Michelin

Michelin Reports on 2010 Sales Results

Michelin has released its sales figures from 2010, reporting an increase of 20.8 per cent in net sales, totalling 17.9 billion euros.

According to Michelin, the growth was driven by a 13.4 per cent increase in sales volumes, led by the group’s global presence and the rebound in mature markets.

Higher prices for raw materials reportedly reduced Michelin’s operating income, which swelled to 1,695 million euros in 2010 for a 9.5 per cent operating margin.

Commenting on the group’s performance, managing partner Michel Rollier said: “For Michelin, 2010 was a year of strong growth, enhanced manufacturing flexibility and historically high margins. In recent years, we have laid the foundations for a new phase of dynamic growth, built on the dedication and professionalism of our teams, the value of our brands and a clearly strengthened balance sheet.”

Rollier did also have a warning for investors, “In light of our capital expenditure commitments and the increase in raw materials costs, free cash flow is expected to be temporarily negative in 2011.”

Nevertheless,Michelin confirmed its objective of generating positive free cash flow over the entire 2011-2015 period. The manufacturer also sought to emphasise its “responsive pricing policy” in the face of rising raw materials costs; sustained productivity gains and cost discipline; not to mention “robust free cash flow”.

Michelin states it has conditions in place to successfully drive a new phase of dynamic growth; and in 2011, it is aiming to drive at least a 6.5 per cent increase in unit sales, in line with the 2011-2015 growth targets.

The firm expects to report higher operating income in 2011, despite the cost of stepping up its presence in new markets (around 150 million euros in temporary outlays for production start-ups, sales and marketing operations and advertising).