Tyre major Michelin has revised its 2025 outlook ahead of its third quarter (Q3) sales announcement on 22 October, citing a tougher operating backdrop than anticipated in July.
The group said on 13 October that the latest Q3 figures point to “further deterioration of the business environment versus expectations made in July”
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As a result, Michelin now expects 2025 segment operating income at constant 2024 exchange rates to be between €2.6bn and €3bn, compared with a prior indication of above €3.4bn.
In Q3, the French tyre company said it recorded year-on-year volume growth outside North America, which it said reflects its capacity to expand across market segments despite ongoing volatility and near-term uncertainty affecting both B2C and B2B demand.
Performance in North America, however, weakened more than forecast.
The Q3 sales volumes in the region fell by nearly 10%, driven by sharply lower OEM demand in truck and agriculture, sluggish truck replacement sales amid a soft economy, and headwinds in B2C.
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By GlobalDataFree cash flow before M&A is now projected at €1.5bn to €1.8bn, versus previously more than €1.7bn.
The company said further details on Q3 sales, and the 2025 outlook will be provided during its 22 October conference call.
When presenting first-half results in July, it had stated: “For 2025 as a whole, sell-in tyre markets are expected to be stable compared with 2024, in a highly uncertain environment in terms of economic activity, customs tariffs and exchange rates.”
In its latest statement, the group added that tariffs have weighed on competitiveness and margins. It also noted a larger-than-expected depreciation of the US dollar, further pressuring the group’s free cash flow.
For the first half of 2025, sales totalled €13bn, down 3.4% year on year.
Tyre volumes declined 6.1%, reflecting continued weakness in original equipment markets, notably in truck, agricultural and infrastructure tyres.
Segment operating income reached €1.5bn, or 11.3% of sales at constant exchange rates, affected by temporarily low production levels.
Free cash flow before acquisitions was negative €102m.
