Michelin reported 39% growth in 2011, sets new targets
By Andrew, 11 Feb, 2012. 0 Comments
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Michelin’s profit for 2011 increased due to the rising demand from European and U.S. truckmakers. The net income of the world's second-largest tiremaker increased by 39% to 1.46 billion euros ($1.94 billion), exceeding analysts' expectations, on a 16% boost in revenue to 20.72 billion. The improvement in profit came about even if the sales volume increased by just 6.7% last year, lower than the 8% gain that the company had predicted. Before one-time gains and losses are considered, its operating income increased by 15% in 2011 to 1.95 billion euros, or about 9.4% of sales, compared with a 9.5% operating margin in 2010.
According to Thomson Reuters data, analysts had anticipated sales of 20.65 billion euros, 1.89 billion in operating profit (after one-time items) and 1.32 billion in net income. Michelin is aiming for a 9% return on capital in 2015 while promising to provide a 30% payout of its profit as dividends. Its sales volumes are estimated to increase by 25% by the year 2015 to 2.5 billion euros ($3.3 billion), compared with a previous goal of 2 billion euros or by 50% by the year 2020.
France-based Michelin is ranked behind Bridgestone of Japan in worldwide production. It raised 1.2 billion euros in a 2010 share issue to finance a growing market expansion comparable to adding a new plant annually. Last November, the tiremaker sold its 9.98% stake in Hankook Tire Co., increasing by up to $610 million to add to its expansion fund. Last April, the company inked a joint venture deal to make car and light-truck tires with China's Double Coin Holdings, adding to its four plants in China.
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