PSA - 2019 Universal Registration Document

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

ASSET IMPAIRMENT 8.3.

Impairment test on theCGU andindividual B. assetsof the Automotivesegment Goodwill and intangible assets and propertywith an indefiniteuseful life The Opel Vauxhall goodwill, as well as the Opel and Vauxhall brands,are subjectto an annualimpairmenttest.Theyare allocated to the Opel VauxhallAutomotiveCGU. The net carryingamountof all property,plant and equipment,net of IFRS 16lease debt and of buy back assets, and intangibleassets included in this CGU was €5.4 billion,of which non-depreciableassets for €3.6 billionwhich were not subject to impairmentthrough the test. The net cash generated by the 2020-2022 Medium-Term Plan (MTP) was discounted at an after-tax rate of 9%, with a terminal value discountedat 10% that takes into accounta growthrate to infinity of 1%. The discount rates and the growth rate to infinity are reviewed each year and were not changed compared to prior periods2017 and 2018.The Medium-TermPlan takenas a reference in the test at the end of 2018 coveredthe years2019-2022,with an estimatedyear for 2023. In the PeugeotCitroënDS businesssegmentCGUs,the EuropeCGU is subjectto an annualimpairmenttest. The net carryingamountof all property,plant and equipment,net of IFRS 16lease debt and of buy back assets, and intangibleassets included in this CGU was €12.0 billioneuros of assets, including non-depreciableassets for 0.1 billioneuro which were not subject to impairmentthroughthis test. The net cash generatedby the 2020-2022Medium-TermPlan (MTP) was discountedat an after-tax rate of 9% with a terminal value discountedat 10% that takes into account growth rate to infinityof 1%. The discountratesand the growthratesto infinityare reviewedeach year and have not been modifiedcomparedto the previousperiods2017 and 2018. The Medium-TermPlan referredto in the test at the end of 2018 coveredthe years2019-2022,with an estimated year for 2023. The Medium-Term Plan taken as a reference in the test at the end of 2017 covered the years 2018-2022. The CGU Celor/Aramiswas the subject of an impairmenttest to cover tangible and intangible assets and goodwill of €97 million. The test didnot evidence any loss of value. As for 2018 and 2017, the recoverablevalueof the assetsremained higher than their carrying amount, even when combining the variationsof the three assumptions:+0.5%of the discountrate for cash flows, -0.5% for the growthrate to infinity,and -0.5% for the adjustedoperating income (loss)for the terminal value. Given the indicatorsof impairmentidentified,specific impairment tests were performedon the Latin AmericanCGU and the Russian CGU on the basis of the 2020-2022MTP. The discountrates used were 13.4% (16.5% in 2018 and 2017) for the Latin Americanplants and 13% (the same in 2018 and 2017) for the Russianplant. These testsidentifiedan additionalannualimpairmentchargeof €2 million (€30 million in 2018 and €17 million in 2017) related to capital expenditureduring the year in Russia. In Latin America,additional impairmentsweretakeninto accountin Brazilfor €39 millionand in Argentina for €29 million due to projections of volumes and profitability.Thesedepeciationswererecognisedunder“Impairment of CGUs”. As at 31 December2019, total impairmentsamountrespectivelyto €236 million for the Latin American and to €113 million for the Russianplants. In addition, the individual R&D assets, held by the integrated companies of the Peugeot Citroën DS business segment, and dedicated to Latin America, were impaired for an amount of €12 million in2019.

Accounting policies A. Under IAS 36 “Impairmentof Assets” , the carryingamount of property,plantand equipmentand intangibleassetsis testedfor impairmentwheneverthere are indicatorsof impairmentand at least oncea year for assetswith indefiniteusefullives,whichare primarilygoodwillandbrands.Indicatorsof impairment includea significant fall in volumes, deteriorating profitability, technologicalor regulatorydevelopmentsthat adverselyimpact the business. The recoverableamountof an asset is the higherof its value in use and its fair valuelesscoststo sell.For purposeof impairment testing,the carryingvalueof the assetor groupof assetstested is usuallycomparedwith its estimatedvalue in use and, if lower than its carryingvalue,with its fair value less costs to sell. Value in use is usuallymeasuredas the net presentvalueof estimated future cash flows. The recoverablevalue of brands is estimated by reference tomarketroyalties. A cash-generatingunit is defined as the smallest identifiable group of assets that generates cash inflows that are largely independentof the cash inflowsfromother assets or groupsof assets (a“CGU”). For purpose of impairmenttesting, the recoverableamount is determinedfor an individual asset, unless the asset does not generatecashinflowsthat are largelyindependentof thosefrom otherassetsor groupsof assets,in whichcasethe assetis tested as part of the cash-generatingunit (“CGU”)to which the asset belongs. In assessingthe value in use of an asset or CGU, the estimated future cash flows are discountedto their presentvalue using a discount rate that reflects current market assessmentsof the time value of moneyand the risks specificto the asset or CGU that are notreflected inthe estimated future cash flows. An impairmentloss is recognizedif the recoverableamount is lower than the carryingamountof the asset or groupof assets tested. For purpose of measuringthe carrying amount of the asset or group of assets tested, the IFRS 16 right of use net of lease liabilitiesrelatedto the assetsor groupof assetstested is included.The impairmentloss is first allocatedto any goodwill allocatedto the CGU (whenapplicable),then to other assetsof the CGU, on a pro rata basis of the carryingamountof each of the assetin the CGU. For purposeof impairmenttesting,CGUs of GroupePSA are as follows: In theAutomotivesegment,CGUsare basedon geographyfor n Peugeot Citroën DS with Opel Vauxhall considered as a separateCGU; In the Automotive equipment segment, the four business n CGUsare testedseparately.TheCGUof Faureciaas a wholeis consideredfor the purposeof the Faureciagoodwilltestingat PSA level; BanquePSA Financepartnershipswith SantanderConsumer n FranceandwithBNPParibas are each a CGU;and, Several CGUs correspondingto other businesses,mainly the n goodwill andbrandsof Celor/Aramis and Free2move. Furthermore,at a lowerlevel,brands(e.g.OpelandVauxhall)are tested yearly, and, in case of indication of impairment, technologies(e.g. diesel and electric) and vehicles (including relatedtechnologyand toolingsspecificto a vehicle)are tested basedon cashflowsassociatedwith suchassetsor groupassets throughthe Automotive segment.

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PSA - GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT