By Denna Bowman
Tyres giant Michelin confirmed its full-year targets today and reported that growth in all tyre markets for the first nine months was faster than had been expected at the start of the year.
According to the French tyres manufacturer, the Chinese market is growing strongly, thanks to government incentives, while North American and European tyre markets, in particular Russia, are also recovering.
Third-quarter sales rose 23.8 percent to 4.65 billion euros, leaving nine-month sales up 19.4 percent to 13.0 billion euros.
Michelin managing partner Jean-Dominique Senard told analysts on a conference call the group would probably look at acquisition opportunities in the low-cost, high-quality segment, where the group did not have a strong enough presence.
He revealed that Michelin would probably look at small and medium-sized targets rather than large companies.
Morgan Stanley analyst Stuart Pearson said: “It is better than expectations but largely due to FX. Volume and mix are slightly short of our expectations, but it does not really change the debate on Michelin, which is more how they utilise the cash they have raised by the capital hike.”
He added: “Whether they announce new greenfield capacity or acquisitions, it is going to be a wait-and-see game.”