Michelin's revenues fell in first half
ERJ staff report (DS)
Paris -- Despite a series of price increases, Michelin's sales revenues fell slightly in the first half, even though volumes increased. The company said the decline was due mainly to exchange rate variations.
Michelin said its cash flow and results were affected by the rapid increase in raw materials. The cpmpany noted however, that, "the significant drop in passenger car & light truck and truck replacement markets in Europe and North America, a drop that accelerated in Europe in May and June."
The company estimated that its raw material costs will increase by 750 million euros for the full year, at constant exchange rates. The company said its policy of increasing prices in the replacement market globally should bring margins up to the levels seen in 2008.
Michelin said its net sales for the six months ended 30 June 2008 were Euro 8239 million, down .9 percent on the previous year. At constant exchange rates, the company said revenues increased by 4.2 percent. The sales volume increased by 2 percent overall, though this was driven mainly by Asian markets. Operating income stood at Euro 708 million, down 11.3 percent, which means an operating margin of 7.8 percent.
The company said it expected replacement tyre sales worldwide to be down by 1 percent in 2008, compared with 2007, as established markets in Europe and North America declined (by 3 percent and 2 percent respectively), more than offsetting rapid growth in the rest of the world. In truckoriginal equipment, however, Michelin sees global growth of 11 percent, despite a decline of 9 percent in North America. THis market will grow by 30 percnt in China; 18 percent in South America and 9 percent in Europe, according to Michelin.
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Press release from Michelin
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