Michelin earnings up on lower first-half sales
ERJ staff report (TP)
Clermont-Ferrand, France – Michelin has reported a fall in net sales for the first half of 2014, but a significant increase in earnings.
Net first-half sales came to €9,673 million – in the same period last year it stood at €10,159 million. The group’s net income for H1 2014 was €624 million – a rise of 23%.
CEO Jean-Dominique Senard said: “In a competitive environment that persisted through the first half, Michelin met its objective of delivering a further improvement in its performance, with a nearly €200-million increase in operating income.”
Michelin said there was slower growth in Q2 2014. For car and light trucks OE demand was down in the new markets, except in China.
The global market for car and light truck tires, as at 30 June 2014, rose by 4% for OE and 5% for replacement.
Truck tires witnessed sustained growth in North America, stabilisation in Europe and contraction in the new markets.
As at 30 June 2014, OE demand for truck tires in Europe fell by 7%, but replacement sales grew by 6%.
For the second half of the year, the company predicted: “Global demand for car and light truck and truck tires should remain supportive in the mature markets and China. On the other hand, the other new markets are seeing a slowdown, especially in the original equipment segment.
“For the full year, the group aims to improve its gross unit margin, while preserving a positive balance between pricing policy, product mix and raw materials costs. The competitiveness plan is being deployed on schedule."
Michelin added that it was maintaining its view that volumes would increase by around 3%, in line with projected 2014 market growth.
The group intends to implement a structural free cash flow of more than €500 million along with a capital expenditure programme maintained at around €2 billion.
More details in 50-page report PDF.