Michelin reports 20% higher sales revenue in Q3 despite lower unit volumes

PARIS—Michelin reported 20.5-percent higher sales revenue for the nine months ended Sept. 30, despite lower unit sales volume for the period, in part due to the impact of Russia's invasion of Ukraine.

Michelin did not report earnings for the period, but said it is sticking with its earlier operating earnings forecast for fiscal 2022 of slightly above $3 billion.

Michelin said that its forecast takes into account a "highly inflationary" environment shaped by continuing operational disruptions, widespread inflation and limited visibility as to future demand.

Michelin is projecting that passenger and light truck tire markets worldwide could end the year flat compared with 2021, with a potential swing of +/- 2 percent, while truck tire markets (excluding China) should expand by 2 percent to 6 percent and specialty tire markets growing by 3 percent to 7 percent.

For the nine-month period, Michelin's sales rose to $22.1 billion; for the third quarter, the increase was 23 percent to $7.5 billion.

The French tire maker attributed the revenue increase to price increases (13.4-percent gain), better product mix (0.9-percent gain) and consolidation of new businesses and growth in non-tire business (2.1-percent gain).

Regarding prices, Michelin said its revenue increase reflected its policy of "systematically passing on cost-inflation factors" and the growing impact of price-indexation clauses.

These gains were offset by a 2.4-percent decline in volumes, mostly due to the exit from Russia and lockdowns in Chinese cities, amid persistent operational disruptions.

While Michelin's unit sales to customers was down slightly in the period, the company said end-user demand held firm in most regions and markets. In response, the company said it is "steering operations to ensure adequate inventory levels."

By segment, Michelin reported:

Passenger and light truck markets grew 1.4 percent, lifted by a third-quarter recovery in original equipment (OE) demand, mainly in North America and China; replacement markets remained stable, with a mix temporarily impacted by rising imports from Asia.

Truck tire markets (excluding China) expanded by 6 percent with an acceleration in the third quarter.

Specialty tire markets remained robust in all segments except agricultural and construction in the third quarter; demand remains strong in mining.