PARIS (Oct. 27, 2014) — Group Michelin's sales revenue in the quarter and nine months ended Sept. 27 fell 4.6 and 4.7 percent, respectively, despite a 1-percent gain in sales volume, the tire maker reported.
Michelin attributed the lower revenue figures to a negative price-mix effect of 2 percent, which it tied largely to long-term “contractual indexation clauses and price repositionings” and a negative currency effect.
Sales in the quarter fell to $6.48 billion and in the nine months to $19.8 billion. Revenue was off more in the truck tires and specialty business units than in the passenger/light truck tires business unit, Michelin said.
The tire maker did not disclose earnings for the quarter or nine-month period but did reconfirm that it expects to report higher operating income in fiscal 2014 vs. 2013, when it reported operating earnings of $2.6 billion, equal to an operating ratio of 9.8 percent.
For the year, Michelin has lowered its outlook for volume growth to 1 to 2 percent, in line with the global market, which it said is now “shaped by economic uncertainty and geopolitical difficulties.”
Despite the uncertainty, Michelin said it sees demand for passenger, light and medium truck tires remaining “buoyant” in North America and China and stable in Europe. In new markets other than China, however, the slowdown observed thus far is expected to continue, particularly in the OE segment.
In particular, Michelin singled out the North American market as being particularly robust, with demand for car/light and medium truck tires up 5 percent both at OE and in the replacement markets, while OE and replacement truck tire demand was up 12 percent (including 19 percent in the third quarter) and 9 percent, respectively.
Michelin said sales of the Michelin brand outpaced other company brands, including 12-percent growth in the premium car/light truck tire segments.
In the final quarter, Michelin said it expects to adjust its cost-management process in response to changing market conditions. The company reported that its “competitiveness plan” had delivered about $225 million in savings over nine months.