PARIS, Oct 19 (Reuters) - Michelin’s quarterly sales rose 3 percent, helped by price increases and buoyant sales of premium tyres, but the French manufacturer warned of worsening currency effects.
Group revenue advanced to 5.335 billion euros ($6.32 billion) from 5.179 billion a year earlier, the world’s second-biggest tyre maker said on Thursday.
Michelin reiterated full-year guidance including a pledge to increase recurring operating income before currency effects - but cautioned that their impact was worsening.
Adverse exchange-rate moves will wipe 110-120 million euros off 2017 earnings, Michelin predicted, a bigger impact than the 85-115 million figure it had forecast last month, when it revised a previous “neutral” currency outlook.
Michelin is cutting costs as it responds to increasing competitive pressure from low-cost rivals. The group is pursuing 1.2 billion euros in savings by 2020.
Price increases delivered a 4.4 percent boost to revenue in the three months ended Sept. 30, Michelin said, while so-called “mix” added 0.6 percent - reflecting stronger demand for pricier premium car tyres of 18 inches and above.
The group sales figure fell a shade short of the 5.35 billion euros expected by analysts, based on the median of seven forecasts in an Inquiry Financial poll for Reuters.
Sales to truck and car manufacturers grew faster than replacement tyre revenue across all markets with the exception of North America, where car production is in decline.
Global sales rose 0.5 percent in car tyres, 2 percent in trucks and 16.1 percent in specialty tyres, a category including mining equipment, agricultural vehicles and aircraft.
The year so far has seen a “sustained rebound in mining tyre demand” that will continue into 2018, Chief Financial Officer Marc Henry said during a conference call with analysts.
$1 = 0.8448 euros Reporting by Laurence Frost, Editing by Michel Rose