Michelin's nine-month sales slip 0.5% as tyre volumes fall

what happened

Michelin reported on Tuesday that its nine-month sales fell 0.5% at current exchange rates, to €19.18 billion ($21.54 billion), according to Reuters. The French tyre maker linked the decline to weaker tyre volumes and a negative currency effect tied to the US dollar's fall. Excluding currency moves, sales actually edged up 1%.

Tyre volumes dropped 0.8%, mostly in original equipment sales. The currency drag reached 1.6% for the period, though it turned positive in the third quarter. The Polymer Composite Solutions unit grew 21.9% to €1.15 billion, helped by the Cooley Group, Flexitallic and TexTech acquisitions. Prices and mix added 1.1%, as the company raised prices to offset higher raw material costs. Michelin kept its full-year guidance unchanged.

why it matters

The results show how a weaker dollar can shrink euro-denominated sales for European exporters, while raw material inflation pushes companies to pass costs on to customers. Investors often watch tyre volumes as a gauge of demand for cars and trucks. Keeping guidance suggests management still expects its current outlook to hold.

market impact

Michelin and European tyre makers: a weaker dollar trims euro sales, and lower volumes weigh on demand.

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