Michelin has recorded half-year net income up 6% to EUR917m (US$1bn), while volume was stable during the same period and rose 2.6% in the second quarter.

Specifically, Michelin noted:

  • Sustained strong growth in the Speciality businesses, led by the mining, agricultural and construction tyre markets
  • Accelerating growth in 2018 and larger Passenger car tyre sales in the second quarter (up 14%)
  • Passenger car and Truck tyre OE sales growth in line with markets
  • Focus on margins in the Passenger car and Truck replacement segments, in a persistently competitive market environment

There was a EUR264m positive impact from the net price-mix and raw materials costs effect, reflected disciplined price management, market share gains in 2018 and larger passenger car tyres, while the supplier described its Speciality businesses performance as "very good." Unfavourable currency effects totalled a negative EUR218m.

"Thanks to the commitment of all its teams, Michelin not only rolled out a new, closer to the customer organisation during the first half of 2018, but also delivered a noteworthy EUR152m improvement in operating income at constant exchange rates," said Michelin CEO, Jean-Dominique Senard.

"Deployment of the Group's strategy will pick up speed in 2018, with the acquisition of Fenner, the creation of a leading North American wholesaler in partnership with Sumitomo, and the projected acquisition of Camso, which will create the world leader in off-the-road mobility."

Outlook:

During the second half of the year, replacement markets are expected to remain on an upward trend, regardless of prevailing winter weather conditions. Demand for original equipment tyres should remain strong in the Earthmover segment, but lose momentum in the Passenger car and Truck segments. Sales of mining tires should also continue to enjoy strong growth. 

For the full year, Michelin confirms its targets of volume growth in line with global market trends, operating income from recurring activities exceeding the 2017 figure at constant exchange rates and structural free cash flow of more than EUR1.1bn.

Show the press release

FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED JUNE 30, 2018

€917 million in net income, up 6%

€1,327 million in operating income from recurring activities, up €152 million or 11% at 
constant exchange rates

2018 guidance confirmed

Volumes up 2.6% in the second quarter and, as expected, stable over the first half due to unfavorable prior-year comparatives.

Sustained strong growth in the Specialty businesses, led by the buoyant mining, agricultural and construction tire markets

Accelerating growth in 18' and larger Passenger car tire sales in the second quarter (up 14%)

Passenger car and Truck tire OE sales growth in line with the markets

Focus on margins in the Passenger car and Truck replacement segments, in a persistently competitive market environment

€264 million positive impact from the net price-mix and raw materials costs effect, reflecting disciplined price management, market share gains in 18' and larger Passenger car tires and a very good performance by the Specialty businesses.

Unfavorable currency effect, totaling a negative €218 million.

Faster external growth, in line with Group strategy, in the Specialty businesses (Fenner, conveyor belts activity and Camso acquisition project), high-tech materials (Fenner) and market access (TBC joint venture with Sumitomo Corp.).

Free cash flow before acquisitions in line with annual objectives, at a negative €79 million.

Credit rating agencies have confirmed that the Group's financial position remains robust after taking planned 2018 acquisitions into account.

Thanks to the commitment of all its teams, Michelin not only rolled out a new, closer to the customer organization during the first half of 2018, but also delivered a noteworthy €152 million improvement in operating income at constant exchange rates. Deployment of the Group's strategy will pick up speed in 2018, with the acquisition of Fenner, the creation of a leading North American wholesaler in partnership with Sumitomo Corp., and the projected acquisition of Camso, which will create the world leader in off-the-road mobility.

Jean-Dominique Senard, Chief Executive Officer

Outlook

Over the second half of the year, replacement markets are expected to remain on an upward trend, regardless of prevailing winter weather conditions. Demand for original equipment tires should remain strong in the Earthmover segment, but lose momentum in the Passenger car and Truck segments. Sales of mining tires should also continue to enjoy strong growth. 
For the full year, Michelin confirms its targets of volume growth in line with global market trends, operating income from recurring activities exceeding the 2017 figure at constant exchange rates, and structural free cash flow of more than €1,100 million.

Original source: https://www.michelin.com/eng/media-room/press-and-news/press-releases/Finance/Financial-Information-for-the-Six-Months-Ended-June-30-2018

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