Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Best Places to Work
    • Rubber Division IEC
    • War in Ukraine
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • ITEC
    • Silicone
    • Online Exclusive
    • Latex
    • Technical Notebooks
    • Executive Action
    • Government/Legal
    • Opinion
    • Blogs
    • Sustainability
    • Products
    • Wacky World of Rubber
  • Airless Tires
  • Custom
    • Sponsored Content
    • White Papers
  • Resources
    • Directory
    • Classifieds & Mold Mart
  • Data
  • Events
    • RN Events
    • RN Livestreams/Webinars
    • Industry Events
    • Past Events
    • Rubber News M&A Live
    • Ask the Expert
    • Healthcare Elastomers Conference
    • Rubber In Automotive Conference
    • Women Breaking the Mold Networking Forum
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
April 25, 2018 02:00 AM

Currency exchange rates impact Michelin's first quarter

Tire Business Report
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    NEWS_190319992_AR_0_EAZOIXBFYEXK.jpg

    PARIS—Weighed down by an unfavorable currency exchange swing in the past several months, Michelin reported a 6.3 percent drop in sales revenue for the three months ended March 31.

    The drop was compounded by a 2.3 percent drop in unit volumes, which Michelin attributed to "massive" dealer inventory build-ups ahead of price increases announced in the fourth quarter of fiscal 2017. Mining tire sales maintained their momentum from 2017.

    Despite the first quarter decline, to $6.41 billion, Michelin is sticking by its earlier forecasts of volume growth in line with global market trends and operating income from recurring activities exceeding the 2017 figure, at constant exchange rates.

    Michelin did not disclose earnings at this time.

    Over the full year, Michelin said it expects demand to increase slightly in the passenger car and light truck tire markets and remain stable in the truck tire markets. The mining tire market should continue to enjoy "robust" growth.

    Michelin said it expects the currency effect will remain "highly unfavorable" throughout the year, generating a negative impact on operating income of nearly $430 million.

    Michelin has revamped its segment operating organization into what it's calling a "closer-to-the-customer" organization. This consists primarily of shifting reporting for replacement van tires into the "Road Transportation & Related Distribution" segment and construction truck tires into the "Specialties" segment.

    This reorganization meant a shift of roughly $180 million in the automotive sector to the road transportation sector, and about $215 million from the transportation sector to the specialty businesses unit.

    By segment, Michelin's auto and road transportation business areas reported 9.3 and 8.2 percent drops in sales, respectively, to $3.41 billion and $1.68 billion. The specialty business unit (earthmover, aircraft, agricultural and 2-wheeler tires), by contrast, reported a 5.5 percent rise in sales to $1.32 billion.

    Within the specialty business unit: earthmover tire sales rose sharply over the 2017 quarter, lifted by strong growth in volumes; agricultural tire sales increased, led by growth in OE volumes; two-wheeler tires sales, excluding Levorin, suffered from the contraction in the recreational segment in mature markets; aircraft tire sales were down slightly, as the currency effect more than offset the robust volume gains in the commercial radial segment.

    Michelin said it is counting on a "large number" of product launches planned for 2018 to help lift sales volumes. In addition, the group expects to be able to manage prices "agilely" so as to protect unit margins in an increasingly competitive marketplace.

    Letter
    to the
    Editor

    Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    Most Popular
    1
    Bolder, Liberty Tire collaboration sets stage for more circular industry
    2
    GM, Stellantis give $15 million lifeline to insolvent supplier
    3
    Panel at ARPM summit stresses cultivating culture of safety
    4
    Smithers: 4 trends changing, challenging automotive
    5
    EV owners: OE tires falling drastically short of treadwear expectations
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Best Places to Work
      • Rubber Division IEC
      • War in Ukraine
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • ITEC
      • Silicone
      • Online Exclusive
      • Latex
      • Technical Notebooks
      • Executive Action
      • Government/Legal
      • Opinion
      • Blogs
        • Products
        • Wacky World of Rubber
      • Sustainability
    • Airless Tires
    • Custom
      • Sponsored Content
      • White Papers
    • Resources
      • Directory
      • Classifieds & Mold Mart
    • Data
    • Events
      • RN Events
        • Healthcare Elastomers Conference
        • Rubber In Automotive Conference
        • Women Breaking the Mold Networking Forum
      • RN Livestreams/Webinars
      • Industry Events
      • Past Events
      • Rubber News M&A Live
      • Ask the Expert
    • Advertise
    • DIGITAL EDITION