Michelin delivers first-half gains, maintains 2022 guidance

Clermont-Ferrand, France - Michelin has posted a 7.7% year-on-year increase in segment operating income, to €1,530 million, on consolidated first half sales 18.7% higher at €13,289 million.

Gains, it said, were made despite “turbulent” trading conditions over the first six months of 2022, with impacts from the conflict in Ukraine and the continuing Covid crisis.

Supply chain disruptions and cost inflation intensified over the period, further dragging tire markets down to the lower end of forecasts, Michelin stated.

Tire volumes fell by 2.2%, though excluding sales in eastern Europe and China, levels were stable,  said the 26 July report. Non-tire sales lifted 18%.

Michelin linked efforts to offset rising costs to a tire price-mix effect of 13.9%, while also posting a positive currency effect of 5.2%, helped mainly by  the US dollar.

“Assertive pricing management effectively addressed the full range of cost inflation factors and maintained unit margins over the period,” the group said in relation to its its higher earnings.

Michelin’s ‘net consolidated result’ came in at €843 million, including a €202 million impairment linked to the suspension of operations in Russia.

“We’ve delivered good results in an extremely unsettled environment, led by the remarkable commitment of all our teams,” managing chairman Florent Menegaux commented. 

Michelin has, however, lowered its market forecasts, with Menegaux noting that “the uncertainties of today’s world make it difficult to express a medium-term outlook.”

The group now expects passenger car and light truck tire markets to end the year between +2% and -2%, 

Truck tire markets are expected to grow by between 2% and 6%, and speciality markets to increase by between 4% and 8%.

On that basis, Michelin maintained its guidance for 2022, with full-year segment operating income tipped to exceed €3.2 billion at constant exchange rates.

In April, Michelin forecast growth of: 0% to 4% in passenger car and light truck tires, 3% to 7% in truck tires (excluding China) and 6% to 10% in the specialty businesses.

At the first-quarter stage, full-year segment operating income was projected to exceed €3.2 billion, compared to €2.9 billion reported last year.