CLERMONT-FERRAND, France — Group Michelin has lowered its full-year earnings outlook as nine-month sales revenue was impacted "significantly" by lower volumes.
For the full fiscal year, Michelin said it expects unit sales volumes to be down by 4% to 6% compared with 2023, which in turn could reduce pre-tax operating income by roughly 2.5% from previous estimates.
The outlook adjustment came as Michelin reported revenue drops of 4.2% for the third quarter and 3.4% for the nine months, driven by 7.1% and 5.3% declines, respectively, in sales volumes for the quarter and nine-month periods.
Sales fell to $7.45 billion in the quarter and to $22.2 billion for the nine months.
Michelin registered revenue declines across all segments, including passenger car/light truck (down 2.4%), truck & bus (down 4.6%) and specialty, which includes aircraft, mining, off-road and two-wheeler tires, as well as polymer composite solutions (down 9.1%).
Michelin linked the decline in sales largely to a "downcycle" in OE demand, within the automotive, truck, agriculture and construction segments.
"For several months Michelin has had to face increasingly intense negative economic factors, whether economic, climatic or geopolitical," President Florent Menegaux said.
The geopolitical factors, he added, have had "a strong impact on most of our markets, particularly in original equipment."
This development, Menegaux said, led to "a significant drop" in sales volumes and a reduction in the activity of factories.
According to Michelin, sales were negatively impacted by volume decline ($1.2 billion) and a $275 million currency exchange effect, primarily due to the devaluation of the U.S. dollar, Chinese yuan, Turkish lira and Chilean peso in relation to the euro.