PARIS (Sept. 20, 2012)—Michelin said it expects its operating profits will rise more than previously forecast, and is increasing its capital expenditure plans.
The tire maker said operating income in 2015 will reach $3.8 billion, $600 million more than it previously predicted.
Michelin described 2013 as a year of transition but said that from 2014 the industry would return to the long-term trend line of four to five percent annually, with raw materials prices tracking a similar trend. The company's objective is to increase sales in line with market growth.
Michelin aims to grow with fast-expanding markets and segments. In particular it sees strong opportunities in passenger tires in the 17-inch and above category and expects to expand capacity in that segment by nearly 70 percent between 2012 and 2015.
The French tire maker said it will boost its deployment in the new markets, which will account for nearly 60 percent of its new capacity investments in the same period. Michelin is increasing its investments in materials, with capital expenditure of around $714 million a year through 2015.
Michelin will commit a total of between $2.1 billion and $2.9 billion a year over the 2012-2015 period, depending on the market outlook, the company said.
For 2015, Michelin aims to report normalized operating margins before non-recurring items of 10-12 percent in the passenger car and light truck segment, 7-9 percent in the truck segment and 20-24 percent in the specialty businesses, which are expected to grow more quickly than the rest of the company.