Michelin posts nine-month sales down 15% to EUR15bn

By Simon Warburton | 26 October 2020

Michelin has recorded sales down 15% at constant exchange rates to EUR15bn (US$17.7bn) for the first nine months of 2020, with a decline of 5% in the third quarter reflecting an upturn in business.

The Group is revising its guidance for 2020 upwards.

After falling steeply in the second quarter due to the health crisis, Michelin says global tyre demand picked up more strongly than expected in the third quarter. 

Passenger car and Light truck tyres: demand plunged 17% during the first nine months, with a 6% decline in the third quarter demonstrating a quarter-on-quarter upturn. Truck tyres: markets ended the first nine months down 14%, with strong Original Equipment demand in China limiting the third-quarter decline to 6%.

Speciality businesses: markets remained in line with first-half trends, with the recovery in Agricultural tyre sales and the rebound in the Two-Wheel segment offsetting a slowdown in the Mining business, which felt the effects of the health crisis with a lag of a few months.

The Automotive (Original Equipment and Replacement) and Speciality businesses gained market share, but the Road Transportation business was impacted by an unfavourable geographic mix.

Outlook for 2020: in a still highly uncertain environment, and taking into account the recent change in tyre demand, Passenger car and Light truck tyre markets are expected to decline by 13% to 15% during the year, Truck tyre markets by between 12% and 14% and the Speciality markets by 15% to 19%.

With these new forecasts and the cost reductions linked to the circumstances, the Group is revising its guidance for 2020 upwards, with segment operating income in excess of EUR1.6bn at constant exchange rates and structural free cash flow in excess of EUR1.2bn, barring any new systemic effect from Covid-19.