2017 results

2017: Another year of progress, in line with the 2020 objectives

Strong structural free cash flow, at €1.5 billion for the year

€2,742 million in operating income from recurring activities,

up €145 million at constant exchange rates

Net income higher year on year, at €1,693 million

2018: Sustained progress, on track to achieve the ambitions set for 2020

  • Strong structural free cash flow, at €1.5 billion for the year.
  • Operating income from recurring activities of €2,742 million, or 12.5% of net sales, up €145 million at constant exchange rates.
    • Determined Group strategy to offset the more than €700 million increase in raw materials costs, resulting in a neutral impact versus raw materials headwind on the non-indexed businesses.
    • Sustained market share gains in 18-inch and larger tires (MICHELIN brand sales up 19% in a segment up 13%), with a price positioning in line with the brand reputation.
    • Competitiveness plan gains exceeded inflation by €36 million, in line with objectives.
    • Highly competitive markets, especially in Europe, which are weighing on the dealership operations.
  • Specialty businesses: operating income from recurring activities up more than 30% and strong growth across every division.
  • Proposed dividend of €3.55 per share, representing a payout of 36% of consolidated net income excluding non-recurring items in line with the Group's commitment to shareholders, to be submitted to shareholders at the Annual Meeting on May 18, 2018.

In 2017, the Michelin Group performed in line with its 2020 roadmap. The strength of its brand and its technological leadership helped to drive 2.6% growth and deliver historically high net income of €1,693 million, demonstrating the Group’s agility in a more challenging business environment. Michelin is pursuing the acquisitions that will support its ambitions for growth and value creation. The introduction of the new organization in early 2018 will deepen employee engagement to enhance customer service, while enabling us to meet our competitiveness objectives. In this way, the Group is confidently moving into another year of progress in 2018 while pursuing its strategy in tires, services, experiences and materials.

Jean-Dominique Senard, Chief Executive Officer


In 2018, the Passenger car/Light truck and Truck tire markets are expected to experience modest growth over the year, while the mining tire, agricultural original equipment and earthmover original equipment markets should remain buoyant.

Given the market conditions, price management will make it possible to generate a net positive effect from changes in the price mix and raw materials costs, assuming an estimated €50‑€100 million increase in raw materials prices. Based on January 2018 exchange rates, the currency effect would reduce full-year operating income from recurring activities by around €300 million.

In this environment, Michelin's objectives for 2018 are volume growth in line with global market trends, operating income from recurring activities exceeding the 2017 figure at constant exchange rates, and structural free cash flow of more than €1.1 billion.

Year over year comparison

(In € millions) 2017 2016
Net Sales 21,960 20,907
Operating income from recurring activities 2,742 2,692
Operating margin on recurring activities 12.5% 12.9%
Passenger car/Light truck tires and related distribution 12.4% 13.1%
Truck tires and related distribution 8.1% 9.7%
Specialty businesses 20.6% 18.6%
Operating income/(Loss) from non-recurring activities -111 99
Operating income 2,631 2,791
Net Income 1,693 1,667
EBITDA from recurring activities 4,087 4,084
Capital expenditure 1,771 1,811
Net debt 716 944
Gearing 6% 9%
Employee benefit obligations 3,969 4,763
Free cash flow 1 +662 +1,024
Structural free Cash flow 2 +1,509 +961
ROCE 11.9% 12.1%
Employees on payroll 3 114,069 111,708
Earnings per share €9.39 €9.21
Dividend per share 4 €3.55 €3.25

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

2 Structural free cash flow: free cash flow before acquisitions, adjusted for i) the impact of changes in raw materials costs on trade payables, trade receivables and inventories; and ii) the payment of interest on the zero-coupon 2017 OCEANE convertible bonds at maturity

3 At period-end

4 2017 dividend to be submitted to shareholder approval at the Annual Meeting on May 18, 2018