Michelin has posted nine-month net sales to September, 2018 up 3.9% to EUR16.2bn (US$18.7bn).
- Third-quarter net sales up on favourable prior-year comparatives, with a 2.9% increase in volumes and, as expected, a 0.5% positive impact from the price-mix effect as the environment weakened late in the period.
- Further market share gains in the 18-inch and larger passenger car tyre segment.
- 3% rebound in truck tyre sales.
- Sustained strong growth in the speciality businesses, up 9%.
- 0.5% gain from the price-mix effect
- 3.4% increase from changes in the business base, following the arrival of Fenner in the speciality businesses and the deconsolidation of TCi.
“Given the significant decline in the passenger car and light truck and truck tyre markets late in the third quarter and the further weakness expected in the fourth quarter, the Group has revised its 2018 markets scenario, notably in China,” said a Michelin statement.
As a result, the Group has refined its guidance and now expects:
- A slight increase in volumes over the full year
- Fourth-quarter performance will be driven by sustained market share gains in the 18-inch and larger segment of the Passenger car and Light truck business and in the Specialty markets
- Full-year volumes will be affected by the major price increases already introduced to offset the sharp currency depreciation in emerging markets
- A year-on-year increase of at least EUR200m in operating income from recurring activities, at constant exchange rates, with no net impact from changes in the price mix and raw materials costs in the second half and competitiveness plan gains offsetting inflation for the year. At the same time, the Group reaffirms the competitiveness plan’s target of EUR1.2bn in savings during the 2017-2020 period
- More than EUR1,100m in structural free cash flow in 2018
Outlook for 2019:
- 1.5% growth in the Passenger car & Light truck tire market, with a 10% gain in the 18-inch and larger segment and a slight upturn in the Chinese market
- Stable truck tyre market
- A 4% to 5% increase in the Speciality businesses
- Around a EUR150m year-on-year increase in EBIT from the latest acquisitions, including initial synergies from Fenner’s integration