After posting strong sales and net profit numbers of 2010, Groupe Michelin’s boss-to-be has set the company’s sights on possible acquisitions.
Jean-Dominique Senard, named to become Michelin’s managing partner, said: “We’ve paid down our debt by half and our profits have rebounded from the severe 2009 economic downturn. We’re ready to move in Asia by takeover besides expanding our plants in India, Brazil and China.
“These are markets we can’t ignore if we are to participate in global growth to the extent we’d like,” Senard told media. The company’s low debt means “we don’t have to ask ourselves too many questions if we need to move.”
Potential targets were not named or hinted at, though Chinese tiremakers would be an obvious option. With Michelin’s potential war chest, nothing can be ruled out, some analysts hinted.
Senard, who will succeed Michel Rollier, will not get the customary lifetime contract, though. He will get a four-year deal. Michelin shareholders will vote May 13 on Senard’s appointment. Rollier, 67, will remain on the board for at least 18 months.
For 2010, Michelin’s worldwide net sales reached $24.2 billion (up 20.8% to 2009 results), and the company produced net profits of $1.43 billion.
Rollier said Michelin wants to increase its sales by at least 6.5% and continue growing operating income. To meet those goals, the company will “stick to an unprecedented capital expenditure program.”
Michelin, with two plants in Nova Scotia and several in the United States, posted 2010 earnings of $1.43 billion U.S., up from $150 million in 2009. Tire sales by volume grew by 13.4% as carmakers boosted their production.
Volume growth will slow to 6.5% this year, Michelin said, but higher selling prices will offset the higher cost of rubber and many other inputs.
