Michelin confirms guidance for 2018
After reviewing the main external factors, namely the markets, raw materials costs and currency effects, Michelin has confirmed its guidance for 2018.
The tyre maker notes that the global passenger car and light truck replacement tyre market is benefiting from growth in European markets, which is offsetting a slowdown in China. The original equipment passenger car and light truck tyre market is contracting, mainly because of weaker growth in China. The truck tyre market remains lifted by strong demand from the freight industry in Americas and Europe, while the specialty markets continue to grow at a fast pace.
The impact that changes in the cost of raw materials has upon operating income is expected to remain neutral in the second half of the year, as rising Brent oil prices will be countered by more favourable natural rubber prices.
The rise of the US dollar against the euro is offsetting the negative impact of currency depreciation in emerging markets, notably the Argentine peso and the Turkish lira, the currencies of countries in which Michelin has substantially increased its prices. The company shares that the expected impact of currency movements it communicated in July is still valid on the back of August’s average rates.
The latest Michelin investor presentation can be read here.