Profits at Michelin slumped 71% last year as sales to vehicle makers declined and reorganisation costs rose.
Net income dropped to EUR106m (US$145m) from EUR360m ($495m) in 2008 on a 9.8% fall in revenue to EUR14.8 bn ($20.3bn).
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Earnings have been suppressed as demand has fallen for both new cars and trucks and replacement tyres which are Michelin’s most profitable product. The company has also been affected by rising raw material costs.
Michelin gave no new earnings forecasts beyond saying it would maintain cost discipline in 2010 and keep positive free cash flow.
Sales for new vehicle production fell 15% last year, led by a 32% contraction to North American carmakers although demand from Chinese carmakers surged 65%, overtaking US volume for the first time.
Car and light truck tyre revenue fell 4.5% to EUR8.28bn ($11.38bn) globally, while heavy truck tyre sales dropped 17% to EUR4.5bn ($6.1bn), the company said.
Free cash flow was a positive EUR1.4bn ($1.9bn) last year compared with negative EUR359m ($493.5m) in 2008. Michelin cut capital expenditure by 47% to EUR672m ($924m). Net debt fell to EUR3bn ($4bn) as of 31 December from EUR4.27bn ($5.87bn) a year earlier.
Chief executive officer Michel Rollier said: “In an environment shaped by a historic decline in tyre demand especially in mature economies, Michelin was able to respond quickly and with more agility than ever.”
Michelin cut its global workforce by 7.1% last year to 109,200.
