(BFM Stock Exchange) – The tire manufacturer has delivered results above expectations for 2024 and said he was waiting for his operating profit in the sectors this year.

The year 2024 proved to be difficult for Michelin. The famous pneumatician was repeatedly forced to revise his volume forecasts, and lowered his key profitability goal last fall. On a more social and political aspect, the company announced in November the closure of two sites in France, namely those of Cholet and Vannes, who employ 1,254 employees. These two sites have known great economic difficulties for several years.

Michelin has now put an end to this exercise, by publishing its annual results on Wednesday evening. The group at Bibendum delivered a satisfactory copy. Oddo BHF thus evokes “a solid publication and capable of reassuring”.

On the Paris Stock Exchange, Michelin increased by 5.5% around 11:20 am and signed the second highest increase in CAC 40.

In the fourth quarter, Clermontoise has generated income of 7.02 billion euros in a withdrawal of 2.4% over one year, but 0.4% up to consensus, housed at 6.99 billion euros according to Bernstein. The group has still suffered from volumes at half mast (-4.6% over a year) but less than in the third quarter (-7.1%). The company has also limited the impact on its income thanks to its faculty to go upmarket and preserve prices. The “price -Mix” effect was thus positive over the quarter up to 2.9 percentage points.

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The still solid cash flow

Throughout the year, Michelin’s revenues fell 4% to 27.19 billion euros, penalized by a fall in volumes of 5.1%. This decrease reflects increased competition on the markets of tire tire public and “cyclical constraints”, in specialty activities (tires for planes, motorcycles, construction vehicles, agricultural, mines, etc.), said Michelin.

On the other account lines, the operating profit of the sectors, key measure of Michelin’s profitability reached 1.596 billion euros in the second half, against 1.868 billion euros a year earlier. Michelin exceeded expectations by 2%, located at 1.567 billion euros on this indicator.

Over 2024, the operating profit of the sectors reached 3.34 billion euros, in withdrawal of 5.2%. The corresponding margin increased from 12.6% in 2023 to 12.4% in 2024. The net profit of the company also fell by 5% to 1.88 billion euros.

Like last year, the good surprise of the publication came from the cash generation. Michelin released an available cash flow of 2.22 billion euros, clearly above the 1.8 billion euros expected by consensus.

Oddo BHF notes that the generation of cash has been supported by a positive impact in terms of working fund need, with in particular lower stock levels and therefore less consumers of cash (for a positive effect of 165 million euros) . Conversely, restructuring expenses grew the generation of cash up to 246 million euros.

Regarding his prospects, Michelin said he was waiting for the tire market growth in 2025, but with an early withdrawal in the first half due “to the drop in demand in the first Monte”.

The group expects an increase in its operating profit in the sectors in 2025 compared to 2024 and tables on a free cash flow before acquisitions greater than 1.7 billion euros. The company also confirmed its targets for 2026, with in particular an operating profit of the sectors expected at 4.2 billion euros for a corresponding margin of 14%.

Towards a second half -volley 2025?

Bernstein estimates that Michelin’s 2025 perspectives are “highly cautious”, especially with regard to the positive impact of 120 million euros expected from restructuring in France.

Deutsche Bank is more enthusiastic. “The company anticipates an improvement in its results in 2025 which is in accordance with consensus and our forecasts, but should also relieve those who feared worse,” writes the German bank.

Oddo BHF stresses that confirmation of the 2026 objectives is “a good surprise”, insofar as consensus is more prudent than Michelin on this horizon.

“This publication confirmed us in our positive opinion on the title. In the short term, the momentum (the dynamics, editor’s note) of results should remain relatively limited but the group will continue to take advantage of its more defensive profile, sheltered from Main risks (prices, CO2, request and pricing) and even favorably exposed to the United States (second exposure of the European automotive sector after Stellantis but without the risks significant prices) “, develops Oddo BHF.

“Beyond that, the dynamics of the results should accelerate from the second semester and especially in 2026, with the expected rebound of specialties, combined with the expected positive effects of the restructuring measures companies since 2023”, anticipates the broker.

“This company does a lot of things well, it is perfectly placed on the tire markets with high added value where the competitive advantage persists, and when volumes will become positive in 2025, we expect the market to start granting it No more credit “, judges Bernstein.