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Michelin Reports Higher Overall Sales in First Nine Months

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Charles M. Hall

October 24, 2023

#Michelin Reports Higher Overall Sales in First Nine Months

Compagnie Generale des Etablissements Michelin has announced an increase in overall sales for the first nine months of the year, despite facing challenges such as a drop in tire sales volumes and adverse currency exchange rates.

##Sales Performance

Michelin's group sales for the period have risen by 2% to €21.15 billion ($22.57 billion). The company continues to maintain its outlook for 2023, expecting segment operating income at constant exchange rates to surpass €3.4 billion for the year, following an upward revision of guidance in July. Additionally, free cash flow before acquisitions is projected to exceed €2.3 billion, surpassing the previous estimate of over €2 billion.

##Tire Sales Volumes

Unfortunately, tire sales volumes experienced a decline of 3.6%. The decrease can be attributed to significant dealer destocking, rising interest rates, and challenging macroeconomic conditions. The phasing out of Michelin's Russian business also contributed to the decline.

##Currency Effects

Currency effects have had a significant impact on revenue, resulting in a decrease of €545 million, according to Michelin.

##Positive Factors

However, despite these challenges, Michelin's tire price-mix experienced a surge of 7.2% amounting to €1.50 billion. This increase helped to offset the weaker sales volumes. Additionally, sales in the specialty business segment rose by 5.4%, reaching €5.37 billion. Michelin emphasized the positive performance of its mining, agricultural, and aircraft markets during an otherwise challenging nine months.