Michelin posts 2.2% quarterly revenue growth at constant exchange rates, reaffirms annual outlook
Key Facts
Michelin reported revenue growth of 2.2% at constant exchange rates in the third quarter of 2026 and reaffirmed its annual outlook for growth in segment operating income. According to the company's sales disclosure, quarterly growth was 0.8% at constant exchange rates and scope of consolidation, also excluding the impact of changes in the companies included in its consolidated accounts. Total group revenue for the first nine months reached about 19.2 billion euros, encompassing its tire and polymer composite solutions businesses. Revenue growth over that period was 1.0% at constant exchange rates, below the pace recorded in the third quarter alone. The acceleration in quarterly revenue came as acquisitions contributed positively to the group's business, while performance continued to vary across tire markets.
In its tire business, Michelin said volumes fell 0.8% in the first nine months of 2026, attributing the decline mainly to weakness in the original equipment market. That weakness affected tires supplied for original vehicle equipment, while the Michelin brand performed better in the replacement tire market over the same period. The brand's replacement market volumes rose 4%, compared with the decline in tire volumes across the group, according to the sales disclosure. In the transportation segment, third-quarter revenue grew 1.7%, supported by a recovery in original equipment in North America. The improvement in that business in the region during the third quarter thus coincided with the continuing impact of original equipment weakness on overall tire volumes for the nine months.
Among the factors affecting revenue, price and sales mix made a positive contribution of 1.1% in the first nine months, according to Michelin. The company attributed that contribution to higher-value products, which supported sales during a period of declining overall tire volumes. Conversely, exchange rate movements reduced revenue by 1.6% over the same period, adding to pressure from weaker volumes. The group said the negative currency impact was mainly linked to dollar weakness in the first half of the year, while reporting quarterly and cumulative revenue growth rates at constant exchange rates. Support from higher-value products thus combined with currency pressure on nine-month revenue among the factors detailed in the company's sales announcement.
Changes in the scope of consolidation added 0.9% to group revenue in the first nine months, supported by the inclusion of Cooley, Flexitallic and Tex Tech, according to Michelin's disclosure. The impact of acquisitions was evident in polymer composite solutions, where revenue rose 21.9% over the period, supported by the acquired businesses. Excluding changes in the scope of consolidation, however, polymer composite solutions revenue fell 2.7%, contrasting with the growth recorded when acquisitions were included. The company attributed the decline to weakness in conveyor belts, which weighed on revenue excluding the impact of newly acquired businesses. Reported business expansion was driven by acquisitions, while weakness in conveyor belts continued to affect performance on a basis excluding changes in the group's scope.
Michelin had reported revenue of 12.7 billion euros in the first half of 2026, up 0.5% at constant exchange rates, according to its financial disclosure for that period. Against that backdrop, third-quarter growth outpaced the first half, with both revenue comparisons excluding currency movements. First-half segment operating income reached 1.45 billion euros, according to the results the group reported for the opening months of the year. That profit represented a margin of 11.4% of sales, the margin Michelin included among its first-half operating performance indicators. Segment operating income rose 7% at constant scope of consolidation and exchange rates, compared with slower revenue growth over that period at constant exchange rates.
In cash flow, free cash flow before acquisitions reached 282 million euros in the first half, according to Michelin's financial results. The company compared that figure with negative free cash flow of 102 million euros in the corresponding period of 2025, marking a shift to positive cash flow before acquisitions. For the whole of 2026, the group maintained its target of generating free cash flow exceeding 1.6 billion euros, also calculated before mergers and acquisitions. Michelin said in its sales disclosure that it "confirms its full-year guidance," which includes growth in segment operating income at constant exchange rates and scope of consolidation. Those annual targets remain in place for the rest of 2026 following the announcement of third-quarter sales and first-nine-month results.