PARIS — Group Michelin reported 7.4% higher revenue for the first quarter of fiscal 2023 despite a 6.6% drop in unit volume, reflecting higher selling prices and an improved product mix throughout the period.
Michelin's revenue rose to $7.47 billion, but Michelin called the comparison with last year's quarter "particularly unfavorable" in light of heavy inventory rebuilding that took place then.
The decline in volumes sold also reflects inventory reductions by the distribution segment worldwide. The company also cited its termination of operations in Russia, stating that this action accounted for roughly one-fourth of the total decline in volumes during the quarter.
Looking ahead, Michelin said it confirms its earlier projections for the fiscal year, with sales volumes expected to fall within a no-growth to 4% decline range. Segment operating income is projected to come in at roughly $3.4 billion at constant exchange rates.
The company said it plans to maintain its strategic focus on creating value by targeting the most profitable segments.
For the quarter ended March 31, Michelin said consumer tire (passenger/light truck) markets contracted by 3%, impacted by falling replacement demand in Europe and North America. OE markets were slightly positive but still well below 2019 levels.
Truck tire markets outside China declined by 2%, as robust OE sales were more than offset by slowing replacement market demand, particularly in Europe and North America.
Specialty tire markets remained strong, Michelin said, especially in the mining and aircraft segments, while being weaker in construction and two-wheelers.
Non-tire markets continued to expand in such segments as general industrial, mining, energy and fleet services.
Being more specific, Michelin said replacement consumer tire demand fell 4% globally, with demand off 9% in Europe and 7% in North and Central America. Demand in China rose 3% year-on-year, led by the upturn in mobility during the period after another episode of COVID-19 late last year
Global replacement market demand for truck tires also fell 4%, with business in Europe dropping 14%. Demand in North and Central America was off 4% in the quarter, but fell 10% in March alone, Michelin said.
