CLERMONT-FERRAND, France — Michelin Group suffered declines in both fiscal 2024 sales and operating income versus 2023, due in part to lower volumes and lower utilization rates.
Operating income slid 5.4% to $3.68 billion as sales dipped 4% to $29.4 billion, leaving the operating ration essentially unchanged at 12.5%.
Net income fell 4.7% to $2 billion.
Michelin CEO and Managing Chairman Florent Menegaux called the 2024 results "solid, despite a particularly unstable economic and geopolitical context."
He went on to say that to maintain competitiveness, Michelin had to "make difficult industrial restructuring decisions in Poland, China, Sri Lanka and France."
Michelin said sales and segment operating income were supported by a powerful improvement in the mix, despite soft tire volumes.
Tire volumes declined 5.1% due to the "unprecedented simultaneous decline" in OE demand across every segment, intensifying competition in mass markets, and one-off headwinds in specialty tires.
Currency fluctuations reduced sales by 1% and segment operating income by 2%, with most currencies declining against the euro, according to Michelin.
Replacement passenger/light truck tire unit sales increased 4% globally, compared with 2023, bolstered by a 9% jump in Europe and a 2% increase in North and Central America.
Michelin roughly $11.5 billion in sales in North America in 2024, down 5.5% versus 2023. As a result, North America's share of Michelin's global revenue dropped slightly to 38.6% from 39.2%.
Michelin said its market positions improved in targeted business segments and geographies, particularly with 18-inch rim diameter and larger passenger tires, high-end truck fleets, mining and aircraft tires.
Michelin attributed the gain to a sustained move upmarket in product mix and growth in sales of 18-inch and larger tires, which now account for 65% of Michelin-branded passenger car tire sales.
However, OE unit sales of passenger/light truck tires edged down 2% globally, due to a 2% drop in North and Central America and 7% decline in Europe.
In the commercial truck tire market, global OE sales (excluding China) dropped 7%, with a 24% surge in OE sales in South America, but a 20% drop in Europe and 11% decline in North and Central America, which Michelin attributed to new emissions standards in January 2024 which created a demand for new vehicles in 2023 versus 2024.
Globally, replacement truck tire sales edged up 3%, bolstered by a 7% increase in North and Central America and a 5% uptick in South America, while Europe was on par with 2023 sales.
Specialty tire sales and operating margin faced a temporary drop due to depressed OE markets in agricultural and construction activities, and to one-off headwinds in mining tires, the tire maker said.
"Our 2024 results are solid, despite a particularly unstable economic and geopolitical context. To maintain our competitiveness, we also had to make difficult industrial restructuring decisions in Poland, China, Sri Lanka and France. Michelin continues to implement its 'Michelin in Motion 2030' strategy," Managing Chairman Florent Menegaux said.
Michelin said 2025 tire markets are expected to experience slight growth over the year, but declining in the first half due to lower OE demand.
Michelin's sales will be impacted negatively in the future by the sale of its Camso brand and some related assets to India's CEAT Ltd. That sale, announced in December, will take three years to complete.
