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Michelin : Michelin announces €4.9 billion in first-quarter 2013 sales, in line with its full-year outlook



  Michelin : Michelin announces €4.9 billion in first-quarter 2013 sales, in
                       line with its full-year outlook

                                                                 PRESS RELEASE
                                             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
                              full-year outlook 

  o Market environment was weak in Europe in Passenger car & Light truck
    tires, disappointing in North America and expanding in the new markets.
     
  o Volume performance reflected:

       o The two fewer business days.
       o The difference in market trends between the mature and the growth
         regions.
       o The decline in original equipment demand, notably in the Earthmover
         segment.
          

  o A negative price-mix, due to:

       o The impact of indexation clauses as raw materials costs decline.
       o The carefully managed price repositioning, targeted on certain tire
         sizes.

             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.

  o Outlook 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.

Market Review

  o Car & Light Truck tires

  First-Quarter   Europe*   North       Asia       South   Africa/India/ Total
      2013                 America   (excluding   America   Middle East
    % change                           India)
  year-on-year
 ^(in number of
     tires)
    Original       - 11%    + 1%        + 5%       + 7%        - 8%      - 1%
    Equipment
                   - 9%     -  2%       + 7%       + 6%        + 4%      - 2%
   Replacement

*Including Russia and Turkey

§  Original Equipment

  o In 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.
  o The North American market grew by 1%, in line with new car production.
  o In 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.
  o In South America, the strong growth trend observed since autumn 2012
    remained in effect, with demand rising by 7% over the period.

§  Replacement

  o In 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
    Nordic countries.
  o Demand 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.
  o In 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%).
  o The South American market increased by 6%, led by Brazil and Colombia in a
    more favorable economic environment.

  o  Truck tires

 First-Quarter   Europe**   North       Asia       South   Africa/India/ Total
      2013                 America   (excluding   America   Middle East
    % change                           India)
  year-on-year
 ^(in number of
     tires)
    Original       - 3%     - 12%       + 5%       + 23%       - 18%     - 1%
   Equipment
                   + 5%     - 1%        - 5%        + 5%       + 8%      + 0%
  Replacement

*Radial market only
**Including Russia and Turkey

§  Original Equipment

  o The 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.
  o The 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.
  o In 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
    29%).
  o The 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.

§  Replacement

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 
activity.

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 
hesitation.

§  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

  o  Overview

          (in € millions)            First Quarter 2013
             Net sales                     4,877
         First-Quarter 2013
       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
factors:

  o The 4.3% contraction in volumes, at a time of weakening demand in mature
    markets.
     
  o The shift in the price-mix effect to a negative 2.7%, corresponding to:
     

       o The €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
         the period.
       o The mix effect was nearly unchanged, at a negative €5 million,
         despite a favorable segment mix.
          

  o The 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.

  o  Net 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.

  o Sales volumes retreated by 2.8% as gains in the new markets failed to
    fully offset the fall-off in mature markets.
  o The 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.

  o Sales 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.
  o Net sales were also impacted by weak integrated dealer sell-out due to the
    sluggish economic environment, particularly in Europe.
  o To 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
OE business.

  o Earthmover 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.
  o Agricultural 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.
  o Two-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.
  o Aircraft 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

  o New tire plant opened in Shenyang, China (January 26)
     
  o New MICHELIN Pilot Sport Cup 2 to premier on the Mercedes-Benz SLS AMG
    Coupé Black Series (March 5)
     
  o Market launch of the MICHELIN X® LINE(TM) Energy(TM) line of Truck tires
    (April 4)
     
  o Michelin Earthmover launches MICHELIN^® OperTrak in North America (January
    11)
     
  o Cooperation agreement signed with Chinese loader manufacturer XCMG (March
    28)
     
  o Six new Two-Wheel tires launched in international markets, all
    demonstrating the MICHELIN Total Performance strategy (March 28)
     
  o Michelin innovates to help improve the energy efficiency of Citroën's
    Hybrid Air demonstrator (March 5)
     
  o Road safety: Michelin and the FIA jointly warn of the dangers of talking
    on the phone while driving (February 19)
     
  o Michelin confirmed as FIA Formula E Championship's official tire supplier
    (March 29)

             A full description of first-quarter 2013 highlights
   may be found on the Michelin website: www.michelin.com/corporate/finance

Conference call
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:

  o In France                         01 70 77 09 34
  o In the UK                         0203 367 9453
  o In the United States           (866) 907 5923
  o From 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.

Investor Calendar

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 
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
alban.de-saint-martin@fr.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 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

------------------------------------------------------------------------------

This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
the
information contained therein.

Source: Michelin via Thomson Reuters ONE
HUG#1694995
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