PCR price-mix key to Michelin's first-half gains

Clermont-Ferrand, France – Michelin's passenger car tire business was the main driver behind the group's strong first half performance – achieved amid a "softer" market environment.

Group-wide sales for the first six months were up 5.9% year-on-year to €14.1 billion, lifted by a strong price-mix, while ‘value management’ contributed to an 11.4% rise in segment operating income to €1.7 billion.

Higher sales were achieved despite a 3.7% decline in tire volumes due, said Michelin, to an uncertain economic environment which prompted dealers to curtail inventories.

In terms of its trading environment, Michelin said tire markets were flat in the passenger car tire segment and declining in truck & bus.

By value, however, sales in the passenger car tire and the related distribution segment increased by 6.4% to €7 billion in the first half, while segment operating income rose by nearly 11% to €866 million.

With volumes down 2.1% year-on-year, the improvement stemmed primarily from a “very favourable price-mix effect”, and from "sustained value enhancement in the geographic and size mix," stated Michelin.

By contrast, truck and bus tire sales declined 2.1% to €34 billion while segment operating income fell by 46% to €168 million.

This, reported Michelin, was due to the “under-absorption of fixed costs, particularly in Europe,” following a 7.7% contraction in volumes.

In specialities business – including aircraft, mining, two-wheeler and off-road tires – Michelin saw a 13.6% increase in sales to €3.6 billion.

Segment operating income rose 54% to €670 million, helped by the ‘still-expanding’ mining tires and price-adjustments.

Elsewhere, Michelin’s conveyor belts business expanded over the period: tracking, in particular, strong growth in the mining industry.

Michelin's ‘high-tech materials’ business reported “robust growth” in engineered seals and precision polymers: with “very high value-added positioning” in medical, energy, aerospace and defence applications.