MICHELIN (CGDE) APRIL 09 & 10, 2020
ESG PRESENTATION
April 09 & 10, 2020
ESG
presentation
01.Michelin sustainable development and
mobility
02. Environment
- Employees' well-being and development
- Governance & Say On Pay
- Appendices
April 09 & 10, 2020
ESG
presentation
Michelin sustainable development and mobility
At Michelin we are convinced that mobility is a factor of human progress but we are aware of the challenges it represents
A population growing from 7 | • SAFETY |
to 9 billions worldwide | |
& | • | UNIVERSAL ACCESS | |
Mobility: | • | EFFICIENCY | |
a human right | |||
• | GREEN | ||
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Our response has been in our purpose for over 130 years
&
BECAUSE WE CARE
ABOUT GIVING
PEOPLE A BETTER
WAY FORWARD
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Our growth and value creation model
Everything will be sustainable at Michelin
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Coordinated management of the Sustainable Development and Mobility approach
Group Executive Committee
Sustainable Development
and Mobility CommitteeStakeholders
Committee
Environment | Human Rights | Employee Health | Ethics Committee |
and Safety | |||
Governance | |||
bodies
Decisions
Recommendations
Operational Committees
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A constructive stakeholder dialogue
At the corporate executive level, a Stakeholders Committee set up in 2016 brings together 12 people representative of the Group's leading stakeholders, including suppliers, investors, unions, customers and NGOs. Four continents are represented on the Committee, which meets with the Executive Committee for a full day at least once per year
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6 Group ambitions for 2020 in line with United Nations Sustainable Development Goals
1 CONTINUOUSLY IMPROVE CUSTOMER SATISFACTION
2 MOVE FORWARD TOGETHER IN PERSONAL WELL-BEING AND DEVELOPMENT
3
4
5
6
INNOVATE TO WIDEN OUR LEAD IN PRODUCT AND SERVICE PERFORMANCE
SET THE INDUSTRY STANDARD FOR RESPONSIBLE MANUFACTURING
CONTRIBUTE TO THE DEVELOPMENT OF OUR HOST COMMUNITIES
DELIVER A ROBUST FINANCIAL PERFORMANCE
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6 Group ambitions for 2020
1 CONTINUOUSLY IMPROVE CUSTOMER SATISFACTION
2
3
4
5
6
By 2020, 100% of the targeted customer groups reach the intended Net Promotor Score (NPS)
2019 result : 67.4%
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6 Group ambitions for 2020
1
2 MOVE FORWARD TOGETHER IN PERSONAL WELL-BEING AND DEVELOPMENT
3
4
5
6
Health & Safety : Total Case Incident Rate (TCIR) <2
2019 result : 1.4
75% of managers promoted from within
2019 result : 74%
80% of top managers in the growth regions were born there
2019 result : 75%
85% of employees engaged
2019 result : 81%
30% women in management and supervisory roles
2019 result : 27.4%
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6 Group ambitions for 2020
1
2
3 INNOVATE TO WIDEN OUR LEAD IN PRODUCT AND SERVICE PERFORMANCE
4
5
6
Save 3 billion liters of fuel over the lifespan of our tires, representing 8 million tonnes of CO2 avoided
2019 result :
- Fuel savings estimated at 2.9 billion liters
- Avoided CO2 emissions astimated at 7.3 million tonnes
Use 30% renewable or recycled materials in our tires 2019 result : 26%
Improve the overall performance of our products by at least 10% vs 2010, while using less raw material in their production
2019 result : 9.9%
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6 Group ambitions for 2020
1
2
3
4 SET THE INDUSTRY STANDARD FOR RESPONSIBLE MANUFACTURING
5
6
Reduce CO2 emissions from logistics activities by 10% vs 2010
2019 result : -10.3%
Reduce the environmental impact of our sites measured through Michelin Environmental footprint (MEF) by 50%, notably by improving our energy efficiency by 38% vs 2005
2019 result :
MEF reduction : -51.2%
Energy efficiency : +31.5%
Ensure that 70% of the 400 leading suppliers assessed by EcoVadis are confirmed as compliant with Michelin standards
2019 result : 715 suppliers assessed / 84% compliant
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6 Group ambitions for 2020
2
3
4
5 CONTRIBUTE TO THE DEVELOPMENT OF OUR HOST COMMUNITIES
6
Create 2,000 local jobs per year with the support of Michelin Development
2019 result : 1,702 jobs created
Reinforce our advocacy of road safety with a strong focus on driver education in emerging countries
In 2019 the global partnerships and local programs deployed by Michelin with its employees and its foundation directly benefited more than 330,000 people
Dedicate 30.000 work days per year to local communities
2019 result : 32,850 work days
100% of Michelin plants are deploying a community involvement program
2019 result : 110 sites
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6 Group ambitions for 2020
1
2
3
4
5
6 DELIVER A ROBUST FINANCIAL PERFORMANCE
€1,400M in structural free cash flow per year from 2020
2019 result : €1,615M
-
15% Return On Capital Employed (ROCE) in 2020
2019 result : 13.7%
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5 commitments for Biodiversity for 2020
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5 commitments relating to ethics and human rights
Contribute to the elimination of all the forms of forced or obligatory labor
Act against corruption in all its forms, including the bribe and extortion of money
Respect freedom of association and acknowledge the right of collective bargaining
Contribute to the effective abolition of the child labor
Contribute to the elimination of any discrimination in respect of employment and occupation
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Michelin ESG Roadmap
2020
AMBITIONS
2020
BIODIVERSITY COMMITMENTS
E&S&G
Environment
Social
2050+ AMBITIONS
2030
COMMITMENTS
commitments relating to ethics and human rights
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New 2030 commitments to achieve ambitions by 2050+
- Reduction of the amount of energy used by a tire in use by 20% by 2030 compared to 2010.
- Elimination of purchased steam from coal- fired plants and of coal-firedboilers in all of the production facilities by 2030
- As awareness of the climate emergency grew, in 2019 it set a new, more ambitious mid-waytarget of a 38% reduction of CO2 emissions in 2030 versus 2010 and submitted it to the Science Based Targets initiative, which was still assessing it at year-end
- 80% of material used by the Group will be sustainable (recycled or renewable)
- In 2015, the Group committed to reducing CO2 emissions from its plants by 50% over the period from 2010 to 2050
- Meeting this stricter target would prepare us to aim for carbo neutrality across our manufacturing base by 2050.
-
Do everything in our power with external partners to ensure that
100% of end-of- life tires are recovered.
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Global engagement and partnerships
Ellen MacArthur | Entreprises pour | UN Global | Tire Industry |
Foundation | l'Environnement | Compact | Project |
CE100 member | Member | Signatory | Co-chair |
International Life | Global Platform | World Business | |
for Sustainable | Council for | ||
Cycle Chair | |||
Natural Rubber | WWF | Sustainable | |
Partner | |||
Founding member | Partnership | Development | |
Member |
Task Force on Climate- related Financial Disclosure Supporter
Science Based Targets
Committed
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Michelin's CSR ratings: a leading & recognized player in
sustainable mobility
● Major sustainability rating (As of April 2020)
CDP | ECOVADIS | ISS-OEKOM | MSCI | VIGEO EIRIS | SUSTAINALYTICS |
2019 | 2019 | 2019 | 2019 | 2018 | 2018 |
Status
Rating | A- | 78/100 | B- | 7.4/10 | 68/100 | 77/100 | |||||||||||
Climate change | Top 1%(natural rubber) | 1 | er | of 31 in the sector | 7ème of 54 in the | ||||||||||||
Ranking / | Light | Global | 24% | 24% | sector | ||||||||||||
Distribution of | Europe | 21% | |||||||||||||||
MICHELIN score manufacturing | Average | 16% | |||||||||||||||
ratings | Water security | 8% | B BB BBB A | 5% | - | ||||||||||||
CCC | AA AAA | ||||||||||||||||
Light | Europe | Global | 3% | ||||||||||||||
MICHELIN score manufacturing | Average |
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April 09 & 10, 2020
ESG
presentation
Environment
Focus on climate change strategy
GreenHouse Gas emission inventory in 2018
CO2 emission on Scope 1 & 2 | CO2 emission on Scope 3 |
Own operations | Activities in the value chain |
1.49 M | 2018 1.51 M |
tons | tons |
CO2 | CO2 |
- ~3M tons CO2 (-25% vs 2010)
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88% | 2018 | 12% |
10 other value chain categories
Purchased goods and services_____ 54%
Capital goods ________________________ 6% | |
Fuel and energy-related activities ________ 4% | |
Upstream transportation and distribution ___ 7% | |
► ~140M tons CO2 | Waste generated in operations __________ 3% |
Business travel _______________________ 0.5% | |
Employee commuting___________________ 1% | |
Downstream transportation and distribution__ 5% | |
End-of-life treatment of sold products _______18% | |
Franchises____________________________ 1.5% |
Focus on climate change strategy
Michelin's commitments are comprehensive and long term
The strategy is comprised of four areas of action:
1 Reducing CO2 emissions from our operations as well as from activities in our supply chain in line with the Paris Agreement
3 Advocating at a global level for the decarbonization
of the transport sector
2 Providing products, solutions and services for our customers that reduce their carbon footprint
4 | Supporting the | |
introduction of a global | ||
pricing system | ||
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Focus on life cycle impact
Actions throughout the entire life cycle of our offers
MANUFACTURING
RAW MATERIALS
Michelin is responsibly developing its natural rubber supply and other sustainable materials.
MATERIALS
RECYCLING
Lehigh Technologies, a Michelin company, produces high-performance materials from end-of- life tires and other post-industrial rubber.
ENERGY
RECOVERY
END OF LIFE
Michelin actively supports resource recovery and recycling systems for end-
Michelin strives to continuously reduce the environmental impact of manufacturing through its environmental management system and performance targets.
LOGISTICS
Michelin applies multiple levers to reduce its carbon footprint for transporting semi- finished and finished products
USE OF PRODUCTS
AND SERVICES
REPRESENTS 63 to 96% OF LIFE
CYCLE IMPACTS*
Michelin's innovations mean longer distances and higher
performance with fewer materials and a smaller carbon footprint. Our services and solutions optimize tire use.
*depending on type of vehicle and environmental impact category
25 April 9 & 10, 2020 - ESG presentation | of-life tires with its stakeholders and |
industry partners around the world. |
Focus on life cycle impact - Raw materials
Sustainable materials
Michelin aims to use more sustainable materials: those coming from renewable resources* or recycled feedstock**, including end of life tires. Our short term target is to reach 30% by 2020. We are currently building our long-term road map for increasing amounts of sustainable materials over time.
RAW MATERIALS
Biodiversity commitments
Development of recyclable materials
Renewable materials projects
BioButterfly
BioImpulse
Natural rubber
…
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Focus on life cycle impact - Manufacturing
Carbon footprint
Our ambition is to achieve a 50% reduction of CO2 emissions by 2050 in line with a 2°C climate change scenario (base year 2010). We are currently revising our 2050 target in response to the urgent need to halt global warming. CO2 emissions were reduced by close to 25% in absolute value from 2010 to 2019.
Coal exit strategy
Renewable energy purchasing ramp-up
Recycle energy
Action plan under validation by Science Based Targets initiative
…
MANUFACTURING
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Focus on life cycle impact - Manufacturing
Michelin Environmental Footprint (MEF)
The MEF is an overall indicator of our most material environmental impacts represented by 6 components measured against tire production volume. In 2005 the MEF was set at 100. Since then, Michelin has reduced its environmental footprint by 51.2%, already surpassing the initial 2020 target of a 50% reduction. We have set a more ambitious 2020 target of -52% or MEF=48
MANUFACTURING
Coal exit strategy
Renewable energy purchasing ramp-up
Recycle energy
Action plan under validation by Science Based Targets initiative
Biodiversity commitments
…
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Focus on life cycle impact - Logistics
Carbon footprint
Our ambition is to achieve a 10% reduction of CO2 emissions per metric ton of tires sold by 2020 (base 2010). By end 2019, this goal was met CO2 emissions were reduced by 10.27%.
LOGISTICS
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Focus on life cycle impact - Use of products
Product performance
We have improved the sustainability performance of our tires by 9.9% since 2010, as measured by energy efficiency (reducing rolling resistance), safety (improving dry and wet grip), road noise (reducing the noise generated by contact with the road), longevity (improving tire wear resistance and robustness) and resource use (reducing the mass of tires). Our target is a 10% improvement by 2020.
USE OF PRODUCTS
AND SERVICES
Tire performances
Reduce rolling resistance
Long lasting performance
Lighter tires
Services & Solutions
Hydrogen fuel cell development
Action plan under validation by Science Based Targets initiative
Creation and participation in mobility ecosystem
Uptis & Vision projects
…
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Focus on life cycle impact - End of life
Recovery rate
Michelin contributes to the collection and recovery of tires at the end of their life, in cooperation with competitors and local stakeholders.
Michelin has the will to do everything in its power with external partners to ensure that 100% of end-of-life tires are recovered by 2050+ .
Worldwide recovery rate of end-of-life tires *
END OF LIFE
* Source: Deloitte TIP 2019
Collective approach: collect and recover tires
TIP
Regional associations ELT companies
Individual approach :
Recycle tires: Lehigh Technologies
Use tires into tires: pyrolysis R&D project, Lehigh Technologies
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Focus on circular economy
Tire performances
Services & Solutions
Hydrogen fuel cell development
Uptis & Vision projects
Coal exit strategy
Renewable energy purchasing ramp-up
Global engagement & partnership (SBTi, Movin'On…)
Biodiversity commitments
Less transport, better transport and transport in a different way
…
Repair, regroove and retread tires
Vision project
…
Recycle energy
Collective approach: collect and recover tires
TIP
Regional associations ELT companies
Individual approach :
Recycle tires: Lehigh Technologies
Use tires into tires: pyrolysis R&D project, Lehigh Technologies
Vision project
…
Biodiversity commitments
Renewable materials projects
BioButterfly
BioImpulse
Natural rubber
Vision project
….
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April 09 & 10, 2020
ESG
presentation
Employees' well-being and development
« Moving Forward Together » study
- Listen to employees: implementation of an annual engagement study in 2013
- 2020 ambition : reach and maintain an 85% employees' engagement rate
- 2019 response rate to the study : 87% of the employees
- Evolution of the employees' engagement rate:
77 | 80 | 80 | 80 | 81 | 85 | |||||||||||||||
74 | ||||||||||||||||||||
34 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Cible 2020 |
April 9 & 10, 2020 - ESG presentation |
MFPM* rated 93/100 on the gender equality index
- Creation of a gender equality index by the French State Secretariat for Gender Equality and the French Ministry of labor in 2018.
- MFPM obtains the maximum score on almost all 5 measurement indicators :
Max | MFPM | ||
Pay gap between women and men | 40 | Gap | 1.1% |
Rating | 38 | ||
Difference in the rate of individual salary increases (excluding | 20 | Variance | 0.5% |
promotions) between women and men | Rating | 20 | |
Promotion rate gap between women and men | 15 | Gap | 3.2% |
Rating | 15 | ||
Number of employees of the gender underrepresented among the | 10 | Number | 3 |
ten employees who received the highest remuneration | Rating | 5 | |
Rate of female employees having benefited from a salary increase | 15 | Rate | 100% |
in the year following their return from maternity leave | Résultat | 15 | |
Result | 100 | Base 100 | 93/100 |
* Manufacture Française des Pneumatiques Michelin
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Michelin's employees training
4.6 million training hours in 2019, representing: ● 2.9 % of total working hours
● 49 training hours per employee per year ● 98% of employees trained*
* "Ambitions 2020" scope of reporting excluding the dealership networks and recently acquired companies and representing 93,807 employees.
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Human Rights : identify and prevent risks
- A human rights governance at the highest level of the company
- An annual action plan
- Human rights impact assessments made in 6 countries
- 9 human rights risks identified in our Duty of Care plan 2019
- A human rights guide in preparation
- CSR risk in supply-chain integrated in 2019/2020 in internal control procedures
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Participating in local community life through our employees
of volunteer work by employees in 2019
to or invested in outreach initiatives in the communities around the Group's plants and offices in 2019
education, local employment, diversity, health, road safety, environment…
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Michelin makes a positive contribution towards Safe Mobility
- Each year, Michelin invests around €5 million in support of Safe Mobility through forming global strategic partnerships
ParternshipsActions
UNRSC
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Creating local jobs and businesses with Michelin
Development
- Since 1990, more than 38,000 jobs (27,000 in France)
- In France, Spain, Italy, the United Kingdom, Canada and the United States
- 2 supportive actions for SMEs:
- provides local companies with expertise and technical support in a wide variety of areas
- provides funding in the form of subsidies or five-year,low-interest,collateral-free loans, designed to create a dynamic process of local job creation
- In France:
- 27,000 jobs created since 1990
- In 2019: 170 agreements signed to support 1,346 jobs in local companies, backed by around €4.2 million
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Since Dundee, a new 3 level approach
Economic, | ||
ESIC | Social and | |
Innovation | ||
Stimulate future regional | ||
Center | ||
economic growth | ||
ATP | Professional | |
Transition | ||
A professional project for | Workshops | |
each Mi staff member | ||
Revitalisation
Recreate jobs on the
territory
MSIP | Creating a new future for people, place and planet
Michelin Scotland Innovation Parc (MSIP): Creating a new future for people, place and planet. MSIP is an ambitious joint venture between Dundee City Council, Michelin, and Scottish Enterprise.
www.msipdundee.com
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Michelin Corporate Foundation
- Creation : 2014 January, under the sign of «Helping people move forward »
- Vocation : bear general interest projects in the long term in every country where the Group is implanted, in five fields:
- Sustainable mobility,
- Sport and health,
- Education and the community,
- Protecting the environment,
- Heritage and the arts
- 113 projects have been backed by the Foundation in 2018 with a total budget of €16.5 M€
- Global Road Safety Partnership | - WWF |
- "Croix-Rouge française | - Yellowstone Park Foundation |
- Médecins du Monde | - ….. |
- Maison de la vie |
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Supplier assessment and promotion of good practices in the supply chain
- CSR assessments of suppliers:
- 715 suppliers assessed in 2019 (EcoVadis desktop assessment)
- 84% obtained a satisfactory score
- About 90% of Raw material spend from suppliers operating in countries at risk of human rights are being assessed
- Mandatory training « Responsible Purchasing » for every member of the Purchasing department
- Purchasing Principles translated in 14 languages, included in all contracts with suppliers
- CSR criteria integrated in internal audits of suppliers
- Distinctions:
- Responsible Supplier Relations and Procurement Label : obtained again in 2019
- Certification of alignment with ISO 20400 sustainable purchasing standard
- Score of 80/100 for "responsible purchasing" by Michelin EcoVadis assessment
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Michelin is committed to help natural rubber supply chain
be transparent
Natural Rubber supply chain is highly complex, uncharted and not fully
transparent (~6M farmers, ~100 000 dealers, over 500 NR processors in tropical countries)
Civil society and clients requires a clean and transparent Natural Rubber supply chain
Michelin, as a corporate social responsible company, is committed to zero deforestation and a supply chain without human and labor
rights violation
Michelin wishes to purchase from trustworthy sources → Improve
Supply chain transparency
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Natural rubber's essential role for sustainable mobility
- Reforestation of 88,000 hectares (o/w ~ 45,000 with hevea's tree) in Indonesia through a joint venture with Barito Pacific Group. This project had led to the creation of some 4,500 jobs by end-2019
- Ouro Verde Bahia, Michelin Ecological Reserve in Brazil: a nature reserve, a research center on rubber plant varieties and a pilot project to improve living conditions for small growers
- Projects and initiatives in support of responsible natural rubber farming led by the Group or its joint ventures to address a broad range of sustainable natural rubber production issues
- GPSNR: A Global Platform for Sustainable Natural Rubber, launched in Singapore in October 2018
- Project was impelled by the Tire Industry Project (TIP), which brings together Michelin and ten other tire manufacturers under the auspices of the World Business Council for Sustainable Development (WBCSD)
- All the stakeholders in the natural rubber value chain were gathered for the occasion
- The ambition is to improve the environmental and socio-economic performance of the natural rubber industry
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Rubberway: CSR risk assessment via smartphone
Comprehensive supply chain questionnaires
User friendly data collection
Automatic data compilation on web-based dashboard
Interactive map
Factories
Intermediaries
Smallholders / Farmers
Estates / plantations >50 Ha
Thai | Bahasa Indonesia | English | Brazilian (Portuguese) | French |
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April 09 & 10, 2020
ESG
presentation
Governance & Say on Pay
A solid governance - characteristics of a partnership limited by shares
Michelin's governance is robust, stable, and focused on the long-term responsibility of senior executives. Operating as a partnership limited by shares, as defined by law, regulations and the Bylaws, offers the Company a number of key advantages
- Meets the fundamental principle of a clear segregation of management and supervisory powers
- Offers shareholders a rarely found level of assurance that the Group is run in their medium- to long-terminterests, particularly during times of volatile markets or economic crisis. The General Partners have unlimited personal liability for the debts incurred by Michelin
- Fosters direct and transparent ties with shareholders
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A solid governance - structure of the Partnership limited by shares
General Partners
SAGES - Société Auxiliaire de Gestion | Florent Menegaux |
- Unlimited joint and personal liability for the Company's debts
- Say on pay resolutions are subject to their approval (Ordinary general meeting) as well as extraordinary resolutions
"Profit shares" allocated under the Bylaws
Limited Partners
Shareholders
- Liability limited to the amount of their investment
- Ultimate decision-making power in the event of a disagreement between the General Partners and the Limited Partners
Share of profits in the form of a dividend
Approve the appointment of the Managers
Elect the members of the Supervisory Board
Adopt the financial statements approved by Management
Appoint the Statutory Auditors
Managers | Term: |
4 years |
• Florent Menegaux - Managing Chairman and General Partner |
Supervisory Board | Term: | Statutory |
4 years | Auditors |
- 9 members of which 1 Lead independent member
• Yves Chapot - General Manager |
Administer and manage the Company
Exercises permanent oversight of the Company's management and reviews the financial statements approved by Management
Reviews strategic roadmaps and advises without intervening in management
Ensures that shareholders' rights are respected
Compensation and Appointments Committee
Audit Committee
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Compensation for serving on the Supervisory Board
(previously referred to as « attendance fees »)
A solid governance - the General Partners, a complementary role
SAGES - Société Auxiliaire de Gestion | Florent Menegaux |
Non-Managing General Partner | Managing General Partner |
Unlimited joint and personal liability for the Company's debts
- Guarantees permanence and is responsible of ensuring Company's continuity of leadership in the position of CGEM's manager were to fall vacant
- In association with the Supervisory Board, ensures management continuity through the implementation of a succession plan
- Recommends candidates for election as Manager of CGEM at the Shareholders Meetings, and, as applicable, submits recommendations to the Supervisory Board for the re-election of Managers or their removal from office
Chairman : Mr. Jacques de Chateauvieux
Shareholders: members of the founding family, current and former Michelin executives and qualified persons from outside the Group
A long-term Commitment
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The Supervisory Board - 9 members
Michel Rollier
Non-independent member (non-executive)
Chairman of the Supervisory Board
Member of the Compensation and Appointments Committee
Olivier Bazil | Barbara Dalibard | Jean-Pierre Duprieu | Aruna Jayanthi |
Independent member | Independent member | Independent member | Independent member |
Chairman of the Audit | Senior independent | Member of the | Member of the |
member | |||
Committee | Audit Committee | Compensation and | |
Chair of the | |||
Appointments Committee | |||
Compensation and | |||
Appointments Committee |
Anne-Sophie de la Bigne | Monique Leroux | Thierry Le Hénaff | Cyrille Poughon | |
Independent member | Independent member | Independent member | Non-independent member | |
Member of the Audit Committee | Member of the | Member of the | (non-executive) | |
Member of the | Member of the | |||
Audit Committee | Audit Committee | |||
Compensation and | Audit Committee | |||
51 | ||||
April 9 & 10, 2020 - ESG Presentation Appointments Committee |
The Supervisory Board - overview
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The Group Management - internal organization
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The Group Management - the Executive Committee, 10 members
- The Managers and the Executive Committee of 8 members
Managing Chairman and General partner: Florent Menegaux
General manager and Chief Financial Officer: Yves Chapot
DB1 : Executive Vice President, Automotive, Motorsport, Experiences, and Americas Regions: Scott Clark
DB2 : Executive Vice President, Road Transportation and European Regions: Laurent Bourrut
DB3 : Executive Vice President, Specialties and Africa/India/Middle East, China, East Asia & Australia Regions: Serge Lafon
DB4 : Executive Vice President, Services & Solutions, High Tech Materials: Sonia Artinian-Fredou
Executive Vice President, Manufacturing: Jean-ChristopheGuérin
Executive Vice President, Research & Development: Eric Philippe Vinesse
Executive Vice President & Chief HR Officer : Jean-ClaudePats
Executive Vice President, Engagement and Brands: Adeline Challon-Kemoun
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Say on Pay 2019 - preliminary note on compensation policies applicable to Management in 2019
Compensation policy for 2020 will be disclosed on the 2019 URD as of April 17, 2020
Press release, April 6, 2020
The health crisis has caused a noticeable slowdown in the activities of the Michelin Group, which has led to some employees having to undergo partial unemployment measures. In this context, and as a demonstration of solidarity with the entire employee community, the Managers, the Executive Committee, as well as the Chairman and independent members of the Supervisory Board are reducing their remuneration.
Florent Menegaux and Yves Chapot, the Managers of the Michelin Group, have expressed their will to give up part of their 2019 variable compensation paid in 2020, once submitted to the vote of the shareholders at the Annual general meeting to be held behind closed doors on June 23, 2020.
Apart from these adjustments, there are no changes in the 2019 compensation policy compared to the presentation made on the 2018 registration document.
As a reminder, the 2019 compensation policy is applied to three Managers during only part of the year.
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Say on Pay 2019 - Florent Menegaux, Managing Chairman, Managing General Partner
Fixed compensation | Annual variable compensation | Long-term incentive bonus (awarded) | ||||||||||
(paid and awarded) | (awarded) | Subject to performance conditions on 3 years | ||||||||||
€900,000 | - | - | ||||||||||
0 to 20 % of Profit Shares | 0 to 30 % of Profit Shares | |||||||||||
Annual variable compensation and the Long-term incentive bonus will be deducted from the Profit Shares(2) | ||||||||||||
Fringe Benefits(1) : - |
Quantifiable criteria:
1. Level of Consolidated net income
6 % of Profit Shares
2. Annual growth in Sales
3. Annual free cash flow (excluding acquisitions)
Quantifiable and qualitative criteria:
1. Digital strategy
2. CSR/Human rights
3. Group transformation support
- Growth in the Michelin share price vs. CAC 40 (from 0 to 11 % of Profit Shares)
- CSR Performance (from 0 to 8 % of Profit Shares)
- MEF
- Employee Engagement
3. Growth in Segment Operating Income(3) (from 0 to 11 % of Profit Shares)
4. Efficiency project SG&A/ gross margin
0 of 10 % of Profit Shares | 0 of 4 % Profit Shares | |||
(1) | Company car | The following will be applied to each criterion except for the one | ||
(2) | Based on calculation of Annual variable | concerning net income: | ||
compensation and Cash-settled deferred variable | • | a trigger point below which no compensation will be due; | ||
compensation: 0,6 % Group's consolidated net income | ||||
• | an intermediate tranche between the trigger point and 100% of the objective, | |||
(3) | SOI : based on current business scope and | |||
with the compensation prorated to the achievement rate for the objective; | ||||
comparable accounting methods, excluding changes in | ||||
exchange rates. | • 100% of the objective, corresponding to the level at which the maximum | |||
compensation for the criterion would be payable. |
56 April 9 & 10, 2020 - ESG Presentation
- Cap : at 2.5x annual fixed compensation of 2019
-
Profit Shares payable out of distributable income for 2021 under conditions: - Approval of the corresponding resolutions by the Annual Shareholders
Meeting called to approve the 2021 financial statements and the compensation concerned
- Profit Shares payable out of distributable income for 2021
- Subject to the availability and amount of Profit Shares for distribution in 2022 out of 2021 profit, after deducting annual variable compensation due for 2021 - F. Menegaux will have to invest in Michelin shares 20% of the long-term incentive bonus received at the end of the three-year period
Say on Pay 2019 - Yves Chapot, General Manager
Fixed compensation
(paid and awarded)
€600,000
Fringe Benefits(1) : -
Annual variable compensation
(awarded)
-
based on 150% of fixed compensation
Long-term incentive bonus (awarded)
Subject to performance conditions on 3 years
-
Based on 100 % of fixed compensation
Quantitative criteria:
1. Growth in SOI(2)
2. Annual growth in Sales
3. Annual free cash flow (excluding acquisitions)
Quantifiable and qualitative criteria:
1. Digital strategy
2. CSR/Human rights
3. Group transformation support
- Growth in the Michelin share price vs. CAC 40 (from 0 to 35 % of criteria results)
- CSR Performance (from 0 to 30 % of criteria results)
- MEF
- Employee Engagement
3. Growth in SOI(2) (from 0 to 35 % of criteria results)
4. the Efficiency project SG&A /gross margin
Maximum 80 % of the base | Maximum 20 % of the base |
The following will be applied to each criterion:
• | a trigger point below which no compensation will be due; | |||
• | an intermediate tranche between the trigger point and 100% of the objective, | |||
(1) | Company car | with the compensation prorated to the achievement rate for the objective; | ||
(2) | SOI : based on current business scope and | • | 100% of the objective, corresponding to the level at which the maximum | |
comparable accounting methods, excluding | compensation for the criterion would be payable. | |||
changes in exchange rates. | ||||
57 April 9 & 10, 2020 - ESG Presentation | ||||
- Ceiling : 120% of the annual average of the annual variable compensation paid to Mr. Chapot for 2019, 2020 and 2021
Say on Pay 2019 - JD- Senard, Managing Chairman and General Partner
Fixed compensation
(paid and awarded)
-
(prorated to the period served in 2019 on a
basis of €1,100,000)
Fringe Benefits(1) : -
Annual variable compensation | ||||||
Long-term incentive bonus | ||||||
(awarded) | ||||||
- | ||||||
- | ||||||
From 0 to 18 % of Profit shares | ||||||
(prorated to the period served in 2019) | ||||||
Annual variable compensation and the long-term incentive bonus will be deducted from the Profit Shares(3)
Quantitative criteria relative to:
1. Level of Consolidated net income
8 % of Profit Shares
2. Annual growth in Sales
3. Annual free cash flow (excluding
acquisitions)
4. Efficiency project SG&A/Gross margin
Quantifiable and
qualitative criteria relative to:
1. Digital strategy
2. CSR/Human rights
3. Group transformation support
- Company car
- Based on calculation of Annual variable compensation and Cash-settled deferred variable compensation : 0,6 % of Group Consolidated net income
58 April 9 & 10, 2020 - ESG Presentation
From 0 to 6 % of Profit Shares | From 0 to 4 % of Profit Shares |
The following will be applied to each criterion except for the one concerning net income:
- a trigger point below which no compensation will be due;
- an intermediate tranche between the trigger point and 100% of the objective, with the compensation prorated to the achievement rate for the objective;
- 100% of the objective, corresponding to the level at which the maximum compensation for the criterion would be payable.
Say on Pay 2020 - preliminary note on Compensation policies applicable to Management in 2020
Compensation policy for 2020 will be disclosed on the 2019 URD as of April 17, 2020
Press release, April 6, 2020
The health crisis has caused a noticeable slowdown in the activities of the Michelin Group, which has led to some employees having to undergo partial unemployment measures. In this context, and as a demonstration of solidarity with the entire employee community, the Managers, the Executive Committee, as well as the Chairman and independent members of the Supervisory Board are reducing their remuneration.
Florent Menegaux and Yves Chapot, the Managers of the Michelin Group, have chosen to reduce their remuneration by around 25% for the months of April and May 2020.
In addition, the members of the Group's Executive Committee have voluntarily decided to reduce their remuneration by around 10% during the same period.
Finally, the Chairman of the Michelin Group Supervisory Board, Michel Rollier, and its independent members are joining this effort by donating 25% of their attendance fees received in 2020 to foundations in their respective countries, which are part of the fight against Covid-19.
These reductions will be continued as long as Group employees are in partial activity due to the Covid-19 health crisis.
59 April 9 & 10, 2020 - ESG Presentation
Say on Pay 2018 - 2018 compensation (cash-settled and fringe benefits) Jean-Dominique Senard, Managing Chairman (until May 17, 2019)
(in €, before payroll and other taxes)
Annual Fixed | Single-Criterion | Multi-Criteria | Long-term incentive | |||||||||||||
Annual Variable | Annual Variable | Performance conditions over 3 years | ||||||||||||||
€1,100,000 | €796,621 | €965,903 | LTI due | LTI awarded | ||||||||||||
€1,362,465 | - | |||||||||||||||
8% of the Consolidated | For up to 14% of the Consolidated | |||||||||||||||
Base: €1,800,000*** | Base: €1,080,000 | |||||||||||||||
Calculation Base** | Calculation Base** | |||||||||||||||
The Variable Components and the Long-term incentive are paid out of the Profit Shares allocated to the General Partners under the Bylaws, | ||||||||||||||||
capped at 0.6% of the Group's consolidated net income and approved at the Annual Shareholders Meeting as part of the appropriation | ||||||||||||||||
Fringe benefit*: €8,470 | ||||||||||||||||
of net income | ||||||||||||||||
Single-
Criterion
19% Fixed
26%
Multi-
Criteria
23% LTI
32%
Paid to the General Partners for the risk incurred by virtue of their unlimited joint and personal liability for the Company's debts
3 quantitative criteria | 4 qualitative criteria | 4 quantitative criteria | |||
- | Annual growth in sales | - | Digital strategy | - Growth in Michelin's share price | |
volume | - | CSR/Environment & | compared with that of the CAC40 index | ||
- | Efficiency project | human rights | - | MEF measurement | |
- Annual free cash flow | - | Manager transition | - | Employee engagement rate | |
excluding acquisitions | - | Group organization | - | Growth in consolidated | |
operating income |
*Company car
**Consolidated Calculation Base:
0.6% of the Group's consolidated net income
***As increased or reduced to reflect the percentage gain or loss in Michelin's share price over the three-year period from 2016 to 2018, namely 10.5%
Achievement in 2018: | Achievement in 2018: |
62.90/100 | 44.58/50 |
Achievement in 2018: 107/150,
or 87.80% of Annual Fixed Compensation
Ceiling: 150% of the average of the Annual Variable Components paid to Jean-Dominique Senard for 2016, 2017 and 2018, and amount of Profit Shares available for distribution after deducting the Variable Compensation due for 2018
60 April 9 & 10, 2020 - ESG Presentation
Say on Pay 2018 - 2018 compensation (cash-settled and fringe benefits) Florent Menegaux, Managing General Partner
(in €, before payroll and other taxes)
Annual Fixed | Single-Criterion | Multi-Criteria | Long-term incentive | ||||||||||||
Annual Variable | Annual Variable | Performance conditions over 3 years | |||||||||||||
€554,672 | €312,374 | €356,106 | LTI due | LTI awarded | |||||||||||
Base: €900,000 | 5% of the Consolidated | For up to 8.50% of the Consolidated | - | - | |||||||||||
(Prorated to reflect the period served in 2018) | Calculation Base** | Calculation Base** | Base: €720,000 | ||||||||||||
(Prorated to reflect the period served in 2018) | (Prorated to reflect the period served in 2018) | ||||||||||||||
The Variable Components of compensation are paid out of the Profit Shares | |||||||||||||||
Fringe benefit*: €5,392 | |||||||||||||||
Single-
Criterion
26%Fixed
45%
Multi-
MultiCriteria-Criteria
29%
Paid to the General Partners for the risk incurred by virtue of their unlimited joint and personal liability for the Company's debts
3 quantitative criteria | 4 qualitative criteria | ||
- | Annual growth in sales | - | Digital strategy |
volume | - | CSR/Environment & | |
- | Efficiency project | human rights | |
- Annual free cash flow | - | Manager transition | |
excluding acquisitions | - | Group organization |
4 quantitative criteria
- Growth in Michelin's share price compared with that of the CAC40 index
- MEF measurement
- Employee engagement rate
- Growth in consolidated operating income
*Company car
**Consolidated Calculation Base:
0.6% of the Group's consolidated net income
Achievement in 2018: | Achievement in 2018: |
62.90/100 | 44.58/50 |
Achievement in 2018: 107/150,
or 64.20% of Annual Fixed Compensation
Ceiling: 150% of the average of the Annual Variable Components paid to Florent Menegaux for 2018, 2019 and 2020, and amount of Profit Shares available for distribution after deducting the Variable Compensation due for 2020
61 April 9 & 10, 2020 - ESG Presentation
Say on Pay 2018 - 2018 compensation (cash-settled and fringe benefits) Yves Chapot, General Manager
(in €, before payroll and other taxes)
Annual Fixed
€372,808
Base: €600,000
(Prorated to reflect the period served in 2018)
Fringe benefit*: €4,352
Multi-Criteria | Long-term incentive | ||||||
Annual Variable | Performance conditions over 3 years | ||||||
€263,763 | LTI due | LTI awarded | |||||
- | - | ||||||
Maximum of 120% of fixed compensation | |||||||
(Prorated to reflect the period served in 2018) | Base: €600,000 | ||||||
Multi-
CriteriaFixed
41%59%
3 quantitative criteria
- Growth in consolidated operating income from recurring activities
- Level of consolidated inventories of finished and semi-finished products
- Level of Automotive segment tire sales volume
2 qualitative criteria
- Organizational transition
- Customer Service initiative/ Net Promoter Score
4 quantitative criteria
- Growth in Michelin's share price compared with that of the CAC40 index
- MEF measurement
- Employee engagement rate
- Growth in consolidated operating income
*Company car
**Liability recognized for the LTI: €94,200
Achievement in 2018: | Achievement in 2018: |
37.61/70 | 20.78/30 |
Achievement in 2018: 58.39/100,
or 70.75% of Annual Fixed Compensation
Ceiling: 120% of the average of the Annual Variable Components paid to Yves Chapot for 2018, 2019 and 2020
62 April 9 & 10, 2020 - ESG Presentation
Say on Pay 2018 - 2018 compensation (entitlement to additional benefits and oth advantages)
Jean-Dominique Senard, Managing Chairman
Florent Menegaux, Managing General Partner
Yves Chapot, General Manager
- Compensation for loss of office as a result of a change of strategy or a change of control, subject to performance conditions decided by the Supervisory Board
- Non-competeindemnity
No additional benefits were paid in 2018
- No other benefits
- No stock options
- No performance shares
- No attendance fees
63 April 9 & 10, 2020 - ESG Presentation
Say on Pay 2018 - 2018 compensation (supplementary pension benefits)
=> Applicable to all senior executives of the two main French companies who have served for at least five years as a senior executive
1.5% of benefits vest each year, entitling participants to an annuity representing a replacement rate of up to 15% of the reference compensation
The replacement rate, including entitlements under compulsory plans, is capped at 35%, which is well below the 45% ceiling for fixed and variable compensation recommended in the AFEP/MEDEF Code
Payment of a gross annual maximum annuity after 10 years of service, conditional on participants ending their career with the company
Mr. Senard, Managing Chairman
Mr. Menegaux, Managing General Partner
Mr. Chapot, General Manager
Estimated amount of annual income at | |
December 31, 2018 | |
Mr. Senard, Managing Chairman | €165,000 |
Mr. Menegaux, Managing General Partner | €135,000 |
Mr. Chapot, General Manager | €110,544 |
64 April 9 & 10, 2020 - ESG Presentation
Say on Pay 2018 - 2018 compensation
Michel Rollier, Chairman of the Supervisory Board
- No compensation is awarded to Michel Rollier aside from attendance fees, consistent with the policy applied for the top executives of other CAC 40 companies
- Most of the fee is contingent on his attendance rate at meetings of the Supervisory Board and the Committee of which he is a member
60% of the fee is tied to his attendance rate at meetings of the Board and its Committees
Individual attendance rate in 2018
100%
Attendance fees for 2018
€90,000
65 April 9 & 10, 2020 - ESG Presentation
April 09 & 10, 2020
ESG
presentation
Appendices
Materiality matrix has revealed a general convergence among external stakeholders and Michelin employees concerning the relative importance of the various social responsibility issues
Our Commitments to Sustainable Development and Mobility
- Transparency
- Staff commitment to Sustainable Development
- Commitment to accessible, clean, sustainable and responsible mobility
- Sustainable, responsible governance
Ethics and compliance
- The safety of users of Michelin products and services
- High-performance,competitive, responsible products and services
- Business ethics
- Responsible purchasing
Human rights
9 Respecting human rights and duty of care
- Diversity of teams
- Staff development
- Contribution to the development of local communities
- Impact on local communities
- Reasoned/balanced development in emerging countries
-
Dialogue with stakeholders
Employee health and safety - Health and well-being of staff
- Impact of digital technologies on our working methods
Environment - Environment (as a Group performance indicator)
- Energy transition and carbon reduction
- Eco-designof our products and services
- Sustainable, responsible operations
Importance for external stakeholders
10,0
9,5
9,0
8,5
8,0
7,5
7,0
6,5
Less important | Important |
7 | |||||
18 | 16 | ||||
4 | |||||
20 | 21 | 9 | 6 | ||
15 | 19 | 1 | 3 | ||
13 | |||||
8 | |||||
11 | |||||
12 | 2 | ||||
14
10
6,5 | 7,0 | 7,5 | 8,0 | 8,5 | 9,0 |
Priority
Priority
5
Important
important Less
9,5 10,0
68 | April 9 & 10, 2020 - ESG Presentation | Importance for internal stakeholders |
Michelin, an unifying body of the Global sustainable mobility
- Some initiatives to decarbonize the transport sector:
Movin'On Summit: an ecosystem initiated by Michelin, which aims at identifying practical solutions in order to meet major mobility challenges.
Michelin, co-founder of Paris Process on Mobility & Climate : creation of a global macroeconomic roadmap to handle the transport sector transformation into a « zero-emission » economy.
In 2019 October, the Global Roadmap of Action towards Sustainable Mobility (GRA) is launched by SuM4All (group initiated by the World Bank)
Florent Menegaux : "The GRA is the first actionable toolbox for public decision makers, designed to help them identify policy measures that best apply to their own country's needs. As a member of the Sum For All steering committee, Michelin is proud to support the GRA, by bringing the business perspective, and funding - through the Michelin Corporate Foundation - a GRA-based digital tool, designed to help countries take appropriate actions."
69 April 9 & 10, 2020 - ESG Presentation
Michelin « Supporter » of Task Force on Climate-related Financial Disclosure
- Since 2018, the Group has applied the recommendations issued by the TCFD organization operating under the aegis of the G20 Financial Stability Board
- A summary of Michelin's answers is published in the Registration Document (cf. chapter 4 of Michelin - 2019 Universal Registration Document). They relate to:
- Governance (Roles, responsibilities and control)
- Strategy (Time horizons, Main risks and opportunities, Climate scenarios used)
- Risks and opportunities (Identifying, assessing and managing risks and opportunities)
- Metrics and targets
- Further information may be found in the public answers to the CDP Climate Change 2019 questionnaire (see https://www.cdp.net/en/responses)
71 April 9 & 10, 2020 - ESG presentation
Michelin is involved in TIP Tire Industry Project, a WBCSD Sector Project
- Since 2005, TIP drives research on potential human health and environmental impacts of tires throughout their lifecycle.
- TIP is a global CEO-led initiative undertaken by leading tire manufacturing companies.
- Together, TIP member companies work towards solutions for a sustainable future on topics including end-of-life tire management, tire and road wear particles, and sustainable natural rubber.
72 April 9 & 10, 2020 - ESG presentation
What are TRWP (Tyre and Road wear Particles) ?
- Tire and Road Wear Particles (TRWPs) are tiny debris produced by the friction between tires and the road, ensuring grip and safety on the road
- These particles are a mixture of rubber and minerals coming from the road
- They have specific characteristics and behaviors
- High density: 1.8
- Big Diameter: average size 100 μm
- High degradability rate
- Scientific studies available to date have not identified risks related to TRWP on human health and fauna/flora in fresh aquatic water
- Scientific studies made to date at the request of TIP and ETRMA found that 2 to 5% of TRWP emitted would reach estuaries and that in the order of 1% of PM10 and PM2.5 present in the air would be issued from TRWP
73 April 9 & 10, 2020 - ESG Presentation
The Group is strongly engaged on the topic of TRWP working in 3 different areas
- Proactively with the industry and the TIP (Tyre Industry Project) in order to increase the scientific knowledge and analysis of potential impacts related to TRWP (repartition in the different environmental compartments, degradability, composition, impact analysis, etc…). In parallel, the Group pays very close attention to all related studies that may serve to enhance and expand current scientific knowledge.
- Alongside the rest of the industry and the European authorities to develop a standardized test method for measuring tire abrasion rate (particulate emissions in g/100 km).
- With our teams, to continue to develop always more performing tyres, optimizing the use of materials and limiting the emissions.
74 April 9 & 10, 2020 - ESG Presentation
Reminder: Scopes 1, 2 and 3
Michelin has established and regularly updates its greenhouse gas (GHG) inventory according to the most widely used international accounting tool
known as the Greenhouse Gas
Protocol (http://ghgprotocol.org/).
The inventory covers Michelin's own
operations (Scopes 1 & 2) and the relevant activities in its upstream and downstream value chain (Scope 3).*
Michelin's carbon footprint is the sum
1.
purchased goods and services
2. capital goods
3. fuel and energy related
activities
Scope 2
INDIRECT
Scope 3 | |
INDIRECT | |
purchased electricity, steam, | |
heating & cooling for own | 8. leased assets |
use |
7. employee commuting
6.
business
Scope 1
DIRECT
company facilities
company vehicles
100% under Michelin responsibility
Michelin has influence over these activities
Scope 3
INDIRECT
9. | |
transportation | 15. |
and distribution | |
investments | |
10. processing | 14. |
franchises | |
of | |
sold products | |
11. use of | 13. leased |
of CO2 emissions in Scopes 1, 2 and 3.
4. | travel |
transportation | 5. waste |
and | generated in |
distribution | operations |
sold | assets |
12. end-of-life | |
products | |
treatment of | |
sold products |
- The inventory boundary is consistent with the scope of Michelin's financial reporting.
Upstream activities | Reporting company | Downstream activities |
75 April 9 & 10, 2020 - ESG Presentation
Analyzing tire life cycles to help protect biodiversity
76 April 9 & 10, 2020 - ESG Presentation
Biosourced materials: with its unique expertise in materials and its culture of innovation, Michelin is breaking new ground with BioButterfly and BioImpulse
Construction of France's
first demonstrator unit capable of producing butadiene using biosourced ethanol
Project in partnership with IFP Energies Nouvelles and Axens
With support from ADEME*
Creation of a new
adhesive resin without any Substances of Very High Concern (SVHC)
Collaborative project
coordinated by Michelin
through ResiCare, that brings
together France's FCBA**, INRA**, INSA** and Leaf, a business unit of Lesaffre.
With support from ADEME*
77 April 9 & 10, 2020 - ESG Presentation
The BioImpulse project is giving new impetus
to the use of biotechnology in materials
years of
project work
- Coordinated by Michelin through its ResiCare entity, the project aims to replace Substances of Very High Concern (SVHCs) in resins
Budget in M€ | Development and scale-up to | Incremental investments through | Design and development of a |
mass production | modularization and ramp-up of | range of non-toxic glues and | |
of a biosourced molecule | processes | resins |
Partners
- The high-potential worldwide market targeted by the substance replacement project is concentrated in the automotive and construction industries
Wood | Insulation | Tires | Molding | Laminates |
compounds |
78 April 9 & 10, 2020 - ESG Presentation
Michelin, IFP Energies nouvelles, and Axens give a new
dimension to the BioButterfly project
Tonnes / year of
production
capacity
Budget in €M
between
2012 and 2022
Partners
- The construction of France's first industrial demonstrator capable of producing butadiene from ethanol, aims to replace the oil-based raw materials used in the company's tires with bio- sourced molecules
*
- 2nd generation, non-competing with food) made from forest or agricultural
residues (straw, woodchips, etc.)
79 April 9 & 10, 2020 - ESG Presentation
2017: Lehigh Technologies acquisition
2018: A new plant in Europe
● Lehigh Technologies MRP (micronized rubber powder) for areas inside and outside of Michelin's applications - high technology materials
● Research and Development to find innovative solutions in the form of new products, such as roads (rubber asphalt)
● Lehigh Technologies won the Innovation Award from the ICIS* 2018
*ICIS is the world's largest provider of market intelligence in the fields of petrochemical, energy and fertilizer industries.
80 April 9 & 10, 2020 - ESG Presentation
Innovation leader with Uptis: the airless concept, an essential step towards more sustainable mobility
- From ambition to action -
(Connected, Autonomous,
Shared, Electric)
Benefits for car
owner
More serenity during
the journeys
81 April 9 & 10, 2020 - ESG presentation
Co-developed
with General Motors
Benefits for all
Material savings and | |
Benefits for fleet | waste reduction |
owners and
profesionnals
Productivity optimisation
Uptis airless concept, a major advancement toward achieving
Michelin's VISION concept, illustration of the mobility in the future
Connected
3D-printed rechargeable
Renewable
& bio-sourced materials
Airless
82 April 9 & 10, 2020 -ESG presentation
Ever more sustainable offers for more value with less impact
SERVICES | NEW PLAYGROUNDS (4R) | |||||
TIRES | ||||||
LIGHTER | ||||||
INVOICING PER KILOMETER | ||||||
PROVIDING LONG LASTING | TRAVELED, PER TONNE | |||||
PERFORMANCE | TRANSPORTED, PER LANDING. | |||||
FULL PRODUCT LIFECYCLE | ||||||
MANAGEMENT | ||||||
MORE FUEL EFFICIENT | ||||||
83 April 9 & 10, 2020 -ESG presentation
Recognition for the economic and environmental benefits of Michelin tires' long-lasting performance
- By offering customers tires that deliver high performance until 1.6mm wear indicators appear
Michelin is improving the tire
industry's environmental | |
footprint | |
by avoiding raw | by reducing |
carbon | |
material waste | |
emissions | |
- Michelin's approach is supported by:
- The automotive industry
- The European Parliament
Michelin is improving consumer | |
purchasing power | |
by increasing | by improving, with |
the time | |
worn tires, the fuel | |
between tire | |
efficiency* | |
changes | |
* Up to a 20% reduction in rolling resistance | |
2019 | 2024-2026 |
In Europe, long-lasting | |
The European | performance will be a |
Parliament | prerequisite for every |
approves worn tire | tire |
testing |
84 April 9 & 10, 2020 - ESG presentation
Tire design: a matter of choice
Technologies are available for a long lasting performance tire:
85 April 9 & 10, 2020 - ESG presentation
Michelin Tires : Performance over the time in every conditions
Performance of the MICHELIN Pilot Sport 4 SUV | Tier 1 market portfolio by range (in %)** |
tire compared with competitors |
Dry Lap time
Rolling
resistance kg/T
Dry Braking
100
90
80
70
60
50
Longevity
Top 6 competitors | ||||||
1st | average | 6th | ||||
Green RR and | 14% | 9% | ||||
Wet Braking | A-Wet | 27% | 17% | |||
portfolio* | ||||||
new | ||||||
*Range whose rolling resistance (RR) rating is A, B or C | ||||||
and wet grip (WG) rating is A | ||||||
**Source: Lizéo, May 2019 |
Wet Braking
worn
MICHELIN Pilot Sport 4 SUV
EU market average
Leading competitor in Europe
86 April 9 & 10, 2020 - ESG presentation
Michelin is meeting the EV chalenge
Increasing range | |||||||
the major challenge for EVs | |||||||
Reducing cockpit | |||||||
noise | |||||||
Coping with torque | |||||||
Supporting heavy | |||||||
batteries | |||||||
Consumer and commercial | Asia | ||||||
EVs | |||||||
By reducing rolling resistance, with the right materials, and aerodynamic drag, with the
right tire design (Slimline)
By using Michelin Acoustic Technology and
adjusting tread design
By improving tread rigidity and contact patch
friction
By designing tires capable of both carrying
heavier loads and reducing rolling
resistance
Racing
- Renault Zoé - MICHELIN Energy E-V
- Tesla, en position de leader - MICHELIN Pilot Sport
- Renault Kangoo Z.E. et Z.E.H2 - MICHELIN Energy Saver
- GM Bolt / Volt
- Peugeot e-2008 - MICHELIN Primacy 4
- Mercedes EQC - MICHELIN Pilot Sport 4 SUV…
• | Certified by a large number | • Formula E - |
Ho | Ho | |
of Chinese OEMs* | MICHELIN Pilot | |
• | Partnership with Hyundai for | Sport |
its EV line |
* Xiaopeng, WM Motors, Human Horizons,Iconiq, SAIC, BAIC, Guangzhou Autos, FAW
87 April 9 & 10, 2020 - ESG presentation
Services & Solutions' functional economy and pay-per-use approach: a virtuous model
* Including Truck and Mining tire maintenance
Usage-based
billing*
vehicles under contract
A global footprint
Connected
services
Monetization of data analyses
For the transportation industry and beyond
Predictive Infrastructure Insurance maintenance
88 April 9 & 10, 2020 - ESG presentation
2 questions about Hydrogen
● H2O & Electricity | Water electrolysis | H2 |
From fossil sources
ZERO CO2 EMISSION | ||
● Hydrocarbon | Steam reforming* | H2 |
* To day more than 90% of the global H2 production is from Hydorcarbon
- storing intermittent energies (wind, solar…) electricity production surplus, through electrolysis
- helping decarbonize transportation. Hydrogen vehicles only reject water
Hydrogen mobility is the unique solution to meet the three challenges simultaneously : pollution, greenhouse gases
and energy transition
89 April 9 & 10, 2020 - ESG Presentation
3 questions about fuell cells
+ +
Electric transmission
Stack
Air system
Cooling system
+ transformer and controller
90 April 9 & 10, 2020 - ESG Presentation
The hydrogen mobility, which growth perspectives are significant, a solution particularly adapted to the professionnal needs
- A fuell cell car will be able to cover longer distances and offer constant availabilty for a lighter and smaller system
3min | X2-X3 |
Fill-up of hydrogen | Autonomy |
500 km | |
257 km |
500 km
90 km
- 2030 market *
2 | ‒ | 80% light vehicles |
(commercial and particular) | ||
million | ‒ | 20% trucks and bus |
vehicles |
* Estimation Michelin
Michelin has decided to target first professionnal markets before approaching passenger cars.
91 April 9 & 10, 2020 - ESG Presentation
Michelin has for ambition to become a world leader of hydrogen systems
- With its expertise in the hydrogen fuel cell, notably with Symbio, Michelin is accelerating the deployment of zero-emission mobility:
- by partnering with Faurecia to create a leading hydrogen fuel cell system
- by participating in the Zero Emission Valley project (Hympulsion) in France, involving public-private partners
- by being a key stakeholder playing as a trusted third party in hydrogen mobility (Hydrogen Europe, Hydrogen Council, MOVIN'ON…)
2030 perspectives | |||||||
÷ | |||||||
of market shares | |||||||
industrial sites | |||||||
employees in 2020 | will be engaged by | the price of a battery & | |||||
Michelin and Faurecia | eventually: Europe, | components in the future, | |||||
Asia and USA | (due to growing demand) | of sales |
92 April 9 & 10, 2020 - ESG Presentation
Disclaimer
"This presentation is not an offer to purchase or a solicitation to recommend the purchase of Michelin shares. To obtain more detailed information on Michelin, please consult the documents filed in France with Autorité des marchés financiers, which are also available from the http://www.michelin.com/eng/ website.
This presentation may contain a number of forward-looking statements. Although the Company believes that these statements are based on reasonable assumptions as at the time of publishing this document, they are by nature subject to risks and contingencies liable to translate into a difference between actual data and the forecasts made or inferred by these statements."
93 April 9 & 10, 2020 - ESG Presentation
Contacts
94 | April 9 & 10, 2020 - ESG Presentation | |
Investor Relations :
Edouard de Peufeilhoux
Humbert de Feydeau
Pierre Hassaïri
Sustainable Development and Mobility
Nicolas Beaumont
Sophie Perrier
+33 (0) 4 63 21 56 90
27, cours de l'île Seguin
92100 Boulogne-Billancourt - France
investor-relations@michelin.com
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Compagnie Générale des établissements Michelin SA published this content on 09 April 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 April 2020 07:22:15 UTC
