Rising raw materials costs are among the reasons for tyre giant Michelin on Wednesday reporting first half operating income 11.3% lower at EUR708m.
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Net profit was 1.4% down at EUR430m. Sales were down 1.9% to EUR8.23bn.
“In a troubled and difficult global environment, and provided second half tyre markets do not worsen beyond current estimated levels, Michelin expects to deliver full-year operating margin before non-recurring items approaching the first half level,” the supplier said.
Michelin added that first half results were hit by two major developments: the significant drop in passenger car and light truck and truck replacement markets in Europe and North America, that accelerated in Europe in May and June; and raw material cost increases that “were sharper than anyone could have anticipated”.
“This led to a time-lag between group cost of sales increases and the mitigating impact of price increases.”
Michelin nonetheless reported growth in all major markets except North America.
