Michelin Group recorded higher sales and net income in 2022 compared to the prior year, though overall tire volumes were down 2% for the year.
The tiremaker attributed the drop in volumes to the uncertain economic picture, and especially the company’s move to suspend operations in Russia in March 2022, as well as a resurgence of COVID-19 in China in the second and fourth quarters. Some of the volume drop can also be attributed to “dynamic sales within the distribution networks owned by the Group,” the company said.
Overall global sales totaled 28.59 billion euros for 2022, up 20% from 23.79 billion euros in 2021.
Net income for the year was 2.00 billion euros, up more than 8% from 1.84 billion euros the prior year.
Michelin says it recorded a gain of more than 3 billion euros due to prices, and that price-mix was positive 13.7% for the year. The company says those gains reflected two things:
- “the disciplined, assertive pricing policy applied in every segment to offset rising raw materials, energy, labor and other costs of sales,” and
- “the favorable impact of price adjustments in the indexed businesses. The 196 million euros positive mix effect reflected the priority focus on the Michelin brand and on high value-added products and services, as well as the growth in demand for 18-inch and larger tires.”
Florent Menegaux, managing chairman of Michelin, said, “In a chaotic environment impacted by a combination of systemic crises, Michelin delivered solid results in 2022. With our future in mind, we maintained all of our industrial and R&D investments. I want to recognize our associates’ engagement which contributes year after year to our Group's successful development.”
Outlook
Michelin didn’t provide a sales projection for 2023, but did provide an outlook on segment operating income, which the company expects to exceed 3.2 billion euros at constant exchange rates. Free cash flow before acquisitions will be more than 1.6 billion euros.
Segment results
In Michelin’s automotive segment, which includes passenger and light truck tires, the tiremaker said sales volumes dropped 4%. In the first half of the year volumes were hurt by the war in Ukraine as well as lockdowns in China related to COVID-19, while the second half of the year was hurt by tougher comparables and economic worries worldwide.
In the road transportation segment, which includes truck tires, volumes were up 0.4%. Michelin noted it “significantly raised its prices” due to several factors, including raw material costs and higher energy and labor costs.
And while sales grew in all three segments by double-digit percentages, the numbers in the specialty businesses segment were stronger than automotive and road transportation, with a 25.6% increase. Michelin didn’t provide volume breakdowns for its specialty businesses, but reported an uptick in demand in the second half of the year for mining tires. The largest portions of that segment, agriculture and construction, both “showed signs of cooling in the second half” of the year.
