Financial performance Report of the Managers 05 In North America, volumes sold contracted over the year as gains in 18-inch and larger Replacement tires and the successful launch of the BFGOODRICH KO3 all-terrain tire were overshadowed by the plunge in Original Equipment sales and the one-off difficulties encountered by the UNIROYAL brand (high year-end 2023 dealer inventories and insolvency issues at a key North American dealer). Volumes also declined in South America, primarily due to competition in the smallest sizes from massive low-cost Asian imports and the wide swings in certain currency rates, which prompted the Group to adjust its pricing and/or credit policies to preserve its margins. In China, Original Equipment sales declined less sharply than in most other regions, in a market buoyed by exports and government incentives. Replacement sales retreated overall, but the mix improved, as declines were concentrated in the smaller size segments and sales of premium models rose. In Southeast Asia, Original Equipment volumes sold were adversely impacted by a steep falloff in demand, but Replacement volumes rose significantly, lifted by market share gains in the 18-inch and larger segment. At a time of geopolitical tensions in a number of countries in the Africa/India/Middle East region, the Group continued to deploy its strategy of selectively focusing on the geographies and market segments capable of leveraging the full value of its technological leadership. Group sales in India remained hampered by import restrictions, despite significant easing in the wake of licensing agreements. Two-wheel tires: in a global market environment that has not yet fully stabilized after the post-Covid bubble, particularly in the Bicycle tire value chain, the Group delivered an excellent performance, with volume gains in every segment and geography except Asia, where it has reduced its exposure to the least well positioned brands. This proactive response, coupled with greater selectivity in the Original Equipment segment, also resulted in a favorable price-mix effect. Michelin Lifestyle reported strong sales growth for the year, primarily in the fine dining, hospitality and travel markets. It remains an unrivaled vehicle for promoting the MICHELIN brand and its premium positioning, generating considerable visitor streams to its online platforms. 5.1.2 c) Road transportation and related distribution – Analysis of sales Sales in the Road transportation and related distribution segment totaled €6,599 million in 2024, down 4.9% from the prior year. Premium truck tire manufacturers faced a complicated business environment in 2024, with Original Equipment markets cooling after expanding robustly in 2023 and Replacement markets reporting only slight growth that was in fact driven almost entirely by the waves of low-cost imports from Asia. In this context, volumes sold declined by 6.1% year-on-year, but disciplined management enabled the Group to deliver positive price and mix improvements. Both of the Group’s two main Original Equipment markets fell sharply in 2024, following the prior-year gains driven by the introduction of a new emissions standard in North America and the end of the post-Covid catch-up growth in Europe. This fed through to a decline in volumes sold, which were also impacted by the contract renegotiations undertaken with most of the partner OEMs to ensure that Michelin technology is fairly valued. In South America, the Group successfully captured all of the market rebound and maintained its market share. The Replacement tire market, excluding China and adjusted for low-cost imports, was unchanged overall for the year. The Group managed to maintain almost all its share of the market, while pursuing its strategy of prioritizing the MICHELIN brand and its most state-of-the-art products, which offer fleets lower total cost of ownership. This was reflected in the launch of the new MICHELIN X® MULTI ENERGY™ 2 and MICHELIN X® LINE ENERGY™ 3 lines, with their optimum energy performance, and in the sustained growth in the Connected Solutions business through the Michelin Connected Mobility offering. Replacement sales in Europe were stable by volume and up in value, lifted by resilient demand in Southern Europe (France, Spain, Italy), which offset the downturn in Central Europe, and by growth in the light truck segment. The sales mix was very favorable in North America, thanks to the increase in volumes sold under the MICHELIN brand and, to a lesser extent, the BFGOODRICH brand. By contrast, retreading sales contracted over the year, pushed down by increased competition from low-cost Asian tires, whose imports surged over the first half. In South America, Original Equipment volumes sold rose as the Group maintained its share of a rebounding market, but sales ended the year down overall, primarily due to a decline in the replacement market. This was particularly the case in Brazil, where half the market is now served by low-cost imports. In this environment, the Group pursued its selective marketing strategy in a commitment to preserving its margins. In Asia (excluding China) and in the Africa/India/Middle East region, the Group pursued its strategy of targeting market segments that fully appreciate MICHELIN solutions for their technological content. 328 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
RkJQdWJsaXNoZXIy NzMxNTcx