Michelin Navigates Uncertain Market, Delivers Solid 2024 Performance

Strong Financial Results Despite Market Headwinds

Michelin demonstrated resilience in 2024, achieving a segment operating income of €3.4 billion and generating free cash flow of €2.2 billion amidst a volatile market. This strong performance underscores the company's adaptability and strategic focus.

Despite a 5.1% drop in tire volumes due to declining original equipment (OE) demand, intensified competition, and challenges in specialty markets, Michelin maintained a 12.6% operating margin at constant exchange rates. This was achieved through a proactive value-driven approach, resulting in a positive 1.9% mix effect and €27.2 billion in sales.

Strategic Focus on High-Value Segments Pays Off

Michelin's strategic focus on high-value segments, such as 18-inch and larger passenger car tires and high-end truck fleets, contributed significantly to the positive mix effect. The company also strengthened its position in key geographies and specialty areas like mining and aircraft tires.

In the Automotive & Two-wheel segment, a strong sales mix, with 18-inch and larger tires reaching 65% of Michelin-branded passenger car tire sales, helped achieve a 13.1% operating margin despite the OE downcycle.

The Road transportation segment saw operating margin recovery at 9.0%, driven by a value-based market approach and enhanced product valorization, resulting in a 26% increase in operating income despite OE market slowdowns.

While the Specialties segment faced temporary challenges due to depressed OE markets and one-off headwinds in mining, growth was recorded in Aircraft and Polymer Composite Solutions activities.

Solid Cash Generation and Positive Outlook

Michelin’s strong cash generation, with free cash flow before acquisitions reaching €2.2 billion and EBITDA at 19.7% of sales, further solidified its financial position. A dividend of €1.38 per share will be proposed at the Annual Meeting.

"Our 2024 results are solid, despite a particularly unstable economic and geopolitical context," stated Florent Menegaux, Managing Chairman, acknowledging the dedication of Michelin teams worldwide.

Market Overview: Mixed Results Across Segments

The global passenger car and light truck tire market saw 2% growth, with replacement sales offsetting OE declines. Truck tire markets (excluding China) experienced marginal growth, hindered by falling OE demand.

Specialty businesses faced varying conditions. The mining tire market, while strong long-term, experienced inventory drawdowns. Beyond-road tires saw mixed growth, with OE demand falling and replacement demand showing resilience. The aircraft tire market continued to expand, while Polymer Composite Solutions faced temporary headwinds despite positive long-term fundamentals.

2025 Guidance and Long-Term Vision

Despite market uncertainties, Michelin expects to improve its segment operating income at constant exchange rates in 2025 and generate over €1.7 billion in free cash flow before acquisitions.

The company maintains its 2026 objectives and continues to implement its "Michelin in Motion 2030" strategy, focusing on sustainable growth, innovation, and customer value.

Michelin's Commitment to Sustainability

Michelin remains committed to its sustainability goals, focusing on carbon neutrality, renewable materials, and environmental performance. The company's achievements in 2024 reflect this dedication, with reduced carbon emissions, increased use of renewable and recycled materials, and improved environmental footprint in manufacturing facilities.

Innovation and Key Highlights of 2024

Michelin continued to drive innovation in 2024, with highlights including the inauguration of a bio-based butadiene production unit, selection for the Artemis lunar terrain vehicle project, and the launch of new tire ranges like the MICHELIN Primacy 5.

The company also made significant strides in employee engagement, workplace safety, and diversity and inclusion, demonstrating its commitment to its people and creating a positive work environment.