_344 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE Report of the Managers Representing 19.2% of sales at end-2023, inventories fell by €871 million year-on-year to come in at €5,447 million. The decrease was mainly attributable to: ● a €154 million favorable currency effect; ● efficient inventory management, which reduced volumes from end-2022 levels, particularly for raw materials and semi‑finished products; ● lower average raw material costs in 2023, which fed through to a favorable price effect across every inventory class. Trade receivables stood at €3,850 million or 13.6% of sales, a year-on-year decrease of €355 million, of which around a third, or €110 million, resulted from translation adjustments. The decline was primarily due to the decrease in volumes sold over the year and, to a lesser extent, the disposal of certain receivables following the introduction of off-balance sheet factoring programs. Trade payables, including those covered by reverse factoring contracts, declined by €406 million year-on-year to €3,605 million, representing 12.7% of sales. The decrease was driven by reduction in purchased inputs, both by volume (due to decline in output) and by value (due to lower raw materials costs). 5.1.4 i) Cash and cash equivalents Cash and cash equivalents were relatively stable at €2,515 million, down a slight €69 million year-on-year (excluding translation adjustments) as a result of the following main factors: ● increases from: ● the exceptionally favorable €2,343 million in free cash flow, ● €28 million in various favorable items; ● decreases from: ● a €1,455 million reduction in debt, stemming mainly from the redemption of a non-dilutive convertible bond issue in November 2023 for €553 million, the decline in commercial paper drawdowns for €355 million, and the repayment of bank loans in Thailand, Indonesia and other countries, for €211 million, ● the payment of €896 million in dividends and other distributions. 5.1.4 j) Total equity Including the €316 million unfavorable change in translation adjustments, total equity rose by €842 million over the year to represent €17,958 million at December 31, 2023. The €1,158 million increase excluding translation adjustments was primarily due to the following factors: ● the €2,024 million increase in comprehensive income for the year, including: ● €1,983 million in net income, ● the €50 million unfavorable impact from post-employment benefit obligations, ● an €18 million favorable tax impact relating to those obligations, ● a €57 million increase from the reversal of translation adjustments on company disposals, mainly in Russia, ● €16 million in other favorable items; ● the €896 million impact from dividends and other payments; ● the €30 million favorable impact from service costs on performance share plans. As a result, at December 31, 2023, the share capital of Compagnie Générale des Établissements Michelin stood at €357,479,113, comprising 714,958,226 shares outstanding corresponding to 990,275,053 voting rights.
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