by Gilles Guillaume
PARIS (Reuters) – Michelin on Wednesday reported consolidated sales growth of around 7% in the first quarter, a positive price-mix effect of 12.3% for the premium tire manufacturer having offset volumes that suffered from the destocking and the cessation of Russian activities.
Like many companies present in Russia, the Clermont group announced last June, a few months after the invasion of Ukraine, its intention to sell its activities on Russian soil to its local management by the end of 2022.
This track has since been abandoned due to difficulties in its implementation, and Michelin has instead engaged in discussions with a local player, which are still ongoing.
The shutdown of Russian activity contributed for a quarter to the 6.6% drop in volumes recorded in the first quarter, the group said in a press release. During a conference call with analysts, the financial director Yves Chapot specified that the impact reached a third for the volumes of the only activities related to passenger vehicles.
“The sell-in markets of Europe and North America were characterized by a reduction in inventories amid improving supply chains, as opposed to the first quarter of 2022 marked by inventory rebuilding,” added Michelin. .
Despite this, consolidated sales for the quarter reached 6.961 billion euros. The group also confirmed its main objectives for 2023, in particular sales in volume between -4% and almost stable – with a possible slight increase in the second quarter thanks in particular to the expected rebound in China compared to 2022 – and an operating profit of the sectors more than 3.2 billion euros at constant exchange rates.
Growth in sales excluding tires – performance materials, fleet management – has slowed to 15% over the last three months, against +22% in 2022, but Yves Chapot explained this difference by a lower price effect.
These new activities, expected to weigh between 20 and 30% of the tire manufacturer’s turnover by 2030, remain “on a very positive trend”, added the financial director of Michelin.
(Gilles Guillaume, edited by Nicolas Delame and Kate Entringer)
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