In a challenging business environment, sales stood at €6.5 billion in the first three months of 2022, a rise of 19%

During the first three months of the year, existing operational disruptions and inflationary pressures were exacerbated by the conflict in Ukraine and the resurgence of Covid-19 in China.

 

In this context, markets continued to grow over the quarter:

  • Passenger car and Light truck tire markets edged up 2% year-on-year, as growth in Replacement demand offset the operational difficulties faced by automakers,
  • Truck tire markets rose by 4% excluding China, where demand fell 37% year-on-year,
  • Demand trended upwards in all the Specialty tire markets, in an environment constricted by the ability to fulfill customer orders, especially for Mining tires,
  • Growth varied within the quarter, with robust gains in January and February and a sudden cooling in March with the conflict in Ukraine and the rebound in Covid-19 cases in China, as well as the impact of high prior-year comparatives.

 

 

Quarterly sales totaled €6,481 million, up 19.0% of which a 3.4% positive currency effect:

  • A sharp 11.9% gain from higher tire prices as the Group pursued its dynamic price management in response to steeply rising energy, logistics and raw material prices,
  • A 1.6% increase from the tire mix effect, led by faster growth in Replacement sales (vs. Original Equipment sales) in the Passenger car and Light truck segments, and the steady enhancement in the product mix,
  • A 0.5% growth in tire volumes, limited by multiple operational disruptions,
  • A 0.8% gain from changes in scope, mainly reflecting the first-time consolidation of Allopneus.com,
  • A strong 11.9% growth in the non-tire businesses.

 

Guidance maintained

In 2022, in a highly uncertain environment, markets are still expected to see growth yet at the low end of the initially indicated ranges:  0% to 4% in Passenger car and Light truck tires, 3% to 7% in Truck tires (excluding China) and 6% to 10% in the Specialty businesses. In this scenario, and barring any increase in systemic impacts¹, Michelin maintains its guidance, with full-year segment operating income above €3.2 billion at constant exchange rates and structural free cash flow² of more than €1.2 billion.

 

¹Serious supply chain disruptions or restrictions on freedom of movement that would result in a significant drop in the tire markets.

²Structural free cash flow corresponds to free cash flow before acquisitions, adjusted for the impact of changes in raw material costs on trade payables, trade receivables and inventories.

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