CLERMONT-FERRAND, France—Michelin's top executives reassured shareholders this week that the company has the necessary financial resources to weather the COVID-19 crisis without drawing down its confirmed lines of credit.
At its annual general meeting held behind closed doors in Clermont-Ferrand on June 23, Michelin said it had a "healthy balance sheet" despite an 8 percent decline in first quarter sales.
The tire maker took "major financial initiatives" at the start of the crisis to ensure business continuity, Managing Chairman Florent Menegaux said in addressing the meeting.
These initiatives include tracking supply and demand on a weekly basis to keep inventories under control, maintaining a firm pricing strategy to preserve margins and the brand, and scaling back capital expenditure and structural costs.
In addition, the group conducted stress tests assuming volume losses of between 20 percent and 35 percent, which Menegaux said confirmed that Michelin has sufficient cash and cash equivalents to survive the crisis.
"Michelin is now leveraging all of these fundamentals to tackle the unprecedented crisis currently raging across the globe," he added.
The French tire maker also renewed its commitment to an "all sustainable vision," which it said would accelerate its transition to "a greener, more virtuous economy."
The strategic vision will be based on a "right balance between people, profit and planet." As part of this vision, Michelin has pledged to achieve a net zero emissions at all its sites by 2050.