Michelin: Supported by its diversified offering, engaged employees
and robust financial position, Michelin is demonstrating its
resilience through a crisis that is as intense as unprecedented
PRESS RELEASEClermont-Ferrand -
July 27, 2020
COMPAGNIE GÉNÉRALE DES ÉTABLISSEMENTS
MICHELINFinancial information for the six months
ended June 30, 2020
Supported by
its diversified offering, engaged employees and robust financial
position, Michelin is demonstrating its resilience through a crisis
that is as intense as unprecedented
- The Group quickly deployed all the measures needed to
safeguard employee health, ensure business continuity and conserve
cash
- Despite collapsing markets and a 20.6% contraction in
sales, segment operating income ended the first half at €310
million:
- 22.4% decline in volumes, leading to a deep fixed cost
shortfall
- 0.3% gain from assertive pricing policy at a time of
declining raw material prices
- 1.6% gain from the still buoyant mix, reflecting market
share gains in the 18-inch and larger segment and resilience in the
Specialty businesses
- €192 million reduction in SG&A costs, excluding €77
million in exceptional outlays directly related to
Covid-19
- A robust financial position recognized by the rating
agencies to weather the crisis
- Strategic choices validated during the first
half:
- A global presence and diversified business base
(resilience in the Specialty businesses, with a 14.7% operating
margin)
- CO2 reduction pathways and objectives approved by the
Science Based Targets initiative
- Expanded CSR governance within the Supervisory
Board
Florent Menegaux, Managing Chairman,
said: “After these recent months of unprecedented crisis, I want to
express my immense pride in the remarkable engagement of our teams,
which has enabled Michelin to fulfill its commitments to its
customers, its communities and its partners. With this same
determination, the Group has undertaken all the measures needed to
secure the sustainability of its operations and attenuate the
financial impact of the economic slowdown. In this still very
uncertain environment, the Group pursues its competitiveness
initiatives to maintain its leadership in the tire businesses and
drive deployment of its growth strategy.”
q Outlook for 2020:
In 2020, after a first half shaped by
the effects of the health crisis, notably the various restrictions
on freedom of movement, global tire demand is expected to be
impacted in the second half of the year by the economic recession
ensuing from the pandemic. Passenger car and Light truck tire
markets are expected to decline by 15% to 20% over the year and
Truck tire markets by between 13% and 17%. Given the relative
resilience of certain segments, the Specialty markets are expected
to contract by 13% to 17%.
In this still highly uncertain market
scenario, Michelin’s objectives are to deliver full-year segment
operating income in excess of €1.2 billion at constant exchange
rates and structural free cash flow* of more than €500 million,
barring any new systemic impact from Covid-19.
*Structural free cash flow corresponds to free
cash flow before acquisitions, adjusted for the impact of changes
in raw material costs on trade payables, trade receivables and
inventories.
.
(in € millions) |
First half2020 |
First half2019 |
Sales |
9,357 |
11,781 |
Segment operating income |
310 |
1,438 |
Segment operating margin |
3.3% |
12.2% |
Automotive andrelated distribution |
-0.8% |
10.3% |
Road transportation and related distribution |
-1.3% |
8.9% |
Specialty businesses andrelated distribution |
14.7% |
19.3% |
Other operating income and expenses |
(133) |
(97) |
Operating income |
177 |
1,341 |
Net income/(loss) |
(137) |
844 |
Earnings per share |
(0.75) |
4.74 |
Segment EBITDA |
1,192 |
2,296 |
Capital expenditure |
490 |
665 |
Net debt |
5,510 |
6,664 |
Gearing |
45% |
54% |
Provisions for post-employment benefit obligations |
3,858 |
3,976 |
Free cash flow1 |
(351) |
(592) |
Employees on payroll2 |
124,000 |
125,400 |
1 Free cash flow: net cash from operating
activities less net cash used in investing activities, adjusted for
net cash flows relating to other financial assets, before
distributions.
2 At period-end.
Covid-19:
impact of the health crisis on the Group’s financial position at
June 30, 2020
Review of the information released by
the Group during the first six months of the year
- On February 10, 2020, the Group issued its guidance for 2020
excluding any impacts from a systemic crisis caused by
Covid-19.
- On March 18, 2020 at 6:10 pm CET, the Michelin Group issued a
press release acknowledging that, due to the decline in tire demand
and the growing systemic crisis in the global economy, the Group’s
2020 guidance was no longer relevant, without any possibility at
that time of assessing the potential impact or, by extension, the
financial objectives of its 2020 plan.
- On April 1, 2020, the Group issued a press release announcing
that the dividend to be submitted to shareholder approval at the
Annual Shareholders Meeting, which had been postponed until
June 23, 2020, would be reduced to €2.00 from the
initially recommended €3.85.
- When the Group released its first-quarter sales figures on
April 29, it described the initial impact of the health crisis on
its business and presented the initiatives undertaken to safeguard
the health of its employees and attenuate the negative impact on
segment operating income and free cash flow. At the same time, the
Group reaffirmed that its finances remained robust, noting that it
had sufficient cash and cash equivalents to weather the crisis
without having to draw down its confirmed lines of credit, even if
demand were to collapse by 35% over the year. As of late April, the
future direction of the health crisis remained too uncertain to
issue any reliable market forecasts and a related profit
scenario.
- On June 23, the Group’s Annual Shareholders Meeting was held
behind closed doors and broadcast live on the ag2020.michelin.com
website. During the meeting, Yves Chapot, Managing Partner and
Chief Financial Officer, again emphasized the strength of the
Group’s finances, noting in particular that the three leading
credit rating agencies – Moody’s, S&P and Fitch Ratings – had
all confirmed the Group’s ratings on May 14, 19 and 29, 2020,
respectively.
Market review for the six months ended
June 30, 2020
The health crisis and the lockdown policies
applied by governments in most countries around the world led to an
unprecedented slowdown in economic activity in the first half of
the year, resulting in a steep plunge in tire demand in every
geography and most of the business segments. Tire demand by
business segment and region is described on page 6 below.
INITIATIVES UNDERTAKEN TO ATTENUATE THE
IMPACT OF THE CRISIS ON CURRENT AND FUTURE PERFORMANCE
From the very first signs of the pandemic,
Michelin defined two absolute priorities: protecting the health and
safety of its employees and doing everything in its power to ensure
business continuity.
Protecting the health and safety of
employees and impact on costs
As early as mid-March, the Group temporarily
suspended part of its manufacturing operations in most of its
geographies and implemented effective health and safety protocols
to protect its employees and curb the spread of the virus. By early
April, some of these operations were able to reopen to meet
customer demand and ensure continuity of the public services that
were playing a critical role in fighting the pandemic. Beginning in
mid-April, all of the European plants gradually resumed their
manufacturing operations, with capacity utilization varying
considerably by business. As of the end of June, all of the Group’s
production plants were up and running.
Supported by the outstanding commitment of its
employees, the Group was also able to quickly produce surgical
masks and hand sanitizer at many manufacturing facilities in
Europe, thereby adding to its purchased stocks. All these
protective measures resulted in additional costs during the first
half, in an estimated amount of €77 million.
In the plants, the distancing rules prohibiting,
for example, people from physically mingling during shift changes,
had an adverse impact on productivity by slowing the pace of
production. When combined with the period’s very weak output, this
decline in productivity increased the sensitivity of segment
operating income to changes in demand (as of June 30, a one-point
decline in volumes would feed through to a full-year reduction of
€136 million).
While the plants were closed, the Group received
financial support from governments to help fund employee furlough
programs. These furlough grants totaled €140 million in the first
half, of which €124 million was factored into the above-mentioned
sensitivity calculations. The Group has not requested any other
form of public support to get through the crisis, such as
government-backed loans or longer payment deadlines.
In addition, Michelin took steps to make some of
its masks more widely available by donating a total of
2.4 million of them to health authorities and emergency
services in all of its host communities. Thanks to its expertise in
metal and plastic 3D printing, the Group was also able to launch
production of parts for ventilators, thousands of sterilizable
polycarbonate face shields, and positioning cushions to make
breathing easier for Covid-19 patients.
In addition, hundreds of outreach initiatives
were organized by Michelin around the world, including the donation
of 4,600 tires and free maintenance services for emergency
vehicles, financial contributions and individual support.
Protecting business continuity by
limiting the impact of the crisis on segment operating income and
free cash flow
To conserve cash, the Group reduced its capital
expenditure budget by around 30%, or €500 million, while
maintaining its ability to support innovation and efficiency
projects, and lowered the recommended 2019 dividend payout by
€330 million. Tracking supply and demand on a weekly basis helped
to keep inventory under control. Corporate overheads were reduced
by €192 million through a variety of cost-saving measures. The
Group was also careful to honor its commitments to all its
partners, with a constant concern for protecting the most
vulnerable. Lastly, Michelin supplied masks and safety equipment to
its customers and distributors, enabling them to conduct their
activities in the best possible conditions.
Liquidity risk
To meet its future cash needs, the Group had the
following sources of financing in place as of June
30, 2020:
- €2.8 billion in cash and cash equivalents. Over the first half,
the Group issued €1.1 billion in commercial paper and arranged a
two-year, €505 million bank loan;
- a €2.5 billion commercial paper program, of which €1,386
million had been utilized at June 30, 2020;
- a $0.7 billion commercial paper program, of which $50 million
had been utilized at June 30, 2020;
- a €0.5 billion factoring program, of which €15 million had been
utilized at June 30, 2020;
- €1.5 billion in confirmed, undrawn lines of credit.
Moreover, the stress tests based on a deep,
prolonged market downturn, whose results were published by the
Group on April 29, 2020, were updated to assess the Group’s ability
to meet its financial commitments given its sources of financing.
The worst-case scenario assumed a 20% decline in demand in the
second half of 2020 followed by an upturn of only 4% in 2021. These
tests demonstrated that with all the financing mechanisms described
above and the measures introduced to attenuate the negative impact
of the crisis on segment operating income and free cash flow, the
Group will be able to withstand any developments as the crisis
unfolds, without even having to draw down its €1.5 billion in
confirmed lines of credit.However, based on the trends observed to
date, the Group expects business to return to 2019 levels in the
second half of 2022.
IMPACT OF THE HEALTH CRISIS ON THE RISK FACTORS SPECIFIC
TO THE GROUP
To a certain extent, the current health crisis
and the way it has unfolded has exacerbated a number of risks or
classes of risks specific to the Group, such as business
interruption or continuity of supply. On the other hand, the
crisis, which is not specific to the Group, is not such that it
alters the scope and classification of the specific risks
identified and described in section 2 Risk Management of the 2019
Universal Registration Document.
The supply chain encountered disruptions during
the first half, but they did not prevent the delivery of critical
components, semi-finished products and finished products even as
the situation evolved very quickly and required the entire chain to
respond accordingly.
The current crisis has shown that the main risk
that has arisen so far concerns the sudden collapse in global
demand and its impact on the economy, which by nature is not
specific to the Group.
As of end-June, the business continuity
procedures prepared by the Group have kept its manufacturing, sales
and administrative operations up and running around the world. In
addition, the Group has not identified any supply continuity
risks.
Market
Review
·Passenger car and Light truck tires
First
half2020/2019(in number of tires) |
Europeincluding CIS* |
Europeexcluding CIS* |
North America |
Central America |
South America |
Asia(excluding India) |
Africa/ India/ Middle East |
Total |
Original Equipment Replacement |
-39% -19% |
-39% -19% |
-40%** -21% |
-26% |
-52% -27% -
|
-24% -15% |
-47% -32% |
-34% -21% |
Second
quarter2020/2019(in number of tires) |
Europeincluding CIS* |
Europeexcluding CIS* |
North America |
CentralAmerica |
South America |
Asia(excluding India) |
Africa/ India/ Middle East |
Total |
Original Equipment Replacement |
-62% -30% |
-62% -29% |
-70%** -33% |
-48% |
-84% -52% -
|
-16% -11% |
-76% -48% |
-45% -30% |
* Including Turkey.
** North America and Central America.
In the first six months of 2020, tire demand was
severely depressed by the Covid-19 health crisis and the related
lockdown measures. During the period, the global Original Equipment
and Replacement Passenger car and Light truck tire
market contracted by 24% in number of tires sold.
§ Original Equipment
Worldwide unit sales of Original Equipment tires
collapsed 34% in the first half of 2020, with a steep downturn in
the last two weeks of March. This caused global tire demand to end
the second quarter alone down 45%, after bottoming out at a 62%
drop in April.
After a first quarter in which global demand
fell by 22%, dragged down by the 46% drop in China due to the
impact of the pandemic, the second quarter (down 45%) was shaped by
the spread of the pandemic and the corresponding closure of
carmaker plants across the European and US markets. In all, demand
fell by 62% in Europe (with a low point of a 94% decline in April),
by 70% in North America (with a low point of 99% in April), and by
84% in South America (with a low point of 100% decline in April).
Over the same period, demand in China continued to recover, with a
gain of 8%.
The other regions (Africa-India-Middle East and
Asia excluding China) were also hard hit by the lockdown policies
enforced in response to the pandemic.
§ Replacement
The global Replacement tire market ended the
first half down a historic 21%. While demand declined by just 11%
in the first quarter, given that the health crisis was only
impacting China and certain neighboring countries, it dropped by
30% in the second quarter, buffeted by the lockdowns ordered in
Europe and North America to deal with the pandemic.
In Europe, the initial effects of the health
crisis were felt in March, with demand falling 18%, and the full
impact of lockdown measures took its toll on the second quarter,
causing a 30% collapse in demand. The fall-off was more pronounced
in France, Spain and Italy, where tight lockdowns were implemented.
There was a clear improvement in June, with the decline easing to
12%.
In North America, the collapse in demand was
particularly steep in April and May, for a total 33% drop in the
second quarter. In a difficult economy, consumers shifted to more
entry-level tires.
After passing South American markets by in the
first quarter, which saw just a 1% decline in demand, the pandemic
hit hard in the second three months, causing demand to plummet by
52%. There were no signs of recovery in June.
After losing 31% in the first quarter due to the
health crisis, the Chinese market returned to growth in the second
quarter, with a 3% gain. The market is still being lifted as strong
growth in the OE market in recent years steadily feeds through to
Replacement demand.
In Africa-India-Middle East, Replacement demand
suffered both from the health crisis and the collapse in oil
prices, which is increasing economic instability in the region.
After showing some resilience to the pandemic in
the first quarter (down 8%), demand in Southeast Asia was more
adversely impacted in the second, losing 25%.
· Truck tires (radial and
bias)
First half
2020/2019(in number of tires) |
Europeincluding CIS* |
Europeexcluding CIS* |
North America |
CentralAmerica |
South America |
Asia(excluding India) |
Africa/ India/ Middle East |
Total |
Original Equipment Replacement |
-32% -9% |
-34% -16% |
-41%** -5% |
-17% |
-35% -21% -
|
+6% -23% |
-53% -26% |
-15% -19% |
Second
quarter2020/2019(in number of tires) |
Europeincluding Russia &
CIS* |
Europeexcluding Russia &
CIS* |
North America |
CentralAmerica |
South America |
Asia(excluding India) |
Africa/ India/ Middle East |
Total |
Original Equipment Replacement |
-45% -19% |
-48% -25% |
-60%** -11% |
-34% |
-59% -35% -
|
+31% -16% |
-59% -27% |
-7% -20% |
* Including Turkey.
** North America and Central America.
The number of new Truck tires
sold worldwide declined by 18% in the period ended June 30, 2020,
hit by the collapse in freight demand at a time of deep economic
distress. The second-quarter performance was in line with
first-quarter trends.
§ Original Equipment
The global Original Equipment Truck tire market,
as measured by the number of new tires sold, contracted by 15% in
the first half of 2020.
The cyclical downturn that began in late 2019 in
Europe and North America continued apace in the first quarter of
2020, leading to a 22% decline in demand, while the health crisis
caused the Chinese market to plunge 18% over the period.
The second quarter (down 7%) saw a very strong
45% rebound in OE demand in China, but markets in the other regions
sank under the weight of the health crisis and its economic impact.
In June, markets were nevertheless relatively less depressed in
Europe (down 18%) and, to a lesser extent, North and Central
America (down 35%).
Demand in the other regions is also being
dragged steeply down by the health crisis and the ensuing economic
impact, aggravated in the Africa-India-Middle East region by the
collapse in oil prices.
§ Replacement
In the midst of an unprecedented health crisis,
the global Replacement market fell by 19% in the first half of
2020, with the first quarter down 18% and the second down 20%.
In Europe, after emerging relatively unscathed
from the crisis in the first quarter, Replacement demand plunged
19% in the second quarter of the year. The impact of the crisis was
somewhat cushioned by the return of Asian tires made in countries
other than China (following customs duties introduced in May 2018
on Chinese tires).
In North America, after a stable first quarter
(up 1%), the impact of the health crisis was partially offset in
the second quarter (down 11%) by favorable prior-year comparatives,
reflecting deep drawdowns of dealer inventory in 2019 after the
massive buildup in late 2018 ahead of new import duties.
In South America, Replacement demand was
relatively unaffected by the health crisis in the first quarter
(down 6%) but plummeted 35% in the second three months of the
year.
In Africa-India-Middle East, Replacement markets
fell steadily over the half, to end the six-month period down 26%
overall.
Demand in Southeast Asia contracted by 18%.
After shedding 11% in the first quarter, the market downturn gained
momentum in the second quarter (down 26%) as the pandemic spread
throughout the region.
- Mining tires: The mining tire market remained
relatively resilient over the first half, although the Quarry and
Underground Mining tire segments contracted in line with prevailing
economic conditions.
- Agricultural and Construction tires: The
weakness in Agricultural tire markets over the period masked recent
rebounds in farm machinery output and demand in Europe. The
Construction segments, which are more sensitive to the economic
slowdown, fell sharply.
- Two-wheel tires: The Covid-19 crisis and
ensuing lockdowns hindered mobility in both the Recreational and
Commuting segments, particularly in Europe and Brazil. As people
gradually return to the road, the two-wheel tire market is
rebounding, lifted by its image as a safer alternative to public
transportation.
- Aircraft tires: The commercial aircraft tire
market collapsed in the first half amid the health crisis and
government-enforced lockdowns. At their low point in April, the
number of worldwide landings in the Commercial and Regional
segments were down by 75%. The Military and General Aviation
segments are holding up well.
- Conveyor belts: Trends in the mining conveyor
belt market varied by region and the length of their lockdowns,
which have prevented certain mines from operating at full capacity.
Mining operations remain strong in Australia, while in North
America, some coal mines have closed and the economic slowdown is
hurting industrial customers.
- Specialty polymers: As a whole, these markets
demonstrated greater resilience (particularly in the medical
applications segments), with the exception of energy seals.
First-half
2020 sales and results
·Sales
Sales for the first six months of 2020 totaled
€9,357 million, a decline of 20.6% from the year-earlier period
that was attributable to the net impact of the following
factors:
- the steep 22.4% decrease in volumes caused by the worldwide
collapse in tire demand in the wake of the health crisis and
resulting lockdowns;
- the still positive 1.9% price-mix effect (2.0% in the first
quarter and 1.7% in the second). The €30 million positive
price effect resulted from the Group’s firm price discipline in the
more competitive business environment created by plunging markets.
The €187 million positive mix effect reflected (i) the
sustained success of the MICHELIN brand’s premium strategy, notably
in the 18-inch and larger segment; (ii) the resilience of the
specialty businesses, such as mining tires and replacement
agricultural tires; and (iii) the favorable impact of the relative
performances of OE and Replacement tire sales;
- the 0.5% negative currency effect;
- the 0.4% positive impact from changes in the scope of
consolidation following the acquisitions of Masternaut and
Multistrada in 2019 and the disposal of Bookatable.
- Results
Segment operating income
amounted to €310 million or 3.3% of sales, versus €1,438 million
and 12.2% in first-half 2019.
The change in segment operating income primarily
reflects:- a €3 million increase from changes in the scope of
consolidation, following the inclusion of Masternaut and
Multistrada and the removal of Bookatable; - a €1,522 million
decrease from the 22.4% collapse in volumes due to the health
crisis, a deep fixed cost shortfall and a loss of industrial
productivity, partly offset by government-backed furlough grants;-
a robust €217 million increase from the price-mix effect, led by
disciplined price management and the continuous enhancement in the
value of the mix;- a €44 million increase from the decline in the
cost of raw materials;- a €192 million increase from the reduction
in SG&A expense enabled by the cost-saving measures deployed in
response to the crisis;- a €77 million decrease from
Covid-19-related expenditure, including the cost of purchasing and
producing masks and hand sanitizer.
Other operating income and
expenses amounted to a net expense of €133 million,
corresponding to the amortization of intangible assets acquired in
business combinations (€45 million), impairment losses on
non-current assets (€49 million) and restructuring costs.
In all, the Group reported a net loss of
€137 million for the period.
·Net financial position
Free cash flow ended the first half at a
negative €351 million, a €241 million improvement on the
prior-year period. The sharp decline in EBITDA caused by the fall
in volumes was more than offset by the reduction in trade working
capital, capital expenditure, tax paid and acquisition outlays. At
June 30, 2020, gearing stood at 45%, corresponding to net debt of
€5,510 million, up €326 million from
December 31, 2019.
·Segment information
In € millions |
Sales |
Segment operatingincome/(loss) |
Segment operatingmargin |
|
H1 2020 |
H1 2019 |
H1 2020 |
H1 2019 |
H1 2020 |
H1 2019 |
Automotive andrelated distribution |
4,394 |
5,658 |
(35) |
585 |
-0.8% |
10.3% |
Road transportation and related distribution |
2,411 |
3,144 |
(30) |
279 |
-1.3% |
8.9% |
Specialty businesses andrelated distribution |
2,552 |
2,979 |
375 |
574 |
14.7% |
19.3% |
Group |
9,357 |
11,781 |
310 |
1,438 |
3.3% |
12.2% |
§ Automotive and related
distribution
Sales in the Automotive and related distribution
segment declined by 22.3% to €4,394 million in the first half
of 2020, from €5,658 million in the prior-year period.
The Automotive segment operating loss amounted
to €35 million or a negative 0.8% of sales, versus operating income
of €585 million and a positive 10.3% in first-half 2019.
The steep decline was primarily due to the 24%
drop in volumes in line with the contraction in the Passenger car
and Light truck tire markets, which led to a fixed cost shortfall
and a loss of industrial efficiency that was only partially offset
by government-backed furlough grants. However, these negative
impacts were partially offset by the positive price-mix effect
stemming from the Group’s disciplined price management and the
growing proportion of 18-inch and larger tires in the sales
mix.
§ Road transportation and related
distribution
Sales in the Road transportation and related
distribution segment amounted to €2,411 million in the first
half of 2020, a 23.3% decline from the €3,144 million reported
for the same period in 2019.
The Road transportation segment operating loss
came to €30 million or a negative 1.3% of sales, versus operating
income of €279 million and a positive 8.9% in first-half 2019.
The collapse in global demand, along with, to a lesser extent, an
unfavorable geographic mix and more selective sales policies, led
to a sharp 25% contraction in volumes, which fed through to a fixed
cost shortfall and a loss of industrial efficiency that was only
partially offset by government-backed furlough grants. These
impacts were somewhat cushioned by the relative resilience of the
Services & Solutions businesses and the robust, positive
price-mix effect stemming from the Group’s selective focus on
value-creating market segments.
§
Specialty businesses and related distribution
Sales in the Specialty businesses and related
distribution segment declined by 14.3% over the period, to
€2,552 million from €2,979 million in first-half
2019.
Segment operating income in the Specialty
businesses stood at €375 million or 14.7% of sales, versus €574
million and 19.3% in first-half 2019.
With a 15% decline in volumes, the Specialty
businesses as a whole weathered the crisis better than the
Automotive and Road transportation businesses. The most resilient
segments were surface mining tires, replacement agricultural tires
and conveyor belts. The sharp decline in volumes also led to a
fixed cost shortfall and a loss of industrial efficiency that was
only partially offset by government-backed furlough grants. The
segment also benefited from a positive price-mix effect, led by
disciplined price management.
“All
Sustainable” Michelin – first-half 2020
Michelin has embedded the “All Sustainable” commitment deep in
its strategic vision and has undertaken a number of
results-oriented initiatives:
- The Michelin Global Works Council is an
innovative forum for international social dialogue across the
Group, created on January 27, 2020 by an agreement signed with the
IndustriALL Global Union. It expresses the Group’s strong belief
that social dialogue is a core driver of its growth and
performance, as well as a vector of progress in employee relations
and social development. By bringing together and representing most
of the Group’s host countries, the Council will act as a locus of
trust, relationships and open exchange, to facilitate greater, more
consensual understanding of the economic, social and environmental
changes that are transforming our world. Every member will be
encouraged to get involved and engaged in serving the general
interest and co-building tomorrow’s world around sustainable
performance and social progress.
- Michelin’s contribution to combating
Covid-19: In addition to maintaining its
priority focus on safeguarding employee health and safety, Michelin
leveraged its capacity for innovation and expertise to respond to
healthcare needs. The Group is also leading outreach initiatives in
its host communities. In all, since the beginning of the pandemic,
the Group has donated more than 2.4 million surgical, FFP2, N95 and
other masks, some 12,600 liters of hand sanitizer, around 4,600
tires mounted free of charge on ambulances, and tens of thousands
of personal protective equipment items. It has also made numerous
contributions in kind or in cash.
- Changes in governance: In
line with its “All Sustainable” strategy, Michelin has created a
new Corporate Social Responsibility Committee (CSRC) of the
Supervisory Board, which will be chaired by Monique Leroux. In
addition, at the Annual Meeting on June 23, 2020, shareholders
approved the election of two Supervisory Board members representing
employees, effective December 2020.
- Taking action to prevent global warming:
Michelin’s strategy to combat global warming is aligned with the
Paris Agreement signed at COP21 in 2015. In May 2020, its CO2
emissions reduction targets were approved by the SBTi*, a leading
independent organization in the field.
The
Group has pledged to reduce its Scope 1 and 2 greenhouse gas (GHG)
emissions by 38% in absolute value by 2030 compared with the 2010
baseline. Note that in 2019, Scope 1 and 2 emissions declined by
nearly 25% compared with 2010. Michelin is committed to reducing a
part of Scope 3 GHG emissions from fuel and energy-related
activities, upstream and downstream transportation and
distribution, and end-of-life treatment of sold products by 15% in
absolute value by 2030 compared with the 2018 baseline. Michelin is
also committed to ensuring that 70% of its raw material suppliers
(as measured by their GHG emissions) have defined science-based
targets by 2024.
SBTi approval
represents the first step toward carbon neutrality, by paving the
way to achieving net zero Scope 1 and 2 emissions in all of the
Group’s plants by 2050. The SBTi program also offers Michelin an
opportunity to deepen its engagement with suppliers and raise their
social responsibility commitment by taking targeted action to
reduce carbon emissions from raw materials
production. *
Launched in 2015, several months before COP21, the Science Based
Targets initiative (SBTi) is a collaboration between four
organizations proposing a voluntary approach to fighting climate
change in the private sector.
- Sustainable materials:
Michelin has embarked on a huge challenge to make every tire
component sustainable, by ensuring that by 2050, 80% of the
materials used to make its tires are sustainable (versus 26% in
2019). The Group is working on an array of ambitious, extremely
innovative programs, such as the recent partnership with Enviro to
use pyrolysis technology to recycle end-of-life tires and recover
new materials, such as carbon black, oil and gas.
- Tire road and wear particles (TRWP): The
Michelin Group is doubly committed to reducing abrasion:
- Individually, by attenuating the abrasion of its own products
by (i) leveraging its materials expertise and a design strategy
focused on optimizing the use of raw materials and reducing their
quantities and (ii) already working to define an ambitious target
for reducing TRWP emissions from its tires in coming years.
- Collectively, by collaborating with industry and public
authority stakeholders to help introduce maximum abrasion limits
and support deeper scientific understanding of TRWPs.
§
Movin’On: the world’s leading sustainable mobility
ecosystem, Movin’On is a core pillar of Michelin’s “All
Sustainable” strategy. It brings together corporate partners,
institutions, NGOs and cities that all share the same vision of
innovating together to build tomorrow’s mobility solutions. The
2020 Movin’On summit, which was scheduled to be held in Montreal in
June to review work in progress, was canceled due to the pandemic.
However, Movin’On maintained its forward momentum by digitizing its
initiatives. Online meetings organized on June 3 and 4 enabled more
than 1,700 experts to actively engage in discussions, while 20 new
communities of interest were launched and 3,500 people selected
startups to participate in a tailor-made support program to develop
their innovative mobility
solutions.
First-half
2020 highlights
– Michelin and HDI Global SE have formed a
partnership to help prevent and reduce road risk for company
vehicle fleets, thereby enhancing the Group’s offering of connected
solutions. (January 17, 2020)
– Closure of the Michelin plant in La
Roche-sur-Yon – The proposed support program for employees at the
Michelin plant in La Roche-sur-Yon, France has been signed by the
CFDT, CFE-CGC, SUD and FO trade unions. (January 23,
2020)
– This year, the MICHELIN Guide France
2020 celebrates sustainable gastronomy with a new green star
pictogram. (January 27, 2020)
–
Fenner Precision Polymers acquires Fabri Cote, a leader in the
development and manufacture of custom rubber-coated fabrics for
aerospace applications. (February 3,
2020) – During the third
Global Ministerial Conference on Road Safety, Michelin reaffirmed
its commitment to safer mobility through a wide range of global
partnerships and a variety of initiatives to raise the awareness of
public authorities and communities. (February 18, 2020)
– Michelin and Total subsidiary AS 24 join
forces to design and trial Fleet Diag 24, a new connected
diagnostic solution to inspect truck tires in service stations.
(February 24, 2020)
– Michelin wins a double at the Tire Technology
Expo in Hanover, being voted “Tire Manufacturer of the Year” for
the second consecutive year and earning the Innovation Award for
Uptis, its puncture-proof tire. (February 27, 2020)
– Fenner launches the new Eagle Poly-V line of
conveyor belts for roller conveyor applications.
(March 2, 2020)
– Covid-19: Michelin and other companies in
France’s Auvergne-Rhône-Alpes region step up to manufacture
reusable face masks. (April 8,
2020) – Michelin has
partnered with Enviro to develop and mass produce an innovative
pyrolysis technology to recycle end-of-life tires. The partnership
fits seamlessly with Michelin’s “All Sustainable” vision.
(April 15, 2020)
– The international Science Based Targets
initiative (SBTi*), a leading independent organization, has
approved Michelin’s CO2 reduction targets. This milestone
corroborates the effectiveness of Michelin’s environmental
initiatives, undertaken in particular to fight against global
warming in line with the COP21 Paris Climate Agreement. (May 21,
2020)
– Michelin and Essilor unveil a joint awareness
campaign during the Movin’On summit. (June 4, 2020)
– Rendezvousing with the future of sustainable
mobility during “Digital meetings by Movin’On.”
(June 3‑4, 2020)
– All four MICHELIN Power motorcycle tire ranges
entirely refreshed. (June 8, 2020)
– Michelin unveils its new MICHELIN Pilot Sport
CUP2 CONNECT tire, delivering higher, longer-lasting performance
and 100% connect-ready. (June 10, 2020)
– Michelin and Symbio: creating the future of
motorsports as partners of MissionH24.Through Symbio, its joint
venture with automotive equipment manufacturer Faurecia, Michelin
has become a preferred partner of the MissionH24 project, which
aims to accelerate the development of zero-emissions mobility by
using hydrogen fuel cell technology in endurance racing. (June 10,
2020)
– Michelin announces the publication of the
first MICHELIN Guide Slovenia and its newly curated MICHELIN Guide
Main Cities of Europe 2020. (June 15, 2020)
– The 2020 Annual Meeting of Michelin
shareholders was held behind closed doors for the first time.
(June 23, 2020)
– Creation of a Corporate Social Responsibility
Committee (CSRC) of the Supervisory Board and governance changes.
(June 24, 2020)
– New MICHELIN TRAILXBIB agricultural tire for
trailed vehicles combines soil protection and longer tread‑life.
(June 25, 2020)
– Michelin will remain supplier of Formula E
until 2022. As a founding partner of the world’s leading
championship race for 100% electric single-seaters since its first
season in 2014/2015, Michelin has long considered Formula E
motorsports as a fantastic opportunity to support its sustainable
mobility vision. In addition to this pioneering motorsport, the
Group is developing a wide array of innovations as part of other
ambitious programs geared towards the mobility of the future, such
as the MissionH24 project to introduce hydrogen technology in
endurance racing, and MotoETM, a fully electric motorcycle
championship organized as part of MotoGPTM. (July 1, 2020)
– Michelin joins the Coalition for the Energy of
the Future. The Coalition aims to accelerate the development of
energy sources and technologies to address the challenges posed by
sustainable mobility in the transportation and logistics industry.
(July 3, 2020)
– Michelin has joined the European Clean
Hydrogen Alliance, launched by the European Commission to support
the EU’s commitment to reach carbon neutrality by 2050. This
objective is also compatible with Michelin’s “All Sustainable”
vision. (July 8, 2020)
A full description of
first-half 2020 highlights may be found on the Michelin website:
http://www.michelin.com
Presentation and Conference
CallFirst-half 2020 results will be reviewed with analysts
and investors during a presentation today, Monday, July 27, at
6:30 p.m. CEST. The event will be in English, with simultaneous
interpreting in French.
The presentation will be webcast live on:
www.michelin.com/en/finance
Conference callPlease dial-in
on one of the following numbers from 6:20 pm CEST:
- In France
+33 (0)1 70 71 01 59 (French) PIN code: 88974766#
- In France
+33 (0)1 72 72 74 03 (English) PIN code: 66281872#
- In the United Kingdom
+44 (0) 207 194 3759 (English) PIN code: 66281872#
- In North America
(+1) (646) 722 4916 (English) PIN: 66281872#
- From anywhere else
+44 (0) 207 194 3759 (English) PIN code: 66281872#
The presentation of financial information for
the six months ended June 30, 2020 (press release, presentation,
financial report) may also be viewed at http://www.michelin.com/en,
along with practical information concerning the conference
call.
Investor
calendar·Financial information for the nine months
ending September 30, 2020: Thursday,
October 22, 2020 after close of trading.
Investor Relations Édouard
de Peufeilhoux+33 (0) 6 89 71 93 73
(mobile)edouard.de-peufeilhoux@michelin.com Humbert de
Feydeau+33 (0) 4 73 32 68 39+33 (0) 6 82 22 39 78
(mobile)humbert.de-feydeau@michelin.com Pierre Hassaïri+33 (0)
6 84 32 90 81 (mobile)pierre.hassairi@michelin.com |
Media Relations Paul-Alexis Bouquet +33
(0) 6 79 33 51 47paul-alexis.bouquet@michelin.comIndividual
Shareholders Isabelle
Maizaud-Aucouturier +33 (0) 4 73 32 23
05isabelle.maizaud-aucouturier@michelin.com Clémence
Rodriguez +33 (0) 4 73 32 15
11clemence.daturi-rodriguez@michelin.com |
DISCLAIMER
This press release 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 Michelin website
https://www.michelin.com/en.
This press release may contain a number of forward-looking
statements. Although the Company believes that these statements are
based on reasonable assumptions at the time of publishing this
document, they are by nature subject to risks and contingencies
liable to translate into a difference between actual data and the
forecasts made or inferred by these statements.
- 20200727_Michelin_PR_Half Year Results
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