PSA_GROUP_REGISTRATION_DOCUMENT_2017

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

MANAGEMENT OF FINANCIAL RISKS 12.7. Financial Risk Management Policy A. In the course of its business, PSA Group is exposed to liquidity risks, as well as interest rate, counterparty, currency and other market risks arising, in particular, from changes in commodity prices and equity prices. The Group’s financial risk management policy will apply in full in 2018 to the operations of the Opel Vauxhall entities. Liquidity risk (1) In the prevailing economic environment, the Group continued with its diversified, proactive financing strategy and conservative liquidity policy in order to meet its general financing needs, particularly the financing of its business and of its development projects. The financing strategy is defined by the Managing Board, and implemented under the direction of the Chief Financial Officer with the Corporate Finance & Treasury Department and submitted to the Supervisory Board’s Finance and Audit Committee. The Group’s cash forecasts, financing needs and interest income and expenses, as well as the level of financial security are reviewed at monthly meetings of the Treasury and Foreign Exchange Committee chaired by the Chief Financial Officer. The financing plan is implemented by the Corporate Finance & Treasury Department. Pursuant to this policy, the Group: issues bonds under an EMTN programme; „ has recourse to bank borrowings in France and abroad; „ sells receivables; „ arranges confirmed lines of credit for its financial security; „ and, where necessary, issues convertible bonds. „

The Group could also raise funds by a capital increase. This financing policy allows it to seize market opportunities to pre-finance itself and to thereby optimise its financial security. At 31 December 2017, the net financial position of the manufacturing and sales companies was €6,194 million compared to a €6,813 million net financial position at 31 December 2016. The breakdown of the net financial position can be found in Note 12.3.A, and changes thereto in Note 12.3.B. The repayment schedule of financial liabilities is set out in the table below. In June 2010, Peugeot S.A. put in place a €5 billion EMTN programme, €2.2 billion of which had been drawn down at end-December 2017. At 31 December 2017, the manufacturing and sales companies had financial security of €17,522 million (see Note 12.4) compared to €16,974 million at end-December 2016. It covers all currently anticipated financing needs for the manufacturing and sales companies over the coming 12 months. Contractual repayment schedule of financial liabilities and derivative Instruments: manufacturing and sales companies The following table shows undiscounted cash flows from financial liabilities and derivative instruments. They include principal repayments as well as future contractual interest payments. Foreign currency cash flows and variable or indexed cash flows have been determined on the basis of market data at the year-end.

Undiscounted contractual cash flows 2018 2019 2020 2021 2022 > 5 years

31 December 2017 (in million euros)

Assets Liabilities

Financial liabilities Bonds - principal repayments Manufacturing and sales companies - excl. Faurecia

(3,006) (1,436)

(776) (430)

- -

-

-

(1,800)

Faurecia

(36)

-

- (700)

(700)

Other long-term debt - principal repayments Manufacturing and sales companies - excl. Faurecia

(1,002)

(384) (72) (75) (110) (42)

(319)

Faurecia

(196)

(40)

(7) (132)

(7)

(5)

(5)

Total bonds and other borrowings Manufacturing and sales companies - excl. Faurecia

(4,008) (1,160) (502) (75) (110) (42)

(2,119) (705)

Faurecia

(1,632)

(76)

(7) (132)

(7) (705)

Total interest on bonds and other borrowings Manufacturing and sales companies - excl. Faurecia

(91)

(91)

- - - -

- - - -

- - - -

- - - -

- - - -

Faurecia

(2)

(2)

Finance lease liabilities

(147)

(147)

Employee profit-sharing fund Derivative instruments Total derivative instruments

(1)

(1)

297

(210)

87

-

-

-

-

-

TOTAL

297 (6,091) (1,390) (509) (207) (117) (747)

(2,824)

207

GROUPE PSA - 2017 REGISTRATION DOCUMENT