Michelin reports steady first-half earnings despite lower sales

Michelin has posted flat first-half earnings for 2026, with group sales declining 2.6% year-on-year to €12.69 billion in the six months ended 30 June. Segment operating income totalled €1.446 billion, or 11.4% of sales, compared with €1.452 billion, or 11.1% of sales, a year earlier. At constant exchange rates, revenue increased 0.5%, driven by a 0.9% price-mix gain and a 0.7% positive consolidation effect, offsetting a 0.9% volume decline and a 3.1% currency headwind. Operating income rose €103 million, or 7%, at constant scope and exchange rates, supported by a €199 million favourable raw materials effect and a €78 million positive price-mix effect, which offset a €130 million increase in manufacturing and logistics costs, including inflation and customs tariffs. A €114 million adverse currency effect, primarily linked to the US dollar, Turkish lira and Japanese yen, also weighed on results.

By reporting segment, consumer & related distribution sales fell 2.6% to €6.93 billion, while segment operating income rose slightly to €867 million, or 12.5% of sales, from €865 million and 12.2% a year earlier. Volumes grew 0.8%, driven by strong momentum in automotive replacement and two-wheel segments, offsetting persistent weakness in automotive OE. The shift towards 18-inch and larger tires and higher value-added products supported the product mix.

Transportation & related distribution (truck tire) sales declined 6.4% to €2.81 billion, with segment operating income edging up to €167 million, or 5.9% of sales, from €166 million and 5.5% a year earlier. Volumes contracted 2.6%, reflecting weak OE sales and uneven replacement demand across regions. Weakness in North American truck OE and poor freight market conditions weighed on performance.

Speciality segment sales fell 2.2% to €2.22 billion, with volumes up 1.0%. Segment operating income declined 2.5% to €312 million, though the operating margin remained flat at 14.1%. Mixed market conditions persisted, with mining, infrastructure and aircraft businesses continuing to grow, while agricultural and materials handling OE markets remained weak.

Polymer Composite Solutions (PCS) sales rose 13.6% to €728 million, driven by acquisitions of Cooley Group and Flexitallic. Operating income for the segment fell 2.9% to €99 million, with margin dropping to 13.6% from 15.9%. Within PCS, the Conveyors business faced tepid demand, particularly in mining markets in Australia and the US, while the Seals business saw strong growth in hydraulic applications, gas compression and aeronautics. The Belts business also grew, supported by industrial markets and new applications in air and fluid management and aeronautics.

Regionally, Europe was the only area to report growth, with sales rising 1.9% to €4.76 billion. North America, including Mexico, saw sales decline 8.4% to €4.52 billion, while other regions slipped 0.5% to €3.41 billion.

Michelin reaffirmed its 2026 guidance, citing improved sales momentum despite an uncertain economic and geopolitical environment. Managing chairman Florent Menegaux emphasized the group’s agility and confidence in navigating competitive pressures and geopolitical tensions.