Stoke-on-Trent, UK – Michelin Tyre UK was strongly hit by the Covid-19 pandemic in 2020 but expects it will return to profit this year following two straight years of delivering loss.
"The company has positive net assets at 31 Dec 2020 and although it has made a loss for the current year and the prior year, latest forecasts show that the company will be profitable for 2021 and future years now that the Dundee factory has closed," Michelin said in in its 2020 annual report filed with the UK Companies House 10 July.
The tire maker reported a 30.8% year-on-year drop in sales to just under £400 million (€467 million) in 2020, as local sales fell 15.7% and exports were down 77%.
Original equipment (OE) volumes were down 33.7% year-on-year while sales to the segment dropped 35%, Michelin said linking the drop to the Covid pandemic and its impact on car production.
Sales, it said, fell sharply in the second quarter when OE manufacturers closed factories, but recovered in the third and fourth quarters.
In the replacement market, volumes were down 10.6% and turnover fell 9.3%, again as a result of the pandemic.
Tire exports were particularly low as a result of the March 2020 closure of the Dundee factory, whose products were mainly exported.
Operating results were affected by the low levels of sales as well as the ongoing costs associated with the closure of the Dundee factory. Operating loss before taxation stood at £42 million, 68% lower than the £25 million loss reported in 2019.
Michelin's UK head office and commercial headquarters is in Stoke-on-Trent with a truck tire retreading factory. The company operates a training & information centre as well as a service centre at the Stoke location.