A solid financial structure
Michelin is striving to achieve better mobility for everyone thanks to four key growth drivers based on its traditional expertise: offering everyone the right tire for each use, providing professional customers with services and solutions which meet their particular needs, allowing everyone to enjoy unique travel experiences and capitalizing on our knowhow in high-tech materials (rubber, bio-sourced materials etc.) to serve non tire-related industries.
For Michelin, profit is a core element of its "Everything will be Sustainable" policy because it is crucial to achieving a balance, firstly to remunerate our various stakeholders - Employees, Suppliers, Shareholders and Governments - but also to finance our future investments. The Group’s survival depends upon a robust financial performance.
Objectives for 2020
- To have a structural free cash flow (cash flows from operating activities less cash flows used in investing activities) of more than €1.4 billion a year from 2020 onward.
- From 2020, achieve an after-tax return on capital employed (ROCE) of no less than 15 percent at a constant scope of consolidation excluding goodwill.
Rate of progress
- Structural free cash flow: €1.615 billion in 2019 (€1.274 billion in 2018, €1,509 billion in 2017, €961 million in 2016, €833 million € in 2015)
- Return on capital employed: 13.7 % in 2019 (14.0% in 2018, 11.9% in 2017, 12.1% in 2016, 12.2% in 2015)
On March 18, 2020, the Group issued a press release acknowledging that, due to the decline in tire demand and the growing systemic crisis in the global economy, the Group's 2020 guidance was no longer relevant, without any possibility, at that time, of assessing the potential impact. As a consequence, the 2020 financial ambitions established in 2013 are no longer relevant (see chapter 5.1.11 of the 2019 URD).