annual report / the year in pictures

Transcription

2005
ANNUAL REPORT / THE YEAR IN PICTURES
Contents
4
KEY FIGURES
6
CORPORATE GOVERNANCE
6 / Message from the Chairmen 8 / Corporate Governance Structures
10 / The Managing Board and Executive Committee 12 / Stockholder Relations
14 2005 IN PICTURES
54 STRATEGY
56 / A Long -Term Vision 58 / Platforms and Cooperation Agreements
59 / A Commitment to People 60 / The Technologies of Tomorrow
62 BUSINESS REVIEW
64 / A Year of Growth and International Expansion
66 / Peugeot 68 / Citroën 70 / R&D 72 / Manufacturing Efficiency 74 / Cooperation
Agreements 76 / Other Businesses
78 SOCIAL RESPONSIBILITY
80 / A Year of Innovation in Employee Relations Practices
82 / The Four Pillars of Our Commitment to Social Responsibility
84 SUSTAINABLE MOBILITY
86 / Cars and the Environment 88 / Maximum Safety Across the Entire Model Lineup
89 / Enhancing the Quality of Mobile Life 90 / Managing the Environmental Impact
of our Production Facilities 91 / Supporting Local Development
92 FINANCIAL STATEMENTS AND STATISTICS
94 / Consolidated Balance Sheets 96 / Consolidated Statements of Income
97/ Consolidated Statements of Cash Flows 98 / Production by Model
99 / Worldwide Sales 100 / Production Facilities 101 / Mechanical Components Plants
and Foundries - Workforce 102 / Sustainable Development Indicators
PSA PEUGEOT CITROËN 2005 ANNUAL REPORT
2
3
The second-largest carmaker in Europe with a market
share of 14.3%, PSA Peugeot Citroën draws its
competitive strength from two broadline marques,
Peugeot and Citroën, the skills of its 208,500 employees
and a stable shareholder base.
We sold 3,390,000 vehicles in 150 countries
worldwide in 2005, reporting sales and revenue
of €56.3 billion for the year. We enjoyed a very
good performance outside Western Europe,
where unit sales exceeded one million vehicles.
Our growth is also being supported by Banque
PSA Finance, a car finance company, Faurecia,
an automotive equipment manufacturer, and
Gefco, a transportation and supply chain
management company.
A responsible global corporate citizen,
PSA Peugeot Citroën will pursue its development, led by the in-depth renewal of its model
line-up. Every day, we will continue to innovate
in the fields of environmental protection and
safety while designing Peugeot and Citroën
cars that meet customers’ expectations around
the world.
Key figures
Worldwide sales
Sales & revenue
Operating margin
(in units)
(in € millions)
(in € millions)
Automobile Division
Other businesses
3,375,300
3,390,000
56,105
Automobile Division
Other businesses
56,267
2,481
11,196
10,866
978
45,239
1,940
1,024
1,503
45,071
916
04
04
05
Balance sheet structure
(in € millions)
Stockholders’ equity, including minority interests
Net financial position of the manufacturing
and sales companies
13,703
14,406
05
Profit attributable to equity holders
of the parent
04
05
Capital employed
(in € millions)
(in € millions)
Automobile Division
Other businesses
1,646
14,123
12,403
6,271
1,029
5,912
6,491
7,852
1,347
381
04
05
04
05
04
05
4
5
Working capital provided
by operations and capital
expenditure
Earnings per share
Dividend per share
(in €)
(Manufacturing and sales companies)
(in € millions)
Working capital provided by operations
Capital expenditure
14.3%
market share in Europe,
where the Group is the region’s
second-largest carmaker.
Earnings per share
Dividend per share
6.97
4,171
3,689
4.47
2,862
2,793
1.35
04
04
05
1.35
3,390,000
vehicles sold worldwide.
05
Workforce
(at December 31, 2005)
30.4%
Automobile Division
Other businesses
208,500
207,600
69,000
68,200
139,500
139,400
04
05
The share of vehicle sales outside
Western Europe has exceeded
30% for the first time.
6
Message from the Chairmen
Thierry Peugeot
Jean-Martin Folz
With 3,390,000 vehicles sold worldwide,
PSA Peugeot Citroën’s performance in 2005
was shaped by stable unit sales (up 0.4%) and
lower financial results. This was due to the
combination of several factors, including flat
European demand, more aggressive competition, sharply higher raw materials prices and the
cost of compliance with the new Euro IV environmental standards. However, the year also saw
a number of major successes, with increased
sales and improved margins outside Western
Europe, a further reduction in production costs
and the development of the Peugeot and Citroën
model lineups. This uneven performance led us
to review our strategic choices and our answer
was clear: our strategy is the right one and the
best way to return to profitable growth is to
rigorously apply our policies and deploy them
more quickly.
PSA Peugeot Citroën’s organization, as expressed in our signature, “One Group, Two Marques”,
has been strengthened by the latest developments in 2005. The difference in Peugeot and
Citroën’s growth during the year illustrates the
benefits of having two broadline marques that
complement each other, whose coexistence
within the Group enables us to optimize model
lifecycle management.
The platform strategy, a core component of
our strategic vision, also made further prog-
ress in 2005. Following the introduction of the
Peugeot 407 Coupé and the Citroën C6, the
Rennes plant now produces six different body
styles on the same platform. Today, the number
of cars built on our three basic platforms is
ramping up very quickly as a percentage of total
output, attesting to the strategy’s success.
The cooperation strategy was also actively
pursued in 2005, which saw the introduction of
the Peugeot 107 and Citroën C1 as part of our
cooperation with Toyota, and the signature of
two new agreements – one with Fiat and Tofas
to jointly develop and produce small entry-level
commercial vehicles and the other with
Mitsubishi to manufacture new Peugeot and
Citroën SUVs. We also presented the manufacturing details of our cooperation with BMW to
produce small, high-tech gasoline engines and
unveiled the new diesel engine lineups developed with Ford. These cooperative agreements
are having an increasingly favorable impact, and
ramp-up is proceeding as scheduled. By 2008,
we expect to be producing more than 500,000
vehicles and around 2,700,000 engines in
cooperation with other manufacturers.
In 2005, we also reached an important milestone in our expansion outside Western
Europe, where, for the first time, sales topped
one million units, accounting for more than
30% of total sales and revenue. Unit sales rose
7
sharply in South America and China, driving a
clear improvement in financial performance. This
growth dynamic is set to continue, led by the
introduction of a large number of new models
tailored to local demand.
The demonstrated effectiveness and expected
future benefits of our strategic vision mean that
we can confirm our two main objectives: to
increase unit sales to four million cars and
achieve a consolidated operating margin of 6% of
sales and revenue. Although business conditions
have prevented us from reaching our objectives
for the time being, we are still committed to
meeting these objectives as quickly as possible,
in particular by implementing assertive action plans
in several key areas of our automobile business.
The first pathway to improvement is to meet
stringent quality standards. Significant progress
has already been made following the deployment of a broad-based improvement plan across
the organization, from project development and
purchasing to manufacturing and customer
service. We are committed to being one of the
top European carmakers in terms of quality.
The second priority is to improve our competitiveness by substantially reducing our production costs, by around €600 million a year. We
expect to maintain this pace of annual cost
savings in the future, thanks to the full impact of
our platform and cooperation strategies, the
ramp-up of the internal improvement plans designed to create a unified production system and the
wider application of new purchasing policies.
The third pathway is our innovation strategy,
an invaluable source of competitive advantage.
It is guided by our commitment to developing
useful technologies that improve safety and
environmental performance, and can be deployed for the largest number of customers.
That’s why, after introducing cars equipped with
Stop & Start, a first-stage hybrid system, we
are now preparing a development program
aimed at bringing a lineup of hybrid diesels to
market by 2010. The first two demonstrators
of that technology – the Peugeot 307 and
Citroën C4 Hybrid HDi – illustrate our vision of
the car of the future and our dedication to developing clean, fuel-efficient powertrains. Our innovation strategy is also designed to provide
customers with the very best safety technology that protects all road users. Eight of our
new models, for example, have earned fivestar ratings in EuroNCAP tests.
Lastly, the model renewal process is well
under way, providing the primary driver of our
future growth. After peaking at 4.5 years in 2005,
the average age of Peugeot and Citroën model
lineups is now steadily declining, to a projected
3.3 years in 2008.
In this renewal process, the first-half introductions of the Peugeot 207 and Citroën C6 are the
big news for now, but they will be followed by
other major launches during the year both in and
outside Western Europe. Together, they will
again demonstrate our ability to innovate and
diversify our model portfolio, which will include
38 body styles in 2006 versus 28 in 2001.
These new model launches will have a positive
impact in 2006, but the business environment is
expected to remain unfavorable, with persistently aggressive competition and flat demand
in Europe. In this environment, we estimate that
operating margin should be in the neighborhood
of the second-half 2005 figure in first-half 2006,
before showing an improvement in the second
six months of the year.
Thierry Peugeot
Jean-Martin Folz
Corporate Governance Structures
Since 1972, Peugeot S.A. has had a two-tier management structure, comprising
a Managing Board, responsible for strategic and operational management,
and a Supervisory Board, responsible for oversight and control.
The Supervisory Board
The Supervisory Board appoints the members
of the Managing Board and oversees the Managing Board’s management of the company.
Thierry Peugeot, Chairman
Jean Boillot, Vice Chairman
Jean-Philippe Peugeot, Vice Chairman
Pierre Banzet
Jean-Louis Dumas
Marc Friedel
Jean-Louis Masurel
François Michelin
Jean-Paul Parayre
Marie-Hélène Roncoroni
Ernest-Antoine Seillière
Joseph F. Toot Jr.
Roland Peugeot, Advisor
Bertrand Peugeot, Advisor
The Strategy Committee
Missions: The Strategy Committee is responsible for considering the Group’s long-term
growth trajectory and strategic direction. It
reviews the Managing Board’s long-term strategic plan and is consulted about proposed major
transactions. It also prepares Supervisory Board
decisions on strategic projects submitted for
the Board’s approval in accordance with Article
9 of the bylaws.
Jean-Philippe Peugeot, Chairman
Jean Boillot
Jean-Louis Dumas
François Michelin
Jean-Paul Parayre
Thierry Peugeot
The Compensation
and Appointments Committee
Missions: The Compensation and Appointments Committee is responsible for preparing
Supervisory Board decisions regarding compensation for members of the Managing Board,
the Supervisory Board and the Board committees, as well as stock option grants to members
of the Managing Board. It also prepares Supervisory Board decisions concerning the appointment of new members of the Supervisory Board
and Managing Board, by proposing selection
criteria, organizing the selection process and
recommending candidates for appointment or
re-appointment.
Thierry Peugeot, Chairman
François Michelin
The Finance Committee
Missions: The Finance Committee is responsible for informing the Board of its opinion on the
interim and annual financial statements of the
company and the Group, and it may also be
asked to review any corporate actions and other
projects requiring prior approval by the Board.
To this end, the Committee reviews in detail the
interim and annual financial statements, the
most significant financial transactions and the
management reporting schedules. It also monitors off-balance sheet commitments and data
to assess the Group’s risk exposure.
Marc Friedel, Chairman
Jean-Louis Masurel
Marie-Hélène Roncoroni
8
9
From left to right
Thierry Peugeot,
Jean Boillot,
Jean-Philippe Peugeot,
Pierre Banzet,
Jean-Louis Dumas.
From left to right
Marc Friedel,
Jean-Louis Masurel,
François Michelin,
Jean-Paul Parayre,
Marie-Hélène Roncoroni.
From left to right
Ernest-Antoine Seillière,
Joseph F. Toot Jr,
Roland Peugeot,
Bertrand Peugeot.
As of January 1, 2006
The Managing Board
and Executive Committee
The Managing Board
Jean-Martin Folz, Chairman
Frédéric Saint-Geours
Claude Satinet
The Executive Committee
Jean-Martin Folz, Chief Executive Officer
Frédéric Saint-Geours, Executive Vice President,
Peugeot
Claude Satinet, Executive Vice President,
Citroën
Yann Delabrière, Finance, Control and Performance
Gilles Michel, Platforms, Technical Affairs,
Purchasing
Jean-Marc Nicolle, Group Strategy and Products
Robert Peugeot, Innovation and Quality
Roland Vardanega, Manufacturing and Components
Jean-Luc Vergne, Employee Relations
and Human Resources
Senior Management
Xavier Fels, External Relations
Jean-Louis Grégoire, Executive Development
Jean-Claude Hanus, Legal Affairs
Liliane Lacourt, Communications
The Executive Committee and the Senior
Management Team meet on a weekly basis to
discuss issues concerning the day-to-day
management of the Group and the Automobile
Division. Specific committees have been set
up for each of the other businesses, which
meet once a month to discuss issues related
to the management of the business concerned.
The day-to-day management of the Group
is the responsibility of the Vice Presidents
Committee made up of senior line executives.
At March 1, 2006, the Committee comprised 51
senior executives, as well as the members
of the Executive Committee and the Senior
Management Team. It meets on a monthly basis.
10
11
From left to right
Jean-Martin Folz,
Frédéric Saint-Geours,
Claude Satinet,
Yann Delabrière,
Gilles Michel.
From left to right
Jean-Marc Nicolle,
Robert Peugeot,
Roland Vardanega,
Jean-Luc Vergne.
From left to right
Xavier Fels,
Jean-Louis Grégoire,
Liliane Lacourt,
Jean-Claude Hanus.
As of January 1, 2006
12
Stockholder Relations
PSA Peugeot Citroën is committed
to providing clear, regular information
to all individual and institutional
stockholders, in France and abroad.
The Group is constantly improving the effectiveness of the investor relations process, including
the various sources of stockholder information
and direct investor contacts at meetings and
special events, in compliance with best practices and the recommendations issued by stock
market authorities.
The Stockholders’ Newsletter, published to
coincide with the release of annual results, the
Annual Meeting and the release of interim
results, is sent to registered stockholders, holders
of more than 10 bearer shares registered with a
French financial institution at December 31 and
employee stockholders. It is also available upon
request.
The Stockholders’ Guide answers the most
frequently asked questions regarding stockholder
rights and the management of Peugeot S.A.
shares.
active in the capital markets. Moreover, the
Group is committed to meeting regularly with
individual stockholders in France through presentations in cities outside Paris, plant visits and a
booth at the Actionaria investor fair.
Contact Information
All stockholders have access to the following
sources of information:
The Annual Report, available in French and
English, provides essential information about
PSA Peugeot Citroën and its operations, including financial highlights and key data.
The Registration Document, prepared in
French and English and filed with the Autorité
des Marchés Financiers, provides a detailed
presentation and analysis of the consolidated
financial statements, the operations of the
different divisions, the resolutions approved
by stockholders in Annual Meeting and legal
information about the Company.
The Interim Report, also published in French
and English, is available as soon as interim results
are released in late July.
Press releases and financial notices are
posted on the Company website.
All these publications are available online at
www.psa-peugeot-citroen.com, which also displays the Peugeot S.A. stock price in real time.
To nurture effective relations with investors,
PSA Peugeot Citroën organizes a growing
number of events for its stockholders and the
entire financial community. Three major meetings are held for the presentation of interim
earnings, the presentation of annual earnings
and the Annual Meeting.
In addition, the Group regularly interacts with
investors by inviting them to meetings or plant
visits in Europe, the United States and Asia, and
invites financial analysts to theme meetings to
help improve their understanding of the Group's
business operations. The Group also participates
in industry presentations by financial institutions
Individual stockholders may request information from
the Investor Relations team via e-mail, at:
investor.relations@psa.fr
or by phone, at 33 (1) 40 66 36 71.
Stockholders wishing to receive financial information
on a regular basis may register at Company headquarters:
Peugeot S.A. - Investor Relations
75, avenue de la Grande-Armée - 75116 Paris
E-mail: investor.relations@psa.fr
Investor Calendar
April 27: First-quarter 2006 sales
May 24: Annual Stockholders' Meeting
May 31: Payment of 2005 dividend
July 26: First-half 2006 results
October 26: Third-quarter 2006 sales
February 7, 2007: 2006 annual results
Stock data
ISIN: FR0000121501
Markets
Eurolist continuous trading –
Euronext Paris SA, Compartment A
Other markets:
Europe: Euronext Brussels and
SEAQ International – London.
United States: Traded as
American Depositary Receipts
(ADRs), with one ADR representing one share of common stock.
Listed in the major indexes
CAC 40, SBF 120, SBF 250,
Euronext 100, DJ Euro Stoxx Auto,
Advanced Sustainable
Performance Indices (ASPI)
and FTSE4Good.
Eligible for:
Deferred settlement under the SDR
system and inclusion in French PEA
stock savings plans.
Par value
€1.00
Shares outstanding
at December 31, 2005
€234,618,266
Closing price
on December 31, 2005
€48.70
Market value
€11.43 billion
Weighting in the CAC 40 index
0.97 %
13
Five-Year Performance of the Peugeot S.A. Share Versus the CAC 40 Index and the DJ Euro Stoxx
Ownership structure at December 31, 2005
(in %)
160
1
140
2 34 56 7
120
1_Peugeot family: 30.22
100
2_Employee mutual fund: 2.53
3_Caisse des Dépôts: 2.64
80
4_Michelin: 1.20
5_Société Générale: 1.41
60
40
01/01
8
6_BNP Paribas: 1.13
04/01
08/01
12/01
04/02
Peugeot S.A. Share
08/02
12/02
04/03
CAC 40
08/03
12/03
04/04
08/04
12/04
DJ Euro Stoxx Automobile
04/05
08/05 12/05
Source: Euronext
7_Treasury stock: 2.39
8_Other: 58.48
Voting rights structure at December 31, 2005
Five-year Summary of Stock Price Performance
2001
2002
2003
2004
2005
58.27
35.40
47.75
60.80
32.20
38.86
43.85
33.53
40.40
52.70
36.93
46.70
57.95
45.20
48.70
(in %)
(in euros)
High
Low
At December 31
1
2 345 6
7
1_Peugeot family: 45.06
2_Employee mutual fund: 1.98
3_Caisse des Dépôts: 2.07
4_Michelin: 1.89
Dividends
2001
Dividend per share (in euros)
Before tax credit
Tax credit
Total revenue
Payout (in %)
2002
2003
2004
2005
5_Société Générale: 1.31
6_BNP Paribas: 1.76
1.15
0.58
1.73
17.6
1.35
0.675
2.025
20.7
1.35
0.675
2.025
21.9
1.35
24.2
* Subject to stockholder approval at the May 24, 2006 Annual Meeting.
** Beginning with dividends received in 2005, the tax credit has been replaced, under certain conditions, with tax relief.
1.35*
-.**
-.**
30.8
7_Other: 45.93
The 2005 Registration Document, filed with the Autorité des Marchés
Financiers on April 24, 2006, is available upon request from:
Investor Relations –75, avenue de la Grande-Armée – 75116 Paris, France
or by phone at 33 (1) 40 66 36 71.
It can also be found on the Company website:
www.psa-peugeot-citroen.com
14
15
2005
IN PICTURES
THE PEUGEOT 1007
Redefining the City Car
Inspired by the Sésame
concept car, whose bold,
creative design delighted the
public at the 2002 Paris Motor
Show, the Peugeot 1007 really
stands out from the crowd,
with compact lines that make
it ideal for driving, and parking,
in the city. Styled as a roomy
mini-MPV 3.37 meters long
and 1.62 meters high, the 1007
has a high driving position that
offers exceptional all-round
visibility and safety.
The innovative, remote-controlled sliding doors glide flush
to the rear panel, providing
unprecedented, totally safe
ingress/egress as well as the
ability to park in very narrow
spaces while leaving enough
room for people to get in
and out.
EMPLOYEE RELATIONS
The First Company
to Receive France’s
“Professional Equality”
Label
PSA Peugeot Citroën was
the first French company to be
awarded the “Professional
Equality” label for its commitment to gender parity.
A number of women were
recently hired using the
method applied by France’s
state-run employment agency
to identify the suitability
of jobseekers regardless of
gender and education.
The proportion of women
among new hires in 2005
was 22.4% for engineers and
managers, 32% for supervisors
and 22.1% for operators.
PSA Peugeot Citroën employees working
on a virtual engine test bed.
CITROËN
The C-AirPlay,
a New World of Driving
Pleasure
Unveiled at the Bologna Motor
Show, Citroën’s new C-AirPlay
concept car has an original
design that combines a curved
body with clean interior lines
to maximize driving sensations.
Powered by a 110-hp gasoline
engine fitted to an automated
SensoDrive gearbox,
the C-AirPlay is also equipped
with the environmentally
friendly Stop & Start technology
that dramatically reduces fuel
consumption and emission
levels.
INTERNATIONAL
OPERATIONS
A Solid Position in Brazil
After just five years in business,
Peugeot Citroën do Brasil has
firmly established its identity
as a Brazilian carmaker.
Inaugurated in 2001, the Porto
Real plant now produces
four models: the Peugeot 206
Sedan, the Peugeot 206 SW,
the Citroën Xsara Picasso and
the Citroën C3. It has also been
making 1.6-liter and 1.4-liter
gasoline engines since 2002.
This year, the plant began
production of flex-fuel engines
for the Peugeot 206 and
Citroën C3, whose ability to
run on any mixture of ethanol
and gasoline makes them
highly suitable for the Brazilian
market.
THE CITROËN C1
The Fun, Reliable
Compact
Introduced in June 2005, the C1
is Citroën’s entry-level model.
Just 3.43 meters long, the
compact four-seater combines
a stylish, fun design with the
highest standards in quality,
handling and safety. Both
the 3-door and 5-door versions
feature minimum overhang
and a curvy front-end with a
wraparound bumper that give
the car a friendly look, while
alluding to its sturdiness
and safety. The C1 also stands
out for its transparent tailgate
and rear lights, as well as for
the innovative design of the
rear doors, which extend right
back to the lamp clusters
on the 5-door model.
The suspension delivers
excellent handling, making
an effective contribution
to primary safety.
ENVIRONMENT
Particulate Filters
Increasingly Popular
The 1,400,000th vehicle
equipped with a particulate
filter rolled off the production
line in 2005. The technology
was invented by PSA Peugeot
Citroën, which is today the
only carmaker in the world
to mass-market a particulate
filter, offering it on ten vehicle
families: the Peugeot 206, 307,
407, 607 and 807 and the
Citroën C3, C4, C5, C8 and Xsara
Picasso. By sharply curbing
pollutant emissions, particulate
filter-equipped HDi diesels are
the world’s cleanest internal
combustion engines. At the
same time, their common-rail
direct injection technology
delivers exceptional performance in reducing CO2 emissions.
QUALITY
Committed to Quality
in Everything We Do
Throughout the production
process, vehicles are systematically checked one by one
to ensure that they meet the
highest standards in terms of
appearance, handling, comfort
and noise level. In all, ten hours
are spent controlling quality
on every executive vehicle.
Fulfilling customer expectations is one of the focal points
of our strategy. Substantial
progress has been made
following the deployment of
a broad-based improvement
plan across the organization,
from project development and
manufacturing to customer
service. The results after three
years are very encouraging
and include a 34% decrease
in customer-reported breakdowns and a 20% decline
in incidents reported after
the first year of use.
COOPERATION
An Efficient Plant for
PSA Peugeot Citroën
and Toyota Cars
As part of the cooperation
with Toyota, the Peugeot 107,
Citroën C1 and Toyota Aygo
are now being built at the
TPCA plant in Kolín, Czech
Republic, which was inaugurated in May 2005. The plant
has an annual production
capacity of 300,000 vehicles
and employs 3,000 people.
THE PEUGEOT 407 COUPÉ
Combining Elegance
with Power
A harmonious balance of
performance and refinement,
the new 407 Coupé builds on
the stylistic codes introduced
on the 407 lineup. With its
multi-functional capabilities
and outstanding driving
experience, the 407 Coupé is
a contemporary expression
of the traditional touring car.
Its powerful, state-of-the-art
engines and carefully chosen
suspension technology deliver
primary safety of the highest
order, as well as convenience,
comfort and driving pleasure
at all times. The 407 Coupé is
the first model in the 407 range
to be equipped with the new
2.7-liter V6 HDi engine with
a particulate filter.
ROAD SAFETY
Five Stars for Maximum
Safety
The European New Car
Assessment Programme
(EuroNCAP) conducts impact
tests to assess motor vehicle
passive safety performance
and publishes the results,
with ratings expressed in stars.
The Citroën C6 and the
Peugeot 407 Coupé, our new
executive models, each
received a five-star rating that
ranks them among the best
vehicles on the market in terms
of passive safety. In the area of
pedestrian protection, the C6
is the first vehicle to earn four
stars, the maximum awarded
by EuroNCAP.
ENVIRONMENT
The Citroën C3: Moving
Forward on CNG
PSA Peugeot Citroën is
convinced that there is a growing market for vehicles
powered by compressed natural gas (CNG), whose abundant
reserves and environmental
qualities make it a highly
promising fuel solution.
Anticipating demand, Citroën
worked with Gaz de France
to develop a dual-fuel version
of the C3 that runs on a mixture
of gasoline and CNG.
The C3 1.4i CNG is currently
being tested in a pilot program
at ten different locations in
France, including Toulouse,
where the model was launched
during the city’s clean energy
campaign.
COOPERATION
An Efficient Industrial
Organization for the
Cooperation with BMW
In 2005, PSA Peugeot Citroën
and BMW presented the
manufacturing details of their
cooperation for the production
of a new family of gasoline
engines. The major components
will be machined for both
partners at the Française de
Mécanique plant in Douvrin,
where the first production
module, covering a surface
area of 60,000 square meters,
was completed at year-end.
Assembly operations will be
carried out by PSA Peugeot
Citroën at Douvrin and by
BMW at Hams Hall in England,
with output eventually rising
to one million units a year.
Entry-level and mid-range
Peugeot and Citroën cars will
be equipped with the new
engines as early as 2006.
An engine crankshaft being stamped.
THE PEUGEOT 206
Record Production
Introduced in September 1998,
the Peugeot 206 celebrated the
production of its five millionth
unit – a 1.6-liter HDi Coupé
Cabriolet with a particulate
filter – at the Mulhouse plant
in France. With 1.1 million
registrations since launch,
France is the car’s leading
market, followed by the United
Kingdom (540,000), Italy
(465,000), Spain (400,000) and
Germany (331,000).
THE GREENHOUSE EFFECT
Carbon Sink Trees Now
Five Years Old
The Peugeot carbon sink
project in the Amazon began
in 1998 in partnership with
France’s national forest service
ONF and Pro-Natura, a FrancoBrazilian NGO. Its aim is to
study the relationship between
reforestation and the absorption of carbon dioxide, the
leading greenhouse gas.
Carried out in close cooperation
with the international scientific
community, reforestation
is promoting the biodiversity
of plant species and protecting
animal habitats, while getting
local communities involved
through native species planting programs.
THE CITROËN C6
The Prestige
of a Grand Tourer
Equipped with LeadingEdge Technology
Unveiled in a world premiere
at the 2005 Geneva Motor Show,
the Citroën C6 has been available since late 2005. This car
is offered in three versions –
the C6, C6 Lignage and
C6 Exclusive – and with two
V6 engine options – a 3-liter
gasoline engine or a 208-hp HDi
with a particulate filter. All of
the models offer an unprecedented level of comfort and
safety as standard, with
directional Xenon headlights,
a soft-diffusion dual-zone air
conditioning system, head-up
display, nine airbags and a
particulate filter on the V6 diesel.
EMPLOYEE RELATIONS
Career-Long Learning
An agreement has been signed
with unions in France concerning career-long training, which
redefines Group guidelines and
objectives to anticipate future
skill needs and fulfill employee
expectations. Key measures
include applying France’s new
employee training law and
developing apprenticeship
programs and trade
certification contracts for
young recruits and jobseekers.
The introduction of such new
programs as Passeport
Formation (Training Passport)
and skills validation will allow
employees to formalize
their skills and know-ledge
and obtain a diploma or
professional certification.
INTERNATIONAL
OPERATIONS
China Celebrates
the Sale of its 50,000th
Peugeot 307 Sedan
In China, the introduction of
the Peugeot 307 Sedan and a
solid sales performance from
Citroën drove a 57% increase
in Dongfeng Peugeot Citroën
Automobile’s sales.
Illustrating our broader
marketing presence in the
country, the Peugeot 307
Sedan has sold over 50,000
units and is already setting
the standard in its segment.
DPCA’s Chief Operating Officer
celebrated the success by
handing the keys to the
50,000th car to the lucky
customer at the Guangzhou
Motor Show. Citroën unit sales
rose 34% to 103,000 vehicles,
as the Chinese market returned
to strong growth after slowing
in second-half 2004.
SUSTAINABLE
DEVELOPMENT
A Bicycle Tour of
the Sochaux Plant
The Sochaux, France plant
opened its doors to visitors
on bicycles during European
Mobility Week, which was
organized by the French
Ministry of Ecology and
Sustainable Development.
An eight-kilometer bicycle
circuit offered visitors a chance
to discover the plant, which
produces 1,915 vehicles a day.
Begun in 2004, the plant’s
travel plan is beginning
to produce results, with
300 employees now coming
to work by bicycle and making
the most of the site’s numerous
bike paths.
CITROËN
Citroën and Sébastien
Loeb: A Winning Team
At the 2005 World Rally
Championship, Citroën
secured the Manufacturers’
title for the third year in a row,
with Sébastien Loeb winning
the driver’s title for the second
time. He also received accolades
from the international motoring
media for his fine performance,
including a “Caschi d’Oro”
trophy from the Italian
magazine Autosprint and an
“International Rally Driver
of the Year” award from the
British magazine Autosport,
as well as being named “Man of
the Year” by Top Gear and CAR.
is committed to achieving unit
sales of four million vehicles
a year and a consolidated
operating margin of 6 %.
54
55
Strategy A Long -Term Vision
Platforms and Cooperation Agreements
A Commitment to People
The Technologies of Tomorrow
STRATEGY
56
A Long -Term Vision
PSA Peugeot Citroën is building its
development on the strength of two
marques, Peugeot and Citroën, which
coexist harmoniously within the Group
but compete with each other in the marketplace. This dual identity enables us to
offer customers broad, diverse model
line-ups, while supporting sustainable
growth in sales and earnings.
PSA Peugeot Citroën owes its growth to an
organization based on two broadline marques:
Peugeot and Citroën. By designing vehicles to
suit each market and carefully coordinating new
model launches, each marque is able to offer
a comprehensive line-up of cars and light
commercial vehicles that express both unique
stylistic identities and shared, strategically
related concepts. Although the two marques
enjoy the independence needed to lead separate and often competing marketing and sales
strategies, their technological, manufacturing,
administrative and financial processes have
been combined to enhance efficiency and
create economies of scale.
In addition to its core competency of making
automobiles, PSA Peugeot Citroën is also
involved in three other businesses that are
critical to driving growth:
Banque PSA Finance provides new vehicle
and replacement part financing for dealers and
offers a comprehensive array of financing and
related services to Peugeot and Citroën carbuyers;
Faurecia, a majority-owned automotive equipment manufacturer that produces such major
component modules as seats, dashboards,
door panels, exhaust systems and front-ends.
Based on revenues generated with the Group
and other carmakers, Faurecia is the leading
original equipment manufacturer in France,
number two in Europe and ninth in the world;
Gefco, a transportation and logistics specialist whose businesses include vehicle preparation and transportation, groupage and full/partload road transportation, logistics and air/sea
freight.
Building long-term growth by focusing
on customers, offering a comprehensive
range of products and services, demanding
the highest standards of quality,
continuously innovating and delivering
next-generation technologies, enhancing
employee skills and dedication, and
efficiently managing costs.
PSA Peugeot Citroën is firmly engaged in a
profitable growth dynamic, whose goal is to
sell four million vehicles a year and achieve a
consolidated operating margin of 6%.
There are significant opportunities for improvement. For one thing, as we meet the challenges
of a still difficult business environment, we are
creating powerful competitive advantage
by maintaining our medium-term objectives
– based on developing our model line-ups,
expanding outside Western Europe and reducing our operating costs, in particular by deploying the platform strategy and increasing
productivity.
We have also implemented an aggressive
model development program that is shortening time-to-market for innovative new concepts
that deliver the styling, performance, comfort,
originality and technologies customers expect.
These customers are aware of the impact cars
have on today‘s society, and want to make
responsible choices in addressing such critical
issues as safety, the environment, recycling
and urban mobility.
Informing every aspect of our strategy is a
commitment to sustainable development.
In addition to diligently fulfilling the economic,
social and environmental responsibilities
associated with our operations, our sustainable development commitment is focused
on three key issues: greenhouse gases, road
safety and urban mobility. Today, a wide
array of practical, innovative technological
solutions, deployable to the largest number
of customers, are being implemented to
produce cars that comply with the highest
environmental and safety standards.
Our growth has been built on the code of
conduct defined in our Ethics Charter, while
relations with stakeholders are based on
trust and respect for ethical practices.
57
Our quality strategy is
supported by the proficient
management of our business
processes across the
product and service lifecycle.
We‘re dedicated to doing
it right the first time, from
design and production to
sales and customer service.
| Growth in sales
Unit sales outside Western Europe
exceeded one million for the first
time in 2005.
1,029,500
950,600
817,200
710,500
587,300
01
02
03
04
05
31 new body styles
are scheduled for launch
between now and 2008.
STRATEGY
Platforms and Cooperation Agreements
To fulfill market expectations, PSA Peugeot
Citroën‘s model line-ups offer a wide choice
of body styles, powertrains and equipment,
as well as advanced, premium quality
comfort and safety features.
At the same time, we are committed
to controlling capital expenditure and
reducing production costs.
These challenges are being met in two ways.
First, vehicle design and process engineering
are guided by the platform strategy, which
consists of sharing vehicle base components,
such as engines, underbodies, axles and gearboxes, among several different models. This
enables us to develop, at less cost, a greater
number of new models with highly distinctive
personalities, but sharing the same basic technical components. Common parts account for
at least 60% of the production cost of vehicles
built on the same platform. By significantly
shortening development cycles, reducing
development, process engineering and production costs, and lowering the price of sourced
equipment and parts, the platform strategy is
also helping to diversify the model portfolio. The
resulting savings are passed on to customers
in the form of competitive prices, more extensive, higher quality standard equipment and
a richer product offering.
Second, PSA Peugeot Citroën is pursuing an
innovative – and growth driving – strategy of
cooperation with other carmakers for the joint
development and manufacture of vehicle bases
or components. Providing similar advantages
to the platform strategy, cooperation agreements enable the partners to share costs,
increase production runs and expand their
model ranges. This type of agreement, which
respects each partner‘s independence, represents the best response to the challenges of
globalization and fast changing markets. Stepping up this cooperation strategy will provide
critical leverage for our future development.
3.2 million
vehicles will be built on the
Group‘s three platforms in
2008, doubling the 2005 figure.
7 agreements
PSA Peugeot Citroën is
cooperating with the world‘s
leading carmakers to jointly
produce engines or vehicle
bases.
A 1.6-liter gasoline engine developed
in cooperation with BMW Group.
58
59
A Commitment to People
More than anything else, PSA Peugeot
Citroën is a community of men and women
motivated by a shared commitment to
meeting our growth and profitability
objectives. That‘s why human resources
policies are an integral part of our strategic
vision as we expand across the global
marketplace.
To support this expansion and prepare to meet
future challenges, programs are being actively
implemented to internationalize and diversify
our teams and to offer fair, performance-based
compensation in a competitiveness-driven
workplace organization focused on safety and
continuous dialogue with employee representatives. People are being recruited from a variety
of backgrounds, in terms of professional experience, education, culture and nationality, with an
emphasis on creating a diversity of jobs, skills
and capabilities. Hiring policies are designed
to avoid any form of discrimination and to encourage diversity, which enriches the team experience and nurtures a spirit of emulation. Reflecting
our steadfast commitment to social dialogue,
PSA Peugeot Citroën has signed important, often
innovative agreements in every host country to
bring labor and management together to discuss
major corporate and community issues. All of
these human resources policies and commitments are making a strong contribution to the
Group‘s momentum.
208,500
people work for PSA Peugeot
Citroën worldwide.
41,000
employees are women in
2005, representing nearly 20%
of the workforce.
42.6 %
of employees are non-French
nationals.
STRATEGY
60
Technologies of the Future
By enabling us to develop, manufacture
and market innovative concepts using
efficient technologies that meet the needs
of the largest number of customers,
our research and development capabilities
are playing a critical role in addressing the
challenges of an increasingly competitive
marketplace while delivering important
new benefits to customers.
R&D programs are focusing on such major
priorities as enhancing road safety, reducing
CO2 and other emissions, and improving fuel
efficiency. We are aware that our cars will be
successful only if customers like them and we
want to retain our leadership positions in
critical automotive technologies. That‘s why
we are developing cars with strong brand
identities.
First priority: design clean, fuel-efficient
vehicles
PSA Peugeot Citroën is actively responding
to two major concerns: abating the greenhouse
effect and meeting the expectations of
customers sensitive to energy efficiency and
fuel prices. Attentive to the desire of carbuyers
to be responsible citizens, we believe our role
is to deliver new technologies that not only help
to improve fuel economy, but also reduce emissions and harmful exhaust gases to limit the
environmental impact of our cars. A good exam-
ple of this commitment is the clean, fuel-efficient HDi diesel engine with a particulate filter.
Second priority: enhancing the safety
of drivers and other road users
More than 10% of the annual R&D budget is
spent on assertively developing technical solutions that help to prevent accidents and reduce
their impact when they do occur. We also play
an active role in other aspects of road safety,
such as improving driver behavior and the roadway environment. The Peugeot and Citroën
vehicle design process is structured to meet
the highest standards in three types of safety:
Primary safety involves preventing accidents,
by improving roadholding, braking performance
and visibility, and by ensuring that the driver
receives adequate information to correctly
perceive and interpret road conditions;
Secondary safety systems protect occupants
and pedestrians in the event of an accident.
They include both structural features and
restraint systems, such as seat belts, seat
design and air bags;
Tertiary safety refers to the emergency
response of rescue crews and medical teams
after an accident. We are a leader in this area,
thanks to our emergency call system, which
has been deployed across the model line-up in
France and six other European countries. To
deliver exceptional comfort to customers,
research is also being conducted in such diverse
areas as sensory analysis and ergonomics.
By analyzing and improving the sensory perception of sound, appearance, smell and touch in
a vehicle interior, these studies demand a
constant dialogue between the social and engineering sciences.
On every new project, we are committed to
meeting these challenges and to demonstrating the quality of our research by developing
useful, innovative technologies.
We are committed to
developing next-generation
innovations in the areas
of safety, the environment,
sensory analysis and
ergonomics.
61
GENEPAC, a next-generation
fuel cell stack developed by
PSA Peugeot Citroën in cooperation
with the French Atomic Energy
Commission (CEA), represents
a solution for the future.
3.39 million Peugeot
and Citroën vehicles were
sold in 2005, including
one million outside
Western Europe.
62
63
Business Review A Year of Growth
and International Expansion
Peugeot Citroën R&D
Manufacturing Efficiency
Cooperation Agreements
Other Businesses
BUSINESS REVIEW
64
A Year of Growth and International Expansion
With 3.39 million vehicles sold worldwide in 2005, PSA Peugeot Citroën
recorded a slight 0.4% increase in sales
in a market that remained extremely
competitive.
light commercial vehicles, with 370,400 registrations and an 18.5% share. Market leadership was consolidated in France, Spain,
Belgium and Portugal, with share exceeding
10% in ten Western European countries.
Despite a good performance elsewhere in the
world, sales in Western Europe contracted
2.7% in a stable market driven by fierce
competition among global carmakers. Sales
declined even more steeply in the final
quarter of the year, when European demand
slowed more sharply than expected, causing
the competitive environment to worsen. In
response, further adjustments were made
to production programs in the autumn, but
vehicle inventory nonetheless remained
above target levels.
In France, where we ranked number one,
Peugeot and Citroën registrations rose by 1.7%
to 785,000, for a 31.6% share of the market.
The second-largest European carmaker
PSA Peugeot Citroën was the secondlargest carmaker in Western Europe, with
2,355,000 cars and light commercial vehicles registered in the region during the year.
Market share in the 18-country region eased
to 14.3% from 14.6% in 2004, reflecting a
commitment to favoring margins over volumes in an aggressive marketplace.
We strengthened our position as Europe’s
number two in the car segment, with
1,984,600 registrations and 13.7% of the
market, while maintaining our leadership in
In Spain, we confirmed our market leadership, with 394,400 registrations and a 20.6%
share.
Over one million cars sold outside
Western Europe
At 1,029,500 units (738,000 Peugeots and
291,500 Citroëns), sales outside Western
Europe exceeded the one million mark for the
first time in 2005, attesting to our broader and
deeper presence in the global marketplace.
Up 8.3% on last year, these sales now
account for nearly one third of the worldwide
total.
Strong growth in Argentina and Brazil
In Latin America, resurgent demand, particularly in Argentina and Brazil, the recent
launch of the Peugeot 307 and 206 SW and
the introduction of new flex-fuel engine
options helped drive a 28.3% increase in
sales to 182,900 units. In Brazil, where the
market expanded by 9.5%, sales were up
27% to 81,900 units, resulting in a market
share of 4.9%, versus 4.3% a year earlier. In
Argentina, where the market grew by 35.2%,
sales rose 47.5% to 52,800 units and market
share stood at 13.8%.
While the Italian market contracted by 1.7%,
rampant competition in the small and midrange segments drove Group registrations
down 11.1% to 240,500, for a 9.9% market
share.
Market share close to 10% in the six
main Central European countries
Sales totaled 209,700 units in Central and
Eastern Europe, where demand contracted
sharply during the year after reaching a record
high in early 2004. In the six main Central European countries (Poland, Hungary, the Czech
In the United Kingdom, registrations totaled
283,300 for a 10.2% share of the market. As
in 2003 and 2004, we continued to pursue a
more restrictive marketing strategy in the
least-profitable segments, especially fleets,
which account for more than 55% of local
sales. As a result, registrations declined by
9.4% in 2005.
In Germany, an upturn in sales drove a 4.7%
increase in registrations, which stood at
202,100 for a market share of 5.7%.
Republic, Slovenia, Croatia and Slovakia) plus
Turkey, market share stood at 9.5% with
150,700 vehicles sold. Sales in Russia rose
12.7% to 16,500 units.
Stepped-up sales in China
Peugeot made its Chinese debut in 2004 with
the market introduction of the 307 Sedan. This
major launch, combined with firm demand
for Citroën cars, helped to drive Dongfeng
Peugeot Citroën Automobile sales up 57.2%
to 141,000 units in a market estimated to have
grown 25.8% to nearly 3,200,000 vehicles.
This momentum should be sustained in 2006
by the introduction of the Peugeot 206 and
two new Citroën models.
65
Outlook for 2006
In an increasingly competitive
marketplace, demand in Europe
is expected to remain at around
2005 levels. During the year,
PSA Peugeot Citroën expects to
reap substantial benefits from a
new phase in the model renewal
process, led by the arrival of the
Peugeot 207. When combined
with the impact of the first full
year of sales of models introduced in 2005 (the Peugeot 107,
1007 and 407 Coupé and the
Citroën C1 and C6), the Peugeot
207 should enable the Group
to go back on the marketing
offensive and return to unit
sales growth in Western Europe.
Sales outside Western Europe
are expected to continue
to increase at the same fast pace
as in the past two years, led by
the launch of new Peugeot
and Citroën models, in Latin
America and China, such as
the Citroën C-Triomphe.
BUSINESS REVIEW
66
Peugeot: International Recognition
Founded in 1810 as a family-owned steel
mill, Peugeot has played a major role
in automobile history. From the first
motorized tricycles to the latest high-tech
models, the marque rapidly became
one of France’s leading carmakers before
expanding across the global marketplace.
A strong identity based on four core values
Embodied in the marque’s sleek, sporty
models, Peugeot’s unique personality sets it
apart from other car brands. It expresses the
four core values of reliability, dynamism, style
and innovation, which inspire the marque’s
product and services strategy and guide
employees in their workplace practices
and commitment. As the basis of its corporate culture, these values enable Peugeot
to move with the times while preserving its
heritage.
The marque is present in a wide range of
market segments, from passenger cars to
light commercial vehicles, and is constantly
renewing its lineup with models whose strong
personalities and robust, reliable performance
set the standard in each segment.
Outstanding cars, an ongoing innovation
process informed by a commitment to environmental stewardship, constant attention to
customer concerns and strong ties to the
world of motorsports are just some of the
qualities that define the marque.
Today, more than ever, these values are
expressed in the marque’s global signature
“Peugeot. The Drive of Your Life”.
A worldwide sales network
Peugeot’s global network of nearly 10,000
dealerships and service centers in more
than 150 countries is supported by fifteen
importer subsidiaries in Western Europe,
five in the Mediterranean basin, four in Latin
America, three in Africa and one in Japan, as
well as a joint venture in China and some
130 importers worldwide.
In all, 2005 was a good year for Peugeot
for several reasons.
Unit sales of the 206 reached 5.4 million,
making it the best-selling Peugeot model ever.
For the sixth year in a row, the model was the
most popular car in its segment in 2005, selling a total of 676,500 units worldwide.
Already available in sedan and SW versions,
the Peugeot 407 line was expanded by the
year-end launch of the Coupé, which now
ranks third in its segment in Europe.
Sales of the Peugeot 607 rose sharply
thanks to the new V6 HDi engine with
particulate filter.
Increasing international expansion
With 37% of total sales now derived outside
Western Europe, Peugeot has consolidated
its strong position in the global marketplace.
In Western Europe, where the market was
shaped by flat demand and fierce competition, Peugeot registrations declined by 4.8%
to 1,254,100 units.
2005 also saw the introduction of four new
models: the Peugeot 1007 in April, the 107
and then the “new 307” in June and the 407
Coupé in November.
Lastly, sales of vehicles equipped with a
particulate filter reached one million by end2005, consolidating Peugeot’s leadership
in the technology.
Faced with sluggish demand across Western
Europe, the marque favored margins over
volumes and tended to avoid the heavy promotional campaigns undertaken by most
other carmakers.
Outside Western Europe, on the other hand,
sales rose a further 5.7% to 738,000 cars
and CKD units invoiced over the year.
Peugeot in Central Europe
In the six Central European countries in
which the marque is present (Poland,
Hungary, the Czech Republic, Slovenia,
Croatia and Slovakia), Peugeot’s market
share stood at 6.1% with 53,000 registrations.
Peugeot in Latin America
In Argentina, demand rose 35.2% to
361,500 registrations, while Peugeot sales
climbed 48.7% to 40,600 units for a market
share of 10.65%. In Brazil, Peugeot sales rose
25.4% to 54,000 units for a market share of
3.3%, versus 2.9% in 2004.
Peugeot in China
The DPCA joint venture successfully
launched the 307, now a benchmark in its
segment with nearly 40,600 units sold.
Backed by a network of 130 Blue Box dealerships, Peugeot is recognized for the quality
of its products and services.
67
2005 was a year of
consolidation for Peugeot,
with 1,995,500 cars and
light commercial vehicles
sold worldwide.
For more information about the marque
visit www.peugeot.com
The Peugeot 1007.
BUSINESS REVIEW
68
Citroën: Expanding in Every Region
of the World
Even today, after more than 85 years,
Citroën vehicles still embody the pioneering spirit of the marque’s founder,
André Citroën.
A strong identity
Citroëns are truly works of art, unique and
meaningful. They are inspired cars that look
like no other, a blend of class, styling and
quality. And because the quality of its cars
and services underpins the image of confidence that keeps customers coming back to
the marque and its dealers, Citroën has
implemented a quality certification process
that is driving more intimate understanding
of customer expectations and a deeper
commitment to meeting them.
Every day, Citroën employees are dedicated
to pursuing growth and efficiency through a
culture of continuous improvement.
Making the environment one of its primary
concerns, Citroën has deployed across its
network a range of resources and services
designed to address environmental issues
with real-world solutions and, ultimately, to
improve the efficiency of the industry as a
whole.
The Citroën network
In France, Citroën’s network includes 346 new
car dealers, 2,310 authorized repair shops,
321 official spare parts distributors and
789 licensed Eurocasion used car dealers. In
the rest of Europe, the company is represented by 18 subsidiaries and 8 importers
operating 1,761 dealerships, around 4,269
authorized repair shops and 1,159 official
spare parts distributors. In the rest of the
world, the network comprises 67 importers,
3 subsidiaries, a joint-venture in China and
1,150 dealerships.
Sales up in Western Europe
In Western Europe, registrations of Citroën
cars and light commercial vehicles rose
1.3% to 1,100,900 units in 2005, for a 6.7%
share of a market shaped by flat demand and
aggressive competition.
Steady growth in Central Europe
Despite lackluster demand in most Central
European countries, Citroën sales rose 11%
in the region.
Robust expansion in the rest of the world
Citroën enjoyed strong growth in Latin
America in 2005. In Argentina, sales rose
43%, outpacing the market and lifting
Citroën’s share to 3.2%, while the September
introduction of a 1.6-liter version drove a 30%
A commitment to people
In all, 13,900 employees, including 6,045
outside France, are helping to drive Citroën’s
financial performance.
surge in Xsara Picasso sales. In Brazil, sales
gained 30% in a market up 9%, increasing
Citroën’s market share to 1.7%. Growth was
led by the introduction of a new version of the
1.4-liter C3 and the launch of the flex-fuel C3,
which can run on any mixture of gasoline and
alcohol.
In China, unit sales rose 29% to 100,400 vehicles, for a market share of 3.1%, as demand
returned to very strong growth after slowing
in second-half 2004.
The most comprehensive and diverse
model lineup in Citroën’s history
One of the highlights of 2005 was the world
premiere of the C6, Citroën’s new executive
model that combines elegance and refinement
with leading-edge technology. The model
also achieved outstanding results in the
EuroNCAP impact tests, with a five-star rating
for adult occupant protection making it one of
the leading models in the executive segment. It
was also the first car to earn the maximum four
stars for pedestrian protection.
Unveiled at the 2005 Geneva Motor Show and
on the market since June, the C1 is Citroën’s
entry-level model and the smallest of the
marque’s compact cars. It combines a fun,
stylish design with the highest standards in
quality, handling and safety.
Since its launch in 2004, the C4 has enjoyed
growing popularity in most countries, with sales
in Western Europe exceeding 200,000 units for
a market share of 1.3%.
Encouraged by the success of its compacts,
Citroën now offers the C3 with a 1.6-liter,
110-hp HDi engine with particulate filter. The
model’s interior has also been revamped with
a new dashboard, the same as on the C2 and
C3 Pluriel, as well as new door panels and trim.
Citroën also had a very successful year at the
World Rally Championship (WRC), winning the
Manufacturer’s title for the third year in a row
and the Driver’s title for the second year in a
row thanks to Sébastien Loeb and his co-driver
Daniel Elena.
69
Fielding its most
comprehensive lineup ever,
Citroën sold 1,394,500
vehicles around the world
in 2005.
For more information about the marque
visit www.citroen.com
The Citroën C1.
BUSINESS REVIEW
70
An Active R&D Commitment
With groundbreaking concepts and
compelling technologies, PSA Peugeot
Citroën is leveraging its research and
innovation commitment to proactively
respond to changes in automotive
markets and emerging customer needs.
Innovative designs that stand out
on the street
When they combine an original concept
with a personalized style and innovative
technologies, cars have the power to
enchant and delight.
Creating this appeal is what our stylists do
at the Automotive Design Network (ADN),
as they imagine the silhouettes of future
Peugeot and Citroën models.
Cars have to resonate with all sorts of
customer expectations, but as attested by
the recently launched Peugeot 107 and
1007 and the Citroën C1 and C6, bold new
designs can articulate needs that are only
just beginning to emerge.
A research dynamic to develop solutions
for tomorrow
Reducing CO2 emissions is by far the
Group’s largest environmental challenge, but
rising oil and fuel prices are also motivating
us to look for alternatives to fossil fuels.
These issues are a focal point of our model
development strategy.
Hybrid technology
The Stop & Start system
By automatically shutting down the engine
when a car is stopped or idling and starting
it up again when the driver presses on
the accelerator, Stop & Start technology
reduces fuel consumption, and therefore
CO2 emissions, by 6 to 15% depending on
traffic conditions. It also helps to significantly
reduce traffic-related noise.
The system is now offered on the Citroën C2
and C3, in combination with another leadingedge technology, the SensoDrive electronically controlled manual gearbox.
Diesel hybrids
Diesel-hybrid technology is currently one of
the most effective ways to improve fuel efficiency and reduce CO2 emissions. Unlike
gas-hybrid technology, which offers little
gain compared with HDi diesels, the combination of an electric-diesel powertrain with a
HDi engine delivers truly breakthrough performance, enhancing fuel efficiency and cutting CO2 emissions to just 90 grams per kilometer on the European cycle.
Anticipating the introduction of this new
technology, in January 2006 we presented
two hybrid HDi demonstrators – a Peugeot
307 and a Citroën C4 – with diesel-electric
powertrains and particulate filters.
Our Hybrid HDi technology combines the
Stop & Start system with a 1.6-liter HDi
diesel with particulate filter. However, this
technology will only be economically viable if
its cost can be brought down to a level that is
affordable for midrange carbuyers. We are
now focusing our efforts on achieving this
objective by 2010.
Fuel cells
Hydrogen fuel cells represent a promising
alternative to fossil-fuel internal combustion
engines. They are destined to play an important role in the future of the automobile
industry and have therefore become an integral part of our environmental strategy.
To conduct our own research into this technology, a dedicated fuel cell unit has been
created at our research center in Carrièressous-Poissy, west of Paris. It is focused
exclusively on studying fuel cells, related
technologies like hydrogen storage and
ways of integrating the technology into vehicles. Framework agreements have already
been signed for the development and trial
of fuel cells.
One example is the GENEPAC project
undertaken in partnership with the French
Atomic Energy Commission (CEA), which
has designed and developed a compact,
efficient 80kW hydrogen fuel cell perfectly
suited to automotive applications.
Innovative technologies for maximum
comfort and safety
PSA Peugeot Citroën is constantly developing useful, innovative technologies that
improve driver comfort and enhance safety.
The head-up display offered on the Citroën
C6, for example, projects key driving information, such as speed and navigation system
prompts, onto the windshield at eye-level.
This eliminates the need to look down at the
instrument panel, enhancing safety and
shortening reaction times. A set of dedicated
controls located on the dashboard next to
the steering wheel enables the driver to turn
the display on and off, adjust the height and
brightness of the image, and select the
desired information (except for speed, which
is always shown when the system is active).
The Citroën C6 also features an active hood,
developed by PSA Peugeot Citroën, which
automatically lifts up in the event of a collision
involving a pedestrian. Thanks to an impact
sensor and a pyrotechnic mechanism, the
hood rises 65 millimeters in just a fraction of a
second to cushion the impact and protect the
pedestrian. A second mechanism keeps the
hood raised despite the force of the impact.
Technological innovation plans
Prepared as part of a proactive approach to
our technological partnerships with certain
71
Bottom: the C3 Citypark parking
demonstrator.
suppliers, technological innovation plans
have proven highly effective by enabling
teams to work together far upstream in the
development process and by simplifying,
clarifying and optimizing relationships
between the partners. We pursued this
approach in 2005 by signing a partnership
agreement with equipment supplier Siemens
VDO Automotive to set up our ninth technological innovation plan.
4 % of Automobile Division
sales and revenue
is dedicated to R&D,
representing a carefully
managed budget of
€1,816 million in 2005.
BUSINESS REVIEW
72
Manufacturing Efficiency
A global manufacturing organization
PSA Peugeot Citroën’s manufacturing organization employs nearly 90,000 people in 19 countries around the world.
Our 32 production sites include 16 assembly
plants and 15 mechanical component plants,
as well as one site that manufactures and ships
CKD units.
Production methods and processes comply
with strict, state-of-the-art standards, applied
by empowered operators committed to continuously improving the reliability of the vehicles
they make. They know that customers expect
Peugeot and Citroën cars to fulfill the highest
standards of quality and that, across the Group,
we have embraced quality as a critical driver of
profitable growth.
Convergence: sharing best practices
Since 2001, PSA Peugeot Citroën has been
implementing the Convergence Plan, a major
process undertaken as part of our industrial
strategy to enhance manufacturing efficiency
by instilling best practices across the production base. The resulting efficiency gains have
enabled us to meet our target of reducing
production costs by €600 million a year and
to halve the capital cost of maintaining and
upgrading our manufacturing facilities.
Once a best practice has been adopted, it is
deployed and implemented across the entire
production base, so that all of the plants
eventually converge towards a single, aligned
organization and shared operating procedures. Significant progress has already been
made. Today, new vehicles are easier to
assemble and workstations are organized
more efficiently, with the result that assembly time declined by 24% between 2001
and 2005.
Launched in 2005, the second phase of the
plan will step up deployment of the unified
manufacturing system with the goal of
achieving optimal production efficiency.
Keeping capital expenditure under control
PSA Peugeot Citroën takes a measured
approach to capital expenditure and is beginning to reap the benefits of rationalization
programs undertaken in recent years. In
2005, a certain portion of capital expenditure
was dedicated to pursuing actions to develop,
renovate and upgrade the production base.
Although the Group will continue to undertake ambitious industrial projects, capital
expenditure is expected to be contained at
under €3 billion a year.
Expanding and optimizing
the manufacturing base
Two new sites in the heart of Europe
Built in partnership with Toyota and inaugurated in May 2005, the Toyota Peugeot
Citroën Automobile (TPCA) production cen-
ter in Kolín, Czech Republic, has the capacity
to produce 300,000 vehicles a year. It is currently manufacturing the Peugeot 107 and
Citroën C1 on a new compact car platform.
The plant in Trnava, Slovakia, which will start
producing the Peugeot 207 in 2006, has
annual capacity of 300,000 vehicles, in three
shifts. It has also been selected for a new,
150,000-unit production facility that will
manufacture a car based on a completely
new concept. Built on the small-car platform,
the vehicle will be added to the line-up in
around 2010.
Sustained upgrading of the production base
Renovation work on the Poissy assembly
line has been completed and the new cutting
and stamping lines in Mulhouse and Poissy
are now on stream.
Production stepped up
on the three Group platforms
The platform strategy continued to be implemented in 2005, driving further organizational
improvements and cost reductions. It is
streamlining process engineering by supporting a high percentage of shared parts and subassemblies and the reuse of proven technological solutions. Standardization of shared
components forms the basis of a more rational manufacturing organization that is having an
impact on purchasing, the supply chain, main-
tenance and assembly line capacity utilization.
In this way, the platform strategy is helping
to reduce production costs, assembly times
and capital expenditure, while improving
manufacturing flexibility in response to
demand for the models concerned. The number of vehicles produced on the three main
platforms is ramping up quickly with every
passing year, helping to considerably broaden
the model portfolio.
Vehicle, engine and gearbox production
start-ups
Capital outlays in 2005 were primarily committed to preparing production start-ups of
new models scheduled for launch in 2006
and 2007, such as the Peugeot 207 to be
assembled in Poissy, Madrid and Trnava as of
spring 2006. Funds were also allocated to the
launch of the Peugeot 307 Sedan in the
Mercosur region and the Peugeot 206, Citroën
C-Triomphe and a new Citroën compact in
China.
Thanks to the programs undertaken to develop and upgrade mechanical subassembly
production, we are now equipped with
modern, efficient manufacturing facilities for
both diesel and gasoline engines. Some of
these funds were also used to adapt our
engines to comply with the new Euro IV
environmental standards, applicable in 2006.
We continued to invest in a new production
73
unit at the Douvrin plant as part of our cooperation agreement with BMW. We also
invested in process engineering programs for
the DW12 HDi engine, whose output has
been raised to 170hp from 136hp, and completed a first phase of investment for the
new electronically controlled mechanical
gearbox at the Valenciennes plant.
On average, 14,000 vehicles,
16,000 gearboxes and
17,000 engines come off
the Group’s production
lines every day.
Quality assurance: a total priority
PSA Peugeot Citroën’s quality
policies are applied not only at
every stage of the production
process, but also to all of the
related services.
Manufacturing processes are
engineered to produce components and subassemblies that
fully comply with specifications,
and vehicles that offer
customers all the features
aligned with our objectives.
In addition, technical and
functional specifications are
defined so that our vehicles
and their components deliver
the driving experience we
promise. Because vehicle
quality is directly related to
the quality of our inputs,
which represent more than
70% of a vehicle’s production
cost, we are committed to
helping our suppliers
effectively manage the development and manufacture of
automotive equipment, while
improving their deliverables
and responsiveness.
That’s why we have introduced
a system for managing the
quality of supplier inputs
based on three principles:
Selective management: In
awarding contracts, a supplier’s
quality performance throughout the product lifecycle is
accorded the same importance
as the price.
Collaborative management:
Suppliers are involved well
upstream in the design and
production process to ensure
optimum quality control.
Incentive management:
The best suppliers are
rewarded with new contracts.
BUSINESS REVIEW
74
Seven Cooperation Agreements
To drive faster growth and reduce costs,
PSA Peugeot Citroën is implementing
an innovative cooperation strategy based
on the joint development and manufacture
of vehicle bases or components with
other independent carmakers.
This strategy was actively pursued in 2005.
A pioneer in cooperation
For more than 30 years, the Group has
demonstrated the unique ability to forge
strategic cooperative agreements that
respect each partner’s personality and independence. We have worked with Renault on
V6 gasoline engines and mid-range automatic
transmissions since 1971, with Fiat on
MPVs and light commercial vehicles and,
since 1998, with the Ford Motor Company
on a line of diesel engines. In 2001, we
announced an agreement with Toyota for the
development and production of entry-level
cars at a new plant in Kolín, Czech Republic,
and in 2002 an agreement with BMW for a
new generation of gasoline engines to be
used by both partners. Two new cooperation
agreements were undertaken in 2005 –the
first with Mitsubishi for SUVs manufactured
in Japan and scheduled for launch by
Peugeot and Citroën in 2007 and the second
with Fiat and the Turkish group Tofas to jointly
develop and produce small entry-level commercial vehicles, which will be rolled out
starting in 2008. Other partnerships designed
to drive technological innovation have been
formed with certain equipment manufacturers.
Important achievements in 2005
A state-of-the-art plant
for a new market segment
Inaugurated in 2005, the equally-owned
Toyota Peugeot Citroën Automobile (TPCA)
plant in Kolín resulted from the successful
cooperation that enabled the partners to combine their strategically-related skills and capabilities. It is now producing the Citroën C1,
Peugeot 107 and Toyota Aygo on a shared
platform. The cooperation has united our intimate understanding of the European small
car and automotive component markets and
Toyota’s expertise in the development,
process engineering and production phases.
Impelled by a strong team spirit, TPCA has
successfully implemented each stage of the
cooperation, on-time and on-target. In 2006,
the plant will produce 200,000 vehicles for the
Group and 100,000 for Toyota.
PSA Peugeot Citroën and BMW:
an efficient manufacturing organization
In 2002, PSA Peugeot Citroën and BMW
announced that they were combining their
technological know-how and experience in the
mass production of automotive components
to jointly develop and manufacture a new fam-
ily of high-tech, 1.4 and 1.6-liter gasoline
engines, which will equip both partners’ vehicles beginning in 2006. Production is expected
to reach around one million units a year. The
main components will be machined for both
partners at the Douvrin plant in northern
France, while engine assembly will be divided among each partner’s facilities –Douvrin
for PSA Peugeot Citroën and Hams Hall in the
UK for BMW Group– to facilitate the logistics
of supplying each manufacturer’s car plants.
The cooperation required the deployment of a
flexible, efficient organization tailored to two
different and geographically distinct engine
assembly processes. A highly integrated,
independent production module was brought
on line in late 2005 at the Française de
Mécanique plant in Douvrin, and will eventually produce 2,500 engines a day. Our Charleville and Mulhouse Metallurgy Division plants
will also be integrated into the industrial plan
as suppliers of raw castings. The quality of
both machined and purchased parts is
managed using criteria common to BMW and
PSA Peugeot Citroën, while a coordinated
procedure has been introduced to support
full, real-time transparency between the two
engine plants.
PSA Peugeot Citroën and Ford: the world’s
leading diesel engine manufacturers
The highly successful cooperation between
Ford and PSA Peugeot Citroën has already
resulted in the production of several generations of high-tech diesel engines that are now
being deployed across the model range, from
small compacts to large sedans and light commercial vehicles.
Thanks in particular to their environmental
benefits, these engines rank among the most
popular in Europe. In 2005, we manufactured
close to 1.53 million cars equipped with common-rail HDi diesels, bringing total output to
nearly eight million units since 1998.
During the year, the fourth phase of our cooperation with Ford was initiated with the
presentation of two new light, clean, energyefficient diesels to be offered on both partners’ light commercial vehicles and executive
cars. The first, a highly reliable and robust
2.2-liter truck engine, will be produced by Ford
at its plant in Dagenham, UK, at an annual rate
of 200,000 units.
Among other models, it will equip our new
Peugeot and Citroën light commercial vehicles. The second, a premium, energyefficient four-cylinder, 2.2-liter car engine, will
be manufactured at our facility in Trémery,
eastern France, which is the world’s largest
diesel engine plant. Intended for both partners’
upper mid-range and executive vehicles, it
will be produced at the rate of 200,000 units
a year.
75
Top: The paint line at the TPCA plant
in Kolín, Czech Republic.
Bottom: The engine assembly line at
the Trémery plant in eastern France.
Vehicles and engines
produced under cooperation
agreements will eventually
represent 20% of
consolidated sales
and revenue.
BUSINESS REVIEW
76
Other Businesses Critical to Growth
Banque PSA Finance, further growth
in new lending
Operating in 18 countries around the world,
Banque PSA Finance supports the sale of
Peugeot and Citroën vehicles by financing
new vehicle and replacement parts inventory
for dealers and offering a comprehensive
array of financing and related services to
carbuyers.
2005 was another year of growth for the
Bank, with outstanding loans and new retail
lending both increasing by around 6%, lifting
the penetration rate on Peugeot and Citroën
sales to 27.1%. The year also saw further
strong development of financing-related
services, with the number of contracts
increasing 16.3% to 1,113,936 from 975,016
in 2004.
As part of its close relationship with Peugeot
and Citroën dealers, Banque PSA Finance
continued to support their business expansion in 2005. Outstanding wholesale financing
amounted to €5,564 million at December 31,
2005, up 2.6% on the previous year. The
strongest gains were recorded in replacements parts financing, where outstandings
rose 13% after climbing 26.1% in 2004. In all,
outstanding loans totaled €22.4 billion in
2005. This growth reflected the fact that the
Bank held onto the strong positions acquired
in its various host countries, while significantly
improving its performance in the European
countries where its position had eroded
somewhat in 2004, as well as in Central
Europe and Latin America. It was also
achieved without sacrificing high margins,
thanks to a favorable refinancing environment and to the effectiveness of the Bank’s
marketing strategy and more particularly the
continued success of its financing and services
packages. Operating margin amounted
to €607 million compared with €518 million
in 2004, representing an increase of 17.2%.
In addition to highly satisfactory business
growth and financial results, 2005 also saw
ongoing international expansion. Operations in
Mexico were extended to wholesale financing
for Peugeot dealers, while in China, the partnership with Bank of China to finance local
Peugeot and Citroën sales was finalized.
Wholesale and retail financing operations
will start-up in China in 2006, when an initial
commercial presence will be established
in Turkey.
Lastly, the Bank also spent much of 2005
preparing for implementation of the Basel II
revised international capital framework,
which will highlight even more than in the
past the quality of its loan book and its
system of internal control.
These positive trends indicate further business growth in 2006, both in the Bank’s traditional marketplace, Western Europe, and in
regions where its presence is more recent,
such as Latin America, Central Europe and
now China. Throughout the year, the Bank
will continue to focus on supporting Peugeot
and Citroën marketing strategies.
Faurecia, a world leader in automotive
equipment
With 60,000 employees working at 160 sites
in 28 countries, Faurecia is now a major player
in the global automotive industry and, based
on revenues generated with the Group and
other carmakers, the number two original
equipment manufacturer in Europe and ninth
in the world. The company specializes in
the design, development, manufacture and
delivery of six major vehicle modules – seats,
cockpits, acoustic units, doors, front ends and
exhaust systems. Three years ago, as part of
its continuous improvement approach, it introduced the Faurecia Excellence System, a common working method based on company and
industry best practices, which creates value
for customers, employees and shareholders.
In line with its international expansion strategy, Faurecia enjoyed sustained growth outside Europe in 2005, including 19% in North
America, 18% in South America and 38%
in Asia. This solid performance outside
Europe helped offset a decline in revenue in
European markets, caused by a sharp drop
in sales to French carmakers.
During the year, the company made further
performance gains in delivered product
quality assurance and met its purchasing
objectives, particularly in best-cost countries.
The industrial redeployment plan continued on
schedule, with the opening of nine new plants
– one in Germany, four in Central Europe, one
in the United States and three in China. With
sluggish demand expected in Europe and sustained growth elsewhere, Faurecia will pursue
its expansion in 2006 by opening fourteen
new plants, including six in the United States,
four in Central Europe and one in China.
Gefco, a benchmark provider of integrated
supply chain services
In recent years, Gefco has been pursuing a
growth strategy based on industrial supply
chain integration and international development. Present on every continent, in 80 countries representing 85% of world trade, Gefco
provides end-to-end logistics solutions in three
areas: vehicle preparation and distribution
(Automotive), groupage and full/part-load road
transportation (Network) and logistics and
air/sea freight (Supply). In 2005, the company
recorded a 3.7% increase in sales and revenue
and pursued its global expansion with new
logistics platforms in Poland, Slovakia, and
the United Kingdom, new automotive centers
in Spain (Ciempozuelos) and Russia (Bykovo)
and new group-age agencies in China
(Shanghai, Wuhan), Brazil (Vitoria), Romania
77
(Bucharest), Poland (Lodz) and Austria (Linz).
As well, it continued to develop alternatives to
road transport, which now represent 25% of
total business. For example, it was the first
customer to use the new Toulon-Rome sea
highway, opened in spring 2005, and of the
3.4 million vehicles it carried in 2005, 35%
were shipped by short-sea lines around
Europe. To support the organization by core
business, a customer-focused cross-business
structure was introduced in 2005, leading to the
creation of new units for Outbound Automotive
Logistics Replacement Parts Logistics and
Industrial Customer Logistics.
Peugeot Motocycles
Present in nearly 50 countries and with sales
and revenue of €106 million, Peugeot
Motocycles ranked as Europe’s third-largest
scooter manufacturer in 2005 and number
one in the 50cc market in France and the
Netherlands. Two new scooter lines, Satelis
and Geopolis, will be launched in 2006.
Peugeot Citroën Moteurs (PCM)
PCM adapts PSA Peugeot Citroën engines
and components for sale to other carmakers
and manufacturers.
Process Conception Ingénierie (PCI)
PCI is involved in the design, manufacture
and installation of industrial equipment.
€22,417 million:
Banque PSA Finance’s loan
book at December 31, 2005.
€10,978 million:
Faurecia’s sales and revenue
in 2005.
€3,000 million:
Gefco’s sales and revenue
in 2005.
Employee relations policies
play a critical role in driving
PSA Peugeot Citroën’s
growth and business
performance.
78
79
Social Responsibility
A Year of Innovation
in Employee Relations Practices
The Four Pillars of Our Commitment
to Social Responsibility
SOCIAL RESPONSIBILITY
80
A Year of Innovation
in Employee Relations Practices
PSA Peugeot Citroën is committed to
growth founded on socially-responsible
principles and practices, consistently
applied in every host country and
business around the world.
In recent years, this commitment has been the
source of innovative employee relations in all
our host countries, particularly in the areas of
fundamental human rights, equal opportunity,
diversity, gender parity and the integration of
disabled people.
On April 9, 2003, the Group pledged to uphold
and promote the ten principles of the United
Nations Global Compact, an agreement
inspired by the Universal Declaration of Human
Rights, the International Labor Organization’s
Declaration on Fundamental Principles and
Rights at Work, the Rio Declaration on
Environment and Development and the United
Nations Convention Against Corruption. These
commitments are also inscribed in our Ethics
Charter, which was drafted and distributed to
all employees in March 2003. The charter
provides a set of fundamental reference points
that every executive, manager and employee
must refer to and comply with in all circumstances. In 2005, further progress was made
when negotiations were opened with unions,
the International Metalworkers’ Federation
(IMF) and the European Metalworkers’ Fede-
ration (EMF) in order to formalize and internationalize the Group’s commitments to fundamental human rights.
Upholding fundamental human rights
PSA Peugeot Citroën respects host country
laws and regulations in every aspect of its
business. We also uphold every individual’s
right to choose a trade, occupation or profession, condemn forced labor and prohibit child
labor.
Fostering diversity and embracing
difference
At PSA Peugeot Citroën, diversity is defined
as getting people to pool their talents and
work together, regardless of their culture,
origin, gender, religion, political convictions,
personal experience, physical characteristics
and career path. We promote this vision of
diversity and equal opportunity worldwide. In
2004, for example, agreements to foster
diversity were signed in France, Spain and
Argentina, with a focus on three basic principles. First, companies must never exclude
particular categories of people from the job
market. Second, a world-class organization
should hire people from a variety of backgrounds, which reflect its host communities
and environments, since this is clearly the
best way to understand and satisfy its customers. Third, companies must plan for the
retirement of employees of the post-war
generation, which will lead them to attract
and hire people from a broader range of
backgrounds. More than a year after signing
the agreements, significant progress has
been made, particularly in our hiring practices.
Of the 1,426 engineers, managers, technicians and supervisors hired in France in 2005,
336 were women, 65 were non-French
nationals, 136 were visible minorities and 48
came from underprivileged urban areas.
Managing skills and resources
responsibly
Career development at PSA Peugeot Citroën
is based on skills and performance. In 2005,
the emphasis was on developing individual
career and skills management applications.
A new approach to managing skills
and expertise
A career management process based on
job tracks has been introduced in order to
identify, by job track or skills cluster, the
required capabilities and to meet employee
expectations for more personalized career
management. On March 8, 2005, an agreement was signed in France with five trade
unions concerning the personal growth and
career development of production line operators. It comprises a variety of career development processes for production workers
that will increase their opportunities for job
enrichment and personal advancement. By
improving the objectivity and transparency
of promotion decisions, the agreement has
enhanced equal opportunity across the
Group. Moreover, it paves the way for
negotiations on career development for
other categories of skilled professionals,
technicians and supervisors.
Preparing and developing tomorrow’s
capabilities through career-long training
In the spring of 2005, management also
signed an agreement with all the unions concerning career-long training opportunities.
The agreement redefined training guidelines
and objectives with the aim of proactively
planning for required skills and team capabilities, while responding more effectively to
employee aspirations by enhancing their
employability. In particular, the agreement
redefines the individual’s right to training
with a view to enabling employees to directly
shape their career itineraries.
Work safety: A sharp improvement
in results and ambitious targets
At PSA Peugeot Citroën, the only acceptable
target is an accident-free work environment
in every country. That’s why we ensure that
efficient, prevention-based workplace health
and safety policies are applied in all our oper-
81
ations. Diligent programs undertaken in
recent years have led to a significant reduction in the number of accidents. In the past
three years, for example, the number of losttime incidents has been reduced by half in all
our host countries.
Some 15,700 people
were hired in 2005,
including 10,200
outside France.
SOCIAL RESPONSIBILITY
82
The Four Pillars of our Commitment
to Social Responsibility
Open social dialogue
for lasting innovation
Our social dialogue policy is based on relations
with independent labor organizations. In every
country, employees who work in production
facilities, service units and major dealerships
are represented by unions or by employeeelected representatives. Agreements on the
exercise of union rights define specific measures to guarantee the absence of anti-union
discrimination and to provide trade unions with
the means to carry out their activities independently. The emphasis on collective bargaining and the involvement of labor organizations
in defining and applying fundamental social
principles – particularly concerning equal
opportunity – has helped our corporate culture
to evolve.
In 2005, 12 agreements in France and more
than 50 outside of France were signed with
employee representatives. Social dialogue
between employee representatives and
management is maintained on a daily basis.
A priority focus on safety
and working conditions
The decrease in workplace accidents in 2005
was a landmark achievement, attributable
to the active involvement of all the stakeholders and the use of more preventive than
corrective measures. Workplace safety is a
top priority across the organization, which
demands the extensive, personal involvement
of every manager. Policies emphasize that
the foundations of a common safety culture
are built on each employee’s behavior and
practices.
Our safety commitment is also shared with
the temporary employment agencies and
subcontractors that work with the Group.
The safety of contractor employees continued to improve in 2005, when the number of
their lost-time incidents during the summer
maintenance turnaround declined by 20%
compared with the year-earlier period.
Dynamic hiring policies
to internationalize teams and diversify
employee skill sets
With business operations in nearly 150
countries, PSA Peugeot Citroën currently
has 208,500 employees worldwide. Nearly
15,700 employees were hired in 2005, while
over the past five years, almost 84,000
people have been hired under permanent
contracts. The workforce is becoming
increasingly international, with 82,400 people
working outside France in 2005, up nearly 64%
from 50,300 in 1999. 42.6% of employees
are non-French, representing some 100
nationalities. By the end of 2005, more than
half of the workforce had been hired within
the last six years.
A total compensation policy based on
performance and fairness
For several years now, the Group’s wage
policy has ensured that employee purchasing power is maintained or, in most cases,
increased depending on our growth and
earnings performance. The policy is
designed to:
Offer compensation that is competitive
with market practices and consistent with
corporate earnings.
Acknowledge individual achievement and
reward performance.
Redistribute the gains from growth to
employees.
Foster employee savings.
Strengthen health care and benefit coverage and meet employee retirement expectations.
The Group is committed to guaranteeing all
employees equal pay for equal work, as well
as equal access to promotions and individual
raises.
Aligning employees with Group objectives
and earnings
All employees around the world are paid an
incentive bonus based on operating margin.
Out of 2005 earnings, some €144 million
was distributed to employees worldwide in
the form of incentive-based bonuses and
profit-shares.
Diversified employee savings plans
To provide more effective support for employees
in pursuing their personal projects, a broad
range of new employee savings plans has
been developed over the past five years. The
Group matches employee funds invested voluntarily in company shares and in the longterm retirement saving plan, as well as
incentive bonuses reinvested in company
shares. In 2005, these matching payments
totaled €14 million.
A growing percentage of employee
shareholders
Employee share ownership has risen steadily
over the last five years, with the percentage
of issued capital held by employees increasing from 0.75% in 2000 to 2.53% at
December 31, 2005. In all, more than 51,000
employees are shareholders of Peugeot S.A.,
including 4,700 in non-French companies.
Preparing satisfactory retirement benefits
Retirement plans are gradually being introduced to supplement state retirement
systems.
Providing a strong social safety net
Personal protection insurance plans have
been set up for all employees in every host
country to provide at least death and disability
cover, guided by an in-depth risk analysis.
83
| Total lost-time incident
frequency rate
The lost-time incident frequency
rate stood at 3.11 in 2005. This rate
covers manufacturing, service and
R&D operations worldwide, as
well as marketing units in France.
The objective in 2006 is a rate of
3.70, covering all of the above
operations plus marketing units
outside France.
100,000 new hires
worldwide, of which
more than 50,000 in France
between 2000 and 2005.
6.48
4.40
Group
objective
3.70
05
06
3.11
02
05
Consolidated Group including
French marketing units
Consolidated Group including
international marketing units
The 2005 corporate social report is available
on request and can be viewed online at:
The three major challenges
of sustainable mobility in
using cars are greenhouse
gases, road safety and
urban mobility.
84
85
Sustainable Mobility
Cars and the Environment
Maximum Safety
Across the Entire Model Lineup
Enhancing the Quality of Mobile Life
Managing the Environmental Impact
of Our Production Facilities
Supporting Local Development
SUSTAINABLE MOBILITY
86
Cars and the Environment
The first challenge to achieving sustainable mobility is to deal effectively with
greenhouse gases. PSA Peugeot Citroën
believes that automobiles should be
harmoniously integrated into their
environment, which is why we are
committed to developing new technologies
that reduce greenhouse gas emissions
at an affordable price for carbuyers.
Reducing fuel consumption
and CO2 emissions
Reducing the amount of CO2 emitted by
Peugeot and Citroën vehicles is a priority
objective and we are actively engaged in
developing technological solutions to meet
it. Today, we are the leader in the market for
fuel-efficient cars, which release less than
120 grams of CO2 per kilometer.
Effective solutions with real-world
relevance
HDi diesel technology: PSA Peugeot Citroën
has consolidated its technological leadership
in diesel powertrains, which consume much
less fuel to deliver the same performance as
gasoline engines. The second generation of
our common-rail, direct-injection HDi diesel
engines reduces CO2 emissions by 20%
compared with a conventional injection diesel,
and by 30% compared with an equivalent
gasoline powerplant. We are also pursuing
our commitment to downsizing, to develop
smaller, more fuel–efficient engines that
deliver equivalent performance as the preceding
larger models. This policy has enabled a
10% improvement in fuel efficiency while
maintaining equivalent torque and power.
The particulate filter: The environmental
performance of diesel engines has been
further enhanced by the particulate filter, an
after-treatment system that eliminates
emissions of particulate matter. Invented
by PSA Peugeot Citroën, particulate filter
technology is a clear demonstration of our
commitment to improving the quality of air
in urban environments. As a vital link in the
emissions-control chain, the system will be
fitted on all our diesel models over the
medium term. We are already marketing
the third generation filter, which had been
deployed across almost the entire model
range by the end of 2005.
The Stop & Start system: Offered on the
Citroën C3 and C2, the Stop & Start system
uses a low-power electrical device to shut
the engine down automatically when the
vehicle is standing still and to start it up again
instantly and noiselessly when reactivated by
the driver. It can reduce fuel consumption
and, consequently, CO2 emissions by up to
15% in heavy traffic.
Viable solutions for tomorrow
Hybrid diesel technology: The recent
presentation of the Citroën C4 and Peugeot
307 Hybrid HDi demonstrators illustrates our
expertise in hybrid technology, as well as our
foresight in combining the HDi diesel engine
with a diesel-electric powertrain to deliver
truly breakthrough performance in terms of
fuel efficiency and CO2 emissions. Nevertheless, hybrids remain intrinsically more
expensive than any internal combustion
solution, due to the addition of costly components. We are actively trying to reduce this
extra cost so as to narrow the price gap
between a hybrid and a conventional diesel
to a more affordable level, with the aim of
launching our first commercial hybrids by
2010.
Fuel cells: A very long-term solution, hydrogen fuel cells offer many benefits, including
a reduction in CO2 emissions, which helps
attenuate the greenhouse effect, and the
elimination of local emissions. To make the
development of automotive fuel cell technology both technically and financially feasible,
we are working on different cells and prototypes in partnership with other researchers.
However, given the challenges involved in
bringing the technology to market, we do not
intend to integrate fuel cells into our vehicles
before 2020.
Promoting biofuels and natural gas
Another way to reduce vehicle CO2 emissions is to develop the use of alternative
energies and new propulsion technologies.
Biofuels: Derived from sugar beets and
cereals (ethanol) or from oilseeds (vegetable
oil methylesters), biofuels represent a renewable source of energy with real environmental
benefits. PSA Peugeot Citroën strongly
encourages the use of biofuels, whose full
potential is yet to be exploited.
Compressed Natural Gas (CNG): As another
alternative fuel solution, we are also exploring the possibilities offered by CNG, which,
in comparison to conventional fuels, is high
calorific, reduces greenhouse gas and other
emissions, and burns very quietly.
To demonstrate our commitment to stepping up the development of CNG vehicles,
we have signed the third CNG protocol
aimed at securing their viability in France
by 2010.
We are also marketing a range of CNG-fuelled light commercial vehicles and recently
unveiled the new CNG Citroën C3.
Today, our research is focusing on a multipurpose CNG engine particularly adapted to
the requirements of major gas exporting
countries where natural gas is already a viable
alternative to oil.
87
Eco-designing for disassembly and reuse
Peugeot and Citroën cars are all designed for
recycling, using eco-design to improve the
processing and recycling of end-of-life
vehicles by limiting the transfer of waste and
supporting the development of recovery and
recycling facilities. Other recyclability techniques include marking plastic parts and elastomers for traceability, using easily recyclable
materials, reducing the variety of materials to
facilitate sorting after shredding and using
recycled materials in new vehicles.
Without any technical
modifications, today’s
engines can run on biofuel
blends of up to 10%
ethanol/gasoline and
up to 30% vegetable oil
methylester/diesel fuel.
88
Maximum Safety Across
the Entire Model Lineup
The second challenge in achieving sustainable mobility is designing vehicles that are
as safe as possible.
To meet it, PSA Peugeot Citroën is constantly
developing solutions to prevent accidents
(primary safety), attenuate their consequences (secondary safety) and improve the
response of rescue teams (tertiary safety).
We actively participate in studies undertaken
by France’s Laboratory of Accidentology,
Biomechanics and the Study of Human
Behavior (LAB) and conduct research on the
critical factors that lead to accidents. We
also maintain open and constructive dialogue
with road safety stakeholders, particularly
in Europe, but also in China, Brazil and
Argentina.
Primary safety:
Leveraging our extensive experience
Accident avoidance
Capitalizing on our expertise in chassis systems, we design cars that deliver maximum
handling, safety and reliability. To attenuate
the consequences of certain emergency
situations, we offer such driver assistance
technologies as anti–blocking systems
(ABS), emergency braking assist (EBA), and
electronic stability programs (ESP), which
help drivers maintain control even in a skid.
On certain models, we also offer innovative
technologies like dual-function directional
Xenon headlights and lane departure warning
systems.
Track tests
Our two test centers are equipped with facilities capable of reproducing every imaginable
set of driving conditions and subjecting cars
to extreme stress.
Secondary safety:
Setting the standard worldwide
Platforms and structures
designed for protection
When an accident cannot be avoided,
Peugeot and Citroën cars afford protection that
is best-in-class worldwide. Their structural
components resist impact and absorb energy to provide a high degree of protection for
occupants, while the passenger compartment
acts as a survival cell, fitted with sophisticated restraint devices.
Restraint systems
for effective occupant protection
From Isofix attachment points, which allow
easy and efficient installation of child seats,
to seatbelt load limiting retractors and
airbags, everything is calculated to maximize
protection for everyone in the vehicle.
Recent statistics indicate that nearly 20% of
the victims of fatal accidents were not wear-
ing a seatbelt at the time. An increasing number of Peugeot and Citroën models are now
fitted with a warning system in which a visual
indicator and alarm inform the driver that
someone has not buckled their belt.
Pedestrian protection
While primary safety systems – which help
to avoid hitting a pedestrian – are obviously
the most effective, each car’s architecture
and styling are carefully designed to attenuate the effects of such an impact.
Thanks to its new active hood, which lifts up
upon collision to cushion the impact of the
pedestrian’s head, the Citroën C6 was the
first car in Europe to earn a record four stars
in pedestrian protection tests conducted by
EuroNCAP.
Five stars from EuroNCAP
In other crash tests, EuroNCAP has awarded
the maximum five stars to eight Peugeot and
Citroën models, placing the Group among
the world’s best in secondary safety. In
2005, the Peugeot 1007 earned the highest
points score in occupant protection of any
car in any segment. In line with our strategy
of making innovations widely available, our
entry-level range also offers excellent
occupant protection, with the Citroën C1 and
Peugeot 107 both rating four stars in EuroNCAP
crash tests.
Tertiary Safety: Leading the way in Europe
The emergency call system
Deployment of the emergency call system
has been stepped up across almost the
entire model lineup. In the event of a medical
emergency or other threatening incident,
occupants can alert a dedicated assistance
center at the touch of a button. In the case of
a collision, the same alert is sent automatically. An operator then establishes voice
contact with the car and, if necessary, alerts
emergency services. Thanks to the car’s
onboard GPS system and GSM mobile
phone, assistance personnel can pinpoint its
exact location, shortening response time and
considerably improving the effectiveness of
rescue operations. By the end of 2005, there
were more than 140,000 Peugeots and
Citroëns equipped with this system in six
European countries.
89
Enhancing the Quality of Mobile Life
As a fundamental driver of economic
and social development and a prerequisite
for access to jobs, healthcare and culture,
the mobility of people and goods is another
important challenge in achieving
sustainable mobility. PSA Peugeot Citroën
contributes to the development of sustainable mobility by taking into account such
important issues as the inalienable right to
mobility, the free flow of automobile traffic
and the right balance between different
modes of transport.
Facilitating traffic flows and improving
the quality of life in cities
We regularly provide technical support and
equipment to encourage the implementation
of innovative ways of using cars.
CNG shuttles between Group sites: To
limit the number of vehicles on the road and
consequently their environmental impact,
a shuttle system using vans powered by
compressed natural gas (CNG) has been
introduced for employees traveling between
our offices in Vélizy and La Garenne, in the
greater Paris region.
Employee car-pooling: Car-pooling among
employees is encouraged at a number of our
sites.
A company travel plan for the Sochaux plant
in France: In addition to the creation of
offsite parking lots, pedestrian and vehicular
traffic flows at the Sochaux plant were reorganized, as part of the company travel plan, to
improve safety and reduce disamenities from
truck traffic. The plan also included the creation
of on-site bike lanes, the introduction of shuttle services, wider use of car-pooling, the
development of local convenience services,
and the possibility of attending eco-driving
courses on how to save energy. In 2006, the
number of cars entering the site will be divided
by 20.
The City on the Move Institute (IVM):
An Innovation Laboratory
IVM is committed to testing real-world solutions that help to provide innovative answers
to urban mobility issues, by bringing together
business people, researchers and academics, as well as people involved in society and
the arts, and members of associations. In
2005, the international “Architecture On The
Move!” exhibition traveled to Guangzhou,
Stuttgart, São Paulo, Brussels and Grenoble.
Relief maps of the Paris metro and a Braille
atlas of the Greater Paris public transit system
were also unveiled during the year, as part of
the program to support the mobility of the
blind and visually impaired.
Road Safety Symposia
In 2005, PSA Peugeot Citroën
organized three symposia on
road safety in China, Brazil
and Argentina, as part of our
sustainable development policy.
Attended by several hundred
people from a variety of backgrounds, the symposia resulted
in the signature of several
agreements.
Organized in partnership with
the Beijing Traffic Engineering
Association and the Chinese
Center for Disease Control,
the Chinese symposium led to
the signing of two agreements,
one with the Tongji Medical
College in Wuhan concerning
seatbelt usage and the other
with the University of Tsinghua
for the computer modeling
of crash tests.
In Brazil, an agreement was
signed with DENATRAN, Brazil’s
national traffic department,
to sponsor a nationwide
communication campaign
to raise parental awareness
of child passenger safety.
In Argentina, an agreement was
signed with the La Plata faculty
of the National Technological
University to investigate and
improve high accident locations
in the Buenos Aires conurbation. Another agreement with
the Argentine Automobile Club
(ACA) will lead to the deployment
of a traffic safety education
program for the primary school
children of Tres de Febrero,
the municipality where our
Buenos Aires plant is located.
As part of the program, dedicated resources will be used to
recreate real traffic conditions
on a test track.
90
Managing the Environmental Impact
of our Production Facilities
Our industrial strategy integrates environmental protection as part of a continuous
improvement process, based on a
disciplined organization, the allocation of
significant funding and an effective reporting
system. Nearly 500 people are involved
in managing our industrial environment,
both at corporate level and in our plants.
An active certification policy
All our production facilities around the world
have introduced an environmental management system based on ISO 14001 certification,
the internationally recognized standard for
environmental management and organization.
Sites are also communicating transparently
with their host communities, self-monitoring
data are transmitted to the public authorities,
and requests for information from neighbors
are systematically answered and, when
necessary, result in corrective actions.
Limiting gaseous releases
Reducing VOC emissions
In France, automobile plants account for less
than 1% of total volatile organic compound
(VOC) emissions produced by human activity.
Nevertheless, we are leading a proactive,
three-pronged strategy in this area to optimize
existing paint shops, deploy clean technologies in new facilities and install air treatment
equipment that incinerates VOCs. These
measures have already driven significant
progress, with VOC emissions from Group
plants worldwide currently totaling 4.93 kilograms per vehicle, compared with a long-term
target of 4.0 kilograms.
A decline in other regulated emissions
By gradually substituting low-sulfur fuels for
conventional high-sulfur fuel oil, worldwide
sulfur dioxide (SO2) emissions from our power
plants have been reduced by more than 80%
since 1995, while nitrogen oxide (NOx) emissions have declined by more than 20% over
the same period.
Controlling CO2 emissions
Since 2005, seven plants in France and one
in England, that produce CO2 from combustion installations, rated over 20 MW, have
been covered by the European Union’s greenhouse gas emissions trading system. Two
plants in Spain will join the scheme in 2006.
Despite a sharp increase in the number of
vehicles produced at the plants concerned,
we have succeeded in effectively containing
total CO2 emissions since 1996. For example,
boiler emissions at French plants have been
reduced by around 40% over the period.
Managing energy and reducing water
consumption and releases
All carmaking processes are energy inten-
sive. That’s why we are committed to developing action plans to manage energy consumption at all our sites.
Conserving water is a key objective in the
production facilities, in particular through the
use of metering systems, the display of the
least water-intensive operating parameters
for each workstation and the deployment of
recycling systems. These measures have
helped to reduce water consumption per
vehicle produced by 50% over the past ten
years. Every plant is connected to the public
wastewater treatment network or equipped
with their own integrated treatment plant,
with releases systematically tracked using
appropriate indicators.
Reducing and efficiently recovering waste
from automobile plants
For more than ten years, programs have
been in place to reduce the amount of automotive process waste per vehicle produced,
and to promote the recovery, recycle or reuse
of any waste that remains. `
Between 1995 and 2005, these programs
have resulted in:
A 28% decline in the amount of waste per
vehicle produced.
A reduction in the proportion of landfilled
waste from 31% to 12%.
An 83% increase in the resource recovery
rate.
Understanding soils to improve protection
Soil contamination is systematically selfmonitored at all the production plants, where
strict procedures are in place to prevent pollution, in particular through the use of retention basins around liquid storage facilities.
91
Supporting Local Development
As part of its commitment to society,
PSA Peugeot Citroën actively supports
the host communities where its plants
and marketing operations are based.
Local Sponsorship and Social
Responsibility Action Plans
Local Sponsorship and Social Responsibility
Action Plans provide a precise framework for
our participation in local communities, which
centers around four main focus areas: the
environment, road safety, urban mobility and
local development. In France, we support
regional associations that provide consulting
services to help small and medium-sized
manufacturers improve their production
processes, as well as the Fondation de la 2e
Chance, a foundation that helps people overcome serious difficulties. We also support
local initiatives in each of our host countries.
The Solidarity Awards
The Solidarity Awards are a competition that
enables employees to carry out a personal or
group project to support local or international
solidarity. In 2005, 27 awards were given by
eight sites, enabling the winners to finance
their projects.
Supporting responsible driving initiatives
As well as dedicating a significant part of our
technological research efforts to road safety,
we also support a variety of initiatives that
encourage more responsible driving.
3,000 people to improve their awareness of
road safety issues.
Through our plants and the marques’
regional offices in France, we are involved in
a road safety awareness program in partnership with the national Ministry of Education,
while in Brazil and Argentina, we are partnering
road safety programs for young people.
Supporting education in France
and internationally
PSA Peugeot Citroën has long fostered a
close partnership with France’s Ministry of
Education that enables students to discover
the world of work and broaden their knowledge of the automobile industry through a
variety of national and international programs.
We are also committed to helping young
people understand the dangers of driving
under the influence. In association with
France’s National Road Safety Council,
Citroën is supporting a designated driver program aimed at getting young adults going out
for an evening to choose one of their party
who agrees not to drink alcoholic beverages
and can therefore drive them home safely.
Similarly, the Group sponsors Voiture & Co.,
a French association that organizes a carpooling service for young people using drivers
who have passed a blood alcohol test.
To help reduce the number of road accidents involving employees, particularly when
commuting, safe driving classes are offered
to improve driving skills. They have been
attended by more than 1,700 employees in
France and other European countries. At the
plant in Vigo, Spain, the Group sponsored a
training program that has enabled nearly
Supporting associations
that combat exclusion
In many countries, we donate vehicles to
associations that use mobility to alleviate
social and economic exclusion or to improve
the quality of life for the disabled, while in
France, we support the Paris emergency
social services agency by donating and
maintaining the organization’s vehicle fleet.
As part of a road safety program for young people, visitors
test the lane departure warning system at the French
Firefighters Conference.
For more information about our sustainable
development commitment:
www.sustainability.psa-peugeot-citroen.com
92
93
Financial statements and statistics
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Production by Model Worldwide Sales
Production Facilities Workforce
Sustainable Development Indicators
94
Consolidated Balance Sheets - Assets
(in millions of euros)
December 31, 2005
Goodwill
Intangible assets
Property, plant and equipment
Investments in companies at equity
Investments in non-consolidated companies
Other non-current financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
Operating assets
Loans and receivables - finance companies
Short-term investments - finance companies
Inventories
Trade receivables - manufacturing and sales companies
Current taxes
Other receivables
Current financial assets
Cash and cash equivalents
Total current assets
TOTAL ASSETS
Manufacturing
and sales
companies
Finance
companies
Eliminations
1,677
3,886
14,909
596
45
1,940
95
579
23,727
75
78
48
1
46
31
279
-
6,889
3,097
180
1,694
11,860
22,400
2,709
18
642
25,769
1,214
6,351
19,425
43,152
635
26,404
26,683
December 31, 2004
Total
Manufacturing
and sales
companies
Finance
companies
Eliminations
1,752
3,964
14,957
596
46
1,986
95
610
24,006
1,798
3,602
14,168
614
65
2,329
96
502
23,174
75
62
50
1
49
2
30
269
-
(162)
(166)
(42)
(60)
(430)
22,238
2,709
6,889
2,931
156
2,276
37,199
6,546
3,296
110
1,756
11,708
21,243
2,717
35
655
24,650
(230)
(660)
(660)
1,214
6,756
45,169
69,175
712
5,158
17,578
40,752
610
25,260
25,529
January 1, 2004
Total
Manufacturing
and sales
companies
Finance
companies
Eliminations
Total
1,873
3,664
14,218
614
66
2,378
98
532
23,443
1,743
3,301
13,619
548
63
881
90
539
20,784
75
42
51
13
53
1
34
269
-
1,818
3,343
13,670
548
76
934
91
573
21,053
(199)
(242)
(17)
(49)
(507)
21,044
2,717
6,546
3,054
128
2,362
35,851
6,211
3,659
138
2,140
12,148
19,719
2,494
47
699
22,959
(138)
(205)
(24)
(61)
(428)
19,581
2,494
6,211
3,454
161
2,778
34,679
(205)
(712)
(712)
712
5,563
42,126
65,569
1,310
5,082
18,540
39,324
804
23,763
24,032
(205)
(633)
(633)
1,310
5,681
41,670
62,723
95
Consolidated Balance Sheets - Equity and Liabilities
December 31, 2005
Manufacturing
and sales
companies
Finance
companies
Eliminations
Equity
Share capital
Treasury stock
Retained earnings and other accumulated equity,
excluding minority interests
Minority interests
Total equity
Non-current financial liabilities
Other non-current liabilities
Non-current provisions
Deferred tax liabilities
Total non-current liabilities
Operating liabilities - finance companies
Financing liabilities
Current provisions
Trade payables
Current tax payable
Other payables
Current financial liabilities
Total current liabilities
TOTAL EQUITY AND LIABILITIES
3,826
2,352
1,417
2,086
9,681
2
17
281
300
1,692
10,240
100
4,155
16,187
22,987
53
79
844
23,963
5,298
21,485
23,963
-
Total
December 31, 2004
Manufacturing
and sales
companies
Finance
companies
Eliminations
Total
January 1, 2004
Manufacturing
and sales
companies
Finance
companies
Eliminations
Total
235
(220)
243
(431)
243
(149)
13,849
542
14,406
13,306
585
13,703
12,133
599
12,826
3,826
2,354
1,434
2,367
9,981
3,791
2,279
1,639
1,968
9,677
7
19
250
276
(230)
(30)
(42)
(226)
(528)
22,757
1,745
10,210
137
4,773
39,622
1,454
10,773
114
4,068
16,409
22,070
54
39
992
23,155
(132)
(660)
5,166
44,788
69,175
3,061
19,470
23,155
-
3,791
2,286
1,658
2,218
9,953
3,891
2,236
1,909
1,785
9,821
64
19
200
283
-
3,891
2,300
1,928
1,985
10,104
(205)
(41)
(17)
(291)
(554)
21,865
1,508
10,732
136
4,769
39,010
1,434
10,036
112
4,114
15,696
20,743
44
28
1,131
21,946
(205)
(16)
(24)
(266)
(511)
20,538
1,478
10,020
116
4,979
37,131
(158)
(712)
2,903
41,913
65,569
2,784
18,480
21,946
(122)
(633)
2,662
39,793
62,723
96
Consolidated Statements of Income
Year ended December 31, 2005
Manufacturing
and sales
companies
Finance
companies
54,887
(43,803)
(7,862)
(1,889)
1,333
1,656
(739)
(310)
607
Other income and (expenses), net
Interest income, net
Finance costs
Income before tax of fully consolidated companies
(352)
355
(414)
922
1
608
Current taxes
Deferred taxes
Income tax expense
(189)
(89)
(278)
(55)
589
631
( 42)
Sales and revenue
Cost of goods and services sold
Selling, general and administrative expenses
Research and development costs
Operating margin
Share in net earnings of companies at equity
CONSOLIDATED PROFIT FOR THE YEAR
Attributable to equity holders of the parent
Attributable to minority interests
(in euros)
Basic earnings per €1 par value share
Diluted earnings per €1 par value share
Year ended December 31, 2004
Total
Manufacturing
and sales
companies
Finance
companies
56,267
(44,266)
(8,172)
(1,889)
1,940
54,745
(43,374)
(7,606)
(1,802)
1,963
1,601
(784)
(299)
518
-
(351)
355
(414)
1,530
32
319
(389)
1,925
(4)
514
-
28
319
(389)
2,439
(178)
(29)
( 207)
-
(367)
(118)
(485)
(347)
(241)
(588)
(120)
(64)
(184)
-
(467)
(305)
(772)
401
398
3
-
(55)
990
1,029
(39)
330
326
4
-
Eliminations
(276)
276
-
4.47
4.46
13
1,350
1,320
30
Eliminations
(241)
241
-
Total
56,105
(43,917)
(7,905)
(1,802)
2,481
13
1,680
1,646
34
6.97
6.96
97
Consolidated Statements of Cash Flows
2005
Total
Manufacturing
and sales
companies
Finance
companies
Eliminations
Total
-
990
1,350
330
-
1,680
12
2
30
(1)
-
3,199
(244)
126
5
3,056
(263)
251
(182)
12
50
(2)
-
3,068
(263)
301
(184)
59
-
-
59
(7)
-
-
(7)
(2)
3,689
(411)
3,278
444
(148)
296
(2)
4,133
(607)
3,526
(34)
4,171
1,139
5,310
390
(465)
(75)
36
36
(34)
4,561
710
5,271
Proceeds from disposals of shares in consolidated companies
23
Proceeds from disposals of investments in non-consolidated companies
2
Acquisitions of shares in consolidated companies
(8)
Investments in non-consolidated companies
(2)
Proceeds from disposals of property, plant and equipment
54
Proceeds from disposals of intangible assets
5
Purchases of property, plant and equipment
(2,862)
Purchases of intangible assets
(939)
Other
(35)
Net cash used in investing activities
(3,762)
(1)
9
(11)
(20)
(23)
-
23
2
(8)
(3)
63
5
(2,873)
(959)
(35)
(3,785)
28
2
(166)
(11)
37
3
(2,793)
(977)
(41)
(3,918)
(1)
6
(11)
(25)
6
(25)
-
28
2
(166)
(12)
43
3
(2,804)
(1,002)
(35)
(3,943)
(321)
8
(10)
(282)
(714)
(1,319)
(8)
(29)
(53)
(5)
(95)
Consolidated profit for the year
Adjustments for:
- Depreciation and amortization
- Non-current provisions
- Change in deferred tax
- (Gains) losses on disposals and other
Share in net earnings of companies at equity,
net of dividends received
Revaluation adjustments taken to equity
and hedges of debt
Working capital provided by operations
Changes in operating assets and liabilities
Net cash from (used in) operating activities
Manufacturing
and sales
companies
Finance
companies
Eliminations
589
401
3,187
(246)
96
6
2004
(48)
(48)
Dividends paid:
- To Peugeot S.A. stockholders
- Intragroup
- To minority stockholders of subsidiaries
Purchases of treasury stock
Changes in other financial assets and liabilities
Other
Net cash from (used in) financing activities
(310)
96
(19)
(198)
2,074
1,643
(96)
(5)
(150)
(251)
25
25
(310)
(24)
(198)
1,949
1,417
Effect of changes in exchange rates
Net increase (decrease) in cash and cash equivalents
34
1,193
3
25
(2)
(25)
35
1,193
3
76
Cash and cash equivalents at beginning of period
CASH AND CASH EQUIVALENTS AT END OF PERIOD
5,158
6,351
610
635
(205)
(230)
5,563
6,756
5,082
5,158
1
(194)
804
610
(36)
(36)
(205)
(205)
(321)
(39)
(282)
(803)
(5)
(1,450)
4
(118)
5,681
5,563
Production by Model
(passenger cars and light commercial vehicles)
98
2005
2004
2003
34,600
73,800
669,900
515,400
169,700
2,600
259,000
18,800
28,100
33,200
144,800
1,500
44,100
900
1,100
795,100
583,700
209,200
25,900
165,000
1,800
18,100
31,200
32,600
143,000
4,200
45,200
100
35,900
816,500
573,300
126,100
101,000
3,200
21,500
35,100
28,500
135,700
3,200
40,600
2,000
1,996,400
985,200
1,809,000
187,400
2,056,200
965,700
1,859,100
197,100
1,922,600
911,600
1,744,100
178,500
34,600
124,800
289,300
97,600
244,300
191,900
80,900
14,000
23,000
32,100
26,600
170,100
49,100
800
149,300
375,600
64,800
51,700
293,900
100,600
11,900
24,000
29,700
24,700
176,200
46,500
-
59 ,900
71,000
383,100
96,000
354,100
110,700
3,800
27,700
29,800
29,200
179,500
42,100
-
TOTAL
of which diesel-powered versions
of which passenger cars
of which light commercial vehicles
1,379,100
743,200
1,173,700
205,400
1,348,900
778,400
1,145,400
203,500
1,386,900
740,900
1,189,000
197,900
TOTAL PSA Peugeot Citroën
3,375,500
1,728,400
2,982,700
392,800
3,405,100
1,744,100
3,004,500
400,600
3,309,500
1,652,500
2,933,100
376,400
PEUGEOT
106
107
1007
206
307
405
406
407
504 / Paykan
607
807
Expert
Partner
J9
Boxer
Others
TOTAL
CITROËN
Saxo
C1
C2
C3
ZX
C4
Xsara
C5
Xantia
C8
Dispatch
C15
Berlingo
Relay
Others
99
Worldwide Sales
(passenger cars and light commercial vehicles)
2005
2004
2003
435,000
342,100
777,100
440,000
332,500
772,500
445,100
343,300
788,400
822,500
760,900
1,583,400
888,700
763,500
1,652,200
907,000
773,400
1,680,400
1,257,500
1,103,000
2,360,500
1,328,700
1,096,000
2,424,700
1,352,100
1,116,700
2,468,800
130,300
79,400
209,700
147,100
73,300
220,400
142,100
74,800
216,900
60,100
23,500
83,600
62,900
27,100
90,000
56,700
19,000
75,700
143,100
51,400
194,500
114,000
40,000
154,000
89,100
29,800
118,900
378,500
133,400
511,900
347,500
107,700
455,200
246,100
128,900
375,000
26,000
3,800
29,800
27,000
4,000
31,000
27,500
3,300
30,800
TOTAL SALES, REST OF THE WORLD
Peugeot
Citroën
738,000
291,500
1,029,500
698,500
252,100
950,600
561,500
255,800
817,300
TOTAL WORLDWIDE SALES
Peugeot
Citroën
1,995,500
1,394,500
3,390,000
2,027,200
1,348,100
3,375,300
1,913,600
1,372,500
3,286,100
WESTERN EUROPE
France
Peugeot
Citroën
Other Western European countries
Peugeot
Citroën
TOTAL WESTERN EUROPE
Peugeot
Citroën
REST OF THE WORLD
Central and Eastern Europe and Turkey
Peugeot
Citroën
Africa
Peugeot
Citroën
The Americas
Peugeot
Citroën
Asia-Pacific
Peugeot
Citroën
Others
Peugeot
Citroën
Production Facilities Worldwide
WUHAN
with Dongfeng
Motor Group
Fukang 988,
Fukang, Élysée,
Xsara Picasso,
Xsara, 206,
307 Sedan,
C-Triomphe
141,500 units
PORTO REAL
206, 206 SW,
C3, Xsara
Picasso
93,500 units
BUENOS AIRES
206, 307, Partner,
Berlingo
66,000 units
SEVELNORD
(Hordain) with
Fiat 807, C8,
Expert, Relay
116,400 units
KOLÍN
with Toyota
107, C1
69,200 units
TRNAVA
207
SOCHAUX
307, 307 CC,
307 SW, 607
413,300 units
POISSY
206, 207, 1007
329,200 units
AULNAY
C2, C3
283,100 units
VIGO
Xsara Picasso,
Berlingo, Partner
441,400 units
Output figures are for 2005.
MULHOUSE
C4, C4 Coupé,
206, 206 CC, 307
405,000 units
RENNES
C5, C5 Estate
407, 407 SW,
407 Coupé, C6
340,700 units
MANGUALDE
Partner,
Berlingo
53,400 units
Automobile production centers
Joint-ventures/cooperative agreements
RYTON
206, 206 SW,
206 RC
130,200 units
MADRID
C3, C3 Pluriel,
Xsara Estate, 207
116,900 units
SEVEL
(Val di Sangro)
with Fiat
Boxer, Dispatch
90,500 units
100
101
Mechanical Components Plants
and Foundries
Asnières (France)
Caen (France)
Charleville (France)
Melun-Sénart (France)
Metz (France)
Mulhouse (France)
Saint-Ouen (France)
Sept-Fons (France)
Sochaux (France)
Trémery (France)
Valenciennes (France)
Vesoul (France)
Free-cutting, hydraulic systems
Axles suspension systems, transmissions
Aluminium and iron castings
Replacements parts
Gearboxes
Aluminium castings, steel forgings, tooling
Stamping
Iron castings
Shock absorbers, rear axles, crossrails
EW gasoline engines and DV, DW diesel engines
Gearboxes
CKD shipments, replacement parts
Douvrin (France)
Hérimoncourt (France)
Porto Real (Brazil)
Jeppener (Argentina)
Xiang Fan (China)
Engines
Engines, gearboxes
Engines
Engines, axles suspension systems, front wheel hubs, crossrails
Engines, gearboxes, axles suspension systems
Workforce
2005
2004
2003
AUTOMOBILE DIVISION
France
Other countries
BANQUE PSA FINANCE
GEFCO
FAURECIA
OTHER BUSINESSES AND HOLDING COMPANY
139,500
99,000
40,500
2,400
9,400
55,000
2,200
139,400
100,400
38,900
2,400
8,800
54,400
2,600
134,700
98,000
36,700
2,200
8,400
51,900
2,700
TOTAL PSA Peugeot Citroën
France
Other countries
208,500
126,100
82,400
207,600
128,300
79,300
199,900
124,700
75,200
Sustainable Development Indicators
102
2005
2004
2003
208,500
19.5%
15,670
25.6%
8,975
28.7
3.11
207,600
19.8%
18,490
25.8%
10,880
25.4
4.09
199,900
18.2%
15,230
22.5%
12,450
26.1
4.97
20
4
19
4
18
4
Water consumption (city water, surface water, underground water)
Water consumption (in cu.m)
Water used per vehicle manufactured (in cu.m)
20,024,371
7.6
21,319,682
7.7
23,761,006
8.6
Consumption of energy (fuel oil, natural gas, coal, coke, electricity, steam)
Consumption of energy (in MWh)
Energy used per vehicle manufactured (in MWh ncv)
6,153,466
2.3
6,490,056
2.4
6,347,808
2.3
656,237
423.5
706.3
684,083
545.6
757.8
695,834
1,041.1
784.4
12,998
4.93
14,782
5.34
15,521
5.62
401,261
152.2
426,705
154.3
429,186
157.8
30.19
60.53
1,317,964
20
141,779
30.62
56.61
969,982
13
60,553
30.82
51.19
602,183
11
16,879
2,151
550
2,183
435
2,098
349
EMPLOYEE RELATIONS INDICATORS
Number of employees
Percentage of women employees
Number of people hired under permanent contracts
Percentage of women among new hires in the Automobile Division
Average annual number of temporary employees (excluding Faurecia)
Average hours of training per employee (excluding Faurecia)
Lost-time incident frequency rate
INDUSTRIAL INDICATORS*
ISO 14001 certification
Number of ISO-14001 certified PSA Peugeot Citroën sites
Number of ISO-14001 certified cooperative sites
Air emissions from combustion plants
Greenhouse gas emissions (in tonnes)
SO2 emissions (in tonnes)
NO2 emissions (in tonnes)
Paintshop VOC releases
VOC releases (in tonnes)
VOC releases per vehicle manufactured (in kg)
Volumes of waste (excluding metallic waste, nearly 100% of which is recycled)
Volumes of waste (in tonnes)
Waste produced per vehicle manufactured (in kg)
*Automobile Division only
SO2 = sulfur dioxide; NO2 = nitrogen dioxide; VOC = volatile organic compounds.
PRODUCT INDICATORS
Cars emitting less than 120g CO2 /km (in % of European market)
Cars emitting less than 110g CO2 /km (in % of European market)
Cars equipped with a particulate filter (total at year-end)
Number of models earning 4 or 5 stars in EuroNCAP safety tests
Vehicles equipped with the emergency call system (total at year-end)
TECHNOLOGICAL INNOVATIONS
R&D expenditure (in € millions)
Number of patents filed in France
All of the Group’s performance indicators, methodology and targets may be found in the Sustainable Development Report,
at www.sustainability.psa-peugeot-citroen.com
The 2005 Registration Document, filed with the Autorité des Marchés Financiers on April 24, 2006, is available upon request from:
Investor Relations –75, avenue de la Grande-Armée – 75116 Paris, France
e-mail: investor.relations@psa.fr - Phone: 33 (0) 1 40 66 37 60 or online: www.psa-peugeot-citroen.com
Corporate Communications Dept., PSA Peugeot Citroën
Photo credits: PSA Peugeot Citroën, Peugeot Direction de la Communication, Citroën Communication - P. 6/7: Moore - P. 8/9: Moore, Frankenberg - P. 10/11: Dolémieux - The year in pictures: (1) Panconi - (2) Meyer - (3) Dingo - (4) X - (5) Dingo
(6) Muratet, Bouffay - (7) Legros - (8) Vlachovsky - (9) Sautelet - (10) Legros, X - (11) Zwickel - (12) Meyer - (13) Zwickel, Muratet - (14) X - (15) Foulon, X - (16) Meyer - (17) X - (18) Reinoso - (19) DPPI - P. 56/57: Legros, Sautelet, Foulon, Muratet - P. 58/59: BMW, Garcin Gasser
P. 64/65: Sautelet, Zwickel - P. 66/67: Muratet - P. 68/69: Dingo - P. 70/71: Muratet, Curtet - P. 72/73: Zwickel, Muratet - P. 74/75: Spilka, Meyer - P. 80/81: Pizzalla - P. 82/83: Legros - P. 86/87: Legros, Stehlin - P. 88/89: X - P. 90/91: Moore
Design, production:
- Publishing: Altavia Prodity.
10,000 copies of this report were printed.
PEUGEOT S.A.
Incorporated in France with issued capital of €234,618,266
Governed by a Managing Board and Supervisory Board
Registered office
75, avenue de la Grande-Armée
75116 Paris, France
R.C.S. Paris B 552 100 554
Siret 552 100 554 00021
Tel.: 33 (1) 40 66 55 11
Fax: 33 (1) 40 66 54 11

annual report / the year in pictures

Transcription

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