PSA - 2019 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2019 Notes to the Consolidated Financial Statements at 31 December 2019

The differencebetween the sale price and the buybackprice is recognised as rental revenue on a straight-linebasis over the duration of the buyback commitment. The vehicle is initially recognisedat productioncost. It is depreciatedon a straight-line basis over the term of the lease, less its residual value, representing the estimated resale price on the used vehicle market.Any additionalgainmadeon the final sale of the vehicleis recognisedin the period in which it is sold on the used vehicle market.If the net differenceis a loss,an allowanceis bookedwhen the buybackcontract issigned. The Groupactsas a principalfor transportation services. Revenue from engineeringproduct performancesis recognised over the term of the license agreementon a straight-linebasis, insofar as the Group is required to update the underlying technology it owns,or at the samerateas the salesof vehiclesand subassemblieswhen licensing revenue is conditionalon certain volumes. To date, the Group does not have a significant financial componentthat wouldrequireadjustmentsbetweenrevenueand The AutomotiveEquipmentsegmentperformsdevelopmentwork and manufacturesor purchasesspecifictoolingto produceparts or modulesfor programmes covered by specific customer orders. For supplyof monoliths (1) to customers the Groupactsas an agent Concerningtools, transferof controlis usuallycarriedout shortly beforethe launchof production,and the revenueis recognisedat that date. net financial income (expense) underIFRS 15. AutomotiveEquipmentsegment (b)

Development work is generally considered as a capitalisable pre-productionexpense and does not trigger, in this case, a recognitionof revenuethat is separatefromthe revenuefromthe parts. Developmentwork is recognisedunder intangible assets (seeNote 5.3.A). Finance companies (2) IFRS 15 sets the accountingprinciplesfor revenue pertainingto contracts entered into with customers. Contracts that concern specific standards are excluded: lease contracts, insurance contracts, and financial instruments. Consequently, most of BanquePSA Finance’srevenuesare excludedfrom the scope of IFRS 15. There has not been a significant change due to the application of IFRS 15. The Group’s finance companies and the finance companies in partnershipwith Santanderprovidewholesalefinancingto dealer networksand retailfinancingto customersof the PeugeotCitroën DS automotive business. Since 1 November 2017, the finance companiesin partnershipwith BNP Paribas have been providing wholesalefinancingto the dealernetworksand retail financingto the customers of the Opel – Vauxhall automotive business. Financingmay take the formof conventionaloans,financeleases, buybackcontractsor long-termleasing.Sales financingrevenues are recorded using the yield-to-maturitymethod, so as to recognise aconstantrateof interestover the lifeof the loan. Most of the finance activities are managed in partnershipwith Santanderand BNP Paribas. The revenue of these operationsis not included in the Group’s consolidated revenue as these companies are accounted for using the equity method (see Notes 11.4.Bet 11.4.C). The revenue of all financing activities at 100% ispresented inNote 4.1.

Key figures B.

2019

2018

2017

(in million euros)

Sales of vehicles and other goods

73,198

72,417

60,490

Service revenue

1,485

1,555

1,650

Financial services revenue

48

55

116

TOTAL

74,731

74,027

62,256

OPERATING EXPENSESANALYSED 5.2. BY NATURE Broken down by type, operatingexpensesinclude staff costs and the depreciation of intangible assets and property, plant and equipment, explained below. Other operating expenses are analyzed by each segment at its own appropriatelevel with the resultthat they cannotbe presentedon a consistentbasisat Group level.

Sales of goods consistmainly of sales of vehiclesand automobile parts,sub-assemblies andcomponents. Service revenuesprimarilycompriseauto repairs and servicingby captive dealers, and vehicle leasing services as described in Note 8.2.D. Financialservicesrevenuecorrespondsfor the most part to gross interestincome, insurance premiums and othergross revenues.

Monoliths are precious metals and ceramics used in emission control systems. (1)

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PSA - GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT