5 _345 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE Report of the Managers 5.1.4 k) Net debt Net debt stood at €3,281 million at December 31, 2023, down €1,039 million from December 31, 2022, mainly as a result of the following factors: ● the positive €2,343 million in free cash flow; ● €896 million in distributions, of which €893 million in dividends; ● the absence of any share buybacks and employee share ownership plans, compared with a €196 million impact in 2022; ● a €363 million increase from the recognition of new leases; ● a €23 million increase arising on changes in the scope of consolidation; ● a €25 million increase from translation adjustments. CHANGES IN NET DEBT (in € millions) December 31, 2023 December 31, 2022 At January 1 4,320 2,789 Free cash flow(1) before M&A and financing of joint ventures and associates -2,804 +67 Investments in new ventures +666 +76 Net financing of joint ventures and associates -205 +37 Free cash flow(1) -2,343 +180 Distributions and other +896 +809 Share buybacks 0 +120 Employee share issue – Bib’Action 0 +76 New leases +363 +198 Changes in scope of consolidation +23 +193 Translation adjustments +25 +77 Other -3 -122 AT DECEMBER 31 +3,281 +4,320 CHANGE -1,039 +1,531 (1) See definition in section 1.5.3. Gearing Gearing declined to 18.3% at December 31, 2023 from 25.2% at end-2022, primarily due to the year-on-year reduction in net debt with the sharp improvement in free cash flow, even as equity rose more slowly over the period. Credit ratings The solicited corporate credit ratings of Compagnie Générale des Établissements Michelin (CGEM), Compagnie Financière Michelin SA and CFM Suisse SA are as follows: CGEM Compagnie Financière Michelin SA CFM Suisse Short term Standard & Poor's A-2 A-2 A-2 Fitch Ratings F2 F2 F2 Long term Standard & Poor's A- A- AFitch Ratings A- A- AOutlook Standard & Poor's Stable Stable Stable Fitch Ratings Stable Stable Stable Moody’s, whose rating has not been solicited since July 1, 2020, nevertheless affirmed CGEM’s “A3” long-term credit rating and “stable” outlook on January 17, 2024.
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