Michelin (ML) Investor Presentation summary

Financial performance and outlook

• H1 2025 saw solid segment operating income of €1,500M with an 11.3% margin at constant FX, despite a -6.1% drop in tire volumes, mainly due to weak OE sales; strong price-mix and cost management partially offset volume and cost headwinds.

• Free cash flow before M&A was -€102M in H1, reflecting typical seasonality, with gearing improving to 22.2% and strong credit ratings maintained.

• 2025 full-year outlook remains unchanged, targeting segment operating income above 2024 at constant FX and free cash flow before M&A over €1.7BN.

• Shareholder returns are supported by a €1.38 dividend per share (+2.2% YoY) and a €250M tranche of the ongoing share buyback program.

• Sales outlook is underpinned by product innovation, with new launches like CrossClimate 3 and growth in mining tires.

Strategic positioning and operational agility

• Maintains a solid, diversified profile with strong engagement (85% rate), local-to-local strategy, and balanced global sales.

• Demonstrates resilience and agility through cost optimization, digitalization, and 12 activity closures in two years.

• Manufacturing capacity is being adjusted to support targeted growth markets, with a focus on value-accretive segments and premium products.

• Strategic partnerships and selective OE contracts drive value, while replacement segments focus on high-value niches.

• M&A remains a growth lever, with a proven track record of successful integrations and strict financial criteria.

Market environment and segment trends

• OE markets remain soft in Europe and North America, while replacement tire markets are resilient, especially in emerging regions and budget segments.

• Truck and agricultural OE segments account for most volume declines, but targeted segments like mining, aircraft, and premium passenger tires show growth.

• Forex and regulatory headwinds persist, but the group maintains a stable outlook assuming no further economic deterioration.

• Non-tire businesses, including Polymer Composite Solutions, are accelerating innovation and contributing to diversification.

• China remains a key market, with strong local presence, OEM partnerships, and premium market leadership.