Michelin: In an erratic environment, Michelin delivered first half segment operating income of €1.5 billion backed by a powerful price-mix effect, and maintains its ambitions for 2025.
Clermont-Ferrand, July 24, 2025, 5:45 pm
COMPAGNIE GÉNÉRALE DES ÉTABLISSEMENTS MICHELIN
In an erratic environment affecting the Group's markets and trading currencies, Michelin delivered first-half segment operating income of €1.5 billion backed by a powerful
price-mix effect. The Group maintains its ambitions for 2025.
The Group's first-half results reflect lower Original Equipment volumes but a powerful price-mix effect.
At €13.0 billion, sales were down 3.4% for the period, including a 1.5% negative currency effect due to the strengthening of the euro, which accelerated to a 3.6% negative effect in the second quarter.
Tire volumes shrank by 6.1%, mainly due to still broadly depressed Original Equipment markets, especially for Truck, Agricultural and Infrastructure tires. In the Replacement segment, with sell-out markets confirming their structural stability, sales volumes were close to 2024 levels (down 1%).
Tire sell-in market developments were largely disrupted by substantial intercontinental import flows in anticipation of changes in customs duties.
Price and mix effects reached a positive 4.0%, reflecting the Group's value-driven approach. The MICHELIN brand strengthened its market positions in targeted regions and segments, and the sales teams successfully rolled out a widely renewed product plan.
Segment operating income stood at €1.5 billion or 11.3% of sales at constant exchange rates, reflecting the temporary impact of low production volumes.
Manufacturing capacity adjustment projects were being rolled out on schedule.
Free cash flow before acquisitions represented a negative €102 million, while segment EBITDA came to 18.6%. The Group returned to its seasonal pattern of cash generation, with an increase in working capital requirements in the first half of the year.
Automotive & Two-wheel (SR1): operating margin stood at 12.2%. While profitability was eroded by lower Original Equipment volumes, it also reflected a strongly enhanced sales mix, with the contribution of 18-inch and larger tires rising 4 points to 68% of MICHELIN-brand Passenger tire sales. The Group is rolling out an offensive product plan including renewal of the MICHELIN Primacy and MICHELIN CrossClimate ranges, and the launch of the MICHELIN CrossClimate3 Sport tire, which is opening up a new market segment.
Road Transportation (SR2): operating margin declined to 5.5%, a temporary dip due to the under-absorption of fixed costs following the steep drop in Original Equipment sales, particularly in North America where the market contracted by 19% over the first half. Fleet services revenue increased and the Group stepped up its program of innovative product launches in Europe and North America.
Specialties (SR3): operating margin stood at 14.5%, reflecting lower volumes caused by the persistent decline in Original Equipment markets in the Agricultural, Construction and Materials Handling tire segments. The Aircraft and Mining tire businesses grew during the period. Polymer Composite Solutions expanded, particularly in the Coated Fabrics and Technical Films and High-Tech Seals businesses, and confirmed the high profitability of this business.
2025 outlook
For 2025 as a whole, sell-in tire markets are expected to be stable compared with 2024, in a highly uncertain environment in terms of economic activity, customs tariffs and exchange rates.
To navigate in this erratic environment, Michelin relies on its fundamentals: agile and engaged teams, differentiating solutions that are valued by demanding customers, diverse markets and a strong local presence in key regions, as well as the financial strength needed to make independent decisions and manage operations effectively.
In the absence of any further deterioration in the economic environment in the second half of the year, Michelin is maintaining its financial ambitions for 2025.
Florent Menegaux, Managing Chairman: "The Group's fundamentals are decisive assets in these unstable and highly unpredictable times. They enable us to manage our activities as closely as possible and adapt to turbulence as best we can. I would like to thank all Michelin's teams for their daily engagement in this context. We are determined to further strengthen the resilience of our business model without giving up our medium-term ambitions."
Key figures
(in € millions)
First-half 2025
First-half 2024
Sales
13,028
13,481
Segment operating income
1,452
1,782
Segment operating margin
11.1%
13.2%
of which Automotive, Two-wheel1
12.2%
13.2%2
of which Road transportation1
5.5%
9.5%2
of which Specialty businesses1
14.5%
17.1%2
Other operating income and expenses
(251)
(211)
Operating income
1,200
1,571
Net income
840
1,163
Earnings per share
1.18
1.62
Segment EBITDA
2,428
2,756
Capital expenditure
766
805
Net debt
3,942
4,260
Gearing
22.2%
23.9%
Net defined benefit obligation
2,498
2,350
Free cash flow3
(114)
659
Free cash flow before acquisitions
(102)
669
Employees on payroll4
127,500
132,300
1 and related distribution.
2 Segment data for the first half of 2024 have been restated to provide with the changes in the scope of consolidation of the segments that took place at the end of 2024. These changes mainly concern the Two-wheel business, which is now included in the "Automobile, Two-wheel and related distribution" segment, to reflect the Group's new organization.
3 Free cash flow corresponds to net cash from operating activities less net cash used in investing activities, adjusted for net cash flows relating to cash management financial assets and borrowing collaterals.
4 Data rounded to the nearest hundred.
Market Review
Passenger car and Light truck tires & Two-wheel
PASSENGER CAR AND LIGHT TRUCK TIRES
First-half2025/2024(in nb. of tires)
Europe*
North & Central America
China
Global Market
Original Equipment
-8%
-5%
+10%
0%
Replacement
+5%
+2%
0%
+3%
* Including Turkey and Central Asia.
The global Original Equipment and Replacement Passenger car and Light truck tire market grew by 2% overall in the first half of 2025, with a 3% gain in Replacement sales and a 0% stability in the OE segment.
PASSENGER CAR AND LIGHT TRUCK TIRES - ORIGINAL EQUIPMENT
In the Original Equipment segment, global demand varied by region but ended the period flat overall year-on-year (+0% growth). Demand fell sharply in Europe and North America, where the many economic and regulatory uncertainties dampened consumer purchasing power and spending. By contrast, demand was very strong in China, supported by a program of government incentives for the purchase of new vehicles.
Although the European market contracted by 8% over the first half, the rate of decline eased from 11% in the first quarter to 5% in the second. New vehicle sales were affected by the erosion of purchasing power and regulatory uncertainties, which led consumers to postpone their purchasing decisions.
In North and Central America too, the market contracted sharply, with 5% declines recorded in both the first and the second quarters. The turbulence generated by the threat of high tariffs weighed heavily on manufacturers' activity in first-half 2025. In addition, the transition to electric or hybrid vehicles slowed during the period.
In China, demand grew by 10% as consumers took advantage of the government incentives for the ...
