Michelin maintains 2026 guidance despite Middle East conflict cost risks

Clermont-Ferrand, France — Michelin is maintaining its 2026 guidance despite growing uncertainty linked to the Middle East conflict, which the group has warned could raise costs, disrupt raw material supply and weaken global demand.

The French group said the conflict had limited direct exposure to its sales, with the Middle East accounting for less than 1% of total group turnover.

Michelin also said it has fewer than 100 employees in the region excluding joint ventures, no tire manufacturing plants, and two joint ventures in Saudi Arabia.

In presentation materials accompanying its first-quarter results, Michelin warned that a prolonged Middle East conflict could weigh on global demand through softer GDP growth while also disrupting supply chains and increasing costs.

The group said weaker economic activity could translate into lower tire demand, while raw materials availability could also come under pressure.

At the same time, Michelin flagged risks of inflation in raw materials as well as higher energy and logistics expenses, which in turn could create pressure on both operating margin and free cash flow.

Under a prolonged disruption scenario, Michelin estimated potential cost inflation of “€400 million or more.”

On supply chains, Michelin said raw materials were currently “secured until June” and that it was maintaining “dynamic monitoring of suppliers.”

In terms of market access, Michelin said risks included possible “disruption to regional customer deliveries,” but added that “alternative commercial routes” were already “secured & operational.”

As part of its crisis management protocol, Michelin said it would leverage its structural strengths to manage the volatile environment.

Measures could include “vertical integration,” and “local-to-local operations” to reduce ‘geographical interdependence.’