2024-02-12 18:27:53
Automotive supplier Michelin published a record operating profit of 3.6 billion euros on Monday thanks to price increases on its tires and sales in higher ranges, thus rebuilding its cash flow.
Automotive supplier Michelin published a record operating profit of 3.6 billion euros on Monday thanks to price increases on its tires and sales in higher ranges, thus rebuilding its cash flow.
The French group, however, recorded a slight decrease in net profit (-1.3%) to 1.983 billion euros, compared to 2.009 billion euros at the end of December 2022, indicates Michelin in a press release, affected in particular by restructuring costs in Germany and the United States.
In an “uncertain economic context”, distributors destocked in 2023 and therefore purchased less in all sectors of activity, explains Michelin. The turnover of the Clermont-based giant therefore fell by 0.9% over one year, to 28.3 billion euros.
Price increases in 2022 and early 2023 to “cover all inflation factors (raw materials, transport, energy, payroll)” however made it possible to partially offset this drop in sales. Sales of premium tires and growth in sales of large tires (18 inches and above), for SUVs in particular, also improved Michelin’s figures in 2023, as did the drop in the cost of raw materials, following a peak in 2022. .
A net debt ratio of 18.3%
Sales related to non-tire activities, such as conveyors, gastronomic guides and connected mobility solutions are also growing. In 2023, the world number 1 tire manufacturer has mainly reconstituted its cash flow: it now has free financial flows of 2.3 billion euros, following having recorded negative flows in 2022.
“In a difficult economic environment, our very committed teams contributed to delivering the very solid results that we are announcing today for 2023,” said Michelin CEO Florent Menegaux.
The group announced the launch of a share buyback program which might represent up to 1 billion euros over the period 2024-2026, “taking into account its structural cash generation and the solidity of its financial structure “, the press release said.
In a context of stable global markets, Michelin’s objective for 2024 is to generate stable operating income from the upper sectors, at 3.5 billion euros at constant exchange rate, and free financial flows before acquisitions greater than 1 .5 billion euros.
The group has a net debt ratio of 18.3%, corresponding to net financial debt of 3.2 billion euros, a decrease of one billion over one year. He proposed a dividend of 1.35 euros per share for the year 2023.
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