PRESS
RELEASE
Clermont-Ferrand, France - April 24, 2019
COMPAGNIE GÉNÉRALE
DES ÉTABLISSEMENTS MICHELIN
Financial information for the three months ended
March 31, 2019
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%).
Jean-Dominique
Senard, Chief Executive Officer, said: "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."
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.
First-quarter
sales growth:
Sales
(in € millions) |
First Quarter
2019
|
First Quarter
2018(1)
restated |
% change |
First Quarter
2018
reported |
SR1: Automotive & related distribution |
2,788 |
2,783 |
+0.2% |
2,772 |
SR2: Road transportation & related
distribution |
1,550 |
1,472 |
+5.3% |
1,368 |
SR3: Specialty businesses and related distribution |
1,471 |
963 |
52.8%(2) |
1,078 |
Group Total |
5,809 |
5,218 |
+11.3% |
5,218 |
-
Following the acquisition of Camso and the
merger of Off-Road businesses, certain minor adjustments have been
made to the composition of the segments.
-
Including the 48.2% positive effect of changes
in the scope of consolidation (first-time consolidation of Camso
and Fenner)
Market
Review
First Quarter
2019/2018
(in number of
tires) |
Europe
including Russia & CIS* |
Europe
excluding Russia & CIS* |
North America |
Central
America |
South America |
Asia
(excluding India) |
Africa/ India/ Middle East |
Total |
Original equipment
Replacement |
-5%
-2% |
-5%
-1% |
-5%**
+5% |
+1% |
-6%
-5% |
-9%
+1% |
-12%
+1% |
-8%
+1% |
* Including Turkey
** Including Central America
The global Original Equipment and
Replacement Passenger Car and Light Truck tire market contracted by
2% in the first quarter of 2019, due to the 8% fall in Original
Equipment demand.
-
Original Equipment
-
In Europe, Original Equipment demand contracted
by 5% in the first quarter, continuing a downtrend that began in
the fourth quarter of 2018. Most of the decline was in Western
Europe, where German carmakers experienced a fall in exports.
-
In North America (including Central America),
demand was down 5% in the first quarter.
-
In Asia (excluding India), total demand fell by
9% during the quarter, due to a 15% drop in the Chinese market and
a modest decline in the region's other markets.
-
In South America, demand contracted by 6% at
end-March, due to the crisis in Argentina and the uncertain
economic environment in Brazil.
-
In Africa/India/Middle East, the market narrowed
by 12% in the first quarter.
-
Replacement
-
In Europe, the market declined by 2% in the
first quarter, due mainly to the crisis in Turkey, which led to a
13% fall in demand, and to a 10% drop in the German market. The
Replacement markets in Italy and Spain expanded slightly, while the
French and Nordic markets contracted by 3% and 4%, respectively.
Concerns about the future consequences of Brexit drove a 7%
increase in the United Kingdom market.
-
In North America, demand grew by 5% overall. The
United States market expanded by 5%, reflecting a sharp increase in
the non pool market (with imports rising ahead of the possible
introduction of new import duties), while the market in Canada
declined by 2% due to lower demand for winter tires.
-
In Asia (excluding India), the market rose by a
modest 1% in the first quarter. After declining in the third and
fourth quarters of 2018, the Chinese market returned to growth (up
2%) at end-March. The dip in the Japanese market (down 2%) was
partly offset by vibrant demand in South Korea (up 6%) and
Indonesia (up 2%).
-
In Central America, the market expanded by a
slight 1% in the first quarter, led by Mexico.
-
In South America, demand contracted by 5% during
the period, heavily impacted by the crisis in Argentina (down 23%)
and lower demand in Brazil (down 2%).
-
In Africa/India/Middle East, the market grew by
1% in the first quarter, with strong growth in the Indian market
(up 7%) offsetting declines in the rest of the region.
First-quarter
2019/2018
(in number of
tires) |
Europe
including Russia & CIS* |
Europe
excluding Russia & CIS* |
North America |
Central
America |
South America |
Asia
(excluding India) |
Africa/ India/ Middle East |
Total |
Original equipment
Replacement |
-1%
-5% |
-1%
-3% |
+12%
-7% |
-32%
-7% |
+27%
-0% |
+0%
+0% |
+9%
-0% |
+4%
-2% |
* Including Turkey
The number of new Truck tires sold
worldwide was stable in the first quarter of 2019, as continued
growth in Original Equipment demand (up 4%) offset lower
Replacement demand (down 2%).
-
Original Equipment
-
In Europe, Original Equipment demand dipped 1%.
The effects of the crisis in Turkey (down 11%) and falling markets
in Spain (down 22%) and the United Kingdom (down 29%) were partly
offset by growth in the French and Italian markets (up 4% and 7%
respectively) and vibrant demand in Poland (up 22%).
-
In North America, the market expanded by a
strong 12% on the back of 19% growth in 2018.
-
In Asia (excluding India), the market was stable
in the first quarter. In China, after dropping 18% in the second
half of 2018 against the backdrop of the trade war with the United
States, Original Equipment demand stabilized in the first quarter
(down 1%). Demand in the other countries of the region grew
strongly, with increases of 5% in Japan, 10% in Indonesia and 6% in
South Korea.
-
In South America, the market continued to
recover, growing 27% in the first quarter on the back of strong
demand in Brazil.
-
The Africa/India/Middle East market rose by 9%,
reflecting the 12% gain in Indian demand in a buoyant economic
environment.
-
Replacement
-
In Europe, the market contracted by 5% as a
result of weaker demand in Poland (down 10%) and Eastern Europe
(down 10%) and the crisis in Turkey (down 23%). The region's other
markets expanded by a slight 1% overall.
-
Demand in North America retreated by 7%,
primarily due to a drop in the non pool market. After significantly
increasing their Chinese tire imports in late 2018, ahead of the
possible introduction of new import duties, dealers focused on
reducing their inventories in the first quarter.
-
In Asia (excluding India), the Replacement
markets were stable in the first quarter. After falling by 10% in
the second half of 2018, the Chinese market was also stable during
the period, while demand in the other countries expanded by 1%
overall.
-
In Central America, the market narrowed by 7%
due to a 10% fall in Mexican demand.
-
In South America, the market was stable in the
first quarter, with growth in Brazil (up 2%) and Colombia (up 11%)
offsetting the effects of the Argentine crisis on local demand
(down 26%).
-
In Africa/India/Middle East, demand for new
tires held firm.
-
Specialty tires
-
Mining tires: the mining
tire market continued to enjoy robust growth in demand from
international and regional mining companies.
-
Off-road tires: in the
agricultural segment, the Original Equipment markets continued to
grow rapidly in North America; however, growth in Europe was held
back by weaker Turkish demand. Replacement demand rose slightly in
Europe but declined in North America, due to unfavorable weather
conditions and declining farming incomes. In Infrastructure, demand
continued to trend upwards in both the Original Equipment and
Replacement segments, except in Turkey.
-
Two-wheel tires: growth
slowed in the European and North American motorcycle tire markets,
as seasonal fluctuations became less pronounced. Demand in the
Commuting segment remained very strong in the new markets.
-
Aircraft tires: led by the
sustained increase in passenger traffic, the commercial aircraft
tire market continued to expand, with more pronounced gains in the
radial segment.
(in € millions) |
First-quarter 2019 |
sales |
5,809 |
Q1 2019
vs. Q1 2018 |
|
|
Total
change |
+591 |
+11.3% |
Of
which Volumes * |
-25 |
-0.5% |
Price-mix |
+104 |
+2.0% |
Currency
effect |
+103 |
+2.0% |
Changes
in scope of consolidation |
+409 |
+7.8% |
* In tonnes
Sales for the first quarter of
2019 totaled €5,809 million, an increase of 11.3% from the
year-earlier period that was attributable to the following
factors:
- A 0.5% or €25 million decrease
due to lower volumes, especially in the Passenger Car and Light
Truck tires market (2% negative effect).
- A 2.0% increase from the
favorable price-mix effect. Prices added 1.3%, reflecting the
Group's disciplined price management, and the mix effect added
another 0.7% as the up-market shift in the product mix
continued.
- A 2% increase from the
favorable currency effect, primarily stemming from US dollar/euro
rates.
- A strong 7.8% increase from
changes in the scope of consolidation, with the contributions of
recently acquired companies (Fenner and Camso) partially offsetting
the deconsolidation of TCi.
Sales stood at €2,788 million for
the first quarter of 2019, largely unchanged from the year-earlier
period.
In narrower markets hit by an 8%
drop in Original Equipment demand, the Group succeeded in limiting
the fall in volumes to 1.6% and consolidated its market share. The
price-mix effect was favorable, reflecting disciplined price
management, supported by the powerful MICHELIN brand, and the
continued up-market shift in the product mix. The effect of changes
in the scope of consolidation was negative, due to the
deconsolidation of TCi.
Sales
for the first quarter amounted to €1,550 million, up 5.3% year on
year.
In slightly cooler markets, the
Group continued to grow its sales, reporting an increase of 0.9%
thanks in part to the development of new service offers and
solutions. The robust price-mix effect reflected the segment's
selective approach, designed to create value.
First-quarter sales totaled €1,471
million, a gain of 53% over the same period of 2018 that was
primarily attributable to the contributions of newly acquired
businesses (Camso and Fenner).
Excluding these acquisitions, the
segment's underlying sales growth was 4.6%, with a robust price-mix
effect along with stable volumes and favorable currency effect.
-
Mining tires: sales continued to grow, thanks to
sustained volumes growth and despite some logistics problems, an
assertive pricing policy and unfavorable exchange rates.
-
Off-Road tires: sales were stable, with the
impact of lower volumes - notably due to the Original Equipment
business's focus on margins - offset by favorable price-mix and
currency effects.
-
Two-Wheel tires: sales contracted slightly
although volumes increased, especially in the Commuting segment.
The Group pursued the integration of Levorin, which reported
significantly higher volumes in a very competitive market.
-
Aircraft tires: sales continued to grow, led by
higher volumes, an effective pricing strategy and favorable
exchange rates.
-
MICHELIN Guide 2019 - France
published, featuring 632 starred restaurants, including 75 new
establishments gaining either one, two or three stars and an
unprecedented number of new star studded restaurants led by women.
(January 21, 2019)
-
The two latest additions to the
MICHELIN Pilot Sport family presented at the Geneva International
Motor Show, the MICHELIN Pilot Sport 4 SUV and MICHELIN Pilot Sport
Cup2 R developed in partnership with the most demanding carmakers.
(March 5, 2019)
-
Acquisition of an 88% stake in
tire manufacturer PT Multistrada Arah Sarana TBK, a leading player
in the fast-growing Indonesian market (March 8, 2019) and launch of
a public tender offer (April 16, 2019) for all or some of
the remaining shares.
-
Michelin named "Tire
Manufacturer of the Year" during the 2019 Tire Technology Expo in
Germany, in recognition of several achievements, notably the
Group's environmental initiatives, product innovation and its work
into worn tire performance. (March 8, 2019)
-
Alliance between Faurecia and
Michelin to create a future world leader in hydrogen fuel cell
systems. (March 11, 2019)
-
The new MICHELIN Anakee
Adventure motorcycle tire introduced in one of the most dynamic,
competitive and innovative markets. (March 21, 2019)
-
Changes to the Michelin
Executive Committee, to create a tight structure focused on
strategic choices. (March 25, 2019)
-
Investor Day held in Almeria
and €500 million share buyback program announced, to be implemented
between 2019 and 2023. (April 4, 2019).
A full
description of 2019 highlights
may be found on the Michelin website:
https://www.michelin.com/en
PRESENTATION AND
CONFERENCE CALL
The quarterly information for the
period ended March 31, 2019 will be reviewed during a conference
call in English later today (Wednesday, April 24, 2019) at
6:30 pm CET. Practical information concerning the call may be
found at http://www.michelin.com/eng.
You may follow the presentation
with slideshow synchronization at http://www.michelin.com/eng
If you have any questions, please
phone one of the following numbers:
· In
France
+33 (0)1 72 72 74 03 + pin code 33159787#
· In the
United Kingdom
+44 (0)207 194 3759 + pin code 33159787#
· In North
America
+1 (646) 722 49 16 + pin code 33159787#
· From
anywhere
else
+44 (0)207 194 3759 + pin code 33159787#
INVESTOR
CALENDAR
Thursday, July 25, 2019 after close
of trading
Thursday, October 24, 2019 after
close of trading
Investor Relations
Edouard de Peufeilhoux
+33 (0) 4 73 32 74 47
+33 (0) 6 89 71 93 73 (mobile)
edouard.de-peufeilhoux@michelin.com
Humbert de Feydeau
+33 (0) 4 73 32 68 39
+33 (0) 6 82 22 39 78 (mobile)
humbert.de-feydeau@michelin.com
|
Media Relations
Corinne Meutey
+33 (0) 1 78 76 45 27
+33 (0) 6 08 00 13 85 (mobile)
corinne.meutey@michelin.com
Individual Shareholders
Isabelle Maizaud-Aucouturier
+33 (0) 4 73 98 59 27
isabelle.maizaud-aucouturier@michelin.com
Clémence Rodriguez
+33 (0) 4 73 98 59 25
clemence.daturi-rodriguez@michelin.com
|
DISCLAIMER
This press release is not an offer to purchase or a
solicitation to recommend the purchase of Michelin shares. To
obtain more detailed information on Michelin, please consult the
documents filed in France with Autorité des marchés financiers,
which are also available from the Michelin website
https://www.michelin.com/en.
This press release may contain a
number of forward-looking statements. Although the Company believes
that these statements are based on reasonable assumptions as at the
time of publishing this document, they are by nature subject to
risks and contingencies liable to translate into a difference
between actual data and the forecasts made or inferred by these
statements.
20190424_PR_Michelin_Q1 Sales
2019
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Michelin via Globenewswire
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