PARIS (March 15)—Despite continuing double-digit growth in raw materials costs and a less-robust economy than last year, Groupe Michelin Chairman Edouard Michelin said he expects earnings this year to at least match those of 2004.
For 2004 Michelin reported a 13.7-percent increase in operating earnings to $1.61 billion, pushing the earnings/sales ratio up nearly a full point to 8.3 percent. Net income, including non-recurring items, jumped 60 percent to $654.7 million. Sales grew 2.1 percent to $19.5 billion.
"We look to 2005 with confidence as such momentum is built on our strengths," Edouard Michelin said. "We will continue to progress further on all tire markets. We are targeting a level of operating result which is at least as good as that achieved in 2004 despite a more difficult environment, in particular because of additional strong raw material price increases."
The company also disclosed it will report results from 2005 according to newly organized reporting segments: SR1—passenger and light truck tires plus related distribution activities; SR2—truck tires and related distribution activities; and SR3—earthmover, agricultural, two-wheel and aircraft tires plus maps and guides, ViaMichelin, Michelin Lifestyle and wheels, the latter of which is being sold.