Financial performance Report of the Managers 05 Cost of net debt (in € millions) 2024 2023 Change Cost of net debt 77 198 -121 At €77 million, the cost of net debt was down €121 million compared with 2023, mainly as a result of the following factors: n a significant €94 million reduction in net interest expense to €77 million, reflecting the net impact of: l a sharp €83 million decrease in interest expense, mainly due to the favorable impact of converting euro-denominated debt into the various currencies used by the Group; l a slight €11 million increase in interest income, attributable to favorable interest rates on cash investments; n a €25 million reduction in income from exchange-rate derivatives, due mainly to a decline in the number of currency swaps and lower interest-rate volatility. Financial expenses represented a cost corresponding to 2.1% of the Group's net debt. Other financial income and expenses (in € millions) 2024 2023 Change Other financial income and expenses 19 2 +17 Despite net exchange losses, due in part to unhedged currencies, other financial income and expenses represented a gain of €19 million in 2024, up €17 million on 2023. The increase was led partly by the sharp year-on-year decline in net exchange losses on unhedged currencies, in particular the Argentine peso, and partly by a €15 million improvement in net income from financial assets, following the grant of a loan to the UK pension fund in 2023. Income tax (in € millions) 2024 2023 Change Income before taxes 2,445 2,490 -45 Income tax (555) (507) -48 Current tax (698) (816) +118 Withholding tax (55) (33) -22 Deferred tax 198 342 -144 Income tax amounted to €555 million in 2024, a €48 million year-on-year increase due in part to the introduction of the Pillar Two reform in France in January 2024, which resulted in a limited €16 million increase in the Group’s total income tax expense for the year. Current tax came to €753 million in 2024. The effective tax rate rose to 22.7%, from 20.4% the year before, as a result of (i) the non-recognition in 2024 of deferred tax assets (mainly relating to UK operations) and (ii) the decrease during the year in profit from equity-accounted companies from the very high 2023 baseline, which had been lifted by the TBC joint venture’s disposal of its retail outlets. Consolidated net income and earnings per share (in € millions) 2024 2023 Change Net income 1,890 1,983 -93 As a % of sales 7.0% 7.0% 0.0 pts n Attributable to the shareholders of the Company 1,884 1,983 -99 n Attributable to the non-controlling interests 6 0 +6 Earnings per share (in €) n Basic 2.65 2.77 -0.12 n Diluted 2.62 2.75 -0.13 338 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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