Michelin : Michelin : Financial Information for the Year Ended December 31, 2012

 Michelin : Michelin : Financial Information for the Year Ended December 31,

                                                                 PRESS RELEASE
                                          Clermont-Ferrand - February 12, 2013

          Financial Information for the Year Ended December 31, 2012

                  Strong 2012 earnings in lackluster markets

                    More than €1 billion in free cash flow

    €2,423 million in operating income before non-recurring items, up 25%

             Operating margin up 2 points, to 11.3% of net sales

  oOperating income before non-recurring items up 25% to €2,423 million,

       oAn efficient pricing policy.
       oA global footprint.
       oStructurally high margins in specialty tires.
       oRestored profitability in the Truck tire business, despite a sharp
         market contraction.

  oVolumes down 6.4%, with demand remaining flat in the second half.
  oMore than €1 billion in free cash flow, demonstrating:

       oThe Group's ability to structurally generate cash
       oThe effective integration of value creation into every unit's

  o12.8% return on capital employed.
  oProposed dividend of €2.40 per share, subject to approval at the Annual
    Shareholders Meeting of May 17, 2013.

  oOutlook for 2013

Given its global footprint, Michelin expects  to hold volumes steady in  2013, 
in a  market  environment  that  is uncertain  in  mature  markets  but  still 
expanding in the new ones.

Raw materials prices are expected to remain stable in the first half, adding a
further €350-400  million to  operating income.  This will  be partly  offset, 
however, by the  impact of indexation  clauses on the  original equipment  and 
earthmover businesses.

The capital  expenditure  program  totaling around  €2  billion  will  support 
Michelin's growth ambitions by bringing  new production capacity on stream  in 
the growth regions, whose  start-up will weigh on  costs. The program is  also 
designed to improve competitiveness in mature markets and drive  technological 
Confident in  its  competitive  strengths  and thanks  to  the  launch  of  an 
ambitious project to  improve its  management systems,  Michelin confirms  its 
2015 objectives and for 2013 expects to report stable operating income  before 
non-recurring items at  constant exchange  rates, a  more than  10% return  on 
capital employed and positive free cash flow.

                      (in € millions)                         2012    2011
Net sales                                                    21,474  20,719
Operating income before non-recurring items                   2,423   1,945
Operating margin before non-recurring items                   11.3%   9.4%
Passenger Car and Light Truck Tires and Related Distribution  9.3%    9.4%
                        Truck Tires and Related Distribution  6.6%    3.5%
                                        Specialty Businesses  26.0%   21.5%
Operating income after non-recurring items                    2,469   1,945
Net income                                                    1,571   1,462
Capital expenditure                                           1,996   1,711
Net debt                                                      1,053   1,814
Gearing                                                        12%     22%
Free cash flow^1                                              1,075   (19)
Return on capital employed                                    12.8%   10.9%
Employees on payroll^2                                       113,400 115,000

^ ^1 Cash flow from operating activities less cash flow used in
investing activities
^2 At period-end

Market Review

  oPassenger Car and Light Truck tires

    2012     Europe*  North     Asia     South  Africa-India-Middle East Total
  % change           America (excluding America
year-on-year                   India)
^(in number
 of tires)
  Original    -5%    +16%    +11%     +0%             -3%           +6%
              -10%   -2%      +2%     +2%             -3%           -4%

Fourth-Quarter Europe*  North     Asia     South   Africa-India-Middle   Total
     2012              America (excluding America          East
   % change                      India)
^(in number of
   Original     -8%    + 10%     +5%     +12%          - 12%          +2%
                -9%    - 1%     +4%     +4%            -5%          -2%

*Including Russia and Turkey

§ Original Equipment

  oIn Europe, tire demand contracted by 5% in 2012. The collapse in new car
    registrations, which fell to a 17-year low in the European Union, masked a
    contrast between the decline in broadline carmaker sales and the firmer
    resistance of specialty and export-driven brands. Markets in Eastern
    Europe continued to expand, increasing by 11% over the year.
  oThe North American tire market grew by 16% in 2012, returning to 2007
    levels thanks to strong new car sales as buyers replaced aging models.
  oIn Asia (excluding India), demand rose by 11% overall. While still
    buoyant, the Chinese market cooled somewhat, ending the year up 6%. Demand
    in Japan (up 11%) and Southeast Asia (up 38%) rebounded off of a 2011
    impacted by natural disasters.
  oThe South American market was stable overall, with a brisk 7% gain in the
    second half offsetting the 7% decline in the first. Demand in Brazil rose
    by 3%, lifted by the government measures introduced in the autumn.

§ Replacement

o In  Europe,  replacement demand  dropped  10% year-on-year  in  a  highly 
uncertain economic environment. Western Europe  saw a record decline,  steeper 
even than in  2008, that was  accentuated by dealer  inventory drawdowns.  The 
winter tire market  dropped 16%,  as expected, and  the high-performance  tire 
segment (17" and bigger)  slowed to a lesser  extent than the European  market 
average, reflecting the sustained improvement in the mix.

o Demand in  North America  retreated 2% as  consumer confidence  weakened, 
despite the  relative stability  of average  miles traveled  and fuel  prices. 
After an upturn in 2010, the market has returned to 2009 levels, with  volumes 
sold noticeably lower than  in 2007. Impacted by  the significant increase  in 
Chinese imports after customs  duties were lifted, the  US market declined  by 

o In Asia (excluding India), markets  ended the year up 2% overall.  Demand 
rose 4% in China despite slowing economic growth, but eased back 1% in  Japan, 
where winter  tire sales  were stable  and  volumes moved  back in  line  with 
recurring trends after the run-up in replacement buying in 2011 following  the 
natural disasters. In  South Korea,  the market  fell 6%  in an  export-driven 
economy hit hard by global economic uncertainty.

o The  South American  market gained  a slight  2% overall,  but with  wide 
variations among countries. Demand expanded by  3% in Brazil as sell-out  held 
firm at 2011 levels.

q Truck tires

    2012      Europe**  North     Asia     South   Africa-India-Middle   Total
  % change             America (excluding America          East
year-on-year                     India)
 ^(in number
  of tires)
  Original      -4%    +2%      -9%     -30%          +31%          -5%
               -14%    -2%      -6%     +3%            +8%          -4%

Fourth-Quarter Europe**  North     Asia     South   Africa-India-Middle  Total
     2012               America (excluding America         East
   % change                       India)
^(in number of
   Original      - 7%    -15%    - 10%     - 27%          + 31%         - 9%
                 + 2%    + 2%      + 2%     +6%           + 6%          +3%

*Radial market only
**Including Russia and Turkey

§ Original Equipment

  oDemand in Europe declined by 4%, to below 2007 and 2008 levels. Although
    the fall-off was a relatively limited 2% in the first half, it gained
    momentum in the second, to 5%, under the impact of the worsening economic
    situation in the region.
  oAfter surging 17% in the first half, the North American market slowed
    precipitously in the second half, to end the year with just a 2% gain.
    Economic uncertainty caused by tax issues in the United States weighed on
    new truck orders during the year.
  oIn Asia (excluding India), demand retreated by 9% overall, with a fairly
    steep 15% drop in China as growth in the economy (particularly exports)
    cooled over the year. The Southeast Asian market, which continues to shift
    to radials, was highly active, up 42%, while the Japanese market rebounded
    12%. In both cases, growth was lifted by prior-year comparatives shaped
    by, respectively, flooding and the tsunami.
  oThe South American market plunged 30% after Brazil introduced Euro V
    emissions standards during the year. However, the Brazilian government's
    introduction of more favorable financing terms helped the market to turn
    around, with an upturn in the final quarter.

§ Replacement

o Demand in Europe dropped 14%, with a 25% plunge in the first half due  to 
inventory drawdowns and  high bases  of comparison.  In the  second half,  the 
market continued to shrink on weak transportation activity and the  lackluster 
economic outlook. In Eastern Europe, the market declined by 3%, primarily  due 
to dealer destocking.

o The North American market ended  the year down just 2%, reflecting  fleet 
manager caution in the face  of economic uncertainty, despite relative  robust 
freight demand. The contraction may also  be explained by the sharp growth  in 
original equipment sales and the availability of retreadable casings.

o In Asia  (excluding India),  markets declined  by 6%  overall during  the 
year. The Chinese market ended 2012  down by 7%, reflecting the slower  growth 
in the economy and in exports. The Japanese  market was down 6% off of a  high 
prior-year comparative, which was  lifted by last  year's price increases  and 
inventory rebuilding after the tsunami. Demand in South Korea also declined as
the global economic slowdown weighed on exports and transportation demand.

o The  South American  market gained  3% during  the year.  In Brazil,  the 
stricter application  of  customs  inspections reduced  imports  and  dampened 
demand in general,  although the  first signs of  a recovery  appeared in  the 
final quarter.

q Specialty Tires

§ Earthmover  tires:  The mining  sector  is  continuing to  expand,  led  by 
sustained demand for ore, oil and gas, and the market for large tires  remains 
buoyant. After  rising  in  the  first half,  the  original  equipment  market 
contracted in the final quarter, with a particularly steep fall-off in Europe.
Demand for tires used in infrastructure  and quarries is shrinking in  Western 
Europe and, after increasing in the first half, turned downwards in the  final 
quarter in North America.

§ Agricultural tires: After  climbing in the  first half, worldwide  original 
equipment demand declined in the  fourth quarter, particularly in Europe.  The 
replacement market dropped  significantly in mature  markets during the  year, 
dragged down by the prevailing economic uncertainty.

§ Two-Wheel tires: Impacted by the lackluster economy, the motorized segments
declined in mature geographies, except North America, but continued to  expand 
in emerging markets.

§ Aviation tires:  Passenger load factors  are continuing to  improve in  the 
commercial aviation segment, on both domestic and intercontinental routes, but
the cargo market was down for the year.

2012 Net Sales and Results

  oNet sales

Consolidated net sales amounted  to €21,474 million for  the year, up 3.6%  at 
current exchange rates compared with €20,719 million in 2011.

Of the total  price mix  effect, which added  6.2% to  growth, €1,052  million 
corresponded to the net impact of  the price increases introduced in 2011  and 
the contractual price reductions due  to the raw materials indexation  clauses 
applicable on nearly 30% of consolidated  sales volumes. It also included  the 
€157 million impact  of a further  improvement in  the sales mix,  led by  the 
premium strategy and the expanding specialty businesses.

Weak demand, particularly in European  markets, dragged sales volumes down  by 
6.4% over the year.

The positive 4.2% currency  effect primarily resulted from  gains in the  euro 
against the US dollar.


Consolidated operating income  before non-recurring items  amounted to  €2,423 
million or 11.3% of net sales, compared with €1,945 million and 9.4% in 2011.

This €478-million improvement mainly reflected the positive price mix  (€1,209 
million, of  which  €1,052  million from  price  increases),  which  favorably 
combined with  the  limited negative  impact  from raw  materials  costs  (€76 
million). It also reflected the  €504-million negative impact of the  decline 
in volumes, the €176  million in outlays to  drive growth (start-up and  other 
costs in the new markets), the  €311 million increase in production costs  and 
other  expenses  and  the  €3-million  positive  impact  on  productivity   of 
production slowdowns. The currency effect was a positive €268 million. Lastly,
the improvement also included the  initial impact of the competitiveness  plan 
launched in early 2012.

In all, net income for the year came to €1,571 million.

  oNet financial position

Free cash flow ended the  year at €1,075 million,  as available cash flow  and 
the sale of a property complex in Paris helped to offset the faster deployment
of growth investments.

At December 31, 2012, gearing stood at  12% while net debt amounted to  €1,053 

q Segment Information

      € millions         Net sales     Operating income     Operating margin
                                     before non-recurring before non-recurring
                                            items                items
                        2012   2011     2012      2011       2012      2011
Passenger   Car    and 11,098 10,780   1,033      1,018      9.3%      9.4%
Light Truck Tires  and 
Related Distribution
Truck    Tires     and 6,736  6,718     444        233       6.6%      3.5%
Related Distribution
Specialty Businesses   3,640  3,221     946        694      26.0%      21.5%
Group                  21,474 20,719   2,423      1,945     11.3%      9.4%

§ Passenger Car and Light Truck Tires and Related Distribution

In all, net  sales in  the Passenger  car and  Light truck  tires and  related 
distribution segment stood at €11,098 million, up 2.9% on 2011.

The sustained firm pricing policy and ongoing improvement in the product  mix, 
led by the  MICHELIN brand's premium  positioning, helped to  offset the  5.5% 
decline in volumes. As a  result, operating income before non-recurring  items 
stood at €1,033 million or 9.3% of net sales, compared with €1,018 million and
9.4% in 2011.

§ Truck Tires and Related Distribution

Net sales in  the Truck  tires and  related distribution  segment amounted  to 
€6,736 million, unchanged from 2011.

In a depressed market, volumes fell 10.8% as the Group focused on turning  the 
Truck tire business  around and  restoring its margins.  This strategy,  along 
with the wide array of market launches and the decline in raw materials costs,
drove a sharp increase in operating income before non-recurring items, to €444
million or 6.6% of net sales from €233 million and 3.5% in 2011.

§ Specialty Businesses

Net sales by the Specialty businesses rose by 13.0% to €3,640 million in 2012.

At €946 million or 26.0% of  net sales, operating income before  non-recurring 
items confirmed  these  businesses'  structurally  high  profitability.  In  a 
particularly favorable currency  environment, they benefitted  from the  still 
positive impact  of  contractual indexation  clauses  based on  raw  materials 
prices, as well as from the 1.7% increase in volumes.

Compagnie Générale des Etablissements Michelin

Compagnie Générale  des  Etablissements Michelin  reported  a profit  of  €465 
million in 2012.

The financial  statements  were presented  to  the Supervisory  Board  at  its 
meeting on February 7, 2013. The audit was completed and the auditors'  report 
was issued on the same date.

The Managing Partner will call an  Annual Shareholders Meeting on Friday,  May 
17 at 9:00 am in Clermont-Ferrand.

Shareholders will be asked  to approve the  payment of a  dividend of €2.40  a 
share, with a dividend reinvestment option.

2012 Highlights

  oStandard & Poor's upgrades Michelin's credit rating to BBB+ (March 23)
  oGlobal leadership in Earthmover tires strengthened with the construction
    of a new plant and the extension of another in North America (April 10)
  oMoody's upgrades Michelin's credit rating to Baa1 (April 24)
  oFirst Passenger Car and Light truck tire produced at Pau-Brasil plant
    (February 9)
  oIn addition to sticker information, the MICHELIN Total Performance
    strategy is showcasing all of the benefits of tire technology with the
    slogan: "Michelin sells performance, not rubber". (June 29)
  oNew MICHELIN Restaurants website launched in France (May 25)
  oThe Group celebrates 10 years of Michelin Performance and Responsibility
    (June 18)
  oMichelin successfully places €400 million seven-year notes issue (June 19)
  oMichel Rollier hands over the reins to Jean-Dominique Senard at the Annual
    Shareholders Meeting on May 11
  o2015 guidance updated (September 19)
  oFirst Truck tire produced at the new Shenyang 2 plant in China (September
  oNew Truck tire lineup presented at the IAA Show in Hanover (September 20)
  oNew Earthmover product lineup for 2012 unveiled at the MINExpo Trade Show
    in Las Vegas (September 24)
  oFIA World Rally Championship: a 20^th Drivers' Title and a 22^nd
    Manufacturers Crown for Michelin (October 9)
  oInvestor Day organized at the Technology Center in Ladoux, France
    (November 5)

                    A full description of 2012 highlights
  may be found on the Michelin website: www.michelin.com/corporate/finance

Presentation and Conference call
Full-year 2012 results will be reviewed  with analysts and investors during  a 
conference call today, Tuesday February 12, at 11:00 am CET (10:00 am UT). The
conference will be in  English, with simultaneous  interpreting in French.  If 
you wish to  participate, please  dial-in one  of the  following numbers  from 
10:50 am CET:

  oIn France  01 70 77 09 19 (Français)
  oIn France 01 70 77 09 39 (English)
  oIn the UK  0203 367 9462 (English)
  oIn the United States  +1 866 907 5924 (English)
  oFrom anywhere else  +44 203 367 9462 (English)

Please  refer  to   the  website   www.michelin.com/corporate  for   practical 
information concerning the conference call.

Investor Calendar

  oQuarterly information for the three months ended March 31, 2013:

                Monday, April 22, 2013 after close of trading

  oFirst-half 2013 net sales and results:

               Thursday, July 25, 2013 before start of trading

Investor Relations                    Media Relations

Valérie Magloire                      Corinne Meutey
+33 (0) 1 78 76 45 37                  +33 (0) 1 78 76 45 27
+33 (0) 6 76 21 88 12 (cell)           +33 (0) 6 08 00 13 85 (cell)
valerie.magloire@fr.michelin.com      corinne.meutey@fr.michelin.com

                                      Individual shareholders
Alban de Saint Martin                 Jacques Engasser
+33 (0) 4 73 32 18 02                  +33 (0) 4 73 98 59 08
+33 (0) 6 07 15 39 71 (cell)          jacques.engasser@fr.michelin.com


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  www.michelin.com 
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.

2012 FY ENG


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Source: Michelin via Thomson Reuters ONE
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