Michelin reduced sales volumes

In the first half of 2024, Michelin sales fell by 4.2% compared to January-June 2023 and amounted to 13.48 billion euros, which is slightly less than analysts' forecasts (13.53 billion euros), reports Reuters.

Sales declined, among other things, due to the "unstable economic situation and weak demand in the French market", noted in Michelin. According to the company's CEO, Florent Menegaux, European-made products have weak competitiveness in the international market due to high energy costs and an influx of tires from Asia.

"European products have lost competitiveness, and before we resisted, but now it is impossible, as there is an overcapacity, - Menegaux noted. - This was the reason for the measures we will take in Germany and Poland [in Germany, the company will completely or partially close three plants, and in Poland, the production of truck tires will be stopped at the Olsztyn plant], but our business in other countries will also be affected [...] Since the time of COVID, due to high energy, transportation and labor costs, exports from Europe have become uncompetitive, regardless of the country of production".

Despite the existing difficulties, Michelin increased its operating profit in the tire sector from 12.1 to 13.2%. The company also stated that they do not change their forecast for the whole year and still expect that the operating profit will exceed 3.5 billion euros.

"In difficult economic conditions, Michelin showed stable results in the first half of the year, which allows us to maintain our forecasts for the year, - Menegaux said. - I would like to sincerely thank our entire team for their ability to adapt".