Michelin confirms 2021 guidance on strong sales

Clermont-Ferrand, France – Michelin Group has confirmed its 2021 guidance following strong sales in the third quarter amid “an increasingly turbulent environment.”

The French group expects to achieve full-year targets of segment operating in excess of €2.8 billion, at constant exchange rates, and structural free cash flow of more than €1 billion, announced Michelin 25 Oct.

Over the three months to end of September, revenue grew 8.6% to €6.0 billion, helped by “robust mix and disciplined price management,” the tire maker said in its third quarter results statement.

Third quarter sales were also helped by a 0.3% (€16 million) positive currency impact and non-tire revenues of €22 million, the French group announced.

Over the first nine months of the year, sales rose 15.6% to €17.2 billion, lifted by the first-half rebound, price management, and a €47-million revenue from non-tire activities. 

Michelin did not provide earnings details for the period under review.

The French tire maker said business environment over the third quarter was characterised by the persistent Covid crisis, “extensive disruption across every supply chain” as well as “rising raw materials, logistics and, now, energy costs.”

In addition, group reported “worsening labour shortages” in North America and, to a lesser extent, in Europe.
 
As for demand, Michelin registered a steep 21% decline in the passenger car OE segment, due primarily to the continued shortages of automotive semiconductors. 

Passenger car replacement volumes remained stable during the period.

In truck tire markets, Michelin reported “a robust 7% gain” outside China and a sharp 30% contraction in China.

The speciality business, including farm, aircraft, mining and two-wheeler tires, sustained demand, with a particularly strong rebound in the OE construction and agricultural tire segments.
 
Over the first nine months of the year, tire volumes grew 8%, of which 1.3% were in the third quarter, Michelin said.

Michelin said the nine-month sales saw a 4.1% increase from the tire price-mix effect, reflecting price increases implemented to offset rising costs, and the tire maker’s market share gains in the large rim-sized tires segment.

Noting a ‘still highly disruptive environment in 2021,’ Michelin said it expected passenger car and light truck tire markets to expand by 6% to 8% over the year, impacted by semiconductor shortages.

The tire maker anticipates a 6-8% growth for the truck tire markets in 2021, and a 9-11% growth for the speciality markets.