By Oliver Hall
Michelin has reported a 10.9 per cent drop in sales during the third quarter of 2009 due which it states is “in line with the decline in global tyre markets.”
The French tyres manufacturer also revealed that during the nine months to September 30, 2009 net sales amounted to 10.888 billion euros, a year-on-year decline of 12.5 per cent, the company said in a statement.
However Michelin, which is cutting more than 1,000 jobs in France, said it was still aiming to generate positive cash flow in the second half of 2009.
The company said that in the second half of the year it expected “improved profitability versus the first half thanks to the raw materials tailwind.”
Michelin said it expected market conditions to vary according to business segment and region in the final quarter.
Passenger car and light truck tyre sales should benefit from higher winter demand as well as the government subsidies introduced in major markets to help flagging car sales.
Truck tyre demand has bottomed out, but at very low levels, the company said. “In the replacement segment, the trucking market is still hesitant, but dealers and fleets are no longer drawing down inventory,” Michelin said.
Michelin said it expected improved profitability in the second half compared with the first thanks to a positive impact from raw material prices, leading to 550 million euros of savings at constant exchange rates.
It expected a further reduction in inventory and confirmed capital expenditure at 700 million euros for this year.