In This Article:
-
Segment Operating Income: EUR3.4 billion.
-
Free Cash Flow: EUR2.2 billion.
-
Revenue: EUR27.2 billion, down by 3.1% at constant exchange rates.
-
Operating Margin: 12.6% at constant exchange rates, 12.4% at current exchange rates.
-
Dividend Per Share: EUR1.38, corresponding to a 52% payout ratio.
-
EBITDA Margin: 19.7%, equating to EUR5.3 billion.
-
Net Financial Debt: Decreased by nearly EUR170 million.
-
Gearing Ratio: 16.7%.
-
Passenger Car Tire Market Growth: 2% over 2024.
-
Truck Tire Market Growth: 1%, excluding China.
-
CO2 Emission Reduction: Decreased by 13% for Scope 1 and 2 emissions.
-
Renewable and Recycled Content: Increased to 31% from 28% in 2023.
-
Engagement Rate: 84.7%, increased by 1.2 points from 2023.
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Michelin (MGDDF) reported a strong cash flow generation of EUR2.2 billion for 2024, marking the second-best performance in the company's history.
-
The company has maintained a high employee engagement rate of nearly 85%, indicating strong internal morale and commitment.
-
Michelin (MGDDF) has successfully reduced its CO2 emissions by 13% compared to 2023, showcasing its commitment to environmental sustainability.
-
The company has increased the renewable and recycled content in its products to 31%, reflecting progress in its sustainability initiatives.
-
Michelin (MGDDF) has a robust local-to-local strategy in the US, with 70% of its sales in the region being serviced by local production, enhancing its market resilience.
Negative Points
-
Michelin (MGDDF) experienced a 3.1% decline in sales at constant exchange rates, with a significant volume decrease of 5.1% in 2024.
-
The company faced challenges in the Specialty segment, particularly in the Beyond Road activities, which were impacted by a sharp decline in original equipment sales.
-
There was a notable underperformance in the SR1 segment due to platform choices that did not perform well, affecting market share.
-
Michelin (MGDDF) anticipates a EUR250 million headwind from raw material costs in 2025, including EUR100 million related to UDR compliance.
-
The company is facing uncertainties in the market for 2025, with expectations of a flattish or slightly positive growth, but with potential volatility in the first half of the year.
Q & A Highlights
Q: What are your expectations for the Specialty division's return on sales for the current year, given the 11.6% recorded in the second half? A: Florent Menegaux, CEO, explained that 2024 was a record year for two-wheel activities, and they expect mining to perform better in 2025 without the one-off impacts seen in 2024. However, the Beyond Road segment may not fully recover until 2026.