Financial Information For The Six Months Ended June 30, 2013
First-Half 2013 Business Performance in Line with Full-Year Objectives
€1,153 million in operating income before non-recurring items
11.3% operating margin before non-recurring items
€147 million in free cash flow
2013 guidance confirmed
• €1,153 million in operating income before non-recurring items, reflecting as expected:
- A 1.5% decline in volumes, in markets that were weak in the first quarter and showing signs of improvement in the second.
- Firm unit margins.
- Improving manufacturing performance.
• €507 million in net income for the period, after a €250-million provision on projects to improve the competitiveness of manufacturing operations.
• Robust financial structure maintained:
- €147 million in free cash flow at a time of ambitious capital expenditure
• 2013 guidance confirmed
In a market environment that should continue to improve in mature markets off of low prior year comparatives and to expand in the new markets, Michelin expects to see modest growth in volumes in the second half. As a result, thanks to its comprehensive range of products and services and its balanced global footprint, the Group confirms its objective stable volumes over the full year.
In the second half, the impact of lower raw materials prices will gain momentum, adding around €350 million to operating income for the year. As a result, and given that prices are likely to remain stable at first-half levels, the second-half consolidated operating margin should benefit from the impact of lower raw materials costs, which are expected to offset the price-mix effect.
As indicated, the capital expenditure program, totaling some €2 billion, will support Michelin’s ambitious growth objectives by adding new production capacity in the new markets. It will also improve competitiveness in mature markets and drive technological innovation.
Jean Dominique Senard, Chief Executive Officer, said: “Michelin’s first-half performance was in line with the 2013 objectives and attests to the Group’s continuous improvement as it moves forward in its New Phase of Dynamic Growth. The Group confirms its objectives for 2013, with the target of reporting stable operating income before non-recurring items, a more than 10% return on capital employed and positive free cash flow.”
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