Michelin Capital Markets Day 2024: the Group confirms the relevance of its strategy to build a world-leading manufacturer of life-changing composites and experiences
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Michelin’s unique proficiency in materials and their application for the most tech-demanding markets positions the Group to unlock significant value creation
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2023 targets achieved: First step succeeded
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Targets set for 2026 towards higher profitability and strong cash generation, and refreshed 2030 ambitions on People, Profit and Planet
Michelin held its Capital Markets Day on May 28, 2024 at the Group's Research & Development Headquarters in Clermont-Ferrand, France.
This Capital Markets Day, the first in-presence since 2019, was the opportunity for the Group to showcase its differentiating innovation power, and its ability to leverage it across several businesses in tyres, connected solutions and polymer composite solutions.
The widely attended webcast session included a progress report on the “Michelin in Motion” strategy, the Group's "all sustainable" vision for 2030, the new mid-terms targets set for 2026, and an update of Michelin 2030 ambitions.
Over the 2021-2023 period, the Group's capacity for innovation has enabled it to grow in both its tyre and non-tyre businesses. By deploying its expertise in tyres, and therefore in the science of composite materials, Michelin was able to expand into new value-creating, growth-generating markets, and became less exposed to cyclical fluctuations.
“We are very proud of this first step towards our ambitions. In a highly turbulent environment marked by multiple crises, the Group delivered a strong performance creating value for all its stakeholders, while pursuing an agile and accretive M&A policy, demonstrating the relevance of its strategy”.
Michelin confirmed its strategic roadmap, refreshed its 2030 ambitions on People, Profit and Planet, and unveiled 2026 targets as a key milestone. The Group also insisted on its speed of evolution and placed greater emphasis on “composites” as part of its identity.
“Announced in 2021, the Michelin in Motion strategy is more relevant than ever. It will guide the Group through to 2030. Michelin is much more than a tyre manufacturer, it is actually a true high-tech company. That is what we wanted to reaffirm at this Capital Markets Day 2024. Of course, the Group will continue to be a world key player in tyres, the ultimate composite and the fruit of our intimate know-how in materials. At the same time, Michelin will further leverage its proficiency in material combinations and their application for the most tech-demanding, growth-oriented markets, far beyond mobility: healthcare, aerospace, marine, industry and construction. We are building a world-leading manufacturer of life-changing composites and experiences.”
2023 targets achieved,
first step succeeded
At its Capital Markets Day (CMD) held in April 2021, the Group had presented its Michelin in Motion strategy with 2030 ambitions and provided financial targets for 2023, adjusted at the March 2023 CMD.
The financial performance of the 2021-2023 period showed a growth, segment operating income and value creation above targets, and Group margin rate maintained despite the dilutive impact of inflation.
Over the period, Michelin made acquisitions worth €1 billion, mainly in the fields of Polymer Composites and Connected solutions. The Group has demonstrated its ability to integrate acquired companies and generate synergies, as well as its capacity to actively manage its portfolio.
[1] At Jan.2021 FX rates
[2] Structural free cash flow corresponds to free cash flow before acquisitions, adjusted for the impact of changes in raw material prices on trade payables, trade receivables and inventories
[3] Reported FCF before M&A (“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] Dilution effect from inflation on margin rate
(1) Inclusion and Diversities Management Index, see definition p.237 of the 2023 Universal Registration Document
(2) Industrial - Michelin Environmental Performance, see definition p.173 of the 2023 Universal Registration Document
(3) New KPI name for “Sustainable materials”, definition unchanged see p. 193 of the 2023 Universal Registration Document
The Group also demonstrated a strong dynamic in the areas of People and Planet, on track to achieve its 2030 ambitions:
Ambitious targets set for 2026,
towards higher profitability
and strong cash generation
* excl. substantial M&A (M&A leading to structuration of a SR4)
** SOM ambitions by SR for illustration (objective set at Group level only) : SR1>14%, SR2>10%, SR3>18%
* levers are to be considered a means to achieve total Group ambitions as stated above, not as single commitments
The Group reaffirmed its strategy and updated its 2030 ambitions
(1) Total Case Incident Rate, see definition p.264 of the 2023 Universal Registration Document
(2) Inclusion and Diversities Management Index, see definition p.237 of the 2023 Universal Registration Document
(3) Net Promoter Score, see definition p.287 of the 2023 Universal Registration Document
(4) Return on Capital Employed, see definition p.349 of the 2023 Universal Registration Document
(5) Industrial - Michelin Environmental Performance, see definition p.173 of the 2023 Universal Registration Document
(6) New KPI name for “Sustainable materials”, definition unchanged see p. 193 of the 2023 Universal Registration Document
The Group shared its ambition of growing non-tyre activities directionally above 20% of total revenue by 2030, supported by value-accretive M&A. The scope of non-tyre activities has been redefined to “businesses other than tyre manufacturing”, from “businesses other than tyre manufacturing and distribution”.
Michelin’s shareholder return policy was confirmed with a payout ratio target of c.50% of net result.
Group’s strategic scorecard was maintained as shown left:
2024 Investor Calendar
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July 24 First-half 2024 results
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October 23 Financial information for the nine months ending September 30, 2024
Supporting documents and webcast will be available on michelin.com
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