Michelin has posted a drop in third quarter net sales down 5.8% from EUR5.44bn (US$7.5bn) to EUR5.12bn, while nine-month sales also dropped 5.3% to EUR15.3bn.

The tyre manufacturer said passenger car and light truck markets were up except in Eastern Europe, with truck business "rebounding" in Europe, but still uncertain in North America.

There were nonetheless price increases in countries experiencing currency depreciation, with a "significantly unfavourable currency environment combining the impact of the lower US dollar and Japanese yen, anticipated at the beginning of the year, with the depreciation of other currencies against the euro in the third quarter."

In light of the outlook for volume growth in the fourth quarter, Michelin is maintaining its full-year objective of stable volumes in an environment shaped by recovering, yet still weak demand in mature markets and expanding demand in new markets.

Faced with a currency environment that has deteriorated since the summer, Michelin said it should experience a more deeply negative currency effect than was expected at the beginning of the year.

As a result, the Group is aiming for a year-on-year increase of around EUR150m in operating income before non-recurring items, excluding the currency effect.

Michelin in Paris and Clermont Ferrand was not immediately available, but the supplier is expected to comment later.

Show the press release

Michelin announces €15,282 million in nine-month sales. Sales volumes up 2% in the third quarter after declining by 1.5% in the first half

  • Markets on a good trend in the third quarter, as expected:
    - Passenger Car and Light Truck Tires: Markets up, except in Eastern Europe.
    - Truck Tires: Technical rebound in Europe, but market still uncertain in North America.
    - Mining market still growing in the third quarter, but other Earthmover markets hurt by the business environment.
  • Sales volumes up 2% in the third quarter, in line with full-year forecasts.
  • Price effect stable in relation to the first half: 
    - Price increases in countries experiencing currency depreciation.
  • Significantly unfavorable currency environment combining the impact of the lower US dollar and Japanese yen, anticipated at the beginning of the year, with the depreciation of other currencies against the euro in the third quarter.

Outlook for 2013

In light of the outlook for volume growth in the fourth quarter, Michelin confidently maintains its full-year objective of stable volumes in an environment shaped by recovering, yet still weak demand in mature markets and expanding demand in new markets.

Faced with a currency environment that has deteriorated since the summer, Michelin should experience a more deeply negative currency effect than was expected at the beginning of the year.

As a result, the Group is aiming for a year-on-year increase of around €150 million in operating income before non-recurring items, excluding the currency effect.

To offset the impact of unfavorable exchange rates, Michelin is further tightening its management of key levers, notably through even more careful control of gross margin and costs.

In this environment, the Group confirms its objective of positive free cash flow in line with the structural objective of €500 million and a 10% return on capital employed.

 

Last update: October 28, 2013

NET SALES (€ MILLIONS)3rd QuarterNine Months
 20132012% Change20132012% Change
PASSENGER CAR AND LIGHT TRUCK 2,702 2,797 -3.3% 8,023 8,298 -3.3%
TRUCK TIRES AND RELATED 1,660 1,775 -6.5% 4,781 5,044 -5.2%
SPECIALTY BUSINESSES 1 761 864 -11.9% 2,478 2,800 -11.5%
GROUP TOTAL 5,123 5,436 -5.8% 15,282 16,142 -5.3%
1 Earthmover, Agricultural, Two-Wheel and Aircraft tires; Michelin Travel Partner and Michelin Lifestyle.

Original source: http://www.michelin.com/corporate/EN/finance/results-ratios/netsales

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