Michelin reports lower sales, earnings as volumes decline

Clermont-Ferrand, France – Michelin Group has reported a decline in both sales and operating income in 2024, due in part to lower volumes and lower utilisation rates.

Full year operating income fell 5.4% year-on-year to €3.3 billion on 4% lower sales of €27.1 billion, reported Michlin 12 Feb.

Tire volumes, said Michelin, were down 5.1% year-on-year due to “the unprecedented simultaneous decline in OE demand across every segment, intensifying competition in mass markets, and one-off headwinds in specialities.”

Revenue was, however, was positively impacted by a 1.9% mix effect and the group improved its market positions in its targeted business segments and geographies.

Particularly, Michelin said, it enhanced its market position in 18-inch and larger passenger car tires, high-end truck fleets, mining and aircraft tires.

In terms of operating income, Michelin said it maintained margin at 12.4% at constant exchange rates, compared to 12.6% last year.

This was achieved through “mix enrichment and improved operating performance” and despite “a low utilisation rate of industrial capacity.”

Furthermore, currency fluctuations reduced sales by 1.0% and segment operating income by 2.0%, with most currencies declining against the euro.

In the ‘automotive & two-wheel’ segment, Michelin said it posted an operating margin of 13.1% despite volumes being “penalised by the OE downcycle.”

The segment was supported by a strong mix, with 18-inch and larger segment reaching 65% of Michelin-branded passenger car tire sales.

In ‘road transportation’ commercial tire segment, operating margin recovered to 9.0%, helped by “a targeted and value-based approach to the market.”

Commercial tire operating income grew by 26% despite a 20% slowdown in the European OE market and an 11% decline in North & Central America OE demand.

In specialities segment, which includes mining, off-road and aircraft tires as well as polymer composite solutions, sales and operating margin faced “a temporary drop”.

Michelin linked the decline to “depressed OE markets” in agricultural and construction activities, and to "one-off headwinds in mining tires."

The aircraft tire and polymer composite solutions recorded growth, with the group strengthening its position in “markets with promising fundamentals.”

“Our 2024 results are solid, despite a particularly unstable economic and geopolitical context,” said Florent Menegaux, CEO and managing chairman.

Menegaux noted that to maintain competitiveness, Michelin had to “make difficult industrial restructuring decisions in Poland, China, Sri Lanka and France.”