Unit sales up 1.5% versus high prior-period comparatives, despite narrower markets:
- Above-market growth in Passenger car/Light truck tire sales,
- Truck tire and Specialty business volumes in line with the markets.
Unfavorable change in price mix, in an environment shaped by persistently low raw materials prices, reflecting:
- The impact of applying raw materials-based price indexation clauses,
- The added effect of price cuts introduced during 2014 and in early 2015.
2015 guidance confirmed, with additional details
- Lower raw materials prices are now expected to have a favorable impact of around €600 million over the year, the aim being to ensure that changes in price mix and raw materials prices have a net positive effect in 2015, with the second half offsetting the negative first-half effect,
- The currency effect is now expected to add more than €350 million to operating income for the year,
- Michelin confirms its objectives of growing unit sales in line with global trends in its markets, delivering an increase in operating income before non-recurring items beyond the currency effect, reporting a return on capital employed in excess of 11%, and generating structural free cash flow of approximately €700 million, with around €1.8 billion in capital expenditure.
Uses of cash
- Michelin will pursue its policy of value-creating investment, focusing on the growing Passenger car/Light truck tire businesses, as well as on innovation, Truck fleet operator services, the digital strategy, raw materials and semi-finished products and customer service,
- A €750 million share buyback program will be carried out over a period of 18 to 24 months.