Clermont-Ferrand, France – Groupe Michelin has flagged up currency effects as a significant factor behind lower profitability in its third-quarter financial results, published 19 Oct.
Michelin notes currency effects in 2017 financial scenario
This, said the French group, means that a €37-million positive currency effect achieved during the first six months, will be more than offset by a projected €150-million charge in the second half of the year.
This could be the reason for another change in Michelin’s estimated 2017 operating income from recurring activities, as reported on 19 Oct.
While in the first half the French company expected the figure to be above that of 2016, the Q3 presentation suggests that the number could to be “equal or more than” that of 2016 which stood at €2.69 billion.
Michelin’s other projections, including the €800 million raw-materials headwind for the year remained unchanged, while it expects its "competitiveness plan gains" versus inflation to be "slightly positive”.
The French tire maker announced 19 Oct that up-trending OE demand, a sustained rebound in demand for mining tires and a “highly favourable” price mix had helped it register a 5% year-on-year rise in third-quarter sales to €5 billion.
For the three months to 30 Sept, volumes rose 1% during the quarter and 2.8% for the first nine months – the latter trend led by early dealer-buying in the first quarter and a continued upturn in mining tire sales throughout the period.
Net sales for the first nine months of the year stood at €16.4bn, up 6% compared to the previous year, the French tire-maker results published 20 Oct also show.
For the first half-year, Michelin’s operational income remained flat at €1.39 billion compared to €1.40 billion in 2016. Increased profitability achieved through competitiveness plans was offset by high inflation rates, it also noted.
The company did not provide earnings figures for the third quarter of 2017.
In terms of sales breakdown, Michelin reported growth in every segment, with a significant improvement in speciality tires, including earthmover, farm, and aircraft tires. The segment posted 18.4% growth in sales at €2.5 billion for the first nine months of the year.
Another area where Michelin saw significant hikes was in the premium passenger car tire segment –18-inch and bigger – where the company posted a 21% growth in volumes.
“A successful premium strategy,” said Michelin had delivered continuous market share with its price premium being 10% higher than premium competitors.