Michelin's Q3 results ahead of forecasts; OTR tyres still in shortage

Paris -- Michelin reported third quarter sales of Euro 3890 million, up 4.5 percent from the same period in 2004. The improvement was helped by favourable exchange rates, and the comapny said sales grew 3.3 percent at constant exchange rates.

The nine-month figures were 11 380 million, 1.5 percent ahead on the same period last year. The improvement was due to improved selling prices, as volumes in Europe were down 2.6 percent, while exchange rates had a small negative effect.

In its corporate stement, Michelin said, "Some of Michelin's key markets evolved in the course of the 3rd quarter 2005 in ways

that did not match Group expectations: in particular, Europe's Truck tyre replacement markets continued on their downward trend despite the fact that the basis for comparison has been more favorable than in the first half." OE sales of truck tyres, however continued at record levels, although the growth cooled somewhat with respect to earlier quarters Michelin said OE truck tyre sales were up 11.7 percent in the year-to-date compared to 2004 but, only up 1.1 percent quarter-on-quarter."

In the earthmover / OTR segment, Michelin said, "the OE market continued to show a solid growth of more than 10 percent compared to last year; the demand for surface mining equipment being even higher. As far as replacement market is concerned, shortages are still prevailing. The overall demand is estimated to be 5 to 10 percent higher than the supply."

Michelin has [reviously estimated its raw materials budget in 2005 would be 14 to 15 percent higher than in 2004. The company said, "Raw material costs have increased in line with these expectations, with a 2nd half versus 1st half increase pattern similar to last year's" Prices rose by around 8 percent in 2004, H2, compared with H1, said Michelin.

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