Clermont-Ferrand, France – Group Michelin has announced that it has taken the necessary measures to strengthen its financial backbone to weather the Covid-19 crisis without drawing down its confirmed lines of credit.
In its annual general meeting held behind closed doors in Clermont-Ferrand 23 June, the French group said it had a “healthy balance sheet” despite a significant 8% decline in first quarter sales.
The tire maker took “major financial initiatives” at the start of the crisis to ensure business continuity, managing chairman Florent Menegaux addressing the meeting.
These included tracking supply and demand on a weekly basis to keep inventories under control, maintaining a firm pricing strategy to preserve margins and the brand, and scaling back capital expenditure and structural costs.
In addition, the group conducted stress tests assuming volume losses of between 20% and 35%, which, according to Menegaux, confirmed that Michelin has sufficient cash and cash equivalents to survive the crisis.
“Michelin is now leveraging all of these fundamentals to tackle the unprecedented crisis currently raging across the globe,” the group boss added.
The French tire maker also renewed its commitment to an ‘all sustainable vision’ which it said would accelerate its transition to “a greener, more virtuous economy.”
The strategic vision will be based on a “right balance between people, profit and planet,” as part of which Michelin aims to to achieve a net zero emissions at all its sites by 2050.
The tire maker also said it expected to present its 2030 roadmap at the beginning of 2021, but did not elaborate further on what the strategy would entail.