Cie Generale Des Etablissements Michelin Sa · EURONEXT:ML
Cie Generale Des Etablissements Michelin Sa — Michelin — Q1 2025 Earnings Presentation
40 slides from Cie Generale Des Etablissements Michelin Sa's earnings presentation, Apr 24, 2025
Slide 1: April 24, 2025
April 24, 2025
Slide 2: Global markets stable in Q1, Replacement resilient but OE highly negative
Global markets stable in Q1, Replacement resilient but OE highly negative both Europe and North America RESULTS Passenger car Truck* excl. China Specialties* & Light truck* Mining OE RT OE RT tires Beyond-road tires OE RT Aircraft tires Polymer Two-wheel Composite tires Solutions * Sell-in Tire Mark
Slide 3: Strong mix and favorable price; volumes down in OE, resilient in RT
Strong mix and favorable price supported by indexation clauses, volumes down in OE across segments but resilient in RT RESULTS Q1 2025 sales evolution (€ millions and as a %) -1.9% 6,642 1 Scope 43 6,515 (+0.0%) 320 6,472 -5 Non-tire Currency businesses (+0.7%) (-0.1%) -486 Price-mix Volumes (+4.8%
Slide 4: Group sales penalized by OE downcycle, Replacement sales growing
Group sales penalized by continuing OE downcycle, Replacement sales growing in RS1, RS2, Mining & Aircraft RESULTS Sales by reporting segment (€ millions) Q1 25 Q1 24 Δ RS1 Sales 3,559 3,518 +1.2% o/w volume change - - -3.3% RS2 Sales 1,529 1,584 -3.5% o/w volume change - - -8.9% RS3 Sales 1,427 1,5
Slide 5: Full-year market outlook: OE expected to stabilize in H2
Full-year market outlook: OE expected to stabilize in H2, Replacement reflecting moderate global growth RESULTS Passenger car Truck* excl. China Specialties* & Light truck* -2% / +2% -2% / +2% -1% / +3% OE RT OE RT Mining tires Beyond-road tires 0% 0% OE RT Aircraft tires H1 H2 H1 H2 H1 H2 H1 H2 Pol
Slide 6: 2025 Product plan demonstrating innovation leadership
RESULTS 2025 Product plan demonstrating innovation leadership Passenger Car Truck Specialties BF GOODRICH KO3 MICHELIN X LINE ENERGY 3 MICHELIN X-CRANE 2 total A/T segment sales Fuel savings (2) Load capacity (4) A/T segment MICHELIN PRIMACY 5 MICHELIN REMIX 2 MICHELIN CEREXBIB 2 Mileage (1) TCO vs
Slide 7: Key partner to major OE players, innovation powered by data and AI
Key partner to major OE players, innovation powered by data and AI – illustrated RESULTS The tire wear monitoring solution for any connected car acknowledged as by major OEMs Ferrari F80 Nio ET5 software and algorithms Peugeot 3008 Hyundai IONIQ 5 & Offering drivers unrivaled levels of safety and co
Slide 8: Polymer Composite Solutions: Accelerating innovation synergies
Polymer Composite Solutions: Accelerating innovation synergies for mission-critical applications RESULTS Flightdeck panel components Addressing fugitive emissions Windshield anti-icing valve for petrochemical industry Cargo compartment smoke detector Cargo door sealing systems Industrial facility pi
Slide 9: Solid Group profile fit for turbulences
RESULTS Solid Group profile fit for turbulences Engaged and agile teams Financial solidity Engagement rate Cash Generation 2019-24 * Gearing end of 2024 Demonstrated agility Recently upgraded * Average Free Cash Flow before M&A (2019-2024) Local-to-local Diverse markets & balanced geographies 2024 s
Slide 10: 2025 Guidance relying on a robust action plan
In an increasingly uncertain context, 2025 Guidance relying on a robust action plan GUIDANCE In a favorably oriented but highly uncertain context… Underlying growth in most destination markets OE markets gradually reversing Tariffs uncertainties Segment operating income Mining headwinds over @ iso-F
Slide 11: 2025 Financial Agenda
AGENDA 2025 Financial Agenda May 16, 2025 July 24, 2025 * October 22, 2025 * * After close of trading 2025 Q1 Sales - April 24, 2025
Slide 12: Appendix
APPENDIX. ‘~~ a.
Slide 13: PC/LT tire: OE markets still depressed in Europe and North America
PC/LT tire: OE markets still depressed in Europe and North America RT resilient overall APPENDIX PC/LT tire sell-in market, Q1 2025 (YoY change in number of tires) Europe North & Central America -13% -8% +6% China Global market +1% + 10% -1% Africa, India, Middle East - 1% +4% +1% South America +5%
Slide 14: Truck tire: Strong OE decline in North America & Europe
Truck tire: Strong OE decline in North America & Europe, RT market globally stable APPENDIX Truck tire sell-in market, Q1 2025 (YoY change in number of tires) Europe North & Central America -12% -14% Global market +1% China -3% Excl. China Incl. China +3% -6% -2% Africa, India, +1% Middle East 0% 0%
Slide 15: Strong price-mix in Q1, volumes still hampered by OE sales
APPENDIX Strong price-mix in Q1, volumes still hampered by OE sales YoY Quarterly change (% of sales) VOLUMES PRICE-MIX CURRENCY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2024 2025 2024 2025 2024 2025 4.8 2.9 2.9 0.7 1.5 0.7 -0.4 -0.4 -1.2 -1.9 -4.1 -4.7 -4.6 -7.1 -7.3
Slide 16: Raw materials cost breakdown and evolution
APPENDIX Raw materials cost breakdown and evolution 2024 Raw materials cost breakdown Natural Rubber: TSR20 and RSS3 (SICOM, $/kg) 4.8 3.7 RSS3 TSR 20 3.4 2.8 TEXTILES 1.9 4.5 2.0 1.6 1.6 2.0 1.6 1.6 1.8 2.1 1.8 1.5 2.2 2.4 3.4 3.2 2.5 NATURAL RUBBER 1.8 1.7 1.4 1.4 1.7 1.4 1.4 1.3 1.7 1.8 1.4 1.7 1
Slide 17: Sales by currency & impact on Segment operating income
APPENDIX Sales by currency & impact on Segment operating income % of sales 2025 Dropthrough* % of sales 2025 Dropthrough* Q1 2025 currency change vs. € Sales ➔ SOI Q1 2025 currency change vs. € Sales ➔ SOI 12 rolling months 12 rolling months USD 39% +3.4% 20% / 30% JPY 1% +0.4% 60% / 70% EUR 32% - -
Slide 18: Gearing improved in 2024, solid credit rating
Gearing improved in 2024, fostered by strong cash generation. Solid credit rating APPENDIX Net debt Agency ratings (€ millions) Compagnie Générale des Établissements Michelin, as of April 24, 2025 -169 3,281 Long Short +382 3,112 Outlook term term +208 +502(1) A stable A-1 Other(2) Translation +965
Slide 19: Sound cash position with maturities well spread over time
A sound adequate cash position with maturities well spread over time APPENDIX Debt maturities as at Dec. 31, 2024 (carrying amount | € millions) 8,000 Loans from financial institutions Securitization 7,000 Bond CP Derivatives and leases 6,000 Cash and cash equivalents Cash management Financial Asset
Slide 20: 2024 Shareholder return sustained at an attractive level
APPENDIX 2024 Shareholder return sustained at an attractive level 2021(1) 2022 2023 2024 DIVIDEND DIVIDEND 1.13 1.25 1.35 1.38(4) PER SHARE(€) • 2024 proposed dividend of €1.38, +2.2% vs 2023 EARNINGS PER SHARE BASIC(€) 2.58 2.81 2.77 2.65 SHARE BUYBACK PAY-OUT RATIO 44% 44% 49% 52% • Program over 2
Slide 21: Restatement of reporting segments of interim periods 2024
APPENDIX Restatement of reporting segments of interim periods 2024 Intermediate restatements following the scope changes of reporting segments implemented in 2024. (Main change: Two-wheel tire business now consolidated in the RS1 vs RS3 previously) Q1 2024 H1 2024 9M 2024 FY 2024 M€ released restate
Slide 22: Strategy
Slide 23: Strategic Scorecard - 2024 results in line with ambitions
APPENDIX Strategic Scorecard - 2024 results in line with 2030 ambitions Be world-class in employee engagement Engagement Rate 82.5% 83.5% 84.7% >85% Be world-class in employee safety TCIR* 1.07 1.01 1.03 <0.5 People Be a reference in diversity, equity and inclusion IMDI 70 72 73 80 Be best-in-class
Slide 24: Leveraging unique and differentiating assets across enlarged playground
Leveraging unique and differentiating assets across enlarged playground APPENDIX TIRES SERVICES AND EXPERIENCES Highly engaged and A powerful and widely talented teams recognized brand Connected E-Retail Solutions Distribution Lifestyle & Retail POLYMER COMPOSITE SOLUTIONS Conveyors, Innovation lead
Slide 25: Widening range of destination markets ensuring resilience
APPENDIX Widening range of destination markets ensuring resilience Destination markets across diverse verticals Balanced geographies 2024 sales breakdown (% of revenue) 2024 sales breakdown (% of revenue) Polymer Composite Solutions Specialties Tires Connected Solutions, Retail & Distribution, Rest
Slide 26: Increasing cash and margin generation across business cycles
APPENDIX Increasing cash and margin generation across business cycles FCF(1) and SOI(2) evolution vs. change in volumes 3.5 3 3 13% 2.5 12% 2 2 7% 1.5 3% 1 3% 1 0.5 1% 1% 2% 0% 0 -1% 0 -2% -0.5 -3% -6% -5% -5% -1.5 -2.5 -15% -14% -3.5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 27: Value-driven strategy: Winning where it matters
APPENDIX Value-driven strategy: Winning where it matters Original equipment: Being selective to extract the right value Maximizing value creation for OEMs & for Michelin Strategic Innovation Brand power partnerships Loyalty Replacement: Accelerating on value-accretive segments Ensuring value creatio
Slide 28: Value-driven strategy: Winning where it matters - illustrated
Value-driven strategy: Winning where it matters - illustrated Technological leadership & APPENDIX Long-lasting trend of mix enrichment differentiating service per year 65% 50% 40% per year CAGR* 2019 2021 2024 Share of >18’’ tires in Sustainable mix impact on EBIT Market trend in >18’’ tires* MICHEL
Slide 29: Industrial operations: Adjusting and upscaling to support growth
Industrial operations: Adjusting and upscaling to support growth on targeted markets APPENDIX Announced capacity adjustments Capacity impact Digital and AI applications Cholet in Manufacturing: a growing reality Olsztyn standard PC € Savings from digital & AI Ardmore Shenyang Karlsruhe Homburg Olszt
Slide 30: 2024 CMD
Slide 31: Driving higher profitability and strong cash generation
2024 CMD Driving higher profitability and strong cash generation Segment Operating Income Segment Operating Margin FCF before M&A (bn €, excl. substantial (1) M&A, @2023 FX) (% of sales) (bn €, cumulative over the period) 4.2 14.0% 5.5 3.6 12.5% 4.4 3.3 12.3% 4.0 Cumulative over 3.0 2024-26 2.8 2017
Slide 32: Confirmed ROCE floor and shareholder return
2024 CMD Confirmed ROCE floor and shareholder return Return on Capital Employed Payout Ratio (% of net result) 49% 11.4% c.50% 44% >10.5% 10.3% 10.1% 21% 2019 2021 2023 2026 2030 2019 2021 2023 2026 2030 ✓ Including impact of M&A (goodwill, ✓ Share buyback program up to €1bn amortization of intangib
Slide 33: Strong mix effect, improved margin across reporting segments
2024 CMD Strong mix effect, improved margin across reporting segments SOI bridge by lever Segment Operating Margin - by SR (€bn and % of sales, excl. substantial M&A, @2023 FX) (% of sales) €4.2bn 13.7% 14.0% SR1 Non-Tire >14% Operational Performance* 6.5% €3.6bn SR2 Mix >10% Volume 12.6% 16.5% SR3
Slide 34: Taking Group competitiveness to the next level: Manufacturing
2024 CMD Taking Group competitiveness to the next level: Manufacturing Strategic levers Tech & Care levers o Local-to-local o IA & Digital o Value-driven production mix o Industrial process optimization o Lower environmental impact o Reduce water and energy consumption o Talent attraction & retentio
Slide 35: Taking Group competitiveness to the next level: SG&A & Supply Chain
Taking Group competitiveness to the next level: SG&A & Supply Chain 2024 CMD Improving SG&A performance Reducing inventory levels and fostering innovation whilst improving customer service Inventory reduction € -0.5bn 2023 2026 2025 Q1 Sales - April 24, 2025
Slide 36: M&A: A proven track record of successful integration
2024 CMD M&A: A proven track record of successful integration Fenner Active portfolio • 9% CAGR 2018-2023 (excl. Solesis) management Multistrada & Camso • 2023 EBIT +4 pts vs 2018 • Solesis capital opened to Altaris 2018-2019 : • Multistrada EBIT from negative territory in based on €450M EV (2021) €
Slide 37: M&A as a growth & value accelerator
M&A as a growth & value accelerator: Accessing new markets and leveraging Group innovation power 2024 CMD Clear fundamentals Strict financial criteria Strategic fit EPS-accretive Accelerating from year 1 growth Parental advantage brought by Michelin Group ROCE sustained above 10.5% Value-accretive t
Slide 38: Glossary
GLOSSARY Glossary Free cash-flow, which is stated before dividend payments and financing transactions, corresponds to net cash from operating activities less net cash used in investing activities, including JV financing, adjusted for net cash-flows relating to cash management financial assets and bo
Slide 39: Disclaimer
DISCLAIMER Disclaimer This presentation is not an offer to purchase or a solicitation to recommend the purchase of Michelin shares. To obtain more detailed information on Michelin, please consult the documents filed in France with Autorité des marchés financiers, which are also available from the Mi
Slide 40: Contacts
CONTACTS BUSINESS CENTER PARIS TROCADERO Guillaume JULLIENNE 112 avenue Kléber 75116 Paris – France Flavien HUET 23 place des Carmes Dechaux 63040 Clermont-Ferrand – France Benjamin MARCUS investor-relations@michelin.com investor-relations@michelin.com 2025 Q1 Sales - April 24, 2025