MICHELIN (Compagnie Generale des Establissements Michelin S.C.A.) Business Report FY2010

Business Highlights

Financial Overview

(in million euros)
  FY2010 FY2009 Rate of change(%) Factor
Sales 17,891 14,807 20.8 1)
Operating income(*) 1,695 862 96.6
Business unit of Passenger Car-Light Truck & Related Distribution
Sales 9,790 8,280 18.2 2)
Operating income(*) 1,014 661 53.4
Business unit of Truck & Related Distribution
Sales 5,680 4,496 26.3 3)
Operating income(*) 249 -69 -
(*) Before non-recurring items.

-The increase was led by a 13.4% improvement in sales volumes and a 1.7% gain from the price mix, as higher prices amply offset the impact of an unfavorable product mix throughout the year.

-In all, net sales in the Passenger Car and Light Truck Tires and Related Distribution segment stood at 9,790 million euro for the year,
up 18.2% on 2009. Unit sales were sustained throughout the year by fi rm demand for winter tires and the strength of the MICHELIN

-Net sales in the Truck Tires and Related Distribution segment amounted to 5,680 million euro for the year, up 26.3% on 2009. Sales volumes rose sharply against low prior-year comparatives, with faster growth at the end of the year causing certain supply issues in mature markets.


-In Jan, 2011, “MICHELIN Pilot Sport 3” sports tire for passenger cars was chosen as an originally equipped tire for the Audi compact car “A1” for its high performance in sporty driving. (From an article in the Nikkan Jidosha Shimbun on January 14, 2011)

-The Company supplies its high-performance tires for the new Porsche Cayenne. Three tire models - MICHELIN Latitude Tour HP, Latitude Sport and Latitude Alpin - will be offered for the vehicle. (From a press release on May 6, 2010)

-All of The Ferrari 599 GTO(a production run of 599 vehicles)  will be equipped with Michelin tires specially designed for this model. The tires come in different sizes: 285/30ZR20 for the front and 315/35ZR20 for the rear. (From a press release on May 6, 2010)

-In Apr. 2010, Ford added 13 new companies to its Aligned Business Framework (ABF), bringing the total to 90 members, and Michelin was included as one of them. Ford created ABF in 2005 to strengthen its collaboration with key suppliers. (From a Ford press release on April 23, 2010)


R&D Expenditure

(in million euros)
  FY2010 FY2009 FY2008
Overall 545 506 499
% of sales 3.0% 3.4% 3.0%

R&D Structure

-4,000 research engineers and developers are engaged in the R&D operations in France, Spain, the United States and Japan.

-The Company has undertaken a top-to-bottom upgrade of its research and development center in Ladoux, near Clermont-Ferrand, France. It will consolidate all Michelin R&D teams and laboratories on the same site to strengthen its innovation capabilities and shorten new tire time-to-market. The project includes the renovation of existing buildings and the construction within the site of a 67,000-square-meter building called RDI Campus. The entire project represents an investment of more than 100 million euros. Construction of the building will begin in spring 2012. The first section of the main building – for around 600 people – will be delivered in 2014. In the center, where some 3,300 people work, a new complex will be built by 2017. The second will be completed in late 2016, when 1,000 additional people will be installed in the Center. (From a press release on January 20, 2011)

Investment Activities

Capital Expenditure by Business Segments

(in million euros)
  FY2010 FY2009 FY2008
Passenger Car Light Truck 599 322 635
Truck Tires 292 178 353
Others 209 172 283
Total 1,100 672 1,271

Capital Expenditure by Geographical Segments

(in million euros)
  FY2010 FY2009 FY2008
Europe N.A. 423 709
North America  N.A. 152 280
Others N.A. 97 282
Total 1,100 672 1,271

-Capital expenditure is expected to total nearly 1.6 billion euro a year over the 2011-2015 period.