Michelin has posted year-end net income up from EUR1.462bn to EUR1.571bn, despite sharp market contraction.
Operating income before non-recurring items rose 25% to EUR2.4bn, reflecting what the supplier says is restored profitability in the truck tyre business.
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Volumes were down 6.4%, with demand remaining flat in the second half, although the manufacturer added it has more than EUR1bn in free cash flow.
“Given its global footprint, Michelin expects to hold volumes steady in 2013, in a market environment that is uncertain in mature markets but still expanding in the new ones,” said a Michelin statement. “Raw materials prices are expected to remain stable in the first half, adding a further EUR350m-EUR400m to operating income.
“This will be partly offset, however, by the impact of indexation clauses on the original equipment and earthmover businesses. The capital expenditure programme totalling around EUR2bn will support Michelin growth ambitions by bringing new production capacity on stream in the growth regions, whose start-up will weigh on costs.
“Michelin confirms its 2015 objectives and for 2013 expects to report stable operating income before non-recurring items at constant exchange rates, a more than 10% return on capital employed and positive free cash flow.”
