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Consolidated results
1. CHANGES IN SCOPE OF CONSOLIDATION
Implementation of the Group’s strategy
led to several changes in the scope of
consolidation in 2002 and 2001. The most
significant in 2002 concerned Dong Feng
Citroën Automobile Company (DCAC),
which was accounted for by the equity
method for the first time. The Group owns
27% of the capital of DCAC, a Chinese
company set up in 1992 to manufacture
and sell Citroën automobiles in the local
market. The decision to account for
DCAC by the equity method was made
following the signature of a series of
agreements between the Group and its
Chinese partner, Dong Feng Motors
(DFM), which owns 31% of DCAC. These
agreements heralded the beginning of a
new phase in the Group’s development
in China. The most important agreements,
which were signed on October 25, 2002
and approved by the Chinese government
on December 11, 2002, provide for the
development of a Peugeot dealer network
alongside the existing Citroën network,
as well as the launch of local production
of six new Peugeot and Citroën models
for the Chinese market between 2002 and
2004. In recognition of this major
extension of its activities, on January 23,
2003, DCAC changed its name to Dong
Feng Peugeot Citroën Automobile (DPCA).
These agreements provide for a change in
DPCA’s ownership structure during 2003
that will give the PSA Peugeot Citroën
Group 50% of the capital. The first step in
the process will be for DPCA to carry out a
CNY 1,000 million (€115 million) share
issue, underwritten in the amount of CNY
624 million (€72 million) by the Group
and CNY 376 million (€43 million) by
DFM. This will be followed by the buyout
of the Chinese and French partner
banks, representing an investment of
CNY 1,264 million (€146 million) for the
Group. Lastly, a new management structure
will be set up allowing the PSA Peugeot Citroën
Group and DFM to share management
control of DPCA on a 50/50 basis.
In October 2002, the Automobile division
sold the Villers la Montagne aluminium
foundry to the Manzoni Bouchot group.
The transaction supports the Group’s
industrial strategy, which consists of focusing
capital expenditure on developing the vehicle
offering and buying in components from
suppliers who specialize in the operations
concerned and are better equipped to
develop the requisite technical expertise
and reduce unit costs.
In early 2002, Banque PSA Finance, the
Group’s Finance division, took over direct
control of retail financing and leasing
operations in the United Kingdom, as well as
the supply of the related services, through
a local branch. Until the end of 2001, these
activities were conducted by a joint subsidiary
of Banque PSA Finance and a local partner,
which is continuing to manage the existing
loan and leasing portfolios on a run-off basis.
This change supports Banque PSA Finance’s
strategy of proposing services closely aligned
with the marketing strategy of the Peugeot
and Citroën marques. It also reflects the
division’s drive to integrate the management
of these services into operating systems
shared by all the bank’s European subsidiaries
and branches.
During 2001, Faurecia, the Group’s
Automotive Equipment division, acquired
the automobile businesses of Sommer
Allibert, a French designer and manufacturer
of instrument panels, cockpits, door
panels and soundproofing. The transaction,
which is described in detail in the 2001
annual report, represented a total
investment of €1,495 million. The first
step consisted of the acquisition, by
Peugeot S.A., of the entire capital of SIT,
the company that held Sommer Allibert’s
automobile businesses. Peugeot S.A.
subsequently exchanged the SIT shares
for Faurecia shares, raising its interest in
Faurecia to 71.6%. The acquisition has
made Faurecia one of the world’s top
three players in each of its markets, with a
broad customer base. Its direct and indirect
sales to the Automobile division represented
only 25.7% of total sales in 2002.
In May 2001, Gefco, the Group’s
Transportation and Logistics division, sold
its Transauto-Stur subsidiary to the Via
Location group. Transauto-Stur is a road
transportation company with a fleet of
around 900 trucks. The divestment was
in line with Gefco’s strategy of focusing
on high value-added transportation and
logistics services and outsourcing actual
transportation operations.
Detailed information about changes in
the scope of consolidation is provided
in note 3 to the consolidated financial
statements.
2. SALES
2.1. Consolidated sales
Consolidated net sales rose 5.4% to
€54,436 million in 2002. In 2001,
reported sales increased by 16.9% to
€51,663 million from €44,181 million
the previous year, including the contribution
of the Sommer Allibert automobile
business acquired by Faurecia during the
year. Based on a comparable scope of
consolidation, 2001 sales growth came to
11.3%. Also in 2001, the cost of certain
sales incentive programs was recorded as
a deduction from sales, and not under
operating expense as was previously the
case. This change was decided in order to
follow the practice adopted by the other
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