MICHELIN (Compagnie Generale des Establissements Michelin S.C.A.) Business Report FY ended Dec. 2013
Business Highlights
Financial Overview |
(in million EUR) |
FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | Rate of change (%) | Factor | |
Overall | ||||
Sales | 20,247 | 21,474 | (5.7) | 1) |
Operating income* | 2,234 | 2,478 | (9.8) | |
Passenger Car-Light Truck & Related Distribution | ||||
Sales | 10,693 | 11,098 | (3.6) | - |
Operating income* | 1,086 | 1,057 | 2.7 | |
Truck & Related Distribution | ||||
Sales | 6,425 | 6,736 | (4.6) | - |
Operating income* | 503 | 464 | 8.4 |
Factors
1)
-The stable volume performance reflected demand that was weak in the first half and more robust in the second, despite the slowdown in Earthmover tire markets over the year;
-The negative price-mix reduced net sales by EUR 516 million euros or 2.4%. This figure included the EUR 550 million negative impact from contractual price reductions based on raw materials indexation clauses and the carefully managed price repositionings targeted on certain tire sizes, as well as the EUR 34-million positive impact from improvements in the product mix, led by the premium strategy in the 17" and larger segment;
-The very unfavorable currency effect, which reduced reported net sales by EUR 716 million or 3.4%, primarily resulted from the stronger euro.
Contracts
-Major contracts in 2013:Products | Model |
Pilot Sport Cup 2 | Porsche "918 Spyder" |
Ferrari "458 Speciale" | |
Daimler "Mercedes-Benz SLS AMG Coupe Black Series" | |
Energy Saver+/Pilot Sport 3 | Peugeot "308" |
Pilot Sport | Subaru "BRZ tS" |
Pilot Super Sport/Pilot Alpin 4/Pilot Sport All Season Plus | Porsche "Panamera" |
Latitude Sport 3/Alpin 2/Latitude Tour HP | Porsche "Macan" |
Pilot Super Sport ZP | GM "Chevrolet Corvette Stingray" |
Joint Venture
<Indonesia>-The Company and PT Petrokimia Butadiene Indonesia (PBI), a wholly-owned subsidiary of Indonesia-based petrochemical producer PT Chandra Asri Petrochemical Tbk, signed an agreement to create a joint venture company, to produce synthetic rubber. The new company will be owned 55% by Michelin and 45% by PBI. The total investment is estimated at USD 435 million. Plant construction is expected to commence in early 2015 with completion and start-up targeted for the beginning of 2017. (From a press release on June 17, 2013)
Plant Closure
<Colombia>-The Company has decided to discontinue the manufacturing operations of its local subsidiary Icollantas in Colombia in response to more than a decade of substantial annual losses, which repeated investments have failed to stem. Production operations at the Chusaca truck tire plant, which employs around 220 people, and at the Cali plant, which makes MICHELIN passenger car tires and BF Goodrich tires with a workforce of around 240 people, will be shut down in the summer of 2013. (From a press release on June 12, 2013)
<Algeria>
-The Company announced that the production and marketing of truck tires in Algeria will be sold to Cevital, the country's largest privately owned manufacturer specializes in food industry. Cevital will initially acquire 67% of the local subsidiary's capital, before buying out the remaining shares in a second phase. Production at the Algerian plant will be discontinued in late 2013. (From a press release on June 10, 2013)
R&D
R&D Expenditure |
(in million EUR) |
FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | FY ended Dec. 31, 2011 | |
Overall | 643 | 622 | 592 |
R&D Facility
<France>-The Company announced that it laid the cornerstone for the main building at the Group's new research and development center at the Ladoux site in Clermont-Ferrand, France. The new building called Campus RDI (Research, Development and Process Engineering) will be staffed by some 1,600 people. While the construction will last until 2018, the first part of the building will be delivered in late 2015, when 600 people are scheduled to begin working there. The second part will be completed in late 2018 and 1,000 additional people will join the staff. Once the work is completed, Michelin's global research center will have been entirely modernized. The project represents an investment of EUR 270 million from 2007 to 2018, of which EUR 170 million will be invested in Campus RDI. (From a press release on December 16, 2013)
Investment Activities
Capital Expenditure |
(in million EUR) |
FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | FY ended Dec. 31, 2011 | |
Overall | 1,980 | 1,996 | 1,711 |