Michelin : Michelin announces €4.9 billion in first-quarter 2013 sales, in
line with its full-year outlook
Clermont-Ferrand - April 22, 2013
COMPAGNIE GÉNÉRALE DES ETABLISSEMENTS MICHELIN
Financial Information for the Three Months Ended March 31, 2013
Michelin announces €4.9 billion in first-quarter 2013 sales, in line with its
oMarket environment was weak in Europe in Passenger car & Light truck
tires, disappointing in North America and expanding in the new markets.
oVolume performance reflected:
oThe two fewer business days.
oThe difference in market trends between the mature and the growth
oThe decline in original equipment demand, notably in the Earthmover
oA negative price-mix, due to:
oThe impact of indexation clauses as raw materials costs decline.
oThe carefully managed price repositioning, targeted on certain tire
Net sales First Quarter 2013 First Quarter % Change
(in € millions) 2012
Passenger Car and Light Truck Tires 2,582 2,760 -6.5%
and Related Distribution
Truck Tires and Related Distribution 1,477 1,604 -7.9%
Specialty Businesses^1 818 940 -13.0%
Group total 4,877 5,304 -8.1%
^1Earthmover, Agricultural, Two-Wheel and Aircraft tires; Michelin Travel
Partner and Michelin Lifestyle Ltd.
oOutlook for 2013
In a market environment that is weak in mature regions and expanding in the
new markets, Michelin confirms its objective of stable volumes in 2013, taking
advantage of its global footprint.
The decline in raw materials prices should have around a €550 million
favorable impact on full-year operating income. If so, this would amply exceed
the around €300 million price-mix impact.
As indicated in February, the capital expenditure program, totaling some €2
billion, will support Michelin's ambitious growth objectives by adding new
production capacity in the new markets. It is also designed to improve
competitiveness in mature markets and drive technological innovation.
In this environment, Michelin confirms its objectives for 2013, when it
expects to report stable operating income before non-recurring items, a more
than 10% return on capital employed and positive free cash flow.
oCar & Light Truck tires
First-Quarter Europe* North Asia South Africa/India/ Total
2013 America (excluding America Middle East
% change India)
^(in number of
Original -11% + 1% +5% +7% - 8% -1%
-9% - 2% +7% +6% +4% -2%
*Including Russia and Turkey
§ Original Equipment
oIn Europe, OE tire demand contracted by 11%, with a contrast between the
decline at broadline carmakers who are drawing down inventory and a better
performance by the specialty and export-driven brands. Markets in Eastern
Europe continued to expand, by 6% over the period.
oThe North American market grew by 1%, in line with new car production.
oIn Asia (excluding India), demand rose by 5% overall, with strong gains in
China (up 15%) and Southeast Asia (up 29%). On the other hand, the
Japanese market dropped 18% following the late 2012 termination of
government carbuying incentives.
oIn South America, the strong growth trend observed since autumn 2012
remained in effect, with demand rising by 7% over the period.
oIn Europe, in a persistently lackluster economic environment, replacement
markets fell back 9% overall. A prolonged winter, which delayed the
changeover to summer tires from March to April, had a particularly adverse
impact on late first-quarter sales, without however prompting a
significant drawdown in still high dealer winter tire inventories. In
March, for example, the market retreated 23% in Germany and 11% in the
oDemand in North America eased back for the third year in a row, by a
slight 2%. Dealers are carefully managing their inventory in an
environment shaped by an uncertain tax outlook and declining raw materials
prices. The US market has seen a steep increase in Asian imports since
customs duties were lifted last autumn.
oIn Asia (excluding India), demand rose by 7% overall, with very fast
momentum in China (up 11%) and the rest of the region moving back in line
with long-term, export-driven growth trends (Japan up 3%, South Korea up
9% and ASEAN up 4%).
oThe South American market increased by 6%, led by Brazil and Colombia in a
more favorable economic environment.
First-Quarter Europe** North Asia South Africa/India/ Total
2013 America (excluding America Middle East
% change India)
^(in number of
Original - 3% -12% + 5% + 23% - 18% - 1%
+ 5% - 1% - 5% +5% + 8% +0%
*Radial market only
**Including Russia and Turkey
§ Original Equipment
oThe market remained weak in Europe, retreating by 3% under the combined
impact of declining truck registrations in the Western Europe and more
buoyant demand in Eastern Europe.
oThe North American market pursued its sharp slowdown, losing 12% over the
period as economic and tax uncertainties weighed on new truck orders,
particularly in the Class 8 segment.
oIn Asia (excluding India), demand rose by 5%, with an 8% gain in China, a
14% decline in Japan and sustained strong growth in Southeast Asia (up
oThe South American OE market rebounded by a brisk 23% compared with
first-quarter 2012, when demand was dampened by the introduction of Euro V
emissions standards in Brazil.
o In Europe, replacement demand rose by 5% overall. In Western Europe,
where transportation activity is still weak, it stabilized at a low level (up
1%), but it continued to surge ahead, by 24%, in Eastern Europe.
o The North American market edged back just 1%, primarily due to demand in
the United States, where the freight business nevertheless continues to trend
slightly upwards, with fewer casings available for retreading.
o Markets in Asia (excluding India) contracted by 5% overall. Demand in
China slowed during the New Year period, then improved in March to end the
quarter down 6%. Markets retreated 2% in Japan, as dealers tightened
inventory, and 4% in South Korea, impacted by the slowdown in transportation
o In a more favorable economy, the South American market increased by 5%
overall, with demand lifted by rising sell-out and the easing of customs
barriers across the region.
q Specialty Tires
§ Earthmover tires: The mining sector is continuing to expand, with sustained
demand for large radial tires. The OE market in Europe and North America is
falling sharply, while demand for tires used in infrastructure and quarries is
shrinking in mature markets, dragged down by economic uncertainty and dealer
§ Agricultural tires: The global original equipment market eased back
somewhat in the first quarter, but still remains robust. Demand for technical
tires is rising, but replacement demand is down slightly in mature markets.
§ Two-Wheel tires: Motorcycle markets are down in the mature regions for the
second year in a row. In Europe, economic uncertainties and weather conditions
are weighing on dealer buying decisions.
§ Aircraft tires: Civil aviation markets rose slightly over the period, while
defense markets are being dampened by government budget restrictions.
Michelin Net Sales
(in € millions) First Quarter 2013
Net sales 4,877
YoY Change in €m and %
Total change - 427 - 8.1%
Of which volumes - 227 - 4.3%
Price-Mix - 138 - 2.7%
Currency effect - 61 - 1.2%
Net sales totaled €4,877 million in the first three months of 2013, down 8.1%
over the year-earlier period due to the combined impact of the following
oThe 4.3% contraction in volumes, at a time of weakening demand in mature
oThe shift in the price-mix effect to a negative 2.7%, corresponding to:
oThe €133-million price effect, reflecting the impact of contractual
indexation clauses and the targeted price repositionings in Europe
and, to a lesser extent, in North America. This latter process was
facilitated by the more favorable trend in raw materials costs over
oThe mix effect was nearly unchanged, at a negative €5 million,
despite a favorable segment mix.
oThe negative 1.2% currency effect, primarily resulting from the
appreciation of the euro. This particularly affected the Truck tire
segment and, to a lesser extent, the Specialty businesses.
oNet sales by reporting segment
§ Passenger Car and Light Truck Tires and Related Distribution
Net sales stood at €2,582 million for the first quarter of 2013, down 6.5%
from the year-earlier period.
oSales volumes retreated by 2.8% as gains in the new markets failed to
fully offset the fall-off in mature markets.
oThe price-mix effect reflected the carefully managed price repositionings
and the favorable mix effect, led by the 17" and larger segment.
§ Truck Tires and Related Distribution
Net sales amounted to €1,477 million in first-quarter 2013, compared with
€1,604 million a year earlier.
oSales volumes, which were down 5.6% year-on-year but showed a slight
upturn quarter-on-quarter, reflected the focus on turning around the Truck
tire business and restoring it to profit.
oNet sales were also impacted by weak integrated dealer sell-out due to the
sluggish economic environment, particularly in Europe.
oTo a lesser extent, they were dampened by the unfavorable currency effect.
§ Specialty businesses
Net sales by the Specialty Businesses declined by 13.0% year-on-year to €818
million in the first three months of 2013.
They primarily reflected the 6.9% fall-off in volumes caused by weaker demand
in the Infrastructure and the OE Earthmover and Agricultural segments, as well
as the early-year contractual price adjustments in the mining segment and the
oEarthmover tires: Net sales were down sharply on the decline in volumes in
the OE and Infrastructure segments, the unfavorable application of raw
materials-based price indexation clauses, and the gain in the euro against
the US dollar.
oAgricultural tires: Sales edged back under the impact of volume weakness,
the application of raw materials-based price indexation clauses, and the
gain in the euro against the US dollar.
oTwo-Wheel tires: net sales retreated somewhat, primarily reflecting the
unfavorable geographic mix and currency effect. The decline in demand was
amply offset by significant market share gains.
oAircraft tires: Penalized by the decline in the defense business, net
sales were down compared with the exceptionally high prior-year period.
First-Quarter 2013 Highlights
oNew tire plant opened in Shenyang, China (January 26)
oNew MICHELIN Pilot Sport Cup 2 to premier on the Mercedes-Benz SLS AMG
Coupé Black Series (March 5)
oMarket launch of the MICHELIN X® LINE(TM) Energy(TM) line of Truck tires
oMichelin Earthmover launches MICHELIN^® OperTrak in North America (January
oCooperation agreement signed with Chinese loader manufacturer XCMG (March
oSix new Two-Wheel tires launched in international markets, all
demonstrating the MICHELIN Total Performance strategy (March 28)
oMichelin innovates to help improve the energy efficiency of Citroën's
Hybrid Air demonstrator (March 5)
oRoad safety: Michelin and the FIA jointly warn of the dangers of talking
on the phone while driving (February 19)
oMichelin confirmed as FIA Formula E Championship's official tire supplier
A full description of first-quarter 2013 highlights
may be found on the Michelin website: www.michelin.com/corporate/finance
The quarterly information for the period ended March 31, 2013 will be reviewed
during a conference call in English later today (Monday April 22, 2013) at
6:30 pm CEST (5:30 UT). If you wish to participate, please dial-in one of the
following numbers from 6:20 pm CEST:
oIn France 01 70 77 09 34
oIn the UK 0203 367 9453
oIn the United States (866) 907 5923
oFrom anywhere else +44 203 367 9453
You may also listen to the conference call in the Finance section of
www.michelin.com/corporate, where the presentation of first-quarter 2013 net
sales is available for download.
2013 interim net sales and earnings:
Wednesday, July 25, 2013 before start of trading
Quarterly information for the nine months ended September 30, 2013:
Monday, 28 October 2013 after close of
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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.comwebsite.
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.
Q1 2013 ENG
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information contained therein.
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