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Management’s discussion and analysis
Employee numbers at December 31, 2001
include the employees of Sommer Allibert
for the first time (18,700 people).
As of the same date, 747,329 convertible
bonds were outstanding, representing
4,483,974 potential shares.
used in prior years and the effect of discounting
the reserves set up in 1999 when the initial
agreements were signed.
4. NET INCOME
Net income for the year came to €1,690
million, unchanged compared with
€1,691 million in 2001 and up by 28.9%
on the 2000 figure of €1,312 million. Net
margin stood at 3.1% of sales, versus
3.3% in 2001 and 3.0% in 2000. Net
income for 2001 included a non-recurring
after-tax gain of €139 million (representing
0.3% of sales) on the sale of a real estate
complex just outside Paris.
Earnings per share for 2002 stood at
€6.65 compared with €6.42 in 2001 and
€5.02 in 2000, representing increases of
3.6% in 2002 and 27.9% in 2001. There
were no dilutive instruments outstanding
in 2002 and diluted earnings per share
would therefore also amount to €6.65,
versus €6.40 in 2001 and €4.84 in 2000,
representing increases of 3.9% and 32.2%
respectively.
During 2002, the Group bought back
12,231,442 Peugeot S.A. shares (net of
shares sold during the year) at an average
price of €45.42 per share. The transactions
were carried out under the stockholder
authorization given at the General Meeting
of May 16, 2001 and May 15, 2002. As of
December 31, 2002, the capital stock of
Peugeot S.A. was made up of 259,109,146
shares of common stock, unchanged from
year-end 2001. Of the total, 15,208,709
shares were held in portfolio. As of
December 31, 2001, the Company held
2,994,287 shares in treasury stock. As of
December 31, 2000, capital stock was
made up of 278,223,630 shares of
common stock with a par value of €1, of
which 16,044,378 were held in portfolio.
The average number of shares outstanding
during the year (excluding treasury stock)
used to compute earnings per share was
254,201,332 shares in 2002,263,357,148
shares in 2001 and 261,283,962 in 2000.
4.1. Early-termination plan costs -
manufacturing and sales companies
Income for 2002 is stated net of a €158 million
charge related to the early-termination plan
for older employees of the Automobile Division
and Automotive Equipment companies in
France. The charge includes the additional
future costs arising from the broadening of
eligibility criteria under the Automobile Division
plan, which is based on a corporate agreement
dated March 4, 1999, an industry-wide
agreement signed on July 26, 1999 and French
government decree no. 2000-105 dated
February 9, 2000. The PSA Peugeot Citroën
Group initially decided to implement the
measures provided for in these agreements
through February 2005 for front-line workers
in the Automobile Division aged 57 and over,
and through to the end of 2002 for technical
and plant supervisory staff aged 58 as well as
for disabled employees aged 55 and over. The
plan has now been extended, allowing
technical and plant supervisory staff to benefit
from the measures until February 2005. In
addition, front-line workers at the Sochaux
plant will be entitled to benefit from the
measures as from the age of 56. The aim of
plan is to speed up the pace of improvement
in manufacturing efficiency within the
Automobile Division while maintaining jobs in
a time of steady business growth. There will
be no further extensions of the measures. The
reserve booked to cover the cost of the revised
plan amounts to €123 million. In addition,
existing reserves have been increased to take
account of adjustments to the assumptions
In 2001, a €31 million charge was recorded,
including a discounting adjustment and
a €22 million reserve set aside following
the extension of the plan to Faurecia
employees. In 2000, the discounting
adjustment represented a €32 million credit.
As of December 31, 2002, total earlytermination
plan reserves carried on the
balance sheet amounted to €486 million,
including €470 million for the Automobile
division and €16million for the Automotive
Equipment division. Including Faurecia,
by February 2005 a total of 13,978 employees
are expected to have left the Group.
4.2. Restructuring costs - manufacturing
and sales companies
In 2002, restructuring costs amounted to
€124 million. Faurecia incurred costs of
€74 million in connection with the
second phase of the plan to enhance
manufacturing efficiency, mainly at the
Sonta plant in Germany and within the
Exhaust Systems Division in France. Costs
associated with the plan launched in
January 2002 to adapt Automobile Division
operations in Argentina to current local
economic conditions amounted to
€9 million. The plan led to the elimination
of 588 jobs, reducing the number of
employees to 1,564 at year-end 2002.
Group operations are now compatible
with the level of local automobile demand
observed since the end of 2001. Lastly,
the downsizing plan was completed at
the Automobile Division’s Villaverde plant
in Spain, representing costs of €30 million.
In 2001, restructuring costs amounted to
€115 million. The main costs concerned
the initial series of capacity reduction
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PSA PEUGEOT CITROËN - MANAGING BOARD REPORT