Compagnie Générale des Etablissements Michelin has called on the assistance of an Investment Services Provider for the implementation of its Share Buyback Program as authorized by the Annual Shareholders Meeting of May 17, 2019.

 

Under the terms of the Agreement signed on August 29, 2019, the parties agree that the Investment Services Provider will sell a certain number of Compagnie Générale des Etablissements Michelin shares, representing a maximum of €70,000,000, to Compagnie Générale des Etablissements Michelin, which undertakes to buy them, between September 2, 2019 and November 21, 2019, at an average price to be determined objectively and independently by the market over the duration of the Agreement, less a guaranteed discount. The price may not exceed the maximum purchase price approved by the Annual Shareholders Meeting of May 17, 2019

 

All of the shares bought back under the Agreement will be cancelled.

In a more difficult than expected environment, segment operating income up 8% to €1,438 million

Rigorous price mix steering and competitiveness plan management

Contribution of acquisitions as expected

Guidance confirmed with a lowered market scenario

  • In weaker than expected markets, Michelin’s volumes declined by 0.9%, with in particular:
    • Group positions maintained in Passenger Car and Light Truck tires, in markets down 2% due to the fall-off in Original Equipment demand.
    • Stable volumes in Truck tires, in a market down 1%, benefiting notably from the deployment of Services and Solutions.
    • Further growth in the mining tire business, helping to offset the steep drop in agricultural tire volumes, due to declining markets.
  • The price-mix/raw materials effect added a net €79 million, thanks to sustained price discipline and continuous enhancement in the value of the mix.
  • €40 million in competitiveness gains, net of inflation.
  • €101 million contribution from recently acquired Fenner and Camso, as expected.
  • Acquisitions of Multistrada and Masternaut in line with the Group’s growth strategy.
In highly volatile markets, the Group demonstrated its ability to protect its margins by tight price steering, and by rigorously implementing its competitiveness plan. It also benefited from strong contribution from its recent acquisitions. In this persistently uncertain business environment, the Group pursues its competitiveness initiatives, its firm pricing policy in order to maintain its leadership in its tire businesses, and to continue the deployment of its growth strategy.
Florent Menegaux, Chief Executive Officer, Michelin

Guidance confirmed

In 2019, the Passenger Car and Light Truck tire markets are expected to decline by 1%, as the modest 1% growth in the Replacement segment fails to offset the steep 4.4% contraction in the Original Equipment segment. The Truck tire markets are expected to decline more quickly in the second half, to end the year down 2%. Mining and aircraft tire markets should continue to expand, offsetting the steep drop in agricultural tire markets and in Original Equipment demand in construction tire markets. The full-year impact of raw materials costs and customs duties is estimated at around a negative €100 million, as forecast.

In this scenario, Michelin confirms its guidance for 2019, with volume growth in line with global market trends; segment operating income exceeding the 2018 figure at constant exchange rates and before the estimated €150 million contribution from Fenner and Camso; and structural free cash flow of more than €1.45 billion.*

 

* Of which €150 million from the application of IFRS 16.

Following a successful public offer, Michelin now holds 99.64% of the share capital of leading Indonesian tire manufacturer PT Multistrada Arah Sarana TBK.

 

In line with its strategy, Michelin acquired 87.59% of PT Multistrada Arah Sarana TBK (“Multistrada”), a tire manufacturer based in Indonesia, on March 8, 2019. As Multistrada is a publicly listed company, and pursuant to Indonesian regulations, the Group launched a public offer for the remaining outstanding shares, at the same price per share as that offered for the 87.59% stake. The transaction enabled Michelin to acquire an additional 12.05% of the share capital, bringing its interest in Multistrada to 99.64%. In total, the Group paid USD 545 million for the acquisition.

The Annual Meeting of Michelin shareholders was held on May 17, 2019 in Clermont-Ferrand under the chairmanship of the Managing Chairman Jean-Dominique Senard.

 

Shareholders adopted all of the resolutions submitted for their approval. These concerned, in particular:

  • The payment of a dividend of €3.70 per share, payable in cash as from May 23, 2019.
  • The advisory vote on the components of Jean-Dominique Senard, Florent Menegaux and Yves Chapot’s compensation as Managers for 2018 and of Michel Rollier, Chairman of the Supervisory Board.
  • The authorization for the Managers to grant performance shares to employees.
  • The re-election of Barbara Dalibard and Aruna Jayanthi as members of the Supervisory Board for a further four-year term until the end of the financial year ending December 31, 2022.

 

Marc Henry, Chief Financial Officer, noted the increase in segment operating income, which amounted to €2.8 billion in 2018 amid a challenging environment. He also emphasized the structural free cash flow of more than €1.2 billion generated in 2018, and the Group’s improved ability to structurally generate cash flow over the past few years.

 

On the back of a 9.3% increase in sales in the first quarter at constant currency rates, the Group confirmed:

  • The annual targets for volume growth in line with global market trends.
  • Segment operating income exceeding the 2018 figure at constant exchange rates and before the additional contribution of Fenner and Camso[1].
  • Structural free cash flow of more than €1.45 billion.[2]

 

Florent Menegaux, Managing General Partner since the Annual Shareholders’ Meeting of May 18, 2018 and Managing Chairman following this Meeting, went on to outline his strategic vision for the Group. His deeply-held conviction is that the Group’s sustainable growth needs to be based on three pillars of equal importance: financial performance that secures the company’s long‑term future, investing in our employees and their development and respect for the planet and its inhabitants.

 

He also highlighted the Group’s main strengths which are the MICHELIN brand, its technological leadership and the commitment of its teams, before reviewing the Group’s four domains of growth:

  • The Tire activity, which is Michelin’s core business. Thanks to its capacity for innovation, the premium status enjoyed by the brand and its market access, the Group offers customers increasingly high‑performance tires that are tailored to their needs. The Group will also have to boost its competitiveness and the efficiency of its manufacturing base to sustainably create value.

 

  • The Services & Solutions business, which revolve around tire-related services, connected mobility and fleet management solutions to unlock efficiency gains for business customers in their mobility.

 

  • The Experiences business, consisting of selections in fine dining, hotel accommodation, wine, travel and itineraries that provide the Group’s individual customers with the opportunity to enjoy unique experiences and buy into the MICHELIN brand.

 

  • The High-Tech Materials business, which leverage the Group’s expertise to deliver tailored and
    one-step-ahead responses to profitable growth markets such as reinforced polymers, biomaterials, hydrogen mobility and 3D metal printing.

 

Florent Menegaux emphasized the need to step up the pace of the Company’s digital transformation, which is a key component of technological leadership and a way to forge close ties with customers.

 

With its clear road map, the Group is confident about its future thanks to the commitment of its teams to meet its targets and transform it into a company of the future, one that is proud of its expertise and values.

 

After paying tribute to the vital role played by Jean-Dominique Senard at his side from the time he joined the Michelin group in 2005, Michel Rollier, Chairman of the Supervisory Board, praised the importance and quality of his contribution as Managing Chairman to the Group’s development. The sharp increase in earnings notably enabled Michelin to carry out key investments in the areas of growth and strategic acquisitions, and implement a balanced dividend strategy. Florent Menegaux for his part warmly commended the fruitful working relationship with Jean-Dominique Senard over the past twelve years and also read out a large number of testimonials from the teams at Michelin.

In an emotional conclusion, Jean-Dominique Senard expressed his immense pride in having headed the Group for all these years and thanked the teams throughout the world for everything they had given him.

 

The presentations to shareholders, vote totals on the resolutions and a webcast of the entire Annual Meeting will be posted on May 17, 2019 on the corporate website (www.michelin.com/eng).

 

 

[1] The additional contribution of Camso and Fenner is estimated at €150 million for 2019

[2] Of which €150 million due to the application of IFRS 16

COMPAGNIE GÉNÉRALE DES ÉTABLISSEMENTS MICHELIN has called on the assistance of an Investment Services Provider for the implementation of its Share Buyback Program as authorized by the Annual Shareholders Meeting of May 18, 2018.

 

Under the terms of the Agreement signed on April 26, 2019, the parties agree that the Investment Services Provider will sell a certain number of COMPAGNIE GÉNÉRALE DES ÉTABLISSEMENTS MICHELIN shares, representing a maximum of €70,000,000, to COMPAGNIE GÉNÉRALE DES ÉTABLISSEMENTS MICHELIN, which undertakes to buy them, between April 29, 2019 and November 21, 2019, at an average price to be determined objectively and independently by the market over the duration of the Agreement, less a guaranteed discount. The price may not exceed the maximum purchase price approved by the Annual Shareholders Meeting of May 18, 2018 or, if the shareholders adopt a new share buyback resolution on May, 17 2019 Annual Shareholders Meeting.

 

All of the shares bought back under the Agreement will be cancelled.

First-quarter 2019: In difficult markets, Michelin announces sales of €5.8 billion, an increase of 9.3% at constant exchange rates, led by a robust price-mix and a strong contribution from newly acquired businesses. 2019 guidance confirmed.

 

  • A resilient performance by the Group in difficult markets, with volumes down by just 0.5% in the first quarter:
    • Passenger car and Light truck tires: market share maintained in an environment deeply impacted by declining Original Equipment demand and slightly declining replacement markets in Europe.
    • Truck tires: volume growth remained firm in slightly contracting markets, as expected, partly thanks to the development of new service offers and solutions.
    • Specialty tires: 2019 growth ambitions confirmed, despite a first quarter impacted by supply chain issues in mining tires and the focus on margins in Original Equipment for Off-Road businesses.
  • A robust 2.0% price-mix effect, still led by disciplined price management, supported by the powerful MICHELIN brand and the sustained product mix enrichment.
  • A strong contribution from the newly acquired businesses (Fenner and Camso) with their integration proceeding according to plan.
  • Acquisition of Multistrada, a major Indonesian tire manufacturer.
  • A favorable currency effect (2.0%).

 


In difficult markets, we once again demonstrated the resilience afforded by our Group’s exposure to different economic sectors, allowing us to confirm our 2019 guidance. First-quarter sales also reflect the major contribution of our recent acquisitions, Camso and Fenner.

Jean-Dominique Senard, Chief Executive Officer

2019 guidance confirmed

In 2019, the Passenger Car and Light Truck tire markets are expected to be mixed, with modest growth in the Replacement segment and a contraction in the Original Equipment segment. The Truck tire markets look set to contract slightly, while the Mining, Aircraft and Two-Wheel tire markets should remain dynamic. Based on April 2019 exchange rates, the currency effect is expected to have a relatively favorable impact on segment operating income. The impact of raw materials costs is currently estimated at around a negative €100 million, mainly affecting first-half results.

In this environment, Michelin confirms its 2019 targets of volume growth in line with global market trends, segment operating income exceeding the 2018 figure at constant exchange rates and before the estimated €150 million contribution from Camso and Fenner, and structural free cash flow of more than €1.45 billion*.

 

* Of which €150 million from the application of IFRS 16.

Michelin today announced that it has agreed to acquire NexTraq, a U.S. provider of commercial fleet telematics, in an all-cash transaction. Based in the Atlanta area, NexTraq is a subsidiary of FLEETCOR Technologies, Inc. (NYSE: FLT), a leading global provider of fuel cards and workforce payment products.

NexTraq provides solutions for driver safety, fuel management and enhancing fleet productivity.  Since its inception in 2000, NexTraq has become a leading provider of GPS fleet management solutions for fleets of small commercial vehicles (classes 3‒5) ranging from two to 50 vehicles.

“Telematics and fleet management services are a rapidly growing category worldwide and an important area of Michelin Group’s overall business plans,” said Ralph Dimenna, chief operating officer for Michelin Americas Truck Tires, the heavy truck unit of Michelin North America. “NexTraq represents a strategic acquisition that accelerates our growth in telematics with synergies that increase our scale, expand our geographic footprint and strengthen overall competitiveness in fleet management technology and services in the United States.”

“While we were able to grow NexTraq’s operating income nearly 400 percent since we acquired the business and to generate a strong return for our shareholders, our decision to divest NexTraq centered on the conclusion that there is insufficient synergy with our core payments business to stay invested in the space,” said Ron Clarke, chairman and chief executive officer of FLEETCOR. “We would especially like to thank the NexTraq management team for their hard work and success in building a market-leading telematics business.”

NexTraq has 117 employees, approximately 7,000 fleet customers and 116,000 individual subscribers. The unit will operate independently within Michelin North America.

“NexTraq has technology that, among other capabilities, monitors reckless driving and stops texting while driving. This capability is an excellent cultural fit with Michelin’s purpose and long-standing commitment to road safety,” Dimenna said.

The closing of the acquisition is subject to completion of certain customary conditions, including clearance under the Hart-Scott-Rodino Act.

Founded by the American Robert M. Parker in 1978, Robert Parker Wine Advocate is the international authority on wine. The power of the ratings given to fine wines are based on the noses and palates of the passionate wine critic and his team of experts, but also on a methodology that is unique in this field. Robert Parker’s affirmed independence with regard to wine producers and the wine trade is the key to producing unbiased, credible reviews. Following professionally conducted peer group tastings, each wine receives not only a descriptive tasting note, but a qualitative score ranging between 50 and 100 points. Thanks to this rigorous system, Robert Parker Wine Advocate has over many years acquired an international reputation that remains solidly anchored and trusted by wine collectors all over the world. Today, the wine publication produces nearly 40,000 wine reviews annually.

Robert Parker Wine Advocate, has offices in Singapore, Napa, CA and Monkton, MD. The RobertParker.com website includes online archives of every Issue of The Wine Advocate dating back to 1992, consisting of more than 300,000 original tasting notes. RPWA has recently developed a special events platform that enables the public to experience fine wine together with gourmet dining. Since 2016, Robert Parker Wine Advocate and Michelin have joined forces in Singapore and Hong Kong-Macau to offer unique dining experiences based on pairing fine cuisine and wine. The highly successful events offer consumers the chance to experience a selection of dishes prepared by the MICHELIN guide’s “starred" chefs and compatible wines recommended by Robert Parker Wine Advocate's experts.

“Working with the MICHELIN guide on events in Singapore and Hong Kong-Macau demonstrated to both of our companies how much richer and more impactful the experiences we create for our loyal readers can be when we come together,” commented Robert Parker Wine Advocate’s Editor-in-Chief and Master of Wine, Lisa Perrotti-Brown. “The similarities between our core values, integrity and rigor as critics within the worlds of wine and food were striking. It very soon became apparent that merging to create a sum that is even better than our parts would be an incredible means of offering fine food and wine lovers around the world even more.”

Founder Robert Parker has been thrilled over the union of the two most independent sources for fine cuisine and wine, and the infinite possibilities it creates: « Far too long critics have divided wine and food into two separate areas of expertise, but now the most realistic blend of impartial, independent, unbiased, intelligent food and wine opinion and wisdom have been married for the benefit of both wine and food consumers. »

With this equity investment, Michelin is strengthening and broadening its experience in the area of gourmet dining.

“Around the world, the credibility of Michelin and Robert Parker Wine Advocate is based on unique selection systems, organized around a proven methodology and undeniable independence,” says Alexandre Taisne, CEO Food and Travel Business de Michelin. “The partnership between Michelin, the global reference in gourmet dining with the MICHELIN guide, and Robert Parker Wine Advocate, the world leader in wine tasting and rating, will enable our customers who enjoy upscale restaurants and fine vintage wines to experience unique moments. Initially we are focusing on markets in Asia and North America before pursuing our deployment in Europe and others regions of the world. We look forward to leveraging our strong relationship to develop even broader offerings for our customers.”

Michelin has successfully placed today a three-tranche bond offering for a total amount of €2.5 billion, with 7-year, 12-year and 20-year maturities respectively.

The 7-year tranche amounts to 750 million euros. It will bear a coupon of 0.875% per annum and will be issued at 99.099% of the nominal value.

The 12-year tranche amounts to 1 billion euros. It will bear a coupon of 1.75% per annum and will be issued at 99.262% of the nominal value.

The 20-year tranche amounts to 750 million euros. It will bear a coupon of 2.50% per annum and will be issued at 99.363% of the nominal value.

The net proceeds from the issue of the bonds will be used for general corporate purposes.

The issue was largely oversubscribed, reflecting institutional investors’ confidence in Michelin’s credit quality, rated A- by Standard & Poor’s and A3 by Moody’s. The issue has been rated A- by Standard & Poor's and A3 by Moody's.

The issue supports the Group's strategy of actively managing its debt and strengthening its liquidity. It helps to diversify Michelin's sources of financing and enhance its financial flexibility by lengthening the average maturity of its debt.

The settlement of the offering is expected to take place on September 3, 2018, once the listing prospectus has received the visa of the French Financial Market Authority (Autorité des Marchés financiers) (AMF). The bonds will then be admitted to trading on Euronext Paris.

Citigroup acted as Global Coordinator and active Joint Bookrunner for the 7-year tranche and the 12-year tranche and as Structuring Advisor and active Joint Bookrunner for the 20-year tranche.

Credit Agricole CIB acted as Global Coordinator and active Joint Bookrunner for the 20-year tranche and as Structuring Advisor and active Joint Bookrunner the 7-year tranche and for the 12-year tranche.

Banco Santander, S.A., Commerzbank Aktiengesellschaft, MUFG Securities EMEA plc, Natixis and Société Générale acted as active Joint Bookrunners for the three-tranche bond offering.

This press release does not constitute or form part of any offer or solicitation to purchase or subscribe for or to sell the bonds and the offering of the bonds is not an offer to the public in any jurisdiction, including France.

Recevez nos informations par email