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February 12, 2019

Michelin 2018 operating income up 11% to EUR2.8bn

Michelin has posted 2018 segment operating income up 11% or EUR304m to EUR2.8bn ($US3.1bn).

By Rhodri Morgan

Michelin has posted 2018 segment operating income up 11% or EUR304m to EUR2.8bn ($US3.1bn).

Sales were up 4.1% at constant exchange rates, while volumes rose 0.9%. After declining in the first quarter, volumes rose by 2% during the following nine months, in markets disrupted by the contraction in Chinese and original equipment passenger car tyre segment demand

There was growth in the speciality businesses and further market share gains in the 18″ and larger passenger car tyre segment. Truck tyre volumes also rebounded 7% in the second half.

“In 2018, in a difficult economic environment, Michelin demonstrated its ability to increase operating income and sustain the improvements in structural free cash flow achieved in recent years,” said Michelin CEO, Jean-Dominique Senard.

“The year also saw faster deployment of the Group’s strategy, with the acquisitions of Fenner and Camso and the creation of the TBC wholesaling joint venture in the US. These transactions have strengthened the Group in key markets and provided new opportunities to create value.”


In 2019, Michelin estimates the passenger car and light truck tyre markets are expected to be mixed, with modest growth in the replacement segment and a contraction in the original equipment segment.

Truck tyre markets are expected to remain stable overall, given the decline in demand in China, while the mining, aircraft and two-wheel tyres markets should remain dynamic.

Based on January, 2019 exchange rates, the currency effect is expected to have a slightly favourable impact on segment operating income. The impact of raw materials costs is currently estimated at around a negative EUR100m.

Michelin’s objectives for 2019 are: volume growth in line with global market trends; segment operating income exceeding the 2018 figure at constant exchange rates and before the estimated EUR150m contribution from Fenner and Camso; and structural free cash flow of more than EUR1.45bn.

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