Michelin Records Increased 3Q Revenues

Michelin has reported a 4.9 per cent rise in third-quarter revenues as a result of charging increased prices. Revenue rose to 4.08 billion euros ($5.12 billion) for the three months ended 30 September from 3.89 billion euros a year earlier. The latest figure was slightly above analysts’ expectations of approximately 4.04 billion euros ($5.07 billion).

The recent decline in raw material prices will have only a small impact on full-year earnings, the company said. It said there is a three- to five-month lag before changes in raw material prices affect final sales of tyres.

Michelin’s third quarter net sales were supported by quarter-on-quarter volume growth (+2.2%) recording a significant improvement compared to the previous quarter. The price mix effect was maintained at a high (4.1%) level. Group quarter-on-quarter net sales were up a satisfactory 4.9 per cent. In the first nine months of 2006, net sales rose 6.4 per cent versus the same period in 2005.

In Europe, Replacement markets were up as the Truck tyre market growth accelerated in the third quarter. The significant contraction of North American Replacement markets continued in the third quarter, although Passenger car and light truck tyre markets edged up in September. The situation varied considerably from one Original Equipment market to the other, according to the manufacturer.

In passenger car and light truck tyre markets, the quarter recorded a sharp drop of -3.4 per cent in Europe and -6.5 per cent in North America, while Truck tyre markets saw accelerating growth peak at 16 per cent in Europe and 12.1 per cent in North America. Markets in emerging countries, driven by China, continued to post high growth.

Michelin confirmed its earlier suggestions that raw material prices will reduce its full-year operating profit by 800 million euros. Against this backdrop, Michelin reported that its operating margin before non-recurring items should be close to 8 per cent for the full year 2006.