Michelin delivers revenue increase despite lower volumes

Clermont-Ferrand, France – Michelin Group has posted a 7.4% increase in first quarter revenue, due mainly to a stronger price/mix and a positive contribution by non-tire sales.

Consolidated sales rose to €7.0 billion over three months to end of March, despite a 6.6% decline in volumes, Michelin reported 26 April.

According to the French group, sell-in markets in Europe and North America were characterised by inventory reductions in a context of improving supply-chains.

In particular, Michelin noted a 25% decline in volumes in eastern Europe due to the weak sell-in demand.

Despite the lower volumes, the French group’s overall sales benefitted from a 12.3% price-mix effect.

Michelin reported growth in high-value tire segments and strong mining tire sales, which "more than offset" an unfavourable OE/replacement mix.

Michelin also noted a 15% tailwind in non-tire sales, involving high-tech materials and fleet services, and a 0.8% gain from currency effects.

The Clermont-Ferrand-based manufacturer did not provide details of earnings or profit in its quarterly report.

Breaking down the performance of tire segments, the passenger car & light truck tire market contracted 3% on lower replacement demand in Europe and North America.

Meanwhile, OE markets in the segment were "slightly positive" but still well below 2019 levels, Michelin noted.

Truck tire markets outside China declined by 2% in the first quarter, reflecting a weak replacement demand.

OE sales in the segment remained strong with Europe and North America seeing 10% and 9% increases in sales respectively. 

The group’s speciality tire markets remained strong, particularly in the mining and aircraft segments.

Michelin, however, noted weaker demand in the construction segment, reflecting a slowdown in home-building, amid rising interest rates.

Two-wheeler tires also saw a slowdown in demand, primarily due to “extensive inventory build-up”, particularly in the bicycle tire segment.

Non-tire markets continued to expand in general industrial, mining, energy and fleet services, continued Michelin.

For the full year, the group confirmed its previously projected outlook, expecting sales volumes to decline within a range of 4%-0%.