2017 First-Half Results

Analyst / Investor conference webcast


Net income of €863 million, up 12%

Volumes up 4.1% (3.6% at constant scope of consolidation)

Operating income from recurring activities of €1.4 billion, stable and in line with the Group’s roadmap

2017 guidance confirmed


  • Volumes up 4.1% (3.6% at constant scope of consolidation) over the first half, dampened in Q2 by heavy buying in Q1 ahead of price increases
    • Growth in Passenger car and Light truck tire volumes (up 3%) and stable volumes in Truck tires,
    • Sustained rebound in mining tire demand and sharp upturn in OE Earthmover and Agricultural tire sales,
    • Acquisition of Brazilian two-wheel tiremaker Levorin in December 2016.
  • Price-mix effect positive, at 1.4% in the first half, accelerating to 2.8% in Q2, reflecting the initial impact of price increases and resulting, as announced, in a €186 million net negative price-mix/raw materials effect over the period.
  • Competitiveness plan gains offset inflation, as expected.
  • Free cash flow of a negative €305 million, in line with annual objectives
    • Stable, excluding acquisitions and capitalized interest on the OCEANE bonds,
    • Working capital management in response to the unfavorable impact of higher raw materials prices.

Michelin’s good performance, compared with a strong first-half 2016, is in line with our 2020 roadmap. The main drivers of the period include an increase in volumes, tight pricing policy management, further improvements in our competitiveness and the commitment of our employees to serving customers. Today, we are confirming our guidance for 2017, with a second half that will benefit from the improved margins resulting from the price increases.

Jean-Dominique Senard, Chief Executive Officer


Over the second half of the year, regardless of prevailing winter weather conditions, replacement markets are expected to recover from their decline after the surge in early buying. Demand for original equipment tires should remain on an upward trend in the Truck, Earthmover and Agricultural segments, with growth slowing in the Passenger car and Light truck segment. Sales of mining tires are expected to remain buoyant.

Given the full-year impact of higher raw materials costs, which are currently estimated at €800 million, Michelin will continue to agilely manage prices, holding unit margins firm in businesses not subject to indexation clauses and applying those clauses in businesses that are. As a result, changes in the price mix and raw materials costs are expected to have a net positive impact in the second half of the year.

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 at constant exchange rates, and structural free cash flow of more than €900 million.


Year over year comparison

In € millions First-Half 2017 First-Half 2016
Net Sales 11,059 10,292
Operating income from recurring activities 1,393 1,405
Operating margin on recurring activities 12.6% 13.7%
Passenger car and light truck tires and related distribution 12.8% 13.8%
Truck tires and related distribution 7.5% 9.9%
Speciality businesses 20.8% 20.6%
Operating income/(loss) from non-recurring activities 27 (51)
Operating income 1,420 1,354
Net Income 863 769
Earnings per share in EUR 1 4.76 4.24
Capital expenditure 585 623
Net debt 1,685 1,719
Gearing 16% 18%
Employee benefit obligations 4,570 5,273
Free cash flow 2 (305) +8
Employees on payroll 3 112,800 112,400

1 Attributable to shareholders of the Company

2 Free cash flow: net cash from operating activities less net cash from investing activities less net cash from other current financial assets, before distributions

3 At period-end