* Q1 revenue down 6.5 pct to 13.03 billion euros
* Confirms 2013 goal to halve operational cash burn
* Says further cost-cutting may be needed
* Shares up 9.2 percent
(Adds executive and analyst comments, shares, early plant
By Laurence Frost
PARIS, April 24 PSA Peugeot Citroen
will seek cost-saving concessions from French unions to help
meet turnaround targets, the company said on Wednesday after
posting a further 6.5 percent sales slump in the first quarter.
The struggling carmaker, which is already scrapping 8,000
domestic jobs and closing a major assembly plant, will begin
talks with unions in coming weeks, Chief Financial Officer
Jean-Baptiste de Chatillon told reporters.
"We will need to launch negotiations on the competitiveness
of the group," Chatillon said. The labour talks follow rival
Renault's deal with unions on a pay freeze and
working-time cuts and may address similar measures, though
further job or plant cuts "are not the subject of these
discussions", the CFO said.
Shares in Peugeot - which had plummeted last week to a
four-month low of 5.17 euros - jumped 9.2 percent to 5.95 euros
by 0728 GMT, helped by the company reiterating its full-year
goal of halving last year's 3 billion euro ($3.9 billion) cash
"Despite weakening end markets, PSA is sticking to the only
tangible financial guidance it has set for 2013", Credit Suisse
Among major carmakers, Paris-based Peugeot has been the
worst hit by a protracted European auto sales slump that has
been particularly deep in its core southern markets.
The company said revenue fell to 13.03 billion euros in the
first three months of 2013, when its share of the shrinking
regional market dropped to 12.3 percent from 12.9 percent.
Under a restructuring plan announced last July, Peugeot is
pursuing a return to break-even late in 2014 and a profit the
The company last year received a state loan guarantee worth
7 billion euros, as well as 1 billion from a share issue and a
further 2 billion from the sale of assets including its
headquarters and Gefco logistics division.
Unveiling its biggest-ever full-year loss of 5 billion euros
in February, Peugeot had insisted its recovery plan would be
enough to turn its business around without further bailouts or
disposals other than real estate.
The Aulnay plant near Paris, earmarked for closure in 2014,
could be shuttered this year ahead of schedule and production
transferred to nearby Poissy if protesters continue to disrupt
output, Peugeot said on Wednesday.
The company also said additional measures may be required if
a European market rebound fails to materialise next year.
"Operational initiatives to offset such potential
deterioration are under review," Peugeot said.
The share rally - amplified by short-covering to cover
earlier bets on a price decline - came amid growing doubts about
Peugeot's turnaround strategy, as well as its 2013 cash-flow
"We ... remain sceptical about PSA achieving this," Citi
analyst Harald Hendrikse said in a note. Quarterly sales were
nonetheless "somewhat ahead of expectations", he added.
Credit agency Moody's earlier this month lowered Peugeot's
rating to B1, four levels below investment grade, and cut the
carmaker's finance arm to "junk" status, citing concerns it may
need more drastic cuts to survive.
Peugeot's recovery plan is based on assumptions including
its ability to claim 13 percent of a stable European auto
The market-share goal is "under strong pressure", de
Chatillon conceded on Wednesday.
($1 = 0.7683 euros)
(Additional reporting by Gilles Guillaume; Editing by James
Regan and David Holmes)