© Stocksak. FILE PHOTO: The logo of French tyre maker Michelin is seen at a company building in Boulogne-Billancourt, near Paris, France, August 6, 2022. REUTERS/Sarah Meyssonnier
(Stocksak), French tyre maker Michelin (EPA) – Tuesday’s reduction in full-year guidance for free cash flow was due to an uncertain demand outlook and soaring inflation. The company posted better quarterly sales than expected.
The company stated in a statement that it expected operating income from its main businesses to exceed 3.2 billion euros ($3.2billion) this year. However, it updated its structural free cash flow guidance to 700 millions euros after previously anticipating more than 1.2billion euros.
The war in Ukraine has exacerbated the supply problems of the tyre industry, which is still facing pandemic-related problems.
Michelin expects the passenger car tyre industry to perform in the range of 2% to 2%. The truck market, including China, is expected to grow 2% to 6% by 2022.
The group, which makes tyres for automobiles, aircraft, and industrial machinery, saw sales increase by 20.5% in the third quarter to 7.44 Billion Euros.
The company polled analysts and predicted sales of 7.16 trillion euros.
It stated that the passenger care tyre market for the group grew by 1.4% in nine months to September. This was attributed to an increase in demand in North America and China for its original equipment tires.
It also stated that while the markets for replacement tyres remained stable, they were temporarily affected due to rising imports from Asia.
($1 = 1.0046 euros)