparency. First, performance. The efforts made

CREATION OF VALUE FOR STAKEHOLDERS REPORT

https://www.groupe-psa.com/en

1 Groupe PSA: an impact player 01 1.1 Message from the Chairman of the Managing Board 01

1.2 Presentation of Groupe PSA 02

2 Governance: guiding growth 04

3 Ecosystem: an innovation-driven industry 06

4 Business model & strategy: driving future growth 08 4.1 Push to Pass strategy: a first step to bridge the vision 08

4.2 Value chain: a holistic approach 10

4.3 CSR Policy: responsibility fully integrated into strategy 11

4.4 CSR commitments: measuring progress 13

5 Creation of value: shared and lasting value for stakeholders 16 5.1 For long-term investors: sustaining growth 16

5.2 For customers: anticipating and responding to expectations 18

5.3 For employees: being a responsible employer 20

5.4 For suppliers and partners: making an extended commitment 22

5.5 For host communities and civil society: being a responsible citizen 23

5.6 For the environment: preserving our planet 24

Appendices – about this report 25

CONTENTS

GROUPE PSA: AN IMPACT PLAYER

1.

11.1 MESSAGE FROM THE CHAIRMAN

OF THE MANAGING BOARDThe past few years brought new forward momentum for Groupe PSA and can be summed up in three words: performance, accountability, transparency.

First, performance. The efforts made in 2014 and 2015 as part of the “Back in the Race” plan have paid off. Thanks to the commitment of all of its employees, the Group has rebuilt its economic fundamentals and is on a growing path thanks to the acquisition of Opel/Vauxhall, while its CSR performance remains one of the best in the world. In parallel, our three automotive brands have consolidated their pricing power. I firmly believe that lasting performance is only possible if a company can offer sustainable responses to its stakeholders: its customers, employees, shareholders and long-term investors, supply partners and host countries. Our new strategic plan Push to Pass, unveiled in the spring of 2016, is a performance plan that effectively distils their expectations over the long term. Our responsibility towards these valued stakeholders is the mainspring of our performance.

Second, accountability. Our Group has a long-standing commitment to Corporate Social Responsibility. It has consistently renewed its support for the ILO conventions and the principles of the UN Global Compact, and has long embraced its responsibility towards society and the environment. These are deeply embedded in its culture and values. Groupe PSA supports the 17 global Sustainable Development Goals published in September 2015 by the Member States of the United Nations in a bid to put an end to poverty, fight inequality and injustice and tackle climate change. Our commitments and initiatives are enshrined in a proactive roadmap based on the three pillars of our company’s Corporate Social Responsibility policy: sustainable mobility, a contribution to local economic development and socially minded co-innovation.

For the Group, accountability also means being committed to business ethics right across the board. This alone can guarantee a strong and fair economy. There can be no accountability without transparency.

Finally, transparency. Having always had one of the lowest CO2 emissions, we decided that we had a responsibility towards our customers and civil society to be open about our vehicles’ fuel consumption in real driving conditions. We are the only car manufacturer to date that has chosen to publicly disclose all of its CO2

emissions, and invite other car manufacturers to follow our lead in this. Our duty is to provide all of our stakeholders with accurate and pertinent information so that they can make informed buying, collaboration and investment decisions.

CARLOS TAVARES

Chairman of the managing board

HISTORICAL BACKGROUND OF GROUPE PSA

1974 Acquisition of all of the outstanding shares of Citroën S.A.

1987 Merging of Aciers et Outillages Peugeot with Cycles Peugeot, under the name of Ecia (renamed FAURECIA in 1998)

2014 Strengthening of the Group’s industrial and commercial partnership with DONGFENG MOTOR GROUP (DFG)

2016Push to Pass Strategy

1896 Foundation of Peugeot S.A.

1976 Merging of the two companies

1995 Transformation of PSA Finance Holding into a banque (current name: BANQUE PSA FINANCE)

2014 Back in the Race Strategy

2017 Acquisition of Opel/Vauxhall: Birth of a European Champion

GROUPE PSA 01

PEUGEOT S.A.

PSA AUTOMOBILES S.A.

DESIGN & PRODUCTION

BANQUEPSA FINANCE

AUTOMOBILESPEUGEOT

FREE2MOVE AUTOMOBILES CITROËN

DS

FINANCEDIVISIONAUTOMOTIVE DIVISION

FAURECIA

AUTOMOTIVEEQUIPMENT

DIVISION

GROUPE PSA: AN IMPACT PLAYER11.2 PRESENTATION OF GROUPE PSAGroupe PSA designs unique automotive experiences and delivers mobility solutions that provide freedom and enjoyment to customers around the world. The Group has three car brands, PEUGEOT, CITROËN and DS, as well as a wide array of mobility and smart services under its Free2Move brand, to meet the evolving needs and expectations of automobile users.

Due to the scope and breadth of their operations, automobile production sites have a considerable economic and social impact on their host communities. These manufacturing centres create jobs and drive growth at the grass-roots level. Groupe PSA has sales operations in 160 countries. It is often the largest employer in its host communities.

This report focuses on the activities of the Automotive Division.

VEHICLES SOLD IN 2016

1,919,000 1,141,000 86,000

160 54 billion2016 revenue

2,973 millionsd’unités

vendues dans le monde

largest car manufacturer in Europe(10.8% market share

Light Commercial Vehicle + Passenger Cars)

employees worldwide

2nd

102.4 g/kmCO 2

1st leading Group in Europein terms of CO2 emissions

19,5

Mobility services11

de part de marchés 2015 véhicules utilitaires légers

170,000

regular users of mobility services

1 million

95 669salariés dans

1 012brevets déposés avec

13 500 salariés en R&D

recurring operating marginof the Automotive Division

and the Group

6% 31 regional launches

by the end of 2017out of 121 launches planned

for 2016-2021

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employees worldwide

2nd

102.4 g/kmCO 2


19,5

Mobility services11


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GROUPE PSA 02

DS7 CrossbackCitroën C3 AircrossPeugeot 3008

FRANCE

BELGIUM

THE NETHERLANDS

LUXEMBOURG

GERMANY

ITALY

AUSTRIA

UNITED KINGDOM

SPAIN

SWITZERLAND

SLOVAKIA

UKRAINE

PORTUGAL

CZECH REPUBLIC

POLAND

Vigo

Mangualde

Madrid

Kolin

Sevelsud (Val di Sangro)

Trnava

JAPANBELARUS

BRAZIL

MEXICO

ARGENTINA

CHILE

ALGERIA

NIGERIAETHIOPIA

WukroKENYA(6)

CHINA

MALAYSIA

VIETNAM

KAZAKHSTANUZBEKISTAN

Kostanai

MinskGEORGIA

Kaduna

TURKEYBursa Okasaki

Mizushima

Shanghai / Wuhan / Shenzhen

Shenzhen

Chu Lai

WuhanTehran 2017(2)

Kashan 2018(3)

Tamil Nadu 2020(5)

Tunis 2018 (1) Chengdu

Gurun

Porto Real

Kenitra 2019(4)

São Paulo

Buenos Aires

Jeppener

XiangyangIRAN

TUNISIA

FRANCE SITES

HordainMulhouse Poissy Rennes Sochaux Caen Charleville-Mézières Douvrin (FM)Hérimoncourt Metz Mulhouse Saint-Ouen Sept-Fons Trémery ValenciennesVesoul

VélizyLa Ferté-VidameSochauxBelchampLa Garenne-ColombesCarrières-sous-Poissy

RUSSIAKaluga

MOROCCO

INDIA

URUGUAYMontevideo 2017 (7)

Jizzakh 2019(8)

GROUPE PSA: AN IMPACT PLAYER1A GLOBAL INDUSTRIAL FOOTPRINT MANAGED AS CLOSE TO MARKETS AS POSSIBLE

For more information: CSR Report, section 1.1. A CSR programme fully integrated into the Group strategy.

MANUFACTURING LOCATIONS IN THE PLANNING STAGE

(1) This Peugeot pick-up assembly project for the Tunisian market is set to start in 2018 - partnership with STAFIM.

(2) The first Peugeot vehicles (208, 2008 and 301) for the region will roll off the production lines of the Tehran plant in 2017 - partnership with Iran Khodro.

(3) The first Citroën models for the Iranian market will roll off the production lines of the Kashan plant in 2018 - partnership with SAIPA.

(4) The first vehicles (segments B and C), meeting the needs of the Moroccan region and customers, will roll off the production lines of the Kenitra plant in 2019.

(5) The first vehicles and powertrains for the Indian market will roll out of the production plants of Tamil Nadu in 2020 - partnership with CK Birla.

(6) This assembly project for the Peugeot 508, followed by the Peugeot 3008 Sport Utility Vehicle, for the Kenyan market, is set to begin in 2017 - partnership with URYSIA.

(7) This assembly project of new Peugeot Expert and Citroën Jumpy vehicles for Argentina and Brazil is scheduled to begin in 2017 - partnership with EASA and Nordex.

(8) This light commercial vehicles production, for the Uzbekistan market, is set to begin in 2019 - partnership with SC Uzavtosanoat.

Note: this does not include o�ce facilities, head o�ces, IT sites, non-automotive businesses,or countries where Group vehicles are sold by an importer.

OTHER LOCATIONS

R&D centre

MANUFACTURING LOCATIONS

Automotive production plant ( in joint venture, cooperation or partnership)

( in the planning stage)

Components factory, casting( in joint venture, cooperation or partnership)

Assembly plant

( in the planning stage)

SALES LOCATIONS

Countries where the Group operates with a commercial subsidiary

GROUPE PSA 03

http://interactivedocument.labrador-company.com/Labrador/EN/PSA/2016csrreport/

Since 1972, Peugeot S.A. has had a two-tier management structure comprised of a Managing Board, responsible for strategic and operational management, and a Supervisory Board, responsible for oversight and control. This separation responds to the concern for a balance of power between the executive and oversight functions, as reflected in the principles of efficient corporate governance.

COMPOSITIONChaired by Louis Gallois, the Supervisory Board consisted of the following 14 members as of February 22, 2017:

p six members appointed upon the proposal from each of the three main shareholders: the French Government, the Peugeot family and Dongfeng;

p six independent members, including the Chairman of the Supervisory Board and a Senior Independent Member;

p one employee representative and one employee shareholder representative.

PROFILEMembers of the Supervisory Board are selected with a view to ensuring sufficient diversity and complementarity of skills to deliver the company’s strategy.

This balanced membership contributes to the quality of the debates and the decisions taken by the Supervisory Board.

BOARD COMMITTEES

The Supervisory Board has created four specialised committees, whose objective is to prepare the work of the Supervisory Board. Each Committee issues proposals, recommendations and opinions within the scope of its responsibilities.

STRATEGY COMMITTEE

p To examine and formulate any recommendation to the long-term strategic plan, the medium-term plan and the investments plan submitted by the Managing Board;

p To examine major projects and strategic projects to be authorised by the Supervisory Board;

p To examine environmental issues, including those relating to climate change and air quality.

APPOINTMENTS, COMPENSATION AND GOVERNANCE COMMITTEE

p To identify the selection criteria of the Supervisory Board members;

p To establish and oversee the succession plan for Managing Board members;

p To evaluate the functioning of the Supervisory Board and any corporate governance issues (including diversity, employee representation...);

p To propose the compensation for corporate officers and the Managing Board members.

FINANCE AND AUDIT COMMITTEE

p To follow-up the internal control and risk management systems, and the auditing and accounting process;

p To examine off-balance-sheet commitments, any project to be authorised by the Supervisory Board, and the appropriation of results and proposal of dividend;

p To examine any issues deemed to involve high risk from a CSR perspective or relating to business integrity and its economic consequences;

p To review periodically the Group’s financial situation and financing position.

ASIA BUSINESS DEVELOPMENT COMMITTEE

p To propose broad guidelines for the long-and medium-term strategic plan for the Asia region;

p To monitor implementation of the strategy proposed by the Supervisory Board;

p To ensure implementation of the partnership agreement with the Dongfeng Group.

50% Non-IndependentMembers

50%Independent

Members

36% Non-FrenchMembers

64%French

46% Women

54%Men

14%Finance & risk management

14%International experience

19%Manufacturing

14%New economic models

10%Human

resources

7%CSR

21%Governance

GOVERNANCE: GUIDING GROWTH

DIVERSITY AND COMPLEMENTARITY OF THE SUPERVISORY BOARD

SUPERVISORY BOARD

ROLEThe Supervisory Board ensures that the strategy proposed and applied by the Managing Board fits with the Group’s long-term vision defined by the Supervisory Board. It reviews the medium-term strategic plan and the capital expenditure plan as well as the budget.

2

Expertise assembled of the Supervisory Board

GROUPE PSA 04

GOVERNANCE: GUIDING GROWTH2MANAGING BOARD

The Managing Board is responsible for executive leadership and financial management. It helps to define and implement the Group’s strategic vision developed in accordance with the long-term objectives set and approved by the Supervisory Board.

Managing Board members are appointed by the Supervisory Board for a period of four years. The Managing Board currently consists of four members, including the Chairman, Carlos Tavares.

EXECUTIVE COMMITTEE The Managing Board is supported by the Executive Committee, organised in a matrix structure by brands, regions and business lines. This structure aims to secure worldwide profitable growth for the Group. Each region is supervised by a Chief Operating Officer (COO), who is responsible for economic profit and the management of Group resources in the region, including manufacturing and sales companies. This responsibility is exercised in partnership with the Group brands and business lines.

COMPENSATION POLICY The compensation policy takes into account principles of completeness, balance, comparability, consistency, and readability of measurement rules.

The compensation structure encourages the attainment of short- and long-term targets with a view to streamlining and aligning the interests of Managing Board members with those of the company and its shareholders. It consists of three elements: an annual fixed part, an annual variable part and a long-term compensation plan (performance shares).

Couleur du logotype :

PANTONE 534CRGB 27/54/94CMYK 95/74/7/44

PANTONE WARM GRAY 9CRGB 131/120/111CMYK 23/32/34/51

RGB 30/35/54


Couleurgrands aplats, fonds impression :

Couleur secondaire :


Couleurs d’accompagnement

Gamme 1 :

PANTONE WARM GRAY 5CRGB 172/163/154CMYK 11/13/16/32

PANTONE WARM GREY 9CRGB 131/120/111CMYK 23/32/34/51


Gamme 2 :




Gamme 3 :



Couleur pour détails Ponctuels :

PANTONE Warm RED CRGB 256/66/56

Couleurgrands aplats, fonds écran :

12.86%Peugeot family (EPF/FFP)

12.86%Dongfeng Motor (Hong Kong) International Co, Limited (DMHK)

12.86%French State (SOGEPA)

7.70% Other individual shareholders2.56%

Employees

10.92%Other French

institutions

39.57%Other foreign

institutions

1.06%Treasury shares

OWNERSHIP STRUCTURE AS OF DECEMBER 31, 2016

GROUP ORGANISATIONAL STRUCTURE

MANAGING BOARD

EXECUTIVE COMMITTEE

Peugeot brand

Finance & IS Jean-Baptiste DE CHATILLON

Middle East and AfricaJean-Christophe QUEMARD

Latin AmericaChina and Asia Eurasia

India-Pacific

Purchasing

Manufacturing& Supply Chain

Programmesand Strategy

Research& Development

Human Resources Mobility ServicesCorporate Secretary

EuropeMaxime PICAT

Citroën brand DS brand

Chairman of the Managing BoardCarlos TAVARES

For more information: Registration Document, section 3. Corporate Governance. CSR Report, section 1.4 Governance geared towards sustainable growth.

GROUPE PSA 05


http://interactivedocument.labrador-company.com/Labrador/EN/PSA/2016registrationdocument/

ECOSYSTEM: AN INNOVATION-DRIVEN INDUSTRY3In the face of the economic, sociological, regulatory, environmental and societal challenges facing the automotive industry, each company must be prepared to rethink its creation of value model. Groupe PSA evaluates and mitigates risks and views these changes as opportunities, reflected in its approach to CSR. It has identified CSR issues according to their materiality in terms of impact on the Group’s financial performance and stakeholder expectations.

Challenges for Groupe PSA

Description Related CSR issues

Bringing a tangible impact on climate change

In the face of global warming and increasingly stringent regulatory requirements, responding to consumer expectations requires not only the building of vehicles that emit less CO2, but also the development of new mobility services.Vehicles emitting less than 100 g/km of CO2 already represent more than 42% of Groupe PSA’s sales volume in 2016 and plug-in hybrid powertrains could generate an additional 4% to 5% by 2020.

pp Vehicle CO2 emissions*pp Environmental performance in the supply chain: purchasing and logisticspp Energy / industrial carbon footprint

Enhancing responsible natural resource use

At a time marked by the scarcity of natural resources, reducing dependence on water resources and raw materials is a matter of both sustainable business and cost reduction.In 2016, steel requirements were reduced by several thousand tonnes, saving € 10 million, and the use of recycled polypropylenes and polyamides saved € 3.8 million (EU vehicle sales).

pp Optimisation of material use in the life cycle of vehicles pp Sustainable water managementpp Optimisation of material cycles in industrial processes (including waste)

Meeting growing societal expectations as regards health and safety

In response to increasing societal concern regarding industrial processes and consumers’ growing vigilance regarding the health impact and safety of products, car manufacturers must increase the adaptability of their vehicles and the positive differentiation of their products in order to anticipate regulations and retain customers.Groupe PSA devotes 50% of its R&D budget to clean techs (including plug-in hybrid petrol-electric models).

pp Vehicle safety*pp Air quality: Reduction of vehicle pollutant emissions* pp Biodiversitypp Control of industrial discharges and nuisances

Supporting the balanced economic development of regions

Growing inequalities in the economic development of regions and the public's lack of confidence in wealth redistribution policies encourage the development of local supply and the implementation of more sustainable value-added distribution practices. Attention therefore needs to focus on the redistribution of the value created by the Group between capital expenditures and remuneration of managers and stakeholders. The Group’s increased CAPEX and R&D investments (9.4% of revenues in 2016 compared with 6.5% in 2013) illustrate this balanced development.

pp Development of local purchasing in the regionspp Balanced distribution of added valuepp Philanthropy and socially responsible mobility

Ensuring protection of human rights

The automotive industry must anticipate increasingly restrictive national and international regulations - relating to "minerals from conflict zones," the balance and integrity of business relationships and the requirement for vigilance by large companies. This is a prerequisite for accessing additional markets and financing. No non-compliance was detected in the application of Groupe PSA's global framework agreement on social responsibility, a reference framework in the field of fundamental human rights, signed in 2010.

pp Human rights in the supply chainpp Ethical business practicespp Responsible information and marketing

Enhancing competitiveness through the development of human capital

In the context of changes in the organisation of the automotive industry (automation of production chain work, in particular) and digital transformation, the strengthening of competitiveness will be achieved by improving employee well-being and satisfaction and the reduction of accidents and work stoppages.The Group invested € 74 million in training in 2016. Investments in safety have contributed to a rate of workplace accident frequency 18 times lower than the average for France’s metallurgical sector.

pp Management of company transformations and social dialogue*pp Health, safety and well-being in the workplacepp Diversity and equal opportunitypp Attractiveness and talent development

Offering new mobility solutions adapted to customer needs

In response to reinforced eco-mobility policies, the increasing complexity of value chains, requiring increased quality control, and reductions in household income, the development of new and customer-adapted mobility solutions is becoming a source of differentiation.Groupe PSA is targeting revenues of € 300 million in 2021 from mobility services for individuals and professionals.

pp Quality of vehicles and services - customer satisfaction*pp Development of new mobility solutions*pp Responsible Customer Relationship Management

For more information: This Report, p.12. CSR Report, section 1.2 CSR in the value creation model.

*Strategic CSR issues (see materiality matrix page 12)

GROUPE PSA 06


3 ECOSYSTEM: AN INNOVATION-DRIVEN INDUSTRY

…ITS DESIGN PROCESSES: environmental and social responsibility throughout the entire life cycle requires special vigilance on hazardous materials, polluting emissions and rare earths. Groupe PSA has long deployed an eco-design approach. It is actively involved in the circular economy, including managing the end-of-life of its products.

…ITS PRODUCTS: development of plug-in hybrid petrol-electric powertrains; the need to improve the performance of electric vehicle batteries; downsizing; active monitoring of the development of new energies (hydrogen, fuel cell, new biofuels, etc.); the need to protect vehicles, passengers and other stakeholders not only from road safety risks, but increasingly from cybercrime.

…ITS SITES: to support the development of its sales in emerging markets such as Africa and the Middle East, the Group has announced new sites (Morocco, Algeria) and its return to Iran. At the same time, it is boosting its production competitiveness in countries where markets are stagnating or declining.

…ITS STAKEHOLDER COMMUNICATION: transparent, reliable information is key to the Group’s stakeholder dialogue. Financial and nonfinancial reports are published in conformity with leading global standards after being audited by third parties. In November 2015, Groupe PSA took the initiative in publishing on it brands websites its real-world vehicle fuel consumption, in association with the environmental NGO Transport & Environment.

…ITS RISK MANAGEMENT: technological advances and international expansion mean that data protection systems must be constantly updated, with reputational and legal monitoring to ensure an immediate response to threats. The financial consequences of risk management are increasingly measured by investors. Groupe PSA is continuously improving its internal control to provide an efficient and structured response to the risks to which it is exposed, whether regulatory, consumer, financial or cybercrime-related.

…ITS MARKETING PROCESSES:digital tools are radically altering the relationship between brands and customers, while new actors are emerging as key influencers and shapers of consumer opinion. The Group invests heavily in Customer Relationship Management (CRM) and is active in the customer information market (investing in Autobutler in 2016, an online quotation site for vehicle repairs).

…ITS WORK ARRANGEMENTS AND TALENT MANAGEMENT: collaborative work, agile project teams, teleworking, integration of digital technology in the business lines, etc. Groupe PSA has elected to make the quality of the dialogue and mutual trust with unions a competitive advantage for the company. The dialogue established by the Group with trade unions in France and at the international level seeks to encourage this dynamic in order to establish in all countries labour relations that are based on dialogue and shared building.

…ITS PRODUCTION PROCESSES: increasing use of standardised modules and platforms. The Group is shrinking its carbon footprint by taking steps to reduce the energy intensity of its processes and switching increasingly to renewable energy. It is also looking at changes to its production processes through the application of disruptive technologies (e.g., 3D metal printing in partnership with Divergent).

For more information: This Report, p.12. CSR Report, section 1.2 CSR in the creation of value model.

TO MITIGATE RISKS AND TO TAKE ADVANTAGE OF ALL OPPORTUNITIES, GROUPE PSA IS RECONSIDERING AND IMPROVING…

GROUPE PSA 07


BUSINESS MODEL & STRATEGY: DRIVING FUTURE GROWTH

4.1 PUSH TO PASS STRATEGY: A FIRST STEP TO BRIDGE THE VISION

The Push to Pass plan, unveiled in 2016, builds on the results of the previous plan, Back in the Race, which enabled the Group to return to profit sooner than expected. This transformation plan is the Group’s roadmap for 2016-2021. It addresses the mobility needs of customers by anticipating changes in vehicle usage. Driven by customers’ shifting expectations, it will unlock the company’s potential by capitalising on the efficiency, operational excellence and agility generated by the Back in the Race plan.

Through carefully managed R&D investment and rigorous control of fixed and production costs, the plan raises the bar for Groupe PSA’s structural performance in targeting:

p average current operating margin of 4% for the Automotive Division for 2016-2018, with a target of 6% by 2021;

p 10% growth in the Group’s revenue between 2015 and 2018, targeting an additional 15% by 2021.

To achieve these targets, the company is rethinking its business model. It will create more value by leveraging its existing customer base, while expanding through digitisation and its multibrand offering of after-sales, leasing, used vehicle business, mobility and fleet management services. Carefully targeted venture capital investments will broaden the portfolio of mobility solutions.

Brand development will be based on:

p a technology strategy that addresses environmental issues, including through the launch of seven plug-in hybrid vehicles and five electric vehicles, and the implementation of the autonomous and connected vehicles programme;

p best-in-class product and service quality, underpinning the pricing power of the brands;

p a product offensive (26 passenger cars and 8 commercial vehicles, including a 1-tonne pick-up in which each brand launches one new vehicle per year in each region);

p a mobility services plan to respond to customer expectations (with the launch of its new brand Free2Move).

This plan will ensure sustainable and profitable organic growth across all of the Group’s regions. Push to Pass is the first step towards achieving Groupe PSA’s ambition to be an efficiency-pioneering global car manufacturer and the leading mobility services provider.

Push to Pass is designed to merge the expectations of the Group’s key stakeholders, including its customers, employees, investors, suppliers and host communities.

4

For more information: Registration Document, section 1.3 Activities and strategy. CSR Report, section 1.1 A CSR programme fully integrated into the Group strategy. 2017 General Meeting OR 2017 FY results.

GROUPE PSA 08

https://www.groupe-psa.com/content/uploads/2017/05/PSA_AG_2017_va_site.pdf



p4 BUSINESS MODEL & STRATEGY: DRIVING FUTURE GROWTH

GROUPE PSA 2021 FROM TURNAROUND TO PROFITABLE SUSTAINABLE GROWTH:

A CUSTOMER-DRIVEN TRANSFORMATION

OUR BUSINESS TARGETS FROM PRODUCT TO CUSTOMER

FROM OWNERSHIP TO EXPERIENCE

FROM CAR TO MOBILITY

FROM ONE BUSINESS TO A PORTFOLIO OF

BUSINESSES

FROM LOCAL TO GLOBAL

OUR VISIONA GREAT CAR MAKER

With cutting edge efficiencyA MOBILITY PROVIDER

For a lifetime customer relationship

OUR PRIORITIES FOR 2021

Product offensive: launch of one new vehicle per region, per brand and per year

International expansion and profitable growth in all its host regions

Scale-up of business activities: after-sales services, used vehicles, multi-brand offerings

Expansion to mobility services: car-sharing, connected services, leasing, fleet management and sharing

OUR OBJECTIVE ENLARGE OUR CUSTOMER BASE

OUR ENABLERS

DIGITAL BOOSTER

A COMPETITIVE TEAM TO CHALLENGE BENCHMARKS

CSR POLICY

GROUPE PSA 09

BUSINESS MODEL & STRATEGY: DRIVING FUTURE GROWTH4

A GREAT CAR MAKERWITH CUTTING EDGE

EFFICIENCY

A MOBILITY PROVIDER FOR A LIFETIME CUSTOMER RELATIONSHIP

INPUTS CAPITAL

OPERATING PROCESSES OUTPUTSPRODUCTS AND SERVICES

OUTCOMESCREATION OF VALUE FOR STAKEHOLDERS

MULTI-BRANDAFTER SALES

FINANCIALLEASING

MULTI-CHANNELUSED CAR

NEW MOBILITYSERVICES

SELL AND DELIVER

ECO-DESIGN

PRODUCTION

RAW MATERIALS

RECYCLINGMATERIALS

MANAGE PRODUCT END OF LIFE

USEDISTRIBUTION

DEVELOPPRODUCTSAND SERVICES

4.2 VALUE CHAIN: A HOLISTIC APPROACHPush to Pass advances Groupe PSA’s customer-centric vision: “A global car manufacturer at the forefront of efficient solutions, a leading mobility services provider”. This roadmap underlines the Group’s holistic, material and transparent approach to growth and its contribution to the mobility and future connected services value chain.

FINANCIALHaving the financial capacity to undertake projects and finance economic development, either in-house or from financial markets.

INDUSTRIALManufacturing resources available for production, research and development, logistics.

INTELLECTUALIntangible assets such as intellectual property and organisational capital such as tacit knowledge.

RELATIONALStakeholder relations; Ability to share information to improve individual and collective well-being; Intangible assets associated with the brand and reputation.

HUMANMotivation of employees to be innovative and adherence to governance principles, risk management methods and ethical values of the company.

ENVIRONMENTALRenewable and non-renewable environmental processes and resources.

For more information: Registration Document, section 1.3 Activities and strategy. CSR Report, section 1.2 CSR in the creation of value model. “Creator of lasting value” Groupe PSA video.

INVESTORS

CUSTOMERS

EMPLOYEES

SUPPLIERS AND PARTNERS

HOST COMMUNITIES AND CIVIL SOCIETY

ENVIRONMENT

For more information: This Report, section 5.

GROUPE PSA 10

https://www.youtube.com/watch?v=alWBlt1uZK4




1. SUSTAINABLE MOBILITYAs a technology pioneer, Groupe PSA demonstrates social responsibility in developing a portfolio of mobility services responsive to changing stakeholder expectations. Its strategy is to be present in all segments of the mobility market.

From the design and manufacturing stages, Groupe PSA is committed to optimising the use of resources by incorporating green or recycled materials into its vehicles to make them recyclable. Through its energy, water and waste practices, it works to reduce the environmental footprint of its production sites and dealership networks.

Focused on major industry challenges and a key enabler of Push to Pass, Groupe PSA’s CSR commitments are organised around 3 pillars: sustainable mobility, economic development of host regions and implementation of innovative, thoughtful social practices focused on the individual. The subject of ongoing stakeholder dialogue and aligned with the UN Global Compact, they reflect a conviction that sustainable financial performance and growth depend on responsible and transparent business practices.

2. HOST REGION ECONOMIC DEVELOPMENT

The Group’s activities have a considerable economic and social impact on its host communities. Groupe PSA recognises the responsibility this entails. As such:

p it selects suppliers that are as close to its production sites as possible and that meet its strict social and environmental standards. By acting responsibly to increase the percentage of local purchases, Group operations contribute to the sustainable economic development of its host regions and countries;

p it supports the least privileged members of society through its corporate foundation, which funds mobility-based inclusion and access to education. It is a testament to the Group’s commitment to serving its host communities.

3. HARNESSING TALENT AND PAVING THE WAY FOR SUCCESS

Groupe PSA’s economic and social performance are intrinsically linked. Reaching its objectives is a matter of effectively channelling energy and resources. The Group prioritises its relationship with employee representatives to define innovative solutions and foster trust and commitment. To support its internationalisation and effectively implement its commitment to employees, it has relied since 2010 on the Global Framework Agreement on Social Responsibility.

STAKEHOLDER DIALOGUE

In 2016, the Group’s dialogue with its stakeholders was based on three core themes:

p future mobility: smart, shared, safe and sustainable;

p employment and workforce policies;

p responsible purchasing: focus on conflict minerals and human rights.

For more information: This strategic Report, section 4.1 Push to Pass strategy. CSR Report, section 1.2 CSR in the creation of value model.

4.3 CSR POLICY: RESPONSIBILITY FULLY INTEGRATED INTO STRATEGY

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Groupe PSA bases its work on a methodology allowing for the verification of the CSR issues the Group must address.

In the initial phase, the list of important CSR issues is drawn up, supplemented by financial elements and then cross-referenced with expectations expressed by stakeholders, provided by the Group’s network of CSR contributors, representing all of its business activities.

In the second phase, all issues are scored so that they can be positioned on the materiality matrix. A specific working group is formed, bringing together the CSR correspondent for the area concerned. Each issue is evaluated from two perspectives: its impact on the Group’s business performance and its importance to stakeholders.

In the third phase, upon completion of this scoring process, the issues are positioned on the materiality matrix. The working group coordinators meet to define three thresholds, thus distinguishing strategic issues – key issues for business models evolution – from those significant – key issues for creation of value – and those substantial – issues linked to challenges and opportunities to monitor and to maintain at the right level. The last step in the methodology consists of the validation of the materiality matrix of CSR issues by the Executive Committee.

Groupe PSA materiality matrix

IMPORTANCE FOR BUSINESS PERFORMANCE

IMP

OR

TAN

CE

OF

TH

E E

XP

EC

TATI

ON

S O

F T

HE

STA

KE

HO

LDE

RS

Industrial pollutants and discharges

Local sourcing in host territories

Balanced distribution of added value

Philanthropy / Socially responsible mobility

Management of company transformations and social dialogue

Occupational health, safety and well-being

Diversity and equal opportunity

Attracting and developping all talents

Responsible information and marketing practices

Ethics inbusiness practicesHuman rights

in supply chain

0

1

2

3

4

0 1 2 3 4

Biodiversity

Vehicle safety

Air quality and vehicle pollutant emissions

Vehicle CO2 emissions

Material use and recycling of products

Water use

Material and waste management in manufacturing

Energy / industrial carbon footprint

Suplly chain environmental performance

Responsible customer data and relationship management

Customer satisfaction /product and service quality

New mobility o�ers

Significant CSR issuesSubstantial CSR issues Strategic CSR issues

Bringing a tangible impact on climate change

Enhancing responsible natural resource use

Meeting growing societal expectation - health and safety

Supporting the balanced economic development of regions

Ensuring protection of human rights

Enhancing competitiveness through the development of human capital

O�ering new mobility solutions adapted to customer needs

Issue linked to the Push to Pass strategy

A CSR POLICY FULLY INTEGRATED TO THE GROUP'S STRATEGY: PERFECT ALIGNMENT BETWEEN THE MATRIX AND PUSH TO PASS

For more information: This Report, section 3.

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For each strategic CSR issue, the Group undertakes a commitment, identifies a specific path towards its targeted goal, and tracks its progress: the level of achievement against each target is published in the Group’s annual CSR Report. The Group’s commitments are defined jointly by the Divisions involved and the Sustainability Department. Members of the Executive Committee are responsible for the level of progress of each commitment, which is publicly disclosed in the CSR Report. Executive Senior Vice-Presidents, depending on their area of responsibility, define action plans to meet the Group CSR targets.

Responsibility is exercised within all of the company's management and executive functions, hence no dedicated CSR body. Ensuring that CSR is central to decisions and actions can significantly boost performance and enables the Groupe to improve its economic and financial efficiency, safeguard the value of its assets, manage risks more effectively and protect its value and sustainability in the medium to long term.


4.4 CSR COMMITMENTS: MEASURING PROGRESS

AMBITION 2025 Reduce average CO2 emissions of vehicles sold worldwide by 30% compared with 2012 levels, to be achieved by:pp a plug-in hybrid petrol-electric powertrain featured in the majority of models sold worldwide;pp a new range of electric vehicles;pp a range of high-performance engines and lighter vehicle platforms, helping to make the Group the European leader in this area.

VEHICULE CO2 EMISSIONS

ACTION PLANSpp Publication of real-world fuel consumption figures (40 major models) in partnership with the NGO Transport & Environment;pp Publication of the associated measurement protocol;pp Continue to downsize petrol engines in China (three-cylinder engines);pp Reduction of CO2 emissions in Brazil;pp Deploy hybrid technologies with different-size engines and battery capacity to meet a wide range of types of use and budgets;pp Optimise internal combustion powertrains (including developing electrification or micro-hybridisation solutions, whose Stop & Start systems are already widely marketed);pp Improve vehicles’ overall fuel efficiency, particularly by optimising vehicle equipment and architecture.

INDICATORSCO2 trend of the Group worldwide (base 100 in 2012):pp 2016 provisional: 86;pp Ambition 2025: 70.

AMBITION 2025 pp Reduce nitrogen oxide emissions of new diesel vehicles by 80% compared with the Group’s Euro 5 vehicles, mainly based on the deployment and optimisation of Groupe PSA’s Selective Catalytic Reduction (SCR) technology;pp Fit all new direct-injection petrol-powered vehicles with particulate filters.

ACTION PLANSTarget 2016 met: pp Identify Euro 6 diesel vehicles to test (representative of sales);pp Measure NOx emissions of six Euro 6 diesel vehicles under real driving conditions using the Real Driving Emissions (RDE) procedure.

Target 2017Test NOx emissions of Euro 6 step 2 diesel vehicles using the Real Driving Emissions (RDE) procedure.

Devote significant resources to R&D in order to identify and market effective technical solutions that can be distributed as broadly as possible.

pp Study a natural-regeneration particulate filter (GPF, gasoline particulate filter) to reduce particulate emissions in number from direct injection petrol vehicles;pp Incorporate the SCR into the particulate filter, resulting in the SCRF (Selective Catalytic Reduction on Filter) system. This new technology is due to be released in 2017 for the Euro 6d-TEMP stage.

INDICATORSpp NOx emissions from Euro 6 vehicles, tested under real driving conditions using the Real Driving Emissions (RDE) procedure, are around 110 to 450 mg/km lower than the Euro 5 vehicles, depending on the vehicle tested;pp The new engine with a high-performance filtration technology, called “diesel particulate filter” (DPF) effectively screens out both fine and ultra-fine particulate matter: 99.7% by number and more than 95% by mass. (source Agency for the Environment and Energy Management (ADEME)).

AIR QUALITY: REDUCING VEHICLE POLLUTANT EMISSIONS

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AMBITION 2025 pp In the Group’s core markets, make each of the three brands the leader of its field in four categories: services, reliability, pre-sale service and after-sale service (measured through benchmark studies in each region).

QUALITY OF VEHICLES AND SERVICES – CUSTOMER SATISFACTION

ACTION PLANSQuality first!

Resources deployed to support product quality… … At the design and engineering phase: pp Perceived quality at the time of purchase: Groupe PSA has drawn up a detailed list of over 1,500 attributes which impact perceived quality. It uses evaluation tools and technical benchmarks to drive its vehicle projects towards the set targets;pp Reliability when new and in use: by optimising technical benchmarks and controlling design and manufacture, both in-house and by Group suppliers, the Group can guarantee measures have been taken to ensure the customer does not experience quality problems and that it can act fast should an anomaly arise;pp Quality in use: specific, more stringent vehicle tests at 60,000 km are also conducted; the Group uses the results to improve the baseline design requirements and manage the ageing of the vehicle after three to five years of use.

… At the production phase:pp 1,800 functional and aesthetic features are checked on every car;pp 50 vehicles per model and per day are test-driven by two professional operators; pp A monitoring and audit plan drawn up by the Quality Assurance Department ensures the plant employees in charge of the daily quality checks meet industry benchmark requirements.

Resources deployed to improve service quality:pp Top-level operational skills: job standards describe the full range of tasks for each key function of the dealership;pp A service quality roadmap: each country is responsible for its own annual Service Quality Plan (deployment of operating standards in each point of sale and control of the delivered quality by each point of sale);pp Ongoing performance measurement and a structured approach: three mechanisms in place to measure the quality performance of dealers a customer quality survey, visits from mystery shoppers, audits of operating standards.

INDICATORSpp Warranty claim rates: result of 57 for a target of 57 (vs. 63 in 2015);pp Recommendation rate: 112 for a target of 114 in sales (vs. 111 in 2015) and 117 for a target of 120 in after-sales (vs. 115 in 2015);pp In China: results of CACSI survey: PEUGEOT was ranked in the 1st Group in aftersales services and CITROËN was ranked in the 2nd Group. Results of JD Power survey: PEUGEOT and CITROËN in the top 3 on CSI/SSI.

VEHICLE SAFETY

AMBITION 2025pp Develop/integrate technologies to offer vehicles with the best, state-of-the-art primary (accident avoidance), secondary (protection during an accident), tertiary (rescue) safety, use security and cybersecurity.pp Enrich these technologies with driver assistance systems, allowing autonomous driving ("mind off" step).pp Bring vehicles to market that are ever safer for their occupants and other road users.

ACTION PLANSAdvance the three types of safety devices: primary (avoiding accidents, improving ground links, control of safety trajectories and distances and man-machine interfaces), secondary (protection during an accident, improving body structure, bodywork, restraints and airbags), tertiary (rescue, especially through emergency call).

Reinforce safety procedures:Active participation in standardisation work on safetysystems in vehicles, to ensure proper optimal functioning in all customer situations.

Establish a repository, a methodology and a dedicated organisation, leveraging a group of experts, on the new threats related to cybersecurity.

Development of the first autonomous vehicle technologies:pp Hands-On: launch of new automated driving functions under driver supervision to alleviate traffic congestion;pp Hands-Off: phased in launch of driver inattention detection functions, night vision with pedestrian recognition, automatic parking, queue assist, etc.;pp Mind-Off: preparation of fully automated driving, redesigned cockpit, etc.

INDICATORSpp 50% of the Group's vehicles sold in 2016 received the maximum score of five stars in EuroNCAP and 100% in China NCAP.pp 2,300,000 PEUGEOT, CITROËN and DS vehicles equipped with Groupe PSA emergency call.pp 17 countries where Groupe PSA’s emergency call service is open.pp Hands-On: new functions launched, including: Lane Keeping Assist, driver inattention detection based on driving time and vehicle movements, active blind spot monitoring and progress with the automatic braking device (PEUGEOT 3008).

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AMBITION 2025 pp Free2Move, Groupe PSA’s new mobility brand, will become its customers’ preferred mobility services provider;pp Groupe PSA is a pioneer in communicating cars and is working towards becoming a first-class provider of mobility services.

AMBITION 2025 pp Anticipate changes in professions and skills by way of permanent systems deployed in the Group’s various host countries.

DEVELOPMENT OF NEW

MOBILITY SOLUTIONS

MANAGEMENT OF COMPANY

TRANSFORMATIONS AND SOCIAL DIALOGUE

ACTION PLANSpp Pooling of all the new Groupe PSA mobility services on a single platform to meet its customers’ different mobility requirements;pp Dedicated finance and insurance packages;pp Development of a wide range of affordable mobility services in response to the new uses and different mobility needs of businesses and individuals.

ACTION PLANSpp The PSA Global Framework Agreement on Social Responsibility;pp Dialogue with employees; pp The human resources development policy: 1. Each Group employee is an active participant in his or her career development, 2. Each manager is responsible for the development of his or her team, 3. Each employee has an annual performance review, 4. Career paths are defined by job family, through each family’s profession, 5. Training is a core investment for the company and for each employee, 6. Job mobility allows interested employees to expand their career horizons and develop their skills.

INDICATORSpp 11 mobility services;pp 1 million regular users.

INDICATORSpp Signature of the “New Momentum for Growth” agreement on July 8, 2016 by five trade unions representing around 80% of employees.

For more information: CSR Report, sections 2. A trendsetter in sustainable mobility / 3. Human resources: enabler of performance / 4. Responsible supply chain management / 5. Reducing the environmental impact of manufacturing and logistics operations.

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CREATION OF VALUE: SHARED AND LASTING VALUE FOR STAKEHOLDERS

5.1 FOR LONG-TERM INVESTORS: SUSTAINING GROWTH

A SECURED LONG-TERM FINANCIAL PERFORMANCE

Setting targets for profitable organic growth

Average current operating margin of more than 4.5% for the Automotive Division for 2016-2018, with a target of 6% by 2021.

10% growth in the Group’s revenue between 2015 and 2018, targeting an additional 15% by 2021.

2016 credit ratings Ba2/outlook stable in April 2016 for Moody’s.

BB+/outlook stable in November 2016 for Fitch.

A stable and balanced capital structure supporting the rollout of strategic projects with the ability to sustain its performance for the third consecutive year

Growth in current operating margin of the Automotive Division, which stood at 6% in 2016 versus 5% in 2015.

5.8% growth in volumes at 3.15 million vehicles in 2016.

A net financial position of nearly €7 billion, compared with €4.6 billion in 2015, due to €2.7 billion in positive free cash flow.

A proven ability to form partnerships with responsible and innovative companies, including start-ups

In September 2016, Groupe PSA joined forces with Montreal-based investment fund MacKinnon, Bennett & Co. (MKB), to take a stake in the car-sharing service Communauto, available in North America and Paris (France), with 50,000 regular users.

An internal audit and risk management frameworkincluding ESG (environmental, social and governance) risks

RobecoSam awarded Groupe PSA a score of 100/100 for the “materiality” criterion in 2016.

A robust compliance and ethics system in the most vital areas: competition, anti-corruption, personal data and homologation

96 employees work to prevent fraud.

5

After achieving the objectives of its Back in the Race recovery plan in 2015, three years earlier than expected, Groupe PSA’s priority is to secure its long-term financial performance.

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CREATION OF VALUE: SHARED AND LASTING VALUE FOR STAKEHOLDERS5

A PERFORMANCE SHARED EQUALLY AMONG ALL STAKEHOLDERS

Transparent and effective decision-making processes A two-tier governance structure: Executive Committee and Supervisory Board.

A compensation policy for the Managing Board based on performance and a long-term view

The compensation structure for the Managing Board members consists of an annual fixed part, an annual variable part (80% collective targets, 20% individual) and a long-term compensation plan (performance shares).

A sustainable dividend policy Based on a payout ratio of 25% from the 2016 financial year.

In 2016, for the first time in six years, a dividend of €0.48 per share was put to the vote at the Shareholders’ Meeting.

INDICE GLOBAL 100

KNIGHTSCORPORATE

GLOBAL 100 INDEX

KNIGHTSCORPORATE

For more information: This Report, section 4. CSR Report, section 1.3.3.1 Value created for its long-term investors. “Creator of lasting value” Groupe PSA video.

A presence in all major SRI (social responsible investment) indices, at August 1, 2017

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https://www.youtube.com/watch?v=alWBlt1uZK4

CREATION OF VALUE: SHARED AND LASTING VALUE FOR STAKEHOLDERS55.2 FOR CUSTOMERS: ANTICIPATING AND RESPONDING TO EXPECTATIONS

Groupe PSA’s CSR policy makes customers central to the company’s processes.

A PERSONALISED CUSTOMER/BRAND RELATIONSHIP

A unique connected experience The objective is a best-in-class customer experience with 700,000 connected customers in 2021.

A unique transparent and shareable experience With CITROËN ADVISOR, it already gives them the opportunity to share their customer experience with the brand’s other customers.

By striving for complete transparency towards customers, this system has been certified by the French standards association AFNOR for its built-in guarantee of reliability and full disclosure of posted comments.

A unique and so simple experience The DS brand is rolling out its ONLY YOU programme, which via “DS AT YOUR SERVICE” offers a unique multi-channel gateway for responding to requests and queries and interacting with existing and prospective customers.

A RELATIONSHIP OF TRUST BUILT ON TRANSPARENCY

Provide customers with better information In November 2015, Groupe PSA announced a unique initiative: it now gives customers access to an independent and certified measure of their real-world fuel consumption, on the PEUGEOT, CITROËN and DS brand websites.

It has joined forces with two NGOs – Transport & Environment and France Nature Environnement. Together they have developed a measurement protocol certified by Bureau Veritas.

GROUPE PSA 18


EASY, SAFE AND SHARED MOBILITY

Free2Move, the freedom of movement

8,100 vehicles are now available for hire through PEUGEOT Rent.

In September 2016, Groupe PSA announced that vehicles would be added to Bolloré’s car-sharing systems in Paris, Lyon and Bordeaux.

In December 2016, launch in Madrid of emov, a car-sharing service equipped with 500 CITROËN C-Zéro electric vehicles: already 100,000 users and 1,000 new customers registered every day.

VEHICLES THAT MEET THE HIGHEST QUALITY AND SAFETY STANDARDS IN ALL MARKETS

Quality is one of the linchpins of the Group’s strategy

Recommendation rate of customers in quality of service surveys between 2011 and 2016:

+12 points for new vehicle purchases

+17 points for after-sales service

Safety is a vital component of mobility

E-call (emergency call system): Groupe PSA has two million connected vehicles, helping to improve road safety.

8 models with five stars in the EURO NCAP rating system.

12 models with five stars in the CHINA NCAP rating system.

BENEFICIAL TOTAL COST OF OWNERSHIP (TCO)

A reduction of Total Cost of Ownership (TCO)

At the Automotive & Business Awards in June 2016, the Connect Fleet Management service ranked second in the “Business Service of the Year” category.

In January 2016, the CITROËN C3 Picasso PureTech 110 BVM won the Best Buy Award from UK magazine What Car? (for its low running costs).

The new PEUGEOT Expert and CITROËN Jumpy were jointly voted best commercial vehicles at the 12th MAAF Auto Environment Awards 2016 (in recognition of their low fuel consumption and CO2 and pollutant emissions).

Around €170* saved per month in vehicle usage costs by business customers in France, compared to the previous model of this same vehicle, thanks to the environmental performance improvements of the PureTech engine.

* Comparison between a Euro 5 standard CITROËN C4 120 hp petrol engine passenger vehicle and a Euro 6 standard 130 hp passenger vehicle based on annual mileage of 30,000 km and a fuel price of €1.40/l.

For more information: CSR Report, section 1.3.3.2 Value created for employees.

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5.3 FOR EMPLOYEES: BEING A RESPONSIBLE EMPLOYER

Groupe PSA has adopted a business strategy based on an organic, profitable and sustainable growth plan, Push to Pass. In order to capitalise on all development opportunities, the Group’s employees play a major role in its strategic plan. Together with employee representatives and the unions, the Group is fostering a culture in which everyone works together to build the future, and where teams can compete to express and develop their talent.

For more information: CSR Report, section 1.3.3.2 Value created for employees.

TO DEVELOP IN A CULTURE WHERE SOLUTIONS ARE DESIGNED COLLABORATIVELY

Make the quality of the dialogue and mutual trust with unions a competitive advantage for the company

95% of employees are covered by collective agreements.

98% of employees are represented by trade unions or employee representatives.

79 unions involved in monitoring the commitments of the global framework agreement on CSR.

In early 2017, the Group renewed its Global Framework Agreement with the IndustriALL trade union federations.

TO TAKE OWNERSHIP OF THEIR CAREER BY DEVELOPING THEIR SKILLS

Progressing and diversifying skills 76% of employees completed at least one training course during the year.

More than 3,300 employees have benefited from the opportunity to learn a new trade within the Group since 2012, as part of the “Top Compétences” scheme.

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LEADER IN HEALTH AND SAFETY: LEVELS HIGHER IN 2016 THAN EVER BEFORE, AMONG THE BENCHMARK COMPANIES IN THE AUTOMOTIVE INDUSTRY

0

1

2

3

4

5

2009 2010 2011 2012 2013 201620152014

4.63

3.87

2.421.99

1.191.38

1.161.18

Total lost-time occupational accident frequency rate*(Total for the year)

* Lost-time occupational accident frequency rate includes Group employees and temporary employees. It corresponds to the number of lost-time occupational accidents times one million divided by the number of hours worked.

TO WORK IN AN ENVIRONMENT THAT PROMOTES HEALTH AND WELL-BEING

An industry leader in workplace health and safety

The frequency of workplace accidents is 18 times less than the average measured in the metalworking industry in France.

26 facilities out of 42 have already achieved a lost-time incident frequency rate less than or equal to 1 point in 2016.

Rethinking the workplace relationship due to the possibilities afforded by new technology

3,000 employees already work from home in France and employees are allowed to work from home for 25 days a year.

To work from home: option now available in other countries, including Brazil, Argentina, Spain and Belgium.

TO SHOWCASE TALENTS IN AN INCLUSIVE ENVIRONMENT

Promoting diversity and combating discrimination

The first “Professional equality” certified company in 2005.

Certified under France’s Diversity label since 2009, recognising good human resources practices to promote diversity and equal opportunity and to prevent discrimination.

A “Youth employment” policy Integrating apprentices and trainees on work-study placements

3,028 trainees on work-study placements (including apprentices) in 2016.

Keeping older employees at work and motivated

32.6% of the Group’s workforce are older employees.

Committed to hiring and retaining employees with disabilities

5,375 employees with disabilities worldwide.

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Groupe PSA’s suppliers play an important role in enabling it to meet its CSR commitments. Suppliers must meet the company’s strict social and environmental standards, extending the benefits to all stakeholders and contributing to Groupe PSA’s commercial opportunities with customers. In addition to qualifying to do business with Groupe PSA in meeting its CSR criteria, suppliers also benefit by improving their product quality, optimising their processes and gaining visibility in new markets.

5.4 FOR SUPPLIERS AND PARTNERS: MAKING AN EXTENDED COMMITMENT

Change in CSR performance of suppliers assessed between 2008 and 2016 75 audits of critical suppliers since 2008

Initial audits After action plans

0%

20%

40%

60%

80%

100%

Compliant Room for improvement

Removed from supplier panel

Non-compliant Critical

52 suppliers audited75 audits performed (initial audit + follow-up audit)

For more information: CSR Report, section 1.3.3.3 Value created for its suppliers and partners.

BOOST INNOVATION

Involving its core and strategic suppliers to meet commitments on reducing CO2 and pollutants emissions, the autonomous vehicle, etc. at a cost acceptable to customers

More than 100 suppliers involved in co-innovation.

BOOST EFFICIENCY

Helping suppliers find solutions to improve their product quality or optimise their processes

40 PSA worldwide, monozukuri coordinators with more than 100 suppliers involved.

.

BOOST ECONOMIC PERFORMANCE

Boosting their prospects by increasing their visibility in new markets

More than 20 new suppliers now based in Morocco, where Groupe PSA has opened a plant, in Kenitra.

Creating commercial opportunities with customers who regard CSR criteria as a key aspect of the supplier selection and listing process

17 strategic suppliers obtaining a minimum overall score of 50/100 in the third-party CSR assessment.

52 Core suppliers obtaining a minimum overall score of 45/100 in the third-party CSR assessment.

More than 7,000 other suppliers asked to obtain or commit to obtaining a minimum overall score of 45/100 in the third-party CSR assessment.

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The Group employs over 170,000 people worldwide. Very often, the Group is one of the leading private employers in the regions where it has manufacturing operations. As a core economic player, it assumes its social responsibility commitments in its various host communities.

5.5 FOR HOST COMMUNITIES AND CIVIL SOCIETY: BEING A RESPONSIBLE CITIZEN

CONCRETE ACTIONS IN THE SOCIAL AND SOLIDARITY ECONOMY

Facilitating access to mobility for vulnerable or disadvantaged members of society

In 2016, the PSA Foundation supported 22 solidarity garages in France with over 9,000 beneficiaires.

€10.3 million donated to community organisations, including €6.1 million for employment schemes and €2.9 million for educational or cultural initiatives.

The leading buyer from companies that only employ people with disabilities in France

Services purchased from companies that only or predominantly employ people with disabilities represent €38 million in value added.

PUBLIC PLEDGES TO SUPPORT THE ECONOMIC DEVELOPMENT OF HOST COUNTRIES

High local sourcing rate The aim in the Kenitra plant in Morocco is to achieve a local sourcing rate of 80%.

Consolidation of the automotive industry in France Groupe PSA is the country’s leading car manufacturer with more than one million vehicles and 80% of its engines and gearboxes manufactured in France in 2016.

A positive contribution to the French trade balance as the leading car manufacturer and second largest contributor across all business sectors

An import/export surplus of 328,000 vehicles and a trade surplus of €4,816 billion in 2016.

Groupe PSA’s Business Lab, a response to fast-changing automotive uses to identify, experiment and transform opportunities into new businesses

The Group set up an investment fund of €100 million to develop mobility activities.

ACTIVE CONTRIBUTION NOW AND IN THE FUTURE, TO ROAD SAFETY FOR EVERYONE

The first mainstream car manufacturer to have deployed a wide-scale, location-aware emergency call system

Groupe PSA has 2 million connected vehicles, helping to improve road safety.

The first car manufacturer to receive the required authorisations to test its autonomous prototypes on the open road

100,000 km travelled in autonomous mode by Groupe PSA vehicles on Europe’s roads as of the end of 2016.

hands on

My autonomous car...

Starting now 2020

. . . will take over withoutmy supervision

After 2020

. . . will handle allsituations

2025

driverless. . . will be completelyautonomous

2030

. . . helps me and adjustsits speed/distancewhen asked

. . . will take over undermy supervision

For more information: CSR Report, section 1.3.3.4. Value created for host communities and civil society.

GROUPE PSA 23



Given the nature of its business and its international presence, Groupe PSA is an economic actor committed to fulfilling its environmental responsibilities.

5.6 FOR THE ENVIRONMENT: PRESERVING OUR PLANET

TECHNOLOGICAL CHOICES FOR A TANGIBLE IMPACT ON CLIMATE CHANGE AND AIR QUALITY

A reduction in the use of fossil fuels with 50% of its R&D budget spent on clean tech

Seven plug-in petrol hybrid vehicles will be launched between 2019 and 2021.

Five electric vehicles will be launched between 2019 and 2021.

In 2016, the Group was the leader in EU-22 with an official average CO2 emissions of 102.4 g/km, compared with the market average of 118.2 g/km.

Air quality as the focus of R&D programmes, introducing technologies drastically reducing nitrogen oxide and particulate emissions

Inventor of the diesel particulate filter (DPF), which it began selling in 2000, more than nine years before Euro 5 standards made it compulsory.

Groupe PSA was the first car manufacturer to introduce SCR (Selective Catalytic Reduction) technology in 2013, reducing nitrogen oxide emissions by up to 90%.

TANGIBLE RESULTS FOR THE CIRCULAR ECONOMY AND SUSTAINABLE MANAGEMENT OF MATERIALS

A commitment to the circular economy to facilitate end-of-life recycling, with preference given to green materials

All Group vehicles are 95% recoverable.

100% of metal waste is recycled.

Improving its processes to reduce the amount of waste and increase recycling

In 20 years, waste production per manufactured vehicle has been halved.

100% of metal waste is recycled.

13,000 tonnes of waste avoided per year at Sept-Fons through the regeneration of casting sand.

Two types of spare parts originating from the circular economy

The “standard replacement parts” service (reconditioned parts and sub-assemblies) and “parts for reuse” service (parts recovered from end of life vehicles).

Collecting and processing end of life vehicles from its dealership networks through partnerships with specialist operators

Close to 820,000 end of life vehicles processed via the Group’s dealer networks between 2009 and 2016 in France.

A PROACTIVE INITIATIVE FOR CARBON OFFSETTING AND BIODIVERSITY

The PEUGEOT-ONF carbon sink project sponsored in the Amazon, involving reforesting vast areas of degraded land and restoring biodiversity in the Brazilian state of Mato Grosso

An area of 1,800 hectares of virgin forest with high biodiversity value has been devoted to scientific research since 2009.

548,930 tonnes of CO2 equivalent sequestered by the biomass and soil in 18 years. For more information: CSR Report, section 1.3.3.5. Value created for the environment.

GROUPE PSA 24


METHODOLOGY OF THE REPORTAn internal working group jointly coordinated by the Sustainability Department and the Strategy Department lent its expertise over the entire course of the report’s preparation.

Unless otherwise indicated, data in this report is as of December 31, 2016.

This report does not include information about Opel/Vauxhall.

TARGET AUDIENCE FOR THIS REPORT The information in this report is intended for all Groupe PSA stakeholders, including shareholders, long-term investors, customers, suppliers, partners, host communities, civil society and NGOs.

[email protected]

APPENDICES – ABOUT THIS REPORT

ANNUAL RESULTS

20

16

REGISTRATION DOCUMENT

Including the annual financial report

20

16

CORPORATESOCIAL

RESPONSIBILITYREPORT

20

16

RELATED PUBLICATIONS

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https://www.groupe-psa.com/content/uploads/2017/02/Presentation_FY_2016_VDEF-online-1.pdf

https://www.groupe-psa.com/content/uploads/2017/05/PSA_AG_2017_va_site.pdf

http://pushtopass.groupe-psa.com/index_en.php



PEUGEOT S.A.Incorporated in France with issued capital of €904,828,213Governed by a Managing Board and a Supervisory Board

Registered Office: 7, rue Henri Sainte-Claire Deville - CS 60125 F-92563 Rueil-MalmaisonR.C.S. Nanterre - APE 70102 - France - siret 552 100 554 00047

groupe-psa.com

Photo credits: GROUPE PSA - Julien CRESP - Mohamed ECH CHARQUI - Monique DUPONT-SAGORIN - Patrick CURTET - Alexis GUILLOT - PEUGEOT STYLE - Jérôme LEJEUNEAdvisory and Design: CAPITALCOM - Layout and production: LABRADOR


http://www.peugeot.fr/accueil.html


htpp://www.labrador-company.com

Documents

CREATION OF VALUE FOR STAKEHOLDERS …...momentum for Groupe PSA and can be summed up in three words: performance, accountability, transparency. First, performance. The efforts made