Michelin Reports Operating Income of 2.9 Billion Euros in 2025, Despite Volume Decline
In 2025, Michelin recorded an operating income of 2.9 billion euros at constant exchange rates, along with a free cash flow before acquisitions of 2.1 billion euros. These results reflect a 4.7% decrease in volumes, particularly in the First Equipment Truck and Agricultural sectors in North America, partially offset by an improved sales mix and the financial strength of the group.
Financial Performance in Detail
Michelin achieved an operating income of 2.9 billion euros in 2025 at constant exchange rates, representing 10.9% of sales, down by 1.5 points from 2024. The group recorded sales of 26.0 billion euros, down by 1.4% at constant exchange rates and 4.4% at current exchange rates. The volume decline was 4.7%, with over 80% coming from First Equipment, particularly in the Truck and Agricultural activities in North America. The MICHELIN brand saw growth in the Replacement sector, while other group brands suffered from massive low-price tire stockpiling by distributors. However, sales trends improved in the fourth quarter. The operating income benefited from an enriched sales mix and operational performance but was heavily impacted by low factory loadings. Michelin's fundamentals strengthened in 2025 with adjusted industrial capacities, increased operational performance, an accelerated product plan, and reinforced brand leadership.
Strengthened Financial Position
The group bolstered its financial position with a free cash flow before acquisitions of 2.1 billion euros, reflecting the quality of operational management. The debt ratio improved to 13%, confirming the group's balance sheet strength. The net income was set at 1.7 billion euros, down by 12%. A dividend of 1.38 euros per share will be proposed at the General Meeting on May 22, 2026. For 2026, the group aims to improve its operating income at constant scope and exchange rates compared to 2025, and to generate a free cash flow before acquisitions of more than 1.6 billion euros. The tire markets are expected to be stable over the year, with a slight decline in the first half and a relative strengthening of the B2B First Equipment markets in the second half. The group is accelerating its growth in Polymer Composite Solutions, which will become a new reporting segment starting in the first quarter of 2026. Confident in its cash generation, the group announces a share buyback program of up to 2.0 billion euros for the period 2026-2028.
Segment Performance
The Automotive and Two-Wheeler segment recorded an operating margin of 11.7%, impacted by the decline in volumes in First Equipment and Tier 2 and Tier 3 brands, but supported by an enriched mix with 68% of MICHELIN passenger car sales in 18 inches and larger dimensions. The Road Transport segment saw its operating margin decrease to 4.7%, heavily penalized by weak First Equipment sales in North America in a market down by 20% in a context of massive overstocking of Class-8 trucks. The group has initiated a deep adaptation plan including the adjustment of industrial capacities and the accelerated renewal of product ranges. The Specialties segment generated an operating margin of 13.5%, with Tire activities penalized by low-cycle First Equipment Agricultural markets, partially offset by dynamic growth in Mining and Aviation activities. The Polymer Composite Solutions are growing and confirm a high level of profitability.
