UNIVERSAL REGISTRATION DOCUMENT 2023 including the annual financial report, the non-financial performance statement and the duty of care plan
CONTENTS 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 1 PRESENTATION AND STRATEGY OF THE MICHELIN GROUP The Group 2 Capitalizing on our fundamentals 7 Accelerating our transformation 25 Meeting the highest standards of governance 41 2 RISK MANAGEMENT 2.1 Risk factors specific to Michelin, description and related management systems 54 2.2 Cross-functional risk management procedures 63 2.3 Internal control process relating to the preparation of accounting and financial information 66 3 CORPORATE GOVERNANCE REPORT 3.1 Administrative, management and supervisory bodies 72 3.2 Supervisory Board practices – Activities in 2023 100 3.3 Management and Supervisory Board compensation policies for 2024 114 3.4 Information about the components of compensation paid or awarded to the corporate officers 124 3.5 Individual compensation paid or awarded to the Managers and the Chair of the Supervisory Board for 2023 138 3.6 Other information about compensation of the executive officers 144 3.7 Total compensation awarded to the Group Executive Committee 149 3.8 Trading in Michelin shares by the corporate officers and their close relatives in 2023 149 3.9 Procedure for assessing agreements entered into in the normal course of business 149 3.10 Articles of incorporation, Bylaws and shareholder participation at General Meetings 150 3.11 Ownership structure and voting rights 152 3.12 Financial authorizations 153 3.13 Change of control 156 3.14 Statutory Auditorsʼ report, prepared in accordance with Article L. 22-10-78 of the French Commercial Code on the Corporate Governance Report 157 4 NON-FINANCIAL STATEMENT Introduction 160 Scope of the report 161 4.1 Sustainable Development Report 166 4.2 Non-Financial Statement 291 4.3 Duty of care plan 302 4.4 Other tables of concordance 309 5 FINANCIAL PERFORMANCE 5.1 Report of the Managers 322 5.2 2023 consolidated financial statements 358 5.3 Financial statements 449 5.4 Additional information 471 6 INVESTOR RELATIONS 6.1 Information about the Company 476 6.2 Share information 477 6.3 Investor relations 480 6.4 Documents on display 480 6.5 Additional share information 481 7 ANNUAL SHAREHOLDERS MEETING OF MAY 17, 2024 7.1 Report of the Managing Chairman and proposed resolutions 498 7.2 Report of the Supervisory Board: recommendations concerning the votes on the proposed resolutions 518 7.3 Statutory Auditors’ reports 525 8 TABLES OF CONCORDANCE 8.1 Table of concordance for the Universal Registration Document 532 8.2 Table of concordance for the Annual Financial Report 534 8.3 Table of concordance with the AMF tables on corporate officer compensation 534 8.4 Table of concordance for the Management Report 535
DOCUMENT D’ENREGISTREMENT UNIVERSEL 2023_MICHELIN _1 This is a translation into English of the Universal Registration Document of the Company issued in French and it is available on the website of the Issuer. All possible care has been taken to ensure that this translation is an accurate presentation of the original. However, in all matters of interpretation, views or opinion expressed in the original language version of the document in French take precedence over the translation. The French language version of this Universal Registration Document was filed on April 7, 2023 with the French securities regulator (Autorité des Marchés Financiers - AMF), as the competent authority under Regulation (EU) 2017/1129, without prior approval in accordance with Article 9 of said Regulation. The Universal Registration Document can be used when securities are offered to the public or for their admission to trading on a regulated market if it is completed by a note on the securities and, if applicable, a summary and all of the amendments made to the Universal Registration Document. The package is approved by the AMF in accordance with EU Regulation 2017/1129. The Annual Financial Report included in the Universal Registration Document is a translation of the official version of the Annual Financial Report in format ESEF (European Single Electronic Format), which may be found on the www.michelin.com website.
2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
_1 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 1 THE GROUP 2 Company profile 2 Interview with Florent Menegaux 4 CAPITALIZING ON OUR FUNDAMENTALS 7 The major trends reshaping a world in transition 8 Our business model 10 Our strengths 12 Our Michelin in Motion strategy 14 Our strategic pillars in detail 16 Tires 18 Connected solutions 21 High-Tech Materials 22 ACCELERATING OUR TRANSFORMATION 25 Our All Sustainable vision 26 An interview with Yves Chapot 27 Profit 28 People 32 Planet 36 MEETING THE HIGHEST STANDARDS OF GOVERNANCE 41 Governance structure 42 The Managers and the Group Executive Committee 44 The Supervisory Board 46 Risk management 48 Ethics and compliance 49 Investor relations 50 Presentation and strategy of the Michelin Group
THE GROUP Company profile Offering everyone a better way forward is our purpose. Michelin believes that the future can only be built on a sustainable growth model. With its unrivaled expertise in composites and advanced manufacturing processes, Michelin is constantly innovating to design premium tires, polymer-based components for critical applications, connected solutions for fleets and remarkable experiences curated by the MICHELIN GUIDE. _2 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
in 2023 Sales €28.3bn North America 39% AUTOMOTIVE LONG DISTANCE AND URBAN TRANSPORTATION SPECIALTY BUSINESSES 50% 6,000 -6% 132,500 86 €1.2bn 45 -10% 25% Beyond-road tires 20% High-tech materials 5% Europe 35% Original equipment and replacement tires people in R&D CO2 emissions in 2023 vs. 2022 people worldwide at year-end 2023 tire production facilities 2023 innovation budget water withdrawals in 2023 vs. 2022 high-tech materials production facilities Heavy truck, light truck and van tires Connected solutions Mining, agricultural, construction, materials handling and aircraft tires Coated fabrics, films, conveyors, belts, seals, inflatable structures, biomaterials, etc. EMPLOYEES INNOVATION PRODUCTION PLANET Michelin, an innovation-driven global leader Other regions 26% 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _3
THE GROUP Interview with Florent Menegaux How did the different business lines contribute to the year’s performance? >FM: These results attest to the collective performance of all our employees. Our customers increasingly understand and value the quality of our solutions, products and services, which is why our financial performance improved despite the decline in volumes. Our operational management also enabled us to sharply scale back inventories, which helped to increase cash flow. How would you describe Michelin’s performance in 2023? > Florent Ménégaux: Michelin delivered a very robust performance in what is still a highly complex environment. Financially, our segment operating income improved significantly to €3,572 million, and our cash flow from operations rose to an all-time high of €3,009 million. In terms of people, the employee engagement rate continued to improve, gaining one point over the year to 83.5% in 2023. At the same time, we made progress in increasing the number of women in management positions and in further reducing the TCIR, which measures the frequency and severity of occupational accidents. On the environmental front, I would like to highlight the significant 6% year-on-year decline in our carbon emissions achieved in 2023. We also reduced the amount of water withdrawn for our manufacturing operations by 10% compared with 2022. We want to continue creating value for people, the planet and our own bottom line. This means continuing to explore new frontiers, where we can fully express our expertise both in high-tech materials and in customer experiences.” Interview with Managing Chairman Florent Menegaux These outcomes are indicative of the overall progress we’re making on the three People, Profit and Planet bottom lines. Year after year, we’re demonstrating that not only is it possible to strike the right balance of creating value in these three areas, but also that their interdependence is the only way for us to drive sustainable growth. I’d like to congratulate all our employees. This performance is theirs, and we can all be proud of it together. _4 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN Interview with Florent Menegaux
How would you assess the first years of the Michelin in Motion plan? >FM: The Group is continuing to execute its strategy and is on track to fulfill its 2030 ambitions. We’ve seen that by maintaining our course, we’ve been able to successfully navigate a complex, ever-shifting environment. Our strategy acts as a compass, guiding us to make the right choices. Because our destination is clear, we can constantly adjust our course to reach it. The second major lesson is the way that our strategy has strengthened our resilience. By deploying our core capabilities in new markets, the strategy is broadening our playing field and reducing our cyclical exposure. This was demonstrated once again this year by the growth in our nontire businesses. Lastly, this success has only been possible because the strategic plan’s six transformations are all delivering their benefits. We can see their real-life impact every day in the personal growth of our employees, in the experience we offer our customers, and in the design of our products, which are now engineered from the outset to minimize their life-cycle environmental impacts. These advances are interconnected, and it’s by driving all the transformations forward that we’ll be able to fulfill our ambitions. Do these results mark the success of your value-first approach? >FM: We want to create value simultaneously for people, the planet and our own bottom line. Value isn’t a niche strategy. Our customers recognize the quality and performance of our products. They’re willing to pay the right price for the real-world benefits we deliver. In this sense, value is embodied in our brand, which has always been a hallmark of trust and innovation. Value also stems directly from the quality of our employees, who work tirelessly to deploy our expertise and offer our customers the very best. By recognizing and promoting the value of what we do today, we’ll be able to design even more environmentally friendly products and services tomorrow, thanks to teams that are increasingly better trained and more engaged. The value-first approach is therefore a source of general progress that we think should benefit as many people as possible. What do you consider to be the highlights of the past year? >FM: The year was shaped by game-changing innovations and progress in every aspect of our business, as you’ll see in the following pages. But I’d like to come back to the announced winding down of some of our production plants in Germany and the United States. This is one of hardest decisions to make when you are looking to prepare a company to face the future, and we made it in response to changes in our competitive environment and structural factors impacting the competitiveness of our output. Despite the tremendous dedication and hard work of the plants’ employees, the situation made it impossible to maintain these operations without compromising the Group’s ability to make today’s performance the springboard for tomorrow's success. That’s why our current priority is to support not only every person directly impacted by these decisions, but also their communities. As Michelin has shown in the past, when such decisions have had to be made, the Group stands totally with the employees. Even after the facilities close, Michelin continues to assume its responsibility by proposing solutions, revitalizing the local ecosystem and creating new jobs. In the face of rising competitive pressure, Michelin is determined to continue strengthening its local-to-local production strategy, which makes the most environmental, financial and social sense. Making the most effective use of our existing capacity is fundamental, and one of the drivers of our future success. How does the global environment impact Michelin? >FM: As we all know, these are times of geopolitical rigidity and rising tensions. I believe that a company has a major responsibility in responding to these challenges, as well as an important role to play. At Michelin, we pay particular attention to deepening our social cohesion, which is the foundation of our performance over time. By deploying our universal social protection floor, but also by offering all employees at least a living wage, we’re making sure that everyone in the corporate community can access a set of guaranteed fundamental rights that enable them and their families to live with dignity and cope with the unexpected. One thing about us is that we don't give up. Where others see threats, we choose to see opportunities. We are always part of the solution. That’s our DNA and our unshakable faith in human progress. The non-tire businesses, whose sales rose by 10% over the year, are proving to be a sustainable growth engine for the Group. I'm thinking, for example, of conveyors, which are part of our high-tech materials business, or our fleet services. The integration of Flex Composite Group is going smoothly and is already creating value. The performance of our Lifestyle operations is also promising. 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _5
What gives you confidence in Michelin’s future? >FM: My deepest source of confidence in the future is the quality of Michelin people. I often say that a manager’s task is to ensure that each Michelin employee can succeed, because when each employee succeeds, the company as a whole will also succeed. The people that make up our Group are its primary asset, and the source of its success. We want our company to remain a place of lifelong learning where everyone, regardless of background or education, can grow and build their career paths in line with their aspirations. Of course, our technological expertise and capacity for innovation are fundamental, but they are only meaningful when they serve human needs. When we deploy new technology in our plants, for example, we make sure that it helps employees to do their jobs better and makes their work more stimulating. Another reason for confidence is our ability to scale up disruptive innovations and bring them to market. We'll need innovation to meet the environmental, social and business challenges we are all facing together. Few companies are as capable as Michelin in supporting innovation, from the emergence of an idea to its widespread deployment. Is Michelin still perceived as a pioneer? >FM: By continuing to write the Michelin saga, we are projecting our exceptional heritage into the future. We can do this because we know that some things never change. Our pioneer DNA is constantly driving us to explore new fields, as Michelin has always done throughout its history. This is what makes us optimistic about our ability to make a decisive contribution to many of the great challenges facing humanity. In doing so, we know that we can count on the strengths that Michelin has demonstrated from the beginning: the engagement of our teams combined with our technological expertise and spirit of innovation to help advance human progress, as well as our overriding confidence in people. How do you see 2024? What are the Group’s major challenges that have to be addressed? >FM: We want to continue creating value for people, the planet and our own bottom line. This means continuing to explore new frontiers, where we can fully express our expertise both in high-tech materials and in customer experiences. THE GROUP Interview with Florent Menegaux We’ll need to focus our resources as effectively as possible, zeroing in on where we can have the greatest impact, where Michelin can really make a difference. Michelin has what it takes to become a global leader in composites and in experiences that can change people’s lives. With tires, we've already mastered the most critical composite, one that is expected to deliver the most performance, sometimes in contradictory ways, for example by being both round and flat, flexible and rigid, exposed to high stress yet also highly resistant. These features and products are in high demand in many other markets, from aerospace and construction to energy and healthcare. The high standards and care we demonstrate in offering customers exceptional experiences is also a strength we’ll be leveraging in every aspect of our business. _6 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
Capitalizing on our fundamentals 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _7 CAPITALIZING ON OUR FUNDAMENTALS
CAPITALIZING ON OUR FUNDAMENTALS Major trends The major trends reshaping a world in transition Michelin’s operating environment is being reshaped by three deep structural trends. In response, the Group intends to capitalize on its powerful innovation and its All Sustainable vision, consistent with its corporate dream of being recognized in 2050 as a leader in innovation capable of helping humanity to explore new frontiers. The environmental transition The resulting challenges for Michelin Making ecodesign standard practice and performing life cycle assessments on all our products and services. Improving our ability to safeguard natural resources by expanding the circular economy and increasing the proportion of renewable and recycled materials used in our products. Reaching net-zero carbon emissions by 2050 in Scopes 1 and 2 and in the Scope 3 categories of upstream and downstream logistics activities, suppliers, treatment of end-of-life tires and energy. Continuing to improve the energy efficiency of our products and further reducing tire and road wear particle emissions. Reducing our water withdrawals more quickly. With global warming, ecosystem degradation and biodiversity loss, humanity is facing an unprecedented challenge. Given that planetary resources are limited, the current growth model has to be reinvented to become lower carbon, more energy-efficient, more circular and more resilient. We also have to rethink the ways we produce and consume, so that resources can be better used. _8 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN The major trends reshaping a world in transition
The technological transition The social transition As digitalization becomes ever-more pervasive, lifestyles, workstyles and the ways that products, services and processes are developed are all changing dramatically. Everything seems faster, closer and, as such, more accessible or easier. This new technological landscape is opening up a myriad of opportunities, including instantaneous access to information, the growing power of artificial intelligence, the proliferation of connected objects, the emergence of new approaches to social and business relationships, the transformation of usage patterns, the development of Industry 4.0 systems and the new impetus in research. Societies are undergoing deep-seated change, transforming our relationship with work. Employees are seeking more flexible, less restrictive and hybrid working conditions, while employers have to reinvent themselves to remain attractive. Lifestyles are also changing, with a growing sensitivity to sustainability, a search for greater resource efficiency, ubiquitous connectivity, the emergence of hybrid travel and an appetite for new solutions. The resulting challenges for Michelin Developing new, high value-added services based on contextualized data. Extensively deploying artificial intelligence to make our production processes safer and more efficient. Offering a holistic approach to connected mobility with our range of services and solutions. Streamlining and simplifying our customer relationships. The resulting challenges for Michelin Enhancing the appeal of manufacturing jobs with Industry 4.0 practices. Enabling customers and employees to improve productivity, safety and ergonomics thanks to the technological advances delivered by our innovation and our proficiency in renewable and recycled materials. Helping to decarbonize city centers with our electric mobility solutions for business fleets. Speeding up the development of connected products and solutions. 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _9
Tires Automotive, road transportation, specialties high-tech materials Flexible composite solutions, engineered polymers, emerging value chains CAPITALIZING ON OUR FUNDAMENTALS Our business model Our business model We are mobilizing our unique competitive strengths... Our Purpose: ...to drive A deep understanding of the uses and science of materials As our core expertise, our knowledge of materials science enables us increasingly to combine and deliver, in the same product, all the performance our customers expect. The ability to process engineer complex products For our tires, process innovation goes hand in hand with product innovation, a distinctive capability that is also being leveraged in our high-tech materials business. Engaged employees In the company: 83.5% of employees engaged. With customers: a Net Promoter Score of 43. In host communities: more than 19,700 local volunteer programs involving employees. A capital of trust MICHELIN, the world’s leading high-performance tire brand, with leadership based on 133 years of innovations that make all the difference for our customers. We care about giving people a better way forward _10 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN Our business model
sustainable growth... ...and create value for all our stakeholders Customers Innovation enables us to improve safety and performance for customers over the long term, while steadily reducing their environmental impact. Employees We believe that all types of diversity are a valuable asset and seek to give everyone the resources they need to grow in a safe and motivating working environment. Shareholders Michelin delivers robust, value‑creating economic performance and is committed to paying out around half of consolidated net income in dividends by 2030. Suppliers Our supplier relationships are governed by transparency and a commitment to moving forward together. Society Through our solutions and initiatives, we are contributing to the vitality of our host communities, to human progress and to a more sustainable world. Environment We are taking action, both upstream and downstream from our operations, to fight climate change, conserve natural resources and protect biodiversity. Connected solutions for fleet operators and monetization of collected data Our strengths: our materials expertise our proficiency in complex production processes the strength of our brand our close customer relationships Trends & challenges The environmental, technological and social transitions Values built on respect respect for facts, people, customers, shareholders and the environment 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _11
CAPITALIZING ON OUR FUNDAMENTALS Our strengths Our strengths Michelin enjoys strategic strengths that are at once rare, inimitable and value-creating. Our distinctive capabilities are a powerful strategic resource Designing and process engineering innovative materials Michelin has developed distinctive expertise, unequaled anywhere in the market, in the design, development and production of innovative materials, such as wire or cord reinforcements and all types of polymers. As structural elements, materials play a decisive role in delivering a tire’s end performance in terms of endurance, longevity, abrasion and energy efficiency. This is why our expertise is expressed in the ability to understand the mechanics of materials in use, to combine components with antagonistic properties and to mass‑produce our own reinforcements and polymers when no other supplier is capable of providing us with the requisite levels of performance. Building on this expertise, the Group develops increasingly innovative products offering ever-higher performance. Designing flexible composite products Our expertise in designing flexible composite products stems from our unparalleled ability to engineer structures that are rigid overall, but locally highly deformable, in which managing the stress between hard and soft materials plays a decisive role. This is the expertise that has enabled Michelin to grow in the tire business, and that the Group is leveraging to expand into new business territories – a tire, for example, has to absorb more than 100 million deformations during its in-use phase, while remaining rigid enough to carry and guide the vehicle. This expertise is expressed through the combination of three key capabilities: (i) a perfect understanding of how our products are used; (ii) outstanding proficiency in modeling and characterizing flexible structures; and (iii) multi-scale prototyping abilities, along with testing and measurement resources to support the seamless transition from virtual to real. Examples include: Tires containing 45% to 63% renewable or recycled materials Fully EV-compatible tire lines Conveyor systems made from tire-derived semi‑finished product wastage Non-toxic adhesive resins from ResiCare Biomaterials from Solesis Examples include: Innovation leadership in airless tire technologies, such as Tweel, UPTIS and the moon wheel The WISAMO inflatable wing-sail for container ships MICHELIN AirProne air cushions for medical applications Fenner Eagle XLD belts providing four times the load capacity of the prior generation _12 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN Our strengths
A powerful, iconic, universal brand Created more than 130 years ago, the MICHELIN brand expresses the Group's values and commitments to its customers and partners around the world. Embodied by the MICHELIN Man – voted Icon of the Millennium by New York’s Advertising Week in 2018 and Best Logo of the Century by the Financial Times in 2000 – the brand symbolizes innovation, quality, safety and performance, all of which are manifested in the products and services designed and developed by Michelin. As such, it is a key success driver of the Michelin in Motion strategic plan and one of the Group’s most valuable assets. With its excellent reputation, the brand has enabled the Group to build market recognition, expand into new growth territories and stand at the top in industry rankings. For example, Michelin has been identified as one of the 100 most innovative companies in the world (Clarivate Top 100 Global Innovators) and was named the number one employer in the automotive category on the 2023 Forbes list of America’s Best Large Employers. The MICHELIN brand enjoys an extraordinary capital of trust and a reputation that speaks reliability, pursuit of excellence and positive impact. Designing dedicated production processes Michelin's ability to design dedicated, one-of-a-kind production processes is one of its key success factors and sources of competitive differentiation. This expertise is characterized by our ability to design the dedicated machines needed to support the broad-scale deployment of our innovations, particularly when new components or materials with novel features have to be incorporated into our products. Throughout its history, Michelin has developed proficiency in flexible composites guiding and assembly processes, as well as the ability to manufacture multi‑technology assembly machines, from design to configuration. Capitalizing on open innovation opportunities, Michelin is working with start-ups and academia to explore innovative technologies. The Group is using artificial intelligence to develop robotic solutions purpose-designed for the complex handling of flexible composites. Transforming our granular understanding of customer usage patterns into customer value The Group has acquired unique capabilities across the data value chain, from capturing descriptive data on customer usage patterns to interpreting and transforming these data into action levers or solutions that in turn enhance customer performance. Taking this holistic approach has enabled us to develop an unequaled ability to create value from data. With the acquisition of Sascar in 2014, Nextraq in 2017 and Masternaut in 2019, Michelin has accelerated its development in data science and the design of leading-edge algorithms. Now combined under the MICHELIN Connected Fleet brand, these three companies’ onboard telematics display units are currently fitted on more than one million trucks and vans. This wealth of data gives Michelin unrivaled understanding of usage patterns and behavior, enabling us to offer our fleet manager customers a wide range of connected services and solutions, such as tire inspection technologies or the production of insights to enhance road infrastructure safety. Examples of applications include: Tires made from bio-based or recycled materials An industrial demonstrator unit capable of producing biobased butadiene in partnership with IFPen and Axens Examples of applications include: MICHELIN Connected Fleet MICHELIN Mobility Intelligence 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _13
CAPITALIZING ON OUR FUNDAMENTALS Our strategy Our Michelin in Motion strategy Launched in 2021, the Michelin in Motion strategic plan sets out the Group’s roadmap to 2030. As part of our All Sustainable vision, it lays the foundations for sustainable growth in three areas: tires, connected solutions and high-tech materials. Robust structural fundamentals Values built on respect The All Sustainable vision Our purpose Respect for facts, people, customers, shareholders and the environment. We believe that tomorrow, everything will be sustainable at Michelin. This vision of the future informs all our decisions, which are grounded in a constant search for the right balance between People, Profit and the Planet. We care about giving people a better way forward _14 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN Our Michelin in Motion strategy
tires Our strengths A portfolio of market-leading brands Proprietary and franchised dealership networks A strong position in online retailing Our strengths An unrivaled range of services Recognized leadership in connected tires Solutions tailored to each customer Our strengths Unparalleled proficiency in materials science and complex industrial processes An already impactful presence in future-facing markets Connected solutions high-tech materials Our value proposition Michelin offers retail and business customers products that deliver unrivaled performance and durability in all sorts of conditions of use, while helping to advance sustainable mobility. Our objectives Target high value-added market segments, in particular premium tires for cars, two-wheel vehicles, bicycles, trucks and specialty vehicles (mining, farming, construction and materials handling machinery, and aircraft). Produce as close to customers as possible with Industry 4.0 plants. Provide excellent customer service. Broaden the B2B services portfolio. Our value proposition Michelin offers a comprehensive portfolio of fleet management services and mobility data solutions that help to optimize the business and operational performance of our customers and facilitate their transition to accidentfree, zero emissions fleets. Our objectives Increase tire-as-a-service sales and offer fleet managers purposedesigned services. Facilitate the transition to electric fleets and continue to improve efficiency, safety and environment protection. Leverage the Internet of things and data analytics to apply our acquired connected mobility expertise in new business territories. A strategy resolutely focused on innovation and performance Our value proposition Michelin is deploying its expertise in high-tech polymer-based materials in growing, high value-added markets. Our products systematically deliver critical properties that enable medical implants, aircraft window seals, automation drive belts and other applications and systems to function properly. Our objectives Develop innovative, high-performance applications for such composite solutions as coated fabrics, films, conveyors, belts, seals and inflatable structures. Introduce game-changing innovations in engineered polymers, such as active membranes, biomaterials, non-toxic adhesives and composite reinforcements (for example, with ResiCare or AraNea). Forge strategic partnerships to offer very high technology-content products in still emerging markets, with initiatives like Symbio, AddUp and Wisamo. 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _15
CAPITALIZING ON OUR FUNDAMENTALS Our strategic pillars in detail TIRES Target segments and priorities for 2024 OUR PRIORITIES FOR 2024 1. Support the growing popularity of electrified mobility 2. Continue to decarbonize our production processes 3. Improve the appeal of our jobs and professions AUTOMOTIVE Our priority targets are: Fast growing segments, such as 18-inch and larger, all-season, Super Sport, quiet and self-healing tires, and tires for hybrid and electric vehicles Motorists sensitive to the premium experience offered by MICHELIN products OEMs that value original equipment of MICHELIN brand tires for their technological content ROAD TRANSPORTATION Our primary targets are trucking companies and fleet managers: Sensitive to the superior performance of MICHELIN products Leveraging new technologies to improve their performance Concerned about the environmental impact of their operations SPECIALTIES Our priority targets are: The mining, farming, aerospace and construction industries The growing, fast changing two-wheel tire market _16 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN Our strategic pillars in detail
Our priority targets are: Managers and operators of truck, bus and coach fleets Managers and operators of corporate and commercial vehicle fleets, particularly in built-up environments Connected mobility data users, such as large public and private infrastructure managers FLEXIBLE COMPOSITE SOLUTIONS Our priority targets are: B2B customers looking for very high-performance components delivering critical properties in the products they design. ENGINEERED POLYMERS Our priority targets are: B2B customers looking for disruptive innovations to drive leapfrog performance gains in their products, based on microscopic innovations. EMERGING VALUE CHAINS Our priority targets are: B2B customers who are taking a chance on new, very high technology content products in emerging value chains. OUR PRIORITIES FOR 2024 1. Continue to enhance our solutions for fleet managers 2. A ccelerate the convergence of our service solutions and tire-as-a-service sales 3. E xpand our solutions for road infrastructure managers following the acquisition of Roadbotics OUR PRIORITIES FOR 2024 1. Launch new flexible composite solutions 2. Step up our R&D commitment in engineered polymers and grow our ResiCare subsidiary 3. Complete the upscaling of Symbio’s fuel cell production at the Saint-Fons plant (a joint venture with Stellantis and Forvia) high-tech materials High-performance resin developed by ResiCare Connected solutions 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _17
Building new capacity at the Shanghai plant CAPITALIZING ON OUR FUNDAMENTALS Tires TIRES In the 2023 DriverReviews Customer Choice Awards, Michelin took the honors in several categories, based on more than 350,000 customer reviews by motorists who had driven more than 300 million kilometers. In particular, the brand was crowned “winner” in the “Best Tyre for High Performance Cars” category with the MICHELIN Pilot Sport 4S, and in the “Best All Season Tyre” category with the MICHELIN CrossClimate 2. Working with tire dealers and manufacturers, DriverReviews collects thousands of verified reviews and opinions by motorists driving all types of vehicles concerning their choice of tires. These verified reviews enable tire manufacturers like Michelin to enhance their trust capital based on tire user experience and eventually to increase their sales. Automotive In November 2023, Michelin announced a significant expansion of production capacity at its car tire plant in Shanghai, China. Scheduled for completion by year-end 2026, the project’s first phase will increase annual capacity for high-performance sedan tires by one million units, to 9.5 million tires a year. The factory of the future, which covers an area of 70,000 sq.m, will be equipped with the latest technologies to support flexibility, artificial intelligence and decarbonization. Built in 2001, the Shanghai plant is one of Michelin’s two production facilities in China, the other being in Shenyang, Liaoning province. In a market driven by growing mobility needs, the rapid transition to EVs and increasingly upmarket demand, Michelin is strengthening its technological leadership and its all-sustainable approach in serving its customers. After shoeing the new all‑electric Porsche 718 Cayman GT4 ePerformance in 2022 with tires containing 53% sustainable materials, Michelin unveiled a racing tire made from 63% renewable or recycled materials at the 24 Hours of Le Mans Centenary race in June 2023. The new, ultra-high-performance tire demonstrates Michelin’s ability to bring breakthrough technologies to both the track and the street. Its component materials include natural rubber, recycled carbon black from end-of-life tires, recycled steel from scrap metal, orange and lemon peel, fir resin and sunflower oil. The carbon black and recycled steel are supplied by Michelin partners Enviro and GSW. Racing tires containing 63% renewable or recycled materials Motorists laud the MICHELIN brand _18 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN Tires
TIRES Michelin equips Flexy, the SNCF’s new road-rail shuttle The UPTIS prototype represents a fundamental milestone in the Group’s research on airless technologies. It is an airless, puncture-proof tire and wheel assembly designed for cars and light vehicles, which to date is the only airless tire in use on open roads in real-life conditions under a business contract. By year-end 2023, the prototypes in use had covered 4.5 million kilometers. UPTIS helps to optimize delivery fleet productivity by eliminating downtime from flats and reducing inflating and pressure-related maintenance, while guaranteeing the safety of drivers and other road users. Since 2023, the prototype has been trialled on last-kilometer delivery routes with customers such as DHL in Singapore and the French Post Office. The trials are enriching Michelin’s knowledge of airless technologies by enabling extensive analyses and harnessing advanced expertise. UPTIS attests to Michelin’s leadership in airless technologies, thanks to its proficiency in composites and other high-tech materials. It is also a further illustration of how Michelin’s sustainable development model is supporting its ambitious 2050 objectives. Airless technology, for increasingly sustainable mobility In 2024, SNCF plans to trial Flexy, a one-of-a-kind, battery-electric shuttle capable of running on both railway lines and conventional roads, which will help to meet the needs of users living in areas underserved by public transportation. It will carry up to 14 passengers, including the driver, on currently unused train lines, helping to ease the isolation of rural communities. Michelin participated in this unusual project, undertaken with the Railenium Institute in the Movin'On ecosystem, to convert the futuristic shuttle to mixed road-rail use, with the goal of bringing it into service in 2026. Long distance and urban transportation 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _19
CAPITALIZING ON OUR FUNDAMENTALS Tires Beyond road tires Michelin has introduced the 70/70R57 MICHELIN X Mine L4 tire, the first radial tire for the world’s largest wheel loader used in surface mining. The innovative tire’s robust radial design eliminates the need to fit chains to the rear axle, which reduces tread wear while providing a more optimized, even footprint and less contact patch deformation. Engineered to meet the highest traction performance standards on wet and dry surfaces, and compatible with the connected pressure monitoring system, the new model delivers a radical step‑change in mine productivity, while also contributing to the safety and sustainability of these operations. A new version of the MICHELIN EVOBIB tire MICHELIN Air X SKY LIGHT, a game-changing innovation in the aircraft tire market In early 2023, Michelin unveiled a new version of the MICHELIN EVOBIB tire, the first tractor tire designed specifically for use with central tire inflation systems. It delivers excellent performance on all types of terrain, with a footprint that is maximized in field use, to reduce soil compaction, and minimized in road use. Thanks to its variable tread pattern and re‑engineered tread design, the MICHELIN EVOBIB tire offers excellent traction capabilities until end-of-life and helps to reduce fuel consumption by two liters an hour. It is also Pressure Field Operation (PFO)-certified, so it has a higher load capacity than its predecessor. Launched as a world first at the Paris Air Show in June 2023, the MICHELIN Air X SKY LIGHT represents a new radial tire technology intended for commercial aviation. It also offers a 15% to 20% longer lifespan, while being lighter than previous generations and delivering better performance. The result of multiple breakthrough innovations in its architecture, use of materials and manufacturing process, the new tire will help to meet the airline industry’s decarbonization objectives while reducing maintenance and transportation costs. Michelin plans to invest $100 million in its Junction City, Kansas (United States) operations over the next five years to increase production capacity of tracks for agricultural equipment. The capital project will enable the facility to meet growing demand for agricultural rubber tracks, particularly in North America. Especially well-suited to large farms, these tracks offer major benefits in protecting the environment and improving productivity, with 5% higher yield than wheeled tractors, lower soil compaction and better access to fields. Investing in agricultural tracks production The first radial tire for giant loaders TIRES _20 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
CAPITALIZING ON OUR FUNDAMENTALS Connected solutions Connected Solutions Launch of MICHELIN Connected Mobility Michelin has introduced its latest innovation, MICHELIN Connected Mobility, a comprehensive technological solution designed to respond effectively to a full range of fleet manager needs. From selecting the most suitable tires to managing tire inventory, tracking tire expenditure and performing automatic inspections, Michelin is leveraging all its expertise to enable customers to reduce vehicle downtime, emissions and accidents. MICHELIN Connected Mobility is an unprecedented alliance between tires and four main support services: The provision of premium tires; Managing and optimizing tire performance; Access to fleet management solutions with MICHELIN Connected Fleet, which matches vehicle data to driver behavior; Access to a new automated predictive maintenance and warning solution: MICHELIN Smart Predictive Tire. Michelin is actively supporting the creation and deployment of RFID technology as the new standard for digitally identifying car, van and truck tires. Assisted by associations like the Global Data Service Organisation (GDSO) and an ecosystem of partners, Michelin is committed to informing, educating and encouraging the take-up of RFID tags as a market standard. RFID tags and their data are already used by Michelin for their efficiency in optimizing traceability throughout the product life cycle. They have also been embraced and promoted by some of our OEM partners and leading dealers. The technology will play a decisive role in the circular economy process, led by the gradual introduction of the EU Digital Product Passport. RFID is a core enabler of the Group’s strategic focus on developing tire-related services based on value-creating data, as part of an all-sustainable approach. Watèa by Michelin, our subsidiary specialized in transitioning business fleets to EVs, has extended its offering to a full array of hydrogen vehicle solutions. The new service will offer hydrogen mobility enthusiasts qualified Peugeot e-Expert Hydrogen and Citroën e-Jumpy Hydrogen vans with higher uptime than their battery-electric versions, plus a high-performance, low-carbon refueling system, financing and insurance solutions, and a suite of digital services. The new system is already fully up and running in the Auvergne-Rhône-Alpes region, with the support of HYmpulsion, in which Michelin is a shareholder. Watèa develops a hydrogen solution for business fleets Making RFID tags a market standard 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _21 Connected solutions
CAPITALIZING ON OUR FUNDAMENTALS High-Tech Materials High-Tech Materials With FCG, Michelin has consolidated a leader in high-tech fabrics and films In September 2023, Michelin announced that it had acquired Flex Composite Group, marking a significant step forward in the development of its high-tech materials business in perfect alignment with the Michelin in Motion 2030 strategy. The new combination is a leader in high-tech fabrics and films, leveraging Michelin’s unrivaled innovation and R&D capabilities and FCG’s advanced customer intimacy and industrial process expertise. FCG offers very high value-added applications in extremely technical markets, such as superyachts, supercars and EVs, sports and infrastructure. The transaction will increase sales of Michelin’s High-Tech Materials business by around 20%, positioning the Group as the go-to source of composite solutions. 400 employees €200m in sales in 2023 9% organic growth from 2015 to 2023 22% EBIT margin 6 production plants in Europe 15% of the patents filed by Michelin in 2023 concerned high-tech materials. Carbon-fiber engineered fabrics _22 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN High-Tech Materials
High-Tech Materials A world leader in conveyor belt solutions and reinforced polymer products, Fenner Conveyors is helping the mining industry decarbonize operations with its Green Series of two conveyor products. The first, PowerSaver, was designed to reduce energy consumption by supporting the system to operate across longer distances and with higher tonnage. This translates into significant benefits for mine operators, including lower operating costs, increased asset life and reduced carbon emissions. The second in the Series, Yeloroll-HD, was engineered by Conveyor Products and Solutions, a company Fenner Conveyors acquired in 2022. It features high-performance composite rollers and a composite shell, which protects the belt more effectively from corrosion and impacts. The composite rollers are 30% to 50% lighter than equivalent steel idlers, resulting in lower energy consumption and much better performance, with fewer noise impacts. Used in tandem, PowerSaver and Yeloroll-HD provide an efficient solution for overland conveyor systems, as well as a smaller environmental footprint. A Green Series of conveyors to decarbonize the mining industry 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _23
2023 was a particularly busy year for Symbio, the innovation and industrialization partner of hydrogen zero-emission mobility pioneers. In July, its ownership structure changed with Michelin’s sale of part of its stake to Stellantis, which will help spur Symbio’s expansion in Europe and the United States. Following the transaction, Symbio is now equally owned by Michelin, Forvia and Stellantis. Then, in December, another major event was the inauguration of the company’s first gigafactory, SymphonHy, in Saint-Fons in the Auvergne-Rhône-Alpes region in France. The largest integrated fuel cell production plant in Europe, SymphonHy has a high level of automation and robotics, supporting large-scale industrial production at more competitive cost. This important breakthrough has consolidated Symbio’s technological and industrial leadership in driving the faster roll-out of clean, competitive, sustainable high-performance hydrogen-powered mobility, thereby helping to further the energy transition and to meet French and European low-carbon objectives. SymphonHy is an integral part of HyMotive, a strategic €1 billion project to develop disruptive technology, supported by the European Union and the French government as part of the IPCEI* program. The site also houses the Group’s headquarters, an innovation center of technological and industrial excellence, and the Symbio Hydrogen Academy. Symbio scales up and accelerates its transformation 16,000 fuel cell systems currently produced, 50,000 by 2026 More than 450 engineers, including 100 dedicated to innovation An energy selfsufficient site A BREEAM “Very Good” certified site *Important project of common European interest CAPITALIZING ON OUR FUNDAMENTALS High-Tech Materials High-Tech Materials _24 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
Accelerating our transformation 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _25 ACCELERATING OUR TRANSFORMATION
Short term Long term Outlook CDP CLIMATE CDP WATER MSCI SUSTAINALYTICS (risk rating) ISS ESG MOODY’S ESG Solutions ECOVADIS AB AAA Low risk B- 71/100 78/100 A2 AStable F2 AStable - A3 Stable 2023 Rating CREDIT RATINGS At December 31, 2023 NON‑FINANCIAL RATINGS At December 31, 2023 Credit rating agencies confirm the Group’s robustness Michelin is a leading sustainability enabler, recognized by the non-financial ratings agencies STANDARD & POOR’S FITCH MOODY’S Our All Sustainable vision At Michelin, we deeply believe that our growth and sustainability depend on achieving the right balance of performance in addressing issues impacting the well-being of the people with whom we interact, our business and financial results, and our ability to safeguard the planet. This All-Sustainable approach, based on the People, Profit, Planet triple bottom line, is embedded in the Group’s growth dynamic being led by the Michelin in Motion strategic plan. An exacting standard in every aspect of our business and a lodestar for the future, this approach sharpens our vision and operationally informs everything we do. ACCELERATING OUR TRANSFORMATION Our sustainability approach _26 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
ACCELERATING OUR TRANSFORMATION An interview with Yves Chapot What levers are you activating at Michelin to create value? > Yves Chapot: We strongly believe that value is created by striking a subtle balance between caring for People, making a Profit and helping to safeguard the Planet. To put this into practice, we nurture positive interactions with each of our stakeholders, which act as vectors of our long-term performance. For our customers, we create value by delivering products and services perfectly aligned with their expectations, while constantly striving to raise performance outcomes and foster efficient interaction. For our employees, we implement policies and initiatives that enable them to work safely in a fulfilling job, with opportunities for career-long learning and development. For our suppliers, our host communities and public authorities, value is created by forging trust-based relationships that enable every stakeholder to plan for future growth and development. Michelin is also working to reduce its environmental footprint to conserve the planet's resources. This means taking fewer natural resources from the environment and releasing less waste and effluent into it, while increasing the proportion of recycled or renewable materials used in our products. Creating value for people and the planet in this way ultimately feeds through to strong business and financial performance, with a sales growth target of 5% a year between 2023 and 2030, and a targeted return on capital employed (ROCE) of more than 10.5%. How does the Group share the created economic value among its stakeholders? > YC: The Group is committed to sharing the value added it creates fairly among its stakeholders. In 2023, this value added stood at €13.1 billion. More than half of that was distributed to employees in the form of fixed and variable compensation and benefits. A significant portion – more than 20% – was also used to finance our future-facing capital projects and drive the development of our business activities. The various taxes and duties paid to our host country governments represented 8% of the total value created. Lastly, just over 10% went to lenders and shareholders, who provide the financing that supports the Group's development. You emphasized that reducing your environmental footprint is a way of creating value. What do you mean by that? > YC: I mean that it is our responsibility to protect natural ecosystems, which represent a silent stakeholder. To pro-actively track the impact of our operations, which generate both positive and negative externalities, since 2019 we’ve valued four negative externalities with the goal of reducing them from €590 million in 2019 to €545 million in 2023. We’re making progress faster than expected, with a valuation of €436 million at year-end 2023. This initiative will be further fine‑tuned in the years ahead, so that we can more effectively disclose the impact of our operations to our stakeholders and more effectively address it in the Group’s management practices. Yves Chapot, General Manager and Chief Financial Officer We are committed to fairly sharing the value added we create.” Our priority is to increase the value the Group creates for all its stakeholders 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN _27 An interview with Yves Chapot
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