Titan International has announced net sales for the fourth quarter of $113.4m, down from the previous fourth quarter of $134.4m. Net sales for the year 2000 were $543.1m, compared to $588m for the previous year. The fourth quarter (2000) loss recorded was $8m, as against $6m for the same quarter 1999. The full year results showed a net income of 4.5m against a loss of $11.4m in the previous year.
The Internet, we are told, will revolutionise our working and private lives. Many companies trumpet the fact that they have websites, but what happens if you want to purchase a tyre over the Internet? Our article sets out to do just that, with mixed results. Some companies were easier to find than others, while the ease of ordering tyres on-line varied considerably. Some of our findings might surprise you.
The tyre giant Michelin has today released more figures. The EBIT margin reached 7.6 % on a turnover of 15.4 billion Euro. Michelin reached this expected good result in spite of the fact that increases in raw material costs ate into the results over the year at many other tyre manufacturers. The truck division, which accounts for about 27 % of the total turnover, confirmed excellent double digit EBIT margins. For this year it is expected that Michelin will again achieve at least the same level of results as it did last year. But there is hope that oil prices are falling, which could give the company even better margins. The net debts stood at 4.9 billion Euro at the end of the year 2000.
In the first half of 2001, the group achieved a turnover of 5,498 million Euro; 12 per cent better than for the same period last year. EBIT came down from 267 million to 158 million Euros due to the closure of plants in Herstal (Belgium) and Bad Nauheim (Germany). Without these, EBIT would have been 58 million Euro better. The truck division shows some very bad figures; turnover is down 8 per cent to 438 million Euro and instead of an EBIT of 33 million Euro (2000), the group has made a loss of 37 million Euros. The tyre situation in America is even worse – despite a slight increase (+1 per cent) in turnover to 839 million Euro, the group made a loss of 53 million Euro. A year ago, the EBIT was +20 million Euro. Continental Automotive Systems boasts an increase in turnover of 31 per cent to 1,960 million Euro, but without the acquisition of Temic, the increase would have been 18 per cent. On the other hand, the EBIT improved by only 3 million Euro to 57 million Euro. The ContiTech business was, as always, very good, but ContiTech is up for sale. The division turned over 933 million Euro and achieved an EBIT of 81 million Euro. The Continental board remains optimistic that it will achieve not only a turnover for the year as a whole of more than 11 billion Euro, but that it will also improve the previous year’s EBIT.
Despite the admission of chairman and CEO Samir G. Gibara that Goodyear’s 4Q results were “disappointing”, some financial analysts have recommended the company’s shares as a “buy”. The results were better than forecast, plus the analysts are confident that Goodyear will start to turn things around before long.
Turnover rose by 3.7 per cent, but the group announced a loss for the first half year of 280 million Euro. This is the result of the fatal recall and all the other costs from Bridgestone Firestone in the USA. Despite all the bad news, the management was confident that it would show a profit at the end of this year of around 80 million Euro. In the US, the group is not expecting to show a profit before the second half next year.
Pacific Dunlop has announced it is to withdraw proposals to split its business into two independent publicly listed companies. The company told the Australian Stock Exchange it has decided to explore options to divest elements of the business and has appointed Deutsche Bank AG to assist. A profit warning for the second half to June 2001 was released, expecting profit to be up to 30 per cent lower than first half results.
In the first half of the year 2000, tyre business accounted for 40 per cent of Pirelli’s turnover, but this has now fallen to only 37 per cent, whereas cables/systems/communications increased to 63 per cent. There was an improvement in tyre business figures for the first six months, but this could not match the results of the other business units. The main reason was the economic problems in Turkey and America, which are very important markets for Pirelli.
The Tun Abdul Razak Research Centre (TARRC) has been deeply involved for the past two years in an EU-funded CRAFT project, the aim of which is to achieve better assessment of new tyre casing integrity in order to increase the number of tyres retreaded in Europe. TARRC hosted a seminar to discuss the impact of existing and proposed regulations on retreaders and some findings from the CRAFT project. The reason for the CRAFT project was based on a concern by retreaders that the quality of some new tyre casings was decreasing, with the danger that the industry could be deprived of its basic raw material. Principal research objectives included the development of new tests in order to predict the retreadability of new tyres, the establishment of a best practice drum test and a league table of tyre brands, rated according to their retreadability. The project will be finished this year. In investigating retreadability, TARRC tested a number of tyres in accordance with Regulation 54, the standard against which new tyres are tested. Under this standard, tyres are drum tested for 47 hours. The results were extremely surprising and indicate that either Regulation 54 is deeply flawed, or that the tyre industry has a problem. Testing 295/80 R22.5 M-rated tyres, the results showed a failure rate among new tyres of 20.8%. The new tyre manufacturers usually carry out their own tests and their failure rates are nothing like this figure, which begs the question why is there such a disparity between manufacturers’ results and the findings from TARRC? Under the new retreading Regulation 109, tyres are chosen and tested at random by an outside agency. Is there any independent validation of the in-house testing of new tyres? A proposal was made that new tyre manufacturers and retreaders cooperate in a programme of cross-testing new tyres in order to try and solve this apparent anomaly. Whether or not this will happen remains to be seen.
Ongoing rows between minority shareholders and main shareholder Michelin may have an adverse effect on company results for 2001. The company is already suffering from decreased demand, a weak Euro and rising raw materials costs. Benoit de la Breteche, president of Stomil’s board said “This year is going to be a difficult one and we should focus on business.”
Compared to last year, Continental Group’s turnover for the first nine months of 2001 has increased from 7,438 billion Euro to 8,240 billion Euro (a rise of about 10.8%). The Group’s operational result (EBIT) of 238 million Euro (385 million Euro in 2000) has especially been affected by the North American tyre business and a non-recurrent expenditure of 58 million Euro due to the reconstruction process, begun in the second quarter and which has resulted in the closure of the truck tyre production site in Herstal (Belgium) and the remoulding site in Bad Nauheim. The Group’s result before tax has fallen by 160 million Euro down to 96 million Euro. After tax of 44 million Euro, the result is 104 million Euro more than last year’s amount, and the earnings per share are 0.35 Euro (1.16 Euro in 2000). Presenting the quarterly results at a press conference, Manfred Wennemer, who was appointed Managing Director on 11th September 2001, explained the Group’s directional change, concentrating on profits, results and cash flow and on cutting down financial debts, which also involves focusing on profitable transactions and devolving profit-and-loss responsibility on to the Business Units. Additionally, Wennemer announced some bigger restructuring measures: “All parts of the company are under scrutiny, and there are no holy cows”, he emphasised, adding the comment that factory closures and redundancies could be a possibility.
Every year, Canadian automotive journalists carry out a series of driving tests, after which they name their “car of the year” in various categories. In the 2001 awards, 10 out of 15 car and truck category winners were fitted with Goodyear tyres. Wayne Barnes, president and CEO of Goodyear Canada, said that the results underline the way the company works closely with OEMs to achieve better vehicle performance.
Michelin’s German subsidiary has improved its results for 2000 in every aspect. Expectations have been more than fulfilled with an increase in turnover of 6.4 per cent to 1.75 billion Euro and a 70.2 per cent increase in profit to 57.8 million Euro. The Michelin Group as a whole has increased net earnings by 35 per cent to 438 million Euro (1999: 325 million Euro). The turnover of 15.4 billion Euro is around 11 per cent higher than the previous year’s figure of 13.88 billion Euro.
Cooper Tire & Rubber has reported financial figures for the third quarter. Turnover was down 6 per cent compared with 3Q last year ($791 million against $844 million). Operating profit was $46 million (3Q 2000 – $60 m) and net income $14.4 m ($23.4 m). For the first nine months of this year, Cooper’s sales totalled $2.4 billion and net income was $36 million. These figures were down 7 per cent and 62 per cent respectively on figures for the same period last year. Cooper has embarked on a restructuring programme designed to save up to $30 million annually and $4 million was saved during the third quarter.
A customer survey conducted by US mail order tyre and wheel retailer Tire Rack has placed Goodyear tyres top in two categories. The Aquatred 3 came first in the all-season category and the Regatta was top of the standard touring section. Goodyear said the results were slightly surprising, as the company does not supply Tire Rack directly with tyres.
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