Michelin’s net income increased 1.6% year-on-year (y/y) to €1.69 billion ($2.03 billion as on 31 December 2017) in the financial year ended December 31, 2017, the French tyre-maker has said.
Net sales increased 5% y/y to €21.96 billion, driven by higher volume and favourable price-mix effect, partially offset by unfavourable foreign exchange translations. Despite higher net sales, the company witnessed 5.7% y/y decline in operating income to €2.63 billion. However, operating income from recurring activities improved 1.8% y/y to €2.7 billion.
The French tyre-maker expects volume growth in line with global market trends in 2018.
The company’s statement:
- Strong structural free cash flow, at €1.5 billion for the year
- Operating income from recurring activities of €2,742 million, or 12.5% of net sales, up €145 million at constant exchange rates
- Determined Group strategy to offset the more than €700 million increase in raw materials costs, resulting in a neutral impact versus raw materials headwind on the non-indexed businesses
- Sustained market share gains in 18-inch and larger tires (Michelin brand sales up 19% in a segment up 13%), with a price positioning in line with the brand reputation
- Competitiveness plan gains exceeded inflation by €36 million, in line with objectives
- Highly competitive markets, especially in Europe, which are weighing on the dealership operations
- Speciality businesses: operating income from recurring activities up more than 30% and strong growth across every division
- Proposed dividend of €3.55 per share, representing a payout of 36% of consolidated net income excluding non-recurring items in line with the Group’s commitment to shareholders, to be submitted to shareholders at the Annual Meeting on May 18, 2018.