Michelin profits down, volumes stable – “more assertive” distribution planned for 2015
Although volumes were slightly up, Michelin had to accept lower year-on-year turnover and profit in the 2014 financial year. Nevertheless, CEO Jean-Dominique Senard stated that last year’s results “provide further confirmation of the group’s strong fundamentals.” He added that measures intended to drive growth this year include the introduction of new Michelin product ranges and a “revamped line-up” within the company’s other tyre brands. Another factor Senard says we can look forward to is “more assertive distribution,” a reference to Michelin’s recently increased interest in wholesale operations within Europe.
Turnover in 2014 came to €19.55 billion, 3.4 per cent lower than a year earlier. While North America and China were overall growth markets for Michelin last year, the tyre maker experienced particular declines in the European replacement market – both passenger car and truck tyres – and in its global agricultural and mining tyre segments. Operating profit lay 2.9 per cent below the previous year at €2.17 billion, although the margin increased from 11.0 per cent to 11.1 per cent. Michelin’s total net profit amounted to €1.03 billion, 8.5 per cent lower year-on-year.
As for Jean-Dominque Senard’s talk of more assertive distribution, details of Michelin’s plans for the European wholesale sector are beginning to fit together; the French firm is aiming to gain greater control over the channels by which its tyres come to market. A piece of the puzzle recently laid on the table was last September’s announcement that the tyre maker intended to acquire a 100 per cent share in the parent company of Germany’s largest tyre wholesaler, Ihle Baden Baden. This deal also covered Ihle’s activities in Romania. That same month, Spanish authorities gave Michelin’s Euromaster operation in the country the go ahead to partner in a wholesale joint venture with Rodi Metro, which functions under the name Nex Tyres SL. More recently, the tyre maker named Dieter von Aspern director of its new Distribution business area. A further, albeit small, sign of Michelin’s interest in wholesale can be seen in the documentation accompanying the release of the company’s latest quarterly figures; these feature, for the first time, the logos of its Ihle and Popgom operations. Michelin will most likely elucidate its wholesale plans in the near future.
Additional Michelin financial information can be found in our company profiles and reports section.