Michelin H1 sales slide 3.4% after euro strength
The company stated that the strengthening of the euro reduced sales by 1.5%, with the impact intensifying to 3.6% in the second quarter.
Tire volumes declined 6.1%, largely due to weakness in Truck, Agricultural, and Infrastructure tire markets.
Replacement tire volumes were more stable, falling just 1% from 2024 levels. Despite the volume drop, Michelin (EPA:MICP) benefited from a strong price-mix effect, which added 4.0% to sales.
The company said the MICHELIN brand gained ground in targeted regions, supported by new product rollouts.
Segment operating income came in at €1.5 billion, or 11.3% of sales at constant exchange rates.
Segment EBITDA stood at 18.6%, though free cash flow before acquisitions was negative €102 million, reflecting seasonal working capital needs and low production volumes.
By segment, Automotive & Two-wheel achieved a 12.2% margin, lifted by premium tire sales, with 18-inch and larger tires now comprising 68% of MICHELIN-brand Passenger tire volumes.
Road Transportation saw margins fall to 5.5% amid sharply lower North American OE demand.
Specialties posted a 14.5% margin, aided by growth in Aircraft and Mining tires and continued expansion in high-margin Polymer Composite Solutions.
Michelin maintained its 2025 outlook, assuming no further economic deterioration.
Managing Chairman Florent Menegaux said the company's 'decisive assets' would help it adapt to volatility, adding, 'We are determined to further strengthen the resilience of our business model without giving up our medium-term ambitions.'
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