PARIS: Michelin's first-quarter revenue fell 2.4 percent as weaker prices and emerging-market currencies outweighed sales volume growth, the French tyre maker said on Wednesday.
Revenue fell to 4.758 billion euros ($6.58 billion) in January-March from 4.877 billion in the year-earlier period, Michelin said in a statement.
Demand for car and truck tyres improved in most markets except eastern Europe, Michelin said, but foreign exchange effects wiped 4.6 percent off revenue, exacerbated by tougher price competition led by rival Bridgestone.
The Japanese tyre maker has cut prices by 3-5 percent in most mature markets, Michelin Chief Financial Officer Marc Henry told reporters and analysts on a conference call.
Demand for vehicles is rebounding from a six-year slump in Europe, improving the outlook for suppliers and tyre makers.
But a weakening of the US dollar, Russian rouble and South American currencies is hurting the value of overseas sales.
Price cuts by Bridgestone and US rival Goodyear have also forced Michelin to slash prices on its BFGoodrich and Kleber budget tyre lines, the company said.
"We have had to adjust those brands to recoup," Henry said, adding that the namesake Michelin brand had largely resisted the pricing pressure. Revenue fell 2.4 percent for the car tyre division and 1 percent in truck tyres, Michelin said.
The specialty business, which makes outsize tyres for mining, agriculture and aircraft, posted a 5.2 percent revenue slide.
The mining market remained on the downward trend but is expected to pick up in the fourth quarter of 2014, Henry said.
Despite the sales setback, Michelin reiterated full-year goals including free cash flow above 500 million euros, a return on capital exceeding 11 percent and an increase in operating income before one-time gains and charges.
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