INTEGRATED REPORT CREATION OF VALUE FOR STAKEHOLDERS AUTOMOTIVE DIVISION CONTENTS 1 Groupe PSA: an impact player 01 1.1 Message of the Chairman of the Managing Board 01 1.2 Presentation of Groupe PSA 02 • A Global footprint managed as close to markets as possible 05 2 Ecosystem: an innovation-driven industry 04 2.1 Risks and opportunities 04 • Relating to future performance and long-term prospects • Groupe PSA's CSR issues mapping 2.2 Groupe PSA’s answers to risks 07 • Mitigating risks and taking advantage of all opportunities 3 Ambition & strategy: driving future growth 08 3.1 Groupe PSA's vision 09 • Towards an efficient, exciting and sustainable mobility 3.2 Groupe PSA’s strategy 10 • Push to Pass, a strategic roadmap for 2016-2021 • PACE!, a plan to make Opel Vauxhall go profitable, electric and global 3.3 Groupe PSA’s enablers 12 • Enabler 1: an efficient governance and a competitive team • Enabler 2: the Digital transformation as an efficiency booster • Enabler 3: our CSR Policy, responsibility fully integrated into strategy 3.4 Strategic indicators 16 • Measuring progress 3.5 CSR commitments 17 • Our ambitions for 2035 4 Value Creation: a shared and lasting value for stakeholders 21 4.1 Value chain: a holistic approach 21 4.2 Creation of value for stakeholders 22 4.3 Investors & shareholders: sustaining growth 23 4.4 Customers: anticipating and responding to expectations 24 4.5 Employees: being a responsible employer 25 4.6 Suppliers and partners: making an extended commitment 26 4.7 Host communities and civil society: being a responsible citizen 27 4.8 The environment: preserving our planet 28 Appendices – about this report 29 GROUPE PSA 01 1 GROUPE PSA: AN IMPACT PLAYER 1.1 MESSAGE OF THE CHAIRMAN OF THE MANAGING BOARD The automotive industry is facing a number of challenges is a value creation opportunity that will allow the Group stakeholders: our customers, our employees, our investors, that we have identified through major trends. Groupe to accelerate its international development. Groupe PSA our suppliers, the civil society, the environment expect us PSA integrates them already in everyday life: the will put all its experience at the service of the recovery to make a positive contribution to the economy, society fragmentation of the markets that requires being both of Opel Vauxhall whose action plan PACE! has set clear and the environment. global and local, the global awareness of climate change objectives, both economically and socially: Opel will generate To push forward environmental and societal innovation, we and the economy of sharing that write a right for all to an operating margin of 2% by 2020 and will offer electrified do not hesitate to shake the codes by engaging partnerships sustainable and affordable mobility, the connectivity and versions for 100% of its models in 2024. with demanding players who question our practices and our the autonomy of objects that open up an immense field We are confident in the momentum that our leadership can missions and help us advance: of possibilities without compromising on security, the create, for the benefit of our customers and employees, and • with the two NGOs, Transport & Environment and digitalization that revolutionizes our ways of thinking, the more broadly for our stakeholders. France Nature Environnement: after measuring and publi- behaviour of consumers that drives the development of shing on our brand websites the fuel consumption in real our offers. Responsibility driving conditions, we continue our unique commitment Responsibility is to take each day engaging decisions which in the automotive industry to publish in 2018 the emissions Faced with these challenges, we must be more Darwinian we will be accountable for in the future. of nitrogen oxides from our vehicles in actual use; than ever, agile and strong of our 3 identity markers: Our Group has been committed for a long time to a socially • through our Foundation, we build philanthropic projects responsible approach. It has always renewed its commit- serving the most vulnerable publics jointly with the most Performance ment to the ILO principles and to the Global Compact. It has operational associations and NGOs; Only the performance can protect us... a long-standing awareness of its responsibilities to society • with the federation of IndustriAll trade unions, we In a record time (2014-2016), Groupe PSA went from a and the environment. They are deeply incorporated into its deploy our global framework agreement on social situation of near bankruptcy to one of the most efficient culture and values. Groupe PSA supports the 17 Global Sus- responsibility renewed in March 2016 and share the economic players in its sector, both financially and socially. tainable Development Goals published in September 2015 actions and results achieved With a Group recurring operating margin of 6.1%, it also by the UN Member States, a roadmap for common good. became the industry leader in the Dow Jones Sustaina- Innovation is in our DNA; it imposes the rigor of a scientific This 2017 Integrated Report shows how we put our values bility Index in September 2017 and remains included approach in the search for the most efficient solutions to and skills at the service of a responsible business model that in the world's leading Socially Responsible Investment serve the greatest number. They are the only means to creates shared and sustainable value. indexes. To consolidate this double economic and secure a significant societal and environmental impact. societal performance, best protection against the vagaries CARLOS TAVARES of the markets, it was essential that we maintain our Transparency Chairman of the Managing Board European foundation, as the basis of our global Responsibility comes with transparency. development. The acquisition of Opel Vauxhall in 2017 Our role as a company is to create sustainable value for our HISTORICAL BACKGROUND OF GROUPE PSA 1896 1987 2014 2014 2016 2017 Foundation of Merging of Aciers et outillages Creation of the Strengthening of the Group’s Push to Pass strategic plan Acquisition of Opel Vauxhall, Peugeot S.A. Peugeot with Cycles Peugeot, DS Automobiles industrial and commercial PACE! strategic plan under the name of Ecia (renamed brand partnership with DONGFENG FAURECIA in 1998) MOTOR GROUP (DFG) 1974 1992 2014 2016 Acquisition of all Foundation of the joint-venture Back in the Race Creation of the of the outstanding Dongfeng Peugeot-Citroën strategic plan Free2Move brand shares of Citroën S.A. Automobiles 1 GROUPE PSA: AN IMPACT PLAYER GROUPE PSA 02 1.2 PRESENTATION OF GROUPE PSA 2017 KEY FIGURES Groupe PSA designs unique automotive experiences and delivers mobility solutions to meet all client expectations. The Group has five car brands, Peugeot, Citroën, DS, Opel and Vauxhall, as well as a wide array of mobility and smart services under its Free2Move brand, aiming to become a great car maker and the preferred mobility provider. 160 3.63 208,227 number of countries million vehicles sold employees with sales operations worldwide worldwide PEUGEOT 3008 CITROËN E-MEHARI DS7 CROssBACK OPEL CROssLAND X VAUXHALL GRANDLAND X FREE2MOVE nd This report focuses on the activities of the Automotive Division. 65.2 2 6.1% billion largest car Group recurring PEUGEOT S.A. revenue manufacturer in Europe operating margin 13.3% market share (Passenger Cars + Light AUTOMOTIVE FINANCE Commercial Vehicles) EQUIPMENT AUTOMOTIVE DIVISION DIVISION DIVISION FAURECIA PSA OPEL AUTOMOBILES AUTOMOBILES DS OPEL FREE 2 BANQUE AUTOMOBILESAUTOMOBILES PEUGEOT CITROËN VAUXHALL MOVE PSA FINANCE OPEL VAUXHALL FREE2MOVE 40 95% 1.56 regional launches All Group vehicles are billion operational free in 2016-2017 95% recoverable cash flow out of the 124 launches planned for 2016-2021 VEHICLES SOLD IN 2017 2,119,800 1,055,700 52,900 403,900* 2.2M clients *from 1 August to (Europe & USA) EC Economic and financial value SO Social value EN Environmental value 31 December 2017 1 GROUPE PSA: AN IMPACT PLAYER GROUPE PSA 03 A GLOBAL FOOTPRINT MANAGED AS CLOSE TO MARKETS AS POSSIBLE SITES IN FRANCE Hordain Mulhouse RUSSIA Poissy Kaluga (16) Rennes BELARUS (12) Sochaux Minsk (13) Kostanai UNITED KINGDOM POLAND UKRAINE KAZAKHSTAN JAPAN UZBEKISTAN CHINA Caen THE NETHERLANDS Eisenach (16) Ellesmere GERMANY Jizzakh 2019 (8) Xiangyang (19) Mizushima Port TURKEY Charleville-Mézières UNITED STATES OF AMERICA Bursa (18) Okasaki (16) Luton Rüsselsheim Gliwice IRAN Douvrin (FM) (2) Wuhan (19) Teheran BELGIUM CZECH REPUBLIC TUNISIA Shanghai/ Wuhan/ Shenzhen Tychy MOROCCO (1) Hérimoncourt (17) Kenitra 2019 Tunis 2018 Kashan 2018 (3) Chengdu (19) Kolin Metz Kaiserslautern SLOVAKIA ALGERIA Shenzhen (20) LUXEMBOURG AUSTRIA Oran 2019 (4) Mulhouse FRANCE MEXICO INDIA Trnava Tamil Nadu 2020 (5) VIETNAM Saint-Ouen SWITZERLAND Chu Lai (9) ETHIOPIA Sept-Fons Aspern Wukro (14) Szentgotthárd NIGERIA Trémery ITALY (11) MALAYSIA BRAZIL Kaduna Gurun (10) KENYA Valenciennes Thika (6) Vesoul Vigo Mangualde Zaragoza Porto Real Vélizy Val di Sangro (15) La Ferté-Vidame PORTUGAL Madrid São Paulo Sochaux URUGUAY Montevideo (7) SPAIN CHILE Belchamp Buenos Aires La Garenne-Colombes Jeppener Carrières-sous-Poissy ARGENTINA MANUFACTURING LOCATIONS OTHER LOCATIONS INDUSTRIAL PARTNERS Automotive production plant R&D centre (1) STAFIM (11) PAN Nigeria Ltd ( in partnership) (2) Iran Khodro (12) Allur Distribution and Saryarka AvtoProm LLP ( in the planning stage) SALES LOCATIONS (3) SAIPA (13) PC Auto et Unison (4) Condor Electronics, Palpa Pro and l’Entreprise Nationale (14)