| 1. Presentation and strategy of the Michelin Group |
1 |
| THE GROUP |
2 |
| Company profile |
2 |
| Interview with Florent Menegaux |
4 |
| CAPITALIZING ON OUR FUNDAMENTALS |
7 |
| Major trends |
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 |
| 2. Risk management |
53 |
| 2.1 RISK FACTORS SPECIFIC TO MICHELIN, DESCRIPTION AND RELATED MANAGEMENT SYSTEMS |
54 |
| 2.2 CROSS-FUNCTIONAL RISK MANAGEMENT PROCEDURES |
63 |
| 2.2.1 Synchronization between Internal Audit, Risk Management and Internal Control |
63 |
| 2.2.2 Internal control process |
63 |
| 2.2.3 Group compliance team and network |
64 |
| 2.2.4 Crisis management processes |
64 |
| 2.2.5 Insurance coverage |
65 |
| 2.3 INTERNAL CONTROL PROCESS RELATING TO THE PREPARATION OF ACCOUNTING AND FINANCIAL INFORMATION |
66 |
| Preparation and processing of accounting and financial information |
66 |
| Management of accounting and finance internal control |
67 |
| Recurring assessments of the accounting and financial information preparation process |
67 |
| 3. Corporate governance report |
71 |
| 3.1 ADMINISTRATIVE, MANAGEMENTAND SUPERVISORY BODIES |
72 |
| 3.1.1 An experienced, stable and responsible management team |
73 |
| 3.1.2 SAGES, a Non-Managing General Partner, guaranteeing the Company's long-term viability |
76 |
| 3.1.3 Strict separation between the Supervisory Board (and its committees) and Management |
78 |
| 3.1.4 Interactions between the various governance structures |
98 |
| 3.1.5 Statements |
99 |
| 3.2 SUPERVISORY BOARD PRACTICES – ACTIVITIES IN 2023 |
100 |
| 3.2.1 General activities |
100 |
| 3.2.2 Supervisory Board members’ attendance rates |
101 |
| 3.2.3 Training for Supervisory Board members |
101 |
| 3.2.4 Supervisory Board succession plans and preparation
of proposals and recommendations for the re-election of Supervisory Board members at the 2024 Annual Shareholders Meeting |
102 |
| 3.2.5 Activities of the Senior Independent Supervisory Board Member |
102 |
| 3.2.6 Review of Supervisory Board members' independence and any conflicts of interest |
103 |
| 3.2.7 Assessment of the Supervisory Board’s practices |
106 |
| 3.2.8 Implementation of the “apply or explain” rule |
107 |
| 3.2.9 Audit Committee |
108 |
| 3.2.10 Compensation and Appointments Committee |
110 |
| 3.2.11 Corporate Social Responsibility (CSR) Committee |
112 |
| 3.3 MANAGEMENT AND SUPERVISORY BOARD COMPENSATION POLICIES FOR 2024 |
114 |
| 3.3.1 General principles |
114 |
| 3.3.2 Compensation policy: the Managers |
115 |
| 3.3.3 Compensation policy: members of the Supervisory Board |
122 |
| 3.4 INFORMATION ABOUT THE COMPONENTS OF COMPENSATION PAID OR AWARDED TO THE CORPORATE OFFICERS |
124 |
| 3.4.1 Compensation of the members of the Supervisory Board |
124 |
| 3.4.2 Compensation of Barbara Dalibard, Chair of the Supervisory Board |
125 |
| 3.4.3 Compensation package of Florent Menegaux, Managing Chairman and General Partner |
125 |
| 3.4.4 Compensation package of Yves Chapot, General Manager |
130 |
| 3.4.5 Compensation ratios of the Managers and the Chair of the Supervisory Board |
134 |
| 3.4.6 Proposed resolution on the disclosures mentioned in Article L. 22‑10-9-I of the French Commercial Code |
137 |
| 3.5 INDIVIDUAL COMPENSATION PAID OR AWARDED TO THE MANAGERS AND THE CHAIR OF THE SUPERVISORY BOARD FOR 2023 |
138 |
| 3.5.1 Vote by shareholders at the Ordinary Shareholders Meeting of May 17, 2024 on the compensation package of Barbara Dalibard, Chair of the Supervisory Board |
138 |
| 3.5.2 Vote by shareholders at the Ordinary Shareholders Meeting of May 17, 2024 on the compensation package of Florent Menegaux, Managing Chairman and General Partner |
140 |
| 3.5.3 Vote by shareholders at the Ordinary Shareholders Meeting of May 17, 2024 on the compensation package of Yves Chapot, General Manager |
142 |
| 3.6 OTHER INFORMATION ABOUT COMPENSATION OF THE EXECUTIVE OFFICERS |
144 |
| 3.6.1 Summary information concerning the executive officers |
144 |
| 3.6.2 Applicable long-term incentive bonuses awarded to executive officers in respect of periods prior to 2023 |
148 |
| 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 |
| 3.10.1 General Partners (Article 1 of the Bylaws) |
150 |
| 3.10.2 Corporate purpose (Article 2 of the Bylaws) |
150 |
| 3.10.3 Managers (Article 10 of the Bylaws) |
150 |
| 3.10.4 Fiscal year (Article 29 of the Bylaws) |
150 |
| 3.10.5 Statutory allocation of profits (Articles 12 and 30 of the Bylaws) |
151 |
| 3.10.6 Shareholder participation at General Meetings |
151 |
| 3.11 OWNERSHIP STRUCTURE AND VOTING RIGHTS |
152 |
| 3.12 FINANCIAL AUTHORIZATIONS |
153 |
| 3.12.1 Granted by the Annual Shareholders Meeting of June 23, 2020 |
153 |
| 3.12.2 Granted by the Annual Shareholders Meeting of May 21, 2021 |
153 |
| 3.12.3 Granted by the Annual Shareholders Meeting of May 13, 2022 |
154 |
| 3.12.4 Granted by the Annual Shareholders Meeting of May 12, 2023 |
155 |
| 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 |
159 |
| INTRODUCTION |
160 |
| SCOPE OF THE REPORT |
161 |
| Definition of content and scope of reporting |
161 |
| Reporting cycle and period |
161 |
| Indicators |
161 |
| Fair, verifiable data |
166 |
| 4.1 SUSTAINABLE DEVELOPMENT REPORT |
166 |
| Introduction – Michelin sustainable development |
166 |
| The Group’s main non-financial performance indicators |
173 |
| 4.1.1 The Environment |
175 |
| 4.1.2 Human rights and employee relations |
232 |
| 4.1.3 Employee and contractor health, safety and security |
259 |
| 4.1.4 Ethics and compliance |
267 |
| 4.2 NON-FINANCIAL STATEMENT |
291 |
| 4.2.1 Identification of the main risks |
291 |
| 4.2.2 Table of Concordance – Non-Financial Statement |
292 |
| 4.2.3 Table of Concordance – Other CSR Issues |
296 |
| 4.2.4 Report by one of the Statutory Auditors, appointed as independent third party, on the verification of the consolidated non‑financial statement |
298 |
| 4.3 DUTY OF CARE PLAN |
302 |
| 4.3.1 Methodology |
302 |
| 4.3.2 Table of concordance |
303 |
| 4.4 OTHER TABLES OF CONCORDANCE |
309 |
| 4.4.1 Global Reporting Initiative (GRI) |
309 |
| 4.4.2 Table of concordance for the SASB (Sustainability Accounting Standard Board) |
317 |
| 4.4.3 Sustainable Development Goals |
318 |
| 5. Financial performance |
321 |
| 5.1 REPORT OF THE MANAGERS |
322 |
| 5.1.1 Tire markets |
322 |
| 5.1.2 Sales |
328 |
| 5.1.3 Consolidated income statement review |
333 |
| 5.1.4 Consolidated balance sheet review |
341 |
| 5.1.5 Consolidated cash flow statement review |
347 |
| 5.1.6 Return on capital employed (ROCE) |
349 |
| 5.1.7 Trend information |
350 |
| 5.1.8 Highlights |
350 |
| 5.1.9 Material contracts |
355 |
| 5.1.10 Information concerning payment terms |
355 |
| 5.1.11 Significant change in financial or trading position |
356 |
| 5.1.12 Information disclosed in compliance with Articles L. 225-102-1 and R. 225-105‑1 of the French Commercial Code |
356 |
| 5.1.13 Disclosure pursuant to France’s Duty of Care Act applicable to parent companies and subcontracting companies |
356 |
| 5.1.14 Five-year summary of consolidated key figures and ratios |
357 |
| 5.2 2023 CONSOLIDATED FINANCIAL STATEMENTS |
358 |
| 5.2.1 Consolidated statement – year ended December 31, 2023 |
358 |
| Consolidated income statement |
358 |
| Consolidated statement of comprehensive income |
358 |
| Consolidated statement of financial position |
359 |
| Consolidated statement of changes in equity |
360 |
| Consolidated statement of cash flows |
361 |
| Notes to the consolidated financial statements |
362 |
| 5.2.2 Statutory Auditors' report on the consolidated financial statements |
445 |
| 5.3 FINANCIAL STATEMENTS |
449 |
| 5.3.1 Review of the financial statements of Compagnie Générale des Établissements Michelin |
449 |
| 5.3.2 Financial statements of Compagnie Générale des Établissements Michelin (parent) |
450 |
| Notes to the financial statements |
452 |
| 5.3.3 Statutory Auditors' report on the annual financial statements |
464 |
| 5.3.4 Statutory Auditors’ special report on related-party agreements |
468 |
| 5.3.5 Statement of changes in equity |
469 |
| 5.3.6 Appropriation of 2023 net income |
469 |
| 5.3.7 Five-year financial summary |
470 |
| 5.4 ADDITIONAL INFORMATION |
471 |
| 5.4.1 Person responsible for the Universal Registration Document |
471 |
| 5.4.2 Statutory Auditors |
471 |
| 5.4.3 Statements incorporated by reference |
472 |
| 6. Investor relations |
475 |
| 6.1 INFORMATION ABOUT THE COMPANY |
476 |
| 6.2 SHARE INFORMATION |
477 |
| 6.2.1 The Michelin share |
477 |
| 6.2.2 Detailed share data |
478 |
| 6.2.3 Per-share data |
478 |
| 6.2.4 Capital and ownership structure |
479 |
| 6.3 INVESTOR RELATIONS |
480 |
| 6.4 DOCUMENTS ON DISPLAY |
480 |
| 6.5 ADDITIONAL SHARE INFORMATION |
481 |
| 6.5.1 Changes in share capital |
481 |
| 6.5.2 Potential shares |
481 |
| 6.5.3 Stock options |
483 |
| 6.5.4 Share grants and performance shares |
484 |
| 6.5.5 Employee share ownership |
494 |
| 6.5.6 Information concerning a share buyback program currently in effect |
494 |
| 6.5.7 Description of the share buyback program submitted for shareholder approval at the Annual Shareholders Meeting of May 17, 2024 |
495 |
| 7. Annual Shareholders Meeting of May 17, 2024 |
497 |
| 7.1 REPORT OF THE MANAGING CHAIRMAN AND PROPOSED RESOLUTIONS |
498 |
| 7.1.1 Ordinary resolutions (1st to 16th resolutions) |
498 |
| 7.1.2 Extraordinary resolutions (17th to 27th resolutions) |
505 |
| 7.2 REPORT OF THE SUPERVISORY BOARD: RECOMMENDATIONS CONCERNING THE VOTES ON THE PROPOSED RESOLUTIONS |
518 |
| 7.2.1 Election and re-election of Supervisory Board members (12th to 14th resolutions) |
518 |
| 7.2.2 Appointment of Statutory Auditors responsible for certifying the Company's sustainability information (15th and 16th resolutions) |
523 |
| 7.2.3 Approval of the compensation of the corporate officers (6th to 11th resolutions) |
524 |
| 7.2.4 Approval of the financial statements, related-party agreements and financial authorizations (1st to 5th and 17th to 27th resolutions) |
524 |
| 7.3 STATUTORY AUDITORS’ REPORTS |
525 |
| 7.3.1 Statutory Auditors’ report on the issue of shares and/or various securities, with or without pre-emptive subscription rights |
525 |
| 7.3.2 Statutory Auditors’ report on the rights issue reserved for members of a Group employee shareholder plan |
527 |
| 7.3.3 Statutory Auditors' report on the share capital decrease |
528 |
| 7.3.4 Other Statutory Auditors’ reports |
528 |
| 8. Tables of concordance |
531 |
| 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 |