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Michelin Steps Up Cost Cutting as Profits Drop
Michelin & Cie. has raised its cost-cutting target €200 million to €1.2 million by 2016 after reporting a 9% drop in net profits for 2014.
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Michelin & Cie. has raised its cost-cutting target €200 million to €1.2 million by 2016 after reporting a 9% drop in net profits for 2014.
The tiremaker's unit volume grew less than 1% last year. Revenue declined 3% to €19.6 billion. A richer product mix and lower raw materials prices contributed an expected €118 million. Operating income grew 1% to €2 billion, but net income fell 9% to €1 billion.
The company says rising production costs in 2014 offset €256 million in cost savings. Net debt jumped fivefold to €707 million.
Michelin predicts light vehicle and heavy truck tire sales will continue this year to be led by growth in North America and China. The company expects further shrinkage in demand for mining and agricultural tires.
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