Michelin's 3Q Sales Drop 2.4%
Groupe Michelin posted net sales of nearly 5.2 billion euros for the third quarter ended Sept. 30. That compares to sales of 5.3 billion euros for the same period last year.
Based on the exchange rate on Sept. 30, 2016, Michelin recorded net sales of $4.6 billion for 3Q 2016.
(Michelin did not include net income or operating income in its financial results because it only releases that information at mid-year and year’s end. Through the first half, it posted net income of 769 million euros on net sales of 10.3 billion euros, an income-to-sales ratio of 7.4%. For the full year, the company projects net income of more than 1.4 billion euros on net sales of 20.8 billion euros, a ratio of 7%.)
First nine months of fiscal 2016
Through the first nine months, Michelin recorded net sales of more than 15.4 billion euros, down 2.1% from the same period in 2015. The company breaks down its sales in billions of euros as follows:
Segment 2016 2015 % change
Consumer tires 8.9 8.8 +0.5%
Truck tires 4.4 4.6 -5.0%
Specialty businesses 2.1 2.3 -6.2%
Michelin’s earthmover, agricultural, two-wheel and aircraft tire sales are included in its Specialty Businesses segment.
Despite the 2.1% decline in overall sales, Michelin says it outpaced the markets with a 1.4% increase in volumes. “Momentum slowed in the third quarter in Europe, however, in an extremely competitive price environment.”
Michelin on the final 3 months
“Over the last three months of the year, markets are expected to remain mixed, in line with the trends observed in the first nine months,” says the company. “In this market environment, given the sustained deployment of the Group's pricing strategy and the estimated 550 million euro positive impact from raw materials costs, the price-mix/raw materials effect is expected to add more than 150 million euros to operating income for the year.
“For the full year, Michelin is confirming its targets of volume growth outpacing global markets, an increase in operating income from recurring activities at constant exchange rates, and structural free cash flow of more than 800 million euros.”