PSA_GROUP_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2017 Notes to the consolidated financial Statements at December 2017

Impairment test on Faurecia Group CGUs C. and other assets Faurecia Group CGUs The carrying amount of each group of assets was compared with the higher of its fair value and value in use. Value in use is defined as the present value of estimated future cash flows expected to be generated by each cash-generating unit based on the latest projections from the Medium-Term Plan (2018-2020 plan revised at mid-2017). The main assumption affecting value in use is the level of recurring operating income, particularly for the calculation of terminal value. The calculation was performed by extrapolating to perpetuity projected cash flows for the last year of the Medium-Term Plan (2020) using a growth rate of 1.4% (1.4% in 2016). Future cash flows were discounted at an after-tax rate of 9.0% (9.0% in 2016), provided by an independent expert.

Following the impairment of the Peugeot Citroën DS Automotive CGU and of individual assets included in this CGU, the net carrying amount of all property, plant and equipment and intangible assets included in this CGU was €11,516 million. Sensitivities to the main changes in assumptions are as follows: the fair value of assets would be €275 million lower than that resulting from the base test with a discount rate 0.5% higher, €231 million with a perpetual growth rate capped at 0.5%, €1,106 million with an operating margin 0.5% lower in the reference year for the terminal value and €1,461 million if the three factors were combined. In the absence of indications of impairment and given the provisional purchase price allocation, the Opel Vauxhall Automotive CGU was not tested for impairment.

The test performed at end-2017 confirmed that the goodwill allocated to the three CGUs was fairly stated in the balance sheet. The balance sheet values are presented in the table below:

31 December 2017

31 December 2016

(in million euros)

Automotive Seating >

794 355

794 376

Clean Mobility > Interior Systems >

67

48

TOTAL

1,216

1,218

The test results are largely positive, and the combined sensitivity to changes in assumptions (0.5 percentage point increase in the discount rate, 0.5 percentage point reduction in the perpetual growth rate and 0.5 percentage point reduction in the perpetual recurring operating income) does not call into question the carrying amount of goodwill. Faurecia CGU in the accounts of PSA Group The stock market value of the Faurecia shares held by Peugeot S.A. at 31 December 2017 was €4,166 million based on a share price of €65.13, representing the price that would be paid in a transaction between minority shareholders not leading to the acquisition of control. The Group’s share of Faurecia’s net assets in the consolidated balance sheet is valued at €1,624 million (including the goodwill of €172 million recognised by Peugeot S.A. at that date). In light of these values no impairment loss was recognised on the Faurecia goodwill at 31 December 2017. Impairment of investments in companies D. at equity in the automotive business The companies at equity in the automotive business include the companies in partnership with Dongfeng Motor Company Group and the company in partnership with Changan Group, based in China. The non-current assets of these companies are tested for impairment on the basis of the same principles as applicable to the Automotive business of Groupe PSA (see Note 8.3). When there are indications of an impairment loss, the assets that are specific to the vehicle models are tested by the Vehicle CGU and all assets

(including those that aren’t specific to the models) are tested in aggregate at the level of each partnership. At 31 December 2017, impairment testing at the companies in partnership with the Dongfeng Motor Group resulted in the recognition of RMB1,515 million in impairment losses (the Group’s share was RMB758 million, i.e. €97 million). At 31 December 2017, impairment testing by Changan PSA Automobiles Co, Ltd in cooperation with Changan Group did not identify any additional impairment losses. At 31 December 2016, the Group’s share of the impairment losses recognised by this company was €263 million. Accordingly, Groupe PSA retained €51 million in impairment losses for investments in companies at equity and a €190 million provision for contingencies after inclusion of a €24 million loss in 2017. The two partners agreed to carry out a capital increase for circa €230 million each in the first half of 2018. In addition, Groupe PSA does additional impairment testing of the investments in companies at equity when there are indications of impairment losses, such as for example a significant fall in volumes or deteriorating profitability. The recoverable amount is determined by looking at the value in use based on cash flow forecasts. These forecasts are taken from the most recent medium-term plan for 2018-2022 approved by the partners of each of these two joint ventures. The terminal value is determined with reference to the data in the final years of the plan and having regard to a perpetual growth rate of 3.0%. The future cash flows are discounted using an after-tax rate of 12.5% for 2018-2022 and 13.5% for the terminal value. At 31 December 2017, the impairment testing of investments in companies at equity in the automotive business did not identify any impairment losses on top of those already recognised for the assets of these companies.

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GROUPE PSA - 2017 REGISTRATION DOCUMENT