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Michelin sales are up based on euros only

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Groupe Michelin posted net sales of 5.3 billion euros for the first quarter of its 2012 fiscal year ended March 31, 2012. That compares to sales of 5 billion euros for the same period last year.

(Michelin only reports net income every half. The company recorded net income of more than 1.4 billion euros on net sales of 20.7 billion euros for its fiscal year ended Dec. 31, 2011. Click here for more information.)

Based on the exchange rate on March 31, 2012, Michelin recorded 1Q net sales of slightly more than $7 billion. Last year, its first-quarter sales were lower in euros but higher in dollars ($7.1 billion) based on the March 31, 2011, exchange rate.

Net sales breakdown by segment

Consumer tires: 2.7 billion euros (up 2.9%). However, volume was down 8.9%. Unit sales were down comparatively due the following:

1. price increases initiated after 1Q 2011,

2. "buyer hesitation" in certain large markets, and

3. "ongoing dealer destocking."

Truck tires: 1.6 billion euros (no change). Volume was down 16.3%, "dragged down by the collapse in European demand, notably in sourthern Europe." (Volumes demonstrated better resistance in North America, said the company.)

Specialty tires: 940 million euros (up 23.8%). Volume was up 6.2%, mainly because of strong earthmover and agricultural tire sales.

Outlook for full-year 2012

"Michelin confirms its objective of stable sales volumes over the full year, in a
market environment that is more uncertain in Europe, resilient in North America
and more vigorous in the growth regions," says the company.

"Capital expenditure, in a projected amount of 1.9 billion euros, is focusing on the
Michlein brand premium segments (mining tires, 17-inch and over tires, etc.),
as well as on production capacity in the new markets.

"Sustained price management in response to rising raw materials should amply
offset their additional cost impact, which is still estimated at 300 million to 350 million euros for the year.

"Lastly, Michelin reaffirms its 2012 objective of reporting a clear increase in
operating income and positive free cash flow, before the impact of the sale of
the Paris (France)  building."

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