Michelin sales up 9.3% in Q1 2019

Michelin Group reports a 9.3 per cent increase in sales (at constant exchange rates) to 5.8 billion euros in the first quarter of 2018, a result it says was achieved “in difficult markets.” The company also notes that these sales “reflect the major contribution” of its recent acquisitions, Camso and Fenner.

Volumes for the quarter were down 0.5 per cent year-on-year; decreasing original equipment tyre demand and a slight decline in the European aftermarket was largely responsible for lighter volumes.

“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,” commented Jean-Dominique Senard, chief executive officer of Michelin.

The company confirms its 2019 guidance. Michelin expects the car and light truck tyre market to deliver mixed results, with modest aftermarket growth and a contraction in the original equipment segment. The truck tyre markets look set to contract slightly, while the mining, aircraft and two-wheel tyre markets should remain dynamic.

Based on April 2019 exchange rates, the currency effect is expected to have a relatively favourable impact on segment operating income. The impact of raw materials costs is currently estimated at around a negative 100 million euros, 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 euros contribution from Camso and Fenner, and structural free cash flow of more than 1.45 billion euros.