Retail

Michelin's sales increased in 2004

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Groupe Michelin's sales for 2004 (excluding exchange rate variations) totaled nearly 15.7 billion euros versus 15.3 billion euros the previous year.

Michelin officials attribute sales growth to higher sales volumes, product mix improvements and "realized price increases passed across all regions.

"Once again, Michelin compensated for recurring external inflationary pressures, including extraordinary raw material price hikes, through a firm pricing policy."

However, Michelin's net sales for the fourth quarter of 2004 were 4 billion euros versus 4.2 billion in 2003.

"After an exceptionally strong first half of the year, replacement markets in Europe and North America reverted to their long-term trends."

Michelin managed to achieve a 1.6% gain in North American replacement passenger and light truck tire sales for the full year of 2004, with "qualitative growth" realized in the V- and Z-rated performance and SUV segments.

However, the OE passenger and light truck tire segments "remained sluggish."

Michelin experienced 3.8% growth in North American replacement truck tire sales in 2004 versus 2003 and a record 38% jump in North American OE truck tire sales.

"Fleet renewal cycles after three years of consolidation and exports to Asia were strong drivers. Record orders of trailers also fueled this growth."

In other segments, earthmover markets "experienced double digit growth in OE and strong demand in replacement markets. Michelin beat historic output records in 2004. However, this was insufficient to match the demand in surface mining, OE and growth segments (contruction, harbor, carriers, etc.) This supply problem was an industry-wide issue."

Farm OE market dynamics "were stronger than expected in 2004 in North America and Europe. This benefited Michelin sales volumes but also generated pressure on its production capacities."

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