Michelin (ML) H2 2025 earnings summary

Executive summary

• Segment operating income reached EUR 2.9 billion at constant exchange rates, with free cash flow before M&A of EUR 2.1 billion, despite lower business volumes and currency headwinds.

• Sales totaled EUR 26.0 billion, down 4.4% year-over-year, mainly due to a 4.7% decline in volumes and adverse FX, especially in OE Truck and Agricultural tires in North America.

• PCS and non-tire businesses contributed positively to sales and operating income, with recent acquisitions accelerating growth.

• The group advanced its Michelin in Motion 2030 strategy, focusing on brand strength, innovation, and sustainability, with high employee engagement and safety improvements.

• Proposed stable dividend of EUR 1.38 per share (50%-57% payout ratio) and announced a new share buyback program up to EUR 2 billion for 2026-2028.

Financial highlights

• Segment operating income was EUR 2,719 million (10.5% margin), down from EUR 3,378 million (12.4%) in 2024.

• Free cash flow before M&A was EUR 2.1 billion, with cumulative EUR 4.4 billion over 2024-2025.

• Net income was EUR 1,664 million, with basic EPS at EUR 2.36.

• Dividend per share maintained at EUR 1.38, with a 57% payout ratio and 4.9% yield.

• Gearing improved to 13%, with net debt reduced to EUR 2,345 million.

Outlook and guidance

• 2026 guidance targets segment operating income above 2025 at iso-scope and Forex, and free cash flow before acquisitions above EUR 1.6 billion.

• Tire volumes expected flat in H1 2026, improving in H2 as OE markets recover; PCS growth to continue.

• Anticipates EUR 400 million raw material tailwind in 2026, offset by EUR 220 million in wage and logistics inflation.

• Tariff impact expected to decrease to EUR 120 million in 2026.

• Polymer Composite Solutions to become a new reporting segment from Q1 2026.