Michelin (ML) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 sales declined to €6,690m, down 5.4% year-over-year, mainly due to a 7.1% drop in volumes, with headwinds from geopolitical tensions, regulatory uncertainty, and sluggish global demand, especially in China and Europe.

• Nine-month 2024 sales reached €20,171m, down 4.6% year-over-year, reflecting a sharp OE market downcycle, headwinds in Specialties, and continued improvement in product mix.

• Operating margin was preserved despite lower sales, reflecting a value-driven approach, strong mix improvement, and focus on premium segments and innovation.

• Tire sell-in markets rose, inflated by high Asian tire imports into Replacement markets, while OE demand deteriorated further in Q3, especially in Europe and North America.

• Group maintained market share in 18-inch and larger PC/LT tires and strengthened core positions in Mining tires.

Financial highlights

• Q3 2024 sales: €6,690m, down from €7,073m in Q3 2023; 9M 2024 sales: €20,171m, down from €21,152m in 9M 2023.

• Volumes declined 7.1% in Q3 and 5.3% over 9M; price-mix contributed +2.9% in Q3 and +1.7% in 9M.

• Currency impact was -1.2% for both Q3 and 9M; FX impact negative EUR 84 million in Q3.

• Segment operating income for H1 2024 was 13.2% of sales; operating margin preserved despite sales decline.

• Automotive segment sales declined 2.4% to €10,356m; Road Transportation fell 4.6% to €4,933m; Specialty businesses dropped 9.1% to €4,882m.

Outlook and guidance

• Full-year sales volumes now expected to end within the [-6%; -4%] range.

• Segment operating income guidance slightly reduced to around €3.4 billion at historical FX.

• Free cash flow guidance upgraded to above €1.7 billion for the full year.

• CapEx expected in the EUR 2.2–2.4 billion range.

• Operating performance net of inflation expected to be slightly positive.