Michelin reports positive cash flow, despite first-half operating loss

ERJ staff report (DS)

Paris -- Michelin reported sales revenue down by 13 percent for the six months ended 30 June 2009, to euro 7,134 million. However, unit sales were down by 23 percent, reflecting a positive 9.6 percent impact from the price mix, and Michelin's firm pricing policy.

The company reported an operating loss of euro 10 million and a net loss of 122 million for the period. However, Michelin said it generated €575 million in free cash flow, through efficient management of working capital (particularly inventory) and the sharp reduction in capital expenditure, to €319 million from €500 million in first-half 2008.

“Faced with the persistent, steep decline in global tire markets, Michelin has responded swiftly and effectively by tightening its management and deploying production adjustment programs,” said Michel Rollier, Managing General Partner.

He continued, "inventories have now returned to more normal levels, but not to the extent that we can talk about a real upturn. We will therefore maintain our efforts in the months ahead, although the decline in raw materials prices should support second-half margins. The Group is committed to generating positive free cash flow in the second half, in order to continue preserving its major business metrics.

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Press release materials from Michelin