Version VA Full 20180316 - groupe-psa.com · 4 - Groupe PSA 2017 Annual Results Groupe PSA has continued its product offensive in the region, where it has successfully launched the

20202020

171717ANNUAL RESULTS

Groupe PSA 2017 Annual Results - 1

2017 Annual Results

CONTENTS

I. MANAGEMENT AND SUPERVISORY BODIES

AT 31 DECEMBER 2017 .................................................................... 2

II. ANNUAL MANAGEMENT REPORT .................................................. 3 1. Group activities ................................................................................................................................... 3

2. Analysis of consolidated annual results ............................................................................................. 5

3. Financial position and cash ................................................................................................................. 8

4. Risk factors and uncertainties ............................................................................................................ 9

III. CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2017 .................................................................. 11

Consolidated statements of income ....................................................................................................... 12

Consolidated statements of income and expenses recognised in equity ............................................. 14

Consolidated balance sheets ................................................................................................................. 16

Consolidated statements of cash flows .................................................................................................. 18

Consolidated statements of changes in equity ....................................................................................... 20

Notes to the consolidated financial statements at 31 December 2017 ................................................. 21

IV. STATUTORY AUDITORS’ REPORT ON THE 2017 CONSOLIDATED FINANCIAL STATEMENTS ................................. 97

2 - Groupe PSA 2017 Annual Results

I. MANAGEMENT AND SUPERVISORY BODIES

AT 31 DECEMBER 2017

Supervisory Board

CHAIRMAN

Mr LOUIS GALLOIS OTHER SUPERVISORY BOARD MEMBERS

Mr Geoffroy ROUX DE BÉZIEUX (Vice-President and Independent Member)

ETABLISSEMENTS PEUGEOT FRERES, represented by Mrs Marie-Hélène PEUGEOT RONCORONI (entitled Vice-Chairman pursuant to the Shareholders’ Agreement)

DONGFENG MOTOR (HONG KONG) INTERNATIONAL CO. LTD., represented by Mr. LIU Weidong (entitled Vice-Chairman pursuant to the Shareholders’ Agreement)

Mrs Catherine BRADLEY

Mrs Pamela KNAPP

Mr Jean-François KONDRATIUK (employee representative member)

Mrs Helle KRISTOFFERSEN

BPIfrance Participations, represented by Mrs Anne GUERIN (entitled as Vice-Chairman pursuant to the Shareholders’ Agreement) (co-opted by the Supervisory Board of July 25, 2017)

Mr An TIECHENG (co-opted by the Supervisory Board of July 25, 2017)

Lion Participations, représentée par M. Daniel BERNARD (co-opted by the Supervisory Board of July 25, 2017)

FFP, represented by M.Robert PEUGEOT

Mr Henri Philippe REICHSTUL

Mrs Bénédicte JUYAUX (employee shareholder representative member) NON-VOTING ADVISORS

Mr Frédéric BANZET

Mr Alexandre OSSOLA (appointed by the Supervisory Board of July 25, 2017)

Mr Lv HAITAO (appointed by the Supervisory Board of July 25, 2017)

Managing Board

CHAIRMAN Mr Carlos TAVARES MEMBERS OF THE MANAGING BOARD Mr. Jean-Baptiste CHASSELOUP de CHATILLON Mr. Maxime PICAT Mr. Jean-Christophe QUEMARD


II. ANNUAL MANAGEMENT REPORT

1. GROUP ACTIVITIES

1.1. Overview of sales activities

Strong acceleration in 2017: Groupe PSA worldwide sales up 15.4%

Groupe PSA sold 3,632,300 1 vehicles worldwide 4th consecutive year of improvement in Groupe PSA sales Successful SUV product offensive supporting the Group’s profitable growth

Strengthening European leadership in Light Commercial Vehicles (LCV) for PEUGEOT and CITROËN, with a 20.2% market share

The Push to Pass plan’s SUV offensive accelerates and the five SUV models launched in the past 18 months have enjoyed growing success. Overall, SUV sales accounted for 23% of consolidated sales at the year-end.

PEUGEOT brand sold nearly 600,000 SUVs in 2017 worldwide and ranks 2nd in the SUV European market with a strong expansion of nearly 60%.

With 259,300 PEUGEOT 3008 SUVs sold globally in 2017, the PEUGEOT brand enjoyed sustained demand for the model, which was named Car of the Year 2017 in Europe and recognised by 38 additional awards worldwide. PEUGEOT also benefited from the success of the new PEUGEOT 5008 launched in March 2017, with 85,900 units sold, and the positive performance of the PEUGEOT 4008 in China, with 51,500 units.

In autumn 2017, CITROËN kicked off its SUV offensive in China with the C5 Aircross, launched in September, and in Europe with the C3 Aircross, launched in October. Each model sold around 22,700 and 35,400 units, respectively, and will be rolled out worldwide in 2018.

At the end of February 2017, DS Automobiles debuted its first SUV, DS 7 CROSSBACK, and opened up online reservations for the La Première limited edition model. In October, the brand launched its exclusive network in parallel with order taking for all the line-up’s versions. The first deliveries are set for February 2018.

In 2017, OPEL and VAUXHALL rationalized the channel mix, in line with PACE! turnaround plan and led a record-breaking product offensive in 2017, with two new SUVs, the Crossland X and Grandland X, launched in May and September with sales of 33,900 and 18,700 units, respectively.

In 2017, Groupe PSA reported its best LCV sales ever, with 476,500 units sold, up 15% on 2016. And with Passenger Car derivatives (PEUGEOT Traveler and CITROËN SpaceTourer for example) these are 658,000 units sold by the Group in 2017.

The PEUGEOT and CITROËN brands strengthened the Group’s leadership status in Europe, where it holds a market share of 20.2% in LCV (1.3 point market share gain) allowing the Group to capture more than 50% of European LCV market growth thanks to the new PEUGEOT Expert and CITROËN Jumpy.

Outside Europe, the Group’s LCV offensive also began to deliver results. In Eurasia, sales were up 55% before the start of local production of new PEUGEOT Expert and CITROËN Jumpy planned in the first half of 2018. In Latin America, sales increased 13% and a full range of renewed products and a complete range of services will be offered in 2018.

In Europe, consolidated sales came in at 2,378,600 units, representing a year-on-year increase of nearly 450,000 vehicles (up 23.2%), of which 376,400 OPEL and VAUXHALL units since 1 August 2017.

Groupe PSA’s market share increased in all of the Group’s main host countries, excluding the United Kingdom. For the first time since 2010, the Group added 0.3 points to its market share (11.1%) from PEUGEOT, CITROËN and DS sales alone.

On top of increased sales of SUVs and LCVs, the Group benefited from the successful launch of the PEUGEOT 308 (166,000 units sold), CITROËN C3 (217,000 units sold), and OPEL Insignia, available in three models, the Sports Tourer, Grand Sport and Country Tourer (total 40 600 units sold from August to December 2017).

In addition, the PEUGEOT 2008 and OPEL Mokka ended the year second and third, respectively, in their segment.

DS Automobiles continued to develop its network, with 150 locations now dedicated to marketing the first-ever second generation DS model, the DS 7 CROSSBACK.

In the Middle East & Africa region, consolidated sales increased by 61.4% year on year at 618,800 units, of which 26,800 for the OPEL brand.

This performance was driven by the Group’s development in Iran (444,600 units sold in 2017) and higher sales in Turkey, Israel and the French overseas departments.

1 As from 1 August 2017, the Group’s scope of consolidation includes the sales volumes of OPEL and VAUXHALL, together representing 403,900 units

sold between August and December.


Groupe PSA has continued its product offensive in the region, where it has successfully launched the new CITROËN C3 the new PEUGEOT 3008 SUV, and the new PEUGEOT Pick Up, which marks the brand’s history-making return to its legitimate place in the segment.

OPEL is in the midst of a product offensive in the region having recently launched the new Insignia and Crossland X and with the launch of the new Grandland X slated for early 2018.

For the DS brand, 2017 marked the development of a dealer network across the region ahead of the market launch of the DS 7 CROSSBACK in the coming months.

The year also saw the production start-up and market launch of the PEUGEOT 2008 SUV in Iran, and the creation of an Iranian joint venture between CITROËN and SAIPA based at the Kashan plant. The Group continued to expand its manufacturing base, breaking ground on the Kenitra plant in Morocco, starting up local production in Kenya and Ethiopia, and signing a memorandum of understanding to set up a new plant in Oran, Algeria.

In China & Southeast Asia, in a difficult economic environment, the Group sold 387,000 vehicles. Showing the first signs of a sales recovery, the Group has seen a rise in sales since July, and a market share gain of 0.3 points in second-half 2017 compared with the first half. The SUV line-up proved to be a triumph, with the successful launch in 2017 of the PEUGEOT 4008 and 5008, and the CITROËN C5 Aircross. It is worthy to note that sales volumes for the new PEUGEOT 308 and the CITROËN C5 and C6 were stable versus 2016, despite weaker demand in this market segment.

In Southeast Asia, Groupe PSA has been accelerating its development, particularly in Vietnam with the successful launch of the PEUGEOT 3008 and 5008 SUVs. The vehicles are now produced locally at THACO’s plant in Chu Lai, just nine months after a new assembly agreement was signed.

In June 2017, Groupe PSA signed an agreement to step up its cooperation with ChangAn Automobile, establishing a solid foundation for faster expansion of the DS brand. Presented at Auto Shanghai, the DS 7 CROSSBACK will be brought to market at the start of the Beijing Motor Show.

Further rebound in Latin America, with sales climbing 12.2% to 206,300 units.

In Latin America, PEUGEOT sales rose 11.1% due to strong momentum in most of the region’s markets. The PEUGEOT 3008 and 5008 SUVs were launched very successfully in every country and sales have exceeded targets. The PEUGEOT Expert, recently launched in Brazil and Argentina and produced in Uruguay, also promises to be a success.

CITROËN’s sales were up 13.8% in most of the region’s markets. For example, sales in Chile jumped 47% thanks to the tremendous success of the new CITROËN C3 and the solid performance delivered in the LCV segment, with Berlingo leading the way. The CITROËN Jumpy, produced in Uruguay and marketed in Brazil and Argentina, has been well received, suggesting that demand for the vehicle will be strong in 2018.

DS Automobiles recorded sales growth of 21.6%, led by Argentina’s performance, where the brand ranks fourth in the premium automotive market thanks to the DS 3, the leading vehicle in its class for the fourth year in a row.

India-Pacific reports 26,100 cars sold and 31% growth.

In Japan, the Group grew by 20% and recorded its best performance in more than 20 years. A sales recovery is under way in Australia and New Zealand, where two new importers have been appointed, resulting in sales almost tripling compared to 2016. Sales for the French Pacific overseas territories continued to rise sharply (up 40%) and South Korea’s performance was in line with that of 2016.

PEUGEOT contributed significantly to this growth, reporting a 37% increase in sales driven by the successful launch of the PEUGEOT 3008 and 5008.

CITROËN’s sales also rose sharply (up 36%) thanks to strong demand for the new C3.

In Eurasia, sales were up 45%, outpacing the auto market. The Group made headway in the region’s major markets, including Russia (up 38%) and Ukraine (up 62%), with a total of 15,200 units sold.

Sales of the new PEUGEOT 3008 SUV were significantly ahead of the previous generation’s performance, accounting for 21% of the brand’s volumes, and helping to drive its volumes up 50.7%. The momentum in sales for CITROËN’s Grand C4 Picasso (up 126%), particularly in the BtoB segment, also pushed up the brand’s sales, by a strong 33.4% in Eurasia.

Groupe PSA’s LCV segment sales rose 55%. Local production of the PEUGEOT Expert, CITROËN Jumpy, PEUGEOT Traveller and CITROËN SpaceTourer in Kaluga, Russia as from 2018 is expected to enable the Group to achieve even faster sales growth in Eurasia.

1.2. Consolidated worldwide sales

The consolidated worldwide sales by brand, by geographical area and by model are available on the Groupe PSA website (www.groupe-psa.com).


2. ANALYSIS OF CONSOLIDATED ANNUAL RESULTS The Group's operations are organised around five main business segments described in Note 4 to the consolidated financial statements at 31 December 2017. Subsequent events are presented in Note 19 to the financial statements.

2.1. Group profit (loss) for the period

(in million euros) 31 December 2016 31 December 2017 Change

Revenue 54,030 65,210 11,180

Recurring operating income 3,235 3,991 756

As a percentage of revenue 6.0% 6,1%

Non-recurring operating income and expenses (624) (904) (280)

Operating income 2,611 3,087 476

Net financial income (loss) (268) (238) 30

Income taxes (517) (701) (184)

Share in net earnings of companies at equity 128 217 89

Profit (loss) from operations held for sale or to be continued in partnership* 195 (7) (202)

Consolidated profit (loss) for the period 2,149 2,358 209

Profit (loss) for the period attributable to owners of the parent 1,730 1,929 199* Including "Other expenses related to the non-transferred financing of operations to be continued in partnership"

2.2. Group revenue

The table below shows consolidated revenue by division:


Automotive Peugeot Citroën DS 37,066 40,735 3,669

Automotive Opel Vauxhall - 7,238 7,238

Faurecia 18,710 20,182 1,472

Other businesses and eliminations* (1,746) (2,945) (1,199)

Revenue 54,030 65,210 11,180

* Including the activities of Banque PSA Finance not covered by the partnership signed with Santander Consumer Finance

Peugeot Citroën DS (PCD) Automotive revenues were up 9.9% compared to 2016, mainly thanks to the favourable effect of product mix (+4.5%), of volumes and country mix (+4.9%) and of sales to partners (+1.5%) that more than compensates the negative impact of adverse exchange rate changes (-1.6%). Opel Vauxhall (OV) Automotive revenues amounted to €7,238 M for the last 5 months of 2017. At constant exchange rates and perimeter (excluding OV), Group revenues were up 12.9% compared to 2015, year of reference of Groupe PSA strategic plan of profitable growth Push to Pass.

2.3. Group Recurring Operating Income

The following table shows Recurring Operating Income by business segment:


Automotive Peugeot Citroën DS 2,225 2,965 740

Automotive Opel Vauxhall - (179) (179)

Faurecia 970 1,170 200

Other businesses and eliminations* 40 35 (5)

Recurring operating income 3,235 3,991 756

* Including the activities of Banque PSA Finance not covered by the partnership signed with Santander Consumer Finance


In 2017, the PCD Automotive recurring operating margin, which corresponds to the ratio of the PCD Automotive recurring operating income to the PCD Automotive revenues, stood at 7.3% compared to 6% in 2016. OV Automotive recurring operating margin stood at -2.5% for the last 5 months of 2017.

Group recurring operating margin excluding OV stood at 7.1% and Group recurring operating margin including OV stood at 6.1% compared to 6% in 2016.

The 33.3% increase in the PCD Automotive recurring operating income was due to the company's improved performance (+€1 270 million), despite an unfavourable operating environment (-€530 million):

- the negative effect of the PCD Automotive division’s operating environment stemmed from a (€492) million effect of "foreign exchange and others", associated essentially with the weakening of the pound sterling and of the Argentinian peso and higher raw material and other external costs amounting to (€358) million. These effects were partially offset by stronger markets totalling +€320 million;

- the improved performance of the PCD Automotive business was due essentially to a very positive product mix effect amounting to +€904 million, as well as lower production and fixed costs amounting to +€498 million, and improved market share and country mix for +€38 million. These effects were partially offset by a negative price and product enrichment effect of (€44) million, as well as other effects (-€134 million).

OV Automotive recurring operating income stood at (€179) million for the last 5 months of 2017. Faurecia’s recurring operating income was €1 170 million, up €200 million.

2.4. Other items contributing to Group profit (loss) for the period

Non-recurring operating income and expenses represented a net expense of (€904) million compared to (€624) million in 2016. They primarily included PCD Automotive division restructuring costs totalling (€426) million – mainly in Europe for (€375) million, OV Automotive division totalling (€440) million – and Faurecia Group for (€86) million. Net financial income and expenses amounted to (€238) million, an improvement of €30 million versus 2016. See Note 12 to the consolidated financial statements at 31 December 2017.

The income tax expenses amounted to (€701) million in 2017 compared to (€517) million in 2016. See Note 14 to the Consolidated Financial Statements at 31 December 2017. The share in net earnings of companies at equity totalled €217 million in 2017, compared to €128 million in 2016. The contribution of the Dongfeng joint ventures (DPCA and DPCS) represented (€30) million, down €272 million. Changan PSA Automobiles Co., Ltd (CAPSA) made a negative contribution of (€24) million in 2017 compared to (€292) million in 2016. See Note 11.3 to the consolidated financial statements at 31 December 2017. The contribution of the joint ventures under the partnership between Banque PSA Finance and Santander Consumer Finance amounted to €201 million, up €20 million. See Note 11.3 to the consolidated financial statements at 31 December 2017. The contribution of the joint ventures under the partnership between Banque PSA Finance and BNP Paribas covering the financing activity of OV amounted to €8 million in 20172. See Note 11.3 to the consolidated financial statements at 31 December 2017.

The profit from operations held for sale or to be continued in partnership, including "Other expenses related to the non-transferred financing of operations to be continued in partnership", amounted to (€7) million compared to 195 million euros in 2016.

The net income, Group share, of €1,929 million was up €199 million. Basic earnings per share were €2.18 versus €2.16 in 2016. And diluted earnings per share were €2.05 up from €1.93 in 2016. A dividend of €0.53 per share will be submitted for approval at the next Shareholders’ Meeting with an ex-dividend date considered to be on May 2nd 2018, and the payment date on May 4th 2018.

2 This contribution represents 2 months of activity of Opel Vauxhall Finance since the date of the closing on November, 1st 2017


2.5. Banque PSA Finance

The results (at 100%) of finance companies are presented below*.


Revenue 1,405 1,476 71

Net banking revenue 1,026 1,145 119

Cost of risk** 0.24% 0.27% +0.03 pt

Recurring operating income 571 632 61

Penetration rate 30.8% 30.0% (0.8) pt

Number of new contracts (leasing and financing) 767,848 845,755 77,907

* These results of BPF for 2017 include the result of 2 months of Opel Vauxhall Finance activities since November, 1st 2017.

** As a percentage of average net loans and receivables

2.6. Faurecia


Revenue 18,710 20,182 1,472

Recurring operating income 970 1,170 200

As a % of revenue 5.2% 5.8%

Operating income 864 1,075 211

Net financial income (expense) (163) (133) 30

Consolidated profit (loss) for the period 706 708 2

Free cash flow 1,011 129 (882)

Net financial position (475) (646) (171)

More detailed information about Faurecia is provided in its annual report which can be downloaded from www.Faurecia.com.

2.7. Outlook

Market outlook In 2018, the Group anticipates a stable automotive market in Europe and growth of 4% in Latin America, 10% in Russia, and 2% in China. Operational outlook improved The objectives of the Push to Pass plan for the Groupe PSA (excluding Opel Vauxhall) are to:

- deliver over 4.5% Automotive recurring operating margin3 on average in 2016-2018, and target over 6% by 2021;

- deliver 10% Group revenue growth by 20184 vs 2015, and target additional 15% by 20214.

The objectives for Opel Vauxhall are:

- deliver 2% Automotive recurring operating margin3 for OV by 2020, and target 6% by 2026;

- deliver positive operational Free Cash Flow by 20205.

3 Recurring operating income related to revenue 4 At constant (2015) exchange rates and perimeter 5 Defined as ROI + D&A - restructuring - capex - Capitalized R&D - change in WRC


3. FINANCIAL POSITION AND CASH

3.1. Net financial position and financial security of manufacturing and sales companies

The net financial position of manufacturing and sales companies are set out and described in Note 12 to the Group's consolidated financial statements at 31 December 2017. The net financial position of manufacturing and sales companies at 31 December 2017 was a net cash position of €6,194 million, down €619 million compared with 31 December 2016. Within this positive net financial position, Faurecia had €646 million in net debt at 31 December 2017, compared to €475 million in net debt at end-December 2016. The Group continued to actively manage its debt in 2017. In order to extend the average maturity of its debt, Peugeot S.A. issued a bond of 600 M€ bond maturing in March 2024 and, in May, a tap bond of 100 M€ with the same maturity. In addition, the European International Bank (EIB) granted a seven-year loan of 250 M€ to PSA Automobiles SA for the financing research and development investments on future emission requirements.

Liquidity reserves for the manufacturing and sales companies amounted to €17,522 million at 31 December 2017, versus €16,974 million at 31 December 2016, with €13,322 million in cash and cash equivalents, financial investments and current & non-current financial assets, and €4,200 million in undrawn lines of credit (see Note 12.4 to the consolidated financial statements at 31 December 2017).

3.2. Detail of Free Cash Flow of manufacturing and sales companies

The Free Cash Flow of manufacturing and sales companies is defined in Note 16 to the consolidated financial statements at 31 December 2017. The Free Cash Flow generated over the period amounted to €500 million, including a €129 million contribution from Faurecia. The Free Cash Flow over the period mainly stemmed from:

- €5,823 million in cash flows generated by recurring operations of which a contribution of €(336) million of OV;

- €(618) million in cash flows related to restructuring plans including €(12) million for OV;

- €8 million improvement in the working capital requirement, including €1,179 million in trade payables, (€ 476) million in trade receivables, and €(167) million in inventories. New vehicle inventory levels are presented below ; OV contribution amounts to €(610) million ;

- €(4,277) million in capitalised capital expenditure and research & development, including Faurecia's share which represented €(1,214) million and the share of OV which represented €(509) million at 31 December 2017 and of which €(436) million in exceptional investments/asset disposals, including Faurecia’s share which represented €(218) million at the end of 2017. Total research and development expenses incurred increased in 2017 compared to 2016 and are presented in Note 5 to the consolidated financial statements at 31 December 2017.

New vehicle inventory levels for PCD and in the independent PCD dealer network:

(in thousands of new vehicles) 31 December 2017 31 December 2016 31 December 2015

Group 97 99 107

Independent dealer network 319 307 243

TOTAL 416 406 350

New vehicle inventory levels for OV and in the independent OV dealer network:

(in thousands of new vehicles) 31 December 2017 31 December 2016 31 December 2015

Group 135 NA NA

Independent dealer network 129 NA NA

TOTAL 264 NA NA

Excluding Free Cash Flow, the changes in net financial position represented €(1,119) million. These are mainly related to dividends paid to Group shareholders in the amount of €(431) million as well as the dividends paid to Faurecia minority shareholders for €(129) million and to the exercise of warrants in the amount of €288 million as well as €(662) million of OV debt consolidation.

3.3. Liquidity and funding of finance companies

The liquidity and funding of finance companies are discussed in Notes 13.3 and 13.4 to the consolidated financial statements at 31 December 2017.


4. RISK FACTORS AND UNCERTAINTIES

Main risk factors specific to the Group and its business

The Group operates in a profoundly changing environment not only in terms of technology, but also as regards modes of consumption and new entrants into the automotive industry. It is therefore exposed to risks that, if materialised, could have a significant adverse effect on its business, financial position, results or outlook. PSA Group pays close attention to ensuring that the risks inherent in its business lines are effectively managed across its various businesses. The Group's various operating units identify and assess risks and evaluate the related internal controls on an ongoing basis, in France and abroad, with annual reporting to the Executive Committee. (Faurecia has its own process). The principal specific risk factors to which the Group may be exposed are described in depth in the 2017 Registration Document (Chapter 1.5) that will be published in March 2018, and include notably:

Operational risks

They include risks related to the Group's economic and geopolitical environment, particularly in the United Kingdom where the Group is exposed to free trade agreements and currency movements (in 2017, Group sales in the UK represent up to 279,000 vehicles). A one point gross change in the pound sterling euro exchange rate has an impact of around €45 million on the Automotive recurring operating income. The long-term impact of the UK's exit from the European Union will depend on the exit terms and their consequences, which are not currently known. There are also risks related to the development, launch and sale of new vehicles (for example petrol/diesel mix), risks related to the emergence of new business models driven by new forms of mobility, customer and dealer risks, raw material risks, supplier risks, industrial risks, environmental risks, workplace health and safety risks, risks associated with cooperation agreements, risks associated with the strategic partnership with Dongfeng, risks related to the non-execution of the PACE plan, information system risks as well as the risks related to climate change.

Financial market risks

The Group is exposed to liquidity risk, interest rate risk, exchange rate risk, counterparty risk, credit risk and other market risks related in particular to fluctuations in commodity prices. Note 12.7 to the consolidated financial statements at 31 December 2017 provides information on risk management, which is primarily carried out by Corporate Finance, identified risks and the Group policies designed to manage them.

Risks related to Banque PSA Finance

These include activity risk, credit risk, liquidity risk, counterparty risk, as well as concentration risk and operational risk. (See Note 13.4 to the consolidated financial statements at 31 December 2017).

Legal and contractual risks

These risks include notably: legal and arbitration proceedings, legal risks associated with anti-competition litigation, regulatory risks, financial covenants, risks related to pension and other post-retirement benefit obligations, risks related to intellectual property rights and off-balance sheet commitments. (See Note 17 to the consolidated financial statements at 31 December 2017).



III. CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2017

Contents

Consolidated Statements of Income ....................................................................................................... 12

Consolidated Comprehensive Income ..................................................................................................... 14

Consolidated Balance Sheets ................................................................................................................. 16

Consolidated Statements of Cash Flows .................................................................................................. 18

Consolidated Statements of Changes in Equity ........................................................................................ 20

Notes to the Consolidated Financial Statements at December 2017 ............................................................ 21

The consolidated financial statements of the PSA Group are presented for the years ended 31 December 2017 and 2016. The 2015 consolidated financial statements are included in the Registration Document that was filed with the French securities regulator (Autorité des Marchés Financiers) on 24 March 2016 under no. D.16-0204.


CONSOLIDATED STATEMENTS OF INCOME

(in million euros) Notes

Manufacturing and sales

companiesFinance

companies Eliminations Total

Continuing operations

Revenue 5.1 65,094 139 (23) 65,210

Cost of goods and services sold (53,017) (98) 23 (53,092)

Selling, general and administrative expenses (5,862) (27) - (5,889)

Research and development expenses 5.3 (2,238) - - (2,238)

Recurring operating income (loss) 3,977 14 - 3,991

Non-recurring operating income 5.4 - 8.3 202 3 - 205

Non-recurring operating expenses 5.4 - 8.3 (1,106) (3) - (1,109)

Operating income (loss) 3,073 14 - 3,087

Financial income 163 4 - 167

Financial expenses (404) (1) - (405)

Net financial income (expense) 12.2 (241) 3 - (238)

Income (loss) before tax of fully consolidated companies

2,832 17 - 2,849

Current taxes (552) (13) - (565)

Deferred taxes (139) 3 - (136)

Income taxes 14 (691) (10) - (701)

Share in net earnings of companies at equity 11.3 (9) 226 - 217

Other expenses related to the non-transferred financing of operations to be continued in partnership

- - - -

Consolidated profit (loss) from continuing operations

2,132 233 - 2,365

Attributable to equity holders of the parent 1,709 227 - 1,936

Operations held for sale or to be continued in partnership

Profit (loss) from operations held for sale or to be continued in partnership (7) - - (7)

Consolidated profit (loss) for the period 2,125 233 - 2,358


Attributable to minority interests 423 6 - 429

(in euros)

2.18

Basic earnings per €1 par value share - attributable to equity holders of the parent (Note 15.2) 2.18

2.06

Diluted earnings per €1 par value share - attributable to equity holders of the parent (Note 15.2) 2.05

2017

Basic earnings per €1 par value share of continuing operations - attributable to equity holders of the parent (Note 15.2)

Diluted earnings per €1 par value share of continuing operations - attributable to equity holders of the parent (Note 15.2)




companiesFinance


Continuing operations

Revenue 5.1 53,884 161 (15) 54,030

Cost of goods and services sold (43,599) (125) 15 (43,709)

Selling, general and administrative expenses (5,136) (35) - (5,171)

Research and development expenses 5.3 (1,915) - - (1,915)

Recurring operating income (loss) 3,234 1 - 3,235

Non-recurring operating income 5.4 - 8.3 117 - - 117

Non-recurring operating expenses 5.4 - 8.3 (741) - - (741)

Operating income (loss) 2,610 1 - 2,611

Financial income 298 4 - 302

Financial expenses (570) - - (570)

Net financial income (expense) 12.2 (272) 4 - (268)

Income (loss) before tax of fully consolidated companies

2,338 5 - 2,343

Current taxes (588) (8) - (596)

Deferred taxes 90 (11) - 79

Income taxes 14 (498) (19) - (517)

Share in net earnings of companies at equity 11.3 (67) 195 - 128


- (10) - (10)


1,773 171 - 1,944


Operations held for sale or to be continued in partnership

Profit (loss) from operations held for sale or to be continued in partnership 174 31 - 205

Consolidated profit (loss) for the period 1,947 202 - 2,149


Attributable to minority interests 415 4 - 419

(in euros)

1.90

Basic earnings per €1 par value share - attributable to equity holders of the parent (Note 15.2) 2.16

1.70

Diluted earnings per €1 par value share - attributable to equity holders of the parent (Note 15.2) 1.93

2016

Basic earnings per €1 par value share of continuing operations - attributable to equity holders of the parent (Note 15.2)

Diluted earnings per €1 par value share of continuing operations - attributable to equity holders of the parent (Note 15.2)


CONSOLIDATED COMPREHENSIVE INCOME

Items recognised in comprehensive income correspond to all changes in equity resulting from transactions with third parties other than shareholders.

(in million euros)

Before taxIncome tax

benefit (expense)

After tax

Consolidated profit (loss) for the period 3,059 (701) 2,358

Items that may be recycled through profit or loss

Fair value adjustments to cash flow hedges 35 (8) 27

- of which, reclassified to the income statement (4) 4 -

- of which, recognised in equity during the period 39 (12) 27

6 (1) 5

- of which, reclassified to the income statement - - -


(424) - (424)

(383) (9) (392)

Items that may not be recycled through profit or loss

Actuarial gains and losses on pension obligations (104) 26 (78)

(487) 17 (470)

- of which, companies at equity 114 - 114

Consolidated comprehensive income 2,572 (684) 1,888

- of which, attributable to equity holders of the parent 1,574

- of which, attributable to minority interests 314

2017

Gains and losses from remeasurement at fair value of available-for-sale financial assets

Exchange differences on translating foreign operations

Total other items of comprehensive income that may be recycled through profit or loss

Total other items of comprehensive income


(in million euros)

Before taxIncome tax

benefit (expense)

After tax

Consolidated profit (loss) for the period 2,666 (517) 2,149

Items that may be recycled through profit or loss

Fair value adjustments to cash flow hedges 53 (19) 34

- of which, reclassified to the income statement 63 (10) 53

- of which, recognised in equity during the period (10) (9) (19)

11 (2) 9

- of which, reclassified to the income statement - - -


Exchange differences on translating foreign operations (52) - (52)

12 (21) (9)

Items that may not be recycled through profit or loss

Actuarial gains and losses on pension obligations 37 (1) 36

49 (22) 27

- of which, companies at equity (78) - (78)

Consolidated comprehensive income 2,715 (539) 2,176

- of which, attributable to equity holders of the parent 1,762- of which, attributable to minority interests 414

2016

Gains and losses from remeasurement at fair value of available-for-sale financial assets

Total other items of comprehensive income that may be recycled through profit or loss

Total other items of comprehensive income


CONSOLIDATED BALANCE SHEETS ASSETS

EQUITY AND LIABILITIES



companiesFinance


Continuing operationsGoodwill 8.1 3,320 1 - 3,321Intangible assets 8.1 7,862 54 - 7,916Property, plant and equipment 8.2 13,275 3 - 13,278Investments in companies at equity 11 1,356 2,116 - 3,472Other non-current financial assets 12.5.A 487 23 - 510Other non-current assets 9.1 1,602 103 - 1,705Deferred tax assets 14 791 13 - 804Total non-current assets 28,693 2,313 - 31,006Operating assetsLoans and receivables - finance companies 13.2.A - 331 - 331Short-term investments - finance companies - 114 - 114Inventories 6.1 7,321 - - 7,321Trade receivables - manufacturing and sales companies 6.2 2,367 - (34) 2,333Current taxes 14 338 15 - 353Other receivables 6.3.A 2,636 85 (2) 2,719

12,662 545 (36) 13,171Current financial assets 12.5.A 1,269 - - 1,269Financial investments 12.5.B 165 - - 165Cash and cash equivalents 12.5.C 11,582 320 (8) 11,894Total current assets 25,678 865 (44) 26,499

Total assets 54,371 3,178 (44) 57,505

31 December 2017



companiesFinance

companies Eliminations TotalEquity 15

Share capital 905Treasury stock (270)Retained earnings and other accumulated equity, excluding minority interests

13,914

Minority interests 2,171Total equity 16,720

Continuing operationsNon-current financial liabilities 12.6 4,778 - - 4,778Other non-current liabilities 9.2 4,280 - - 4,280Non-current provisions 10 1,596 - - 1,596Deferred tax liabilities 14 890 7 - 897Total non-current liabilities 11,544 7 - 11,551Operating liabilities Financing liabilities - finance companies 13.3 - 415 (8) 407Current provisions 10 4,658 119 - 4,777Trade payables 13,362 - - 13,362Current taxes 14 225 9 - 234Other payables 6.3.B 7,878 81 (36) 7,923

26,123 624 (44) 26,703Current financial liabilities 12.6 2,531 - - 2,531Total current liabilities 28,654 624 (44) 29,234

Total liabilities of continuing operations (1) 40,198 631 (44) 40,785

Total transferred liabilities of operations held for sale or to be continued in partnership - - - -

Total equity and liabilities 57,505

(1) excluding equity

31 December 2017




companiesFinance


Continuing operationsGoodwill 8.1 1,513 1 - 1,514Intangible assets 8.1 5,393 61 - 5,454Property, plant and equipment 8.2 11,291 2 - 11,293Investments in companies at equity 11 1,487 1,527 - 3,014Other non-current financial assets 12.5.A 685 37 - 722Other non-current assets 9.1 1,368 7 - 1,375Deferred tax assets 14 574 19 - 593Total non-current assets 22,311 1,654 - 23,965Operating assetsLoans and receivables - finance companies 13.2.A - 346 - 346Short-term investments - finance companies - 103 - 103Inventories 6.1 4,347 - - 4,347Trade receivables - manufacturing and sales companies 6.2 1,560 - (19) 1,541Current taxes 14 148 16 - 164Other receivables 6.3.A 1,763 92 (4) 1,851

7,818 557 (23) 8,352Current financial assets 12.5.A 629 - (1) 628Financial investments 12.5.B 110 - - 110Cash and cash equivalents 12.5.C 11,576 530 (8) 12,098Total current assets 20,133 1,087 (32) 21,188

Total assets 42,444 2,741 (32) 45,153

31 December 2016



companiesFinance

companies Eliminations TotalEquity 15

Share capital 860Treasury stock (238)Retained earnings and other accumulated equity, excluding minority interests

12,035

Minority interests 1,961Total equity 14,618

Continuing operationsNon-current financial liabilities 12.6 4,526 - - 4,526Other non-current liabilities 9.2 3,288 - - 3,288Non-current provisions 10 1,429 - - 1,429Deferred tax liabilities 14 880 15 - 895Total non-current liabilities 10,123 15 - 10,138Operating liabilities Financing liabilities - finance companies 13.3 - 430 (9) 421Current provisions 10 3,249 125 - 3,374Trade payables 9,352 - - 9,352Current taxes 14 169 3 - 172Other payables 6.3.B 5,366 74 (23) 5,417

18,136 632 (32) 18,736Current financial liabilities 12.6 1,661 - - 1,661Total current liabilities 19,797 632 (32) 20,397

Total liabilities of continuing operations (1) 29,920 647 (32) 30,535

Total transferred liabilities of operations held for sale or to be continued in partnership - - - -

Total equity and liabilities 45,153

(1) excluding equity

31 December 2016


CONSOLIDATED STATEMENTS OF CASH FLOWS



companiesFinance

companies Eliminations TotalConsolidated profit (loss) from continuing operations 2,132 233 - 2,365Other expenses related to the non-transferred financing of operations to be continued in partnership

- - - -

Adjustments for non-cash items:

• Depreciation, amortisation and impairment 16.2 2,667 13 - 2,680

• Provisions 225 (5) - 220

• Changes in deferred tax 137 (3) - 134

• (Gains) losses on disposals and other (134) (5) - (139)Share in net (earnings) losses of companies at equity, net of dividends received

240 (88) - 152

Revaluation adjustments taken to equity and hedges of debt 28 - - 28

Change in carrying amount of leased vehicles (90) - - (90)

Funds from operations 5,205 145 - 5,350

Changes in working capital 6.4.A 8 (82) 1 (73)

Net cash from (used in) operating activities of continuing

operations (1) 5,213 63 1 5,277

Proceeds from disposals of shares in consolidated companies and of investments in non-consolidated companies 81 4 - 85Capital increase and acquisitions of consolidated companies and equity interests

16.3 (840) (525) 270 (1,095)

Proceeds from disposals of property, plant and equipment and of intangible assets

323 - - 323

Investments in property, plant and equipment (2) 8.2.B (2,351) - - (2,351)

Investments in intangible assets (3) 8.1.B (1,753) (16) - (1,769)

Change in amounts payable on fixed assets (239) - - (239)

Other 66 2 - 68

Net cash from (used in) investing activities of continuing operations

(4,713) (535) 270 (4,978)

Dividends paid: • To Peugeot S.A. shareholders (431) - - (431)

• Intragroup - - - - • Net amounts received from (paid to) operations to be continued in partnership

- - - -

• To minority shareholders of subsidiaries (129) (6) - (135)

Proceeds from issuance of shares 305 270 (270) 305(Purchases) sales of treasury stock (137) - - (137)Changes in other financial assets and liabilities 12.3.B 43 - (1) 42Other 2 - - 2

Net cash from (used in) financing activities of continuing operations

(347) 264 (271) (354)

Net cash related to the non-transferred debt of finance

companies to be continued in partnership (4) - - - -

Net cash from the transferred assets and liabilities of operations held for sale or to be continued in partnership (4)

(7) - - (7)

Effect of changes in exchange rates (119) (2) - (121)

Increase (decrease) in cash from continuing operations and held for sale or to be continued in partnership

27 (210) - (183)

Net cash and cash equivalents at beginning of period 11,464 530 (8) 11,986

Net cash and cash equivalents at end of period 16.1 11,491 320 (8) 11,803(1) Excluding flows related to the non-transferred debt of finance companies to be continued in partnership.

(4) Details of cash flows from operations to be continued in partnership are disclosed in Note 16.5.

2017

(2) Of which for the manufacturing and sales activities, €743 million for the Automotive Equipment segment and €1,462 million for thePeugeot Citroën DS Automotive segment.(3) Of which for the manufacturing and sales activities, €134 million for the Peugeot Citroën DS Automotive segment, excluding researchand development.




companiesFinance

companies Eliminations TotalConsolidated profit (loss) from continuing operations 1,773 171 - 1,944Other expenses related to the non-transferred financing of operations to be continued in partnership

- 11 - 11

Adjustments for non-cash items:

• Depreciation, amortisation and impairment 16.2 2,477 20 - 2,497

• Provisions (31) (28) - (59)• Changes in deferred tax (93) 5 - (88)• (Gains) losses on disposals and other (139) (7) - (146)Share in net (earnings) losses of companies at equity, net of dividends received

355 (102) - 253

Revaluation adjustments taken to equity and hedges of debt 76 (1) - 75Change in carrying amount of leased vehicles 48 - - 48

Funds from operations 4,466 69 - 4,535

Changes in working capital 6.4.A 471 1,287 177 1,935

Net cash from (used in) operating activities of continuing

operations (1) 4,937 1,356 177 6,470

Proceeds from disposals of shares in consolidated companies and of investments in non-consolidated companies 608 202 - 810Capital increase and acquisitions of consolidated companies and equity interests

(349) (71) - (420)

Proceeds from disposals of property, plant and equipment and of intangible assets

242 1 - 243

Investments in property, plant and equipment (2) 8.2.B (2,106) (1) - (2,107)

Investments in intangible assets (3) 8.1.B (1,449) (18) - (1,467)Change in amounts payable on fixed assets 237 - - 237Other 144 - 10 154

Net cash from (used in) investing activities of continuing operations

(2,673) 113 10 (2,550)

Dividends paid: • To Peugeot S.A. shareholders - - - - • Intragroup 434 (434) - - • Net amounts received from (paid to) operations to be continued in partnership

- 120 - 120

• To minority shareholders of subsidiaries (123) (11) - (134)

Proceeds from issuance of shares 332 (5) - 327(Purchases) sales of treasury stock - - - -Changes in other financial assets and liabilities 12.3.B (1,548) - (443) (1,991)Other - - (4) (4)

Net cash from (used in) financing activities of continuing operations

(905) (330) (447) (1,682)

Net cash related to the non-transferred debt of finance

companies to be continued in partnership (4) - (2,615) 305 (2,310)

Net cash from the transferred assets and liabilities of operations held for sale or to be continued in partnership (4)

(255) 1,097 1 843

Effect of changes in exchange rates (93) 16 - (77)

Increase (decrease) in cash from continuing operations and held for sale or to be continued in partnership

1,011 (363) 46 694

Net cash and cash equivalents at beginning of period 10,453 893 (54) 11,292

Net cash and cash equivalents at end of period 16.1 11,464 530 (8) 11,986

(1) Excluding flows related to the non-transferred debt of finance companies to be continued in partnership.

(4) Details of cash flows from operations to be continued in partnership are disclosed in Note 16.5.

2016

(2) Of which for the manufacturing and sales activities, €666 million for Automotive Equipment Division and €1,440 million for theAutomotive Division.(3) Of which for the manufacturing and sales activities, €78 million for Automotive Equipment Division, excluding research anddevelopment.


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in million euros)

At 31 December 2015 808 (238) 10,090 (28) 9 (82) (4) 10,555 1,664 12,219

Income and expenses recognised in equity for the period

- - 1,730 34 9 51 (62) 1,762 414 2,176

Measurement of stock options and performance share grants

- - 8 - - - - 8 10 18

Redemption of convertible bonds - - (4) - - - - (4) (5) (9)

Effect of changes in scope of consolidation and other

- - (4) - - - - (4) 9 5

Issuance of shares 52 - 278 - - - - 330 15 345

Treasury stock - - 10 - - - - 10 (13) (3)

Dividends paid by other Group companies

- - - - - - - - (133) (133)

At 31 December 2016 860 (238) 12,108 6 18 (31) (66) 12,657 1,961 14,618

Income and expenses recognised in equity for the period

- - 1,929 22 5 (80) (302) 1,574 314 1,888

Measurement of stock options and performance share grants

- - 29 - - - - 29 11 40

Repurchase of treasury stock - (116) (18) - - - - (134) (22) (156)

Effect of changes in scope of consolidation and other

- - (6) - - - - (6) 27 21

Issuance of shares 45 - 243 - - - - 288 17 305

'Equity warrants Peugeot SA equity warrants delivered to General Motors

- - 541 - - - - 541 - 541

Treasury shares delivered to employeess

- 84 (53) - - - - 31 - 31

Dividends paid by Peugeot S.A. - - (431) - - - - (431) - (431)

Dividends paid by other Group companies

- - - - - - - - (137) (137)

At 31 December 2017 905 (270) 14,342 28 23 (111) (368) 14,549 2,171 16,720

Effect of changes in exchange

rates

Equity -Attributable

to equity holders of the parent

Treasury stock

Equity -Minority

interestsShare

capital

Retained earnings excluding

revaluationsTotal

equity

Revaluations - excluding minority interests

Cash flow hedges

Available-for-sale

financial assets

Actuarial gains and losses on

pension obligations


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 2017

Note 1 - Accounting Policies and Performance Indicators....................................................... 22

Note 2 - Acquisition of the Opel Vauxhall Business ................................................................. 24

Note 3 - Scope of Consolidation ............................................................................................... 26

Note 4 - Segment Information ................................................................................................. 29

Note 5 - Operating Income ....................................................................................................... 31

Note 6 - Requirements in Working Capital of Manufacturing and Sales Companies .............. 35

Note 7 - Employee Benefits Expense ....................................................................................... 38

Note 8 - Goodwill and Intangible Assets – Property, Plant and Equipment ............................ 44

Note 9 - Other Non-Current Assets and Other Non-Current Liabilities ................................... 50

Note 10 - Current and Non-Current Provisions ........................................................................ 51

Note 11 - Investments in Equity-Accounted Companies ......................................................... 52

Note 12 - Financing and Financial Instruments – Manufacturing and Sales Companies ......... 58

Note 13 - Financing and Financial Instruments – Finance Companies .................................... 76

Note 14 - Income Taxes ............................................................................................................ 82

Note 15 - Equity and Earnings per Share ................................................................................. 85

Note 16 - Notes to the Consolidated Statements of Cash Flows ............................................. 88

Note 17 - Off-Balance Sheet Commitments and Contingent Liabilities ................................... 90

Note 18 - Related Party Transactions ....................................................................................... 91

Note 19 - Subsequent Events ................................................................................................... 92

Note 20 - Fees Paid to the Auditors ......................................................................................... 92

Note 21 - Consolidated Companies at 31 December 2017 ...................................................... 93


Preliminary note The consolidated financial statements for 2017 including explanatory notes were approved for issue by the Managing Board of Peugeot S.A. on 19 February 2018, with Note 19 taking into account events that occurred in the period up to the Supervisory Board meeting on 28 February 2018.

NOTE 1 - ACCOUNTING POLICIES AND PERFORMANCE INDICATORS

1.1. ACCOUNTING STANDARDS APPLIED

The PSA Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union on 31 December 20176. As the IFRS standards not adopted by the European Union do not have a material impact on the Group's consolidated financial statements, they are thus also compliant with the IFRS framework. International Financial Reporting Standards include IFRSs and IASs (International Accounting Standards) and the related interpretations as prepared by the Standing Interpretations Committee (SIC) and the International Financial Reporting Interpretations Committee (IFRIC).

The main amendments applicable to the Group for the first time in 2017 are as follows: - the amendment to IAS 12 "Recognition of Deferred Tax Assets". This amendment was applied when

consolidating OPEL; - the amendment to IAS 7 "Disclosure Initiative". This amendment requires a link to be shown between cash

flows from financing activities in the Statement of Cash Flows and Changes in short-term debt in the balance sheet. This information is disclosed by the Group (see Note 12.3.B).

The new IFRS standards that will be applied in the years to come, for some subject to their adoption by the European Union are the following:

New standards and interpretations First application in the EU for annual periods beginning on or after:

Impacts

IFRIC 22 Foreign Currency Transactions and Advance Consideration 01.01.20187 Without material impact

IFRS 9 Financial Instruments 01/01/2018 See below

IFRS 15 Revenue from Contracts with Customers 01/01/2018 See below

IFRS 16 Leases 01/01/2019 See below

IFRIC 23 Uncertainty over Income Tax Treatments 01/01/2019² Without material impact

IFRS 17 Insurance Contracts 01/01/2021² Without material impact

In respect of IFRS 15, the Group reviewed its contracts. The main areas of impact are expected in the Automotive Equipment Division. In actual fact, from 2018, Faurecia will be classified as agent for monolith sales8, thereby reducing recognised revenue. The impact on Faurecia would be €3,219 million, and €2,947 million at Groupe PSA level.

IFRS 15 bases revenue recognition on the transfer of control, whereas IAS 18 “Revenue” based revenue recognition on the transfer of risks and rewards. The bulk of automotive business revenue is from the sale of new and used vehicles, and the sale of spare parts. For these activities, the transfer of control takes place at the same time as the transfer of risks and rewards. The Group also provides its customers with services, for consideration or free of charge. They are already recognised over the

6 The International Financial Reporting Standards adopted for use in the European Union can be downloaded from the European Commission's website (http://ec.europa.eu/internal_market/accounting/ias/index_en.htm)

7 Not yet adopted by the European Union 8 Precious metals and ceramics used in emission control systems.


service period under IAS 18 and will continue to be under IFRS 15 (subject to different performance obligations), except for certain services that are currently not material. Some vehicles are sold with a buyback commitment. These transactions are already accounted for as leases under IAS 18. The income is staggered over the period from the sale of the new vehicle to the buyback of the used vehicle. The same will apply under IFRS 15. The Group also confirmed that its Automotive business operates as principal and not as agent. The warranties provided to end customers are designed to cover defects in the vehicles sold. Provisions are funded for them both under current standards and under IFRS 15. The Group does not have a significant financial component that would require adjustments between revenue and net financial income (expense). The possible impact on Opel Vauxhall's operations is being assessed.

With respect to IFRS 9, the impact on the measurement of the receivables of Manufacturing and Sales Companies is not material. Moreover, phase 3 of the new standard broadens hedge accounting to portions of raw materials, more closely aligning the accounts with economic realities. The impact on the funding of provisions for receivables by Financial Companies is not material.

With respect to IFRS 16, the Group intends to apply the standard on a prospective basis. The Group did an inventory of leases, with the impact still being calculated. The search for an IT system is also underway. 1.2. USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions in order to determine the reported amounts of certain assets, liabilities, income and expense items, as well as certain amounts disclosed in the notes to the financial statements relating to contingent assets and liabilities. The estimates and assumptions used are those deemed by management to be the most pertinent and accurate in view of the Group’s circumstances and past experience. Estimates and assumptions are reviewed periodically. Nevertheless, given the uncertainty inherent in any projections, actual results may differ from initial estimates. For the preparation of the 2017 annual financial statements, special attention was paid to the following items: Fair value of the assets acquired and liabilities assumed in the course of a business combination (see Note 2 on

the acquisition of the Opel Vauxhall operations); The recoverable amount of the Peugeot Citroën DS and Opel Vauxhall Automotive Divisions intangible assets and

property, plant and equipment (see Note 8.3), and the recoverable amount of investments in companies at equity (see Note 11.3);

Provisions (particularly restructuring provisions, pensions, warranty provisions for new cars as well as claims and litigation) (see Note 5.4.B, Note 7.1 and Note 10);

Sales incentives (see Note 5.1.A); Residual values of vehicles sold with buyback commitment (see Note 8.2.C and Note 9.2). Deferred tax assets (see Note 14). 1.3. PERFORMANCE INDICATORS In its financial communications, the Group publishes performance indicators that are not directly discernible from the summary consolidated financial statements. The main indicators defined in the notes to the financial statements are as follows: Recurring operating income (loss) by segment (see Note 4.1 and Note 5); Free Cash Flow and Operating free cash flow (see Note 16.5); Net financial position (see Note 12.3); Financial security (see Note 12.4).


NOTE 2 - ACQUISITION OF THE OPEL VAUXHALL BUSINESS

On 6 March 2017, General Motors Co. (GM) and Groupe PSA signed an agreement for the acquisition of a majority interest in the Opel Vauxhall subsidiaries of General Motors and the European operations of GM Financial in partnership with BNP Paribas. These transactions were finalised in the second half of 2017 as follows. 2.1. ACQUISITION OF THE AUTOMOTIVE BUSINESS OF OPEL VAUXHALL On 31 July 2017, Groupe PSA completed the acquisition of Opel's and Vauxhall's automotive subsidiaries from GM. A. Description of the transaction The transaction includes the bulk of Opel/Vauxhall’s automotive business, comprising the Opel and Vauxhall brands, six assembly and five component-manufacturing facilities, one engineering centre (Rüsselsheim in Germany). Opel/Vauxhall will also continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to Groupe PSA platforms over the coming years. The purchase price paid by Groupe PSA, for the automotive business of Opel and Vauxhall was €1,018 million (see details in 2.1.F). B. Opening balance sheet

C. Allocation of the purchase price The fair value measurement of the assets acquired and liabilities assumed was done by an independent expert. (1) Property, plant and equipment The fair value of the property, plant and equipment was €1,577 million. This includes €908 million in leased vehicles (sale with buyback commitment), €201 million in land, €468 million in buildings, plant and equipment. This property, plant and equipment was measured using a combination of three approaches:

market approach: price of a comparable asset in similar circumstances; income approach: present value of future cash flows; cost approach: replacement cost.

(2) Intangible assets: Brands The fair value of the Opel and Vauxhall brands was €1,792 million. They were measured using the royalties method. These brands have indefinite useful lives. (3) Inventories The fair value of inventories was €2,970 million. Inventories were measured at the selling price less selling costs.

(in million euros) 31 July 2017

Purchase price 1,018

Intangible assets acquired 1,792

Property, plant and equipment acquired 1,577

Other non-current assets acquired 517

Current assets acquired 4,120

Cash acquired 301

Provisions assumed (1,390)

Financial liabilities assumed (785)

Trade payables assumed (3,171)

Other liabilities assumed (3,753)

Assest acquired and liabilities assumed (792)

Goodwill 1,810


(4) Provisions The fair value of provisions was €1,390 million, and included:

€581 million in provisions for contingencies; €494 million in provisions for warranties.

(5) Deferred taxes Deferred tax assets and liabilities were first calculated on the basis of temporary differences between the IFRS carrying amounts following the allocation of the purchase price and the tax bases of the assets acquired and liabilities assumed. In accordance with IAS 12, recognised deferred tax assets were limited to the amount of deferred tax liabilities and taxable profits expected over the life of the 2018 – 2021 medium-term plan. A total of €336 million in net deferred taxes was recognised. In accordance with IFRS 3, this price and its provisional allocation may be adjusted within twelve months of the acquisition date. D. Goodwill Goodwill totalled €1,810 million. This relates to the synergies expected by Groupe PSA in purchasing, manufacturing and R&D. E. Opel Vauxhall's contribution to revenue and profit (loss) for 2017 The contribution to revenue and profit (loss) since 1 August 2017 is as follows:

Revenue : €6,864 million;

Profit (loss): -€674 million.

The Group does not feel in a position to prepare pro-forma information for the relevant 12-months that could be audited in line with IFRS 3 for the following reasons:

PSA acquired a business cut out of General Motors Europe, excluding the historical operations of General Motors which had a material impact on this scope;

the results of General Motors Europe were prepared using another accounting basis (US GAAP and General Motors specific policies) with notably internal cost-sharing rules, in particular for R&D, and a transfer pricing policy, that will no longer be employed;

Given the seasonality of the automotive industry, Opel's five-month results simply cannot be extrapolated to 12 months.

Against this background, it would not be possible for us to meaningfully adjust the historical data using reasonable means in order to provide the market with useful information. Moreover, a breakdown of the Opel Vauxhall contribution over five months is detailed in the presentation of our results by operating segment (see Note 4.1.). F. Purchase price The €1,018 million purchase price for the Opel Vauxhall automotive business breaks down as follows:

Cash payment of €477 million (see 2.1.G); Fair value of the Peugeot S.A. equity warrants.

The fair value of the equity warrants subscribed by General Motors Co. or its affiliates is estimated at €541 million (see Note 15.1). This value was estimated using the Black & Scholes model, considering that the warrants are equivalent to European style options with a maturity of five years and assuming the level of historical volatility of the PSA stock observed over two years. This fair value also includes the net present value of the five years' worth of dividends that General Motors will receive on the exercise date of the warrants.

G. Cash flow analysis of the price paid upon acquisition The net cash flow of €26 million paid for the acquisition includes the €477 million in cash paid to General Motors Co. (see 2.1.F) minus the €150 million cash advance to GM and €301 million in cash on the opening balance sheets of the acquired companies.

26 - Groupe PS

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tly or indirectmethod. must be recogint operation

ments that areccounted for t the criteria gate have a

estments in acnd internal mss of a subsid

esult, if there be negative.

r determining31 July 2017.

OMOTIVE FIN

holly-owned sfinalised the

sing the exist

acquired groinfluence beced in Note 13

ts 50% interethe contractuaAt 31 Decemb

d a provisionroup of entitie

which to finacation may thu

d scope preseation of idenfit in 2017 pe balance she

companies ofnies in which

tly exercises a

gnised based may be conde qualified as using the equfor consolida

material effeccordance wit

margins are elidiary betweeis no agreeme

g the final purThis process

NANCE OPERA

subsidiary of joint acquisiting Opel Ban

oup, is owned cause it only h3.4 Opel Bank

st, BPF paid al terms. This

ber 2017 work

nal allocation es accounted

lise the fair vaus be revised

nted in Note tified assets resented in Net date.

f which PeugePeugeot S.A.

significant inf

on the propoducted under

joint ventureuity method.ation and thact on the coh the general minated in con the parent ent committin

rchase price bis ongoing an

ATIONS IN PA

PSA Group aion, announcek, Opel Finan

50:50 by BNPhas 50% of thek S.A. is accou

€489 million. price is less th

k on identifyi

of this estimfor by the equ

alue measuremup to end-Oct

11.4.D – BNPand liabilitie

Note 11.4.D r

ot S.A. is the pdirectly or ind

fluence are in

ortion of assea contractual s because the

t aren't consonsolidated finprinciples set

onsolidation. and minority

ng the parent

based on the Od the purchas

ARTNERSHIP

and BNP Pared on 6 Marc

ncial Services

P Paribas Perse voting rightunted for und

This price rehan the shareng and meas

mated initial uity method.

ment and allotober 2018.

P Paribas agrees measured represents tw

parent. directly exerc

ncluded in the

ets, liabilities, arrangement

e parties have

olidated for mnancial statemt out in Note 1

y interests bat to absorbing

Opel/Vauxhallse price is not

WITH BNP

ibas Personalch 2017, of alland Vauxhall

sonal Financets and doesn'tder the equity

epresents thee of net assetsuring the fair

consolidation

ocation of this

eement in theat fair value

wo months of

cises exclusive

consolidated

revenue andt or through ae rights to the

materiality orments. These12.8.

ased on theirg the losses of

l t

l l l

e t y

e s r

n

s

e e f

e

d

d a e

r e

r f

(2) ChangesBusiness comwith IFRS 3 (RThe identifiavalue, providpost-acquisitAcquisition-rIn the event adjusted agaGroup. In accordancmore freque (3) GoodwilGoodwill attdirectly attriassets and lialevel of the e (4) Other chAny change operating incremaining inChanges in otransactions costs, being

ConversioB. (1) Translat(a) StandardThe Group’s statements. in which theat the year–exchange rasubsidiaries subsidiaries i (b) Specific mCertain subsaccordingly rat the historlosses are reThe Group dForeign Exch

s in scope of cmbinations oc(Revised) – Buble assets acq

ded that they tion cash flowrelated costs aof a price adj

ainst goodwil

ce with IAS 36ntly if events

ll on equity-atributable to ibutable acquabilities acquiequity-accoun

hanges in scoin ownership

come (loss) (iterest.

ownership int(transactionsreallocated be

on methods tion of the find method

functional cuThe functiona majority of t

–end exchangte for each mare recorded

is measured in

method sidiaries outsirecognised as ical exchangecognised dire

does not operhange Rates.

consolidationccurring after usiness Combiquired and liameet the acc

ws due to syneare recognisedustment in thl. Any subseq

6 – Impairmeor changes in

accounted comacquisitions o

uisition costs, ired. It is inclu

nted companie

ope of consolip interests reif material) as

terests that ds with ownersetween the pa

nancial statem

urrency is the al currency oftheir transactige rate and tmonth. Gainsd in equity n their functio

ide the euro their function rate and monctly in profit oate in hyperin

n resulting in1 January 201

inations. bilities and coounting criter

ergies in additd as expenses

he 12 months quent adjustm

ent of Assets, n circumstance

mpanies of equity-accoover the Gro

uded in “Inveses concerned.

idation esulting in thes a disposal o

o not result i in their capaarent and the

ments of fore

euro (€), whmost foreign

ions are denotheir income and losses runder "Trans

onal currency.

zone carry onal currency. netary items aor loss. nflationary co

n exclusive co10 are accoun

ontingent liabria of IFRS 3 (rtion to the asss in the periodfollowing the

ment is recog

goodwill is nes indicate th

ounted compoup’s equity stments in co.

e loss of conof the whole e

in a loss of ccity as owner

e minority inte

eign subsidia

ich is also then subsidiaries ominated. Th statements resulting fromslation reserv.

out most of Non-monetarat the year–e

ountries withi

ontrol nted for using

bilities assumerevised). The rsets and liabild in which thee acquisition dnised as debt

not amortisedat it might be

panies is the in the acquismpanies at eq

trol of an enentity immedi

ontrol of the rs) and therefoerests.

aries

e presentatiois their local ce balance sheare translate

m the translave". Goodwil

their transacry items in thend exchange

n the meanin

Groupe

g the acquisiti

ed are measuresidual goodities recogniscosts are incuate, the provit or credit ag

but tested foimpaired (see

excess of theition-date faiquity” and tes

ntity is recogniately followe

subsidiary arore lead to eq

n currency in currency, correets of these ed on a montion of financl arising on

ctions in euroese subsidiarierate. The resu

g of IAS 21 –

PSA 2017 Ann

ion method, i

red at acquisidwill representsed on initial curred. isional initial

gainst profit o

or impairmene Note 8.3).

e cost of shar value of thsted for impa

nised under ned by an inves

re accounted quity, includin

the consolidaresponding tosubsidiaries a

nthly basis atcial statementhe acquisit

os or US dolles' accounts aulting translat

– The Effects o

ual Results - 27

n accordance

ition-date fairts anticipatedconsolidation.

assessment isor loss of the

nt annually or

res, includinge identifiableirment at the

non-recurringstment in the

for as equityng transaction

ated financialo the currencyare translated

the averagents of foreignion of these

lars, which isare translatedtion gains and

of Changes in

7

e

r d .

s e

r

g e e

g e

y n

l y d e n e

s d d

n


(2) Translation of transactions in foreign currencies In compliance with IAS 21, transactions in foreign currencies are translated into the subsidiary's functional currency at the exchange rate on the transaction date. At each balance sheet date, monetary items are translated at the closing rate and the resulting translation adjustment is recognised in profit or loss, as follows: in recurring operating income, for commercial transactions carried out by all Group companies and for financing

transactions carried out by the Banque PSA Finance group; in interest income or finance costs for financial transactions carried out by the manufacturing and sales

companies.

3.2. COMPOSITION OF THE GROUP The Group consists of the Peugeot S.A. holding company, listed on Euronext, and its affiliates consolidated in accordance with Note 3.1.

The Group's operations are organised around five main segments (see Note 4): The Peugeot Citroën DS Automotive segment, covering the design, manufacture and sale of passenger cars and

light commercial vehicles under the Peugeot, Citroën and DS brands. It mainly comprises wholly owned subsidiaries, as well as jointly controlled subsidiaries for the production of vehicles or subassemblies in Europe and for industrial and commercial activities in China. These jointly controlled subsidiaries are consolidated in accordance with IFRS 11 (see Note 3.1);

The Opel Vauxhall Automotive segment, covering the design, manufacture and sale of passenger cars and light commercial vehicles under the Opel and Vauxhall brands. It mainly comprises wholly owned subsidiaries;

The Automotive Equipment segment, corresponding to the Faurecia group comprising the Interior Systems, the Automotive Seating and the Clean Mobility businesses. Faurecia is listed on Euronext. Peugeot S.A. holds 46.3% of Faurecia’s capital and 63.09% of its voting rights which give exclusive control by the Group. The exercise of all the dilutive instruments issued by Faurecia would have no impact on the Group’s exclusive control;

The Finance segment, corresponding to the Banque PSA Finance group, which provides retail financing to customers of the Peugeot, Citroën and DS brands and wholesale financing to the brands' dealer networks. Banque PSA Finance is classified as a financial institution. This mainly stems from the partnership between Banque PSA Finance and Santander Consumer Finance for the Peugeot, Citroën and DS brands as well as from the partnership with BNP Paribas for the Opel and Vauxhall brands.

The Group’s other activities are housed under “Other businesses”, which notably includes the Peugeot S.A. holding company, and minority stakes in the Gefco group as well as in Peugeot Scooters (Peugeot Motocycles) both consolidated by the equity method.

31 December 2017 31 December 2016

Fully consolidated companies

Manufacturing and sales companies (1) 317 278Finance companies 18 18

335 296

Joint operations

Manufacturing and sales companies 3 3

Companies at equity

Manufacturing and sales companies 55 50

Finance companies (2) 43 29

98 79

Consolidated companies 436 378

(1) 39 new companies fully consolidated, of which 34 for the Automotive Division Opel Vauxhall.(2) 14 new companies accounted at equity, of which 12 for the Finance Division Opel Vauxhall.


NOTE 4 - SEGMENT INFORMATION

In accordance with IFRS 8 – Operating Segments, segment information is presented in line with the indicators used internally by management to measure the performance of the Group's different business segments. The Group's main performance indicator on the segments is Recurring Operating Income. The definition of operating segments is provided in Note 3.2. For internal reporting, the full data of the Finance segment is given at 100%. It represents the consolidation of all the entities of the Finance divisions by global integration or at equity, before the impact of IFRS 5. The “Reconciliation” column provides a link with the presentation given in the consolidated income statement. 4.1. BUSINESS SEGMENTS

The columns for each segment shown in the table below are on a stand-alone basis. All intersegment balance sheet items and transactions are eliminated and, for the purposes of reconciliation with the Group's financial statements, are shown under the heading "Eliminations and reconciliations" together with unallocated amounts. Faurecia and Banque PSA Finance publish consolidated financial statements and segment information for these two businesses is therefore presented down to the level of net profit. For the other segments, as cash positions and taxes are managed jointly in some countries, only operating income and share in net earnings of equity-accounted companies are presented by segment. All intersegment commercial transactions are carried out on an arm's length basis on the same terms and conditions as those applicable to the supply of goods and services to third parties. The 100% column under Finance companies represents the data on full consolidation of the companies in partnership with Santander and BNP Paribas. These columns coupled with the "Reconciliation" column make it possible to piece together the consolidated contribution of finance companies, with the share in net earnings of companies at equity in partnership with Santander and BNP Paribas.

2017

(in million euros)Peugeot

Citroën DSOpel

Vauxhall 100% Réconciliation

Revenue

• third parties 40,281 6,864 17,947 2 1,347 (1,231) - 65,210

• intragroup, intersegment 454 374 2,235 88 129 - (3,280) -

Total (2) 40,735 7,238 20,182 90 1,476 (1,231) (3,280) 65,210

Recurring operating income (loss) 2,965 (179) 1,170 23 632 (618) (2) 3,991

Non-recurring operating income 176 2 4 20 3 - - 205

Restructuring costs (426) (440) (86) 1 (1) 1 - (951)

Impairment of CGUs, provisions for onerous contracts and other (96) - - - - - - (96)Other non-recurring operating income and (expenses), net (11) (38) (13) 3 (14) 11 - (62)

Operating income (loss) 2,608 (655) 1,075 47 620 (606) (2) 3,087

Interest income 12 - - 30 42

Finance costs (114) - - (94) (208)

Other financial income - 5 (1) 121 125

Other financial expenses (31) (1) - (165) (197)

Net financial income (expense) - - (133) - 4 (1) (108) (238)

Income taxes expense (262) (204) 194 (429) (701)

Share in net earnings of companies at equity (55) - 35 11 17 209 - 217Other expenses related to the non-transferred financing of operations to be continued in partnership - - - - - - - -

Consolidated profit (loss) from continuing operations 715 437 (204) 2,365

Profit (loss) from operations to be sold or continued in partnership - - (7) - - - - (7)Consolidated profit (loss) for the period 708 437 (204) 2,358

Capital expenditure(3) (excluding sales with a buyback commitment) 2,717 169 1,217 - 30 (13) 4,120

Depreciation provision (1,877) -25 (722) - (19) 7 (2,636)

Eliminations and

unallocated (1)

Finance companies

(2) of which a turnover of €39,076 million for manufacturer's activity of the Automotive division Peugeot Citroën DS.(3) The capital expenditure of the Peugeot Citroën DS and Opel Vauxhall segments relates to capital expenditure incurred for the production of Peugeot CitroënDS and Opel Vauxhall vehicles.

(1) The "Eliminations and unallocated" column includes eliminations of intersector sales between the Finance companies and the other sectors (€106 million).

AutomotiveAutomotive Equipment

Other Businesses Total


In 2017, on a fully consolidated basis, Banque PSA Finance (Finance Companies segment) generated net banking revenue of €1,145 million. Net provision expense (cost of risk) amounted to €64 million. In 2017, after application of IFRS 5, Banque PSA Finance (Finance Companies segment) reported net banking revenue of €46 million. Net provision expense (cost of risk) amounted to €5 million.

In 2016, on a fully consolidated basis, Banque PSA Finance (Finance Companies segment) generated net banking revenue of €1,026 million. Net provision expense (cost of risk) amounted to €52 million. In 2016, after application of IFRS 5, Banque PSA Finance (Finance Companies segment) reported net banking revenue of €161 million. Net provision expense (cost of risk) amounted to €5 million. 4.2. GEOGRAPHICAL SEGMENTS The indicators provided by region are revenue broken down by customer marketing area and property, plant and equipment broken down by geographic location of the consolidated companies.

2016

(in million euros) Automotive 100% Réconciliation

Revenue

• third parties 37,065 16,819 - 1,263 (1,117) - 54,030

• intragroup, intersegment 1 1,891 112 142 - (2,146) -

Total (2) 37,066 18,710 112 1,405 (1,117) (2,146) 54,030

Recurring operating income (loss) 2,225 970 39 571 (570) - 3,235

Non-recurring operating income 109 7 1 - - - 117

Restructuring costs (456) (90) (1) - - - (547)

(143) - - - - - (143)

- (23) (28) (2) 2 - (51)

Operating income (loss) 1,735 864 11 569 (568) - 2,611

Interest income 10 - - 85 95

Finance costs (147) - - (188) (335)

Other financial income 12 (9) 13 191 207

Other financial expenses (38) (1) 1 (197) (235)

Net financial income (expense) - (163) - (10) 14 (109) (268)

Income taxes expense (189) (206) 187 (309) (517)

Share in net earnings of companies at equity (93) 20 6 15 180 - 128

- - - - (10) - (10)

532 368 (197) 1,944

- 174 - - 31 - 205

Consolidated profit (loss) for the period 706 368 (166) 2,149

2,481 1,074 - 39 (20) 3,574

Depreciation provision (1,895) (661) - (24) 4 (2,576)

Eliminations and

unallocated (1)

Capital expenditure (excluding sales with a buyback commitment)

(1) The "Eliminations and unallocated" column includes eliminations of intersector sales between the Finance companies and the other sectors (€127 million).(2) of which a turnover of €35,948 million for manufacturer's activity of the Automotive division.

Impairment of CGUs, provisions for onerous contracts and other

Other non-recurring operating income and (expenses), net



Profit (loss) from operations to be continued in partnership

Automotive Equipment

Other Businesses

Finance companies

Total

(in million euros) Total

2017

Revenue 47,762 481 3,439 1,287 4,719 2,985 4,537 65,210

Property, plant and equipment 11,538 143 478 123 582 73 341 13,278

2016

Revenue 38,959 339 3,191 916 3,781 2,323 4,521 54,030

Property, plant and equipment 9,686 160 407 118 472 62 388 11,293

(1) of which France :

(in million euros) 2017 2016

Revenue 14,954 12,992

Property, plant and equipment 5,780 5,614

North America Europe (1) Eurasia

China & South-Asia

India Pacific

Latin America

Middle East & Africa

NOTE 5 -

Operating inthe Group's sThe Group ucorresponds items of incorecurring perIn practice, described in restructu impairm

performcontract

gains on

Selling, gSelling, geneand warranty 5.1. REVEN

AccountinA.

(1) Manufac

(a) Peugeot Revenue inclIn accordancare transferrthe delivery Sales at costmechanical sSales of newoperating lea whateve for bothThe differenover the durand equipmebasis of the vehicle markon the used v Sales incentiThe cost of cthree monthsales are recoThe Group’s The correspo

9 Consolidated continued in

OPERATIN

come correspshare in the n

uses recurringto operating

ome and experformance. other non-rethe notes to turing and ear

ment losses (anmed on the c

ts; n disposals of

general and aderal and adminy costs.

NUE

ng policies

cturing and s

Citroën DS anludes mainly rce with IAS 18red. This genedate, in the cat of items pursub-assemblie

w vehicles witases when it iser the duratio direct sales ace between t

ration of the bent. Depreciavehicle’s cos

ket. Any additvehicle marke

ives current and fuhs, determineognised. In caincentive pro

onding cost is

profit (loss) fromn partnership”

NG INCOM

ponds to profinet earnings og operating in income befo

ense that are

ecurring operathe financial sly-terminationnd subsequencash-generatin

real estate an

dministrative nistrative exp

sales compan

nd Opel Vauxrevenues from

8 – Revenue, nerally correspoase of direct srchased on bees that are intth a buyback s probable than of the buyb

and sales finanthe sale price buyback commation expensest less its estional gain ma

et. If the net d

uture sales incd country by

ases where theogrammes increcognised at

m continuing ope

E

t (loss)9 beforf equity-accoucome as its m

ore other nonunusual in na

ating income statements whn plan costs;nt adjustmentng units (CGU

nd impairment

expenses enses corresp

nies

hall Automotm the sale andnew vehicle saonds to the dasales. ehalf of otheended to be bcommitment at the vehicleack commitmnced by Banquand the buyb

mitment. The e is calculatedimated residu

ade on the findifference is a

centive progrcountry, and e cost of the pclude retail fint the time of t

erations, excludin

re net financiaunted compan

main business-recurring inc

ature or infre

and expensehere appropri

ts) recognisedUs) to which

t of real estat

pond to gener

tive segmentsd leasing of veales are recogate when the

r parties and bought back a are not reco will be bough

ment; ue PSA Financback price is vehicle is init

d over the terual value, rep

nal sale of theloss, an allow

rammes is acccharged agai

programme vanancing grantthe sale.

ng “other expen

al income or enies. s performancecome and expquent in occu

es consist maiate (see Note

on (i) non-cuh they belong

e held for sale

ral administra

s ehicles and thenised on the d

e vehicles are

sales to subct cost are not

ognised at theht back. This p

ce and its subsrecognised astially recognisrm of the leapresenting th

vehicle is recwance is booke

crued on the binst profit foraries accordinted at a signif

ses related to th

Groupe

expense, curre

e indicator. Repenses, defineurrence and n

ainly of the fe 5.4):

urrent assets fg, and (ii) th

e.

ative expenses

e sale of othedate the risks made availab

contractors ot included in ree time of deliprinciple appli

sidiaries. s rental revened at productse by the stre anticipated

cognised in thed when the b

basis of historthe period in

ng to sales, it ificant discoun

he non-transferre

PSA 2017 Ann

ent and defer

ecurring opered restrictive

not included in

following item

following imphe correspond

s, indirect sel

r goods and s and rewards

ble to non-gro

of raw materiaevenue. ivery but accoies:

nue on a straition cost in prraight-line med resale price he period in wbuyback contr

rical costs forn which the cis deducted fr

nt to market i

ed financing of o

ual Results - 31

red taxes and

rating incomely as materialn the Group’s

ms which are

pairment testsding onerous

ling expenses

ervices. of ownership

oup dealers or

als, parts and

ounted for as

ght-line basisroperty, plantethod, on the

on the usedwhich it is sold

ract is signed.

r the previouscorrespondingrom revenue.nterest rates.

operations to be

d

e l s

e

s s

s

p r

d

s

s t e d d

s g

.

e

32 - Groupe PS

(b) AutomotThe Automoproduce partThe revenuepaid in propminimum levconsidered atooling in proIf the contrawork-in-prog (2) Finance The Group’s to dealer neNovember 2the dealer netake the formare recordedloan. Most of the operations ismethod (see

Key figureB.

Sales of goodService revedescribed in Financial serrevenues.

5.2. RECUR

Broken downand propertsegment at ilevel. Staff costs Group staff c

(in million eu

Sales of vehi

Service reven

Financial ser

Total

SA 2017 Annua

tive Equipmentive Equipmets or modules recognition c

portion to pavel of orders pas having beioperty, plant act includes a gress. The cor

companies finance comp

etworks and 017, the finanetworks and rm of conventid using the yi

finance activs not included

e Note 11.4). T

es

ds consist mainues primariNote 8.2.C.

rvices revenue

RING OPERA

n by type, opey, plant and its own appro

costs included

uros)

cles and other

nue

rvices revenue

al Results

nt segment ent segment ps for programmcriteria providrts delivered placed by the ing sold. The and equipmepayment gua

responding re

panies and theretail financ

nce companieretail financinional loans, fiield-to-matur

vities are mand in the GrouThe revenue o

inly of sales ofly comprise a

e correspond

ATING EXPENS

erating expenequipment,

opriate level w

d in the Recurr

r goods

performs devemes covered bded for in IAS

to the custocustomer. Undevelopmen

nt (see Note 8arantee, the devenue is reco

e finance coming to customes in partnersng to the custonance leases,ity method, s

naged in partp's consolidat

of all financing

f vehicles andauto repairs a

s for the mo

SES ANALYSE

ses include stexplained bewith the resu

ring Operating

elopment worby specific cus18 are not m

omer, with thnder such circt costs are r

8.2.A). development ognised when

mpanies in parmers of the ship with BNPomers of the , buyback conso as to recog

tnership withted revenue

g activities at 1

d automobile pand servicing

ost part to int

ED BY NATUR

taff costs and elow. Other rult that they c

g Income are

rk and manufstomer orderset in cases wh

heir full recovumstances, decognised in

and tooling cthe customer

rtnership withPeugeot Citr

P Paribas haveOpel – Vauxh

ntracts or longgnise a consta

Santander aas these com100% is prese

parts, sub-ass by captive d

terest income

RE

the depreciatrecurring opecannot be pre

as follows:

factures or pus. here developmvery being suevelopment wintangible as

costs are recor signs off on e

h Santander proën DS autoe been providhall automotivg-term leasingant rate of in

nd BNP Paribpanies are acnted in Note

emblies and cdealers, and v

e, insurance p

tion or amortrating expensesented on a

urchases spec

ment and toobject to an u

work and toolssets (see No

ognised in inveach technica

rovide wholeomotive businding wholesaleve business. Fg. Sales financnterest over t

bas. The reveccounted for 4.1.

components. vehicle leasin

premiums and

tisation of intases are analyconsistent b

2017

63,444

1,650

116

65,210

ific tooling to

oling costs areunguaranteeding cannot be

ote 5.3.A) and

ventories andal phase.

sale financingness. Since 1e financing toFinancing maycing revenueshe life of the

enue of theseby the equity

ng services as

d other gross

angible assetsysed by eachasis at Group

2016

52,526

1,358

146

54,030

o

e d e d

d

g 1 o y s e

e y

s

s

s h p

The Competi€103 million Details of pe DepreciatioDepreciation

5.3. RESEAR

AccountinA. Research andeducation ansubstantiallyUnder IAS 38demonstrate its inten

financial that it is

entity; that the Capitalised dExpenses forand the amo (1) PeugeotDevelopmenproject launrecognised irepresentingamount maincost of exteractivities are

(in million eu

Automotive D

Automotive D

Automotive E

Finance com

Other busine

Total

(1) Including(€4,109 millio

(2) In 2016, €

(3) in 2016, €

(in million eu

Capitalised d

Other intangi

Specific tooli

Other propert

Total

itiveness and (€96 million insion costs ar

on and amorn and amortisa

RCH AND DEV

ng policies d developmennd training n

y improved ma8 – Intangibl

e in particularntion to compl and other re

s probable tha

cost of the asdevelopment cr the year inc

ortisation of ca

t Citroën DS ant expenditurench (correspoin intangible

g up to seven nly comprisesrnal services re included, su

uros)

Division Peuge

Division Opel V

Equipment Divi

mpanies (3)

esses

€4,030 millionon in 2016).

€225 million rep

€17 million repre

uros)

development ex

ible assets

ing

ty, plant and e

Employment in 2016). re disclosed in

rtisation expation expense

VELOPMENT

nt expenses innecessary for aterials, methle Assets, dev:

plete the intanesources for that the future e

sset can be mcosts include lude researchapitalised dev

and Opel Vaue on vehicles nding to theassets. It is

years for vehs payroll costsrelated to theuch as rent, b

ot Citroën DS

Vauxhall

ision (2)

representing s

presenting staff

esenting staff co

xpenditure

equipment

Tax Credit (CI

n Note 7.

ense e included in r

EXPENSES

nclude the cothe develop

ods, productsvelopment ex

ngible asset ahis purpose; economic ben

easured reliabrelated borro

h costs, non-cvelopment cos

uxhall Automand mechanic

e styling deciamortised f

icles and ten ys of personnee project. No building depre

(1)

staff costs of m

f costs were recl

osts were recla

Of which

ICE) has been

recurring oper

st of scientificment, producs, processes, sxpenditure is

and use or sel

nefits attributa

bly. wing costs (se

capitalised stusts.

motive segmecal sub-assemision for vehfrom the stayears for mec

el directly assoverheads or

eciation and

anufacturing ac

lassified in activ

ssified in activit

Opel Vauxhall

deducted fro

rating income

c and technicaction or implsystems or ser

recognised a

ll it, as well a

able to the de

ee Note 12.2.Audy and devel

nt mblies (engine

icles) and thart-of-productchanical sub-aigned to the

r indirect costinformation s

ctivities of the P

vities to be sold

ties to be sold o

Automotive se

Groupe

om personnel

e breaks down

al activities, inlementation arvices. as an intangib

s the availabi

evelopment ex

A). opment costs

es and gearboe start-up ofion date ove

assemblies andproject, the c

ts related to rsystem utilisat

Peugeot Citroë

d or continued i

or continued in

egment

PSA 2017 Ann

expenses in t

n as follows:

ndustrial propand marketin

ble asset if th

ility of adequ

expenditure w

s under the a

oxes) incurredf pre-series per the asset’d modules. Th

cost of prototresearch and tion costs. Th

2017

(4,537)

(1,101)

(3,177)

(7)

(98)

(8,920)

ën DS Automoti

in partnership.

partnership.

2017

(845)

(98)

(636)

(1,057)

(2,636)

(24)

ual Results - 33

he amount of

perty, and theng of new or

he entity can

ate technical,

will flow to the

bove criteria,

between theproduction iss useful life,he capitalisedtypes and thedevelopment

he capitalised

2016

(4,641)

-

(3,059)

(9)

(70)

(7,779)

tive segment

2016

(825)

(100)

(650)

(1,001)

(2,576)

-

3

f

e r

n

,

e

,

e s ,

d e t d

34 - Groupe PS

amount alsoagreements cooperation expenditure a project-by- (2) AutomotDevelopmenare paid in pminimum levacceptance intangible asthat accumuthe asset wedevelopmen

Research B.

The amounts 5.4. NON-R

ImpairmeA.

The detail of

RestructuB. Restructuring

(in million eu

Total expend

Capitalised d

Non-capital

Amortisation

Total

(1) Including €Vauxhall auto(2) In addition12.2.A).

(in million euNet gains on

Other non-rec

Total non-re

Impairment loRestructuringOther non-rec

Total non-re

Reversal of imonerous contReversal of imonerous cont

Impairment locontracts of tImpairment locontracts of t

SA 2017 Annua

o includes thethat is not biagreements

incurred to d-project basis

tive Equipment work is undproportion to vel of ordersof the comm

ssets. The intalated amortis

ere amortisedt expenditure

and develop

s presented in

RECURRING O

ent test on CGf impairment t

uring costs g costs consis

uros)

diture (1)

development ex

ised expendi

of capitalised

€2,055 million fomotive segmen

n to this expen

uros) disposals of r

curring operati

ecurring oper

oss on Faurecg costscurring operati

ecurring oper

mpairment losstracts of the Pmpairment losstracts of the O

oss on CGUs,the Peugeot Coss on CGUs,the Opel Vaux

al Results

e portion of qlled to the pa

are also cadevelop mecha

and capitalise

ent Division dertaken for a

parts delivers placed by t

mercial offer aangible asset isation at eachd on a straighte is recognised

pment expen

n the above ta

OPERATING IN

GU, provisiontesting, provis

st mainly of wo

xpenditure (2)

iture

development

for the Peugeont and €469 mi

diture, borrowi

real estate ass

ing income on

rating income

cia CGUs and o

ing expenses o

rating expens

s on CGUs, oteugeot Citroëns on CGUs, ot

Opel Vauxhall A

other assets Citroën DS Aut other assets

xhall Automotiv

qualifying devartner. Generapitalised, whanical sub-assed.

ll programmeed to the cushe customer,and the starts amortised b year-end doet- line basis o

d in inventorie

ses, net

able are stated

NCOME AND

ns for onerousions for oner

orkforce redu

expenditure

ot Citroën DS Aillion for Faurec

ing costs are c

sets

other CGUs

e

other Faurecia

on other CGUs

ses

ther assets ann DS Automotther assets anAutomotive seg

and provisionsomotive segmand provisionsve segment

velopment exprally, developmhen they aresemblies com

es covered bystomer, with t, the costs int-of-productiobased on the qes not represeover five yeares and work-in

d net of resea

D EXPENSES

us contracts rous contracts

uctions.

Automotive segmcia (€437 millio

capitalised purs

a assets

s

nd provisions foive segment

nd provisions fogment

s for onerous ent

s for onerous

penditure incment costs bie meeting capliant with ne

specific custotheir full reconcurred durinon date of thquantity of paent less than s. If the contrn-progress.

arch funding re

and other des and other im

ment (€1,924 mn in 2016).

suant to IAS 23

or

or

urred by the lled to the Grapitalisation ew emissions

omer orders. overy being sung the periodhe parts or marts delivered the amount tract includes

eceived by the

epreciations mpairment is d

Notes

8.1

million in 2016)

3 - Borrowing

Notes

8.3.B

8.3.B

8.3.C5.4.B

Group underroup by its pacriteria. All standards is m

Where develubject to an ud between thmodules are r

to the customhat would bea payment gu

e Group.

disclosed in No

2017

(2,932)

1,536

(1,396)

(842)

(2,238)

6), €408 million

costs (Revised

2017164

12

128

205

(107)

(38)-

(951)(13)

(1,109)

r cooperationartners underdevelopment

monitored on

opment costsunguaranteedhe customer'srecognised inmer, provided recognised ifuarantee, the

ote 8.3.

2016

(2,361)

1,267

(1,094)

(821)

(1,915)

for the Opel

d) (see Note

2016101

10

-6

117

(143)

--

(547)(51)

(741)

n r t n

s d s n d f e


Peugeot Citroën DS Automotive segment In 2017, Peugeot Citroën DS Automotive segment restructuring costs amounted to €426 million. They relate chiefly to the recognition of the restructuring plans covering the Group’s industrial sites in Europe (Jobs and Skills Matching System –DAEC–, Jobs and Skills Reallocation Plan –PREC–, Employment Safeguarding Plan –PSE– and older employee plans) in the amount of €375 million and the reorganisation of its commercial operations in Europe in the amount of €32 million. Other restructuring costs relate mainly to the Group’s subsidiaries in Latin America in the amount of €16 million. Opel Vauxhall Automotive segment In 2017, Opel Vauxhall Automotive segment restructuring costs amounted to €440 million. Automotive Equipment segment (Faurecia Group) In 2017, Faurecia group restructuring costs totalled €86 million, including €78 million in provisions for redundancy costs, mainly in Germany, France, the United States and in the Netherlands.

NOTE 6 - REQUIREMENTS IN WORKING CAPITAL OF MANUFACTURING AND SALES COMPANIES

6.1. INVENTORIES

Inventories are stated at the lower of cost and net realisable value, in accordance with IAS 2 - Inventories. Cost is determined by the first-in-first-out (FIFO) method and includes all direct and indirect variable production expenses, plus fixed production expenses based on the normal capacity of each production facility. The net realisable value of inventories intended to be sold corresponds to their selling price, as estimated based on market conditions and any relevant external information sources, less the estimated costs necessary to complete the sale (such as variable direct selling expenses, refurbishment costs not billed to customers for used vehicles and other goods). The Automotive Equipment segment performs development work and manufactures or purchases specific tooling to produce parts or modules for programmes covered by specific customer orders. When the contract includes a payment guarantee, the development costs are recognised in inventories and work-in-progress and the corresponding revenue is recognised when the customer signs off on each technical phase.


Peugeot Citroën Automotive segment (426) (456)

Opel Vauxhall Automotive segment (440) -

Automotive Equipment segment (86) (90)

Other businesses segment 1 (1)

Total (951) (547)

(in million euros) Gross Allowance Net Gross Allowance Net

Raw materials and supplies 1,272 (153) 1,119 807 (140) 667Semi-finished products and work-in-progress 1,049 (30) 1,019 949 (31) 918

Goods for resale and used vehicles 1,204 (83) 1,121 911 (110) 801Finished products and replacement parts 4,289 (227) 4,062 2,107 (146) 1,961

Total 7,814 (493) 7,321 4,774 (427) 4,347

Of which Opel Vauxhall Automotive segment 2,862

31 December 2017 31 December 2016

36 - Groupe PS

6.2. TRADE

A provision believes thatexistence of In accordancflows have btransfer of rithe risk of laCosts incurreIn segment rtransferred t

Assignments

6.3. OTHER

Other recA.

(in million eur

Trade receiva

Allowances fo

Total - manuElimination of

Total

(in million eur

State, regiona

Personnel-rel

Due from sup

Derivative inst

Prepaid expeMiscellaneou

Total

(1) In 2017, themployment ta

SA 2017 Annua

RECEIVABLE

for impairmet there is a risunresolved cl

ce with IAS 39been transferisks, dilution te payment. T

ed in transferrreporting, thisto the Group’s

s of trade rece

R RECEIVABLE

ceivables

ros)

bles

or doubtful acco

ufacturing andf transactions w

ros)

al and local tax

ated payables

ppliers

truments

ensess other receiva

he Group sold €ax credits (see N

al Results

ES

ent is recordesk that the recaims or litigat9, the Group rred along wrisk is not incTransferred rering a receivabs rule also apps finance com

eivables to fina

ES AND OTHE

ounts

d sales compawith the finance

xes excluding i

ables

€43 million worNote 12.6.E).

ed on the maceivables will tion, the age oderecognises

ith substantiacluded inasmueceivables areble are recognplies to the Pepanies and to

ancial institut

ER PAYABLES

aniese companies

Of which

ncome tax (1)

Of which

rth of French re

nufacturing anot be recove

of the receivas receivables ally all of theuch as it has e not derecognised in financeugeot Citroëo the finance c

tions are discl

S

h Opel Vauxha

h Opel Vauxha

esearch tax cred

and sales comered. Indicatiobles and the ofor which the

e risks and rebeen defined

gnised when tcial expense. n DS and Opecompanies in

osed in Note

all Automotive s

all Automotive s

dits and €94 mi

mpanies’ tradeons of probabobligor’s signie contractual ewards of ow

and correctlyhe default risk

el Vauxhall Aupartnership.

12.6.E.

31

segment

31

segment

illion worth of F

e receivables ble impairmenificant financirights to rec

wnership. In ay segregated k is retained b

utomotive seg

December 2017

3

2,674

(307)

2,367(34)

2,333

724

December 2017

3

1,198

41

195

274

444484

2,636

434

French competi

if the Groupnt include theal difficulties.eive the cashanalysing thenotably from

by the Group.

gments’ debts

31 December 2016

1,726

(166)

1,560(19)

1,541

-

31 December 2016

908

38

196

41

361

219

1,763

-

itiveness and

p e

h e

m .

s

Other payB.

6.4. CHANG

Analysis oA.

Analysis oB.

(1) Analysis

(in million eur

Taxes payabl

Personnel-rel

Payroll taxes

Payable on fix

Customer pre

Derivative inst

Deferred incoMiscellaneou

Total

(1) This item coperating rece

(in million eur

(Increase) de

(Increase) de

Increase (dec

Change in inc

Other change

Net cash flow

Total

2017

(in million eur

Inventories (1)

Trade receiva

Trade payable

Income taxes

Other receiva

Other payable

Net cash flow

Total

yables

GE IN WORKI

of the change

of the changeby type

ros)

le other than in

ated payables

xed asset purc

epayments

truments (1)

ome s other payable

corresponds toeivables and pa

ros)

crease in inven

crease in trade

crease) in trade

come taxes

es

ws with Group f

ros)

bles

es (2)

s

bles

es (3)

ws with Group fi

O

NG CAPITAL

e in working

e in balance s

ncome taxes

chases

es

the fair value oyables. These i

ntories

e receivables

e payables

finance compan

finance compan

Of which Opel V

REQUIREME

capital

sheet items

Of which

of instruments pinstruments are

nies

nies

Vauxhall Autom

NTS OF MAN

h Opel Vauxha

purchased by tanalysed by m

motive segment

NUFACTURIN

all Automotive s

the Group to heaturity in Note 1

t at 31 Decemb

Groupe

G AND SALES

31

segment

edge currency12.7.A, "Manage

ber 2017(1

(2

(3

PSA 2017 Ann

S COMPANIE

December 2017

3

1,108

1,207

358

1,625

2,004

203

943

430

7,878

2,058

risks on currenment of financia

2017

(167)

(476)

1,179

(124)

(404)

8

17

25

(4,347)

(1,560)

9,352

21

(1,763)

5,366

7,069

(15)

7,054

1) €(2 863) millio2) €2 906 million3) €2 099 million

At 1 January 3

ual Results - 37

ES

31 December 2016

660

1,019

354

597

1,569

17

800

350

5,366

-

nt or forecastal risks".

2016

(365)

291

389

4

152

471

(38)

433

(7,321)

(2,367)

13,362

(113)

(2,636)

7,878

8,8031

8,804

on

n

n

At 31 December

7


(2) Movements of the year

The change in working capital in the consolidated statement of cash flows at 31 December 2017 (€8 million positive effect) corresponds to cash flows from operating activities (€41 million negative effect), exchange differences (€15 million positive effect), change in the ineffective portion of currency options (€28 million positive effect) and other movements (€6 million positive effect).

NOTE 7 - EMPLOYEE BENEFITS EXPENSE

7.1. PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS

In addition to pension benefits paid in accordance with the laws and regulations of the countries in which they operate, Group companies are liable for the payment of supplementary pensions and retirement bonuses. These benefits are paid under defined contribution and defined benefit plans. For defined contribution plans, contributions made during the year are expensed. In accordance with IAS 19 - Employee Benefits, obligations under defined benefit plans are measured by independent actuaries using the projected unit credit method. The main assumptions underpinning the measurement of the commitment are the retirement date, wage increases and staff turnover, and a discount rate and an inflation rate. The projected benefit obligation is measured twice a year for the main plans, at mid-year and at year-end, and every three years for the other plans, except when more frequent valuations are necessary to take into account changes in actuarial assumptions or significant changes in demographic statistics. Changes in actuarial assumptions and experience adjustments – corresponding to the effects of differences between previous actuarial assumptions and what has actually occurred – give rise to actuarial gains and losses. These actuarial gains and losses are recorded under “consolidated comprehensive income”, and are not recyclable in the income statement. In the event of change in the benefits conferred by a pension plan, the effects of changes are recognised in full in the income statement of the period in which they are incurred, in “operating income” under “past service cost”. As a result, for each defined benefit plan, the Group records a provision in an amount equal to the projected benefit obligation less the fair value of the plan assets. These pension surpluses constituted by the Group are recognised in the balance sheet according to the IFRIC 14 interpretation.


At 1 January 7,069 6,379

Cash flows from operating activities (41) 484

Cash flows from investing activities (144) 400

Changes in scope of consolidation and other (1) 1,920 1

Translation adjustment 28 (164)

Revaluations taken to equity (29) (31)

At 31 December 8,803 7,069

(1) of which €1,785 million related to the acquisition of Opel Vauxhall in 2017.

2017 2016

Cash flows from operating activities of manufacturing and sales companies (41) 484

Exchange differences 15 51

Change in the ineffective portion of currency options 28 (45)

Other changes 6 (19)

8 471Change in working capital in the statement of cash flows

The net cost The serv The accr

expensecommitm

Other emplo long-ser healthca

Plan descA. Group emploretirement bunder defineto pay fixedPayments unIn France, th the retir the port

an exteremploye

the pensnew ent

the close

In the Unitedto new entra500 active emreplacement

In Germany,companies a the retir the supp

The supplemgranting a rewho have annew schemeguarantees approved by

AssumptiB.

At each peribonds with a

Prime corpoexample, bon

Discount Rat20172016Inflation Rate20172016Average Dur20172016

of defined bevice cost and pretion expenses). These twoments.

oyee benefit ovice awards p

are costs paid

criptions oyees in certabonuses repreed contributiod contributionnder defined be existing def

rement bonustion of the toprnal fund in ee's final salarsion plan set

trants in 1981 ed Citroën sup

d Kingdom, thants since Mamployees, 6,7t rate of up to

, the main dt 1 August 20

rement bonusplementary pe

mentary pensioent relating ton employmene, defined ban annuity b the Board of

ions

od-end, the da life that app

rate bonds arnds rated AA

te

e

ration (in years

enefit pensionpast service coe of the net c

o components

obligations recpayable by Fre

by certain su

ain countries aesenting one-on or defined ns into the fubenefit plans cfined benefit pses provided fp-hat pension2002 and guary (currently cup by the foand covers 1

pplementary

he Group has ay 2002. At 31700 former em 66% of the e

defined bene17 in the form

ses provided fension plan co

on scheme fo salary trancht contract wienefit plan f

based on theDirectors.

discount rate roximates the

re defined as or AAA by Mo

s)

n plans for theost (recognise

commitment os (accretion an

cognised in thench and foreibsidiaries in t

are entitled tooff paymentsbenefit plans

und concerneconcern primaplans concernor by collectiv scheme for earantees an a

covering 2,500rmer subsidia2,000 retired plan (ACC) tha

four trustee-a1 December 2mployees notmployee's fin

fit plan relatm of: or by collectivovering 20,000

r all Faurecia he C. A specificth Faurecia Sfor French m

e reference s

is determinee duration of t

bonds awardoody's or Stan

Euro

11

11

e period thereed in "Recurrinof the return ond return on a

e balance sheign subsidiariehe United Sta

o supplements made at thes. The Group’ed. The paymarily France, t:

ve bargaining engineers andaggregate rep0 retired empary of the Chemployees atat covered 4,1

administered 2017, 18,200 t yet retired aal salary.

tes to Opel

ve bargaining 0 employees.

managerial ec pension sch.A. or any of

members andsalary, the Fa

ed based on tthe benefit ob

ded one of thndard & Poor's

zone Un

1.60 %.50 %

1.80 %.80 %

1712

efore correspong income");on plan hedgiassets) are de

eet concern: es;

ates.

tary pension be time of retis only obligat

ments are recthe United Kin

agreements;d managemenplacement raloyees); rysler group it end-2017; 100 retired em

defined benebeneficiaries nd 11,000 ret

Automobile

agreements;This plan was

mployees in Feme dedicateits subsidiarie

d defined coaurecia group

the most reprbligation.

e top two rats).

nited-Kingdom

2.60 %2.80 %

3.20 %3.25 %

1514

Groupe

onds to the su

ng assets (in oetermined bas

benefits payabrement. Thes

tion under deognised in in

ngdom and Ge

nt personnel tte from all p

in France (Tal

mployees at e

efit plans. Thewere coveredtired employe

GmbH coveri

s fully funded

France compred to the execes has been intribution pla

p’s operating

resentative re

tings by a rec

m

%%

%%

54

PSA 2017 Ann

um of the follo

other financiased on the dis

ble annually tse benefits eiefined contribncome (loss) ermany.

that was not tplans of up to

lbot), which w

nd-2017.

ese plans haved by these plaees. The plans

ing beneficia

at 1 August 2

rises a definedcutive commitmplemented an for foreigincome, and

eturns on prim

cognised ratin

ual Results - 39

owing:

al income andscount rate of

to retirees, orther are paidution plans isfor the year.

transferred too 60% of the

was closed to

e been closedans, includings guarantee a

ries in these

2017.

d benefit planttee members

in 2015. Thisgn members,d the budget

me corporate

g agency (for

9

d f

r d s .

o e

o

d g a

e

n s s , t

e

r

40 - Groupe PS

The assumptcountry. Theassumption ffor hourly em

Mortality and Sensitivity ofthe United K

A 1-point incthe investmeand €12 milli

In 2012, the to vary hedg

InformatiC. The projecte

The breakdo

The fair value

In 2017, the the United Kfunds. In Frawhile bond fand in EuropIn the Unitedinflation-linkcorporate boIn Germany, (minimum inIn France, thdecision hadIn the United2017. It is esplanned for 2In Germany,million for 20

France

United Kingdo

Germany

France

United Kingdo

Germany

SA 2017 Annua

tions regardine assumption for the United

mployees and

d staff turnov

f assumptionsingdom would

crease or decrent income reion for the Ge

Group arranging assets in r

ion on externed benefit obli

wn of externa

e of shares an

actual return Kingdom was +ance, equity ffunds are invepean inflation-d Kingdom, allked governmeonds rated A o

bond investmnvestment gra

e Group is fre been made ad Kingdom, thstimated at £32018. , the Group’s018.

om

om

al Results

ng future salarfor French p

d Kingdom pl0.75% for sal

ver assumptio

s: a 0.25-poind lead to the f

rease in the eecognised in 2erman plans.

ged an interesresponse to ch

nal funds igation is part

al funds is as f

nd bonds was

on external f+4 % for the Ffunds consist ested in prime-linked governl the equities ent bonds deor higher. ments are 80%ade) and 8% inee to decide tas to the amouhe Group's an33 million (€3

s annual cont

ry increases talans is inflatioans is inflatioaried employ

ns are based o

nt increase or following incr

expected retu2017 of €9 m

st rate swap fohanges in the

ially covered

follows:

at level 1 in 2

unds manageFrench funds,of MSCI EMU

e European gonment bonds.are invested inominated in

% in corporaten short-term mhe amount ofunt of contribnual contribu

37 million) for

tribution (exc

Discount rat

Eq

1

1

31

ake into accoon plus indivi

on plus 1 %. Inyees.

on the specifi

decrease in treases or decr

rn on externamillion for Fren

or the United liability at the

by dedicated

2016 and 2017

ed by the Grou, +2.8 % for thU Euro index overnment bo in global equin pounds ster

e bonds with amoney marketf its contribut

butions to be pution (excludinr 2018, althou

luding Faurec

-2.75%

-4.17%

-4.94%

e +0.25 PT

quities Bond

19 % 81 %

12 % 88 %

0 % 100 %

1 December 20

unt inflation aidual pay risen Germany, th

c economic co

he discount rareases in proje

al funds wouldnch plans, €2

Kingdom wite discount rat

external fund

7.

up in France, ihe German futracker funds

onds, in Europ

ty funds. 69 %rling. The rem

an average ratt instrumentstions to the expaid in 2018.ng Faurecia) augh this sum

cia) amounte

Inflation rate

ds Equities

% 17 %

% 19 %

% -

017 31 Decem

and forecast ie according tohe assumptio

onditions of e

ate and in theected benefit

d have led to 8 million for

hin the pensioe.

ds.

in Germany ands and +5.6

s and internatpean corporat

% of the bond maining 31 %

ting of A-, 12%. xternal funds.

amounted to £may change i

d to €12 mill

1.91%

3.70%

1.13%

e +0.25 PT

s Bonds

83 %

81 %

-

mber 2016

individual payo the employ

on is for inflat

each host coun

e inflation rateobligations:

an increase othe United K

on fund, maki

nd by the pen% for the Un

tional index tte bonds rate

portfolio are

% are compris

% in EU gover

. At 31 Decem

£34 million (€in light of the

lion. It is est

y rises in eachee’s age. Theion plus 0.5%

ntry.

e in France or

or decrease iningdom plans

ing it possible

nsion trusts inited Kingdom

tracker funds,ed A or higher

comprised ofsed mainly of

rnment bonds

mber 2017, no

€39 million) ine negotiations

imated at €4

h e

%

r

n s

e

n m

, r

f f

s

o

n s

4

MovemeD.

Excludin

ReconciliaE.

Expenses F.

These expen service c the imp

expense interest

“Other f

(in million euros

Projected bene

At beginning o

Service cost

Interest cost

Benefit paymen

Unrecognised a

- amount - as a % of proje

period (1)

Effect of change

Effect of change

Effect of curtailm

At period-end:

External fund

At beginning o

Normative return

Actuarial gains

- amount - as a % of proje

period (1)

Translation adju

Employer contr

Benefit paymen

Effect of change

At period-end:

'(1) The percentaGermany include

(in million euros

Present value

Fair value of ext

Net (liability) asheet before m(IFRIC 14)

Minimum fundin

Net (liability) asheet

Of which, liabilit

Of which, asset

Of which, unfund

nt for the yeng minimum f

ation of bala

recognised ises are record

cost is recordepact of restrues";

cost and thefinancial incom

s)

efit obligation

of period: Prese

nts for the year

actuarial gains and

ected benefit ob lig

es in exchange ra

es in scope of co

ments and settlem

: Present value

of period: Fair v

n on external fund

and (losses):

ected benefit ob lig

ustment

ibutions

nts for the year

es in exchange ra

: Fair value

age actuarial gaines the effect of the

s)

of projected be

ternal funds

asset recognisedminimum fundin

ng requirement lia

asset recognised

ty (Note 10)

t

ded plans

ar funding requi

nce sheet ite

n the incomeded as followsed under "Selcturing is rep

e normative rme” respectiv

nt value

d (losses):

gation at beginning

ates

nsolidation and o

ments

value

ds

gation at beginning

ates and other

ns and (losses) ischange in scope o

nefit obligation

d in the balanceg requirement

ability (IFRIC 14)

d in the balance

rement (IFRIC

ems

e statements: ling, general aported under

return on extely.

France

(1,620)

(49)

(24)

111

-

86g of

5.3 %

-

other (3)

1

(1,498)

899

13

-

20g of

2.2 %

-

45

(118)

-

859

calculated on theof consolidation du

France

(1,498)

859

e (639)

-

e (639)

(663)

24

0.3 %

C 14)

and administrr "Non-recurr

ternal funds a

United Kingdom Ge

(2,098)

(62)

(56)

114

-

(187)

8.9 %

75

(60) (

-

(2,274) (

2,777

75

-

81

2.9 %

(97)

42

(114)

-

2,764

201

basis of the obligue to the acquisitio

United Kingdom Ge

(2,274) (

2,764

490

(37)

453

(134)

587

0.0 %

2017

rative expenseing operating

are recorded

ermany Other

(425) (270)

(48) (14)

(26) (7)

11 35

- -

(151) 3

5.4 % 1.1 %

- 15

(2,385) (316)

- -

(3,024) (554)

130 140

22 4

- -

46 (3)

1.7 % 2.1 %

- (8)

15 7

(11) (25)

2,502 182

2,704 297

7

gations and the exton of Opel Vauxhal

ermany Other

(3,024) (554)

2,704 297

(320) (257)

- -

(320) (257)

(320) (276)

- 19

0.0 % 15.4 %

7

Groupe

es"; g income" or

under "Othe

Total Franc

(4,413) (1,564

(173) (43

(113) (36

271 8

(249) (95

5.6 % 6.1 %

90

(2,764)

1 2

(7,350) (1,620

3,946 93

114 2

144 1

3.6 % 1.9 %

(105)

109 2

(268) (94

2,684

6,624 89

ternal fund at the bll in 2017.

Total France

(7,350) (1,620

6,624 899

(726) (721

(37)

(763) (721

(1,393) (747

630 26

1.2 % 0.0 %

PSA 2017 Ann

"Non-recurri

er financial ex

eUnited

Kingdom O

4) (2,096) (

3) (10)

6) (71)

9 82

- -

5) (316)

% 15.1 % 6.

- 313

- -

9 -

0) (2,098) (

2 2,657

3 94

- -

8 475

% 17.9 % 2.

- (403)

0 36

4) (82)

- -

9 2,777

2016

beginning of the p

eUnited

Kingdom O

0) (2,098) (6

9 2,777

) 679 (4

- (39)

) 640 (4

7) (63) (4

6 703

% 0.0 % 9.

2016

ual Results - 41

ing operating

xpenses" and

Other Total

670) (4,330)

(16) (69)

(17) (124)

46 217

-

(43) (454)

.4 % 10.5 %

1 314

- -

4 33

695) (4,413)

285 3,874

7 124

-

7 500

.5 % 12.9 %

- (403)

12 68

(41) (217)

- -

270 3,946

period, which for

ther Total

695) (4,413)

270 3,946

425) (467)

- (39)

425) (506)

425) (1,235)

- 729

6 % 1.5 %

g

d

42 - Groupe PS

Pension expe

7.2. SHARE-

Stock optionshare-based

EmployeeA. No plan was

PerformaB.

(1) Peugeot(a) 2015 perfA performantreasury stocpotentially aexpenses asspayroll taxes (b) 2016 perfA performanstatements).the vesting subject to cpotentially aaccordance w (c) 2017 perfPlan charFollowing thBoard at its m2017. This plof presence wVesting is susegment's av2016 and 20In light of th2020 and 14

(in million eurosService cost

Interest cost

Normative return

Effect of curtailm

Total (before mliability)

Change in minim(IFRIC14)

Total

SA 2017 Annua

enses break d

-BASED PAYM

s and performpayment plan

e stock optioawarded betw

ance share pla

t S.A. performrformance shance share plancks were deliattributable tsociated with

s.

rformance shance share pl The allocatioperiod. Takin

continued emttributable towith IFRS 2, w

formance sharacteristics e authorisatiomeeting of 27lan covers a mwithin the Gro

ubject to two verage recurr19 at constan

he objectives, April 2021.

s)

n on external fund

ments and settlem

minimum fundin

mum funding requ

al Results

own as follow

MENT

mance shares ns. These plan

ons ween 2009 an

ans

mance share pare plan n was establivered to Freno foreign res

h this plan, m

are plan an was esta

on of performang into considmployment ono the beneficiawas €7.1 millio

are plan

on given by t7 April 2016, tmaximum of 2oup at the enperformance

ing operatingt exchange rathe shares w

ds

ments

ng requirement

uirement liability

ws:

are granted tons are recogni

nd 2017. The l

plan

shed in 2015nch tax residesidents; the r

measured in a

blished in 20ance shares is

deration the pn 3 June 201aries of the plan for 2017, ex

he Extraordinhe Peugeot S.

2,693,000 shad of the vestin

e conditions r income (ROI

ates. will vest in two

France(49)

(24)

13

1

(59)

-

(59)

o Group mansed in accord

last plan expir

5. At the end ent beneficiarrelevant vesticcordance wi

016 (see Nots subject to a performance

19 and 3 Junan. The persoxcluding payro

nary Sharehol.A. Managing res. The allocng period. elating to the) over the 20

o equal parts

United Kingdom Ge

(62)

(56)

75

-

(43)

-

(43)

201

agement and ance with IFR

red on 19 Aug

of the vestinries. As of 31ng period enith IFRS 2, wa

te 6.2.B.(1).(bcondition of ptargets, the e 2020. At y

onnel expenseoll taxes.

lders’ MeetinBoard adopteation of perfo

e percentage 17-2019 perio

subject to pr

ermany Other(48) (14)

(26) (7)

22 4

- -

(52) (17)

- -

(52) (17)

7

certain emploRS 2 – Share-b

gust 2016.

g period on 3 December 2

nds on 31 Maas €4.4 millio

b) to the 20presence withshares will v

year-end 2017s associated w

g of 27 April ed a performaormance share

of the Peugeod and Group

resence withi

Total Franc(173) (43

(113) (36

114 2

1 2

(171) (27

-

(171) (27

oyees under ebased Paymen

31 March 2012017, 379,124arch 2019. T

on for the 20

016 consolidahin the Groupvest in two eq7, 1,907,491 with this plan

2016 and theance share plaes is subject t

eot Citroën DSp revenue gro

n the compan

eUnited

Kingdom O3) (10)

6) (71)

3 94

9 -

7) 13

- 4

7) 17

2016

equity-settlednt.

17, 2,019,0004 shares werehe personnel17, excluding

ated financialat the end of

qual portionsshares were

, measured in

e Supervisoryan on 10 Aprilto a condition

S Automotivewth between

ny at 14 April

Other Total(16) (69)

(17) (124)

7 124

4 33

(22) (36)

- 4

(22) (32)

d

0 e l

g

l f s e n

y l

n

e n

l


Personnel costs arising from the performance share plan characteristics At year-end 2017 the plan covers a maximum total of 2,334,942 shares, resulting in the delivery of treasury shares. For the purposes of calculating personnel costs, the weighted average fair value of the shares notified is €15.38. The personnel expenses associated with this plan, measured in accordance with IFRS 2, was €7.5 million for 2017, excluding payroll taxes. (2) Faurecia performance share plan In 2010, Faurecia established a performance share plan for executives of group companies. These shares are subject to service and performance conditions. The amount recognised in income for the period is an expense of €21.1 million (compared with an expense of €17.8 million in 2016). The details of performance share plans at year-end 2017 are provided in the following table:

Following achievement of the performance target in the plan awarded by the Board on 24 July 2013, 947,050 shares were delivered in July 2017. In light of the achievement of the performance targets in the plan awarded by the Board on 28 July 2014, 761,865 shares will be delivered in July 2018. 7.3. MANAGEMENT COMPENSATION

The Group is managed by the Managing Board. The Group’s management bodies correspond to the Group Executive Committee, which includes the members of the Managing Board and other members of executive management. The compensation details provided in the table above do not include payroll taxes. The amount of compensation paid to members of management bodies, including accrued variable compensation, is provisional. The fixed compensation of the Managing Board members was constant in 2017.

Furthermore, the expense recognised in 2017 for the contribution to the new defined contribution pension plan totalled €4.8 million for the members of the Managing Board and the other members of the Executive Committee and breaks down into €2.4 million paid to a pension fund and €2.4 million paid in cash to the beneficiaries (taking into account a scheme based on taxation upon first deposit). Details of the performance shares granted in 2015, 2016 and 2017 granted to members of the managing bodies and still exercisable at period-end, can be found in the following table:

Date of Managing Board decision: (number of shares)- objective

achieved

23/07/2015 570,122 741,081

25/07/2016 687,711 894,665

20/07/2017 617,595 802,830

ables radiées(1) Net of free shares granted cancelled.

- objective exceeded

Maximum number of performance

shares(1) due if:

(in million euros) Notes 2017 2016

Number of Executive Committee members at 31 December 18 18

Fixed & variable compensation and other short-term benefits (excluding pensions) 22.2 17.2

Stock option and performance share costs (1) 7.2 4.8 6.9

(1) This is the portion of the IFRS 2 expense for the period relating to the Managing Board's members and other members of theExecutive Committee.

(number of options) 2017 2016

1,670,000 1,585,000 Performance shares held at 31 December

44 - Groupe PS

Besides, membenefits andor any comp

NOTE 8 -

Property, plalosses, pursu 8.1. GOODW

AccountinA. Accounting developmen

Other intThe portion internal or easset when iover the estdevelopmenOther intangthe estimate

Change inB.

31 Decembe

(in million eur

At beginning

Purchases/ad

Amortisation

Impairment lo

Disposals

Change in scTranslation a

(2) including 1,

At period-en(1) Including b12.2.A).

31 Decembe

(in million eu

At beginnin

Purchases/a

Amortisation

Impairment lo

Disposals

Change in scTranslation a

At period-en(1) Including b12.2.A).

SA 2017 Annua

mbers of the the performaensation for l

GOODWIL

ant and equipuant to IAS 36

WILL AND INT

ng policies policies relatt expenses in

ternally-develof developm

external costs t is probable

timated usefut costs are ex

gible assets (ced period of be

n carrying am

er 2017

ros)

g of period

dditions (1)

for the year

osses

cope of consoliadjustment

,810 million in g

Of which O

ndorrowing costs

er 2016

ros)

g of period

dditions (1)

for the year

osses

cope of consoliadjustment

ndborrowing costs

al Results

Group's manance shares uoss of office.

LL AND INT

pment and in(see Note 8.3

TANGIBLE AS

ting to goodNote 5.3.(A).

loped or purcment costs re

necessary to that these co

ul life of the pensed as inc

consisting prinenefit, not to

mount

idation and oth

goodwill for the

Opel Vauxhall A

of €88 million c

idation and oth

of €92 million c

agement bodunder the plan

TANGIBLE

ntangible asse3).

SSETS

dwill are des

chased intanglating to softcreate the so

osts will genersoftware, ranurred.

ncipally of patexceed twent

her (2)

Opel acquisitio

Automotive seg

capitalised in ac

her

capitalised in ac

dies are not enns referred to

ASSETS – P

ets are carrie

scribed in N

gible assets, extware for intoftware or imrate future ecnging from fo

tents and tradty years.

on.

gment

ccordance with

Go

ccordance with

Go

ntitled to anyo above, or an

PROPERTY

ed at amortis

ote 3.1.A.(3)

xcluding reseternal use thaprove its perf

conomic beneour to twelve

demarks) are

1,514

-

-

-

-

1,829(22)

3,321IAS 23 (Revis

Develoexpeoodwill

1,382

-

-

-

-

1275

1,514IAS 23 (Revis

oodwillDevelo

expe

y long-term bey other forms

Y, PLANT A

ed cost less d

and those

arch and deveat correspondformance is refits. The capityears. Other

amortised on

4,860

1,619

(845)

(80)

(1)

8(70)

5,491

40

ed) - "Borrowin

sofother opment

nditure

4,352

1,365

(825)

(47)

(19)

1321

4,860sed) - "Borrowin

opment enditure

sofother

enefits apart s of share-bas

AND EQUIP

deductions o

related to r

velopment expds to directly

recognised as talised costs ar software ac

n a straight- li

594

150

(98)

-

(46)

1,8241

2,425

1,795

ng Costs" (see

Brands, ftware and intangible

assets

417

102

(100)

2

(2)

176(1)

594ng Costs" (see

Brands, ftware and intangible

assets

from pensionsed payments

MENT

f impairment

research and

penditure y attributablean intangible

are amortisedcquisition and

ne basis over

5,454

1,769

(943)

(80)

(47)

1,832(69)

7,916

1,835

e Note

Intangible assets

4,769

1,467

(925)

(45)

(21)

18920

5,454e Note

Intangible assets

n s

t

d

e e d d

r

BreakdowC.

Impairment t 8.2. PROPE

AccountinA. (1) Cost In accordancor productioCapitalised cagreements tThe cost of iuse includes GovernmentMaintenanceLeased assetcommitmentAssets acquivalue of the is recognised (2) Deprecia(a) StandardDepreciationresidual valuexcept for re

Buildings Material anComputer eVehicles anFixtures and

(b) Specific tIn the Peugelives of the cthe frequenc

(in million eur

Net

Automotive O

Faurecia CG

Faurecia CG

Automotive PFinancing ac

Total

wn of goodwi

tests on good

RTY, PLANT A

ng policies

ce with IAS 16n cost. They acosts includethat is not biltems of proprelated borro

t grants are ree costs are expts include veht, which are rered under finfuture lease p

d in the same

ation d method n is calculatedue, over theirental vehicles.

nd tooling equipment d handling eqd fittings

tooling eot Citroën DScorrespondingcy of model ch

ros)

Opel Vauxhall C

Us

U

Peugeot Citroëtivities Peugeo

ill at end of p

dwill allocated

AND EQUIPM

6 - Property, Pare not revalue the portionled to its part

perty, plant anowing costs (secognised as apensed as inc

hicles leased tecognised accance leases, apayments, or amount. The

on a straightr estimated u The main use

quipment

S and Opel Vag models, whhanges.

CGU

n DS CGUot Citroën DS C

period

to the Autom

MENT

Plant and Equed. n of specific ners.

nd equipmentee Note 12.2.

a reduction in urred. o retail custo

cording to theas defined in Ito the fair vaassets are de

t-line basis to useful lives. Peful lives of pr

(in years)20 - 304 - 163 - 44 - 7

10 - 20

uxhall Automich are gener

CGU

motive Equipm

uipment, pro

c tooling exp

t that take at .A). the cost of th

omers by the method descIAS 17 - Lease

alue of the leapreciated by a

write off the Property, planroperty, plant

motive segmenrally shorter t

ment CGUs are

perty, plant a

penses incurr

least twelve

he correspond

Group's compcribed in Notees, are recognased propertyapplying the m

acquisition ont and equipmt and equipme

nts, specific tohan the usefu

Groupe

e discussed in

and equipmen

ed by the G

months to ge

ding assets.

panies and vee 5.1.A.(1)(a). nised at an am, whichever is

method and ra

r production ment generallent are as follo

ooling is depreul lives of the

PSA 2017 Ann

Note 8.3.

nt are stated

Group under

et ready for t

ehicles sold w

mount equal ts lower. A finaates indicated

cost of the asly have no reows:

eciated over te tooling conc

2017

1,810

1,216

172

1221

3,321

ual Results - 45

at acquisition

cooperation

heir intended

ith a buyback

o the presentancial liabilityd below.

ssets, less anyesidual value,

the estimatedcerned due to

2016

-

1,218

172

124-

1,514

5

n

n

d

k

t y

y ,

d o

46 - Groupe PS

In the Automcustomer, prwould be recThe estimatedecision is m

BreakdowB.

The carrying

Leased veC.

Leased vehicretail customaccording to

31 December

(in million euro

Net

At beginning

Purchases/add

Depreciation fo

Impairment los

Disposals

Transfers and rChange in sco

and other (2)

Translation adj

At period-end

Gross valueAccumulated dimpairment

Of which Opel Vsegment (carryi(1) Including pro(Revised) - "Bo(2) Change in sc

31 December

(in million euro

Net

At beginning

Purchases/add

Depreciation fo

Impairment los

Disposals

Transfers and rChange in sco

and other (2)

Translation adj

At period-end

Gross valueAccumulated dimpairment

(2) Change in sc

(1) Including pro(Revised) - "Bo

SA 2017 Annua

motive Equipmrovided that cognised if theed useful live

made to halt pr

wn of propertamount of pr

ehicles cles totaling amers by the G

the method d

2017

os)

of period

ditions (1)

or the year

sses

reclassificationspe of consolidati

ustment

d

depreciation and

Vauxhall Automoting amount)

operty, plant andorrowing Costs"

cope of consolida

2016

os)

of period

ditions (1)

or the year

sses

reclassificationspe of consolidat

ustment

d

depreciation and

cope of consolida

operty, plant andorrowing Costs"

al Results

ment segmentaccumulated e asset were des of propertroduction of a

ty, plant androperty, plant

an amount of Group's compdescribed in N

2,116

121

(253

28

(107

24ion

408

(28

2,309

6,766d

(4,457)

tive 345

equipment acquiamounted to €31

tion and other" m

Land andbuildings

2,174

127

(218

(4

(55

18ion

70

4

2,116

6,897d

(4,781)

tion and other" m

equipment acquamounted to €35

Land andbuildings

t, specific toodepreciation

depreciated oty, plant anda vehicle or m

d equipmentand equipme

€3,299 milliopanies and veNote 5.1.A.(1)(

6 5,122

1 1,052

3) (1,343)

8 8

7) (38)

4 205

8 805

8) (97)

9 5,714

6 31,978

) (26,264)

5 317

ired under financ1 million (see Not

movements in "Lea

d s

Plant and equipment

4 4,712

7 787

8) (1,352)

4) 120

5) (44)

8 521

0 357

4 21

6 5,122

7 31,285

) (26,163)

movements in "Lea

ired under financ5 million (see Not

d s

Plant and equipment

ling is deprecat each year

on a straight-lid equipment

mechanical sub

ent can be ana

on at year-endehicles sold w(a).

2,475

-

(12)

-

-

-

850

(14)

3,299

3,537

(238)

629

ce leases for €14te 12.2.A).

ased vehicles" inc

Leased

vehicles (2)

V

2,570

-

(6)

-

-

-

(8)

(81)

2,475

2,799

(324)

ased vehicles" inc

ce leases for €21te 12.2.A).

Leased

vehicles (2)

V

iated based or-end does none basis over are reviewed

b-assembly.

alysed as follo

d include vehwith a buyba

22

8

(4)

-

(2)

1

-

1

26

82

(56)

-

4 million. Borrowi

cludes net chang

Vehicles and handling

equipment

21

8

(4)

-

(3)

-

-

-

22

81

(59)

cludes net chang

1 million. Borrowi

Vehicles and handling

equipment

on the quantitot represent lfive years.

d periodically

ows:

icles leased uck commitme

305

23

(81)

-

(5)

31

44

(3)

314

958

(644)

14

ing costs capitalis

es for the year (a

Fixtures, fittings

and other

269

22

(71)

-

(9)

56

38

-

305

905

(600)

ges for the year (a

ing costs capitalis

Fixtures, fittings

and other

ty of parts deless than the

y, particularly

under short-teent, which ar

1,253

1,202

-

7

-

(261)

(551)

(34)

1,616

1,647

(31)

143

sed in accordanc

dditions less disp

Assets under

construction

1,148

1,190

-

4

-

(595)

(497)

3

1,253

1,296

(43)

dditions less disp

sed in accordanc

Assets under

construction

livered to theamount that

y whenever a

erm leases tore recognised

Total

11,293

2,406

(1,693)

43

(152)

-

1,556

(175)

13,278

44,968

(31,690)

1,448

ce with IAS 23

posals).

Total

10,894

2,134

(1,651)

120

(111)

-

(40)

(53)

11,293

43,263

(31,970)

posals).

ce with IAS 23

e t

a

o d

8.3. ASSET

AccountinA. In accordancintangible asindefinite usfall in volumbusiness. Timpairment present valueFor the purpwhich the asdefined as thcash inflows If a CGU’s reto the extentThe two Peucorrespondinequipment u5.3.A.(1)). Thhigher CGU and both braIn terms of plants (incluGroup may dagreements In the Automrelated intanSeating, InteEquipment srecognised in

ImpairmeB. segment

The projectioassets in thprojections a(MTP) and tGroup's mos VEHICLE CGUThe Vehicle CThese flows The flows areAt 31 Decemand Opel Vau Individual asSpecific tests2022 MTP. Ttests identifiRussia. It waimpairment million.

IMPAIRMENT

ng policies ce with IAS 3ssets is testedeful lives, wh

mes, deteriorhe recoverabtest usually ce of estimated

poses of impassets belong, he smallest idfrom other as

ecoverable amt possible, as ugeot Citroënng to a vehicleused to manhe assets belolevel, respect

ands are allocaindividual assding propertydo impairmenwith joint-ven

motive Equipmngible assets aerior Systems egment CGU n the PSA Gro

ent test on thts

ons used to dhe Peugeot Care taken fromake into acco

st recent estim

Us CGU tests areare projectede discounted

mber 2017, thuxhall Automo

ssets s performed oThe discount ed an additioas recognisedrecognised pr

T

6 "Impairmend whenever tich is primari

rating profitale amount of

consists of estd future cash

airment testinexcept where

dentifiable Grssets or group

mount is less tan adjustmen

n DS and Opee model. The

nufacture theonging to the tively, Peugeoated to Opel Vsets, where ty, plant and ent tests on asntures) or assement segmentand property,

and Clean Mcomprises the

oup’s consolid

he CGU and in

determine futCitroën DS Am the last meount the mainmates, which a

e taken from cd out over theusing an aftere tests on theotive segmen

on the Latin Arates used wenal annual imd under non-reviously, tota

nt of Assets"there are indly goodwill anbility, technoan asset is thtimating the flows.

ng, the recovee the recoveraroup of assetsps of assets. han its carryi

nt to the carryel Vauxhall Aassets include

e model, as wvehicule CGU

ot Citroen DS Vauxhall Autohere are indiequipment anssets dedicateets dedicated t, each CGU coplant and equ

Mobility) to we assets of theated financial

ndividual ass

ture cash flowAutomotive Aedium-term pn risks pertainare based on e

cash flow proj estimated lif

r-tax rate of 9e assets dedicts did not iden

American planere 16.5% forpairment cha-recurring opal impairment

, the recoverdications of imnd brands. Indological or rehe higher of itasset’s value

erable amounable amount s that genera

ng amount, aying amount oAutomotive se

ed in a Vehiclwell as capit

Us and all the and Opel Vau

omotive CGU.ications of imnd intangible ed to specific to a single teorresponds touipment. The

which support e CGUs in thel statements.

sets of the Pe

ws for the purAutomotive splan presentedning to this pexternal forec

ections for eafe cycle of the.5%. cated to the Vntify any impa

nts and the Rr the Latin Amarge of €17 miperating incomt charges for

rable amount mpairment andications of imegulatory devts value in use

in use. Value

nt is determinof the individtes cash inflo

n impairmentof any goodwilegments comle CGU consistalised mode

other assets uxhall Automo

mpairment theassets) in La

c contracts (inechnology. o a programmse CGUs are cassets and g

e above four B

eugeot Citroë

rposes of impegment wered to the Supeplan. The autocasts.

ach vehicle moe vehicle mode

Vehicle CGUsairment.

ussian plant wmerican plantillion related tme. As of 31the Latin Am

Groupe

of property, nd at least onmpairment arevelopments the and its fair ve in use is usu

ned for a cashdual asset canows that are l

t loss is recogll allocated to prise a numbt of tooling anl developmenare combined

otive CGUs. T

e Group doestin America a

n particular co

me and comprcombined in Bgoodwill are aBusiness Units

ën DS and Op

pairment testie updated inervisory Boardomotive mark

odel showing el and of the c

in the Peuge

were updateds and 13% foto capital expe

1 December 2erican and Ru

PSA 2017 Ann

plant and eqnce a year foe in particulahat adverselyvalue less cosually measure

h-generating n be determinargely indepe

gnised in profio the CGU. ber of Vehiclend other specnt expenditud and tested

The Opel Vaux

s impairmentand Russia. Mooperation ag

rises all customBusiness Unitsallocated. Thes and the Faur

pel Vauxhall A

ing of CGUs an December d, which coveket forecasts

indications ofcorrespondin

eot Citroën DS

d on the basisor the Russianenditure duri2017, taking ussian plants

ual Results - 47

quipment andor assets withr a significanty impact thets to sell. Theed as the net

unit (CGU) toned. CGUs areendent of the

it or loss and,

e CGUs, eachcific plant andre (see Notetogether at a

xhall goodwill

tests on theMoreover, thegreements or

mer contract-s (Automotivee Automotiverecia goodwill

Automotive

and individual2017. These

ers 2018-2022used are the

f impairment.g spare parts.

S Automotive

s of the 2018-n plant. Theseng the year ininto accounttotalled €378

7

d h t e e t

o e e

,

h d e a l

e e r

-e e l

l e 2 e

.

.

e

-e n t 8

48 - Groupe PS

The researchAutomotive s Peugeot CitrThe profitabperformanceThe after-taxgrowth rate test the asseAs of 31 DePeugeot CitrFollowing ththe net carrymillion.

Sensitivities than that recapped at 0.€1,461 millioIn the absenAutomotive C

ImpairmeC.

FAURECIA GThe carrying use is defineunit based oThe main assof terminal vof the Mediuunchanged aThe test perbalance shee

The test resuincrease in treduction in FAURECIA CGThe stock maa share priceleading to thvalued at €1these values

(in million eur • Automotive • Clean Mob • Interior Sys

Total

SA 2017 Annua

h and developsegment and

roën DS and Obility assumede of the Peugex discount ratof 1%. These

ets of the Peugecember 2017oën DS Autome impairment

ying amount o

to the main csulting from t5%, €1,106 m

on if the threence of indicatCGU was not

ent test on Fa

ROUP CGUs amount of ea

ed as the presn the latest prsumption affevalue. The calcum-Term Planafter-tax rate orformed at enet. The balanc

ults are largehe discount rthe perpetua

GU IN THE ACarket value ofe of €65.13, rehe acquisition1,624 million (

no impairme

ros)e Seatingbilitystems

al Results

pment individdedicated to

Opel Vauxhalld for the pueot Citroën DSte applied warates are unchgeot Citroën D7, taking intomotive CGU tot of the Peugof all property

changes in assthe base test

million with ane factors wereions of impaitested for imp

aurecia group

ach group of ent value of erojections froecting value inculation was

n (2020) usingof 9.0% (9.0%nd-2017 confce sheet value

ely positive, arate, 0.5 percel recurring op

CCOUNTS OF Pf the Faureciaepresenting thn of control. T(including thent loss was re

ual assets hethe Chinese a

Automotive urposes of deS Automotive as 9.5% for 20hanged compDS Automotiveo account impotalled €604 meot Citroën Dy, plant and e

sumptions aret with a discon operating m combined. irment and gipairment.

p CGUs and o

assets was coestimated futm the Mediumn use is the leperformed by a growth rate

% in 2016), proirmed that ths are presente

nd the combentage point

perating incom

PSA GROUP shares held b

he price that wThe Group's se goodwill of €ecognised on t

ld by the fullyactivities have

CGU etermining thbusiness.

018–2022 andpared with thoe CGU. pairment rec

million. DS Automotiveequipment an

e as follows: ount rate 0.5%

margin 0.5% lo

iven the prov

other assets

ompared withure cash flowm-Term Plan evel of recurry extrapolatine of 1.4% (1.4

ovided by an inhe goodwill aed in the tabl

ined sensitivireduction in

me) does not c

by Peugeot S.Awould be paidhare of Faure€172 million the Faurecia g

y consolidatede been impaire

he terminal v

d 10.5% for those used for th

ognised prev

e CGU and ofd intangible a

the fair value% higher, €23ower in the re

visional purch

the higher ofws expected to

(2018–2020 ping operatingg to perpetui

4% in 2016). Fndependent ellocated to the below:

ty to changesthe perpetua

call into quest

A. at 31 Deced in a transactecia's net asserecognised b

goodwill at 31

d companies ed ion the am

value is cons

he terminal vahe periods en

iously, net im

f individual asassets include

e of assets wo1 million withference year

ase price allo

f its fair valueo be generateplan revised at

income, partty projected c

Future cash floexpert. he three CGU

s in assumptil growth rate

tion the carryi

mber 2017 wtion between ets in the cony Peugeot S.A December 20

31 De

of the Peugemount of €78 m

sistent with t

alue based oded 31 Decem

mpairment ch

ssets includeded in this CGU

ould be €275 h a perpetuafor the termi

ocation, the O

e and value ined by each cast mid-2017). ticularly for thcash flows forows were disc

Us was fairly

ions (0.5 perce and 0.5 percing amount of

was €4,166 mil minority sha

nsolidated balA. at that dat017.

ecember 2017

31

79435567

1,216

ot Citroën DSmillion.

the historical

n a perpetualmber 2016, to

harges of the

d in this CGU, was €11,516

million lowerl growth ratenal value and

Opel Vauxhall

use. Value insh-generating

he calculationr the last yearcounted at an

stated in the

centage pointcentage pointf goodwill.

lion based onreholders notance sheet is

te). In light of

1 December 201679437648

1,218

S

l

l o

e

, 6

r e d

l

n g

n r n

e

t t

n t s f

D. ImpairmeThe companCompany GrThe non-currto the Automassets that aspecific to thAt 31 Decemin the recognAt 31 Decemnot identify recognised binvestments in 2017. The In addition, Gindications orecoverable taken from tventures. Thto a perpetu2022 and 13At 31 Decemnot identify a

8.4. OFF-BA

MinimumA.

In order to scarmakers foarrangementadvantage. Under the teand specificarrangementto cover the Any adverse they are conFor contractsfor as off- ba

(in million eu

Capital comm

Orders for res

Minimum pur

Non-cancella

Total

ent of investmnies at equity oup and the crent assets of motive busine

are specific to he models) arember 2017, imnition of RMB

mber 2017, impany addition

by this compain companiestwo partners

Groupe PSA dof impairmentamount is dethe most recee terminal va

ual growth rat.5% for the te

mber 2017, thany impairme

ALANCE SHEE

m purchase cospeed up its or the joint ts enable the

erms of these c tooling andts. If it fails torelated produ consequencesidered probas where the p

alance sheet c

ros)

mitments for th

search and de

rchase commit

able lease com

ments in comin the autom

company in pathese compa

ess of Groupethe vehicle m

e tested in aggpairment test1,515 million

pairment testal impairmenny was €263

s at equity an agreed to caroes additionat losses, suchetermined by ent medium-tlue is determte of 3.0%. Th

erminal value. e impairment

ent losses on t

ET COMMITM

ommitmentsgrowth and rdevelopmentpartners to sh

agreements, d to taking o honour this uction costs bes of these coable, in the foproducts are mommitments

he acquisition o

velopment wor

tments

mmitments

mpanies at eqmotive busineartnership witnies are testee PSA (see N

models are tesgregate at theting at the co

n in impairmening by Changa

nt losses. At 3million. Accod a €190 millirry out a capital impairment as for examlooking at th

term plan forined with refe

he future cash

t testing of intop of those a

MENTS AND C

s reduce costs,

and/or manhare project c

the Group is delivery of aminimum puorne by the pommitments rm of asset immanufacturednet of any pro

of non-current

rk

Of which O

quity in the aess include thth Changan Ged for impairmote 8.3). Whsted by the Ve level of eachmpanies in pant losses (the an PSA Autom31 Decemberrdingly, Grouion provision tal increase fot testing of theple a significa

he value in usr 2018-2022 aerence to theh flows are d

vestments in lready recogn

CONTINGENT

the Group hnufacture of costs, deliverin

committed ta minimum rchase comm

partner. are reflected

mpairments od by the Grouovisions.

assets

Opel Vauxhall A

automotive bhe companiesroup, based in

ment on the ben there are ehicle CGU an

h partnership.artnership witGroup's share

mobile Co, Ltd r 2016, the Gpe PSA retainfor contingen

or circa €230 me investmentsant fall in volse based on capproved by te data in the fiscounted usi

companies anised for the a

T LIABILITIES

as entered inmechanical sng economies

o financing inquantity of

mitment, it wil

in the consor, if necessary

up's partner, c

Automotive se

Groupe

business in partnersh

n China. asis of the samindications o

nd all assets (

th the Dong Fe was RMB 75in cooperatio

Group's share ned €51 millioncies after incmillion each ins in companieumes or deteash flow forethe partners oinal years of tng an after-ta

t equity in thassets of these

RELATED TO

nto cooperatioub-assemblies of scale that

vestment in rproducts ma

l be required

lidated financy, provisions focapacity reser

31 D

egment

PSA 2017 Ann

hip with Dong

me principlesof an impairmincluding tho

Feng Motor G58 million, i.e.on with Chang

of the impaon in impairmclusion of a €2n the first half

es at equity weriorating proecasts. These of each of ththe plan and hax rate of 12.

e automotivee companies.

OPERATING

on agreemenes or vehiclest translate into

research and anufactured to pay a pen

cial statemenor contingencrvation fees a

ecember 2017

3

1,284

22

173

1,867

3,346

475

ual Results - 49

g Feng Motor

as applicablement loss, the

se that aren't

roup resulted €97 million).

gan Group didirment lossesent losses for

24 million lossf of 2018. hen there arefitability. Theforecasts areese two jointhaving regard.5% for 2018-

e business did

ACTIVITIES

ts with others. These jointo competitive

developmentby the jointalty designed

ts as soon ascies. are accounted

31 December 2016

854

33

53

1,473

2,413

-

9

r

e e t

d

d s r s

e e e t d -

d

r t e

t t d

s

d

50 - Groupe PS

Capital coB. This item coGroup's comautomotive December 20

Non-cancC.

Non-cancellaproperty and

NOTE 9 -

9.1. OTHER

The Group h€204 million "available-foreported as n 9.2. OTHER

Periods

(in million eu

2017

2018

2019

2020

2021

2022

2023

Subsequent y

Total non-ca

(in million eu

Excess of pa

Investments

Derivative insGuarantee de

Total

(1) Correspond

(in million eu

Liabilities relOther

Total

SA 2017 Annua

ommitments orresponds m

mmitment towequipment m

017, the Grou

cellable lease

able leases ard vehicles. The

OTHER NO

R NON-CURRE

has invested into these two

or-sale" in acconon-current a

R NON-CURRE

ros)

years

ancellable le

uros)

ayments to ex

in non-consoli

struments (1)

eposits and ot

ding to the non

uros)

ated to vehicle

al Results

for the acqumainly to comwards the two manufacturersup had already

e commitmen

e entered inte lease terms

ON-CURRE

ENT ASSETS

n the two "Foo funds, €145ordance with

assets because

ENT LIABILITI

ase commitm

ternal funds ov

idated compan

ther

-current portion

es sold with a

uisition of nonmmitments to

Fonds d’Avens. The Groupy paid €145 m

nts

o in the normreflect local p

ENT ASSETS

onds d’Avenir5 million of w

IAS 39 and are of the lock-u

ES

ments

ver pension ob

nies and units

Of which Ope

n of derivative in

buyback com

Of which Ope

n-current asso purchase prnir Automobilep's total comm

million into the

mal course of practices in ea

S AND OTH

r Automobile"which has beere therefore mup applicable

bligations

in the FAA fun

el Vauxhall Au

nstruments hed

mitment

el Vauxhall Au

sets roperty, plane (FAA - tier 1mitment to F

ese two funds

business and ach country.

HER NON-C

" (FAA - tier 1en paid to dameasured at fto the Group'

nds

tomotive segm

dging commod

5.1.A

utomotive segm

t and equipmand tier 2), tw

FAA amounte.

consist mainl

CURRENT L

1 and tier 2). Tte. These uni

fair value (sees investment.

31 De

Notes

31 De

7.1.E

ment

dity risks.

Notes

31 De

A.(1).(a)

ment

ment. It also wo funds set ed to €204 m

ly of leases o

LIABILITIES

The Group haits have been

e Note 12.8.C..

ecember 2017

3

-

446

272

242

175

129

112

491

1,867

ecember 2017

3

630

462

6

607

1,705

118

ecember 2017

3

4,180

100

4,280

863

includes theup to support

million. At 31

n commercial

S

as committedn classified as(3)). They are

1 December 2016

263

209

172

148

130

107

-

444

1,473

1 December 2016

729

254

28

364

1,375

-

31 December 2016

3,126

162

3,288

-

e t 1

l

d s e


NOTE 10 - CURRENT AND NON-CURRENT PROVISIONS

ACCOUNTING POLICIES In accordance with IAS 37 – Provisions, Contingent Liabilities and Contingent Assets, a provision is recognised when, at the balance sheet date, the Group has a present obligation towards a third party, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and no inflow of resources of an equivalent amount is expected. Provisions for restructuring costs are recognised only when the restructuring has been announced and the Group has drawn up or has started to implement a detailed formal plan. In application of IFRIC – 21 Levies charged by public authorities, taxes levied by public authorities are recognised as of the date of their tax generating event. Provisions are discounted only when the effect is material. In this case, the discount rate is based on a risk-free rate.

Warranties A provision is recorded to cover the estimated cost of vehicle and spare parts warranties at the time of sale to independent dealer networks or end-customers. Revenues from the sale of extended warranties or maintenance contracts are recognised over the period during which the service is provided.

The provision for warranties mainly concerns sales of new vehicles, where the contractual obligations generally cover two years. It corresponds to the expected cost of warranty claims related to vehicles and replacement parts. The amount expected to be recovered from suppliers is recognised as an asset, under "Miscellaneous other receivables" (Note 6.3.A). Provisions for tax claims concern a number of claims primarily outside France, and notably in Brazil.

31 December 2016 Additions

Releases (utilisations)

Releases (unused

provisions)

Recognised in equity during

the period

Change in scope of consolidation

and other31 December

2017

Pensions (Note 7.1.E) - - - - - - -

Other employee benefit obligations and other 187 - - - - - 187

Total non-current provisions 187 - - - - - 187

Warranties 42,735 42,735

Commercial and tax claims and litigations 1,235 172 (112) (1) 104 (5) 1,393

Restructuring plans (1) 194 36 (30) - - 3 203

Long-term and operating contract losses 1,429 208 (142) (1) 104 (2) 1,596Other 924 679 (548) (82) - 473 1,446

Total current provisions 46,517 1,095 (832) (84) 208 469 47,373

Of which Opel Vauxhall Automotive segment 1,384 1,857

(1) The main additions for restructuring plans in 2017 are discussed in Note 5.4.B.


NOTE 11 - INVESTMENTS IN EQUITY-ACCOUNTED COMPANIES

The share in earnings of equity-accounted companies represents the Group’s share of the earnings of those companies, plus any impairment of investments in equity-accounted companies. Gains on disposals of investments in equity-accounted companies are recorded in operating income.

Companies accounted for by the equity method include: joint ventures with Dong Feng Motor Group (see Note 11.4.A) and Changan (see Note 11.4.B), located in China; finance companies in partnership with:

o Santander Consumer Finance covering the financing of the Peugeot, Citroën and DS brands’ operations in the following countries: France, the United-Kingdom, Malta, Spain, Switzerland, Italy, the Netherlands, Belgium, Germany, Austria, Brazil and Poland (see Note 11.4.C);

o BNP Paribas covering the financing of the Opel and Vauxhall brands’ operations in the following countries: Germany, France, the Netherlands, the United-Kingdom, Sweden and Switzerland (see Note 11.4.D);

o as well as the joint company with Dongfeng Motor Group in China; the companies over which the Group has significant influence, mainly Gefco and since 2015 Peugeot Scooters. 11.1. CHANGES IN THE CARRYING AMOUNT OF INVESTMENTS IN EQUITY-ACCOUNTED COMPANIES


At beginning of period 3,014 2,637

Dividends and profit transfers (1) (369) (381)

Share of net earnings 217 128

Newly consolidated companies (2) 555 484

Capital increase (reduction) (3) 57 42

Changes in scope of consolidation and other 108 188

Translation adjustment (110) (84)

At period-end 3,472 3,014

O/w Dongfeng Peugeot Citroën Automobile goodwill 75 82

O/w Dongfeng Peugeot Citroën Automobile Finance Company Ltd goodwill 2 3

O/w Saipa Citroën Company goodwill 90 -

O/w Gefco goodwill 57 57

(2) Concerns mainly companies in partnership with BNP Paribas(3) Concerns mainly companies in partnership with Santander

(1) Dividends and profit transfers in 2017 included €200 million in net dividends paid to the Group by the companies in partnershipwith DPCA, of which €10 million withheld.


11.2. SHARE IN NET ASSETS OF EQUITY-ACCOUNTED COMPANIES

The share in net assets of equity-accounted companies breaks down into €3,472 million (€3,014 million at 31 December 2016) for companies with positive net equity, reported under “Investments in equity-accounted companies” less €206 million (€193 million at 31 December 2016) for companies with negative net equity.

11.3. SHARE IN NET EARNINGS OF EQUITY-ACCOUNTED COMPANIES

(in million euros)Latest %

interest 31 December

201731 December

2016Dongfeng Motor Company cooperation agreement : 897 1,192

• Dongfeng Peugeot Citroën Automobile (1) 50 % 868 1,043• Dongfeng Peugeot Citroën Automobile Sales Co 50 % 17 143

• Dongfeng Peugeot Citroën International Co 50 % 12 6Changan cooperation agreement : Changan PSA Automobiles Co., Ltd 50 % (190) (177)Other 151 10

Automotive 858 1,025Automotive equipment 136 115

Gefco (1) 25 % 156 153

Peugeot Scooters 49 % - 1

Other activities 156 154

Manufacturing and sales activities 1,150 1,294

Finance companies in partnership with Santander Consumer Finance 50 % 1,535 1,450Finance companies in partnership with BNP Paribas 50 % 493 -

Dongfeng Peugeot Citroën Automobile Finance Company Ltd (1) 25 % 88 77

Finance activities 2,116 1,527

Total 3,266 2,821(1) Including goodwill (see Note 11.1)

(in million euros)Latest %

interest 31 December

201731 December

2016

Dongfeng Motor Company cooperation agreement : (30) 242

• Dongfeng Peugeot Citroën Automobile (1) 50 % (14) 129• Dongfeng Peugeot Citroën Automobile Sales Co 50 % (16) 113

• Dongfeng Peugeot Citroën International Co 50 % - -

Changan cooperation agreement : Changan PSA Automobiles Co., Ltd 50 % (24) (292)Other (1) (43)

Automotive (55) (93)Automotive equipment 35 20

Gefco (1) 25 % 17 14

Peugeot Scooters 49 % (6) (8)

Other activities 11 6

Manufacturing and sales activities (9) (67)

Finance companies in partnership with Santander Consumer Finance 50 % 201 181Finance companies in partnership with BNP Paribas 50 % 8 -

Dongfeng Peugeot Citroën Automobile Finance Company Ltd (1) 25 % 17 14

Finance activities 226 195

Total 217 128(1) Including goodwill (see Note 11.1)

54 - Groupe PS

11.4. KEY F

The detailed

DongfengA. PSA Group a Dongfen

for accoDongfen

Dongfeninfluenc

Dongfensignifica

Another joinThe amounts

Earnings item

The amount depreciation

Revenue

Recurring ope

Operating inc

Of which dep

Net financial

Income taxes

Profit (loss) fr

Profit (loss) fr

Profit (loss) o

Income and e

Other inform

Net dividend Group

Group's share(Share in net

SA 2017 Annua

INANCIAL DA

data about th

g Motor Ground Dongfeng

ng Peugeot Ciounting purpong Citroën brang Peugeot Cie. It markets i

ng Peugeot Cint influence. tly controlleds below repre

ms at 100%

of depreciat of assets as i

erating income

come (loss)

preciation and i

income (loss)

s

rom continuing

rom discontinu

of the period

expenses reco

mation

received from t

e in the profit (earnings of co

al Results

ATA OF EQUI

he equity-acco

up cooperatioMotor Grouptroën Automo

oses as a joinands in China aitroën Automin China the vitroën AutomIt markets out company is bsent the com

tion and impadentified by t

e (loss)

impairment

g operations

ued operations

gnised in equit

the joint ventur

loss) of the peompanies at eq

TY-ACCOUNT

ounted compa

on agreemen have three joobile (DPCA),

nt venture. It and Fengshenobile Sales Co

vehicles produmobile Interna

tside China, inbeing createdbined financia

airment recorthe two partne

ty, net

re(s) by PSA

eriod quity)

TED COMPAN

anies are the

nt in the autooint ventures:based in Wumanufacture

n; o (DPCS), bas

uced by DPCA;ational Co (DPn the ASEAN zin charge of r

al statements

rded in 2017 ers for 1,515

In

NIES

following.

omotive activ han, which is

es motor veh

sed in Wuhan; PCI), based inzone the vehicresearch and dof DPCA and

for 4,172 mimillion yuan.

2017

5,404

59

(138)

(548)

51

26

(61)-

(61)

(30)

-

200

n million euros

vities

subject to joicles under th

n, over which

n Singapore, ocles produceddevelopment.DPCS.

llion yuan inc

2016

7,455

524

568

(299)

55

(138)

485-

485

242

-

260

oint control anhe Dongfeng

the Group h

over which thd by DPCA. .

cludes notab

2017

41,355

498

(1,060)

(4,172)

384

211

(465)-

(465)

In million yu

nd is qualifiedPeugeot and

has significant

he Group has

ly the overall

2016

54,795

3,858

4,181

(2,202)

402

(1,015)

3,568-

3,568

uans

d d

t

s

l

Balance shee

Changan B. Since 2011, PShenzhen, sumarkets mot Earnings item

Assets

Non-current a

Current asset

Of which cas

Liabilities

Non-current l

Of which non

Current liabili

Of which curr

Equity

Transition ta

Equity

% of interest

Group's share

Goodwill

Investments i

Revenue

Recurring ope

Operating inc

Of which dep

Net financial

Income taxes

Profit (loss) fr

Profit (loss) fr

Profit (loss) o

Income and e

Other inform

Group's share(Share in net

Net dividend Group

et items at 10

cooperation PSA Group anubject to jointor vehicles un

ms at 100%

assets

ts

sh and cash eq

s

iabilities (exclu

n-current financ

ties

rent financial li

able

e in equity

in company at

erating income

come (loss)

preciation and im

income (loss)

s

rom continuing

rom discontinu

of the period

expenses recog

mation

e in the profit (earnings of co

received from t

00%

agreement d Changan ha

nt control andnder the DS b

quivalents

uding equity)

cial liabilities

iabilities

equity

e (loss)

impairment

g operations

ued operations

gnised in equit

loss) of the peompanies at eq

the joint ventur

ave owned a jod classified forand in China

ty, net

riod quity)

re(s) by PSA

oint venture kor accounting. The newly b

31 Dece

In

In

known as Chag purposes asuilt plant beg

ember 2017

31 Dec

2,954

2,668

1,691

269

269

3,731

5111,622

1,622

50%

811

75886

n million euros

2017

133

(11)

(14)

(8)

(28)

(6)

(48)-

(48)

(24)

-

-

n million euros

Groupe

ngan PSA Auts a joint ventan production

cember 2016

31 De

3,380

2,826

1,224

287

287

3,711

222,208

2,208

50%

1,104

821,186

2016

368

(22)

(488)

(464)

(24)

(72)

(584)-

(584)

(292)

-

-

PSA 2017 Ann

tomobile (CAPture. It manun in 2013.

ecember 2017

3

23,057

20,806

13,196

2,100

2,100

29,106

3,98512,657

In million yu

2017

1,014

(83)

(104)

(63)

(213)

(44)

(361)-

(361)

In million yu

ual Results - 55

PSA), based inufactures and

1 December 2016

24,746

20,700

8,957

2,103

2,103

27,166

16416,177

ans

2016

2,702

(161)

(3,561)

(3,383)

(177)

(529)

(4,267)-

(4,267)

ans

5

n d

56 - Groupe PS

Balance shee

SantandeC.

The combinetables belowThe scope oBrazil. Earnings item

Assets

Non-current a

Current asset

Of which cas

Liabilities

Non-current l

Of which non

Current liabili

Of which curr

Equity

Transition ta

Equity

% of interest

Group's share

In million euroNet banking

General opera

Gross operat

Cost of risk

Operating in

Non operating

Income taxes

Profit (losss)

Income and e

Other inform

Net dividend r

Group's shareequity)

SA 2017 Annua

et items at 100%

er agreement

ed financial sw. of the partner

ms at 100%

assets

ts

sh and cash eq

s

iabilities (exclu

n-current financ

ties

rent financial li

able

e in equity

osrevenue

ating expenses

ting income

ncome

g items

for the period

expenses recog

mation

received from th

e in the profit (lo

al Results

%

t in the financ

tatements of

rship with San

quivalents

uding equity)

cial liabilities

iabilities

and others

d

nised in equity,

he joint venture(

oss) of the perio

cing activitie

all the joint

ntander inclu

, net

(s) by PSA Gro

od (Share in net

es

ventures wit

udes at 31 De

31 Dece

In

oup

t earnings of co

h Santander

ecember 2017

ember 2017

31 Dec

442

141

62

272

272

691

379(380)

(380)

50%(190)

n million euros

ompanies at

are presented

7 eleven Euro

cember 2016

31 D

388

192

91

408

408

525

250(353)

(353)

50%(177)

d in summary

opean countri

December 2017

3

3,442

1,100

480

2,120

2,120

5,390

2,954(2,968)

In million yu

20171,041

(380)

661

(58)

603

(12)(190)

401

201

(3)

136

y form in the

ies as well as

31 December 2016

2,847

1,408

665

2,990

2,990

3,845

1,832(2,580)

uans

2016895

(330)

565

(28)

537

-(176)

361

181

(3)

(92)

e

s

Balance shee

BNP ParibD.

The combinetables belowThe scope ofEarnings item

Balance shee

In million eur

Customer loa

Other assets

Total assets

Financing liab

Other liabilitie

Equity

Total liabilit

In million euroNet banking

General opera

Gross operat

Cost of risk

Operating in

Non operating

Income taxes

Profit (losss)

Income and e

Other inform

Net dividend r

Group's shareequity)

In million euro

Customer loa

Other assets

Total assets

Financing liab

Other liabilitie

Equity

Total liabiliti

et items at 10

bas agreeme

ed financial stw. f the partnersms at 100%

et items at 10

ros

ans and receiva

s

bilities

es

ties

osrevenue

ating expenses

ting income

ncome

g items

for the period

xpenses recog

mation

received from th

e in the profit (lo

os

ns and receivab

bilities

es

ies

00%

ent in the fina

tatements of

hip with BNP

00%

ables

and others

d

nised in equity,

he joint venture(

oss) of the perio

bles

ancing activit

all the joint v

Paribas includ

, net

(s) by PSA Gro

od (Share in net

ties

ventures with

des at 31 Dece

up

t earnings of co

h BNP Paribas

ember 2017 s

ompanies at

Groupe

are presente

ix European c

31 D

31 Dece

1

1

PSA 2017 Ann

ed in summar

countries.

December 2017

3

24,605

2,639

27,244

18,978

5,199

3,067

27,244

201766

(43)

23

(1)

22

-(6)

16

8

-

-

mber 2017

9,157

1,020

0,177

7,133

2,057

987

0,177

ual Results - 57

ry form in the

31 December 2016

22,450

2,481

24,931

17,635

4,396

2,900

24,931

7

e

58 - Groupe PS

11.5. RELATTransactionsSale and puaccounted co

Receivables a

Dealings betthe joint ven

NOTE 12

12.1. ACCO

The principleare described 12.2. NET F

Finance costs

Finance cA. Finance costs

(in million eur

Sales to man

Sales and as

Purchases (2)

(2) of which €1

(1) of which €5(€33 million in

(in million eur

Long-term loa

Loans - due w

Accounts rec

Accounts pay

(in million eur

Interest incom

Finance costs

Other financia

Other financia

Net financia

(1) Including €3

SA 2017 Annua

TED PARTY Ts with equity-archase transaompanies are

and payables

ween PSA Grtures.

- FINANCICOMPAN

OUNTING POL

es governing td in Note 12.8

FINANCIAL IN

s include in 20

costs s are actual ex

ros)

nufacturing and

ssignments to 2)

,856 million in p

546 million in sn 2016).

ros)

ans

within one yea

ceivable

ybale

ros)

me (1)

s

al income

al expenses

l income (exp

30 million for the

al Results

TRANSACTIONaccounted comactions carrieas follows:

with equity-a

oup and the f

NG AND FNIES

LICIES

the measurem8.

NCOME (EXPE

016 an except

xpense less th

d sales compan

companies in p

purchases from

ales to compan

r

pense)

e Automotive div

NS – EQUITY-mpanies are b

ed out by the

accounted com

financial com

INANCIAL

ment of finan

ENSE)

tional charge

he capitalised

nies (1)

partnership wit

m Gefco (€1,684

nies in partners

vision and Other

-ACCOUNTEDbilled on arm'e consolidate

mpanies are a

panies are lar

INSTRUM

cial assets an

of €65 million

portion of as

th Santander

4 million in 2016

hip with DCPA

r Businesses (€8

D COMPANIEs length termd manufactu

s follows:

rgely unchang

ENTS – MA

nd liabilities w

n for the early

sets in develo

6).

(€735 million in

85 million in 201

S s. ring and sale

ged following

ANUFACTU

within the mea

redemption o

opment.

n 2016) and €2

31 D

16).

es companies

Santander's i

URING AND

aning of IAS 3

of bonds by P

2017

675

5,171

(2,257)

23 million in sal

December 2017

3

48

116

318

(364)

2017

42

(208)

121

(196)

(241)

with equity-

investment in

D SALES

32 and IAS 39

Peugeot S.A.

2016

857

5,172

(2,043)

es to CAPSA

31 December 2016

51

27

315

(325)

2016

95

(335)

203

(235)

(272)

-

n

9

CapitaliseBorrowing coplant and eqcapitalised aqualifying ascosts. When funds eligible for cincome on thWhen funds costs eligibleborrowing co Finance cos

Other finaB.

12.3. NET F

Net financialAccording tothat may be and sales coshare of themanufacturinFinancial asscurrent. All o

(in million eur

Financial cost

Foreign excha

Finance costs

Of which Aut

Capitalised bo

Total

(in million eur

Finance costs

Of which Aut

Interest incom

Of which Aut

Total

Of which Aut

(in million eur

Expected retuOther financia

Financial inc

Interest cost o

Ineffective porOther financia

Financial ex

ed borrowingosts that are quipment or as part of the sets under IA

are borrowedcapitalisation he temporary borrowed for

e for capitalosts for the pe

sts incurred,

ancial incom

FINANCIAL PO

l position (neto the Group's

utilised to reompanies. Thiese financial ang and sales c

sets and liabilother assets a

ros)

ts

ange gain (loss

s incurred

tomotive Divisio

orrowing Costs

ros)

s incurred

tomotive Divisio

me

tomotive Divisio

tomotive Divisio

ros)

urn on pension al income

come

on employee be

rtion of the chanal expenses

xpenses

g costs directly attrib

an intangible cost of that aS 23 – Borrow

d specifically corresponds investment o

r general corpisation is deteriod of the o

net of inter

e and expen

OSITION (NET

t debt) of the definition, it

edeem these s definition rassets not reacompanies (seities with matnd liabilities a

) on financial tr

n and Other Bus

on and Other Bus

on and Other Bus

on and Other Bus

funds

enefit obligation

nge in fair value

butable to thasset that ta

asset (the “quwing Costs an

for the purpoto the actual

of any borroweporate purpostermined by perating segm

est income

ses

T DEBT) OF M

manufacturinis equal to th

liabilities, as emains unchaadily available

ee Note 12.4).turities of mo

are reported a

ransactions and

sinesses

sinesses

sinesses

sinesses

ns

e of financial ins

e acquisition,akes at least tualifying assed their carryin

ose of obtaini borrowing ced funds not yses are used t

applying a ment that obta

MANUFACTU

ng and sales che financial liwell as thoseanged from te is not take. ore than one as current.

d other

struments

, constructiontwelve montht”). Group invng amount do

ng a qualifyinosts incurredyet used. o obtain a qucapitalisation ains the qualif

RING AND SA

companies is aiabilities net o

e assigned to the date of fin into consid

year at the b

Groupe

n or productiohs to get readventories do oes not theref

g asset, the aduring the p

alifying asset,rate equal

fying asset.

ALES COMPA

a financial indof financial asspecific expenrst adoption eration in th

alance sheet

PSA 2017 Ann

on of an itemdy for its intenot meet thefore include a

amount of boperiod less an

, the amount to the weigh

ANIES

dicator not dessets used as nses of the mof IFRS in the financial se

date are clas

2017

(337)

2

(335)

(216)

127

(208)

2017

(335)

(216)

42

31

(293)

(186)

2017

21

100

121

(20)

(28)

(148)

(196)

ual Results - 59

m of property,nded use are

e definition ofny borrowing

rrowing costsny investment

of borrowinghted average

fined by IFRS.collateral, or

manufacturinge Group. Theecurity of the

sified as non-

2016

(447)

(15)

(462)

(311)

127

(335)

2016

(462)

(311)

95

85

(367)

(226)

2016

26

177

203

(27)

(45)

(163)

(235)

9

, e f g

s t

g e

. r g e e

-

60 - Groupe PS

CompositA.

Change inB. In 2017, the12.7.A. In 2017, the Net cash fro€5,205 milliodiscussed in Investments net investmepayment of Groupe PSA equity intereOther cash iwarrants, forThese varioumillion, whic cash res net deb

variatio

The €1,046 mmillion and €S.A. from theDebt repaym€304 million Furthermore

(in million euros

Non-current fina

Current financia

Other non-curre

Current financia

Financial investCash and cash

(Net debt) Net

Of which extern

Of which financwith finance com(1) Of which PeuVauxhall AutomOther Business

(in million eur

Increase in bo

Repayment o

(Increase) dec

(Increase) dec

Increase (dec

Net cash flow

Total

SA 2017 Annua

tion of net fin

n net financiae Group kept

manufacturinm operating a

on plus the poNote 6.4.A. for the perio

ent and finan€431 million subsidiaries,

ests. inflows for thr €288 millionus cash inflowch breaks dowerves increasebt before cans:

million increa€100 million be European In

ments in the ain 2012 bond

e, the non-cas

s)

ancial liabilities

al liabilities

ent financial asse

al assets

tmentsequivalents

financial positi

nal loans and borr

cial assets and liampanies

ugeot Citroën DS,motive segments ases

ros)

orrowings

f borrowings an

crease in non-c

crease in curre

crease) in curre

ws with Group fin

al Results

nancial posit

al position (nup the proa

ng and sales coactivities for tositive impact

d in property,ncing needs fin dividends as well as €7

he period comn. ws and outflowwn as follows:

ed by €153 mash and cas

se in borrowby Peugeot S.Avestment Ban

amount of €73ds upon maturh changes rep

31 Dece

(

(

ets

1

on

rowings

abilities

Opel and

nd conversion o

current financial

nt financial ass

nt financial liab

nance compani

ion (net debt

net debt) ctive refinanc

ompanies havthe year totalof a €8 millio

, plant and eqfor the year to Peugeot S74 million in

mprised the c

ws have result

illion; sh equivalen

ings mainly reA., and the €2nk (see Note 131 million incrity in July 201presented an

ember 2016

Net decrein cash

cequivale

(4,526) (9

(1,661)

685

629

110

11,576

6,813

6,804

9

7,288

of bonds

l assets

sets

bilities

ies

t)

cing strategy

ve slightly decled positive €

on slight increa

quipment andstood at €1,

S.A. shareholdcapital increa

capital increa

ted in a cont

nts increase

esulted from 250 million lo12.6.A). clude notably 17. increase of €7

ease and

cash ents

Change scope

consolidatio

960) (82

604 (812

(19) (157

344 30

55

6

30 (750

and conserva

reased their n€5,213 millionase in working

d intangible as253 million. T

ders, €129 miases and acqu

ses following

rolled reducti

ed by €43 m

the 23 Marchan arranged o

(see Note 12

729 million in

in of

onRemeasurement of equity

2) -

2) (1)

7) (10)

01 1

- -

- -

0) (10)

ative liquidity

net financial p, representingg capital. Cha

ssets amounteThis amount llion to non-c

uisitions of co

in particular

on in the net

million as a

h 2017 issuanon 2 February

.6.A) the repa

the net debt

Exchange rate fluctuations

23

91

(11)

(17)

-

-

86

y policy descr

position. g funds from nges in worki

ed to €4,020 mincludes in p

controlling shonsolidated co

r the convers

t financial pos

result of th

nce of two boy 2017 by PSA

ayment by Pe

of the Group.

Other changes

767

(752)

(1)

11

-

-

25

2017

1,046

(731)

169

(548)

107

43

(1)

42

ribed in Note

operations ofng capital are

million. Otherparticular theareholders of

ompanies and

sion of equity

sition of €619

he following

onds for €600A Automobiles

eugeot S.A. of

.

31 December 2017

(4,778)

(2,531)

487

1,269

165

11,582

6,194

6,186

8

6,840

2016

1,262

(2,921)

(70)

160

21

(1,548)

(443)

(1,991)

e

f e

r e f d

y

9

g

0 s

f

12.4. FINAN

Financial sec€1,241 millionon-current €1,575 millio

UNDRAWThe Group's lines of credi

The Peugeotrespectively,This credit fa

This facility is a level o a ratio oThe net debtlisted under All of these cFaurecia’s adarranged on credit was reThis credit fa

12.5. BREA

Other nonA.

(in million eur

Cash and casFinancial inveCurrent & non

TotalLines of creditLines of credit

Total financi

of which Fa(1) of which €43

(in million eurPeugeot S.A.FaureciaUndrawn con

(in million eur

Loans and rec

Financial ass

Derivative inst

Total financi

NCIAL SECUT

curity is made on (€585millio

financial asseon (€1,088 mil

WN SYNDICATmanufacturi

it expiring at v

t S.A. and GIE both falling d

acility was und

s subject to thof net debt of of the net debtt of manufact“Total Equity”

clauses were cdditional borr15 Decembe

enegotiated oacility was und

KDOWN OF F

n-current an

ros)

sh equivalents (

estmentsn current financ

t (undrawn) – et (undrawn) – F

ial security

aurecia3 million in Arge

ros) and GIE PSA

nfirmed lines

ros)

ceivables

ets classified a

truments

ial assets, net

ITY

up of availabon at 31 Decemets respectivellion at 31 Dec

TED LINES OF Cng and sales various dates

PSA Trésoreridue in Novemdrawn at the p

he respect of: manufacturint of manufactturing and sal” in liabilities. complied withowing capacitr 2014. It com

on 24 June 20drawn at the p

FINANCIAL A

d current fin

(1)

ial assets

excluding FaureFaurecia

entina (€12 millio

Trésorerie

of credit

as "at fair value

le cash, othermber 2016) anly were includcember 2016)

CREDIT companies hthrough to 20

ie credit line iber 2020. period-end.

ng and sales coturing and salees companies

h at 31 Decemty, other than

mprises only o016 to extendperiod-end.

ASSETS

ancial assets

cia

on at 31 Decemb

through profit o

r readily availand €334 millioded in the ca).

have the follo021:

s comprised o

ompanies of les companiess is defined a

mber 2017. n trough Peugone €1,200 md the maturity

s

ber 2016).

N

or loss"

able financial on (€503 milliolculation of fi

owing addition

of two tranche

ess than of €6 to consolidatnd disclosed i

geot S.A., resuillion tranche y to five years

Non-current

255

223

9

487

31 Decembe

Groupe

assets and unon at 31 Decenancial secur

nal borrowing

es for €2,000

6 billion; ted equity of lin Note 12.3.

ults from a neexpiring in De

s from that da

Notes31 D

12.5.C12.5.B

31

Current

1,261

-

8

1,269

er 2017

PSA 2017 Ann

ndrawn creditember 2016) irity, represent

g capacity un

million and €

less than 1. The Group’s

ew syndicatedecember 201ate, namely 2

December 2017

3

11,582165

1,575

13,3223,0001,200

17,522

2,849

December 2017

3

3,0001,2004,200

Non-current

285

380

20

685

31 Decembe

ual Results - 61

lines. n current andting a total of

der revolving

1,000 million,

equity is that

line of credit9. This line of

24 June 2021.

31 December 2016

11,576110

1,088

12,7743,0001,200

16,974

2,840

31 December 2016

3,0001,2004,200

Current

627

-

2

629

er 2016

d f

g

,

t

t f .

62 - Groupe PS

Financial B.

Short-term ihorizon is les

Cash and C. Cash primarprimarily of subject to anoriginal matuCash and cas

Cash includeAt 31 Decemovernight moAll of these Term Money

12.6. BREA

Main finaA.

The financial

The main traBond issuOn 23 Marchan annual coOn 2 Februarepaid in MaIn July 2017,

(in million eur

Mutual fund u

Cash and cur

Total - manuo/w deposits

Total

(in million eur

Other bonds

Finance lease

Other long-ter

Other short-te

Derivative inst

Total financi

SA 2017 Annua

investmentsinvestments ass than 12 mo

cash equivalily representscash investmn insignificanturity of three sh equivalents

s the proceedmber 2017, caoney market ninstruments c

y Market Fund

KDOWN OF F

ancing transal risk managem

ansactions durues by manufh 2017, Peugeoupon of 2%. ary 2017, PSAarch 2024 bea

Peugeot S.A.

ros)

units and money

rrent account ba

ufacturing andwith finance co

ros)

e liabilities

rm borrowings

erm financing a

truments and o

ial liabilities

al Results

s are investme

onths. They to

lents s cash in banents and negt risk of chanmonths or les

s include:

ds from borrowash equivalentnotes in the acomply with

ds.

FINANCIAL LI

actions duringment policy is

ring the year wfacturing and eot S.A. issued

Automobilesring interest arepaid at mat

y market secur

alances

d sales compaompanies

nd overdraft fac

other

nts of surplutal €165 millio

nk current acotiable debt sge in value a

ss according to

wings arrangets mainly inclmount of €1,4the 'Committ

IABILITIES

g the year s set out in No

were as followsales compan

d two bonds f

s S.A. arrangeat an annual rturity the €30

rities

anies

cilities

us cash flows on (€110 milli

ccounts, and securities tha

and held in oro IAS 7.

ed to meet futluded money 489 million, atee of Europe

ote 12.7.A.

ws: nies (excludinfor €600 millio

ed a €250 milrate of 1.5%.04 million bon

N

Am

for which thion as of 31 D

excludes banat are readily rder to meet

ture financingmarket fund

nd commerciean Securities

ng Faurecia) on and €100 m

lion loan from

d.

Non-current

3,835

147

795

-

1

4,778

Carrying amo31 Decembe

mortised cost o

he remaining ecember 2016

nk overdrafts.convertible toshort-term ca

g needs (see ns for €4,610 mal paper for € Regulators' (

million maturi

m the Europe

31

Current

651

27

452

1,399

2

2,531

ount at er 2017

or fair value A

maturity an6).

. Cash equivao known amoash commitm

note 12.3.A). million, bank

€104 million. (CESR) definit

ing in March 2

ean Investmen

December 2017

8,719

2,863

11,582

(8)

11,574

Non-current

3,706

143

674

-

3

4,526

Amortised cost

Carrying am31 Decemb

d investment

alents consistounts of cash,ments with an

deposits and

tion of Short-

2024, bearing

nt Bank to be

31 December 2016

8,389

3,187

11,576

(8)

11,568

Current

393

23

251

981

13

1,661

or fair value

mount at er 2016

t

t ,

n

d

-

g

e

CharacterB.

CharacterC.

(in million eur

Manufacturin

2003 bond iss

2013 bond iss

2013 bond iss

2016 bond iss

2017 bond iss

2017 bond iss

Faurecia

2015 bond iss

2016 bond iss

Total bond is

EIB loan (1)- €

EIB loan - €25

EIB loan - €30

FDES loan (1)

Borrowings - M

Borrowings -

Borrowings - S

Borrowings - R

Borrowings - O

Borrowings - O

Borrowings - B

Borrowings - R

Other borrowi

Faurecia

Other borrowi

Total other l

(1) EIB: Europe(2) Concerns th

Manufacturin – euro-deno

Manufacturin– foreign cur

(in million eur

Commercial p

Short-term loa

Bank overdraf

Payments iss

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(1) Liquidity risk In the prevailing economic environment, the Group continued with its diversified, proactive financing strategy and conservative liquidity policy in order to meet its general financing needs, particularly the financing of its business and of its development projects. The financing strategy is defined by the Managing Board, and implemented under the direction of the Chief Financial Officer with the Corporate Finance & Treasury Department and submitted to the Supervisory Board’s Finance and Audit Committee. The Group's cash forecasts, financing needs and interest income and expenses, as well as the level of financial security are reviewed at monthly meetings of the Treasury and Foreign Exchange Committee chaired by the Chief Financial Officer. The financing plan is implemented by the Corporate Finance & Treasury Department. Pursuant to this policy, the Group: issues bonds under an EMTN programme; has recourse to bank borrowings in France and abroad; sells receivables; arranges confirmed lines of credit for its financial security; and, where necessary, issues convertible bonds.

The Group could also raise funds by a capital increase. This financing policy allows it to seize market opportunities to pre-finance itself and to thereby optimise its financial security. At 31 December 2017, the net financial position of the manufacturing and sales companies was €6,194 million compared to a €6,813 million net financial position at 31 December 2016. The breakdown of the net financial position can be found in Note 12.3.A, and changes thereto in Note 12.3.B. The repayment schedule of financial liabilities is set out in the table below. In June 2010, Peugeot S.A. put in place a €5 billion EMTN programme, €2.2 billion of which had been drawn down at end-December 2017. At 31 December 2017, the manufacturing and sales companies had financial security of €17,522 million (see Note 12.4) compared to €16,974 million at end-December 2016. It covers all currently anticipated financing needs for the manufacturing and sales companies over the coming 12 months. Contractual repayment schedule of financial liabilities and derivative instruments: manufacturing and sales companies The following table shows undiscounted cash flows from financial liabilities and derivative instruments. They include principal repayments as well as future contractual interest payments. Foreign currency cash flows and variable or indexed cash flows have been determined on the basis of market data at the year-end.

31 December 2017

(in million euros) 2018 2019 2020 2021 2022 > 5 years

Financial liabilities Bonds - principal repayments

(3,006) (776) (430) - - - (1,800)Faurecia (1,436) (36) - - - (700) (700)

Other long-term debt - principal repayments(1,002) (384) (72) (75) (110) (42) (319)

Faurecia (196) (40) (7) (132) (7) (5) (5)

Total bonds and other borrowings(4,008) (1,160) (502) (75) (110) (42) (2,119)

Faurecia (1,632) (76) (7) (132) (7) (705) (705)

(91) (91) - - - - -Faurecia (2) (2) - - - - -Finance lease liabilities (147) (147) - - - - -Employee profit-sharing fund (1) (1) - - - - -

Derivative instruments Total derivative instruments 297 (210) 87 - - - - -

TOTAL 297 (6,091) (1,390) (509) (207) (117) (747) (2,824)

Total interest on bonds and other borrowings

Undiscounted contractual cash flowsLiabilitiesAssets

Manufacturing and sales companies - excl. Faurecia





Covenants None of the borrowings of the manufacturing and sales companies excluding Faurecia are subject to specific acceleration clauses based on minimum credit ratings. In some cases, the borrowings of manufacturing and sales companies are subject to clauses whereby the borrower gives the lenders certain guarantees that are commonly required within the automotive industry.

They include: Negative pledge clauses whereby the borrower undertakes not to grant any collateral to any third parties. These

clauses nevertheless carry certain exceptions; “material adverse changes” clauses, which apply in the event of a major negative change in economic conditions; ”pari passu” clauses, which ensure that lenders enjoy at least the same treatment as other creditors; ”cross-default” clauses, whereby if one loan goes into default other loans become repayable immediately; clauses whereby the borrower undertakes to provide regular information to the lenders; clauses whereby the borrower undertakes to comply with applicable legislation; change of control clauses.

In addition, EIB loans are dependent on the Group carrying out the projects being financed and, in some cases, require the Group to pledge a minimum amount of financial assets. All of these clauses were complied with in 2017.

Drawing on the €3 billion syndicated credit facility established in April 2014 and amended in November 2015 (see Note 12.4) is subject to compliance with: a level of net debt of manufacturing and sales companies of less than of €6 billion; a ratio of the net debt of manufacturing and sales companies to consolidated equity of less than 1. The net debt of manufacturing and sales companies is defined and disclosed in Note 12.3. The Group's equity is that listed under "Total Equity" in liabilities.

The €1,200 million syndicated line of credit arranged on 15 December 2014 by Faurecia and comprising only one €1,200 million tranche expiring in June 2021 (see Note 12.4) contains only one covenant setting limits on debt.

The compliance with this ratio is a condition to the availability of this credit facility. As of 31 December 2016, Faurecia complied with this ratio. (2) Interest Rate Risks Trade receivables and payables are due within one year and their value is not affected by the level of interest rates. Cash reserves and short-term financing needs of manufacturing and sales companies - excluding Automotive Equipment companies - are mainly centralised at the level of GIE PSA Trésorerie, which invests net cash reserves on the financial markets. These short-term instruments are indexed to variable rates or at fixed rates. The gross borrowings of manufacturing and sales companies - excluding Automotive Equipment companies - consist mainly of fixed-rate long-term loans. The proportion of the manufacturing and sales companies' borrowings - excluding Automotive Equipment companies - at variable rates of interest is now 2.1 %, based on the principal borrowed. Faurecia independently manages hedging of interest rate risks on a centralised basis. Such management is implemented through Faurecia's Finance and Treasury Department, which reports to its executive management. Hedging decisions are made by a Market Risk Committee that meets on a monthly basis. A significant part of the gross borrowings (syndicated credit facility, sale of receivables, short-term loans, commercial paper as applicable) are at variable or renewable rates. The aim of the Group’s interest rate hedging policy is to reduce the impact of changes in short-term rates on earnings. The hedges arranged comprise mainly euro-denominated interest rate swaps. In order to benefit from historically low interest rates, 2- and 3-year maturity hedges have been set up. These hedges cover a part of the interest on variable rate borrowings, due in 2018 and first quarter of 2019, against a rise in interest rates. Some of Faurecia's derivative instruments have qualified for hedge accounting under IAS 39 since 2008. The other derivative instruments purchased by Faurecia represent economic hedges of interest rate risks on borrowings but do not meet the criteria in IAS 39 for the application of hedge accounting. Faurecia is the only entity that holds cash flow hedges of interest rate risks.

Adjusted net debt* / EBITDA**

* Consolidated net debt

** EBITDA: Faurecia's Earnings Before Interest, Tax, Depreciation and Amortisation for the last 12 months.

2.50maximum


The net interest rate position of manufacturing and sales companies is as follows:

(3) Counterparty and credit risks The Automotive Division places significant emphasis on guaranteeing the security of payments for the goods and services delivered to customers. Relations with Peugeot and Citroën dealers are managed within the framework of the Banque PSA Finance sales financing system described below. Payments from other customers are secured by arrangements with leading counterparties that are validated by the Group Treasury Committee. At Faurecia, the main counterparties are leading carmakers whose creditworthiness is tracked customer-by-customer. Other counterparty risks concern investments of available cash and transactions involving currency, interest rate and commodity derivatives. These two types of transactions are carried out solely with leading financial partners approved by the Group Treasury Committee. The related counterparty risks are managed through a system of exposure limits by amount and by commitment duration. The limits are determined according to a range of criteria including the results of specific financial analyses by counterparty, the counterparty's credit rating and the amount of its equity capital. Available cash is invested either in money market securities issued by approved counterparties, or in mutual funds or deposit accounts. The bulk of money market securities in the portfolio are issued by leading banks and the remainder by non-financial sector issuers. Mutual funds are selected according to guidelines specifying minimum fund credit ratings and maximum maturities of underlying assets. In addition, the amount invested in each fund is capped based on the fund's total managed assets. Derivatives transactions are governed by standard ISDA or Fédération Bancaire Française (FBF) agreements and contracts with the most frequently used counterparties provide for weekly margin calls.

(4) Currency risk The manufacturing and sales companies manage their foreign exchange positions on transactions denominated in foreign currencies with the objective of hedging the risk of fluctuations in exchange rates. Automotive Division currency risks are managed centrally, for the most part by PSA International S.A. (PSAI) under the supervision of executive management. All products used by PSAI are standard products covered by International Swaps and Derivatives Association (ISDA) master agreements. The goal is to minimise Automotive Division exchange differences by systematically hedging as soon as the foreign currency invoice is booked. At Group level, currency risks are managed by requiring manufacturing companies to bill sales companies in the latter's local currency (except in rare cases or where this is not allowed under local regulations). Currency risks on these intragroup billings are also hedged using forward foreign exchange contracts. In most cases, foreign currency intragroup loans of Automotive Division companies are also hedged.

31 December 2017 (in million euros) Total

Fixed rate 1,484 90 241 1,815Variable rate 11,565 - - 11,565Fixed rate (2,405) (1,403) (3,015) (6,823)Variable rate - (213) - (213)Fixed rate (921) (1,313) (2,774) (5,008)Variable rate 11,565 (213) - 11,352Fixed rate (415) 383 - (32)Variable rate 415 (383) - 32Fixed rate (1,336) (930) (2,774) (5,040)Variable rate 11,980 (596) - 11,384

Intraday to 1 year 2 to 5 years

Total assets

Total liabilities

Beyond 5 years

Net position before hedging

Derivative financial instruments

Net position after hedging

31 December 2016 (in millions euros) Total

Fixed rate 824 109 - 386 1,319Variable rate 11,490 - - 50 11,540Fixed rate (736) (1,351) - (2,806) (4,893)Variable rate (1,077) (36) - - (1,113)Fixed rate 88 (1,242) (2,420) (3,574)Variable rate 10,413 (36) 50 10,427Fixed rate (79) - (436) - - (515)Variable rate 79 - 436 - - 515Fixed rate 9 (1,678) (2,420) (4,089)Variable rate 10,492 400 50 10,942

Intraday to 1 year

Net position before hedging

Beyond 5 years2 to 5 years

Total assets

Derivative financial instruments

Net position after hedging

Total liabilities


The foreign currency policy includes the hedging of future flows for the Automotive Division. It consists of hedging the main net exposures to G10 currencies. These hedges are underpinned by governance rules and a strict decision-making process. They are classified as cash flow hedges under IAS 39. The maximum horizon for these hedges is two years. The hedging ratios depend on the maturity. At 31 December 2017, the Automotive Division had cash flow hedges on the following currencies: GBP, CHF, PLN, CNY, KRW and JPY. The Group does not hedge its net investment in foreign operations. PSAI also carries out proprietary transactions involving currency instruments. These transactions are subject to very strict exposure limits and are closely monitored on a continuous basis. They are the only non-hedging transactions carried out by companies in the PSA Group and have a very limited impact on consolidated profit. The historical Value at Risk (VaR) method is used to identify and manage market risks. The historical VaR uses volatilities and exchange rates for the various currencies since the beginning of 2011. VaR represents the maximum possible loss on the portfolio, based on the confidence level. The confidence levels measured are 95% and 99%. For both of these confidence levels, applying historical VaR to the portfolio at 31 December 2017 would not have had a material impact on Group earnings. This method assumes that future VaR will follow the same trend as historical VaR. It does not provide an indication of the losses that would be incurred under an extreme stress scenario. Currency risks relating to the commercial transactions of the Faurecia’s subsidiaries are managed independently and centrally by Faurecia using forward purchase and sale contracts and options as well as foreign currency financing. Faurecia manages the hedging of currency risks on a central basis, through its Group Finance and Treasury department, which reports to the executive management. Hedging decisions are made by a Market Risk Management Committee that meets on a monthly basis. Currency risks on forecasted transactions are hedged on the basis of estimated cash flows determined when budgets are prepared, validated by executive management. The related derivatives are classified as cash flow hedges when there is a hedging relationship that satisfies the IAS 39 criteria. Subsidiaries located outside the euro zone receive intragroup loans in their functional currency. These loans are refinanced in euros, and the related currency risk is hedged by swaps. Net position of the manufacturing and sales companies in the main currencies (open positions at 31 December) The net position of the manufacturing and sales companies in the main foreign currencies is as follows:

A 5% increase or decrease in the year-end exchange rate of the main currencies in which the manufacturing and sales companies had open balance sheet positions at 31 December 2017 (see table below) would have the following direct impact on income before tax and equity :

31 December 2017 (in million euros) GBP JPY USD PLN CHF RUB CZK Other Total

Total assets 225 81 859 29 260 62 140 469 2,125

Total liabilities (84) (39) (38) (7) (3) (23) (215) (36) (445)

Future transactions 1,775 (241) 30 5 388 13 (53) (448) 1,469Exposure to fixed charge coverage commitments - - - - - - - - -

Net position before hedging 1,916 (199) 851 27 645 52 (128) (15) 3,149

Derivative financial instruments (1,882) 197 (773) (30) (645) (35) 67 (73) (3,174)

Net position after hedging 34 (2) 78 (3) - 17 (61) (88) (25)

31 December 2016 (in million euros) GBP JPY USD PLN CHF RUB CZK Other Total

Total assets 233 50 534 19 284 50 117 218 1,505

Total liabilities (70) (12) (7) (19) (1) (53) (193) (15) (370)

Future transactions (34) (105) 89 (60) 289 13 (50) (104) 38Exposure to fixed charge coverage commitments - (55) - - - - - - (55)

Net position before hedging 129 (122) 616 (60) 572 10 (126) 99 1,118

Derivative financial instruments (148) 67 (588) 55 (572) 6 43 (112) (1,249)

Net position after hedging (19) (55) 28 (5) - 16 (83) (13) (131)

(in million euros) JPY / EUR PLN / EUR CNY / EUR USD / CAD CZK / EUR USD / DZD CNY / USD Other

Hypothetical fluctuation against the euro 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0 % 5.0%

Impact on income before tax - 1 - - 3 3 - 1

Impact on equity 5 3 - - 3 - - -


The following table shows the net position of the manufacturing and sales companies in the main foreign currencies versus the other currencies:

(5) Commodity risk The Automotive Division's exposure to commodity risks is tracked jointly by the Purchasing Department and PSA International S.A. (PSAI) which is responsible for hedging the Group's currency and commodity risks, while Faurecia's risks are managed independently. The Automotive Division’s commodity risks are reviewed at quarterly intervals by a Metals Committee chaired by the Group’s Chief Financial Officer. This Committee monitors hedging gains and losses, reviews each quoted commodity that may have a material impact on the Group’s operating income and sets hedging targets in terms of volumes and prices over periods of up to three years. The hedging ratios depend on the maturity. Cash flow hedges are used only when they qualify for hedge accounting under IAS 39, except in certain cases signed-off by the Managing Board and referred to the Supervisory Board. The production costs of the Automotive Division and Faurecia are exposed to the risk of changes in certain raw materials prices, either as a result of their direct purchases or indirectly through the impact of these changes on their suppliers' costs. These raw materials are either industrial products such as steel and plastics whose prices and related adjustments are negotiated between buyers and vendors, or commodities traded on organised markets, such as aluminium, copper, lead or precious metals, for which the transaction price is determined by direct reference to the prices quoted on the commodity market. Part of the Automotive Division's exposure to fluctuations in commodity prices is hedged using derivative instruments traded on regulated markets. The aim of these hedges is to minimize the impact of changes in commodity prices on physical deliveries for the Group's production needs. In 2017, commodity hedges concerned purchases of aluminium, copper, lead, platinum and palladium. For the Automotive Division, in the event of a 23% rise (fall) in base metal prices (aluminium, copper and lead) and a 24% rise (fall) in precious metal prices (platinum and palladium), the impact of the commodity hedges held at 31 December 2017 would have been a €59 million increase (decrease) in consolidated equity at 31 December 2017 (versus €75 million at 31 December 2016). As all commodity hedges qualified as cash flow hedges under IAS 39, changes in the fair value of these instruments resulting from changes in the prices of the hedged commodities would not have had any impact on 2017 profit. The commodity price trend assumptions were determined based on the average historical and implicit volatilities observed on the relevant commodity markets in the reporting year. Faurecia's sales contracts with customers do not include any indexation clause based on commodity prices. The risk of an unfavourable change in commodity prices is attenuated through a policy of regular price negotiations with customers and tight inventory management. Faurecia does not use derivative instruments to hedge its commodity and energy purchases.

31 December 2017 (in million euros) UAH / USD USD / CAD USD / BRL USD / ARS USD / DZD CNY / USD

Total assets - - 72 18 - 5

Total liabilities (11) - (58) (197) - -

Net position before hedging (11) - 14 (179) - 5

Derivative financial instruments - - (19) 180 - -

Net position after hedging (11) - (5) 1 - 5

31 December 2016 (in million euros) UAH / USD USD / CAD USD / BRL USD / ARS USD / DZD CNY / USD

Total assets - - 91 23 - 25

Total liabilities (4) - (36) (174) (83) -

Net position before hedging (4) - 55 (151) (83) 25

Derivative financial instruments - - (54) 153 - -

Net position after hedging (4) - 1 2 (83) 25

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t .


Hedging instruments that are not subject to compensation clauses in case of default by either party do not represent a significant amount for the Automotive Division.

(2) Impact of hedging instruments on income and equity (a) Impact of cash flow hedges

(b) Impact of fair value hedges

The “Net gain (loss) on hedges of borrowings” presented in Note 12.2.A also includes gains and losses on economic hedges that do not qualify for hedge accounting under IAS 39.

31 December 2016 Maturity

(in million euros) Assets Liabilities < 1 year 2 to 5 years > 5 years

Currency risk

Fair value hedges:

65 (41) 820 820 - -

Cash flow hedges:

3 (7) 561 445 116 -

• Cross-currency swaps - - 22 - 22 -

Trading instruments (1) - - 2,048 2,040 8 -

Total currency risks 68 (48) 3,451 3,305 146 -

Interest rate risk

Cash flow hedges:

• Interest rate swaps and interest rate options 1 (2) 7 - 7 -

Total interest rate risks 1 (2) 7 - 7 -

Commodity risk

Cash flow hedges:

• Swaps 22 (3) 324 210 114 -

Total commodity risks 22 (3) 324 210 114 -

TOTAL 91 (53) 3,782 3,515 267 -

Of which:

Total fair value hedges 65 (41) 820 820 - -

Total cash flow hedges 26 (12) 914 655 259 -

• Currency options and forward foreign exchange contracts

• Currency swaps, currency options and forward foreign exchange contracts

Carrying amount Notional amount

(1) Currency trading instruments: derivative instruments not qualifying for hedge accounting under IAS 39. As IAS 21 requires receivables andpayables denominated in foreign currencies to be systematically remeasured at the closing exchange rate with any gains or losses taken toincome, the Group has elected not to designate these receivables and payables as part of a documented hedging relationship, although their

(in million euros)

Change in effective portion recognised in equity

Change in ineffective portion recognised in profit or loss

Effective portion reclassified to the income statement under "Finance costs"

2017

39

(9)

Effective portion reclassified to the income statement under "Cost of goods and services sold"

2016

(13)

(36)

(27)

(10)

(5) (8)

(in million euros)

Change in ineffective portion recognised in profit or loss

Net impact on income (23) (37)

2017 2016

(37)(23)

72 - Groupe PS

12.8. FINAN

Financial A. Financial assThe event gedate.

TranslatioB. In compliancthe exchangerate and the in recurr

transact in intere

compan

RecognitiC. IAS 39 provid

(1) FinanciaThese assetsloss for the p

(2) Loans an“Loans and maturities ar

(3) Available“Available-foare recognisrecognised dfair value areprofit or lossFurthermorecost or withi “InvestmentGroup consid “Other non-FAA is a funFrance's Autto their net a

RecognitiD. Borrowings amethod. When the Gthrough an related eithe

SA 2017 Annua

NCIAL INSTRU

assets and liets and liabilit

enerating the

on of transacce with IAS 21e rate on the resulting exch

ring operatingtions carried oest income oies.

on and measdes for differe

al assets at fas are recognisperiod.

nd receivablereceivables” re very short,

le-for-sale finor-sale financised in the badirectly in come recognised s where the ve, a special linn a minimum ts in non-conders to be rep-current assetd to support omotive Induasset value at

ion and measand other fina

Group obtains effective inte

er to assets or

al Results

UMENTS

iabilities - deties within thebalance shee

ctions in fore1, transactions

transaction dhange differeg income, for out by the Banor finance co

surement of ent methods o

air value throed in the bala

es are carried atheir fair valu

nancial assetsial assets” arelance sheet a

mprehensive iin the incom

value falls by ne-by-line ana

of 1 year. solidated com

presentative ots” classified a

automotive ustry Pact sign

the balance s

surement of ancial liabilitie

government erest rate basr to income, d

finitions e meaning of

et recognition

ign currencies in foreign cudate. At each nce is recognicommercial t

nque PSA Finaosts for finan

financial asseof measureme

ough profit orance sheet at

at amortised ue correspond

s e securities that fair value. ncome. Only e statement over 50% comlysis is carried

mpanies” are of fair value, exas “available-fequipment m

ned on 9 Febrsheet date.

financial liabes are genera

loans at belosed on markeepending on t

IAS 39 includeis the transac

es urrencies are t

balance sheeised in profit otransactions c

ance Group; ncial transact

ets ent depending

r loss fair value. An

cost measureds to their carr

hat may be heGains and loimpairment lof the period

mpared to thed out where t

carried on thxcept in casesfor-sale” corr

manufacturersruary 2009. Th

bilities ally stated at a

ow-market inet rates. The the purpose f

e the items lisction (i.e. com

translated intet date, moneor loss, as follcarried out by

tions carried

g on the natur

ny change in t

ed using the rying amount,

eld on a lastinosses arising losses reflecti

d. An impairme acquisition cthe value falls

he balance shs of impairmeespond to un set up at th

he units are m

amortised cos

terest rates, subsidy is reor which the f

sted in the tabmmitment) da

o the subsidiaetary items arows:

y all Group co

out by the

re of the finan

their fair valu

effective inte, including any

ng basis or sofrom remeasng a prolonge

ment loss is sycost or over as over 30% co

eet at their ant. its in Fonds de French gov

measured at fa

st measured u

the loans’ amcognised in afunds are use

ble in Note 12te, and not th

ary's functionre translated

ompanies and

manufacturi

ncial assets.

e is recognise

erest methody impairment

old in the shosurement at fed or significa

ystematically a minimum oompared to th

acquisition co

d’Avenir Autovernment's inair value. This

using the effe

mortised costaccordance w

ed.

2.8.E. he settlement

al currency atat the closing

for financing

ng and sales

ed in profit or

. When their

.

rt term. Theyfair value areant decline inrecognised inf three years.he acquisition

ost, which the

mobile (FAA).itiative unders corresponds

ective interest

is calculatedwith IAS 20 as

t

t g

g

s

r

r

y e n n .

n

e

. r s

t

d s

Financial E.

The fair valubasis of mainstruments for financial

(in million euros)

Other non-curre

Other non-curre

Trade receivable

Other receivable

Current financia

Financial investm

Cash and cash

Assets

Non-current fina

Other non-curre

Trade payables

Other payables

Current financia

Liabilities

(1) Other non-curr(2) Excluding liab

(in million euros

Other non-curre

Other non-curre

Trade receivable

Other receivable

Current financia

Financial investm

Cash and cash

Assets

Non-current fina

Other non-curre

Trade payables

Other payables

Current financia

Liabilities

(1) Other non-curr(2) Excluding liab

instruments

ue of financialrket data fortraded on an assets held by

)

nt financial assets

nt assets (1)

es

es

l assets

ments

equivalents

ancial liabilities

nt liabilities (2)

l liabilities

rent assets exclude

ilities related to veh

s)

nt financial assets

nt assets (1)

es

es

l assets

ments

equivalents

ancial liabilities

nt liabilities (2)

l liabilities

rent assets exclude

ilities related to ve

reported in t

l instruments r assets consactive marke

y the Group is

s

e the amount of pen

hicles sold with a b

s

e the amount of pe

hicles sold with a b

the balance s

held by the Gsidering that t is based on

s the bid price

Carrying amount

487

972

2,367

2,636

1,269

16511,582

19,478

4,778

100

13,362

7,8782,531

28,649

nsion plan surplus

buyback commitm

31 Decem

Carrying amount

685

639

1,560

1,763

629

11011,576

16,962

4,526

162

9,352

5,3661,661

21,067

nsion plan surplus

buyback commitm

31 Decem

sheet

Group is calcthey are no

the market pe on the marke

Fair value

at f

487

972

2,367

2,636

1,269

16511,582

19,478

4,906

100

13,362

7,8782,505

28,751

ses (see Note 9.1),

ent.

mber 2017

Fair value

Instat

685

639

1,560

1,763

629

11011,576

16,962

4,528

162

9,352

5,3661,667

21,075

ses (see Note 9.1),

ment.

mber 2016

ulated wheneot intended trice at the baet at the mea

fair value through profit or

loss

Avf

fi

223

-

-

-

-

165

11,582

11,970

-

-

-

-

-

which are not finan

A

truments fair value through profit or

Av

f

380

-

-

-

-

110

11,576

12,066

-

-

-

-

-

which are not finan

A

Groupe

ever it can beo be sold. Tlance sheet dasurement dat

vailable-for-sale nancial assets

Lreceiv

and liab

-

460

-

-

-

-

-

460

-

-

- 1

-

-

- 2

ncial assets as defi

Analysis by class

vailable-for-sale

financial assets

Lreceiv

andliab

-

249

-

-

-

-

-

249

-

-

-

-

-

- 1

ncial assets as def

Analysis by class

PSA 2017 Ann

e estimated reThe fair valueate. The markte.

Loans, vables other

bilities

Borrowinga

amortisecos

255

506

2,367

2,362

1,261

-

-

6,751

- 4,77

95

3,362

7,675

- 2,52

21,132 7,30

ined by IAS 39.

of instrument

Loans, vables

d other bilities

Borrowing

amortiseco

285

362

1,560

1,722

627

-

-

4,556

- 4,52

140

9,352

5,349

- 1,64

14,841 6,17

fined by IAS 39.

of instrument

ual Results - 73

eliably on thee of financialket price used

gs at ed st

Derivative instruments

- 9

- 6

- -

- 274

- 8

- -

- -

- 297

78 -

- 5

- -

203

29 2

07 210

gs at ed st


- 20

- 28

- -

- 41

- 2

- -

- -

- 91

24 2

- 22

- -

17

49 12

73 53

3

e l

d

74 - Groupe PS

InformatiF.

The change i

InformatiG.

(en millions d'eur

Level 1 fair valu

Other non-curren

Financial investm

Cash and cash e

Level 2 fair valu

Other non-curren

Other non-curren

Other receivables

Current financial

Level 3 fair valu

Other non-curren

Other non-curren

Total financial a

(in million euros)

Level 1 fair val

Level 2 fair val

Non-current fina

Other non-curren

Other payables

Current financial

Level 3 fair val

Total financial

(in million eur

Liabilities

Non-current f

Current financ

(in million eur

Liabilities

Non-current f

Current financ

SA 2017 Annua

on about fin

n level 3 fair v

ion about fin

ros)

ue inputs: quoted

nt financial assets

ments

equivalents

ue inputs: based

nt financial assets

nt assets

s

assets

ue inputs: not ba

nt financial assets

nt assets

assets measured

)

lue inputs: quote

lue inputs: base

ncial liabilities

nt liabilities

l liabilities

lue inputs: not b

liabilities meas

ros)

financial liabilit

cial liabilities

ros)

financial liabilit

cial liabilities

al Results

ancial assets

value does no

nancial assets

d prices in active

on observable m

sed on observab

at fair value

ed prices in activ

d on observable

based on observa

sured at fair valu

ies

ies

s and liabilitie

ot contain any

s and liabilitie

Dins

markets

market data

le market data

ve markets

e market data

able market data

ue

es measured

y material item

es not measu

Derivative struments

Instrumeat fair va

throprofit or l

-

-

- 11,

9

6

274

8

-

-

297 11,

31 Decem


Instat f

profi

-

(5)

(203)

(2)

a

(210)

31 Dec

Carrying amount

4,778

2,529

31 Decemb

Carrying amount

4,524

1,649

31 Decemb

at fair value

ms.

ured at fair v

ents alue

ough oss

Available-fosale financi

asset

223

165

582

-

-

-

-

- 39

- 6

970 46

ber 2017

truments fair value

through it or loss Other lia

-

-

-

-

-

cember 2017

Fair value

4,906

2,503

er 2017

Fair value

4,526

1,655

er 2016

value

or al ts


- -

- -

- -

- 20

- 28

- 41

- 2

91 -

69 -

60 91

31 D

abilitiesDeriv

instrum

-

-

-

-

-

Level 1

3,881

625

Fai

Level 1

3,702

395

Fai

Instruments at fair value

through profit or loss

Avasale

380

110

11,576

-

-

-

-

-

-

12,066

December 2016

vative ments

Instrumentsat fair value

throughprofit or loss

(2)

(22)

(17)

(12)

(53)

31 December 2

Level 2

1,025

1,878

r value level

Level 2

824

1,260

r value level

ilable-for financial

assets

-

-

-

-

-

-

-

185

64

249

s e h s

Other liabilities

- -

- -

- -

- -

- -

2016

Level 3

-

-

Level 3

-

-

Effect of fH.

12.9. OFF-B

(in million euro

Manufacturin

Total interest i

Total interest e

Remeasureme

Disposal gains

Net impairmen

Total - manuf

(1) For instrumen

(in million euro

Manufacturin

Total interest i

Total interest i

RemeasuremeDisposal gains

Net impairmen

Total - manuf

(1) For instrumen

(in million eur

Guarantees g

Pledged or m

financial inst

BALANCE SHE

os)

g and sales co

ncome

expense

ent (1)

s and dividends

nt

facturing and s

nts classified as "

os)

g and sales co

ncome

ncome

ent (1)

s and dividends

nt

facturing and s

nts classified as "

ros)

given

mortgaged asse

truments on

EET COMMIT

ompanies

sales companie

"at fair value throu

ompanies

sales companie

"at fair value throu

ets

profit or loss

TMENTS AND

201

InState

Im

es

ugh profit or loss"

201

IncState

Im

es

ugh profit or loss"

Of which

s

D CONTINGEN

17

come ement mpact

at fair vathrouprofit

lo

10

(210)

(3)

14(123)

(312)

", remeasuremen

16

come ement mpact

at fair valthrouprofit

lo

11

(320)

81(138)

-

(366)

", remeasuremen

h Opel Vauxha

NT LIABILITIES

lue ugh t or oss

Available-forsale

financialassets

- -

- -

32 -

- 15- (6)

32 9

nt includes interes

Analy

ue ugh

or oss

Available-for sale

financial assets

- -

- -

84 -- 35- (4)

84 31

nt includes interes

Analys

all Automotive s

Groupe

S

r e l

s

Loansreceivables

and otheliabilities

- 10

-

- (14

5 (1) (117

9 (122

st and dividends

sis by class of i

Loans,receivables

and otherliabilities

11

-

1(173)

4

(157)

st and dividends r

sis by class of in

31 D

segment

PSA 2017 Ann

, s r s

Borrowings atamortised

cost

0 -

- (210

) 18

) -) -

) (192)

received.

nstrument

r Borrowings at

amortised cost

-

- (320)

1) -4 -

) (319)

received.

nstrument

December 2017

31

406

478

884

128

ual Results - 75

t d t


- -

) -

8 (39)

- -- -

) (39)


-

-

(5)--

(5)

1 December 2016

325

538

863

5

76 - Groupe PS

Pledged oThis item incBank (EIB). Wcovered in caThe following

NOTE 13

13.1. ACCO

Financial A. The assets an

RecognitiB. (1) FinanciaMarketable sChanges in tchange fair v (2) Loans anLoans and rerespect of thaccounting: outstand accrued unamort

with thir unamort unamort deposits

Interest incoexactly discoLoans and rremeasured at fair value remeasuremLoans and resingle instalmvalue of estim

Pledges or m

(in million eur

2017

2018

2019

2020

2021

Subsequent y

Total pledge

Total assets

Percentage o

SA 2017 Annua

or mortgagedcludes the FreWhen the matash. g table analys

- FINANCI

OUNTING POL

assets and lind liabilities o

ion and measal assets at fasecurities are he fair value o

value of the ec

nd receivableeceivables rephe loans and

ding principal;interest;

tised commissrd parties on itised contributised loan sets received at t

ome is allocatounts estimatereceivables aat fair value iare recognis

ment at fair valeceivables arement. Impairmmated future

mortgages ex

ros)

years

ed or mortgag

of total assets

al Results

d assets ench governmturities of Fre

ses pledged an

NG AND F

LICIES

iabilities - deof finance com

surement of air value thro

carried at fairof the hedgedconomic hedg

es ported in the b

receivables. T

;

sions paid to inception of loutions receive-up costs, wh

the inception

ted by the efed future cashare generally in accordanceed in profit olue of the hede tested for imment is measu

cash flows dis

xpiring in the

ged assets

ment bonds (Onch governm

nd mortgaged

INANCIAL

finitions mpanies mainly

financial asseough profit orr value througd securities arges.

balance sheetTheir carrying

referral agentoans and reced from the brich are deducof finance lea

ffective intereh receipts thro

hedged agae with hedge aor loss and ardging instrumempairment whured by compscounted at th

years indicat

OATs) given aent bonds do

d assets by co

INSTRUM

y include loan

ets r loss gh profit or lore recognised

t correspond tg amount incl

ts as well as deivables, whicrands, which acted from the ases, which are

est method, ough the expeinst interest accounting pore offset by tent. (see Notehen a loss evearing the carrhe effective in

ted

s collateral foo not correspo

mmitment pe

ENTS – FIN

ns and receiva

ss if they benedirectly in pr

to Banque PSAudes the follo

directly attribuh are added t

are deducted foutstanding pe deducted fr

with the effeected life of th

rate risks, wolicies. Gains he effective pe 12.7.B). ent occurs, corying amount nterest rate.

or loans from ond to those o

eriod:

NANCE COM

ables, marketa

efit from interofit or loss, to

A Finance's neowing items b

utable adminio the outstanfrom the outsprincipal; om the amou

ective interesthe loan. with the hedand losses ariportion of the

orresponding of the loan o

31 D

the Europeaof loans, com

MPANIES

able securities

rest rate hedgogether with t

et financial cobefore the eff

istrative expending principastanding princ

unt financed.

t rate being

dged portion ising from reme loss or gain

in practice tor receivable t

December 2017

3

-

391

6

38

-

43

478

57,505

0.8%

n Investmentmitments are

s and debts.

ges. the offsetting

ommitment infect of hedge

nses incurredl; cipal;

the rate that

of the loanmeasurementn arising from

o default on ao the present

1 December 2016

435

16

44

-

-

43

538

45,153

1.2%

t e

g

n e

d

t

n t

m

a t

For retail loa an impa

is assessdiscount

impairmloans’ edoubtfu

For other lodetermined onon-performof 451 days ibe reclassifie

RecognitiC. See Note 12.

13.2. CURR

Loans andA. (1) Analysis

Retail, CorpoCitroën and DWholesale ficertain Europrovided by t (2) Maturiti

(in million eur

Total net "Ret

Total

Total net "Cor

31 Decembe(in million eur

Unallocated

Less than one

Two to five ye

Beyond five y

Total gross l

Guarantee deDepreciation

Total net loa

ns and receivirment loss issed based onted average lo

ment losses oneffective interl loans. oans and recon a case-by-c

ming. Reclassiff it can be de

ed as non-perf

on and meas.8.D.

RENT FINANC

d receivables

orate and EquDS customersinance receiv

opean importethe finance co

ies of loans a

ros)

tail, Corporate

rporate Dealers

er 2017ros)

e year

ears

years

oans and rece

eposits on lease

ans and receiv

vables: s recognised on the probaboss ratio; n non-performrest rate, wh

ceivables (cocase basis, whfication occursmonstrated thforming befor

surement of

IAL ASSETS

s - finance co

uivalent financs to purchase ovables represeers which havompanies to t

and receivabl

and Equivalent

s"

eivables outst

es

vables outstan

on sound loanbility of the o

ming loans arich is used t

nsisting mainhen the first ins when at leahat there is nore the 91-day

financial liab

mpanies

ce receivablesor lease vehicent amounts ve been tran

the dealer net

les

"

tanding

nding

ns when the boutstanding lo

re determinedto calculate p

nly of wholenstalment is m

ast one instalmo counterpartperiod has ex

bilities

s represent locles.

due to Peugnsferred to Gtworks.

Net "Retail,and E

borrower defaoan being cla

d based on thprovisions for

sale loans), missed or at thment is over 9ty risk. In the cxpired.

oans provided

geot, Citroën roup finance

9

181

117

-

307

(1)(7)

299

Corporate Equivalent"

Groupe

aults on a singassified as no

he average lor credit losse

provisions fohe latest whe91 days past dcase of an agg

d by the finan

and DS by tcompanies, a

31

Net "Corpora

PSA 2017 Ann

gle instalmenton-performing

oss ratio discoes on non-pe

or known cren the loan is rdue, or withingravated risk,

nce companie

their dealer nand working

December 2017

3

27061

331

(25)

62

-

-

37

-(5)

32

ate Dealers"

ual Results - 77

t. Impairmentg and on the

ounted at therforming and

edit risks arereclassified asn a maximumthe loan may

s to Peugeot,

networks andcapital loans

31 December 2016

28660

346

Total

(16)

243

117

-

344

(1)(12)

331

7

t e

e d

e s

m y

,

d s

78 - Groupe PS

(3) Allowan

Short-terB. Short-term in

Cash and C. Cash and caincluding ter

13.3. FINAN

Analysis bA.

Analysis bB.

All bonds are

(in million eur

Performing lo

Total gross l

Depreciation

Total net loa

Items taken inguarantee dep

Performing lo

(in million eurOther debt seBank borrowin

Customer dep

Amounts due

Total

(in million eur

• Less than o

• Two to five y• Beyond five

Total

(in million eur

EUR

USD

ARSOther currenc

Total

SA 2017 Annua

ces for credit

m investmennvestments co

cash equivalsh equivalent

rm loans, cent

NCING LIABIL

by maturity

by repaymene mainly repay

ros)

ans with no pa

oans and rece

ans and receiv

nto account in posits

ans with past d

ros)ecurities and bongs

posits

e to Group man

ros)

one year

yearsyears

ros)

cies

al Results

t losses

nts – Finance onsist primari

lents ts amounted tral bank depo

LITIES – FINA

nt currency yable in euros

st due balance

eivables outst

vables outstan

amortised cost

due balances a

ond debt

nufacturing and

companiesily of certificat

to €320 millosits, French t

NCE COMPA

s. Other financ

es

tanding

nding

t calculations a

and non-perform

sales compan

tes of deposit

lion at 31 Detreasury bond

NIES

cial liabilities

Cor

and

ming loans

ies

t held by the s

ecember 2017s and investm

can be analys

31 DeceRetail,

rporate and Equivalent

288

17

305

(28)(7)

270

securitisation

7 (€530 millioments in mutu

ed as follows

mber 2017

Corporate Dealer

Co

64

2

66

-(5)

61

31

31

31

funds.

on at 31 Deceal funds.

by repaymen

31 DecRetail,

orporate and Equivalent

290

23

313

(20)(7)

286

1 December 2017

3

257150407

8

415(8)

407

December 2017

3

150

257-

407

December 2017

31

2

209

14254

407

ember 2016),

nt currency:

cember 2016

Corporate Dealer

63

8

71

-(11)

60

31 December 2016301125426

4

430(9)

421

1 December 2016

165

261-

426

1 December 2016

21

237

10860

426

,

Credit lineC.

At 31 Decem

€28 €21

13.4. MANA

Financial A. Most of the ventures witto them. The risk man (1) LiquidityThe financingFinance. Banque PSA quality of theIts financingliabilities. ThCommittee omonitoring oSince the esfinancing the

Financing strAt 31 DecemThe bank als

Renewal of bDetails of ba

Covenants The revolvingthe first half In addition tretention of

(2) Interest Banque PSA impact of chthe related rThe implemeBanque PSA

(3) CounterpBanque PSA failure to fulthe dealers' vehicle and s

(in million eurUndrawn co

es

mber 2017, the80 million in un

million in und

AGEMENT O

risk managefinancing act

th Santander a

nagement disc

y risk g strategy of

Finance's cape bank's asset is ensured b

he implemenof Banque PSof financing plstablishment ese entities.

rategy implemmber 2017, the

o has cash res

bank facilitiesnk facilities ar

g bilateral lineof 2016, haveto these covebank status, a

rate risks Finance's pol

hanges in inteefinancing. entation of tFinance.

party and creFinance's expfill their contretail custom

sell it on the

ros)nfirmed lines

e credit lines tndrawn revolvdrawn various

F FINANCIAL

ment policy ivities for theand with BNP

cussed below

Banque PSA

pital structurets. by the broad

ntation of thiSA Finance wans drawn upof local part

mented in 201e only financinserves of €572

s re provided in

es of credit (foe the customaenants represand the comp

icy aims to merest rates usi

his policy is

edit risks posure to cretractual obliga

mers. In the eused vehicle

of credit

totalling €301 ving bilateral s bank lines o

RISKS

e networks anP Paribas, whic

relates to the

Finance is de

and equity ra

est possible ris policy is mith in particu

p by coherent tnerships with

16 ng of Banque 2 million.

n Note 13.3.C.

or a total outsary acceleratiosenting markliance with a

easure, ring feng appropriat

monitored by

dit risk corresations. The covent of defaumarket. The r

million are delines; f credit.

nd customers ch provide th

e activities of B

efined under t

atio comply w

range of liqumonitored byular monitorin

region. h Santander,

PSA Finance i

.

standing amoon clauses forket practices, "Common Eq

ence in the cote financial in

y the ALM Co

sponds to theounterparties ult, Banque Prisk that the v

etailed as follo

of PSA Groupe financing an

Banque PSA F

the direction

with the latest

idity sources,y the ALM Cng and foreca

Banque PSA

s derived from

unt of €301 m such arrangethe syndicat

uity Tier One"

ontext of stresnstruments to

ommittee and

e risk of losseconcerned ar

PSA Finance gvehicle's sellin

Groupe

ows:

p brands are nnd apply their

inance itself.

of the govern

regulatory re

, matching ofCommittee anasting of regu

A Finance is n

m the bond iss

million) signedements. ed credit fac" capital ratio

ss scenarios ao match intere

d the Risk M

es due to borrre Peugeot, Cenerally has t

ng price on th

31

PSA 2017 Ann

now managedr risk manage

ning bodies of

equirements,

f maturities ond the Risk ulatory liquidi

no longer re

sues.

d by Banque P

cilities continuof at least 11

and if necessaest rates on t

Management C

rower defaultCitroën and DS

the right to rhe used vehicl

December 2017

3

301

ual Results - 79

d by the jointment policies

f Banque PSA

reflecting the

of assets andManagementity ratios and

sponsible for

PSA Finance in

ue to require1%.

ry reduce thethe loans and

Committee of

t or borrowerS dealers andrepossess thele market will

31 December 2016365

9

t s

A

e

d t d

r

n

e

e d

f

r d e l

80 - Groupe PS

be less than Note 13.1.B)Wholesale leaccordance wGroup creditlastly the gepartner, Banand risk-monRetail loan asystem is adaselection is tthe teams aton-going basDefaults withCorporate loone or moredue to paymConcerning cthey remain Banque PSA the liquidity interest rate Available casor in moneta (4) CurrencyGroup policysame currencross currencThe Group dIn view of ththe finance c

Hedging iB. The different

Impact of

Impact of fai

The hedging

(in million eur

Gains and los

Gains and los

Net impact o

Gains and los

Gains and los

Net impact o

SA 2017 Annua

the outstand. ending decisiwith strict rut committee. T

eneral level ofque PSA Fina

nitoring procecceptance proapted accordihe responsibit Banque PSAsis, as well as th no impairme

oans with one e installmentsent incidents

concentrationat reasonableFinance’s expreserve and orisks.

sh is invested ary mutual fun

y risk y consists of nncy, entity-by-cy swaps, curroes not hedgee Group's hed

companies wo

instruments: t types of hed

f hedging inst

ir value hedge

has no effect

ros)

sses on remeas

sses on remeas

on income

sses on remeas

sses on remeas

on income

al Results

ding debt is t

ions for fleetles on lendingThe level of cf risk borne bnce has contr

ess. ocesses are bing to the speility of the par

A Finance’s hethe characterent concern oor more insta

s that are oveor claims, and

n of credit riske levels and doposure to finaof any excess

in money mands.

ot entering in-entity, using rency swaps ae its net invesdging policy oould not have

Finance comdges and their

truments on i

es

on equity (ot

surement of he

surement of he

surement of fin

surement of he

aken into acc

t customers ag limits, eithe

credit lines is by the approvractual mecha

ased on a loccific charactertner which useadquarters mistics of files w

only corporateallments that

er 270 days pad do not refles, Banque PSAo not exceed tancial countercash, and (ii)

arket securitie

nto any operatappropriate

and forward fostment in foreof the operatio

any material

mpanies accounting tr

income and e

ther compone

edged custome

edges of custom

ancial liabilities

edges of financi

count in dete

and dealers er by the locadependent on

ving Credit Coanisms to ensu

cal credit scorristics of eachses the decisio

monitor the lewith past due e loans.

are over 90 dast due are n

ect a default riA Finance conthe limits set rparties is limthe use of de

es issued by le

tional currencfinancial instroreign exchan

eign operationonal currencyimpact on co

reatment are

equity

ents of compre

r loans recogni

mer loans recog

s recognised in

al liabilities rec

rmining the a

are made baal Banque PSAn the item to ommittee. Foure that it is p

ring system. Th local marketon-making to

evel of risk of instalments.

days past dueot classified aisk.

ntinually moniin banking reg

mited to (i) theerivatives (swa

eading banks,

cy positions. Lruments if nenge contracts.ns. y positions, a cnsolidated pro

described in N

ehensive inco

sed in profit or

gnised in profit

n profit or loss

cognised in pro

amount of the

ased on a deA Finance crebe financed,

r its companiproperly involv

o enhance itst. For partnersols that it hasrequests and

and loans to as non-perfor

tors its largesgulations. e investment aps and optio

in deposit ac

Liabilities are mecessary. The

change in excofit or equity.

Note 12.7.B.

ome).

loss

or loss

fit or loss

e related imp

etailed risk aedit committe

the client’s ries operated jved in the dec

s effectivenesship subsidiars developed. d acceptance

o local adminisrming when t

st exposures t

of funds corrons) to hedge

ccounts with l

matched withhedging is ac

change rates a.

2017

-

-

-

6

(12)

(6)

pairment (see

ssessment inees, or by theisk rating andjointly with acision-making

s, the scoringries, customerIn both cases,closely on an

strations withhe delays are

to ensure that

responding tocurrency and

leading banks

h assets in thechieved using

at the level of

2016

1

(2)

(1)

10

(10)

-

e

n e d a g

g r ,

n

h e

t

o d

s

e g

f

13.5. FINAN

Financial A.

InformatiB.

The fair value

InformatiC.

Effect of fD.

Concerning trecognised in

(in million euros

Other non-curre

Other non-curre

Loans and rececompanies

Short-term invecompanies

Other receivabl

Cash and cash

Assets

Financing liabil

Other payables

Liabilities

(in million eur

Assets

Loans and rec

LiabilitiesFinancing liab

(in million eur

Finance com

Total interest

Total interest

Remeasurem

Net impairme

Total - finan

(1) For instrume

NCIAL INSTRU

instruments

ion about fines of the mar

ion about fin

financial inst

the Finance con “recurring o

s)

ent financial asse

ent assets

eivables - finance

estments - finance

es

h equivalents

ities - finance co

s

ros)

ceivables - fina

bilities - finance

ros)

mpanies

income

expense

ent (1)

ent

ce companies

ents classified a

UMENTS

reported in

nancial assetsketable secur

ancial assets

truments on

ompanies, theoperating inco

Caram

ets

e

ompanies

31 D

ance companies

e companies

S

s

s "at fair value th

the balance s

s and liabilitieities held by f

s and liabilitie

profit or loss

e impact on thme”.

rrying mount

Faval

23 2

103 10

331 33

114 1

85 8320 32

976 97

415 481 8

496 49

December 2017

s

2017

Income Statement

Impact

Insat

thro

72

(47)

3(5)

23

hrough profit or

sheet

es measuredfinance compa

es not measu

s

he income sta

air ue

Instruments afair valu

through profor los

23 2

03 10

31

14 11

8520 32

76 55

1581

96

Carrying amount

331

406

31 Decembe

struments t fair value ough profit

or loss

Asa

-

-

9-

9

loss", remeasur

at fair valueanies are at le

ured at fair v

atement of as

at ue fit

ss

Available-for-sale financial

assets

23 -

01 2

- -

4 -

- -

20 -

58 2

- -

- -

- -

Analys

Fair value

331

406

er 2017

Available-for le financial

assets

-

-

--

-

rement includes

Analysis by

Groupe

e evel 2.

alue

ssets and liabi

-l

s

Loans, receivables

and other liabilities

- -

2 -

- 331

- -

- 83

- -

2 414

- -

- 80

- 80

is by class of ins

Level 1

-

256

Fai

Loans, receivables

and other liabilities

a

72

-

6(5)

73

s interest and div

y class of instru

PSA 2017 Ann

ilities pursuan

Borrowings at amortised

cost

-

-

-

-

-

-

-

415

-

415

strument

Level 2

-

-

ir value level

Borrowings at amortised

cost

-

(47)

--

(47)

vidends receive

ument

ual Results - 81

nt to IAS 39 is


-

-

-

-

2

-

2

-

1

1

Level 3

331

150


-

-

(12)-

(12)

d.

s

82 - Groupe PS

13.6. OFF-B

NOTE 14

In accordancbase of assedeferred tax

A deferred taand equity-a the Grou it is prob

In practice: for subs

dividend for equit

between current

liabilitiesthe subs

14.1. INCOM

Current taA.

Current taxewith the tax In France, PeFrench incomThe Group hWhen withhappropriately

Tax rate iB. The French sThe Amendinoffsetting taxThe 2017 FcontributionThe deferred

(in million eur

Financing com

(in million eurCurrent taxeCorporate inc

Deferred taxDeferred taxe

Total

SA 2017 Annua

BALANCE SHE

- INCOME

ce with IAS 12ets and liabilit

assets are rec

ax liability is rccounted comup is able to cbable that the

sidiaries fully ds that will bety-accounted n the tax basetax benefits gs, except whesidiary.

ME TAXES OF

axes s represent thregulations an

eugeot S.A. anme taxes on a as also electe

holding taxesy in current ta

n France statutory incong Finance Acx loss carryforinance Act c. From 2022, t

d tax assets an

ros)

mmitments to c

ros)escome taxes

xeses arising in the

al Results

EET COMMIT

E TAXES

2 - Income Taxties and theircognised only

recognised fompanies, excecontrol the time temporary d

consolidated, paid by the scompanies, a

e of the sharesgenerated by

en the differen

F FULLY-CON

he amounts pnd rates in eff

nd its French sconsolidated d to file a con

s on manageaxes.

me tax rate isct of 29 Decemrwards againschanged the this rate will b

nd liabilities h

customers

e year

TMENTS AND

xes, deferred r carrying amoy when there i

or all taxable tpt to the exte

ming of the revifference will

, a deferred tubsidiary in th

a deferred taxs and their carintragroup p

nce is conside

NSOLIDATED C

aid or currentfect in the varsubsidiaries thbasis in accor

nsolidated tax ement fees a

s 34.43%, inclumber 2013 rait taxable profincome tax

be reduced toave been rem

D CONTINGEN

taxes are calcount. Deferreis a reasonabl

temporary difent that both oversal of the tnot reverse in

tax liability ishe following yx liability on drrying amoun

provisions andered to be tem

COMPANIES

tly due to the rious countriehat are at leasrdance with A return in othare used by

uding supplemsing this tax rfit for the yearate in Franc

o 25.83%. measured to re

NT LIABILITIES

culated for all ed tax liabilitie expectation

fferences assoof the followitemporary difn the foreseea

s recognised oyear by decisiodividend distrit;

d sales are nomporary, for e

tax authoritie

es. st 95%-ownedArticle 223 A oer countries tthe recipien

mentary contrrate to 38% apr is maintainece to 28.92%

eflect the new

S

temporary dies are system

n that they wil

ociated with ing conditions ference; and able future.

only in respecon of the Groubutions is rec

t cancelled byxample, when

es for the yea

d maintained tof the French Tthat have Grounts to pay ta

ributions.pplies up to Ded at 50% in 20% from 2020,

w rates.

31

ifferences betmatically recoll be recovere

nvestments is are satisfied:

ct of distribuup; cognised for a

by recognisingn the Group p

r, calculated i

their election Tax Code. up relief scheax, income i

December 201

017. , including th

December 2017

3

12

2017

(565)

(136)

(701)

tween the taxognised, whileed.

n subsidiaries:

tion taxes on

all differences

g deferred taxplans to divest

in accordance

to determine

mes. is recognised

5. The cap on

he additional

31 December 2016

10

2016

(596)

79

(517)

x e

s

n

s

x t

e

e

d

n

l

ImpairmeC. Deferred taxyear tax estimTax loss carr(subject to th 14.2. RECO

CONS

This reconcilof income.

Tax credits inThe IAS 12 tsubsidiaries fcredits for €4 14.3. CHAN

Analysis bA.

(in million eur

Pre-tax profit

Pre-tax profit

Pre-tax profit

Income (loss

French statut

Theoretical

Tax effect of

• Permanent

• Income taxa

• Tax credits

• Effect of diff

Income tax

• Other impai

Income tax e

• of which t

• of which t

• of which t

(1) of which €(2

• Assets on Funrecognised

(in million eur

Current Tax

Assets

Liabilities

Defered Tax

Assets befor

Offsetting of

Net assets

Liabilities

ent losses on xes are determmates, consistryforwards rehe 50% cap) a

NCILIATION SOLIDATED S

iation covers

nclude researctest resulted for €1,031 m48 million.

NGE IN TAX ITby nature

ros)

(loss) from con

(loss) before ta

(loss) from ope

s) before tax o

tory income tax

tax expense f

f the following

differences (1)

able at reduced

ferences in fore

before impair

rment losses

expense

ax expense on

ax expense on

ax expense on

219) million in 2

French tax cond or impaired

ros)

es

xes

re offsetting of

French tax gro

deferred taxmined as desctent with the elating to theare recognised

BETWEEN THTATEMENT O

the full resul

ch tax credits in the impa

illion and the

TEMS ON THE

ntinuing operat

ax on expenses

erations to be c

of fully-consol

x rate for the pe

for the period

g items :

d rates

eign tax rates a

rment losses o

n continuing op

n expenses rela

n operations to

2017 in respect o

solidation defic

French tax gro

oup loss

xes cribed above.impairment t

e French tax d are the balan

HEORETICAL IOF INCOME

ts of consolid

that do not mirment of thedeferred tax

E BALANCE S

ions

s related to ope

continued in pa

lidated compa

eriod

d based on the

and other

on the French

erations

ated to operatio

be continued i

of the tax loss ca

cits of Peugeot

oup loss

Deferred taxtesting of the group availabnce sheet.

INCOME TAX

dated compan

meet the define deferred ta

x assets on tem

HEET

erations to be c

artnership

anies

e French statu

h tax group

ons to be contin

n partnership

arryforwards of O

S.A. generate

xes were testeAutomotive Dble for offset

X IN FRANCE A

nies regardless

nition of goverax assets on mporary diffe

continued in pa

utory income t

nued in partner

Opel Vauxhall.

d during the ye

Groupe

ed for impairmDivision CGU. ting against n

AND INCOM

s of their clas

rnment grantstax loss carry

erences for €1

artnership

tax rate

rship

ear and

31

PSA 2017 Ann

ment on the

net deferred

E TAX IN THE

ssification in t

s. yforwards of 1,062 million

2017

2,849

-

-

2,849

34.4%

(981)

(102)

80

27

133

(843)

134

8

(701)

(701)

-

-

December 2017

3

353

(234)

119

1,421

(617)

804

(897)

(93)

ual Results - 83

basis of four-

tax liabilities

E

he statement

Opel and itsas well as tax

2016

2,343

(16)

248

2,575

34.4%

(887)

114

70

27

83

(593)

76

(37)

(554)

(517)

6

(43)

31 December 2016

164

(172)

(8)

1,170

(577)

593

(895)

(302)

3

-

s

t

s x

84 - Groupe PS

MovemenB.

14.4. DEFER

Tax loss carry

The IAS12 tethe deferred

(in million eur

Current taxe

At beginning

Expense

Payments

Translation ad

At end of pe

Deffered Tax

At beginning

Expense

Equity

Translation ad

At end of pe

(in million eur

Tax credits

Other deferr

Deferred tax

Deferred tax lDeferred tax l

Deferred tax

Deferred taxcarryforward

(1) The gross atax losses that(2) Of the impa€781 million a(3) Offsetting cotax assets cov14.1).(4) The main teand difference

SA 2017 Annua

nts for the ye

RRED TAX AS

yforwards rela

est led to the tax assets on

ros)

es

g of period

djustments and

eriod

xes

g of period

djustments and

eriod

ros)

red tax assets

x assets

liabilities beforeliabilities offset

x liabilities

x assets on taxds

amount of deferrt can be carried

aired unrecogniare related to the

onsists of presenvered by deferre

emporary differees in amortisatio

al Results

ear

SSETS AND LI

ating to the F

impairment on temporary d

d other charges

d other charges

Gros

Va

Pre

De

Oth

Tota

s

e offsetting of th (French tax gr

x loss

red tax assets coforward, regard

ised deferred tae French tax gro

nting on the faced tax liab ilities

ences that generon or depreciatio

ABILITIES

rench tax grou

of Opel and itifferences for

s

s

ss (1)

aluation allowan

eviously unreco

eferred tax asse

her deferred tax

l deferred tax

he French tax roup) (3)

orresponding todless of whether

ax assets, €671oup (€1,883 mill

ce of the balancs, taking into ac

rate deferred taxon methods or p

up totalled €1

ts subsidiariesr € 1,062 millio

nces

ognised deferre

et offset (Frenc

x assets offset

x assets on tax

group (4)

o tax loss carryfothey were recog

million (€722 mion at 31 Decem

e sheet the netcount the legal

x liab ilities ariseperiods.

11,788 million

s' deferred taon, as well as

ed tax assets (2

h tax group) (3)

t

x loss carryfo

orwards represegnised on the ba

million at 31 Dember 2016).

deferred tax porestrictions on

e from the capita

n at 31 Decem

x assets on lothe tax credit

31

31

2)

)

rwards

ents all deferredalance sheet at

ecember 2016)

osition of the Frethe use of tax lo

alisation of rese

mber 2017.

oss for € 1,03ts for € 48 mil

December 2017

3

(8)

(565)

687

5

119

(302)

(136)

21

324

(93)

December 2017

3

13

5,007

(2,649)

(1,741)

(534)

(31)

52

739

804

(1,431)

534

(897)

d tax assets corrt 31 December 2

are related to F

ench tax group,oss carryforward

arch and develo

31 million andlion.

31 December 2016

(45)

(596)

599

34

(8)

(388)

79

(20)

27

(302)

31 December 2016

-

5,190

(1,719)

(2,894)

(453)

(9)

115

478

593

(1,348)

453

(895)

responding to2017.

Faurecia, and

with deferredrds (see Note

opment costs

d

NOTE 15

15.1. EQUIT

Capital mA. The capital mcapital and elevel of capitEquity breakEquity attribplus reservesMinority intevaries in linetranslation reby Peugeot SThere are noPeugeot S.A.Banque PSA regulations. Peugeot S.A. to awar

affiliated to reduc

Analysis oB. Rights issuesCapital inAs part of tshareholdersof a total of inflow of €28

EmployeeIn Q4 2017, "Accelerate"

Grants ofThe perform Analysis of s

Issuance of eAs part of thwere issued The equity weuro each, wThe exercise the date of tamount of th

(in euros)

Share capital

Equity warran

Share capita

- EQUITY A

TY

management management ensure that ittal to be held s down into putable to equs and retainederests mainlye with changeserves) and

S.A. in respecto financial co and GIE PSA Finance comp

shares are hed shares to ed with it whence the compan

of share capits ncrease consethe capital ins, exercisable 342,060,365 w

88 million. The

es shareholdithe Group u

offer. It resu

f performanceance share pl

share capital

equity warranhe purchase oto Adam Ope

warrants entitwith one share

price of eachtheir issue. Thhe capital inc

l at beginning o

nts converted in

al at end of pe

AND EARN

policy policy relates

t has secure lcurrently or in

portions attribuity holders ofd earnings of ty represent nges in the Fau- exceptional

t of Faurecia. venants baseTrésorerie is splies with the

eld in treasuryemployees, dn the stock opny's share cap

tal and chang

ecutive to thencreases carrfrom the secwarrants issue equity warra

ing plan ndertook a clted in the de

e shares by Peans establishe

nts of a majority il GmbH, a sub

tle the holder e per warrant.h warrant will he issue of thcrease liable t

of period

nto shares

eriod

NINGS PER

s to equity as ong-term capn the future a

butable to minf the parent isthe Group's vaon-Group shaurecia group'ly - in the eve

d on consolidsubject to com

e capital adeq

y for the followirectors and

ptions are exepital.

ges in the ye

exercise of eried out in tond year. Dured. Their exerants (BSA) we

capital increaslivery of 1,508

eugeot S.A. ed in 2015, 20

nterest in thebsidiary of the

to subscribe be €1, and these warrants to arise from

SHARE

defined undepital resourceand setting divnority interests equal to thearious busineareholders of's consolidateent of a sale,

dated equity. mpliance withuacy ratio and

wing purposeofficers of thrcised or whe

ear

equity warranthe first half ring the year rcise resulted

ere exercisable

se reserved f8,515 treasury

016 and 2017

e Opel Vauxhe General Mot

for up to 39,

hey will only bdoes not immthis issue is €

er IFRS. It is ds. Managing cvidend policiets and to equi share capitalss segments.f Faurecia. Eqed equity (in purchase or a

The drawdowh an equity-bad other capita

es: he Company oen performanc

nts of 2014, eq

2017, 128,29d in the delivee until 29 Apr

or employeesy shares.

are described

all automotivtors Group, fo727,324 shar

be exercisablemediately imp€39,727,324 f

Groupe

esigned to opcapital essents. ty holders of t of Peugeot S

quity attributparticular ne

any other equ

wn on the cosed financial

al requiremen

or of compance plans’ share

quity warrant5,194 warrantry of 44,903,3il 2017.

s. Over 11,00

d in Note 7.2.B

ve business, 3or a total fair ves in Peugeot

between thepact consolidafor 39,727,32

85

4

90

PSA 2017 Ann

ptimise the Grtially involves

the parent coS.A. less any tr

table to minoet earnings auity transactio

onfirmed credratio (see Not

nts imposed u

nies or groupes are allocat

ts were issuets had been e318 new shar

00 employees

B.

9,727,324 eqvalue of €541 t S.A. with a p

e 5th and 9th yeated equity. T

24 new shares

2017

59,924,895

44,903,318

04,828,213

ual Results - 85

roup's cost ofs deciding the

ompany. reasury stock,

ority interestsnd change in

on carried out

dit facilities ofte 12.4).

under banking

pings that areed ;

ed to formerexercised, outes and a cash

took up this

uity warrantsmillion.

par value of 1

ears followingThe maximums. In addition,

2016

808,597,336

51,327,559

859,924,895

5

f e

,

s n t

f

g

e

r t h

s

s

1

g m

,

86 - Groupe PS

General Motand are oblig

Situation at Share capitafully paid-upincreases caron 19 June 2at 12.23% (accounted fotreasury stocand for 17.45the voting rig

The share pr

Treasury C. All Peugeot treasury stocThe Group mChanges in tr

(1) Number

No cancellati (2) Change i

The purchaseThe share pr

(number of sh

At beginning

Purchases ofShares delive

Shares delive

At period-en

Allocation

• Shares held

• Coverage of

• Coverage of

• Coverage of

(in million eur

At beginning

Purchases du

Shares delive

Shares delive

At period-en

Average price

SA 2017 Annua

tors and its afged to sell the

31 Decemberl amounted t

p. Shares mayrried out in th

2017, Dongfen12.86% at 31or 19.94% of ck. For the Pe5% of the votght, including

ice on 31 Dec

stock S.A. shares hck are taken to

may use the bureasury stock

of shares he

ion of shares

in value

e price of treaice on 31 Dec

hares)

g of period

f treasury shareered under the 2

ered as part of t

nd

d for allocation

f the 2015 perfo

f the 2016 perfo

f the 2017 perfo

ros)

g of period

uring the period

ered under the

ered as part of

nd

e per share (in

al Results

ffiliated compe PSA shares re

r 2017 o €904,828,2 be held in rehe first-half ong Motor Gro1 December

the voting reugeot familyting rights, exc

treasury stoc

cember 2017 w

eld by the Gro equity, so thuyback authorare presented

eld

was made ne

asury shares iscember 2017 w

es2015 free share

the employees

on exercise of

ormance share

ormance share

ormance share

d

2015 free shar

the employees

euros)

anies do not heceived withi

13 at 31 Deceegistered or bf 2017, the stup and the Pe2016) i.e. 11ight, includin, this stake accluding treasu

ck, and for 9.8

was €16.96.

roup are recohat any disposrisations givend in the follow

ither in 2016

s deducted frowas €16.96.

e plan

s' shareholding

f future perform

e plan

e plan

e plan

re plan

s' shareholding

have any goven a period of

ember 2017, bearer form, atakes of Lionseugeot family10,622,220 shg treasury stccounted for ury stock. For87% of the vot

orded at cost sal gains or lon at Shareholdwing table:

nor in 2017. N

om equity.

plan

ance share pla

plan

ernance or vo35 days from

divided into sat the sharehs Participation (FFP and Eta

hares each. Fock, and for 17.63% of thLion Participa

ting rights, exc

as a deductiosses have no ders' Meeting

No purchases

ans or stock op

oting rights in the date of ex

shares with a older’s discre

n (BPI France) blissements P

For Dongfeng 19.74% of the voting rightation, this stacluding treasu

on from equitimpact on pro

gs to buy bac

were made in

Notes Tra

5 (2

(1

11

ptions 6

7.2.B

7.2.B 2

7.2.B 2

11

respect of thxercise of the

par value of etion. Followin which entere

Peugeot Frère Motor Grou

he voting right, including tr

ake accountedury stock.

ty. Proceeds ofit (loss) for tck Peugeot S.A

n 2016.

2017

ansactions T

9,113,263

5,729,9872,019,000)

1,508,515)

1,315,735

6,033,735

389,000

2,200,000

2,693,000

1,315,735

2017

(238)

(116)

53

31

(270)

19.58

ese warrants, warrants.

€1 each. It isng the capitaled the capital

es) each stoodup, this stakehts, excludingreasury stock,d for 9.97% of

from sales ofthe period. A. shares.

2016

Transactions

9,113,263

-

-

9,113,263

4,448,263

2,465,000

2,200,000

-

9,113,263

2016

(238)

-

-

-

(238)

,

s l l

d e g , f

f

Reserves D.

Reserves and

Other Peuge

Minority E.

Minority inte

15.2. BASICBasic earningcalculated as

Basic earnA. Basic earningperiod. The averagecancelled du

Diluted eaB.

Diluted earnexercise of stThe performeffect on 31

(in million eur

Peugeot S.A

Other Peugeo

Reserves and

Total

(in million eur

Reserves av

Without any aAfter deductio

Total

Tax on distr

(1) Correspond

Consolidated Average num

Consolidated parent (in mil

Basic earningof the parent Basic earning

and retainedd retained ear

ot S.A. statuto

interests erests corresp

C EARNINGS Pgs per share as follows:

nings per shags per share a

e number of sring the perio

arnings per snings per shatock options,

mance share gDecember 20

ros)

. legal reserve

ot S.A. statuto

d retained earn

ros)

vailable for dis

additional corpon of additiona

ributed earnin

ding to the portio

basic earningsber of €1 par va

basic earningslion euros)

gs per €1 par v(in euros)

gs per €1 par v

d earnings, ernings, includi

ory reserves a

pond mainly to

PER SHARE and diluted ea

are - Attributare calculated

shares outstaod and change

share - Attribre are calculaperformance

grants (see No017.

ory reserves an

ings of subsidi

stribution:

orate tax beingl tax (1)

ngs

on of the long-te

s - attributable alue shares ou

s of continuing

value share of c

value share (in e

xcluding minng profit for t

and retained e

o the interests

arnings per sh

table to equiton the basis

anding is calces in the numb

butable to eqated by the tshare grants

ote 7.2.B) an

d retained earn

aries, excludin

g due

erm capital gain

to equity holdetstanding

operations - at

continuing oper

euros) - attribu

nority interesthe year, can

earnings inclu

s of other sha

hare are prese

ty holders ofof the weight

ulated by takber of shares

uity holders treasury stocto employeesd the equity

nings

ng minority inte

s reserve that r

ers of the paren

ttributable to eq

rations - attribu

utable to equity

sts be analysed a

de:

areholders of F

ented at the f

f the parentted average n

king into accoheld in treasu

of the parenk method. Th

s and equity wwarrants (se

erests

remains subject

nt (in million eu

quity holders o

utable to equity

y holders of the

Groupe

s follows:

Faurecia.

oot of the inc

umber of sha

ount the numury stock.

t his consists o

warrants. e Note 15.1.B

31 D

31 D

t to additional ta

uros)88

of the

y holders

e parent

PSA 2017 Ann

come stateme

res outstandi

mber of share

of taking into

B) had a pote

December 2017

3

86

13,631

197

13,914

December 2017

3

12,562

1,069

13,631

149

ax.

2017

1,9361,929

86,113,459

2.182.18

ual Results - 87

ents. They are

ng during the

es issued and

o account the

ential dilutive

31 December 2016

80

13,650

(1,695)

12,035

31 December 2016

12,582

1,068

13,650

198

2016

1,5251,730

802,566,768

1.902.16

7

e

e

d

e

e


The following tables show the effects of the calculation:

(1) Effect on the average number of shares

(2) Effect of Faurecia dilution on consolidated earnings of continuing operations - attributable to equity holders of the parent

(3) Effect of Faurecia dilution on consolidated earnings - attributable to equity holders of the parent

The performance share grants of Faurecia have a potential impact on the total number of Faurecia shares outstanding without affecting the number of shares held by the PSA Group. Consequently, they have a potential dilutive effect on consolidated profit attributable to the PSA Group. Due to their terms, the Faurecia stock options’ plans do not have any material dilutive impact in 2016 and 2017.

NOTE 16 - NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS

The statement of cash flows is partitioned into cash flows from operating activities, cash flows from investing activities and cash flows from financing activities depending on the nature of the transactions. The Group’s main choices as regards presentation were as follows: Interest flows were kept under cash flows from operating activities; Payments received in connection with grants were allocated by function to cash flows from investing activities or

cash flows from operating activities depending on the nature of the grant; The conversion options of convertible bonds (involving both optional and mandatory conversion) are presented

on a capital increase line under cash flows from financing activities; Voluntary contributions paid into pension funds are recognised under cash flows from operating activities; Payments made on the deferred portion of a fixed asset purchase are presented under cash flows from investing

activities for the period (“Change in amounts payable on fixed assets”); Tax payments are classified under cash flows from operating activities; Bonds’ redemptions are classified under cash flows from financing activities.

Notes 2017 2016Average number of €1 par value shares outstanding 886,113,459 802,566,768Dilutive effect, calculated by the treasury stock method, of: • Equity warrants (2014 capital increases) 15.1.B 10,763,952 91,404,878• Equity warrants delivered to General Motors Group 15.1.B 39,727,324 -• Performance share plans 7.2.B 4,350,427 4,115,300

940,955,162 898,086,946Diluted average number of shares

(in million euros) 2017 20161,936 1,525

- -

Consolidated profit (loss) from continuing operations (after Faurecia dilution effect) 1,936 1,525

2.06 1.70

Consolidated profit (loss) from continuing operations - attributable to equity holders of the Dilutive effect of Faurecia (performance share grants and equity warrants exercise)

Diluted earnings of continuing operations - attributable to equity holders of the parent per €1 par value share (in euros)

(in million euros) 2017 2016Consolidated profit (loss) attributable to equity holders of the parent 1,929 1,730

- -

Consolidated profit (loss) after Faurecia dilution 1,929 1,730

Diluted earnings attributable to equity holders of the parent per €1 par value share (in euros) 2.05 1.93

Dilutive effect of Faurecia (performance share grants and equity warrants exercise)


16.1. ANALYSIS OF NET CASH AND CASH EQUIVALENT REPORTED IN THE STATEMENTS OF CASH FLOWS

16.2. NET CHARGES TO DEPRECIATION, AMORTISATION AND IMPAIRMENT IN THE STATEMENT OF CASH FLOWS

16.3. CAPITAL INCREASE AND ACQUISITIONS OF CONSOLIDATED COMPANIES AND EQUITY INTEREST

The capital increases and acquisitions of consolidated companies and of equity interests during the year for €1,095 million mainly involved the following transactions:

the acquisition of Opel Automobile GmbH for a net cash impact of €26 million (see Note 2.1);

the acquisition of 50% of Opel Bank SA by Banque PSA Finance, a finance company in partnership with BNP Paribas for €489 million (see Note 2.2);

Faurecia's acquisition of Coagent for €192 million;

the €148 million capital increase by Automobiles Citroën and PSA Automobiles at Saipa Citroën Automobiles Company.

16.4. INTEREST RECEIVED AND PAID BY THE MANUFACTURING AND SALES COMPANIES

Interest received and paid by manufacturing and sales companies is included in working capital provided by operations, and is as follows:

(in million euros) Notes31 December

201731 December

2016

Cash and cash equivalents 12.5.C 11,582 11,576

Payments issued 12.6.C (93) (112)

Other 2 -

Net cash and cash equivalents - manufacturing and sales companies 11,491 11,464

Net cash and cash equivalents - finance companies 13.2.C 320 530Elimination of intragroup transactions (8) (8)

Total 11,803 11,986

(in million euros) Notes 2017 2016

Depreciation and amortisation expense 5.2 (2,636) (2,576)

Impairment of:

• capitalised development costs 8.1.B (80) (47)

• intangible assets 8.1.B - 2

• property, plant and equipment 8.2.B 43 120

Other (7) 4

Total (2,680) (2,497)


Interest received 32 86Interest paid (287) (377)

Net interest received (paid) (255) (291)


16.5. DETAIL OF CASH FLOW FROM OPERATIONS TO BE CONTINUED IN PARTNERSHIP

16.6. DETAIL OF FREE CASH FLOW FROM MANUFACTURING AND SALES OPERATIONS

Operational free cash flow includes cash flows generated by operations net of investing activities excluding non-recurring items. It is determined as follows:

Non-recurring operational cash flows mainly include cash flows from restructuring and changes in equity investments.

NOTE 17 - OFF-BALANCE SHEET COMMITMENTS AND CONTINGENT LIABILITIES

Off-balance sheet commitments given in the normal course of business were as follows at 31 December 2017:


- (11)

Change in liabilities related to the financing of operations to be continued in partnership - (2,299)

- (2,310)

Profit (loss) from operations to be continued in partnership (7) 204

Change in assets and liabilities of operations to be continued in partnership - 759

Net dividends received from operations to be continued in partnership - (120)

(7) 843


Net cash related to the non-transferred debt of finance companies to be continued in partnership

Net cash from the transferred assets and liabilities of operations to be continued in partnership


Net cash from (used in) operating activities of continuing operations 5,213 4,937

Net cash from (used in) investing activities of continuing operations (4,713) (2,673)

Dividends received from Banque PSA Finance - 434

Free Cash Flow 500 2,698

Minus, net cash from non-recurring operating operations (1,054) 164

Operational Free Cash Flow from manufacturing and sales operations 1,554 2,534

(in million euros) Notes31 December

201731 December

2016

Manufacturing and sales companies

Financing commitments 12.9 884 863

Operating commitments 8.4 3,346 2,413

(1) 4,230 3,276

Finance companies 13.6 12 10

(1) of which Opel Vauxhall Automotive segment 475


17.1. CONTINGENT LIABILITIES

Automotive equipment On March 25, 2014, the European Commission and the Department of Justice of the United States of America and on November 27, 2014, the Competition Commission of South Africa, initiated an enquiry covering certain suppliers of emission control systems on the basis for suspicions of anti-competitive practices in this segment. Faurecia is one of the companies covered by these enquiries. On 28 April 2017 the European Commission decided to terminate the investigation of certain suppliers of emission control systems initiated on 25 March 2014. The other inquiries are ongoing. On 19 May 2017, the Brazilian Competition Authority (CADE) initiated a survey of Faurecia Emissions Control Technologies do Brasil and some of its former employees, alleging anti-competitive practices in the Brazilian emission control market. Faurecia agreed settlements with claimants in the three ongoing class actions, which had been filed in the United States District Court for the Eastern District of Michigan against a number of suppliers of emission control systems, including various Faurecia Group companies, claiming anti-competitive practices involving exhaust systems. These settlements, for non-material amounts, for the amount of the defence legal fees, brought these class actions to an end. Two class actions involving similar claims were also filed in Canada but are at a very preliminary stage. In the event that anti-competitive practices are proven, possible sanctions include fines, criminal charges or civil damages. Faurecia is at present unable to predict the consequences of such inquiries and class actions including the level of fines or sanctions that could be imposed : therefore, no accruals were accounted for as of December 31, 2017. Automotive business The customs agreement governing the automotive industry between Brazil and Argentina provides for the payment of penalties by the Argentine automotive industry should the average ratio of imports to exports vis-à-vis Brazil exceed a certain threshold over the 2015–2020 period. Penalties may be payable by the Group should the automotive industry as a whole and the Group not hit the required ratio. No provision has been funded due to the uncertainties surrounding developments in the automotive markets in Argentina and Brazil between now and 2020 and the steps that the Group could take. 17.2. COMMITMENTS CONNECTED WITH THE GEFCO GROUP

Representations and warranties were made to JSC Russian Railways (RZD) as part of its acquisition of the Gefco Group from PSA in December 2012. At 31 December 2017, the Group had not identified any material risks associated with these representations and warranties. Under the logistics and transportation service agreements entered into by the PSA and Gefco groups, the Group gave guarantees regarding the satisfactory performance of the logistics contracts and a five-year exclusivity clause. An amendment signed in November 2016 supplemented these logistics and transportation service agreements. This amendment, which came into effect on 1 January 2017, extends the exclusivity clause until the end of 2021 and confirms the guarantees regarding the satisfactory performance of the logistics contracts given by PSA Group. At 31 December 2017, the Group had not identified any material risks associated with these guarantees.

NOTE 18 - RELATED PARTY TRANSACTIONS

Related parties are companies subject to significant influence consolidated by the equity method, members of the managing bodies and shareholders holding more than 10% of Peugeot S.A. capital. Transactions with companies accounted for by the equity method are disclosed in Note 11.5. Other than these transactions, there were no significant transactions with other related parties.


NOTE 19 - SUBSEQUENT EVENTS

Between 31 December 2017 and 28 February 2018, the date on which the financial statements were approved by the Supervisory Board, no event likely to significantly impact the economic decisions made on the basis of these consolidated financial statements occurred.

NOTE 20 - FEES PAID TO THE AUDITORS

Faurecia’s Statutory Auditors are PricewaterhouseCoopers and EY.

(in million euros) 2017 2016 2017 2016 2017 2016

Audit

Statutory and contractual audit services

• Peugeot S.A. 0.7 0.2 0.7 0.3 - -

• Fully-consolidated subsidiaries 2.1 2.3 7.6 7.7 4.4 4.5

o/w France 1.3 1.4 2.5 2.8 1.1 1.2

o/w International 0.8 0.9 5.1 4.9 3.3 3.3

Sub-total 2.8 2.5 8.3 8.0 4.4 4.5

o/w Faurecia - - 4.1 4.1 4.4 4.5

Excluding Faurecia 2.8 2.5 4.2 3.9 - -

97% 100% 89% 94% 83% 82%

Other services provided to subsidiaries

• Peugeot S.A. - - - - - -

• Fully-consolidated subsidiaries 0.1 - 1.0 0.5 0.9 1.0

o/w France 0.1 - 0.8 0.5 0.9 1.0

o/w International - - 0.2 - - -

Sub-total 0.1 - 1.0 0.5 0.9 1.0

o/w Faurecia - - 0.5 0.5 0.9 0.8

Excluding Faurecia 0.1 - 0.5 - - 0.2

3% 11% 6% 17% 18%

TOTAL 2.9 2.5 9.3 8.5 5.3 5.5

o/w Faurecia - - 4.6 4.6 5.3 5.3Excluding Faurecia 2.9 2.5 4.7 3.9 - 0.2

Mazars EY PWC


NOTE 21 - CONSOLIDATED COMPANIES AT 31 DECEMBER 2017

The Companies listed below are fully consolidated, except those marked with an asterisk (*), which are consolidated by the equity method, and those marked with two asterisks (**), which are consolidated as joint operations and recognised in proportion to the share of assets, liabilities, revenue and expenses controlled by the Group.

Company Country % interest


Other businesses Automotive Peugeot Citroën DS

Peugeot S.A. France 100 Pièces et Entretien Automobile Bordelais France 100GIE PSA Trésorerie France 100 Citroën Deutschland GmbH Germany 100Grande Armée Participations France 100 PSA Retail GmbH Germany 100Financière Pergolèse France 100 Peugeot Deutschland GmbH Germany 100PSA Ventures France 100 Peugeot Citroën Deutschland GmbH Germany 100SARAL Luxembourg 100 Peugeot Citroën Retail Italia S.p.A. Italy 100PSA International S.A. Switzerland 100 Peugeot Automobili Italia S.P.A. Italy 100Groupe GEFCO France 25 * Citroën Italia S.p.A. Italy 100Groupe PMTC - Peugeot Motocycles France 49 * PSA Services SRL Italy 100

Peugeot Citroën Japon Co. Ltd. Japan 100Automotive Peugeot Citroën DS Peugeot Citroën Tokyo, Co Ltd Japan 100

Peugeot Mexico S.A. de C.V. Mexico 100PSA Automobiles S.A. France 100 Servicios Automotores Franco-Mexicana S de RL de CV Mexico 100Peugeot Algérie Algeria 100 Peugeot Citroën Automobiles Maroc Morocco 95PCA Asesores de Seguros S.A. Argentina 98 Peugeot Citroën DS Maroc Morocco 100Circulo de Inversores S.A.U. de Ahorro parafines de Argentina 100 Peugeot Polska Sp. Zo. O. Poland 100Peugeot Citroën Argentine S.A. Argentina 100 Citroën Polska Sp.ZO.O. Poland 100Peugeot Austria GmbH Austria 100 Peugeot Citroën Automoveis Portugal S.A. Portugal 99Peugeot Autohaus GmbH Austria 100 Automoveis Citroën S.A. Portugal 100Citroën Osterreich GmbH Austria 100 Peugeot Portugal Automoveis Distribuçao Portugal 100Peugeot Belgique Luxembourg Belgium 100 Peugeot Portugal Automoveis S.A. Portugal 100Peugeot Distribution Service Belgium 100 Peugeot Citroën Russie Russia 100Citroën Bélux Belgium 100 PCA Slovakia s.r.o. Slovakia 100PCI do Brasil Ltda Brazil 100 Psa Services Centre Europe s.r.o. Slovakia 100PSA ventures serviços de mobilidade urbana Ltda Brazil 100 Plataforma Comercial de Retail, S.A.U. Spain 97Peugeot Citroen do Brasil Automoveis Ltda Brazil 100 PSAG Automóviles comercial España, S.A. Spain 100Automores Franco Chilena SA Chile 100 Peugeot Citroën Automóviles España, S.A. Spain 100Peugeot Chile Chile 100 Placas de Piezas y Componentes de Recambios, S.A. Spain 100Peugeot Citroën (CHINA) Automotive Trade Co China 100 Peugeot Suisse S.A. Switzerland 100PSA (Shanghai) Management Co. Limited China 100 Citroën Suisse S.A. Switzerland 100PSA (Wuhan) Management Co. Limited China 100 PCR Retail Suisse SA Switzerland 100PCA Logistika cz Czech Republic 100 Peugeot Citroën Gestion International SA Switzerland 100Technoboost France 60 PCMA Holding B.V. The Netherlands 70Aramis SAS France 70 Peugeot Nederland N.V. The Netherlands 100Celor France 70 Citroën Nederland B.V. The Netherlands 100Société Industrielle Automobile de Provence France 100 PSA Retail Nederland BV The Netherlands 100Véhicules d'occasion Citroën et DS France France 100 Peugeot Otomotiv Pazarlama A.S. Turkey 100Peugeot Citroën Poissy S.N.C. France 100 Peugeot Citroën Ukraine LLC Ukraine 100PSA Retail France SAS France 100 Melvin Motors Ltd United Kindom 100Société Mécanique Automobile de l'Est France 100 Peugeot Citroën Retail UK Ltd United Kindom 100Peugeot Citroën Mécanique de l'Est S.N.C. France 100 Robins and Day Ltd United Kindom 100Peugeot Citroën Mécanique du Nord-Ouest S.N.C. France 100 Warwick Wright Motors Chiswick Ltd United Kindom 100Peugeot-Citroën Mulhouse SNC France 100 Peugeot Citroën Automobile UK Ltd United Kindom 100Peugeot-Citroën Rennes SNC France 100 Peugeot Motor Company PLC United Kindom 100Peugeot-Citroën Sochaux SNC France 100 Rootes Ltd United Kindom 100Automobiles Peugeot France 100 Citroën UK Ltd United Kindom 100Automobiles Citroën France 100 Wuhan Shenlong Hongtai Automotive Co. Ltd China 10 *Car On Way France 100 Changan PSA Automobile Limited China 50 *Citroën Argenteuil France 100 Dongfeng Peugeot Citroën Automobiles Ltd China 50 *

Citroën Dunkerque France 100Dongfeng Peugeot Citroën Automobiles International PTE China 50 *

Conception d'Equipements Peugeot Citroën France 100Dongfeng Peugeot Citroën Automobiles Sales Company Ltd China 50 *

DJ 56 France 100 Iran Khodro Automobiles Peugeot Iran 50 *Française de Mécanique France 100 Saipa Citroën Company Iran 50 *GEIE Sevelind France 100 Peugeot Citroën South Africa Ltd South Africa 49 *Mécanique et environnement SAS France 100 STAFIM-GROS Tunisia 34 *

Mister Auto France 100Société Tunisienne Automobile Financière Immobilière et Maritime - STAFIM Tunisia 34 *

Peugeot Citroën Pièces de Rechange France 100 Toyota Peugeot Citroën Automobiles Czech s.r.o. Czech Republic 50 **Peugeot Média Production France 100 Societa Europea Veicoli Leggeri S.p.a. Italy 50 **Peugeot Saint-Denis Automobiles France 100 PCMA Automotiv Rus Russia 70 **Prince Garage des Petits Ponts France 100PSA ID France 100 Automotive Opel -VauxhallSabrié France 100Société Commerciale Distribution Pièces de Rechange et France 100 Opel Automobile GmbH Germany 100Société Européenne de Véhicules Légers du Nord - France 100 Opel Austria GmbH Austria 100Société de Pièces et Services Automobile de l'Ouest France 100 Opel Wien GmbH Austria 100Société Lilloise de Services et de Distribution de Pièces France 100 Opel Automotive Services Belgium N.V. Belgium 100Société Lyonnaise de Pièces et Services Automobile France 100 Opel Belgium N.V. Belgium 100Société Nouvelle Armand Escalier France 100 Opel Danmark A/S Denmark 100




Automotive Opel -Vauxhall Automotive Equipment

Opel Finland Oy Finland 100 Faurecia NHK (Xiangyang) Automotive seating Co Ltd China 46Opel France S.A.S. France 100 Faurecia Tongda Exhaust System (Wuhan) Company Ltd China 46Opel Group Warehousing GmbH Germany 100 Faurecia-GSK Automotive seating co Ltd China 46Opel Hellas S.A. Greece 100 Foshan Faurecia Xuyang Interior Syst. Cny Limited China 46GBS Hungary Kft Hungary 100 Nanchang China 46Opel Southeast Europe LLC Hungary 100 Ningbo China 46Opel Szentgotthard Automotive Manufacturing Ltd Hungary 100 PowerGreen Emissions Control Technologies Co. Ltd China 46Opel Automobile Ireland Limited Ireland 100 Shanghai Faurecia Automotive Seating Co Ltd China 46Opel Italia S.r.l. Italy 100 Tianjin Faurecia Xuyang Automotive Seat Co. Ltd China 46Opel Norge AS Norway 100 Emcon Tech. Czech Republic Czech Republic 46Opel Manufacturing Poland Sp.z o.o. Poland 100 Faurecia Automotivr Czech Republic Czech Republic 46Opel Poland Sp.z o.o. Poland 100 Faurecia Components Pisek s.r.o Czech Republic 46Opel Portugal, Lda Portugal 100 Faurecia Exhaust Systems Moravia S.r.o Czech Republic 46Opel Sibiu SRL Rumania 100 Faurecia Exhaust Systems S.R.O. Czech Republic 46Opel CIS LLC Russia 100 Faurecia Interior Systems Bohemia S.r.o. Czech Republic 46Opel España , SLU Spain 100 Faurecia Interiors Pardubice S.r.o Czech Republic 46Opel Europe Holdings, SLU Spain 100 Etud. et Constr. sièges pr l'Automobile France 46Opel Sverige AB Sweden 100 Faurecia ADP Holding France 46Opel Suisse S.A. Switzerland 100 Faurecia automotive Holdings Inc France 46Opel Nederland B.V. The Netherlands 100 Faurecia Automotive Industrie France 46Opel Türkiye Otomotiv Ltd. Sirketi Turkey 100 Faurecia Automotives Composites France 46Baylis (Gloucester) Ltd United Kindom 93 Faurecia Exhaust International France 46Go Motor Retailling Ltd United Kindom 95 Faurecia Exteriors International France 46Automotive UK No. 1 United Kindom 100 Faurecia Industrie France 46Holdings UK No.3 Limited United Kindom 100 Faurecia Intérieur Industrie France 46IBC Vehicles LTD United Kindom 100 Faurecia Intérieurs Mornac France 46Vauxhall Motors Limited United Kindom 100 Faurecia Intérieurs Saint Quentin France 46VHC Sub-Holdings (UK) United Kindom 100 Faurecia investissement France 46

Faurecia Metalloproduckia Holding France 46Automotive Equipment Faurecia Seating Flers France 46

Faurecia Services Groupe France 46Faurecia France 46 Faurecia Sièges d'Automobiles SAS France 46Faurecia Argentina SA Argentina 46 Faurecia Systèmes d'Echappements France 46Faurecia Sistemas de Escape Argentina Argentina 46 Faurecia Ventures France 46Faurecia Automotive Belgium Belgium 46 Hambach Automotive Exteriors SAS France 46Faurecia Industrie N.V. Belgium 46 Hennape Six France 46FMM Pernambuco Componentes Automotivos Ltda Brazil 24 SIEBRET France 46Faurecia Automotive do Brasil Brazil 46 SIEDOUBS France 46Faurecia Emissions Control Technologies do Brasil Brazil 46 SIELEST France 46Faurecia Emissions Ctrl Techn. Canada Ltd Canada 46 SIEMAR France 46CSM Faurecia Automotive Parts Co. Ltd China 23 TRECIA SAS France 46Dongfeng Faurecia Emissions Control Technologies Co., China 23 Faurecia Abgastechnik GmbH Germany 46Faurecia Liuzhou Automotive Seating Co., Ltd China 23 Faurecia Angell - Demmel GmbH Germany 46Faurecia (Tianjin) Automotive Systems Co. Ltd China 24 Faurecia Automotive Gmbh Germany 46Faurecia Yinlun Emissions Control Technology (Weifang) China 24 Faurecia Autositze Gmbh Germany 46Changchun Faurecia Xuyang Automotive Seat CO China 46 Faurecia Emissions Control Technologies Germany GmbH Germany 46Changsha Faurecia Emissions Control Technologies Co. China 46 Faurecia Innenraum Systeme GmbH Germany 46Chengdu Faurecia Limin Automotive Systems Company China 46 Emcon Technologies KFT Hungary 46Chongqing Faurecia Changpeng Automotive Parts Co. Ltd China 46 Emcon Technologies India PVT Limited India 46Cummings Beijing China 46 Faurecia Automotiv Seating India Private India 46Dongfeng Faurecia Automotive Interior Systems Co. Ltd China 46 Faurecia Emissions Control Tec India 46Emcon Emmi Tech. Chongqing Co Limited China 46 Faurecia Technology Center India Pty Ltd India 46Emcon Env Tech. Yantai Co Limited China 46 PFP Acoustic and Soft Trims India Private Limited India 46Emissions Control Technologies (Shangaï) Co Limited China 46 Faurecia Azin Pars Company Iran 46Emissions Control Technologies Foshan Company China 46 Faurecia Emissions Control Technologies Italy SRL Italy 46Emissions Control Technologies Ningbo Hangzhou Bay China 46 Faurecia Japan K.K. Japan 46Faurecia (changchun) Automotive Systems China 46 Howa Interior's - Japon Japan 46Faurecia (Changshu) Automotive Systems Co.,Ltd China 46 Faurecia AST Luxembourg SA Luxembourg 46Faurecia (China) Holding Co. Ltd China 46 Faurecia Automotive Luxembourg Luxembourg 46

Faurecia (Guangzhou) Automotive Systems Co China 46Faurecia Hicom Emissions Control Technologies (M) Sdn Bhd Malaya 46

Faurecia (Jimo) Emissions Control Technologies Co. Ltd China 46 Emcon Tech. Hldgs 2 S. de RL Mexico 46Faurecia (Nanjing) Automotive Systems Co China 46 Exhaust Services Mexicana sa Mexico 46Faurecia (Quingdao) Exhaust Systems Co Ltd China 46 Faurecia Howa Interiors de Mexico SA de CV Mexico 46Faurecia (Shangai) Automotive Systems China 46 Faurecia Sistemas Automotrices de Mexico Mexico 46Faurecia (Shenyang) Automotive Systems Co Ltd China 46 Servicios Corporativos de Personal Especializado Mexico 46Faurecia (Tianjin) Clean Mobility Co. Ltd China 46 Faurecia Automotive Industries Morocco Morocco 46Faurecia (Wuhan) Automotive Components Systems Co China 46 Faurecia Automotive Systems Technologies Morocco 46Faurecia (Wuxi) Seating Components Co Ltd China 46 Faurecia Equipements Automobiles Maroc Morocco 46Faurecia (Yancheng) Automotive Systems Company China 46 Faurecia Automotive Polska Spolka Akcyjna Poland 46Faurecia Changchung Xuyang Interiors Systems Co China 46 Faurecia Gorzow Sp Zoo Poland 46Faurecia Emiss. Ctrl Tech. Develop. (Shanghai) Cy Ltd China 46 Faurecia Grojec R&D Center Sp Z.o.o. Poland 46Faurecia Emissions Ctrl Technologies (Chengdu) Co China 46 Faurecia Legnica Sp Z.O.O. Poland 46Faurecia Exhaust Systems Changchun Company Ltd China 46 Faurecia WALBRZYCH Spz.o.o. Poland 46Faurecia Exhaust Systems Qingpu Co. Ltd China 46 EDA Estofagem de Assentos Portugal 46Faurecia Honghu Exhaust Systems Shangai Company Ltd China 46 Faurecia Assentos de Automovel Portugal 46




Automotive Equipment Automotive Equipment

Faurecia Sistemas de Escape Portugal 46 SAS Automotiv France France 23 *Faurecia Sistemas de Interior de Portugal Portugal 46 SAS Autosystemtechnik Gmbh and Co KG Germany 23 *SASAL Portugal 46 SAS Autosystemtechnik Verwaltung Gmbh Germany 23 *Euro Automotive Plastic Systems Rumania 46 NHK F. Krishna India Automotive Seating Private Limited India 9 *Faurecia Seating Talmaciu S.R.L. Rumania 46 Basis Mold India Private Limited India 18 *Faurecia Autocomponent Exterior Systems Russia 46 Azin Faurecia Interior Systems Company Iran 23 *Faurecia Automotive Development Russia 46 Faurecia LIGNEOS Italy Srl Italy 23 *Faurecia Metallo Produckcia Exhaust Systems Russia 46 Faurecia NHK Co Limited Japan 23 *OOO Faurecia Automotiv Russia 46 Faurecia SAS Automotive Systems & Services SA de CV Mexico 23 *Faurecia Automotive Slovakia Sro Slovakia 46 Faurecia SAS Automotive Systems SA de CV Mexico 23 *E.C.T. South Africa (Cape Town) (Pty) Ltd South Africa 46 SAS Autosystem de Portugal Unipessoal ltda Portugal 23 *Faurecia Exhaust Systems South Africa Ltd South Africa 46 Vanpro Assentos Limitada Portugal 23 *Faurecia Interior Syst. Pretoria (Proprietary) Ltd South Africa 46 Faurecia Automotive Sro Slovakia 23 *Faurecia Interior Systems South Africa (PTY) Ltd South Africa 46 SAS Automotive RSA (Proprietary), Ltd South Africa 23 *Faurecia Emissions Control Systems Korea South Korea 46 Componentes de Vehiculos de Galicia Spain 23 *Asientos de Castilla Leon Spain 46 COPO Iberica Spain 23 *Asientos de Galicia S.L. Spain 46 Industrias Cousin Frères S.L. Spain 23 *Asientos del Norte Spain 46 SAS Autosystemtechnik SA Spain 23 *Emcon Technologies Spain SL Spain 46 SAS Otosistem Tecknit Ticaret ve Limited Turkey 23 *Faurecia Asientos para Automovil Espana Spain 46 Teknik Malzeme Ticaret ve Sanayi A.S. Turkey 23 *Faurecia Automotive Espana Spain 46 FAURECIA DMS Leverage Lender LLC United States 21 *Faurecia Holding Espana S.L. Spain 46 Faurecia JV in Detroit United States 21 *Faurecia Interior Systems Espana Spain 46 SAS Automotive USA Inc United States 23 *Faurecia Interior Systems Salc Espana S.L. Spain 46Faurecia Sistemas de Escape Espana Spain 46 Peugeot Citroën DS FinanceIncalplas S.L. Spain 46Tecnoconfort Spain 46 Banque PSA Finance France 100Valencia Modulos de Puerta SL Spain 46 BPF Algérie Algeria 100Faurecia Interior Systems Sweden AB Sweden 46 PSA Finance Argentina Compania Financiera S.A. Argentina 50E.C.T. Co Limited Thailand 46 PCA Compañía de Seguros S.A Argentina 70Faurecia & Summit Interior Systems Thailand 46 PSA Factor Italia S.p.A. Italy 100Faurecia Interior Systems Thailand Thailand 46 PSA Renting Italia S.p.a Italy 100Emcon Technologies Dutch Hldgs BV The Netherlands 46 PSA Insurance Ltd Malta 100Faurecia Automotive Seating B.V. The Netherlands 46 PSA Insurance Manager Ltd Malta 100Faurecia Emissions Control Technologies Netherlands B.V. The Netherlands 46 PSA Insurance Solutions Ltd Malta 100Faurecia Informatique Tunisie Tunisia 46 PSA Life Insurance Ltd Malta 100Sté Tunisienne d'Equipements Automobiles Tunisia 46 PSA Services Ltd Malta 100Faurecia Polifleks Otomotiv Sanayi Ve Ticaret Anonim Sirketi Turkey 46 Banque PSA Finance Mexico SA de CV SOFOM Mexico 100Emcon Technologies UK Limited United Kindom 46 Bank PSA Finance Rus Russia 100Faurecia Automotiv Seating UK Ltd United Kindom 46 Peugeot Citroen Leasing Russie Russia 100Faurecia Midlands Ltd United Kindom 46 PSA Finance Nederland B.V. The Netherlands 100SAI Automotive Fradley United Kindom 46 PSA Financial Holding B.V. The Netherlands 100SAI Automotive Washington Limited United Kindom 46 BPF Pazarlama A.H.A.S. Turkey 100Faurecia Automotiv Seating Inc United States 46 Economy Drive Cars Limited United Kindom 100Faurecia E.C.T. USA LLC United States 46 PSA Finance Belux Belgium 50 *Faurecia Exhaust Systems INC United States 46 Banco PSA Finance Brasil S.A. Brazil 50 *Faurecia Interior Louisville LLC United States 46 PSA Corretora de Seguros e Serviços Ltda Brazil 50 *Faurecia Interior Systems Holdings LLC United States 46 Dongfeng Peugeot Citroën Auto Finance Company Ltd China 25 *Faurecia Interior Systems INC United States 46 Auto ABS DFP Master Compartment France 2013 France 50 *Faurecia Interior Systems Saline LLC United States 46 Auto ABS FCT2 2013-A France 50 *Faurecia Madison Automotive Seating Inc United States 46 Cie pour la Location de Véhicules - CLV France 50 *FAURECIA North America Holdings LLC United States 46 CREDIPAR France 50 *FAURECIA USA Holdings, Inc United States 46 FCT Auto ABS - Compartiment 2013-2 France 50 *Fnk North America United States 46 FCT Auto ABS French Leases Master France 50 *Faurecia Automitive del Urugay Uruguay 46 FCT Auto ABS French Loans Master France 50 *SAS Automotriz Argentina SA Argentina 23 * FCT Auto ABS LT Leases Master France 50 *SAS Automotive Belgium Belgium 23 * FCT Auto ABS3 - Compartiment 2014-01 France 50 *SAS Automotive do Brasil Brazil 23 * PSA Banque France France 50 *Faurecia Changchun Xuyang Faurecia Acoustics & Soft Trim Co Ltd China 19 * PSA Bank Deutschland GmbH Germany 50 *Changchun Faurecia Xuyang Automotive Components Technologies R&D China 21 * Auto ABS German Loans Master Germany 50 *Beijing WKW FAD Automotive Parts Co. Ltd China 23 * ABS Italian Loans Master S.r.l. Italy 50 *Chongqing Guangneng Faurecia Interior Syst. Company Ltd China 23 * Banca Italia S.P.A. Italy 50 *Dongfeng Faurecia (Xiangyang) Emissions Systems Co., Ltd China 23 * PSA Insurance Europe Ltd Malta 50 *Dongfeng Faurecia Automotive Exterior Systems Co. Limited China 23 * PSA Life Insurance Europe Ltd Malta 50 *Dongfeng Faurecia Automotive Parts Sales Co. Ltd China 23 * PSA Consumer Finance Polska Sp. z o.o Poland 50 *Faurecia Liuzhou Automotive Seating Sales Co., Ltd China 23 * PSA Finance Polska Sp.z.o.o. Poland 50 *Jinan Faurecia Limin Interior & Exterior Systems Company Limited China 23 * Auto ABS Spanish Loans 2016, FT Spain 50 *Lanzhou Faurecia Limin Interior & Exterior Systems Company China 23 * FTA Auto ABS - Compartiment 2012-3 Spain 50 *SAS (Wuhu) Automotive Systems Co Ltd China 23 * PSA Financial Services Spain E.F.C. S.A. Spain 50 *Xiangtan Faurecia Limin Interior & Exterior Systems Cny Ltd China 23 * Auto ABS Swiss Lease 2013 GmbH Switzerland 50 *Zhejiang Faurecia Limin Interior & Exterior Systems Cny Ltd China 23 * PSA Finance Suisse S.A. Switzerland 50 *SAS Autosystemtechnik SRO Czech Republic 23 * PSA Financial Services Nederland B.V. The Netherlands 50 *Parrot Faurecia Automotive France 9 * Auto ABS UK Loans PLC - Compartiment 2012-5 United Kindom 50 *Automotive Performance Materials (APM) France 23 * FCT Auto ABS UK Loans United Kindom 50 *Cockpit Automotive Systems DOUAI France 23 * PSA Finance UK Ltd United Kindom 50 *




Opel - Vauxhall Finance

Opel Bank S.A France 50 *Opel Finance Germany Holdings GmbH Germany 50 *Opel Bank GmbH Germany 50 *Opel Leasing GmbH Germany 50 *Opel Finance SpA Italy 50 *Opel Finance AB Sweden 50 *Opel Finance SA Switzerland 50 *Opel Finance International B.V. The Netherlands 50 *Opel Finance N.V. The Netherlands 50 *OPVF Holdings U.K. Limited United Kindom 50 *Vauxhall Finance plc United Kindom 50 *OPVF Europe Holdco Limited United Kindom 50 *


IV – STATUTORY AUDITORS’ REPORT ON THE 2017 CONSOLIDATED FINANCIAL STATEMENTS

This is a free translation into English of the statutory auditors’ report on the consolidated financial statements issued in French and it is

provided solely for the convenience of English-speaking users. This statutory auditors’ report includes information required by European

regulation and French law, such as information about the appointment of the statutory auditors or verification of the information

concerning the Group presented in the management report. This report should be read in conjunction with, and construed in

accordance with, French law and professional auditing standards applicable in France. To the Annual General Meeting of Peugeot S.A.,

Opinion

In compliance with the engagement entrusted to us by your Annual General Meeting, we have audited the accompanying consolidated

financial statements of Peugeot S.A for the year ended December 31, 2017.

In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of

the Group as at December 31, 2017 and of the results of its operations for the year then ended in accordance with International

Financial Reporting Standards as adopted by the European Union.

The audit opinion expressed above is consistent with our report to the Finance and Audit Committee.

Basis for opinion

Audit framework

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Statutory Auditors’ Responsibilities for the Audit of the

Consolidated Financial Statements section of our report.

Independence

We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2017 to

the date of our report and specifically we did not provide any prohibited non-audit services referred to in Article 5 (1) of Regulation (EU)

No. 537/2014 or in the French Code of Ethics (Code de déontologie) for statutory auditors.

Justification of Assessments – Key Audit Matters

In accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial Code (Code de commerce) relating to

the justification of our assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our

professional judgment, were of most significance in our audit of the consolidated financial statements of the current period, as well as

how we addressed those risks.

These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion on specific items of the consolidated financial statements.

Purchase price allocation of Opel Vauxhall

(Note 2 to the consolidated financial statements)


Risk identified

On July 31, 2017, PSA group acquired the majority of the subsidiaries of General Motors in Europe, composed of Opel and

Vauxhall brands (hereafter “Opel Vauxhall”).

This acquisition resulted in the recognition of goodwill of 1,810 million euros after the allocation of the purchase price. This

allocation will be finalized within the twelve-month period following the acquisition date. This allocation is based on fair value

estimates of assets and liabilities acquired. PSA group engaged an independent expert to assist the group in the identification

and valuation of the main tangible and intangible assets of Opel Vauxhall.

We consider that the purchase price allocation is a key audit matter given the significance of the transaction and the level of

Management’s judgment to identify the acquired assets and liabilities, to assess their fair value and to correctly describe this

information in the notes to the consolidated financial statements.

Our response

As part of our audit of the consolidated financial statements, our work consisted in:

obtaining an understanding of the scope of the work performed by PSA group and by its independent expert to

identify and estimate the fair value of the assets and liabilities acquired ;

analyzing, with the support of our valuation experts, the methodologies applied for the valuation of the most significant

assets and liabilities acquired, and assessing the main assumptions and parameters used to determine their fair value

and notably:

- the consistency of future cash flows used in the valuation with the business plan of a market participant (as

determined by IFSR 3);

- the consistency of tangible assets fair value estimates with market data or similar transactions valuation;

- the elements supporting the valuation of onerous contracts;

- for brands valuation, the consistency of the royalty rates applied to revenue projections with the sector’s

benchmarks.

analyzing the appropriateness of the information provided in the notes to the consolidated financial statements in

respect with the purchase price allocation.

Valuation of the recoverability of the fixed assets

(Notes 8.3 A, 8.3 B et 8.3 C to the consolidated financial statements)

Risk identified

As at December 31, 2017, the net book value of the Group’s fixed assets amounted to € 3,321 million for goodwill, € 7,916

million for intangible assets, and € 13,278 million for tangible assets. These assets are allocated to cash generating units

(“CGU”).

The recoverability of the fixed assets is tested each time impairment indicators are identified and at least once a year for assets

with infinite useful life (mainly goodwill and brands).

Impairment is recorded when the net booked value of these assets exceeds their net recoverable value. The net recoverable

value is the highest amount between the value in use and the market value. The value in use is determined using discounted

cash-flow and involves a high level of Management’s judgment notably in the determination of cash-flow projections, discount

rates and long-term growth rates.


We consider that the valuation of the recoverability of the fixed assets is a key audit matter given the significance of these

assets in the Group’s consolidated financial statements, the level of Management’s judgment and the uncertainties related to

the assumptions used.

Our response

We performed a critical analysis of the methodologies used by the Management to determine the recoverable value of the

Group’s fixed assets. We obtained the medium-term plans (“MTP”) and the impairment tests for each CGU and assets showing

impairment indicators.

On the basis of this information, our work consisted in:

reconciling with the accounts the net book values of the CGUs and individual assets that are subject to impairment

testing;

analyzing the cash flow projections and the consistency of the margin rates and volumes used for the purpose of

those tests with external benchmarks and the latest Management’s estimates presented to the Group’s governing

bodies;

comparing future projections with the estimates used for impairment tests in previous years and with the Group’s

historical performance;

comparing the discount rates used with the available market data;

verifying, on a sample basis, the accuracy of the valuation model used by t Management ;

performing a sensitivity analysis of the CGUs’ recoverable value to a variation of the main impairment test

assumptions (long-term growth rates, margin rate used for terminal value, discount rates).

Valuation of the equity accounted affiliates of the automotive activities

(Notes 8.3 D et 11 to the consolidated financial statements)

Risk identified

As at December 31, 2017, the net book value of the equity accounted affiliates in the automotive activity amounted to € 858

million. These equity accounted companies mostly include the Group’s share in the joint ventures with Dong Feng Motor Group

and Changan in China.

The results of the equity accounted companies include fixed assets impairments resulting from the impairment tests performed

in application of the same principles as those applied to test the fixed assets of PSA Group’s automotive activities. When an

impairment indicator is identified, the assets allocated to a specific car model are tested for each related Vehicle CGU. The total

assets (including those not allocated to a specific car model) are also tested at the level of each joint venture. In addition, PSA

Group tests the equity accounted affiliates when an impairment indicator is identified.

At December 31, 2017 the impairment tests performed at the level of the joint-ventures with Dong Feng Motor led to book an

impairment of RMB 1,515 million (RMB 758 million for PSA share, representing € 97 million).

As at December 31, 2017 the impairment tests performed at the level of Changan PSA Automobile Co., Ltd, the joint-venture

with Changan, did not lead to book additional impairment. At December 31, 2016 an impairment of € 263 million for PSA share

was booked for this joint-venture. As a consequence, PSA Group maintains a full impairment of the equity accounted

investment of € 51 million and a provision for risk of € 190 million after a loss of € 24 million was recognized for the financial

year 2017.

We consider that the valuation of the equity accounted affiliates of the automotive activity is a key audit matter given the joint

ventures’ significant decrease in sales and profitability in China and Management’s estimates in the determination of the

assumptions underlying the assets valuation of these joint-ventures.


Our response

As part of our audit of the consolidated financial statements, our work consisted in:

analyzing whether impairment indicators exist, such as a significant decrease in volumes and profitability;

considered the audit work performed by the auditors of the joint-ventures’ with Dong Feng Motor Group in China, and

their conclusions on the implementation of the assets impairment tests performed by the joint-ventures and the

reasonableness of the assumptions used by Management;

assess the consistency and the appropriateness of the major assumptions used in the assets impairment tests

performed for the joint-venture with Changan in China, including those in relation with the business plan submitted to

the governance bodies of the joint-venture.

Verification of the Information Pertaining to the Group Presented in the Management Report

As required by law, we have also verified in accordance with professional standards applicable in France the information

pertaining to the Group presented in the Board of Directors’ management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.

Report on Other Legal and Regulatory Requirements

Appointment of the Statutory Auditors

We were appointed as statutory auditors of Peugeot S.A. by your Annual General Meetings held on May 25, 2005 for Mazars

and on May 31, 2011 for ERNST & YOUNG et Autres.

As at December 31, 2017, MAZARS was in the 13th year and ERNST & YOUNG et Autres in the 7th year of uninterrupted

engagement respectively.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with

International Financial Reporting Standards as adopted by the European Union and for such internal control as management

determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue

as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting

unless it is expected to liquidate the Company or to cease operations.

The Finance and Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal

control and risks management systems and where applicable, its internal audit, regarding the accounting and financial reporting

procedures.

The consolidated financial statements were approved by the Board of Directors.


Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Objectives and audit approach

Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about

whether the consolidated financial statements as a whole are free from material misstatement. Reasonable assurance is a high

level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect a

material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or

in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these

consolidated financial statements.

As specified in Article L. 823-10-1 of the French Commercial Code (Code de commerce), our statutory audit does not include

assurance on the viability of the Company or the quality of management of the affairs of the Company.

As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises

professional judgment throughout the audit and furthermore:

Identifies and assesses the risks of material misstatement of the consolidated financial statements, whether due to

fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence

considered to be sufficient and appropriate to provide a basis for his opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control.

Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal

control.

Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by management in the consolidated financial statements.

Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit

evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant

doubt on the Company’s ability to continue as a going concern. This assessment is based on the audit evidence

obtained up to the date of his audit report. However, future events or conditions may cause the Company to cease to

continue as a going concern. If the statutory auditor concludes that a material uncertainty exists, there is a

requirement to draw attention in the audit report to the related disclosures in the consolidated financial statements or,

if such disclosures are not provided or inadequate, to modify the opinion expressed therein.

Evaluates the overall presentation of the consolidated financial statements and assesses whether these statements

represent the underlying transactions and events in a manner that achieves fair presentation.

Obtains sufficient appropriate audit evidence regarding the financial information of the entities or business activities

within the Group to express an opinion on the consolidated financial statements. The statutory auditor is responsible

for the direction, supervision and performance of the audit of the consolidated financial statements and for the opinion

expressed on these consolidated financial statements.


Report to the Finance and Audit Committee

We submit a report to the Finance and Audit Committee which includes in particular a description of the scope of the audit and

the audit program implemented, as well as the results of our audit. We also report, if any, significant deficiencies in internal

control regarding the accounting and financial reporting procedures that we have identified.

Our report to the Finance and Audit Committee includes the risks of material misstatement that, in our professional judgment,

were of most significance in the audit of the consolidated financial statements of the current period and which are therefore the

key audit matters that we are required to describe in this report.

We also provide the Finance and Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No.

537/2014, confirming our independence within the meaning of the rules applicable in France such as they are set in particular by

Articles L. 822-10 to L. 822-14 of the French Commercial Code (Code de commerce) and in the French Code of Ethics (Code de

déontologie) for statutory auditors. Where appropriate, we discuss with the Finance and Audit Committee the risks that may

reasonably be thought to bear on our independence, and the related safeguards.

Courbevoie and Paris-La Défense, March 1, 2018

The Statutory Auditors

French original signed by

MAZARS ERNST & YOUNG et Autres

Thierry Blanchetier Jérôme de Pastors Laurent Miannay Ioulia Vermelle

Photo credits:PEUGEOT COMMUNICATION

CITROËN COMMUNICATION / William CROZES / Continental ProductionsMARQUE DS

GROUPE PSA / Communications Department

PEUGEOT S.A.Incorporated in France with issued capital of €904,828,213

Governed by a Managing Board and a Supervisory Board Registered Offi ce: 7, rue Henri Sainte-Claire Deville

92563 Rueil-Malmaison - FranceB 552 100 554 R.C.S. Nanterre – Siret 552 100 554 00021

Phone:+ 33 (0)1 55 94 81 00groupe-psa.com

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Version VA Full 20180316 - groupe-psa.com · 4 - Groupe PSA 2017 Annual Results Groupe PSA has continued its product offensive in the region, where it has successfully launched the