Nine-month sales rose by 20.5% to €20.7 billion.

In a highly inflationary environment, 2022 full-year guidance is confirmed for operating income and adjusted for structural free cash flow.

In a market environment shaped by continuing operational disruptions, widespread inflation and limited visibility as to future demand, Michelin delivered growth in sales and is steering operations to ensure adequate inventory levels.

 

Nine-month markets remained on an upward trend:

  • End-user demand (sell-out) held firm in most regions and markets.
  • As regards sell-in demand, Passenger Car & Light Truck tire markets grew by 1.4%, lifted by a third-quarter recovery in Original Equipment (OE) demand, mainly in North America and China; Replacement (RT) markets remained stable, with a mix temporarily impacted by rising imports from Asia.
  • Truck tire markets -excluding China- expanded by 6.0% with an acceleration in the third quarter.
  • Specialty tire markets remained robust in all segments except Agricultural and Construction in the third quarter; demand remains strong in Mining.

 

Consolidated sales for the nine months ended September 30, 2022 came in at €20.7 billion, up 20.5% year-on-year, including a 6.5% positive currency effect:

  • A 13.4% gain from price increases, reflecting the Group’s policy of systematically passing on cost inflation factors and the growing impact of price indexation clauses.
  • A 0.9% increase from the mix effect reflecting growth in the Passenger Car 18-inch and larger segment and in Mining, partially offset by an adverse OE/RT mix effect in the Automotive business.
  • A 2.4% decline in volumes, mostly due to the exit from Russia and lockdowns in Chinese cities, amid persistent operational disruptions.
  • A 1.0% gain from changes in scope, mainly reflecting the consolidation of Allopneus.com.
  • Non-tire sales grew by 22% accounting for 1.1% of consolidated sales growth, demonstrating the validity of the ongoing Michelin in Motion Group strategy.

Market projections for Passenger Car and Light Truck tire markets are expected to end the year between +2% and -2%, Truck tire markets (excluding China) to expand by between 2% and 6%, and Specialty tire markets to grow by between 3% and 7%.

Within this scenario, full-year guidance is confirmed for segment operating income above €3.2 billion at constant exchange rates, and adjusted to €0.7 billion for structural free cash flow[1].

 

 

[1] Structural 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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