PARIS — Michelin Group suffered a 37.6% drop in operating income during fiscal 2020 on 15.2% lower sales, with business interruptions in many of the company's major markets related to the COVID-19 pandemic accounting for most of the impact.
Despite the double-digit declines, the company is optimistic about 2021, forecasting its operating income will rebound by a third over 2020 and revenue will perform in line with market expectations, which it put at 6% to 10% for passenger car/light trucks, 4% to 8% for trucks/buses and 8% to 12% for the specialty markets (OTR, farm, aircraft, two-wheeler).
Operating income fell to $2.13 billion on sales of $23.3 billion, Michelin said, dropping the operating ratio three-plus points from fiscal 2019. Net income fell 43.4% to $710 million.
Michelin attributed the sales decline to lower volumes (down 14%) and negative currency exchange rate changes, offset slightly by a 1.2% positive price-mix effect. Michelin said the volume decline would have been worse had it not been for a stronger-than-expected recovery in the second half of the year.
By segment, Michelin reported sales in the auto/light truck business fell 14.7% to $11.5 billion; commercial transportation (truck/bus tires and associated businesses) dropped 16.7% to $6.11 billion; and other businesses were off 14.4% to $5.67 billion.