Michelin sales, earnings down on OE decline, currency

Clermont-Ferrand, France – Michelin Group has reported a 3.4% year-on-year decline in first half sales as “an erratic [trading] environment" impacted markets and currency exchange rates.

Sales for the first six months of 2025 came in at €13.0 billion, while segment operating income fell 18% to €1.45 billion from €1.78 billion posted in 2024, Michelin reported 24 July.

The results, said the French group, reflect lower OE volumes but a “powerful price/mix effect.”

Sales were impacted by a 1.5% negative currency effect due to the strengthening of the euro, which accelerated to a 3.6% negative effect in the second quarter.

Tire volumes shrank by 6.1%, mainly due to “still broadly depressed” OE markets, especially for truck, agricultural and infrastructure tires.

Volumes remained close to the 2024 levels (1% down) in the replacement segment, Michelin said sellout markets confirm structural stability.

Tire sell-in market developments, however, were largely disrupted by “substantial intercontinental import flows in anticipation of changes in customs duties.”

As for price and mix effects, Michelin noted a positive 4.0% contribution to its results, adding that the Michelin brand strengthened its market positions “in targeted regions and segments.”

At €1.5 billion, segment operating income stood at 11.3% of sales at constant exchange rates, which Michelin said reflected “the temporary impact of low production volumes.”

Michelin said its manufacturing capacity adjustment projects are being rolled out on schedule.

Breaking down the segments, the ‘automotive & two-wheel’ (SR1) reported an operating margin of 12.2%.

Profitability, said Michelin, was eroded by lower OE volumes, but this was offset by “a strongly enhanced sales mix.”

In particular, sales of 18-inch and larger tires rose four points to 68% of Michelin-brand passenger tire sales.

The group is also rolling out a new product plan: renewing its Primacy and CrossClimate tire ranges, and launching the CrossClimate3 Sports tire 'to open up a new market segment'.

Michelin's truck & bus ‘road transportation’ (SR2) segment saw a decline in operating margin which stood at 5.5%.

The “temporary dip” was due to the “under-absorption of fixed costs following the steep drop in OE sales, particularly in North America where the market contracted by 19% over the first half.

Meanwhile, revenue for fleet services increased while the group stepped up its programme of “innovative product launches” in Europe and North America.

The specialities segment (SR3), which includes mining, off-road and aircraft tires, reported an operating margin of 14.5% on "persistent decline in OE markets” in the farm, construction and material handling segments.

Sales to the aircraft and mining tire businesses grew during the period, Michelin's statement continued.

Revenues at the group's 'polymer composite solutions' unit expanded, particularly in the coated fabrics, technical films, and high-tech seals businesses.

In the conveyor belt business, Michelin said market fundamentals closely track mining industry demand over the long term and “are structurally sound.”

In the short term, particularly in the US, the group said that “many economic and geopolitical uncertainties are weighing on mine operators' investment decisions.”

For the full-year outlook, Michelin maintained its financial guidance provided that there is no “further deterioration in the economic environment in the second half of the year.”

“The group's fundamentals are decisive assets in these unstable and highly unpredictable times,” said Florent Menegaux, managing chairman.

We are, he added, determined to “further strengthen the resilience of our business model without giving up our medium-term ambitions.”