By John Meyer, consultant in financial affairs – Eurasia Business News, October 23, 2024. Article No 1274.

Michelin has recently revised its full-year sales guidance, now expecting a decline in sales volumes between -6% to -4% for 2024. This adjustment follows a reported 3.4% drop in net sales during the first nine months of the year at constant exchange rates, largely attributed to weaker global demand across various segments, particularly in Original Equipment (OE) markets.

Sales Performance

For the first nine months of 2024, Michelin’s sales reached approximately €20.2 billion, marking a 3.4% decline compared to the previous year. The automotive segment alone saw a 2.4% decrease, reflecting challenges in OE demand, especially for electric vehicles (EVs) and a slowdown in replacement tire sales due to economic conditions in China.

Impact of Economic Factors

CEO Florent Ménégaux noted that Michelin is facing “increasingly intense negative economic, climatic, and geopolitical factors,” which are significantly impacting most markets. This has resulted in a notable reduction in both sales volumes and production activities.

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Adjusted Financial Projections

Alongside the lowered sales volume expectations, Michelin has also adjusted its segment operating income forecast to around €3.4 billion, down from over €3.5 billion previously anticipated. Free cash flow is now estimated to exceed €1.7 billion.

Market Dynamics

The decline in sales volumes was particularly pronounced in the OE segment, which experienced a 7.1% drop in Q3 2024, driven by reduced demand across all categories of tires. Despite these challenges, Michelin reported improvements in its product mix, particularly with larger tire sizes contributing positively to its market share.

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This revised outlook underscores Michelin’s ongoing struggle with market conditions while attempting to navigate through adverse economic climates and maintain operational resilience.

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© Copyright 2024 – Eurasia Business News. Article no. 1274.