PARIS — Despite operating in a "chaotic environment impacted by a combination of systemic crises," Michelin Group generated "solid" fiscal 2022 results — a 14.5% improvement in segment operating income on 20.2% higher revenue.
Amid market turbulence and a highly inflationary context, Michelin reported segment operating income of $3.57 billion on sales of $30 billion, yielding an operating earnings ratio of 11.9%. Net income increased 39.4% to $2.11 billion.
Revenue rose despite lower unit sales, Michelin said, reflecting a series of price increases in most markets.
Despite the positive fiscal 2022 earnings report, Michelin sees segment operating income falling slightly in fiscal 2023 based on what it perceives as a "soft market demand scenario."
Looking at 2023 and beyond, Managing Chairman Florent Menegaux said Michelin maintained all of its industrial and research/development investments.
Further, Michelin said "in a context of strong economic uncertainties," tire markets should remain globally stable compared with 2022, with unit sales volumes running from 4% below 2022 to on par with 2022.
The group also anticipates a "significantly negative" impact of inflation (raw materials, transportation, energy, labor) on its 2023 results, impacts it hopes to offset through further enhancement of its product mix and "disciplined implementation" of its pricing policies.
As for 2022, Michelin said tire markets ticked up slightly, supported by original equipment demand and sustained demand from truck and mining sector tire customers.
Michelin reported double-digit gains in revenue in all three of its operating sectors: passenger/light truck tires up 17.8%, commercial trucks up 19.7% and specialty businesses up 25.6%.
Overall tire sales volumes decreased, Michelin said, mainly impacted by the war in Ukraine and the COVID-related consequences in China, and reflecting the company's priority set on margin protection.
Michelin's business in North America paced the company's growth globally, increasing 30.2% to $11.5 billion. As such, North America now represents 38% of Michelin's global sales revenue, up three percentage points over 2021.
The price-mix effect came to 13.7%, Michelin said, demonstrating its determination to offset all cost inflation factors. The currency-exchange effect was 6.2%, led by the U.S. dollar.
A Euro 1.25 per share dividend will be proposed at the annual general meeting in May.