Michelin: Q1 2021: €5.4 billion in sales, up 8.3% at constant
exchange rates, lifted by the recovery in demand.
Clermont-Ferrand, April 26, 2021
COMPAGNIE GÉNÉRALE DES ÉTABLISSEMENTS
MICHELINFinancial information for the three months
ended
March 31, 2021
Q1 2021: €5.4 billion in sales, up 8.3%
at constant exchange rates, lifted by the recovery in
demand.
With the strong upturn in global demand,
which offset major supply chain disruptions and persistent
health-related restrictions:
- Passenger car/Light truck
and Truck tire markets rose by 9%
and 20%, respectively,
- Specialty markets saw a
rebound, impelled by the Agricultural, Construction and Two-wheel
tire businesses,
- Demand rebounded sharply in
China across every market, returning to near-2019
levels.
€5,448 million in first-quarter sales,
up a reported 2.3% after a negative 6% currency
effect:
- 7.5% growth in tire volumes
with, in particular, consolidation of the Group’s positions in
Passenger car/Light truck Replacement markets and gains in the
Specialty businesses,
- A 0.3% increase from tire
prices, as firm price discipline in response to higher raw
materials and logistics costs offset the negative impact of
indexation clauses,
- A 0.6% increase from the
tire mix, as the sustained shift upmarket in the product mix, with
market share gains in MICHELIN-branded 18-inch and larger tires,
more than made up for the unfavorable business mix,
- Stable sales in the
non-tire businesses, which were adversely impacted
by the fall-off in demand in the restaurant and
travel guides segments.
“Despite the disruptions from the
Covid-19 pandemic and a certain amount of disorganization in the
supply chain, Michelin delivered a robust performance in a first
quarter shaped by an upturn in global demand. In addition to
diligently managing its prices and strengthening its positions in
the most promising growth segments, the Group continued to improve
its competitiveness, in line with the Michelin in Motion strategy
presented last April 8. In these challenging, uncertain times, I
would like to thank everybody in the Michelin corporate community
for their commitment to preparing the Group’s future and
sustainable growth,” said Managing Chairman Florent
Menegaux.
Michelin is opening
up the capital of
Solesis to
Altaris Capital Partners to step up its
expansion in healthcare markets:
- Demonstrates the Group’s
ability to capture the value of its High-Tech Materials
businesses,
- The
disposal gain added around
€130
million1 to consolidated
net income.
Guidance confirmed
In 2021, in a still highly uncertain
environment as the health crisis unfolds, Passenger car/Light truck
tire markets are expected to expand by 6% to 10% over the year,
Truck tire markets by between 4% and 8%, and the
Specialty markets by 8% to 12%.
Even as raw materials and logistics costs continue to rise,
the Group maintains its objective of reporting a slightly positive
net impact of changes in the price mix and raw materials
costs.
In this scenario, and barring any new
systemic impact from Covid-19,2
Michelin confirms its guidance, with full-year segment
operating income in excess of €2.5 billion at constant exchange
rates and structural free cash flow3
of around €1 billion.
First-quarter sales
Sales(in € millions) |
First quarter2021 |
First quarter2020 |
% change(at
current
exchangerates) |
RS1: Automotive and related distribution |
2,694 |
2,597 |
+3.7% |
RS2: Road transportation and related
distribution |
1,388 |
1,360 |
+2.1% |
RS3: Specialty businesses and related
distribution |
1,366 |
1,370 |
-0.3% |
Group Total |
5,448 |
5,327 |
+2.3% |
Market Review
- Passenger car and Light truck
tires
First quarter2021/2020(in number of
tires) |
Western&CentralEurope* |
Russia&CIS |
North&
CentralAmerica |
South America |
China |
Asia(excluding India &
China) |
Africa/ India/ Middle East |
Total |
Original Equipment Replacement |
-4% +8% |
-8% -1% |
-8% +10% |
-5% +8% |
+80% +36% |
-5% +4% |
+2% -3% |
+10% +9% |
*Including Turkey
Both the Original Equipment and Replacement
segments of the global Passenger car and Light truck tire market
rebounded by 9% in units sold in the first quarter of 2021, with a
much faster 24% year-on-year gain in March reflecting the low 2020
comparatives caused by the spread of the pandemic.
In the OE segment, tire demand rebounded by 10%,
as the sharp market upturn from the low 2020 comparatives was
dampened by the impact of semiconductor shortages in the global
automotive industry.
In China, where markets felt
the impact of Covid-19 from January 2020 onwards, demand surged 80%
in the first quarter, reflecting the domestic carmaking industry’s
lower exposure to the shortage of electronic components.
While European and North
American markets declined in the first two months of the
year as the chip shortage forced plants to suspend production,
March logically saw an extremely robust recovery off of weak
prior-year comparatives hard hit by Covid-19.
In all, OE demand ended the first quarter down
4% in Western and Central Europe and down 8% in
North and Central America.
In South America, demand
declined by 5% over the full three months and remained negative in
March due to disruptions in the supply of electronic
components.
Demand in Southeast Asia, which
was less affected by the Covid-19 crisis in the first quarter of
2020, contracted by 5%, primarily due to semiconductor supply
issues.
In the first quarter of 2021, worldwide demand
for Replacement tires rose by 9% from a favorable basis of
comparison, particularly in March.
Replacement markets in Western and
Central Europe rebounded by 8%, as flat sales in the first
two months were offset by a 24% upsurge in March, despite the
restrictive measures still in place in some countries. Dealer
inventories remain low.
In the
southern European countries
(France, Spain and Italy), where lockdowns had had the deepest
impact in first-half 2020, demand was relatively more vibrant than
in the rest of Europe, particularly in March.
Demand in Russia and the CIS
remained down 1% in first-quarter 2021, reflecting the pandemic’s
fairly light impact in the prior-year period.
In North and Central America,
Replacement demand rose by 10% overall, with gains in all of the
leading markets over the period (United States, up 11%; Canada and
Mexico, up 9%). This solid performance was led by an increase in
Asian tire imports into the United States in January, ahead of the
introduction of new customs duties, and by the very favorable basis
of comparison in March.
Demand in South America
rebounded by 8% in the first quarter of 2021, back in line with
2019 levels.
In China, where Covid-19 had
impacted markets from January 2020 onwards, demand climbed 36% on
very favorable comparatives.
In Asia (excluding China and
India), demand ended first-quarter 2021 up 4%, reflecting
a market recovery that varied by country. Demand in Japan, South
Korea and Thailand rebounded naturally off of favorable
comparatives, while the Vietnamese market went from strength to
strength with an 8% increase on top of the already solid 4% gain in
first-quarter 2020. In Indonesia, on the other hand, the sharp
upturn in March only made up for the declines in January and
February.
Demand in the Africa/India/Middle
East region fell back 3% in first-quarter 2021, as the
strong 21% rebound in March from favorable prior-year comparatives
failed to offset the declines in January and February.
- Truck tires (radial and bias)
First quarter2021/2020(in number of
tires) |
Western&Central
Europe* |
Russia
&CIS |
North& Central
America |
South America |
China |
Asia(excluding India &
China) |
Africa/ India/ Middle East |
Total |
Original Equipment Replacement |
+21% +17% |
+0% +2% |
+10% +11% |
+18% +14% |
+48% +57% |
-8% -2% |
+7% +2% |
+28% +18% |
*Including Turkey
The number of new Truck tires sold worldwide
rose by 20% in first-quarter 2021, buoyed by the strong upturn in
freight demand as the global economy recovered.
The global Original Equipment Truck tire market,
as measured by the number of new tires sold, expanded by 28% in the
first three months of 2021, led by 48% growth in China.
In Western and Central Europe,
the OE market rose by 21% on a recovery that gained new momentum in
March, spurred by fast growing demand in Italy and Germany.
Despite the prevailing shortage of
semiconductors, OE demand in North and Central
America rebounded robustly off of favorable prior-year
comparatives, particularly in March, although it remained
significantly below its first-quarter 2019 levels.
Demand in China maintained its
strong growth trajectory with a 48% gain in the first quarter, led
by both favorable bases of comparison and truck fleet upgrades to
the standards required under the China 6 regulation, which will
come into effect in July 2021.
In the rest of the world, the South
American market enjoyed a vibrant 18% increase that
outpaced the impact of favorable comparatives, while the
Asian, Indian and African
markets were still held back by the crisis.
The worldwide Replacement tire market saw a
sharp 18% uplift in the first quarter of 2021, with particularly
strong momentum in February and March, driven by the 57% increase
in demand in China and by the global economic recovery.
In Western and Central Europe,
the market rose by 17% over the period. Demand was lifted by growth
in Southern Europe (France, Spain, Italy), on top of the impact of
favorable comparatives, helped by strong freight demand.
In North and Central America, a
recovering economy and strong freight demand enabled markets to end
first-quarter 2021 up 11%, versus flat growth in the prior-year
period despite the spread of the pandemic.
The Eastern European market
rose by 2% compared with a very high level in the year-earlier
period, when it gained 21%.
Markets in South America
expanded by 14% overall during first-quarter 2021, led by strong
demand in Brazil, Chile and Peru. Argentina saw a steep 18% decline
that reflected the high basis of comparison in first-quarter 2020,
which saw 21% growth.
In China, the fast growing
economy, which has completely emerged from the health crisis,
pushed Replacement demand up 57% in the first quarter, lifting it
close to 2019 levels.
In the rest of the world, the
Asian, Indian and African
markets were relatively unchanged compared with
first-quarter 2020, which had yet to be seriously impacted by the
health crisis.
- Mining tires: The
surface mining tire market began the year slowly but showed signs
of a pick-up in March.
- Agricultural and
Construction tires: Agricultural tire markets sustained
the rebound observed since the summer of 2020, which has been very
robust in the OE segment thanks to the improvement in grain prices
and farm incomes. The Construction and Infrastructure segments are
benefiting both from the strong upturn in OE demand and from dealer
inventory rebuilding.
- Two-wheel tires:
With two-wheel vehicles offering an increasingly popular
alternative to public transportation, demand remains buoyant,
particularly in the OE motorcycle and bicycle segments.
- Aircraft tires:
The commercial aircraft tire market remains weak, although March
was the strongest month since the onset of the health crisis.
Demand in the Military and General Aviation segments continued to
hold up well over the period.
- Conveyor belts:
The mining conveyor belt market had a mixed performance in
first-quarter 2021, with demand flattening in Australia due to the
dispute with China over coal exports but recovering in North
America as conditions improved in the manufacturing industry.
Michelin sales
(in € millions) |
First quarter 2021 |
Sales |
5,448 |
Q1 2021 vs. Q1 2020 |
|
|
Total change |
+121 |
+2.3% |
Of which Tire volumes* |
+402 |
+7.5% |
Tire price-mix |
+45 |
+0.9% |
Non-tire businesses |
0 |
0.0% |
Currency effect |
-321 |
-6.0% |
Changes in scope of consolidation |
-5 |
-0.1% |
* In tonnes
Sales for the first three months of 2021 totaled
€5,448 million, an increase of 2.3% from the year-earlier period
that was attributable to the net impact of the following
factors:
- A 7.5% or €402 million increase from very
strong growth in volumes as markets rebounded on the robust
recovery in global economic activity.
- A 0.9% increase from the favorable price-mix
effect. Prices added 0.3%, reflecting the net impact of (i) the
Group’s unwavering commitment to disciplined price management and
(ii) the expected adverse impact of adjustments from the
application of raw materials indexation clauses as of January 1.
The mix effect, which accounted for a further 0.6% of growth,
stemmed from the sustained up-market shift in the product mix and
the strength of the MICHELIN brand, attenuated by an unfavorable
business mix.
- Stable sales in the non-tire businesses, with
growth in the High-Tech Materials and Services & Solutions
businesses offset by the collapse in demand in the restaurant and
travel guides segments caused by the Covid-19 pandemic.
- A 6% decrease from unfavorable exchange rate
movements, primarily the decline in the US dollar, the Brazilian
real, the Turkish lira and the ruble against the euro.
- A slight decrease from changes in the scope of
consolidation following the removal of the printing, publishing and
marketing businesses associated with Maps & Guides for France,
effective February 1, 2021.
- Sales by reporting segment
Automotive and related distribution
Sales in the first three months of 2021 amounted
to €2,694 million, up 3.7% on the same period in 2020.In sharply
rebounding markets, volumes rose by 7.8%, consolidating the Group’s
positions. Growth was dampened, however, by an unfavorable
geographic mix, particularly in the OE segment with the very strong
upturn in the Chinese market. The price-mix effect was favorable,
reflecting the expected adverse impact of applying raw materials
indexation clauses as of January 1 in the indexed businesses,
disciplined price management in the Replacement markets, supported
by the strength of the MICHELIN brand, and the continued
enhancement of the product mix, with market share gains in
MICHELIN-branded 18-inch and larger tires. The Segment was also
impacted by a change in the scope of consolidation following the
removal of the printing, publishing and marketing businesses
associated with Maps & Guides for France, effective February 1,
2021.
Road transportation and related
distribution
Sales for the first quarter amounted to €1,388
million, an increase of 2.1% compared with first-quarter 2020. In
markets that sharply rebounded over the period, volumes rose by
8.1%, held back by an unfavorable geographic mix caused mainly by
very strong growth in the Chinese market. The price-mix effect was
robust, reflecting the segment’s selective focus on creating
value.
Specialty businesses and related
distribution
First-quarter sales totaled €1,366 million,
unchanged from the same period of 2020. Volumes rebounded by 6.2%
on the brisk recovery in the Agricultural, Construction and
Two-wheel tire markets. There was a negative impact from the
business mix, due to slower growth in the mining and aircraft tire
businesses, but it was partly offset by the positive price effect
from the Group’s sustained pricing discipline.
-
Off-the-road tires: Group sales were lifted by the
rebound in demand for Agricultural tires and tracks and
Construction tires, which was especially strong in the Original
Equipment segment. The Defense and Powersport businesses are
continuing to trend upwards.
- Mining
tires: Sales were supported by the Group’s strong
positions in both the Surface Mining and Original Equipment
segments.
-
Two-wheel tires: Output is being driven by
fast-growing demand and high capacity utilization in both the
Motorcycle and the Bicycle segments, despite the situation in
Brazil where the Manaus plant and the Levorin brand have been
particularly hard hit by the health crisis.
- Aircraft
tires: The Military and General aviation segments are
continuing to expand, while the Commercial segment remains severely
impacted by the lack of commercial flights until vaccination is
more widespread.
- Fenner’s
conveyor belt businesses are still trending
upwards in line with the markets, with solid growth in order
backlog in North America.
Capital Markets Day: Michelin in
Motion, the Group’s “All Sustainable” strategy for
2030
At the Group’s Capital Markets Day on April 8,
2021, Florent Menegaux, Managing Chairman, and Yves Chapot, General
Manager and Chief Financial Officer, accompanied by all the members
of the Group Executive Committee, presented Michelin in Motion, the
Group’s “All Sustainable” strategy for the next ten years.
In particular, Mr. Menegaux noted that: “With
this new Michelin in Motion strategic plan, the Group is embarking
on an ambitious growth dynamic for the next ten years. I am
convinced that the engagement and capacity for innovation of our
teams will enable us to deliver a harmonious blend of sustained
business performance, continuous employee development and a
commitment to the planet and our host communities. Even as it
remains true to its heritage, by 2030 the Group’s profile will have
significantly changed with the ramp-up of new, high value-added
businesses in both around and beyond markets. It is this ability to
constantly reinvent itself that has underpinned Michelin’s strength
for more than 130 years and which today gives us confidence in the
future.”
A dedicated page has been created for the event
on the www.michelin.com website. It features a number of
replayable videos that review the day’s presentations and offer
insight into the following themes, which are going to drive the
Group’s sustainable growth:
- Michelin’s Environmental Leadership: Focus on the Automotive
segment
- Industry 4.0: a key lever to improve our industrial
efficiency
- Services and Solutions: understanding customer needs and how
our products are used enables us to develop and offer high
value-added solutions
- High-Tech Materials: leveraging our R&D expertise in
materials, to develop new growth avenues
- Metal 3D Printing: a unique offering in a very high-potential
market
- Hydrogen: becoming a global player in hydrogen mobility
First-quarter 2021 highlights
January 6, 2021 ─ Michelin launches a
simplification and competitiveness project to support developments
in its operations in France. To prepare for the future, Michelin
has launched a three-year project to upgrade and transition its
manufacturing, corporate and administrative operations in France.
As part of this process, the Group has reaffirmed its commitment to
positioning France in the production of premium and specialty tires
while continuing to base new high value-added businesses in the
country, particularly in the services, sustainable materials,
energy transition and recycling segments. The simplification and
competitiveness plan will be supported by an innovative social
dialogue approach.
January 18, 2021 – Michelin unveils the 2021 MICHELIN Guide
France, showcasing 33 more restaurants committed to sustainable
fine dining.
February 8, 2021 – The MICHELIN X® Multi™
Energy™ family of truck tires is enhanced with two new fitments
delivering greater fuel efficiency, lower CO2 emissions per
kilometer and a host of other benefits.
February 9, 2021 – Michelin announces the
construction of its first end-of-life tire recycling plant, in
Chile. Based on Enviro’s pyrolysis technology, the Group will offer
a solution that helps the environment and supports the development
of a circular economy.
February 9, 2021 – CAMSO, a Michelin Group
brand, today introduced the CAMSO TLH 732+ telehandler tire
that delivers 64% more service life than its predecessor, the TLH
732. The new tire offers professionals in the construction industry
performance, long-lasting durability, puncture resistance and
improved traction.
February 11, 2021 – Michelin signs a letter of
commitment for maritime transport with Neoline, a French shipowner
relying mainly on sail propulsion. A test initiative to help
decarbonize Michelin's logistics operations.
February 23, 2021 – Michelin reveals how to make
a tire 100% sustainable. By 2050, the Group is committed to making
MICHELIN tires entirely from renewable, recycled, biosourced or
otherwise sustainable materials. An objective being met with
powerful R&D capabilities and an open innovation strategy.
February 24, 2021 – The Coalition for the Energy
of the Future, of which Michelin is a member, has announced seven
projects with major milestones set to be reached as early as
2021.To date, 14 members have committed to accelerating the
energy transition in transportation and across the entire supply
chain.
February 25, 2021 – Michelin launches the
MICHELIN Pilot Sport EV, the first tire in the Pilot Sport family
purpose-engineered for electric sports cars. Designed in close
collaboration with Tesla, the 20-inch MICHELIN Pilot Sport EV has
been type-approved for the Tesla Model Y.
March 10, 2021 – Michelin launches the new
MICHELIN Wild Enduro Racing Line mountain bike tire, designed for
cyclists who want to ride the same tires as pro racers.
March 12, 2021 – ViaMichelin itineraries now
include the cost of a car’s wear and tear, giving users greater
control over their travel budget. A new way for Michelin to offer
everyone a better mobility experience.
March 19, 2021 – Michelin partners with Sennder,
Europe’s leading digital freight forwarder, to make road freight
more cost-effective and less carbon intensive.
March 26, 2021 – Michelin invests €3.5 million
to open its first automated mask manufacturing workshop in France,
with the goal of producing four million units a month.
April 2021 – Michelin subsidiary Symbio has
joined two development projects, one with bus manufacturer Safra
and the other with Stellantis, in a further illustration of the
growing importance of hydrogen technology in making zero-emission
mobility a reality.
April 2, 2021 – The benefits of Michelin and
BMW’s long-standing relationship, built on the shared values of
precision, performance, responsibility and innovation, have once
again been demonstrated with the development of the MICHELIN Pilot
Sport 4S* and the MICHELIN Pilot Sport Cup2 Connect tires
specifically for the BMW M3 and M4.
April 8, 2021 – At its Capital Markets Day,
Michelin presents Michelin in Motion, its “All Sustainable”
strategy for 2030, which is designed to achieve the right balance
between people, planet and profit.
April 15, 2021 – Michelin and Altaris announce
their intention to join forces to speed the growth of Michelin
subsidiary Solesis in healthcare markets. A concrete illustration
of the Group’s commitment to expanding outside the tire
industry.
April 15, 2021 – ProovStation partners with
Michelin in automated vehicle inspections, enhancing its solutions
with the Group’s expertise in tire data analysis.
A full description of highlights for the first
three months of 2021may be found on the Michelin website:
http://www.michelin.com/PRESENTATION
AND CONFERENCE
CALL First-quarter 2021 sales will
be reviewed with analysts and investors during a presentation in
English today, Monday, April 26, 2021 at 6:30 p.m. CEST.
WEBCASTThe presentation will
be webcast live on: https://www.michelin.com/en
CONFERENCE CALLPlease dial-in
on one of the following numbers from 6:20 pm CEST:
|
+33 (0) 1 72 72
74 03 – PIN: 65604205# |
|
+44 (0)207 194
3759 – PIN: 65604205# |
|
(+1) 646 722 4916
– PIN: 65604205# |
|
+44 (0) 207 194
3759 – PIN: 65604205# |
Financial information for the three months ended March 31, 2021
(press release and slideshow) may also be viewed at
http://www.michelin.com/en, along with practical information
concerning the conference call.
INVESTOR CALENDAR
- Annual Shareholders Meeting:
|
Friday, May 21, 2021 |
|
Monday, July 26, 2021 after close of trading |
- Financial information for the nine
months ending September 30, 2021:
|
Monday, October 25, 2021 after close of trading |
Investor Relations Édouard
de Peufeilhoux+33 (0) 6 89 71 93 73
edouard.de-peufeilhoux@michelin.com Humbert de Feydeau+33 (0)
6 82 22 39 78 humbert.de-feydeau@michelin.com Pierre
Hassaïri+33 (0) 6 84 32 90 81 pierre.hassairi@michelin.com |
Media Relations +33 (0) 1 45 66 22
22groupe-michelin.service.de.presse@michelin.com Individual
Shareholders Isabelle Maizaud-Aucouturier+33 (0) 4 73 32 23
05isabelle.maizaud-aucouturier@michelin.com Clémence
Rodriguez+33 (0) 4 73 32 15
11clemence.daturi-rodriguez@michelin.com |
DISCLAIMER
This press release is not an offer to
purchase or a solicitation to recommend the purchase of Michelin
shares. To obtain more detailed information on Michelin, please
consult the documents filed in France with Autorité des Marchés
Financiers, which are also available from the
www.michelin.com/eng
website.This press release may contain a
number of forward-looking statements. Although the Company believes
that these statements are based on reasonable assumptions as at the
time of publishing this document, they are by nature subject to
risks and contingencies liable to translate into a difference
between actual data and the forecasts made or inferred by these
statements.
1Without any impact on segment operating income or
guidance2Serious supply chain disruptions or restrictions on
freedom of movement that would result in a significant drop in the
tire markets.3 Structural free cash flow corresponds to free cash
flow before acquisitions, adjusted for the impact of changes in raw
material costs on trade payables, trade receivables and
inventories.
- 20210426_Michelin_PR_Q1 Sales 2021
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