Michelin has recorded half-year net income up 6% to EUR917m (US$1bn), while volume was stable during the same period and rose 2.6% in the second quarter.
Specifically, Michelin noted:
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- Sustained strong growth in the Speciality businesses, led by the mining, agricultural and construction tyre markets
- Accelerating growth in 2018 and larger Passenger car tyre sales in the second quarter (up 14%)
- Passenger car and Truck tyre OE sales growth in line with markets
- Focus on margins in the Passenger car and Truck replacement segments, in a persistently competitive market environment
There was a EUR264m positive impact from the net price-mix and raw materials costs effect, reflected disciplined price management, market share gains in 2018 and larger passenger car tyres, while the supplier described its Speciality businesses performance as “very good.” Unfavourable currency effects totalled a negative EUR218m.
“Thanks to the commitment of all its teams, Michelin not only rolled out a new, closer to the customer organisation during the first half of 2018, but also delivered a noteworthy EUR152m improvement in operating income at constant exchange rates,” said Michelin CEO, Jean-Dominique Senard.
“Deployment of the Group’s strategy will pick up speed in 2018, with the acquisition of Fenner, the creation of a leading North American wholesaler in partnership with Sumitomo, and the projected acquisition of Camso, which will create the world leader in off-the-road mobility.”
Outlook:
During the second half of the year, replacement markets are expected to remain on an upward trend, regardless of prevailing winter weather conditions. Demand for original equipment tyres should remain strong in the Earthmover segment, but lose momentum in the Passenger car and Truck segments. Sales of mining tires should also continue to enjoy strong growth.
For the full year, Michelin confirms its targets of volume growth in line with global market trends, operating income from recurring activities exceeding the 2017 figure at constant exchange rates and structural free cash flow of more than EUR1.1bn.
