Michelin is doing better than resisting inflation. The French tire giant has suffered from the increase in transport and raw material costs, which rose in its accounts to 560 million euros in the first half. But the rate increases that the group passed in 2022 and this year have allowed it to “ cover all inflation factors ”.
In this context, it does not matter that Bibendum sold fewer tires (- 3.7 %) in the first half, and in particular fewer replacement tires (- 6 % in Europe and North and Central America). Its turnover increased by 5.9%, to 14.1 billion euros, and its net profit jumped by 44.7%, to 1.2 billion.
Bibendum experienced very sustained activity in particularly profitable niche sectors: aircraft tires, mining tires, industrial equipment such as seals or conveyors… In these businesses, the margin reached 18% in the first half, allowing the group to generate an operating profit of 670 million. In car tires, Michelin’s main activity, the margin reached only 12.3%, for an operating profit of 866 million.
“Michelin has many strengths with quality product and service offerings which, combined with appropriate prices and mix, allow us to focus on the most value-generating market segments,” said the group’s president. , Florent Menegaux. In this context, the group has revised its objective for the 2023 financial year upwards: it is now targeting an operating result of the sectors (its preferred indicator, which measures the performance of the group’s operating sectors) above 3.4 billion euros. euros, against 3.2 billion previously. He expects a free cash flow (free cash flow) above 2 billion against 1.6 billion previously.
