Michelin lowers full-year outlook on 4% decline in nine-month sales

Clermont-Ferrand, France – Michelin Group has lowered its full-year outlook as nine-month sales were significantly impacted by lower volumes.

For 2024, Michelin expects volumes to be in the range of -6% to -4% compared to 2023, said the French group 23 Oct.

Full-year guidance for operating income was lowered from the previous estimate of €3.5 billion to €3.4 billion at constant exchange rates.

Free cash flow before acquisitions is expected to increase to “more than €1.7 billion”, compared to the previous forecast of over €1.5 billion.

The outlook adjustment came as Michelin revenue for the first nine months of the year fell 4.6% year-on-year to €20.2 billion, driven by a 5.3% decline in volumes, including a 7.1% decrease in the third quarter.

The French group posted revenue declines across all segments, including passenger car/light truck (PC/LT), truck & bus (TBR) and speciality, which includes aircraft, mining, off-road and two-wheeler tires, as well as polymer composite solutions.

Michelin linked the decline in sales largely to a ‘downcycle’ in OE demand, within the automotive, truck, agriculture and construction segments.

“For several months Michelin has had to face increasingly intense negative economic factors, whether economic, climatic or geopolitical,” said group president Florent Menegaux.

The geopolitical factors, he added, have had “a strong impact on most of our markets, particularly in original equipment.”

This development, Menegaux said, led to “a significant drop” in sales volumes and a reduction in the activity of factories. 

According to Michelin, sales were negatively impacted by a €1.1 billion impact of volume decline and a €250 million effect of currency exchange, primarily due to the devaluation of the US dollar, Chinese yuan, Turkish lira and Chilean peso.

Price-mix effect had a positive 1.7% (€364 million) effect on sales, reflecting: a negative €62 million impact of easing prices more than offset by the €426 million positive impact of the mix.