2018 First-Half Results

Analyst / Investor conference webcast

The conference call was held on July 23, 2018 at 6:30pm CET and is broadcast on the website.


€917 million in net income, up 6%

€1,327 million in operating income from recurring activities, up €152 million or 11% at
constant exchange rates

2018 guidance confirmed


  • Volumes up 2.6% in the second quarter and, as expected, stable over the first half due to unfavorable prior-year comparatives.
    • Sustained strong growth in the Specialty businesses, led by the buoyant mining, agricultural and construction tire markets
    • Accelerating growth in 18’ and larger Passenger car tire sales in the second quarter (up 14%)
    • Passenger car and Truck tire OE sales growth in line with the markets
    • Focus on margins in the Passenger car and Truck replacement segments, in a persistently competitive market environment
  • €264 million positive impact from the net price-mix and raw materials costs effect, reflecting disciplined price management, market share gains in 18’ and larger Passenger car tires and a very good performance by the Specialty businesses.
  • Unfavorable currency effect, totaling a negative €218 million.
  • Faster external growth, in line with Group strategy, in the Specialty businesses (Fenner, conveyor belts activity and Camso acquisition project), high-tech materials (Fenner) and market access (TBC joint venture with Sumitomo Corp.).
  • Free cash flow before acquisitions in line with annual objectives, at a negative €79 million.
  • Credit rating agencies have confirmed that the Group’s financial position remains robust after taking planned 2018 acquisitions into account.

Thanks to the commitment of all its teams, Michelin not only rolled out a new, closer to the customer organization during the first half of 2018, but also delivered a noteworthy €152 million improvement in operating income at constant exchange rates. Deployment of the Group’s strategy will pick up speed in 2018, with the acquisition of Fenner, the creation of a leading North American wholesaler in partnership with Sumitomo Corp., and the projected acquisition of Camso, which will create the world leader in off-the-road mobility.

Jean-Dominique Senard, Chief Executive Officer


Over the second half of the year, replacement markets are expected to remain on an upward trend, regardless of prevailing winter weather conditions. Demand for original equipment tires should remain strong in the Earthmover segment, but lose momentum in the Passenger car and Truck segments. Sales of mining tires should also continue to enjoy strong growth.
For the full year, Michelin confirms its targets of 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 €1,100 million.

Year over year comparison

In € millions First-Half 2018 First-Half 2017
Net Sales 10,603 11,059
Operating income from recurring activities 1,327 1,393
Operating margin on recurring activities 12.5% 12.6%
Passenger car and light truck tires and related distribution 11.5% 12.7%
Truck tires and related distribution 7% 7.3%
Speciality businesses 22% 19.6%
Operating income/(loss) from non-recurring activities 23 27
Operating income 1,350 1,420
Net Income 917 863
Earnings per share in EUR 1 5.12 4.76
Capital expenditure 588 585
Net debt 3,753 1,685
Gearing 33% 16%
Employee benefit obligations 3,904 4,570
Free cash flow 2 -2,049 -305
Employees on payroll 3 113,600 112,800

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