Groupe Michelin posted net sales of 3.7 billion euros for the third quarter ended Sept. 30, 2009. That compares to sales of 4.2 billion euros for the same period a year ago. Based on the exchange rate on Sept. 30, 2009, Michelin posted net sales of nearly $5.5 billion.
The company attributed the 10.9% drop in 3Q sales (and 12.5% comparative drop through three quarters) to the decline in tire shipments globally. Price-mix benefits positively impacted 3Q sales by 4%, and year-to-date sales by 7.6%.
Despite the decline, Michelin "maintains its objective of generating positive free cash flow in the second half of 2009." It gives two main reasons for being optimistic:
1. improved profitability versus the first half, thanks to the decrease in raw material costs; and
2. a further reduction in inventory and capital expenditure (an estimated 700 million euros for the year).
Global consumer, truck and specialty tire/business sales in 3Q09 compared to 3Q08 were down 4.6%, 17.6% and 17.8%, respectively. Passenger and light truck tire sales account for 55.7% of total sales.
Michelin adds that it expects automobile industry stimulus programs and dealer demand -- especially for winter tires -- to positively impact the consumer tire segment in the second half.
