CLERMONT-FERRAND, France—Michelin's revenue for the first three months of 2020 fell 8.3 percent to $5.8 million, as unit sales dropped 11.7 percent amid the economic downturn caused by the coronavirus spread.
Michelin did not, at this time, disclose earnings for the period, but stressed in its first-quarter results that it has taken a number of measures to "mitigate the financial impact of the impending deep recession."
While volumes were off by nearly 12 percent for the quarter, Michelin said the decline reflected an even steeper drop in March, especially in the last two weeks of the month.
Automotive and related distribution sales revenue fell 6.9 percent to $2.87 billion, based on a 10.5 percent drop in unit volumes. This was offset to an extent by a "favorable" price-mix effect, which reflected, in part, the "continued enrichement" of the mix. The consolidation of Indonesian tire maker P.T. Multistrada also had a positive impact.
Road transportation and related distribution sales declined 12.3 percent to $1.5 billion, driven by a 14.9 percent drop in unit volumes. The impact was "cushioned" by a favorable geographic mix and the resilience of its services and solutions offering, as well as a "robust" price-mix effect.
Specialty businesses and related distribution saw revenue slip 6.9 percent to $1.51 billion, based on a 9.9 percent drop in volume due to the collapse of certain markets impacted by the health crisis. It was, however, offset by the robust price-mix effect. Within this segment, sales of surface mining tires remained resilient, Michelin said, while sales of other OTR tires declined steeply as markets collapsed. Two-wheeler tires fell slightly, reflecting market share gains in a "sharply contracting" market.
Sales of aircraft tires, meanwhile, remained "somewhat firm," supported by the strong demand in the commercial aircraft tire segment early in the year and the resilience of the military segment.
Michelin declined, at this time, to publish an outlook for the remainder of 2020, saying the "direction of the pandemic and its economic impacts remain too uncertain to issue any reliable market forecasts and a related profit scenario.
"Nevertheless," the company said, "at a time of steeply declining raw material prices, the group expects to see a more positive net price-mix/raw materials effect, which should slightly attenuate the much more pronounced impact of lower volumes."
In its results presentation, Michelin noted how the various market segments and geographic regions fared.
In the consumer (passenger and light truck tires) area, OE sales fell 23 percent and aftermarket demand was off 12 percent. Within this sector, Asia fared the worst, with OE off 32 percent and replacement down 20 percent. In North America, OE fell 12 percent and the aftermarket was down 11 percent.
In the commercial (truck and bus tires) area, OE sales dropped 24 percent and replacement sales were off 15 percent. As with the consumer segment, Asia showed the largest declines, with OE off 28 percent and replacement down 30 percent.