Michelin (ML) H2 2024 earnings summary

Executive summary

• Continued deployment of the Motion Strategy 2030, focusing on innovation, brand strength, and expansion into services and polymer composites, with major innovations such as a bio-based butadiene demonstrator and digital energy management partnership with Microsoft.

• Achieved growth in high-value tire segments (18-inch+), all-season, and winter tires, with new product launches and technological partnerships, and a continued upmarket shift in product mix.

• Maintained strong employee engagement (84.7%), with 57% employee shareholder subscription and living wage certification for all employees.

• Advanced sustainability initiatives, including a 13% reduction in CO2 emissions (scopes 1 & 2), a 3-point increase in renewable/recycled material rate, and progress on carbon reduction and circular economy initiatives.

• Strategic focus on value-driven segments, innovation, and sustainability, with continued progress on the "Michelin in Motion 2030" plan.

Financial highlights

• Segment operating income reached €3.4 billion in 2024, with a 12.6% margin at constant exchange rates, despite a 5.1% drop in tire volumes.

• Free cash flow before acquisitions was €2.2 billion, the second-best in company history.

• Sales totaled €27.2 billion, down 3.1% at constant FX, with a 5.1% volume decrease and a 2% price/mix improvement.

• Operating margin stabilized at 12.6% at constant FX, with EBITDA margin at 19.7% of sales.

• Proposed dividend of €1.38 per share, a 52% payout ratio.

Outlook and guidance

• 2025 guidance targets higher segment operating income at constant FX and free cash flow above €1.7 billion, excluding M&A.

• Market expected to remain volatile, with flattish or slightly positive growth in passenger car and truck tires, and a rebound in OE in H2 2025.

• Anticipates continued growth in two-wheel, mining, aircraft, and polymer composite solutions.

• Ongoing product launches and industrial footprint optimization planned.

• 2026 objectives reaffirmed.