Q3 2026 Compagnie Generale des Etablissements Michelin SCA Earnings Call

October 20, 2026

Speaker #4: And I'll hand over to Ms. Bénédicte de Bonchose, Group CFO. Madam, please go ahead.

Bénédicte de Bonnechose: Thank you. Good evening or good afternoon, ladies and gentlemen. Thank you for joining us today for Michelin 2026 nine months revenue presentation. Let me start with a word about revenue growth. If we look at revenue growth at iso-FX, it was up by 1% over the first nine months. This growth rate increased in Q3 year-on-year, which is 2.2%. Part of this growth is fueled by targeted acquisitions in Polymer Composite Solutions, our fourth reporting segment, where three newly acquired companies are now fully consolidated into Q3 revenue. Over the nine months, they bring a positive contribution of 1.2% to the group scope effect. If we focus on organic growth at iso-FX, the same acceleration pattern applies, with 0.1% over the first nine months and with 0.8% in the third quarter.

Speaker #2: Thank you. So, good evening or good afternoon, ladies and gentlemen. Thank you for joining us today for the Michelin 2026 Nine Months Revenue Presentation. Let me start with a word about revenue growth.

Speaker #2: If we look at revenue growth at ISO Forex, it was up by 1% over the first nine months. And this growth rate increased in Q3 year-on-year, reaching 2.2%.

Speaker #2: Part of this growth is fueled by targeted acquisitions in polymer-composite solutions or the false reporting segment, where three newly acquired companies are now fully consolidated into Q3 revenue.

Speaker #2: Over the nine months, they bring a positive contribution of 1.2% to the Group scope effect. If we focus on organic growth at ISO FX, the same acceleration pattern applies.

Speaker #2: The 0.1% over the first nine months, and plus 0.8% in the third quarter, confirms the resilience of our business model in a very volatile and demanding market environment.

Bénédicte de Bonnechose: This confirms the resilience of our business model in a very volatile and demanding market environment. Turning now to tire market overview. Over the first nine months, demand remained contrasted, with particularly weak conditions in North America, despite the ongoing recovery in truck original equipment. This is, of course, a preoccupation for us, as this region generates around 40% of the group's revenue. I will come back to this topic later. If we look at passenger car and light truck, the global market was broadly stable. Original equipment was down 1%, while replacement was up 1%. At OE, the main year-on-year swing occurred in China, down 7%, driven by lower public incentives impacting on domestic demand. In replacement, China was up 6%, supported by the replacement needs from vehicles sold in recent years.

Speaker #2: Turning now to the tire markets overview. Over the first nine months, demand remained contrasted, with particularly weak conditions in North America, despite the ongoing recovery in truck original equipment.

Speaker #2: This is, of course, a preoccupation for us, as this region generates around 40% of the group's revenue. I will come back to this topic later.

Speaker #2: If we look at passenger car and light truck, the global market was broadly stable. Original equipment was down 1%, while replacement was up 1%.

Speaker #2: At OE, the main year-on-year swing occurred in China, down 7%, driven by lower public incentives impacting domestic demand. In replacement, China was up 6%, supported by the replacement needs from vehicles sold in recent years.

Bénédicte de Bonnechose: Europe and North America decreased, primarily due to lower tire imports against a high 2025 comparison base. Looking at miles-driven indicators, the decline in imports was not driven by lower mileage on a year-to-date basis. However, we did see a first inflection in August, with miles driven down 0.5% in the US, potentially reflecting the initial impact of higher oil prices. In truck, excluding China, the market was up 1% over nine months. OE improved and turned positive on a cumulative basis, supported by the long-awaited recovery in North America, with Q3 production upswing following strong orders of Class 8 trucks in H1. Replacement was also up 1%, but with major regional differences. There, since we are talking about sell-in markets, imported tire flows are key to understand the high regional swings. Europe and South America faced growing imports. North America compared with a high 2025 reference base.

Speaker #2: Europe and North America decreased, primarily due to lower tire imports against a high 2025 comparison base. Looking at market-driven indicators, the decline in imports was not driven by lower mileage on a year-to-date basis.

Speaker #2: However, we did see a first inflection in August, with miles driven down 0.5% in the US, potentially reflecting the initial impact of higher oil prices.

Speaker #2: In truck, excluding China, the market was up 1% over nine months. OE improved and turned positive on a cumulative basis, supported by the long-awaited recovery in North America, with Q3 production upswing following strong orders of Class A trucks in H1.

Speaker #2: Replacement was also up 1%, but with major regional differences. There, since we are talking about selling markets, imported tire flows are key to understanding the high regional swings.

Speaker #2: Europe and South America faced growing imports, while North America is compared with a high 2025 reference base. On top of that, the US market faced a long-lasting weak demand for transportation.

Bénédicte de Bonnechose: On top of that, the US market faced a long-lasting weak demand for transportation. If we look at beyond road activities, OE markets were down, especially the agricultural high-power segment in North America, still at the bottom of this cycle. Replacement, on the other hand, was positive. Mining remained indeed on a positive trend, in line with the structural healthy demand. After a strong start of the year, the aircraft market slowed down, especially in the Middle East and in North America. Let's now move to the group revenue bridge for the nine months. Group revenue reached EUR 19.2 billion on a reported basis. It grew by 1% at constant exchange rates, and organic growth was slightly up, as shared in the introduction, +0.1%.

Speaker #2: Now, if we look at beyond-road activities, OE markets were down, especially the agricultural high-power segment in North America, which is still at the bottom of the cycle.

Speaker #2: Replacement, on the other hand, was positive. Mining remained on a positive trend, in line with structurally healthy demand. After a strong start to the year, the aircraft market slowed down, especially in the Middle East and North America.

Speaker #2: Let's now move to the group revenue bridge for the nine months. Group revenue reached €19.2 billion on a reported basis. It grew by 1% at constant exchange rates, and organic growth was slightly up, as shared in the introduction, at +0.1%.

Bénédicte de Bonnechose: Scope contributed EUR 179 million or 0.9%, benefiting from the integration of targeted acquisitions in Polymer Composite Solutions, including Tex Tech on 1 July, and partially offset by the divestment of Compact Line activities in 2025. Volumes declined by 0.8%, and this was driven by OE across our businesses, and I will get back to this in a few minutes to provide more color. Price mix contributed EUR 206 million, which represents +1.1%. This was driven primarily by a strong mix effect, reflecting the continued prioritization of our portfolio. In passenger car at the Michelin brand, 18 inch and above tires reached 70% of total share. Price effect improved along the year, with indexation clauses graduated in neutral and pricing actions to deal with increasing input costs and dynamic competition.

Speaker #2: Scope contributed €179 million, or 0.9%, benefiting from the integration of targeted acquisitions in polymer-composite solutions, including Tech-Tech from July 1st, and was partially offset by the divestment of compact line activities in 2025.

Speaker #2: Volumes declined by 0.8%, and this was driven by OE across our businesses. I will get back to this in a few minutes to provide more color.

Speaker #2: Price mix contributed €206 million, which represents a plus 1.1%. This was driven primarily by a strong mix effect, reflecting the continued primarization of our portfolio.

Speaker #2: In passenger car, for the Michelin brand, 18-inch and above tires reached 70% of the total share. Price effect improved throughout the year. With indexation closing gradually turning neutral, and pricing actions to deal with increasing input costs and dynamic competition.

Bénédicte de Bonnechose: Last, Forex had a negative impact of EUR 300 million, -1.6%, mainly reflecting the depreciation of several currencies against the euro. Overall, despite still challenging market environments, particularly in original equipment, Michelin managed to post positive growth at constant exchange rates. More importantly, this performance improved progressively along the year. This was particularly evident in the Q3, which we will now look at in more detail. Q3 revenue grew by 2.2% at constant exchange rates. Organic growth reached +0.8%, marking a clear acceleration compared with the H1. The volume effect remained slightly negative at -0.2%. Due to persistent low original equipment markets across several activities, and we did not reach the growth we expected in Q3 despite an improving trend along the quarter. As for price mix, it was the main driver of organic growth, contributing +1.5%.

Speaker #2: Lastly, Forex had a negative impact of €300 million, minus 1.6%, mainly reflecting the depreciation of several currencies against the euro. Overall, despite still challenging market environments, particularly in original equipment, Michelin managed to post positive growth at constant exchange rates.

Speaker #2: And more importantly, this performance improved progressively throughout the year. This was particularly evident in the third quarter, which we will now examine in more detail.

Speaker #2: Q3 revenue grew by 2.2% at constant exchange rates. Organic growth reached plus 0.8%, marking a clear acceleration compared with the first half of the year.

Speaker #2: The volume effect remained slightly negative, at minus 0.3%, due to persistent low original equipment markets across several activities. We did not reach the growth we expected in Q3, despite an improving trend throughout the quarter.

Speaker #2: As for price mix, it was the main driver of organic growth, contributing plus 1.5%. Mix remained strong at plus 1.1%, and the price effect turned positive, benefiting from the targeted price increase implemented during the second quarter to offset raw material cost inflation.

Bénédicte de Bonnechose: Mix remained strong at +1.1%, and the price effect turned positive, benefiting from the targeted price increase implemented during the Q2 to offset raw material cost inflation. Scope contributed +1.4%, mainly reflecting the contribution of recent acquisition within Polymer Composite Solutions, including Tex Tech from 1 July. Last, currencies became a tailwind in the quarter, contributing +1.7%, primarily due to the appreciation of the US dollar against the euro. What does this mean overall? Q3 marks a clear step-up versus the H1, with organic growth back in positive territory and all major growth drivers, except volumes, moving in a favorable direction. Turning to tire set volumes, let's now have a look at how they developed over the nine months. Over the period, tire volumes declined by 0.8% as continued weakness in original equipment more than offset the solid growth in replacement.

Speaker #2: Then scope contributed plus 1.4%, mainly reflecting the contribution of recent acquisitions within polymer-composite solutions, including Tech-Tek from July 1st. Last, currencies became a tailwind in the quarter, contributing plus 1.7%, primarily due to the appreciation of the US dollar against the euro.

Speaker #2: So, what does this mean overall? Q3 marked a clear step up versus the first half, with organic growth back in positive territory, and all major growth drivers except volumes moving in a favorable direction.

Speaker #2: Now, turning to tire set volumes, let's have a look at how they developed over the nine months. Over the period, tire volumes declined by 0.8% as continued weakness in regional equipment more than offset strong growth in replacement.

Bénédicte de Bonnechose: Original equipment reduced volumes by 1.4 points, reflecting weak demand across most businesses. In passenger car, demand remained negative, and we were affected by an unfavorable customer and vehicle mix in certain regions, particularly Europe and North America. On the positive side, in China, where the market contracted by 7%, we overperformed and posted volume growth. In truck, market conditions were weak in H1, mostly in North America, and Q3 only partially offset it. In agricultural, OE remains stuck at the bottom of its prolonged market downturn. As regards replacement sales, it did grow by 0.6 points. This was primarily fueled by the Michelin brand, which sales up 4% over the period. What are the key drivers behind this performance? First, our strong premium product offering with the right competitive positioning. Then we can also mention the success of recent product launches, such as Michelin Primacy 5 Energy.

Speaker #2: Original equipment reduced volumes by 1.4 points, reflecting weak demand across most businesses. In passenger car, demand remained negative, and we were affected by an unfavorable customer and vehicle mix in certain regions, particularly Europe and North America.

Speaker #2: On the positive side, in China, where the market contracted by 7%, we overperformed and posted volume growth. In truck, market conditions were weak in H1, mostly in North America, and Q3 only partially offset it.

Speaker #2: And in agricultural OE, it remained stuck at the bottom of its prolonged market downturn. As regards replacement sales, they did grow by 0.6 points. This was primarily fueled by the Michelin brand, with sales up 4% over the period.

Speaker #2: So, what are the key drivers behind this performance? First, our strong premium product offering, with the right competitive positioning. Then, we can also mention the success of recent product launches, such as Michelin Primacy 5 Energy.

Bénédicte de Bonnechose: We also continued to see solid growth in high-value dimensions, particularly 18 inch and above. In addition, momentum remains favorable in China and North America, and resilient position in Europe despite a more volatile import environment. This contrasts with tier 2 and tier 3 brands, which continue to face intense competition from low-cost Asian imports, particularly in Europe and North America. In summary, while original equipment markets remain challenging, replacement continued to demonstrate the strength of our premium positioning. The Michelin brand once again outperformed its market, confirming its role as a key driver of resilience, market share gains, and value creation. If we look at now our four reporting segments, first comment is that all of them delivered revenue growth at constant exchange rates, except transportation. I will get back to transportation topic in a few minutes.

Speaker #2: We also continued to see solid growth in high-value dimensions, particularly 18-inch and above. In addition, momentum remained favorable in China and North America, and we maintained a resilient position in Europe, despite a more volatile import environment.

Speaker #2: This contrasts with Tier 2 and Tier 3 brands, which continued to face intense competition from low-cost Asian imports, particularly in Europe and North America.

Speaker #2: In summary, while original equipment markets remained challenging, replacement continued to demonstrate the strength of our premium positioning. The Michelin brand once again outperformed its markets, confirming its role as a key driver of resilience, market share gains, and value creation.

Speaker #2: If we look at our four reporting segments now, the first comment is that all of them delivered revenue growth at constant exchange rates, except Transportation.

Speaker #2: And I will get back to the transportation topic in a few minutes. As to Specialties, reported revenue was down 0.9%, but excluding the compact line activities divested in 2025, the segment grew by 0.5% on a like-for-like basis.

Bénédicte de Bonnechose: As to specialties, reported revenue was down 0.9%, but excluding the Compact Line activities divested in 2025, the segment grew by 0.5% on a like-for-like basis. Last, Polymer Composite Solutions revenue increased by 21.9%, driven by M&A with the successful integration of Cooley and Flexitallic in H1 and Tex Tech in July. Organic development was slightly negative like in H1 due to conveyors which mask growth across all other categories. Let's now take a closer look at this segment performance. I will start with the only category still going down, conveyor. It represented 36% of PCS revenue over the period, to be compared with 40% in 2025. The market environment continued to be unfavorable in the wake of H1. Australia remains impacted by weak demand linked to construction, especially linked with iron ore demand, facing a weak Chinese construction end-use market.

Speaker #2: Lastly, Polymer-Composite Solutions revenue increased by 21.9%, driven by M&A with the successful integration of Coolay and Flexidelic in H1, and Tech-Tech in July. Organic development was slightly negative, as in H1, due to conveyors—which masked growth across all other categories.

Speaker #2: Let's now take a closer look at this segment's performance. I will start with the only category still going down: conveyors. It represented 36% of PCS revenue over the period, compared to 40% in 2025.

Speaker #2: The market environment continued to be unfavorable in the wake of H1. Australia remained impacted by weak demand linked to construction, especially associated with iron ore demand, facing a weak Chinese construction destination market.

Bénédicte de Bonnechose: On the other side, North America continued to be affected by tight customer cash management. However, the situation is trending upwards, with Q3 sequentially better than Q2, and the evolution of the order book gives us confidence that the trend will continue in Q4. Turning to Sealing. Revenue continued to grow, supported by strong demand in hydraulic systems, particularly in infrastructural and construction. The integration of Festo Plastic is contributing positively. As to Coated Fabrics and Films, they maintained a favorable momentum. Growth was driven by the diversification of applications beyond traditional markets, notably in marine, space or defense. The integration of Cooley Group and Tex Tech reinforced our position in high-performance composite materials. Finally, Belting continued to develop, supported by healthy industrial end markets, notably logistics and energy, as well as applications linked to tire and fleet management.

Speaker #2: On the other side, North America continued to be affected by tight customer cash management. However, the situation is trending upward, with Q3 sequentially better than Q2.

Speaker #2: And the evolution of the order book gives us confidence that the trend will continue in Q4. Turning to Sealing, revenue continued to grow, supported by strong demand in hydraulic systems, particularly in infrastructure and construction.

Speaker #2: The integration of Flexidelic is contributing positively. As to cotton fabrics and film, they maintained a favorable momentum; growth was driven by the diversification of applications beyond traditional markets, notably in marine, space, or defense.

Speaker #2: The integration of Coolay Group and Tech-Tech reinforced our position in high-performance composite materials. Finally, belting continued to develop, supported by healthy industrial and markets, notably logistics and energy, as well as applications linked to air and feed management.

Bénédicte de Bonnechose: Overall, Polymer Composite Solutions continues to progress and is becoming a more meaningful contributor to group growth with a broader and more balanced portfolio following recent acquisitions. As promised, let me spend a few minutes on the North American situation. As mentioned earlier, market conditions in the region remained difficult over the first 9 months, with an economy that remains sluggish and increasingly polarized. Growth is largely driven by technology-related sectors, while other parts of the economy are facing more pressure. Consumer sentiment remains low and freight indicators a difficult environment for transport fleets. Despite this context, our Q3 sales grew in both volume and mix. In replacement, the performance was positive. In passenger cars, the Michelin brand continued to outperform the market.

Speaker #2: Overall, polymer-composite solutions continue to progress and are becoming a more meaningful contributor to group growth, with a broader and more balanced portfolio following the recent acquisition.

Speaker #2: So, as promised, let me spend a few minutes on the North American situation, as mentioned earlier. Market conditions in the region remained difficult over the first nine months, with an economy that remained sluggish and increasingly polarized.

Speaker #2: Growth is largely driven by technology-related sectors, while other parts of the economy are facing more pressure. Consumer sentiment remains low, and trade indicators point to a difficult environment for transport fleets.

Speaker #2: Despite this context, our Q3 sales grew in both volume and mix. In replacement, the performance was positive. In passenger car, the Michelin brand continued to outperform the market.

Bénédicte de Bonnechose: This is particularly encouraging in a market where sell-out rates remains resilient, with miles driven growing year-on-year, despite slight negative inflation in the month of August. It has helped us to overcompensate weak sales in Uniroyal brands due to strong competition of budget tires. In Mining, the group posted a strong Q3, overperforming in the large dimension tires. In Truck, the group is holding its position year to date, but on a very negative market, where fleets remain under pressure from weak freight demand, a driver shortage and rising operating costs. In original equipment, the situation was contrasted. In passenger cars, the market remained low and Michelin faced an unfavorable mix of brands and models. In truck, the long-expected recovery of the market finally materialized in Q3. With exposure to truck makers now stabilized at the right level, Michelin was able to benefit from the rebound.

Speaker #2: This is particularly encouraging in a market where sell-out rates remain resilient, with market-driven growth year-on-year despite slight negative inflation in the month of August.

Speaker #2: It has helped us to overcompensate for weak sales in the Uniroyal brand due to strong competition from budget tires. In Mining, the Group posted a strong Q3, overperforming in large dimension tires.

Speaker #2: And in Truck, the Group is holding exposition year-to-date, but on a very negative market, where fleets remain under...

Speaker #5: Pressure from weak freight demand, a driver shortage, and rising operating costs. In original equipment, the situation was contrasted. In passenger cars, the market remained low, and Michelin faced an unfavorable mix of brands and models.

Speaker #5: In Truck, the long-expected recovery of the market finally materialized in Q3. With exposure to truckmakers now stabilized at the right level, Michelin was able to benefit from the rebound.

Bénédicte de Bonnechose: In agriculture, the market remains stuck in a down cycle, especially on the high-power segment to which the group is overexposed. Now, let's take a closer look at our truck business worldwide. Our transportation segment is the only one that is not growing at constant exchange rates over the period. However, it is growing organically in Q3, both volume and value. I want to take a minute to explain the situation. The key message is that the OE replacement trends reversed in Q3. Indeed, in original equipment, the market is recovering. You can see on the slide the 10-year evolution of the tire market in North America, Europe and South America, the three main regions in which we operate. The down cycle of the OE market has been really long, and we are only starting to get out.

Speaker #5: And in agriculture, the market remained stuck in a down cycle, especially in the high-power segment, to which the Group is overexposed.

Speaker #6: No.

Speaker #5: Let's take a closer look at our truck business worldwide.

Speaker #6: Our transportation segment.

Speaker #5: It is the only one that is not growing at constant exchange rates over the period. However, it is growing organically in Q3—both volume and value.

Speaker #5: So, I want to take a minute to explain the situation. The key message is that the OE replacement trends reversed in Q3. Indeed, in original equipment, the market is recovering.

Speaker #5: You can see on this slide the 10-year evolution of the tire markets in North America, Europe, and South America—the three main regions in which Michelin operates.

Speaker #6: We operate.

Speaker #5: The down cycle of the OE market has been really long, and we are only starting to get out. This is thanks to the recovery in North America, and we anticipate that this positive trend should continue, at least in the first half of next year.

Bénédicte de Bonnechose: This is thanks to the recovery in North America, and we anticipate that this positive trend should continue, at least in the first half of next year. The group was able to capitalize on this upswing to go from double-digit negative sales in H1 to positive sales in Q3. In replacement, the picture is also contrasted, but in a different direction. In H1, our sales were up low single digits, supported by Europe, but penalized by the Americas. In Q3, replacement sales declined mid-single digit, reflecting the slowdown in Europe and continued soft demand in North and South America. In South America, the strong growth of the selling market actually reflects the high imports of tires to the region. Despite these challenges, sales momentum is improving in Q3.

Speaker #6: of next year.

Speaker #5: The group was able to capitalize on this upswing to go from double-digit negative sales in H1 to positive sales in Q3. In Replacement, the picture is also contrasted, but in a different direction.

Speaker #5: In H1, our sales were up low single digits, supported by Europe but penalized by the Americas. In Q3, replacement sales declined mid-single digits, reflecting the slowdown in Europe and continued soft demand in North and South America.

Speaker #5: In South America, the strong growth of the saline market actually reflects the high import of tires to the region. Despite these challenges, sales momentum is improving in Q3.

Bénédicte de Bonnechose: Combined with the actions the group has taken over the past few years, including right-sizing its capacities and deploying its product plan, this should support a more positive outlook. On a very different topic, let me spend a few minutes on the electrification of passenger cars, a major transformation that is a powerful tailwind for Michelin. As you know, electrification is expanding securely, and higher fuel prices have boosted it further in 2026, particularly in China and Europe, where electrified vehicles here, meaning all of them, BEV and hybrid altogether, are expected to represent nearly two-thirds of all vehicles produced. Electrification is especially favorable for Michelin because we are uniquely positioned. First, in original equipment, we have a strong exposure to premium EV fitments, more than twice our total market share at OE. This reflects the ability of our technologies to meet the demanding requirements of electric vehicles.

Speaker #5: Combined with the actions the Group has taken over the past few years—including rightsizing its capacities and deploying its product plan—this should support a more positive outlook.

Speaker #5: Now, on a very different topic, let me spend a few minutes on the electrification of passenger cars—a major transformation that is a powerful tailwind.

Speaker #6: for Michelin.

Speaker #5: As you know, electrification is expanding securely. Higher fuel prices have boosted it further in 2026, particularly in China and Europe, where electrified vehicles—meaning all of them, BEV and hybrid altogether—are expected to represent nearly two-thirds of all vehicles produced.

Speaker #5: Electrification is especially favorable for Michelin because we are uniquely positioned. First, in original equipment, we have a strong exposure to premium EV fitments—more than twice our total market share at OE.

Speaker #5: This reflects the ability of our technologies to meet the demanding requirements of electric vehicles. All Michelin tires are EV-ready; they have been designed to meet the performance requirements of both internal combustion and electrified vehicles.

Bénédicte de Bonnechose: Then all Michelin tires are EV ready. They have been designed to meet the performance requirements of both internal combustion and electrified vehicles. This allows us to capture the value of EV transition across our entire range. In addition, EVs are typically fitted with larger and higher valued tires. This supports the premiumization of our portfolio and contributes positively to the mix. Last, these original equipment fitments create a powerful replacement pull-through effect. Faster wear leads to shorter tire life with most brands, and Michelin stands out in terms of our customer experience. Thousands of certified drivers reviews testified for that. All of this is supported by Michelin ability to leverage its unique know-how in material science. When it comes to tire performance, Michelin differentiates itself by an exceptional combination of energy efficiency and tire longevity, not to mention other key performance.

Speaker #5: This allows us to capture the value of the EV transition across our entire range. In addition, EVs are typically fitted with larger and higher-valued tires.

Speaker #5: This supports the premiumization of our portfolio and contributes positively to the mix. Last, these original equipment fitments create a powerful replacement pull-through effect. Faster wear leads to shorter tire life with most brands, and Michelin stands out in terms of our customer experience.

Speaker #5: Thousands of certified drivers’ reviews testify to that. All of this is supported by Michelin’s ability to leverage its unique know-how in material science.

Speaker #7: When it comes to tire performance.

Speaker #5: Michelin differentiates itself by an exceptional combination—combination of energy efficiency and tire longevity—not to mention

Speaker #6: the key performance.

Bénédicte de Bonnechose: EV makes it hard for tires, and we love it. The tougher the game, the better for Michelin. In short, electrification is a powerful value creation driver for Michelin, supported by our strong EV fitment position, EV ready product range, and differentiated performance. I will now turn to our outlook for 2026. Starting with tire markets for the full year. We have reduced the ranges of our full year forecast, even though the environment remains volatile. For passenger car and light truck, the full year market should land between -1% and +1%. The OE markets proved more resilient than we thought after the Middle East crisis broke out. However, we anticipate them to become slightly more negative in Q4. The replacement market should also be slightly negative in Q4, notably due to high reference base of imported flows to Europe.

Speaker #5: EVs make it hard for tires, and we love it.

Speaker #7: The tougher the game, the better for Michelin. In short, electrification is a powerful value creation driver for Michelin, supported by our strong EV fitment position, EV-ready product range, and differentiated performance.

Speaker #7: So, I will now turn to our outlook for 2026.

Speaker #5: Starting with tire markets for the full year, we have reduced the ranges of our full-year forecast, even though the environment remains volatile. For passenger car and light truck, the full-year market should land between -1% and +1%.

Speaker #5: The OE markets proved more resilient than we thought after the Middle East crisis broke out. However, we anticipate them to become slightly more negative in the fourth quarter.

Speaker #5: The replacement market should also be slightly negative in Q4, notably due to the high reference base of imported flows to Europe. For truck, excluding China, we expect the full-year market to be between 0% and +2%.

Bénédicte de Bonnechose: For truck, excluding China, we expect the full year market to be between 0% and +2%. The main variation in Q4 versus year to date has to do with OE in North America in the wake of Q3 and ahead of EPA regulation in the US early next year. Replacement is expected to remain soft. For specialties, we also expect the full year market to land between 0% and +2%. At this stage, we look at year to go as pretty similar to year to date. Mining should remain supportive. Aircraft will depend on geopolitical developments and fuel costs. Beyond road remains contrasted, with OE still down overall, with agriculture still stuck in North America and with no short-term signs of recovery. Eventually, beyond road replacement will be more resilient.

Speaker #5: The main variation in Q4 versus year-to-date has to do with OE in North America in the wake of Q3 and the head of EPA regulation in the US early next year.

Speaker #7: Replacement is expected to remain soft.

Speaker #5: And for Specialties, we also expect the full-year market to land between 0% and +2%.

Speaker #7: At this stage, we look at year-to-group as pretty similar to year-to-date. Mining for Women Support Team. Aircraft will depend on geopolitical developments and fuel costs.

Speaker #5: Beyond-road remains contrasted, with OE still down overall, with agriculture still stuck in North America, and with no short-term signs of recovery. Eventually, beyond-road replacement could be more resilient.

Bénédicte de Bonnechose: Before moving to guidance, let me come back to a slide that many of you remember, dealing with the impact of the Middle East conflict. Back in April, on the Q1 release, we presented a scenario based on a prolonged conflict with Brent oil around $100 per barrel for the rest of the year and the related impact on raw material, energy, and logistic costs. Six months later, we are in the same landscape with a single change dealing with economic context. Demand across businesses and regions was damaged here and there. It has not collapsed, but we see slower demand in many markets. Supply chains, mainly upstream supply, which was the main identified risk in terms of business continuity, held fast. There, the quality of our relationship with long-standing suppliers did help a lot.

Speaker #5: Before moving to guidance, let me come back to a slide that many of you remember, dealing with the impact of the Middle East conflict.

Speaker #7: Back in April, on the Q1 release, we

Speaker #5: We presented a scenario based on a prolonged conflict, with Brent oil around $100 per barrel for the rest of the year, and discussed the related impact on raw material, energy, and logistics costs.

Speaker #5: Six months later, we are in the same landscape, with a single change related to the economic context. Demand across businesses and regions was damaged here and there.

Speaker #5: It has not collapsed, but we see slower demand in many markets. Supply chains—mainly upstream supply, which was the main identified risk in terms of business continuity—held fast.

Speaker #5: There, the quality of our relationship with longstanding suppliers did help a lot. As to cost inflators, our assumptions were correct, as well as the impact on our P&L and free cash flow.

Bénédicte de Bonnechose: As to cost inflators, our assumptions were correct, as well as the impact on our P&L and free cash flow. How do we navigate this uncertain environment? In a nutshell, with a nice combination of discipline and agility in the hands of experienced and empowered teams. This applies to most operations, such as managing cross-sales, rerouting flows of goods, adjusting prices dynamically based on input costs and competitive situation, steering our production based on customer demand to drive year-end inventory, or managing expenses and CapEx with precision. This leads me to our financial guidance for 2026. Based on our performance over the first nine months and the ability of our teams to navigate in highly uncertain conditions, we are confirming our 2026 guidance on both SOI and free cash flow before M&A. On shareholder return, just an update on our EUR 750 million share buyback program.

Speaker #5: So, how do we navigate this uncertain environment? In a nutshell, with a balanced combination of discipline and agility, in the hands of experienced and empowered teams.

Speaker #5: And this applies to most operations, such as managing crisis sales, rerouting flows of goods, and adjusting prices dynamically—based on input costs and the competitive situation.

Speaker #5: Steering our production based on customer demand to drive year-end inventory, or managing expenses and CapEx with precision—this leads me to our financial guidance for 2026.

Speaker #5: Based on our performance over the first nine months and the ability of our teams to navigate in highly uncertain conditions, we are confirming our 2026 guidance on both SOI and free cash flow before M&A.

Speaker #5: Until all are returned, just an update on our €750 million share buyback program. We inform you that over 80% has already been executed. So we are well on track, and we confirm our willingness to maintain a strong balance sheet and to return cash to shareholders.

Bénédicte de Bonnechose: We inform you that over 80% has already been executed. We are well on track, and we confirm our willingness to maintain a strong balance sheet and to return cash to shareholders. This balanced approach reflects our confidence in the group's fundamentals. We already know that 2027 will remain highly uncertain, both geopolitically and economically. We plan to accelerate our investment in our brands, in digital, in innovation and competitiveness to sustain Michelin performance. Before we move to Q&A, let me briefly highlight one important date in our financial calendar, our Capital Markets Day on 28 May 2027. This brings me to the end of my presentation. Thank you very much for your attention, and I will now be happy to take your questions.

Speaker #5: This balanced approach reflects our confidence in the Group's fundamentals. We already know that 2027 will remain highly uncertain, both geopolitically and economically. We plan to accelerate our investment in our brands, in digital, in innovation and competitiveness to sustain Michelin's performance.

Speaker #5: So, before we move to Q&A, let me briefly highlight one important date in our financial calendar: our Capital Markets Day on May 28, 2027.

Speaker #5: So this brings me to the end of my presentation. Thank you very much for your attention, and I will now be happy to take your questions.

Operator 2: Ladies and gentlemen, if you wish to ask a question, please press star one on your phone keypad. Please limit yourself to two questions each. If you have additional questions, we kindly ask you to rejoin the queue to allow time for other analysts. The first question is from Harry Martin with Bernstein. Please go ahead.

Speaker #8: Ladies and gentlemen, if you wish to ask a question, please press *1 on your phone keypad. Please limit yourself to two questions each.

Speaker #8: If you have additional questions, we kindly ask you to rejoin the queue to allow time for other analysts. The first question is from Harry Martin with Bernstein.

Speaker #8: Please go ahead.

Harry Martin: Good evening. Thanks for taking my question. The first one, I will just ask on the volumes in Q3. It looks like European replacement volumes on the passenger tire side turned negative. Market growth for 18 inch and above has remained double digits. The latest data I had seen is the imports have moved slightly lower after the new tariff. Could you just reflect on what is happening with market share in Europe and whether that turns around in the final quarter of the year? The second question I have just to help understand the EBIT guidance reiteration. On pricing, historically you have been able to pass on cost inflation. Is there any sort of contingency planning being done this time around with a potentially weaker consumer for a percentage that might not be absorbed? Are you still fully assuming that?

Speaker #9: Good evening. Thanks for taking my question. So the first one, I'll just ask about the volumes in Q3. It looks like European replacement volumes on the passenger tire side turned negative.

Speaker #9: Market growth for 18-inch and above has remained in the double digits. And the latest data I’ve seen is that imports have moved slightly lower after the new tariffs.

Speaker #9: So, could you just reflect on what's happening with market share in Europe, and whether that turns around in the final quarter of the year?

Speaker #9: And then, the second question I have, just to help understand the EBIT guidance reiteration: on pricing, historically, you've been able to pass on cost inflation.

Speaker #9: But is there any sort of contingency planning being done this time around with a potentially weaker consumer, for a percentage that might not be absorbed?

Speaker #9: Or are you still fully assuming that? And then, if I could just sneak in as well, are there any tariff refunds or any other boosts to the second-half margin outside of the core bridge items that we need to be aware of?

Harry Martin: If I can just sneak in on that as well, are there any tariff refunds or any other boosts to the H2 margin outside of the core bridge items that we need to just be aware of? Thank you.

Speaker #9: Thank you.

Speaker #5: So, thank you, Ari. I will start with your four questions related to volume in Q3, with market and tire segment growth. The first element that you need to have in mind is the fact that in Europe we had strong imports before antidumping measures were put in place in July.

Bénédicte de Bonnechose: Thank you, Harry Martin. I will start with your first question related to volume in the Q3 with market 18 inch plus growing. First element that you need to have in mind is the fact that in Europe we had strong imports before anti-dumping measures that had been put in play in July, meaning that high inventories in the distribution sector with a lot of pressure on tier 2, tier 3 brands. in this context, I think we did a good performance regarding Michelin brands in Europe in the replacement market in Q3, with a very positive performance there. Regarding now tier 2 and tier 3 brands, at Kleber brand it was quite good again in Europe, but it was much more difficult on tier 3 brands.

Speaker #5: This means there are high inventories in the distribution sector, with a lot of pressure on Tier 2 and Tier 3 brands. In this context, I think we performed well with the Michelin brands in Europe in the replacement market in Q3.

Speaker #5: With a very positive performance there. Regarding Tier 2 and Tier 3 brands: for Kleber brand, it was quite good again in Europe, but it was much more difficult for Tier 3 brands.

Bénédicte de Bonnechose: Here it is where we can see a fierce competition with all the import tires that have been entered in Europe in 2025 in anticipation of anti-dumping. Looking at now your question about pricing. You mentioned our capacity historically to pass on inflation, it is exactly what we did in Q2 and Q3. As you know, it is important for us to do what we call and to manage our pricing with what you call precision pricing. It was important for us to calibrate our price increase in Q2 and Q3, both in Asia, Europe, and North America, to have the right, I would say, balance between price increase to cover our inflation, while in the same time preserving our position in the market in term of market share.

Speaker #5: And here is where we can see fierce competition with all the import players that have entered Europe in 2025, in anticipation of anti-dumping.

Speaker #5: Looking at your question about pricing, you mentioned our capacity historically to pass on inflation. It's exactly what we did in Q2 and Q3.

Speaker #5: And as you know, it is important for us to do what we call, and to manage our pricing with, what you call, precision pricing.

Speaker #5: So it was important for us to calibrate our price increase in Q2 and Q3, both in Asia, Europe, and North America, to have the right, I would say, balance between price increase to cover our inflation, while at the same time preserving our position in the market in terms of market share.

Bénédicte de Bonnechose: I consider we have done it quite well this year with this very good balance in terms of volume, price, margin to cover our fixed cost absorptions. Last element about it, what we have announced, and it is still the case today, with the price increase we have done, we will cover 80% of the inflators, the remaining 20% being covered in H1 2027 due to indexation of our contract. Regarding now the tariff refunds, as you remember probably that in H1 we received EUR 20 million. We received additional around EUR 80 million in Q3. We do not expect all the refunds to come in the year to go. All in all, we have received between H1 and Q3, EUR 100 million tariff refund.

Speaker #5: So I consider we have done quite well this year, with a very good balance in terms of volume, price, and margin to cover our price tick cost absorptions.

Speaker #5: The last element about it—what we have announced, and it's still the case today—with the price increase we have made, we will cover 80% of the inflators. The remaining 20% will be covered in H1 2027 due to the indexation of our contracts.

Speaker #5: So, regarding the tariff refunds, as you probably remember, in H1 we received €20 million, and then we received an additional approximately €80 million in Q3.

Speaker #5: And we don't expect other refunds to come in during the year to go. So, all in all, we have received, between H1 and Q3, €100 million in tariffs.

Speaker #5: Refund. Thank you very much. Thank you, Ari.

Harry Martin: Thank you very much.

Bénédicte de Bonnechose: Thank you, Harry Martin.

Operator 2: The next question comes from Monica Bosio with Intesa Sanpaolo. Please go ahead.

Speaker #8: The next question comes from Monica Bosio with Intesa Sanpaolo. Please go ahead.

Monica Bosio: Yes, good evening, and thanks for taking my questions. The first one is on the transportation. The segment operating margin for the transportation business sat at 5.9% in H1. I am just wondering if you can give us an update on the capacity utilization rate in the transportation area, and if you would see it reasonable to expect a special improvement in the transportation segment operating margins in H2 2026. The second question, maybe it is too early to ask, but the company confirmed the EUR 400 million headwinds from raw materials. Now 2027, maybe could be worse. Can we project this number or maybe a material higher number for 2027 as for the raw mat? Thank you very much.

Speaker #10: Yes, good evening, and thank you for taking my questions. The first one is on Transportation. The segment operating margin for the Transportation business stood at 5.2%.

Speaker #10: 5.9% in the first half. We are seeing a swing in the original equipment market. Still a difficult situation in the replacement market. I'm just wondering if you can give us an update on the capacity utilization rate in the Transportation area, and if you would see it reasonable to expect a sequential improvement in the Transportation segment operating margins in the second half of 2026?

Speaker #10: And the second question—maybe it's too early to ask—but the company confirmed the €400 million headwind from raw materials. Now, 2027 maybe could be worse.

Speaker #10: Can we project this number or maybe a material higher number for 2027? as for the raw matter? Thank you very much.

Bénédicte de Bonnechose: So thank you, Monica. I will start with your first question related to the transportation segment. Regarding our capacity utilization rate, the loading rate is around 77% to 78% for passenger car and truck, both. As you know, we do not comment H2 operating margin by segment. But overall, at group level, we expect a stability close to 2025, which means with the H2 below H1 due to the negative raw mat impact in the H2. It is what I can say to you for this first question. Regarding now the update on raw material and the other cost items for H2, do you still confirm the previous indication, and what do we see for 2027? We are exactly in the same landscape than what we explained regarding inflation. We are in a context of raw material.

Speaker #5: So, thank you, Monika. I will start with your first question related to the Transportation segment. Regarding our capacity utilization rate, the loading rate is around 77% to 78% for passenger car and truck, both.

Speaker #5: As you know, we do not comment on H2 operating margin by segment, but overall at the group level, we expect a 7.8% margin close to 2025.

Speaker #5: Which means with H2 below H1 due to the negative raw material impact in H2. It's what I can say to you for this first question.

Speaker #5: Regarding the update on raw material and other cost items for H2, do you still confirm the previous indication? And what do we see for 2027?

Speaker #5: So it's exact— we are exactly in the same landscape than what we explained regarding inflation. We are in the context of raw material. You know, we said in last April Additional €400 million inflation, €200 million in raw material.

Bénédicte de Bonnechose: We said in last April, additional EUR 400 million inflation, 200 on raw material, we are exactly at this, and 100 to cover logistic and energy. So we are in the same range as what we have communicated in H1. At the end for raw material, it will end with a tailwind between EUR 50 and EUR 100 million full year. For 2027, it is a bit early to say, but what we can say regarding raw mat, we expect negative raw mat in the H1 semester for 2027. But it is a bit too early to quantify it precisely.

Speaker #5: We are exactly at this, and €100 million to cover logistics and energy. So, we are in the same range as what we communicated in H1.

Speaker #5: And at the end, for raw materials, it will end with a tailwind between €50 million and €100 million for the full year. For 2027, it's a bit early to say, but what we can say regarding raw materials is we expect negative raw material in the first half for 2027.

Speaker #5: But it's a bit too early to quantify it precisely. Okay, got it. Thank you, Benedikt. Thank you. Thank you, Monika.

Monica Bosio: Okay, got it. Thank you, Bénédicte. Thank you.

Bénédicte de Bonnechose: Thank you, Monica.

Operator 2: The next question comes from Stephen Benhamou with Bank of America. Please go ahead.

Speaker #8: The next question comes from Stephen Benhamou with Bank of America. Please go ahead.

Speaker #9: Yes, good evening. Thanks for taking my question. The first one is on volumes. What makes you confident about a potential rebound in Q4, given the challenging environment?

Stephen Benhamou: Yeah, good evening. Thanks for taking my question. The first one is on volumes. What makes you confident about potential rebound in Q4 in the context of a challenging environment, as you mentioned, weaker tire demand and also a tougher comparison basis in Q4? My second question is just to confirm the numbers that you've provided right now. It's about the breakdown of those cost inflation/raw mat. If I'm not mistaken, at the last conference call in July, you were anticipating EUR 80 to EUR 100 million of raw mat tailwind. Now it's between EUR 50 to EUR 100 million. In terms of manufacturing and logistic costs, you were anticipating a net impact of around EUR 230 million. Can you please confirm or not those numbers? Thank you.

Speaker #9: As you mentioned, the weaker tire demand and also a tougher comparison basis in Q4. And my second question is just to confirm the number that you've provided right now.

Speaker #9: It's about the breakdown of those cost inflation/ROMAT. If I'm not mistaken, at the last conference call in July, you were anticipating €80 to €101 million of ROMAT tailwind.

Speaker #9: Now it's between €50 million and €101 million. And in terms of manufacturing and logistics costs, you were anticipating a net impact of around €230 million.

Speaker #9: Can you please confirm or not those numbers? Thank you.

Bénédicte de Bonnechose: Thank you, Stephen. Starting with your question, the volume and the potential rebound in Q4. You understood that we won't see this rebound as expected in Q4, and we expect now slight negative Q4 and slight negative for full year. It's fully linked to the economic global situation of our markets, both economic situation and with, in addition, all the import flows coming from here and there in many regions in the world, which create a difficult situation in many of our markets. No more rebound expected in Q4, slight negative in Q4 and for full year. Regarding now cost inflation. No change on raw material. Yes, I have given just before the range between EUR 50 to EUR 100 million. Your positive element regarding raw mat, you mentioned EUR 80, so it is in the range, if I may say.

Speaker #5: Thank you, Stéphane. So starting with your question on the volume and the potential rebound in Q4, so you understood that we won't see this rebound as expected in Q4, and we expect now slight negative Q4 and slight negative for full year.

Speaker #5: It's fully linked to the economic global situation of our markets—both the economic situation and, in addition, all the import flows coming from here and there in many regions of the world, which creates a difficult situation in many of our markets.

Speaker #5: So, no more rebound expected in Q4—slight negative in Q4 and for the full year. Regarding our cost inflation, there is no change on raw material.

Speaker #5: Yes, we— I have given just before the range between €50 million to €100 million. Your positive element regarding your growth, you mentioned 80, so it is in the range, if I may say.

Bénédicte de Bonnechose: The other inflators, we are exactly in the range that what we have said in H1 regarding energy and logistic cost. No change at all compared to what we have announced in H1.

Speaker #5: And other indicators, we are exactly in the range that what we have said in H1 regarding energy and logistic costs. So no, no change at all compared to what we have announced in H1.

Stephen Benhamou: Thank you. That's very clear.

Speaker #5: Thank you, Nathalie Clerc. Thank you, Stephen.

Bénédicte de Bonnechose: Thank you, Stephen.

Operator 2: The next question comes from Martino De Ambroggi with Equita. Please go ahead.

Speaker #8: The next question comes from Martino De Ambrogi with Equita. Please go ahead.

Martino De Ambroggi: Thank you very much, and good evening, everybody. My question is on the BEV. Since you showed a slide specifically on this, could you quantify the amount of volumes or sales maybe expected this year or maybe in the 9 months, and if you have any target in the next couple of years? Am I right in assuming that this business is detrimental for your profitability since it is mainly original equipment so far, and when the aftermarket will become prevalent on the volume slide? Thank you.

Speaker #9: Thank you very much. Good evening, everybody. My question is on the BEV, since you showed a slide specifically on this. Could you quantify the amount of volumes or sales, maybe this year, or expected this year, or maybe in the 9 months?

Speaker #9: And do you have any targets for the next couple of years? Am I right in assuming that this business is detrimental to your profitability, since it's mainly original equipment so far?

Speaker #9: When will the aftermarket become prevalent on the volume side? Thank you.

Bénédicte de Bonnechose: Thank you, Martino. Regarding your first question about BEV sales. As you know, we are overexposed at OE premium on EV, especially in China where we are doing very well. It is a bit difficult to forecast, I would say, the growth on this segment. What we can see is the fact that, we expect around 5 million units, 2028 BEV, and for sure it will depend part of it of the situation that we have regarding duties right now. You take the example of Europe. Now we can see BEV decreasing, hybrids going up. It is changing a bit. Yes, we are overexposed. 80% of our sales at OE in China are with Chinese OEMs, and we are not only accompanying them in China mainland, but we are accompanying them in their export too, which is an important element.

Speaker #5: So, thank you, Martineau. Regarding your first question about BEV sales: As you know, we are overexposed at OE premium on EV, especially in China, where we are doing very well.

Speaker #5: It's a bit difficult to forecast, I would say, the growth in this segment. But what we can see is the fact that we expect around 5 million units of BEVs in 2028.

Speaker #5: And for sure, it will depend, in part, on the situation that we have regarding duties right now. You can take the example of Europe.

Speaker #5: Now we can see BEV decreasing, hybrids going up. So it is changing a bit. But yes, we are overexposed—80% of our sales at OE in China are with Chinese OEMs, and we are not only accompanying them in mainland China, but we are accompanying them in their export too, which is an important element.

Bénédicte de Bonnechose: What we can say regarding BEV sales, I think we have, regarding BEV in China, it is around 35% of the total vehicle and around 25% in Europe. It is growing and due to the situation with the oil price increase, we can see now that the BEV sales are accelerating, at least in Europe and continue to in China, even if as of this year we have a decrease in market due to the less incentive from the Chinese government. It is an important tailwind for us. Then after, we consider that the overexposition that we have will benefit in the future for our sales.

Speaker #5: So, what we can say regarding sales—EV sales—I think we have, regarding BEV in China, it is around 35% of the total vehicles, and around 25% in Europe.

Speaker #5: So it is growing, and due to the situation with the oil price increase, you can see now that EV sales are accelerating, at least in Europe, and continue to in China, even if this year we have a decrease in the market due to less incentive from the Chinese government.

Speaker #5: So it is an important tailwind for us. And then after, we consider that the overexposition that we have will benefit in the future for ourselves.

Martino De Ambroggi: Okay. If I take 100% of your car segment sales, is it much less than 10%?

Speaker #11: Okay, but if I take 100% of your car segment sales, is it much less than 10%, or—

Bénédicte de Bonnechose: I think it's below 10%. You need to have in mind that, in addition, when we look at the total park worldwide, today is around 5%. It will take a lot of time then to have a real impact on the car park. It will take, I would say, years. It's what I can say. It's less than 10% today of our sales.

Speaker #5: I think it's below, below 10%. If we take— so you need to keep in mind that, in addition, when we look at the total part worldwide, today it's around 5%.

Speaker #5: So it will take a lot of time then to have a real impact on the car park, and it will take, I would say, years.

Speaker #5: That's what I can say. So, it's less than 10% of our sales today.

Martino De Ambroggi: Okay. Thank you, Bénédicte.

Speaker #9: Okay. Thank you, Benedikt. Thank you, Martine.

Bénédicte de Bonnechose: Thank you, Martino.

Operator 2: The next question comes from Christoph Laskawi with Deutsche Bank. Please go ahead.

Speaker #8: The next question comes from Christoph Laskawi with Deutsche Bank. Please go ahead.

Christoph Laskawi: Good evening. Thank you for taking my questions. The first one would be on price investments and volume. Throughout the year you have talked about price investments and balancing the brand versus competition. I was just wondering if you could comment on if those investments actually yielded the results in terms of market share developments that you had been targeting or expecting, or if they were in any case better or worse across the regions. Then also in that regard, should we expect the market share trends across the major regions in Q4 to be roughly similar to Q3? A second question block.

Speaker #7: Good evening. Thank you for taking my questions. The first one would be on price investments and volumes. Throughout the year, you've talked about price investments and balancing the brand versus competition.

Speaker #7: I was just wondering if you could comment on whether those investments actually yielded the results in terms of market share and developments that you had been targeting or expecting, or if they were, in any case, better or worse across the regions?

Speaker #7: And then, also in that regard, should we expect the market share trends across the major regions in Q4 to be roughly similar to Q3?

Speaker #7: And a second question, or second question block, just coming back to raw materials. I appreciate it's early days for '27, but given the sourcing and the visibility that you might have into H1, is it fair to assume that we should see roughly the same headwind in H1 '27 that you guide for H2 '26?

Christoph Laskawi: Just coming back to raw materials, and I appreciate it is early days for 2027, but given the sourcing and the visibility that you might have into H1, is it fair to assume that we should see roughly the same headwind in H1 2027 that you guide for H2 2026 or, is it again much too early to comment? Thank you.

Speaker #7: Or is it, again, much too early to comment? Thank you.

Bénédicte de Bonnechose: Thank you, Christoph. Regarding your first question, price versus volume. You are talking about an important point, which is our capacity to manage our price to be able then to gain volumes. If you look at what we have achieved in terms of performance end of September with the Michelin brand at +4%, I think you have the answer. As we are leader, it is very important for us to move very slowly, this question of pricing, because as I often said, it takes 5 minutes to decrease prices, it takes years to increase prices. It is where we consider we have a good track record in terms of capacity to manage correctly this balance between price and volume.

Speaker #5: Thank you, Christophe. So regarding your first question, price versus volume, you are talking about an important point, which is our capacity to manage precisely our price, to be able then to gain volumes.

Speaker #5: If you look at what we have achieved in terms of performance at the end of September with the Michelin brand—at plus 4%—I think you have the answer.

Speaker #5: So, as we are a leader, you know, it's very important for us to move very slowly on this question of pricing, because as I often say, it takes five minutes to decrease prices; it takes years to increase prices.

Speaker #5: So, it is where we are. I would say we consider that we have a good track record in terms of capacity to manage correctly this balance between price and volume.

Bénédicte de Bonnechose: Regarding Q4 versus Q3, we consider that we will be in a capacity to sustain the same level of market share in Q4 that we had in Q3. For sure, there is this question of affordability, which is at the top of our mind. It is why it is so important in the context of, with a difficult market situation, with slowdown in economy in many geographies to manage more than ever, the sweet spot between price and volume. Regarding raw mat, your assumption regarding the magnitude of the raw mat headwind in H1 2027 is, I think, correct in terms of magnitude. It is not, I would say, a crazy assumption. It is not so easy to quantify today, and we will give more detail early 2027.

Speaker #5: So, regarding Q4 versus Q3, we consider that we will be in a capacity to sustain the same level of market share in Q4 that we had in Q3.

Speaker #5: For sure, there is discussion of affordability, which is at the top, at the top of our mind, and it is why it is so important in the context of a difficult market situation, with slowdown in the economy in many geographies, to manage more than ever the sweet spot between price and volume.

Speaker #5: Regarding raw material, or raw mat, your assumptions regarding the magnitude of the raw mat headwind in H1 2027 are, I think, correct in terms of magnitude.

Speaker #5: It is not, I would say, a crazy assumption. So it's not so easy to quantify today, and we will give more detail early 2027.

Christoph Laskawi: Thank you.

Speaker #5: Thank you. Thank you, Christophe.

Bénédicte de Bonnechose: Thank you, Christoph.

Operator 2: The last question comes from Jose Asumendi with J.P. Morgan. Please go ahead.

Speaker #8: The last question comes from José Azumendi with JPMorgan. Please go ahead.

Jose Asumendi: Thank you very much. Good evening, Brigitte. Three quick ones if I may, please. First one, can you comment on the ability to pass on price increases on passenger cars tires in the US? I am not seeing much evidence for the industry. I think it is quite challenging, but I would love to hear your thoughts if I am mistaken. Second, can you comment on the opportunity to accelerate mix in Q4 versus Q3 for the group overall? Then the third one, if you could please, just contrast again a little bit the balance of price mix raw materials in the H2 versus the H1. Thank you very much.

Speaker #7: Thank you very much. Good evening, Brigitte. Three quick ones, if I may, please. First one: can you comment on the ability to pass on price increases on passenger cars?

Speaker #9: Tires in the US—I'm not seeing much evidence for the industry. I think it's quite, quite challenging. But I would love to hear your thoughts if I'm mistaken.

Speaker #9: Second, can you comment on the opportunity to accelerate mix in Q4 versus Q3 for the group overall?

Speaker #7: And then the third one, if you could please just contrast again a little bit the balance of price, mix, and raw materials in the second half versus the first half?

Speaker #7: Thank you very much.

Bénédicte de Bonnechose: Thank you, Jose. Regarding the pricing trends and especially the situation in the US. Yes, you are right. The situation today is challenging for the whole industry. It is not about cost inflators coming from Middle East, but it has to start with the tariff situation that we had to pass on the market since 2025, which has not been easy as you know. We tried to do it and we did not succeed fully, as we have not been followed by, I would say, competition. Regarding the situation in 2026 and the cost inflators and our capacity to pass it on the market, I would say it depends on the competition. We succeeded to pass it, and we are just now looking at some of our competitors very recently decided to follow our move there.

Speaker #5: Thank you, José. Regarding the pricing trends, especially the situation in the US: yes, you're right, the situation today is challenging for the whole industry.

Speaker #5: It's not about cost inflators coming from the Middle East, but it has to start with the tariff situation that we had to pass on to the market since 2025.

Speaker #5: Which has not been easy, as you know. We tried to do it and we didn't succeed fully, as we have not been followed by, I would say, competition regarding the situation in 2026 and cost inflators, and our capacity to pass it on to the market.

Speaker #5: I would say it depends. On the competition, we succeeded in passing it, and we are just now looking at some of our competitors.

Speaker #5: Very recently, they decided to follow our move there. But overall, keep in mind that yes, it is a challenging situation for the wool industry in the US right now.

Bénédicte de Bonnechose: But overall, have in mind that, yes, it is a challenging situation for the whole industry in the US right now. Regarding Q4 and your question of acceleration of the mix versus Q3, the answer is not really. Part of it is linked to the fact that we will have the OE rebound that will have an impact on the mix in Q4, with a rebound in truck in North America. Your third question is about balance price mix versus raw mat in Q4?

Speaker #5: So regarding Q4 and your question about acceleration of the mix versus Q3, the answer is: not really, not really. Part of it is linked to the fact that we will have the OE rebound.

Speaker #5: That will have an impact on the mix in Q4, with a rebound in truck in North America. So, and your third question is about balanced price mix versus raw material in Q4?

Jose Asumendi: Yes, please.

Speaker #5: Yes, please. So raw material will be, as you know, more negative in Q4. It has turned negative during Q3, but we expect a stronger impact in Q4.

Bénédicte de Bonnechose: Raw mat will be, as you know, more negative in Q4. It has turned negative during Q3, but we expect a stronger impact in Q4. As you know, we are not commenting on price forward booking. I will stop here my answer. Thank you, Jose.

Speaker #5: And as you know, we are not commenting on price forward booking, so I will stop here my answer. Thank you, José. Thank you.

Jose Asumendi: Thank you.

Operator 2: We have a follow-up question from Stephen Benhamou with Bank of America. Please go ahead.

Speaker #8: We have a follow-up question from Stephen Benhamou with Bank of America. Please go ahead.

Speaker #7: Yes, thank you. Actually, my question has been answered, so that's okay on my side. Thank you.

Stephen Benhamou: Yes. Thank you. Actually, my question has been answered, so that is okay on my side. Thank you.

Bénédicte de Bonnechose: Yes. Thank you, Stephen. If we have no more question, do you confirm?

Speaker #5: Yes, thank you, Stephen. So, if we have no more questions, do you confirm? Yes, that was the last one. Okay. So now I will end this presentation.

Operator 2: Yes. That was the last one.

Bénédicte de Bonnechose: Okay. Now we end this presentation. Thank you very much for your attention. We will have the pleasure now to speak to many of you in the next coming days to highlight a bit our performance in Q3. Thank you very much.

Speaker #5: Thank you very much for your attention. We will have the pleasure now to speak to many of you in the coming days to highlight a bit our performance in Q3.

Speaker #5: Thank you very much.

Operator 2: Ladies and gentlemen, this concludes today's Michelin conference call. Thank you for your participation. You may now disconnect.