- Tire market environment in line with the second quarter:
- Original equipment demand trending upwards in every segment
- Replacement markets down slightly in the mature regions
- Sustained rebound in mining tire demand
- Nine-month volumes up +2.8%, lifted by early dealer buying in the first quarter, the recovery in mining tire sales throughout the nine months and a return to normal dealer inventory levels
- Acquisitions added +0.6% to growth
- Faster improvement in the price-mix effect in the third quarter, to a positive +5%, for a total +2.6% impact over the first nine months, reflecting:
- The implementation of all of the announced price increases
- The favorable mix effect, primarily reflecting +21% growth in volumes in the premium 18-inch and larger segment
- The currency effect reduced net sales by +3.7% in the third quarter and was neutral over the full nine months
2017 guidance confirmed
In the final months of 2017, regardless of prevailing winter weather conditions, replacement markets are expected to gradually move back in line with their long-term trend. Demand for original equipment tires should continue to expand in the Truck, Earthmover and Agricultural segments, with slower growth in the Passenger car and Light truck business. Sales of mining tires, which have been rebounding since late 2016, should also continue to enjoy strong growth.
In the second half, changes in the price mix and raw materials costs are expected to have a net positive impact, as announced. For the full year, the impact of higher raw materials costs is currently estimated at approximately €(800) million.
For the full year, Michelin confirms its targets of volume growth in line with global market trends, operating income from recurring activities exceeding the 2016 figure, excluding the currency effect currently estimated at between €(110) million and €(120) million, and structural free cash flow of more than €900 million.