Michelin Net Income Falls 53.8%

Net income fell 53.8%, to 357 million euros in 2008 compared with 774 million euros in 2007. The financial come against a backdrop of spiralling tyre unit sales volumes (down 2.9% for the year, falling a huge 16% in the fourth quarter). However, when calculated at constant exchange rates, net sales reportedly grew 1.1% in 2008. Either way, operating margin took a real beating falling 4.2 percentage points to 5.6% in 2008.

In North America, Michelin North America posted total sales of $8.3 billion for 2008.

In response to the figures, Forbes reported “investors sent shares of Michelin up 0.7%, or 20 euro cents to 31.16 euros. Like Pirelli just a few days earlier, Michelin announced that it will work on enhancing plant flexibility, with an emphasis on driving further expansion in the new, high growth potential markets. In order to face the challenges that the “difficult” market is presenting, the company will cut capital expenditure to around 700 million euros.

Michel Rollier, managing partner, commented: “In response to the prevailing bearish outlook for the coming months, Michelin is strengthening the management of its production programs in order to increase plant flexibility, tighten inventory management and optimize cash. We have decided to reduce our capital spending substantially in 2009 while maintaining the key orientations of our mid-term strategy. We will further enhance our competitiveness, strengthen our leadership without compromising the value of our products and broaden our footprint in the growth regions. This way, we’ll be ready to rebound as soon as the markets recover.”

Michelin’s financial planning is based on the assumption that tyre markets will remain behind 2008 levels for the first half of 2009, before stabilising and “firming up as replacement market inventories are replenished and business activity begins to recover.” (Tyres & Accessories/Staffordshire, U.K.)

GRI recently conducted programs in Sri Lanka to empower women and motivate children under its Green x Circle initiative. The company said these endeavors aimed to address the needs of the community, focusing on both women empowerment and youth motivation.

GRI recently organized a training program titled "Management of household finance under current economic conditions" at the Ingiriya Rubber Collecting Center in Sri Lanka, South Asia led by Shashika Nimali, an NLP practitioner and life coach. The company said this initiative provided women in the industry with essential skills and knowledge to effectively manage household finances. GRI's tailored training sessions equipped participants with tools for informed decision-making, ultimately fostering greater financial security and independence, the company said.