PARIS (Feb. 13, 2012)—Michelin reported double-digit gains in operating and net profits last year as higher sales volumes and an improved price/mix constellation offset increased costs.
Based on the solid fiscal 2011 performance, Michelin's top management raised the firm's operating income target for 2015 to more than $3.5 billion and confirmed the goal to increase sales at least 25 percent.
For the year ended Dec. 31, Michelin reported operating and net income of $2.71 billion and $2.04 billion, up 14.7 and 39.4 percent, respectively, over 2010.
Sales grew 12.8 percent to $28.9 billion on 6.7-percent volume growth and higher selling prices and an improved product mix, the company said.
Capital expenditures were up 55.5 percent to $2.38 billion and the number of employees grew 3.5 percent to 115,000.
In general, Michelin said worldwide demand for tires remained strong in every region, starting the year with a sharp rise before slowing mid-year. Demand for truck tires, especially, slumped during the summer in a less favorable economic environment.
Michelin reported double-digit sales growth in all of its business segments, but pre-tax operating income for truck tires and related distribution fell 6.4 percent and was essentially unchanged for the passenger car/light truck tires and related distribution. Operating earnings at the specialty businesses unit—OTR, farm, aircraft and two-wheeler tires—by contrast jumped 60.6 percent.
The passenger/light truck unit reported $1.42 billion in earnings on 10.1-percent higher sales of $15 billion; unit sales volume was up 3.9 percent.
The truck tire unit had $324.5 million in earnings on 18.3-percent higher sales of $9.36 billion; unit sales volume rose 5.8 percent.
The specialty businesses unit was $966.6 million in the black on 33-percent better sales of $4.49 billion; unit volume was up 22.4 percent.
Globally, Michelin's business grew by double digits in its three key reporting areas: up 15 percent in Europe to $12.3 billion; up 12.9 percent in North America (including Mexico) to $9.67 billion; and up 21.8 percent in the group's “other” areas (Asia, Africa, Middle East, Latin America) to $6.89 billion.