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Growth Strategy Built on a foundation of growth, competitiveness and commitment, Michelin’s strategic vision is designed to deliver strong, diversified growth by capturing the full value of its products and services in mature markets and expanding more quickly in new markets. As we continue to make our organization more competitive and cost-effective, the mutual commitment of the Company and its employees will enable us to successfully move forward together.

Objectives for 2015

Growth in sales volumes of at least 25% over the 2011- 2015 period.
Operating income of around €2.5 billion in 2015.
A more than 9% return on capital employed each year.
Annual capital expenditure of around €2 billion.
Positive free cash flow over the 2011-2015 period.
A dividend payout rate of around 30% of consolidated net income, before exceptional items.

Innovation and DifferentiationOne of the main thrusts of Michelin’s strategy is to leverage technology and innovation to differentiate its products and services, so as to consolidate its leadership and effectively meet the needs of tire users. For more than twenty years, our innovation programs have focused on delivering sustainable mobility solutions. Today, we are the world’s leading manufacturer of fuel-efficient tires and are spearheading the move towards a product-service system, which consists of selling a service or the use of a product rather than the product itself. For example, trucking companies and airlines can choose to be billed based on the number of kilometers traveled, the number of tonnes transported or the number of landings carried out using tires supplied and maintained by Michelin. We are committed to maintaining our solid lead in this new services-based economy by delivering targeted solutions combining innovative products and services.
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Hide DetailsWith an annual R&D budget of nearly €600 million, 6,000 employees and a patent portfolio that has tripled in ten years, Michelin’s innovation priorities are to:
bring new tire ranges to market more quickly;continuously improve performance so that each new range outperforms the previous generation;develop breakthrough innovations to develop totally new solutions to mobility challenges.
Driving faster GrowthMichelin is investing more than ever in the MICHELIN brand, which expresses its commitment to quality and innovation, as evidenced by the worldwide advertising campaign deployed in 2010.
MICHELIN brand sales are driving the growth strategy across every product line (Passenger Car and Light Truck tires, Truck tires and Specialty tires) and in every market. The benchmark premium brand, MICHELIN is widely recognized for the quality of its products and services, and will be enhanced by a multi-brand portfolio. Multiple brands enable us to serve retail networks that want to offer each customer just the right tire without leaving the Michelin Group brand universe.
Hide DetailsThe retread business is also being actively expanded in every market, both to encourage the market shift to radial tires (notably in India and China) and to demonstrate the value of the MICHELIN new tire casing, which in most cases is readily re-usable. To impel this growth, we are investing directly in retreading capacity in Europe, China and Russia, and partnering with franchisees (supplying the process and tread bands) in North America, Brazil, the Middle East and other geographies.
Another growth driver is the steady improvement in market access. We are strengthening our integrated dealer networks through acquisitions and stepping up our franchising operations in every market. By 2015, we expect to have 1,000 Euromaster franchisees in Europe and 1,800 TyrePlus Centers in fast-growing markets, building on the current TyrePlus network of close to 1,200 outlets in ten countries.
Because these brands are also designed to help us reach our profitability targets, they will be initially focused on the fast growing segment of competitively priced tires for high-performance vehicles. The BFGoodrich®, KLEBER, UNIROYAL, TIGAR, KORMORAN, RIKEN, TAURUS or WARRIOR brands will be used in their respective markets.
Stepping up Capital ExpenditureWith €1.7 billion invested in 2011, Michelin has returned to an active capital expenditure strategy. The program will be further expanded in the years ahead, with the commitment of nearly €2 billion a year from 2012 to 2015 on projects to:

sharply increase production capacity in fast-growing markets;
continue aligning plants in mature markets to keep pace with product developments and make them more competitive;
develop the information systems needed to meet our operational excellence and quality of service targets.

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Engineering industry, steel industry, defence

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