Groupe Michelin posted net income of 667 million euros on net sales of 10.1 billion euros for the first half ended June 30, 2011. That compares to income of 504 million euros on sales of 8.3 billion euros for the same period in 2010.
Based on the exchange rate on June 30, 2011, Michelin recorded net income of nearly $960 million on sales of $14.5 billion for the first six months of its fiscal 2011. The company's income-to-sales ratio was 6.6%.
Michelin's operating income rose 18.1%, from 822 million euros to 971 million euros.
Here is the 1H sales breakdown by segment, in millions of euros.
Tires 1H '11 vs. 1H '10
Consumer: 5,252 up 13.7%
Truck: 3,266 up 27.3%
Specialty*: 1,587 up 36.6%
* Includes earthmover and ag tires.
In the passenger and light truck segment, Michelin credited the 7.2% increase in unit sales to "a solid performance" by the Michelin brand and the launch of new products, including the Michelin Pilot Super Sport and the BFGoodrich Rugged Terrain T/A. Net sales in the first half also were affected by price increases.
A 15.6% increase in sales volumes in the truck tire segment was a result of:
1. the successful launch of new products and services, and
2. "a strong marketing performance and first-quarter purchases made ahead of price increases."
Michelin says it expects ongoing market growth "at a pace closer to long-term trends" in the second half.
"Against this backdrop, the Groupe is aiming for growth in sales volumes of approximately 8% for the full year.
"Michelin is dilligently pursuing its pricing policy, which is intended to pass on the increase in raw material prices. Together, the price increses announced or implemented to date are expected to offset estimated additional full-year costs of around 1,800 million euros.
"Given the impact of raw material costs on working capital requirement -- amounting to approximately 400-500 million euros for the full year -- and the faster deployment of capital expenditure programs, free cash flow is expected to be temporarily negative in 2011," says the company. "Michelin reaffirms its objective of reporting higher operating income in 2011."
