Clermont-Ferrand, France – Michelin has laid out the details of its new all sustainable “Michelin in motion” strategy for 2030 which will see the French group targeting sales growth of 5% a year and investing in new ‘non-tire growth territories’.
In its capital market day 8 April, Michelin presented various industrial competitiveness drivers, such as digital manufacturing, high-tech materials and services & solutions, which it said would deliver €80 million in savings a year between 2020 and 2023.
Moreover, the French group aims to cut SG&A expenses in the tire business by €65 million, net of inflation, by 2023 and by a total of €125 million by 2025.
The strategic plan stipulates that Michelin will drive sustained growth, with an average 5% increase per year in sales between 2023 and 2030, "once the current Covid-19-related crisis is over."
By 2030, the group expects to report €24.5 billion in sales, up from €20 billion reported in 2020, said chief financial officer Yves Chapot in an 8 April statement.
The group also aims to increase segment operating to €3.3 billion from €1.9 billion in 2020, and deliver ROCE (return on capital employed) of over 10.5% between 2023 and 2030.
As part of the strategy, Michelin said it was targeting new non-tire growth territories, while continuing to expand and invest in its tire business.
Led by its capacity for innovation and its materials expertise, Michelin said it was looking to drive “strong expansion” in five “around and beyond tire” business segments.
The segments include: Services & solutions, flexible composites, medical devices, metal 3D printing and hydrogen mobility.
In services & solutions, the group said it will "broaden and deepen" its portfolio of fleet solutions, in particular by leveraging smart objects and the value of its collected data.
Michelin also intends to “expand significantly in the very fast-growing flexible composites market.” These include conveyors, belts, coated fabrics and seals, it added.
The non-tire segments, Michelin expects, will deliver 20% to 30% of total sales by 2030.
Furthermore, the Clermont-Ferrand-based group said it had begun to calculate the costs of some of its “negative externalities”, such as carbon emissions and water and solvent use. The group said it was committed to reducing those costs by 10% by 2023.
As part of its environmental pledge, Michelin said it wil 'sharply reduce' its direct and indirect CO2 emissions by 50% compared with 2010. The group also aims to achieve carbon neutrality in transportation-related areas 2050.
In addition, Michelin said it intended to "sharply increase" the sustainable raw materials content in all its products to 40% by 2030, in line with its target of 100% by 2050.
“By 2030 the group’s profile will have significantly changed with the ramp-up of new, high value-added businesses in both around and beyond markets,” said managing chairman Florent Menegaux during the capital market day event.
“It is this ability to constantly reinvent itself that has underpinned Michelin’s strength for more than 130 years and which today gives us confidence in the future,” he added.