Michelin expects no great change this year due to the recession which affected Europe’s car and truck industries.
Europe’s largest tiremaker reported operating profit of 2.42 billion euro ($3.24 billion) for 2012, missing the 2.52 billion euro forecast of analysts. Michelin will focus on selling outside Europe, a market where automakers have already made important sacrifices to cut costs and keep their workers. The tiremaker expects ‘steady’ tire sales this year and ‘stable’ earnings.
Clermont-Ferrand, France-based Michelin said that sales in 2012 increased 3.6% to 21.5 billion euro and free cash flow was 1.08 billion euro compared with 19 million euro in 2011. Back in September, Michelin announced it planned to invest 1.6 billion euro to 2.2 billion euro annually until 2015 for fuel expansion and for a 2.5 billion euro operating income reached in 2015. The company said today the plan is still standing and that it also aims at increasing the dividend 14% to 2.40 euro a share.
Last year group volume at Michelin dropped 6.4% because of weak demand especially in the European markets. Car and light-truck tire sales fell 5.5% and operating margin dropped 0.1% point to 9.3%.