Michelin’s Sales Are Up on Lower Volumes So Far in 2019
Michelin Group overcame lower volumes in passenger, medium truck, agricultural and construction tires to post a 10.4% increase in global sales in the first nine months of 2019.
The company reported sales of 17.9 billion euros ($19.59 billion), up from 16.2 billion euros in the first nine months of 2018.
Michelin did not report earnings.
Sales in the third quarter, which ended Sept. 30, 2019, were up 8.9%. The company said 3Q sales were “supported by an active price-mix strategy and the contribution of recent acquisitions.”
Excluding the company’s acquisitions, global sales were up 1.3% in the first nine months of 2019.
Said Michelin CEO Florent Menegaux: “In response to a market downturn that was sharper than expected, particularly in the truck segment, the Group is continuing to improve the competitiveness of its operations, carefully manage its prices and strengthen its positions in the fastest growing segments and businesses. In these challenging times, I would above all like to commend all our teams for their engagement and hard work in limiting the impact of this unfavorable environment.”
In 2019’s first nine months, volumes fell by 0.8% compared to the year-ago period. Michelin said “mix enrichment, firm pricing policy and acquisitions” supported sales growth in its three business divisions (automotive, road transportation and specialty businesses).
Michelin said automotive tire volumes contracted “in line with the markets.” However, the Michelin Pilot Sport 4 SUV tire led “sustained growth” in the 18-inch and larger segment. Overall, Michelin’s global automotive tire sales were up 3.7% year-over-year.
Sales of medium truck tires globally were up 2.4% versus the prior year. Michelin said disciplined price management in its road transportation division offset declining volumes due to weaker markets, notably in Europe.
Sustained growth in mining activities offset the steep decline in agriculture and construction markets. Global sales in the specialty business division were up 39.7%. Michelin attributed much of the increase to the first-time consolidation of off-the-road tire manufacturer Camso Inc. and Fenner plc, a maker of conveyor belts and reinforced polymer products for the mining industry.
The inclusion of recently acquired companies, as well as the divesture of Michelin’s Tire Centers LLC (TCi) business, added 7.1% to the company’s sales. In addition to Camso and Fenner, the acquired companies are Indonesian tire maker Multistrada and European telematics provider Masternaut.