CLERMONT-FERRAND, France — Michelin Group reported solid results for the three and nine months ended Sept. 30, prompting the company to reaffirm its previous guidance for fiscal 2021 sales and earnings.
Helped by "robust mix and disciplined price management," revenue for the quarter grew 8.6% to $7 billion, Michelin said. Sales were helped by a 0.3% positive currency impact and non-tire revenues of $26 million.
Over the first nine months, sales were up 15.6% to $20.3 billion, based on 14.8% unit volume growth, a 2.8% improvement tied to higher selling prices, a 1.3% increase from an improved mix (reflecting market share gains in larger rim diameter tires) and a 5.8% jump in revenue from non-tire products.
Michelin did not disclose earnings at this time but confirmed its earlier guidance for fiscal 2021 of $3.3 billion in segment operating income and structural free cashflow of over $1.2 billion.
The French tire maker said business environment during the third quarter was characterized by the lingering COVID-19 crisis, "extensive disruption across every supply chain" as well as "rising raw materials, logistics and, now, energy costs."
In addition, group reported "worsening labor shortages" in North America and, to a lesser extent, in Europe.
By category, Michelin reported double-digit sales gains in the consumer and commercial sectores — up 18.9% and 16.4%, respectively — along with 8.4% growth in the industrial (OTR, aircraft, motorcycle, etc.) business.
As for demand, Michelin registered a steep 21% decline in the passenger car OE segment, due primarily to the continued shortages of automotive semiconductors.
Passenger car replacement volumes remained stable during the period.
In truck tire markets, Michelin reported "a robust 7% gain" outside China and a sharp 30% contraction in China.
The specialty business, including farm, aircraft, mining and two-wheeler tires, sustained demand, with a particularly strong rebound in the OE construction and agricultural tire segments.
Over the first nine months of the year, tire volumes grew 8%, of which 1.3% were in the third quarter, Michelin said.
Michelin said the nine-month sales saw a 4.1% increase from the tire price-mix effect, reflecting price increases implemented to offset rising costs, and the tire maker's market share gains in the large rim-sized tires segment.
Noting a "still highly disruptive environment in 2021," Michelin said it expected passenger car and light truck tire markets to expand by 6% to 8% over the year, impacted by semiconductor shortages.
The tire maker anticipates a 6% to 8% growth for the truck tire markets in 2021, and a 9% to 11% growth for the specialty markets.
