5 _339 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE Report of the Managers Transportation costs (in € millions) 2023 2022 Change Transportation costs 1,485 2,056 -27.8% As a % of sales 5.2% 7.2% Transportation costs came to €1,485 million in 2023, down 28% on 2022. The steep reduction was driven by a number of factors, including (i) the decline in volumes sold; (ii) the fall in maritime shipping costs since late 2022, which fed fully through to logistics costs in 2023; and (iii) the Group’s performance in raising supply chain productivity, curtailing the use of air freight and rationalizing finished product delivery modes by improving the tonnes carried/tonnes sold ratio. In addition, the shipping market is mainly denominated in US dollars, so the decline in the dollar against the euro over the year contributed to the decrease in transportation costs. Sales and marketing expenses Sales and marketing expenses represented 4.3% of sales in 2023, versus 4.1% in 2022. In value and on a like-for-like basis, they rose by €36 million year-on-year, primarily due to cost inflation. Nevertheless, they remained lower than in 2019. The year-on-year increase as a percentage of sales primarily reflected the time lag between price increases and the impact of inflation on payroll. Research and development expenses (in € millions) 2023 2022 Change Research and development expenses 756 698 +8.2% As a % of sales 2.7% 2.4% Research and development expenses rose by €58 million year‑on-year to €756 million. This increase attested both to the Group's commitment to maintaining its technological leadership in delivering performance and sustainability in its products and services, and to the impact of inflation on research and development expenses. They represented 2.7% of sales for the year, versus 2.4% in 2022 and more or less on a par with 2019. General and administrative expenses General and administrative expenses amounted to €2,336 million, a €92 million year-on-year increase that was primarily attributable to inflation. They represented 8.2% of sales for the year, up 0.4 points compared with 2022. Segment other income and expenses Segment other income and expenses represented a net expense of €74 million in 2023, up from a net expense of €26 million in 2022. Other operating income and expenses Other operating income and expenses correspond to items that are not taken into account by Management when measuring the performance of the operating segments due to their nature or their significant, unusual or abnormal characteristics. Other operating income and expenses represented a net expense of €920 million in 2023, versus a net expense of €375 million in 2022. The €545 million increase mainly corresponded to the recognition of provisions for restructuring, following the Group's announcements in October and November 2023 that it intended to terminate certain production operations in, respectively, the United States and Germany. To a lesser extent, the depreciation of a number of rubber cropland plots in Indonesia also increased net expense for the year. Other operating income and expenses are described in more detail in note 9 to the consolidated financial statements.
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