Michelin sales up 2% in “complex” trading environment

Clermont-Ferrand, France – Michelin has posted a 2% year-on-year increase in sales for the first nine months of 2023, to €21.2 billion.

Revenues edged upwards as “soft volumes and a forex headwind” largely offset gains from mix-enhancement and non-tire activities, the group reported 24 Oct.

Reverses included a 3.6% dip in tire volumes on destocking by dealers, pressured by prevailing economic conditions and rising interest rates.

Michelin’s exit from the Russia market, meanwhile, cut volume-growth by 0.7 points over the first nine months.

The group posted a 7.2% gain from positive tire price-mix effects, though the trend was in decline: up 12.3% in the first quarter, 6.7% in the second and 3.3% in the third.

Over the first three quarters, Michelin noted a €1,285-million positive price-effect from the full-period impact of price increases introduced in 2022 and early 2023.

A further €219-million positive mix-effect largely reflected increased leveraging of the Michelin brand and growth in demand for larger tires in the light vehicle segment.

Automotive segment

The French group’s sales in the ‘automotive and related distribution’ segment increased by 3.6% year-on-year to €10,611 million over the first nine months.

Stable passenger car and light truck tire sales reflected robust OE demand in most regions offset “slightly” by negative replacement demand and destocking in Europe and the Americas.

Michelin also reported steadily expanding demand for 18-inch and larger tires as well as inventory levels returning to normal levels, except for winter tires in Europe.

Road transport

Group sales in the ‘road transportation and related distribution’ segment declined by 4.3% year-on-year over the first nine months of 2023, to €5,173 million.

In truck tire markets, Michelin posted a 5.0% year-on-year decline in sales outside China due to “substantial dealer and B2B fleet inventory reductions.”

While OE demand remained "robust" in Europe and North America, Michelin expected destocking in truck tire replacement markets to continue up until the yearend.

Speciality & non-tire

Sales in Michelin’s specialty businesses segment increased by 5.4% year-on-year to €5,368 million over the first nine months.

Michelin described specialty tire markets as “dynamic” in mining, aircraft and OE agricultural tires, but “soft” in the construction, replacement agricultural and two-wheeler markets.

Elsewhere, the group’s non-tire markets expanded in the fleet services, mining, energy segments, while remaining “stable” in general industrial applications.

A resulting 12.6% increase in non-tire sales was “led by the conveyor, seal and belt businesses and by the growth in fleet services solutions. “

Complex market

“Our group is reporting solid sales revenues in a complex market environment, CEO Florent Menegaux said of Michelin’s latest results.

“We are continuously tightly steering our operations and adapting to the market’s shifting needs,” Menegaux also commented. 

Michelin did not provide details of earnings for the first three quarters but did confirm previous guidance for 2023: ‘segment operating income at constant exchange rates’ to exceed €3.4 billion.