Michelin Exceeds H1 Operating Income Forecasts, Maintains 2026 Guidance
Michelin's First-Half 2024 Financial Performance and Outlook
By Mathias de Rozario and Gilles Guillaume
July 27 (Reuters) - French tyre maker Michelin reported first-half segment operating income above market expectations on Monday and confirmed its 2026 outlook, despite adverse currency movements that weighed on reported sales.
Sales Performance and Currency Impact
First-half sales fell 2.6% to 12.7 billion euros ($14.4 billion), broadly in line with analysts' average forecast of 12.8 billion euros in a company-compiled consensus, as negative currency effects more than offset modest underlying growth.
Growth Drivers
"Sales rose by 0.5% at constant exchange rates, driven by a favourable price-mix effect and recent acquisitions we have made in the polymer composites solutions business," finance chief Bénédicte de Bonnechose said in a call with journalists.
Operating Income and Analyst Expectations
Segment operating income, which represents the combined profit of Michelin's main business divisions, rose to 1.45 billion euros ($1.65 billion), ahead of analysts' expectations of 1.40 billion euros.
Impact of Middle East Conflict on Costs
Michelin estimates the conflict in the Middle East will add about 400 million euros to its energy, raw-material and logistics costs this year.
Supply Chain Management
The company has created 35 emergency response teams to monitor its supply chain, as around 55% of its raw materials are derived from oil, de Bonnechose said.
Supplier Visibility and Inventory Challenges
She said supplier visibility had shrunk to between one and two months, limiting Michelin's ability to rebuild strategic inventories.
"As a result, we are unable, for example, to rebuild our strategic stocks," de Bonnechose said.
Outlook and Guidance Confirmation
She added that Michelin had not experienced any material shortages so far and was able to confirm its 2026 outlook.
($1 = 0.8793 euros)
(Reporting by Mathias de Rozario in Gdansk and Gilles Guillaume in Paris; Editing by Matt Scuffham)
