Financial performance Report of the Managers 05 Automotive, Two-wheel and related distribution – Analysis of segment operating income Automotive, Two-wheel and related distribution (in € millions, for new scope of reporting) 2024 2023 2024/2023 2024 (% of consolidated total) 2023 (% of consolidated total) Sales 14,667 14,859 -1.3% 54% 52% Change in volumes -1.6% Segment operating income 1,917 1,968 -2.6% 57% 55% Segment operating margin 13.1% 13.2% -0.1 pts Segment operating income amounted to €1,917 million or 13.1% of sales, versus €1,968 million and 13.2% in 2023 (at comparable scope of reporting). The Automotive segment maintained its operating income and margin almost on a par with 2023 despite (i) a 1.6% decline in volumes sold, impacted by the downturn in Original Equipment markets and the one-off contraction in UNIROYAL-brand volumes in North America due to problems at a distributor; and (ii) a general decrease in prices due to the application of indexation clauses in OEM contracts. This was primarily thanks to the highly favorable mix effect, driven by (i) the sustained growth in sales of 18-inch and larger tires and other outcomes of the priority focus on the most value-accretive market segments; and (ii) the faster momentum in Replacement tire sales compared with Original Equipment sales. Distribution operations increased their percentage of the segment sales stream and maintained its generally neutral bottom-line contribution. Exchange rate movements had a negative impact on segment operating income. Road transportation and related distribution – Analysis of segment operating income Road transportation and related distribution (in € millions, at new scope of reporting) 2024 2023 2024/2023 2024 (% of consolidated total) 2023 (% of consolidated total) Sales 6,599 6,941 -4.9% 24% 24% Change in volumes -6.1% Segment operating income 597 474 +26.1% 18% 13% Segment operating margin 9.0% 6.8% +2.2 pts Segment operating income totaled €597 million or 9.0% of sales, versus €474 million and 6.8% in 2023 (at comparable scope of reporting). The Road transportation segment sustained its first-half earnings rebound, despite an environment dampened by very unfavorable Original Equipment markets in Europe and North America and the extensive transformations in the production base following the announced restructuring projects in Germany, Poland and China. Volumes sold contracted by 6.1%, mainly due to the cyclical downturn in Original Equipment demand and the Group’s ongoing strategy of redeploying in the most value-accretive segments and geographies. The latter factor nevertheless fed through to a very favorable mix effect, which was further enhanced by the positive price effect after OEM contracts were renegotiated to better reflect the technological value delivered by the Group’s products. The Connected Solutions business, combined under the MICHELIN Connected Fleets brand, continued to expand, thanks mainly to more disciplined management and improved operating efficiency. It made a positive contribution to segment operating income. Exchange rate movements had a negative impact on segment operating income. Specialty businesses and related distribution – Analysis of segment operating income Specialty businesses and related distribution (in € millions, at new scope of reporting) 2024 2023 2024/2023 2024 (% of consolidated total) 2023 (% of consolidated total) Sales 5,927 6,543 -9.4% 22% 23% Change in volumes -9.1% Segment operating income 864 1,130 -23.5% 26% 32% Segment operating margin 14.6% 17.3% -2.7 pts 334 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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