PARIS (Feb. 27, 2001) — After weathering fiscal 2000 in better shape than its major competitors, Group Michelin is forecasting its sales this year will grow faster than the global market and operating profits will keep pace with sales.
The forecast is despite market conditions that are ``clearly going to be more difficult´´ than in 2000, Michelin said.
For fiscal 2000, operating earnings slipped 3.7 percent, to $1.07 billion, as rising raw materials costs, deteriorating market segments and the euro´s weakness ate into the margin.
Net profits rose 35 percent, to $403.7 million, as 1999 profits were hit by a major restructuring charge. Sales rose 11.9 percent, to $14.2 billion, based on solid unit growth and the positive effect of currency exchange fluctuations.
Michelin based its 2001 forecast on the effects of price increases carried out in January, efficiency gains, new higher-value-added products, and more stable raw materials pricing.
Long-term, Michelin still expects to achieve a 10-percent operating margin by 2005 — up from 7.6 percent last year — while outgrowing the market by two percentage points annually.