Michelin raises full year outlook on strong first half results 

Clermont-Ferrand, France – Michelin Group has revised up its full year segment operating income (SOI) outlook on the back of a “very good first half”. 

The French group expects SOI for 2021 to be in excess of €2.8 billion compared to ‘in excess of €2.5 billion’ announced previously, Michelin said in a 26 July statement without providing a sales outlook. 

During the first half, SOI rose 360% year-on-year to €1.4 billion and earnings (EBITDA) nearly doubled to €2.27 billion, on 19.6% higher sales of €11.2 billion.

Sales were lifted by a 22.8% increase in volumes, reflecting market share gains in “every segment”, especially 18-inch and larger tires.

Sales of non-tire activities also increase 4.6% during the first six months of the year, Michelin reported.

Michelin also linked the strong results to a €126 million increase from the positive net price-mix/raw materials effect. 

The 1.4% gain from “responsive pricing management” helped offset the rise in raw material procurement costs, while the mix effect added a 1% growth in SOI, Michelin added. 

The results were, however, negatively affected by an unfavorable currency effect, stemming primarily from the US dollar’s weakness against the euro. This, Michelin said, reduced SOI by €150 million.

Despite the robust market recovery during the first half, Michelin warned that supply chain interruptions remained a concern.

“These solid results should not overshadow the persistent impact of the health crisis, which is causing major disruptions, particularly in the supply chain,” said CEO Florent Menegaux.

As for the full year outlook, Michelin said global demand will not benefit from “as favourable a base” in the second half of the year and results will likely continue to be impacted by global supply chain disruptions. 

Michelin expects passenger car and light truck tire markets to expand by between 8% and 10% over the year while truck tire markets are set to rise between 6% and 8%. The speciality markets – including farm, mining, two-wheeler and aircraft tires – are expected to deliver 10% to 12% growth over the year.