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(CercleFinance.com) – More than 10% increase: this is the sanction imposed by the Paris Bourse on the Peugeot SA (PSA Groupe) share following the very good half-yearly accounts published yesterday evening. In addition to operating profitability 'in German', growth remains very high, even without taking into account Opel / Vauxhall, in much better shape. And the cash generation is at the rendezvous.
It must be said that the half-yearly accounts published last night by the car manufacturer to the lion are not common for a French industrial group.
Still buoyed by the acquisition of Opel / Vauxhall (OV, nearly ten billion euros over the period), the consolidated turnover of the group took off 40.1% to 38.6 billion euros. Or, but the perimeter effect is far from explaining everything, since in organic data, growth is still very strong: + 22.9%!
Indeed, the Automotive PCD division (for Peugeot, Citroën and DS) grew by more than 10% to 22.1 billion billings. Thanks to a volume effect but also to a favorable product mix, its recurring operating profit is up by almost 30%, and the PCD margin still climbs to a 'German' level, one would be tempted to say: 8.5% ( + 120 basis points), a 'record' according to the group.
Of course, the operating margin of the group as a whole is lower (7.8%, +40 basis points) due to OV. The fact remains that the German manufacturer, consolidated for just one year, has already returned to profitability and has a recurring operating margin of 5%. Better yet: OV contributes more than one billion euros to PSA's operational free cash flow, which totals 3.2 billion euros. This is a good argument in favor of the acquisition of OV by Peugeot, a very 'European' operation that was welcomed in a mixed way.
In the end, Peugeot SA ended the first half of its 2018 financial year with a net profit, group share, increased by 18% to nearly 1.5 billion euros. The forecasts, which bode notably for a current operating margin of more than 4.5% for the automotive division in 2018, and more than 6% in 2021, have been confirmed, although they now appear very conservative.
Bernstein's badysts are simply astounded by these 'huge' accounts: while General Motors' Opel / Vauxhall lost money for 20 years, PSA's, consolidated for just 12 months, already wins! In other words, the turnaround was as mbadive as it was fast.
And on the side of 'PCD', the margin (8.5%) is 'unheard of for 30 years for a car manufacturer of the mbad market', is still enthusiastic a note of research, which also indicates: 'These numbers have outperformed our wildest dreams'.
In short, 'we consider PSA to be the most interesting European car manufacturer, whereas the merger with Opel is likely to transform its profitability and its long-term positioning', argues Bernstein. The buying advice ('outperformance') is maintained, as well as the price target of 30 euros.
'This is a legend that is being written before our eyes. The achievements of Carlos Tavares at the helm of PSA and now of OV are extraordinary, "concludes Bernstein, who also recalls that PSA is virtually immune to the risk of trade war with the United States. An almost unique case in Europe.
EG
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