Pole Position: UBS European & US Autos Daily

Research evidence excerpt

Pole Position: UBS European & US Autos Daily

Michelin H1 results today post market hours

Michelin will release its H1 results today after market hours and management will host a

conference call at 6.30pm CET.

Michelin did host its pre-close call on 2 July (transcript available on the company

website).

This will be the first earnings call with the new group CFO and since the company

decided to create a fourth division: Polymer Composite Solutions.

For H126, we are broadly in line with the consensus available on the company’s website

and we expect group revenue of c€12.8bn, -1.7% yoy, made up of volume -0.3%, price/

mix of +1.1% and FX -3.4%, and group EBIT (before restructuring) of €1.37bn, -6% yoy,

implying an EBIT margin of 10.7% (vs H125's 11.1%, but slightly up vs H225's 9.8%).

For Q2 more specifically, we expect slightly positive volume growth: based on the

monthly market data published by Michelin, we estimate PC was flattish while Trucks

was slightly positive, helped by RT. We estimate Michelin will slightly outperform PC

markets thanks to Europe and some pre-buy. In Trucks, Michelin indicated during its pre

close call the division could generate flat to positive growth.

We also model slightly positive FCF, in line with the normal seasonality (ie, more of the

cashflow generation comes from H2). Including acquisitions made (-€1bn), the SBB (we

assume €300m repurchased since the announcement of a €750m envelope for 2026)

and the dividend cashed out (close to -€1bn), we estimate net debt will reach c€4.5bn,

implying a net debt/EBITDA of c1x, vs 0.5x at YE2025.

The company will host a conference call. We expect questions to focus on: 1) inflationary

pressures (energy, raw mat and logistics) resulting from the Middle East conflict and the