Michelin 2025 Financial Report
On February 11, Michelin officially released its 2025 financial report. Despite continuing to optimize its product portfolio and implement price increases, the global tire giant was still unable to avoid a decline in both sales revenue and operating profit due to falling tire sales and fluctuating euro exchange rates.
Data shows that Michelin's tire sales volume in 2025 decreased by 4.7% year-on-year, with total sales revenue falling to €26 billion (approximately RMB 212.874 billion). At constant exchange rates, sales revenue declined by 1.4%, while at current exchange rates it declined by 4.4%. Operating profit was €2.9 billion (approximately RMB 23.773 billion), with an operating profit margin of 10.9%. Benefiting from a high-end product portfolio and pricing measures, profits showed resilience, but low factory capacity utilization limited further growth potential.
The original equipment market is in "hell mode," with North America being the hardest hit
The financial report clearly points out that the original equipment market was the main culprit for the decline in tire sales, contributing 80% of the sales drop. Among them, the truck and agricultural tire original equipment business in the North American market suffered the most severe decline.
In the global replacement market, Michelin's main brand achieved slight positive growth, while its other brands continued to see their market share eroded by lower-priced tires. However, since the fourth quarter, sales of these brands have shown signs of improvement.
China Becomes a Bright Spot: Growth in Both Passenger Cars and Two-Wheeled Vehicles
Amidst a generally sluggish market, the Chinese market performed exceptionally well. In 2025, Michelin achieved growth in both original equipment and replacement tires for passenger cars and two-wheeled vehicles in China, with increases of 9% and 2% respectively, making it one of the few regions in its global business to achieve "double growth."
Significant Divergence Among the Three Major Segments, Non-Tire Business Becomes a "Top Performer"
Looking at the business segments, although the automotive and two-wheeled vehicle tire business was dragged down by shrinking original equipment sales and low-price competition, its operating profit margin remained stable at 11.7%, driven by a continued increase in the sales proportion of high-value products. Among these, 18-inch and larger tires accounted for 68% of Michelin brand passenger car tire sales, and the new Primacy and CrossClimate series also brought incremental growth to the replacement market.
The truck and bus tire business was dragged down by the sales collapse of North American "Level 8" truck manufacturers, shrinking by 20% and narrowing its operating profit margin to 4.7%. Michelin has launched a comprehensive adaptation plan, including adjusting production capacity, accelerating product iteration, and promoting connected solutions, to reshape the segment's profitability.
In contrast, the specialty products business performed the best. The off-highway tire segment successfully hedged against the cyclical downturn in the agricultural OEM market, driven by strong demand in the mining and aviation tire sectors. Furthermore, polymer composite solutions not only achieved sales growth but also contributed high profit margins, pushing the segment's overall operating profit margin to 13.5%. Michelin is accelerating its investment in this high-value-added area through acquisitions and other means.
Operational efficiency supports financial stability, with cash flow reaching €2.1 billion
Thanks to refined operational management, Michelin's free cash flow is projected to reach €2.1 billion in 2025, with a slight increase in the leverage ratio to 13%, while maintaining a robust overall balance sheet.
Managing Director Florent Menegaux stated that despite intensified industry competition, a volatile tariff environment, and continued sales pressure, Michelin achieved solid financial performance thanks to its flexible market response, industrial capacity adjustments, and product portfolio upgrades.
He specifically pointed out that polymer composite solutions are becoming a key pillar of the group's strategic transformation, and recent acquisitions demonstrate Michelin's ability to position itself in high-value-added sectors.
Looking ahead to 2026, Michelin expects the global tire market to stabilize overall, with a slight contraction in the first half of the year and a potential recovery in OEM business in the second half.
