Michelin almost doubled net income in 2002, citing cost reductions and price-mix as positive factors offsetting adverse currency movements in the Americas. Operating income in 2002 was 1.225 billion euros – 18% ahead of 2001 on net sales of 15.645 billion euros.
Net income was 614 million euros, up 96% over 2001.
Operating margin was 7.8% in 2002 against 6.6% in 2001.
However, the company said that in 2002, tyre markets remained below their 2000 level.
Michelin said that it benefited from the cost reduction efforts initiated nearly three years ago. In particular, competitiveness programs implemented in 1999 in Europe and in 2001 in North America, reached their objectives in 2002.
Although substantially increased over 2001, raw material purchasing costs had a slight positive impact on the evolution of the operating income: 2002 benefited from the strong decrease recorded during the second half of 2001 (-6%), which the rise in these costs in the first half 2002 only partially offset.
Michelin said that volumes sold expressed in tons were up 2.9% in 2002. This progress was partly driven by the increase in sales of winter tyres and by String growth in Eastern Europe and China.
Michelin was cautious on the year ahead, saying that there is a risk of market decline. Raw material costs should increase, but the company expects the depreciation of the euro versus the dollar should mitigate the effects of that.
