Despite facing challenges such as a decline in tire sales volumes and currency exchange rate headwinds, Compagnie Generale des Etablissements Michelin has reported higher overall sales for the first nine months of the year.
Solid Growth in Group Sales
Michelin announced a 2% increase in group sales for the period, amounting to 21.15 billion euros ($22.57 billion). The company also expressed confidence in achieving its 2023 guidance.
Factors Impacting Tire Sales Volumes
Tire sales volumes experienced a 3.6% drop due to various factors. The significant dealer destocking, as well as rising interest rates and challenging macroeconomic conditions, contributed to this decline. Additionally, the discontinuation of Michelin’s Russian business further affected the figures.
Currency exchange rate fluctuations had an impact on Michelin’s revenue, resulting in a reduction of EUR545 million.
Positive Contribution from Tire Price-Mix and Specialty Business Segment
To offset the weaker sales volumes, Michelin successfully increased its tire price-mix by 7.2% to EUR1.50 billion. Furthermore, the company’s specialty business segment saw a noteworthy 5.4% rise in sales, reaching 5.37 billion euros. This growth was primarily driven by strong performances in the mining, agricultural, and aircraft markets.
Despite the challenges faced, Compagnie Generale des Etablissements Michelin remains resilient and continues to make strides in its various business segments.
David Sachs – Wall Street Journal