Financial Information for the Quarter Ending March 31, 2009
First-Quarter Net Sales Down 14.2% to €3.5 Billion
- Unit sales declined by 24.4% in the first quarter, primarily due to the fall-off in tire demand in all of the Group’s markets except China. The decline was especially apparent in the Original Equipment business and, more broadly, in Truck tires.
- The price-mix had a very positive 11.0% impact, reflecting the price increases carried out in 2008, firmer demand in the Replacement than in the Original Equipment markets and the MICHELIN brand’s relatively strong performance, particularly in the Replacement business.
- Inventory volumes were stable over the first three months of the year, thanks to the production flexibility programs that will be stepped up in the second quarter to help optimize working capital. Inventory value will also benefit from the decline in raw materials prices.
- Capital expenditure has been sharply curtailed, in line with an annual budget held to €700 million, equally allocated between the first and second halves.
- Adjusting the production base: in response to the unprecedented collapse in demand in North America and the resulting overcapacity, the BFGoodrich plant in Opelika, Alabama will close by October 2009, giving rise to an approximately estimated €120 million in restructuring costs.
- In 2009, the Group’s priority focus will be on managing cash, by optimizing the management of manufacturing operations and sharply reducing capital expenditure, at a time when markets are expected to recover only gradually.
In this environment, the Group is well on track to meet its objective of generating positive free cash flow in 2009.
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This press release is not an offer to purchase or a solicitation to recommend the purchase of Michelin shares. To obtain more detailed information on Michelin, please consult the documents filed in France with Autorité des Marchés Financiers, which are also available from the www.michelin.com website.
This press release may contain a number of forward-looking statements. Although the Company believes that these statements are based on reasonable assumptions as at the time of publishing this document, they are by nature subject to risks and contingencies liable to translate into a difference between actual data and the forecasts made or inferred by these statements.