Buying the financially troubled Vauxhall/Opel outfits hasn't exactly harmed the PSA Group's bank balance, as the company has announced it hit a new earnings record last year.
Thanks to strong sales of new Peugeot and Citroen models, PSA shares jumped by as much as eight percent following the results, with net income rising by 11.5 percent to £1.7 billion. Operating income increased by nearly 25 percent to £3.5 billion as well, despite losses of nearly £160 millon from Vauxhall/Opel since the purchase of the German brand was completed in August last year. Finally, profit jumped by over £800 million and revenue by 4.5 percent.
It's a remarkable turnaround for a company that just six years ago was close to bankruptcy.
'We have a very agile company, and we know how to move around the chaos,' Peugeot CEO Carlos Tavares, who masterminded the company's turnaround, told reporters.
The company's success has led to a reconsideration of its targets – by 2021 PSA aimed to have a 6 percent margin (not including Opel or Vauxhall), but last year the margin was already 7.3 percent.
'Let’s see in 2019,' said PSA's chief financial officer Jean-Baptiste de Chatillon about the possibility of PSA changing its targets. 'We’re certainly doing quite well right now.'
PSA's success has also given it breathing room according to industry watchers: 'The core business is so handsomely profitable that it gives PSA time and flexibility to sort out Opel,' said Bernstein analyst Max Warburton.