Michelin sees double-digit growth over 2020

PARIS—Michelin rebounded strongly from a troubled 2020 to report solid double-digit gains in fiscal 2021 earnings and revenue, although both fell slightly short of the pre-pandemic fiscal 2019 results

Operating income for the year ended Dec. 31 rose 57.9 percent to $3.51 billion on 16.2 percent higher revenue of $28.1 billion, yielding an improved operating ratio of 12.5 percent (versus 9.2 percent in 2020). Net income rose nearly tripled over 2020 to $2.18 billion.

Michelin attributed the sales gain to a strong rebound (11.8 percent) in tire volumes, as demand turned sharply upward in every tire market. Replacement tire sales were also lifted by dealer inventory rebuilding throughout the year, the company said.

From a business unit perspective, passenger/light truck tire business was up 18.8 percent over 2020, truck tire revenue was up 16 percent and the specialty business reported an 11.4-percent gain.

In addition, the company cited gains in the price effect (4.5 percent or $1.1 billion) the price effect and product/mix (1.6 percent or $390 million), which takes into account the "sustained success" of Michelin's premium brand strategy, Menegaux said, particularly in the larger rim-diameter (18 inches and larger) segments.

The collapse in automotive output caused by the semiconductor shortage fed through to a very favorable sales mix, with a greater percentage of replacement sales in the automotive segment.

In 2021, Michelin delivered 'very good results in extremely difficult conditions, while maintaining the priority to protect its employees," Managing Chairman Florent Menegaux said, adding that the results "once again demonstrated (Michelin's) strength and resilience."

Looking ahead, Michelin is projecting modest (6- to 7-percent) improvement in operating income as the company and industry deals with a "still highly unsettled environment," Menegaux said.

Michelin is projecting market expansions of up to 4 percent in passenger and light truck tires, 1-5 percent in truck tire markets and 6-10 percent in specialty markets (OTR, farm, aircraft, 2-wheeler, etc.). The company did not issue a sales revenue forecast for 2022.