Michelin reduced sales

In the first nine months of 2024, Michelin's revenue was €20.2 billion, down 3.4% from the same period last year. Sales in physical terms decreased by 5.3%, and in the third quarter, the decline was 7.1%, which, according to the company, is due to a decrease in demand for tires of all categories in the original equipment sector, as well as an increased focus on priority segments and a deterioration in the mining tire market.

Following the results of January-September, Michelin changed its forecast for the entire 2024 year, and now it is expected that the turnover will decrease by 4-6% (previously a decline of 2-5% was expected), and the operating profit at constant exchange rates will be €3.4 billion (previously this indicator was forecasted at the level of €3.5 billion). At the same time, the forecast for the flow of free cash flow excluding merger and acquisition costs was increased from €1.5 to €1.7 billion.

"Our strategy is yielding positive results, and the stability of our company continues to strengthen," said Florent Menegaux, Managing Director of Michelin. "At the same time, in recent months, we have faced a number of unfavorable factors, including economic, climate, and geopolitical ones, and their role is growing, which has a significant impact on most markets, especially the original equipment sector. As a result, there was a significant reduction in sales and production volumes at our plants."

The company's documentation also notes that demand for passenger tires in the OE segment decreased by 3%, and the decline was most significant in Europe (-6%), while in North America and China, the situation is relatively stable (-1% and +1%, respectively).

In the secondary market for passenger tires, demand increased by 3%, and in Europe, despite an influx of imports from Asia, growth was 7%, which was made possible, among other things, by good sales of winter tires. In addition, revenue is positively affected by the increase in sales of tires with a diameter of 18 inches or more.

In North America, demand for passenger tires in the secondary market increased by 3% (in the third quarter, growth slowed to 1%), which was facilitated by an increase in the number of kilometers driven by local motorists. At the same time, in China, demand decreased by 1%, and in the third quarter, the decline was 5%.