Michelin (ML) H1 2024 earnings summary

Executive summary

• Sales reached €13.5 billion in H1 2024, down 4.2% year-over-year, mainly due to lower volumes and negative currency effects, but supported by a 1.9% positive mix effect and value-driven strategy.

• Segment operating income rose to €1,782 million (13.2% of sales), up from 12.1% in H1 2023, driven by mix improvements, lower operating costs, and disciplined management.

• Net income was €1,163 million, down 4.7% year-over-year, reflecting higher restructuring costs and lower equity-accounted profits.

• Free cash flow before acquisitions was €669 million, supported by efficient inventory management and strong EBITDA margin at 20.4%.

• Full-year 2024 guidance is maintained: segment operating income above €3.5 billion and free cash flow before acquisitions over €1.5 billion.

Financial highlights

• Segment EBITDA reached €2.8 billion (20.4% of sales), up 1.6 points year-over-year.

• Gross margin improved to 29.9% from 27.5% year-over-year.

• Net debt stood at €4,260 million, down €365 million year-over-year, with gearing at 23.9%.

• Dividend of €1.35 per share paid in May 2024; payout ratio 49%.

• Capital expenditure was €805 million (6.0% of sales), focused on competitiveness and growth.

Outlook and guidance

• 2024 guidance maintained: segment operating income above €3.5 billion at constant exchange rates and free cash flow before acquisitions over €1.5 billion.

• Full-year volume scenario adjusted to -5% to -2%; operating performance net of inflation expected slightly positive.

• Capex guidance: €2.2–2.4 billion.

• Tire markets expected flat to slightly positive for PC/LT and Truck, softer for Specialties.

• Raw materials expected to be slightly unfavorable in H2; logistics and energy costs favorable; labor costs remain a headwind.