In the first half of 2017, sales increased by 4.1% (including a constant consolidation range of 3.6%) due to a large number of purchases before the first quarter's price increase, sales growth slowed in the second quarter, and sales of passenger car tires and light truck tires increased ( (3% increase). Truck tire sales were stable; demand for mining tires continued to pick up; sales of original market construction machinery tires and agricultural tires increased rapidly; in December 2016, Levorin, a Brazilian motorcycle tire manufacturer, was acquired.
The favorable price/product mix effect in the first half of the year was 1.4%, which accelerated to 2.8% in the second quarter, reflecting the initial impact of price growth. The negative price/product mix and raw material impact in the first half of the year was EUR 186 million.
Michelin tires
The income of the competitiveness plan offsets inflation as scheduled
The EUR 305 million negative free cash flow, which is consistent with the annual target, remains stable, excluding the interest on the capitalization of acquisitions and OCEANE securities; and the operation of capital management to cope with the adverse effects of rising raw material prices.
Mr. Sunard, CEO of the Michelin Group, said: “Compared with the strong growth in the first half of 2016, Michelin performed well in the first half of 2017 and is in line with the 2020 development plan. The main growth drivers in the first half of 2017 include increased sales. , Strict price management policies, initiatives to increase competitiveness, and the commitment of employees to serve our customers. Today, we have confirmed our goals for 2017, and we will be mainly relying on increased profits from price increases in the second half of the year."
Forecast
In the second half of 2017, regardless of the cold weather in winter, the replacement tire market is expected to emerge from the recession after the early purchases soared. The demand for original tyres in the market for truck tyres, construction machinery tyres and agricultural tyres will continue to grow, while the demand for primary tyres in the passenger car tyres and light truck segment will grow at a slower pace. Miner's tire sales are expected to continue to maintain a strong trend.
In view of the impact of the increase in raw material costs throughout the year (currently estimated at around 800 million Euros), Michelin will continue to flexibly control prices, ensure that the gross profit of business units unaffected by the price index terms remains unchanged, and at the same time implement the price index in the corresponding business sector. Terms. Therefore, the price/product mix and raw material effects are expected to have a favorable impact in the second half of the year.
On the whole, Michelin is expected to complete its annual sales target in line with the development trend of the global market. The operating profit of the recurring business exceeds 2016 with constant exchange rate, and forms a structural free cash flow of more than 900 million euros.
In the first half of 2017, tire sales in the global market for truck original tyres and replacement tyres increased by 3%. The price of replacement tyres increased. The profit in the first quarter increased by 7%. In the second quarter, it contracted by 3%. The original market segment continued to grow in the first half of the year. %.
Original tire
Due to low interest rates, increasing demand for truck services, and recovery in the construction industry leading to a rebound in truck sales, sales of original tyres in Western Europe increased by 6%. At the end of 2016, the eastern European market began to pick up, and it continued until the first half of 2017, with an increase of 11% in sales volume.
The sales volume of the North American market decreased by 19% in 2016 and began to rebound rapidly in the second quarter of 2017, mainly driven by the demand for truck services.
In the first half of 2017, sales of radial tires and bias tires in Asia (excluding India) generally increased by 17%. The Chinese market rebounded and sales surged by 22%, mainly due to the law prohibiting truck overload and the Chinese government's infrastructure investment plan. Market sales in Thailand grew steadily, by 10%, offsetting the 5% unfavorable situation of Japan's truck tire production decline caused by weak export sales.
The sluggish economic development in the South American region led to a 3% drop in local market sales. The market demand in the entire South American region and Brazil has stabilized.
Sales of tires in the original and replacement tire markets for passenger cars and light trucks increased by 3% in the first half of 2017. After most tire manufacturers announced price increases, consumers made significant purchases of tires, which led to a 5% increase in sales in the first quarter, and sales volume increased by only 1% in the second quarter as market demand fell.
Original tire
In the European market, sales rose rapidly by 6% in the first quarter, and fell 4% in the second quarter due to the decline in car sales in the UK and Germany. The Eastern European market began to recover. Product demand was stronger than in the first quarter.
Demand in the North American market continued to decline. Although sales increased by 2% in the first quarter, sales fell by 1% in the second quarter.
The Asian market (excluding India) increased its total sales by 3% in the first quarter. Although the Chinese government has adjusted its purchase incentive policies for small cars, the Chinese market has continued to prosper and sales have increased by 3%.
The South American market has also risen. Affected by the recovery of the automobile production and sales industry in Argentina and Brazil, the sales volume has increased steadily in the first quarter, but it is also vulnerable to the unstable political situation in the region.
Replacement tire
Prior to the price increase, Western European market demand increased by 5% in the first quarter and demand decreased by 2% in the second quarter, mainly due to the decrease in demand from end-users and an increase in dealer stocks. Sales in the 18-inch and above tires and seasonal tires market surged in the first half of the year. The Eastern European market continued to grow steadily in the first half of the year, an increase of 16% over the same period of last year. Budgetary imports continue to flow into Western and Eastern European markets on a sustainable basis.
In the North American market, the announcement of future price increases prompted the market to increase by 3% in the first quarter and by 1% in the second quarter. At the same time, sales of imported tires increased by 5% in the first half of the year and demand for high-speed tires was strong.
The demand for Asian markets in the first half of the year increased by 5% (excluding India). Due to the earlier announced price increase in the Chinese market, the market demand in the first quarter increased by 12%, the demand in the second quarter fell to 2%, dealer stocks were high, and wholesalers sold relatively slowly. Demand in the Japanese market increased by 6%, and demand in the South Korean market increased sharply before May, mainly due to an increase in sales before the price rise, but quickly declined in June. In the first half of 2017, the ASEAN countries (excluding Thailand) experienced a substantial increase, mainly due to the large number of purchases before the price increase.
In the first half of 2017, the overall demand in South Africa increased by 7%, the Brazilian market increased by 10%, and the number of imported Asian tires increased by 70%.
Replacement tire
The freight and construction industry environment in Western Europe is very good. Rising tire prices and importation have led to high dealer inventory and dealer demand. In the Eastern European market dominated by mid-to-low-end segmented business, demand in the first half of 2017 increased by 7%, and quickly declined to 1% in the second quarter.
In the second quarter of 2017, the sales volume of the North American market plunged by 9% compared with the same period of last year. This was mainly due to the increase in the import volume of Chinese tires before the implementation of the latest tariff item in the previous year. In addition, the sales of new models of trucks led to the second quarter sales recovery of the original market, but at the same time limited the market sales of replacement tires.
The Asian mid-market replacement tire and bias replacement tire market (excluding India) experienced a 3% drop in sales in the first half of 2017. The overall sales volume in the Chinese market increased by 3%. However, the decline in the freight market, the restructuring of some dealers, and the rainstorms in southern China in June affected the above factors, and the sales volume in the second quarter fell by 6%. Sales in the Southeast Asian market increased by an overall 3%, and sales in the Japanese market picked up rapidly, increasing 11%, offsetting the 3% drop in sales in the Thai market.
In the first half of 2017, the sales volume of radial tires and bias tires in the South American market increased by 3%. However, sales volume slowed down at the end of the first half of the year due to rising prices and large inventory of dealers. Affected by a favorable economic environment, the Brazilian market has increased sales by 10%.
Special tires
Construction Machinery Tire: After three consecutive years of decline, the miner tire market began to pick up in the first half of 2017, with stocks bottoming out and production recovering.
Affected by low inventory and high demand for mining equipment, sales of the original tire market began to increase.
The demand for infrastructure and quarrying and mining tires has generally risen as tire manufacturers have announced price increases.
Agricultural tires: In the mature areas, the sales volume of the original tire market fell. Since the second quarter, the original market demand has unexpectedly increased.
Although the prices of agricultural commodities are low, the replacement tire market still maintains expansion, mainly because distributors bulk up before the price rises.
Motorcycle tires: The demand for motorcycle tires in the mature market has increased, and emerging markets continue to maintain a good momentum of development.
Aircraft tires: With the growth of passenger flow, passenger tire market demand continues to grow.
Net Sales and Earnings in the First Half of 2017
Net sales
In the first half of 2017, total net sales reached 11.059 billion euros, an increase of 7.5% compared to the same period of last year. This is mainly due to the following factors:
Product sales increased by 3.6% and sales increased by 372 million euros, of which 52 million euros came from acquisition of Levorin, a Brazilian motorcycle tire manufacturer;
Sales increased by 145 million euros from a favorable price/product mix effect of 1.4% (which was 0.1% in the first quarter and 2.8% in the second quarter). The price effect has caused net sales to increase by 60 million euros, including offsetting the impact of rising raw material costs, the 67 million euros in price increase in non-price index business, minus the 7 million euros in price adjustments in the application of price index clause business. The favorable product portfolio effect brought in another 85 million euros of net sales, reflecting the extremely favorable product mix effect and the favorable effect of the recovery of the mining machinery tire business, partly offset by the negative impact of the relative growth rate of sales of original and replacement tyres.
Affected by the favorable exchange rate, sales increased by 198 million euros, which was mainly affected by the dollar.
result
In the first half of 2017, the operating income of the combined recurring business reached 1.393 billion euros, accounting for 12.6% of net sales, while the figures for the same period in 2016 were 1.405 billion euros and 13.7% respectively. The non-recurring business operating profit reached 27 million euros, which was mainly affected by the American post-retirement medical plan and the amendment clause of the British pension plan, which partially offset the changes in the fair value of non-current assets.
Recurring business operating profit comes from EUR 139 million in sales growth. And as previously indicated, the favorable price/product mix effect of 145 million euros partially offset the 331 million euros negative impact of rising raw material costs. The competitiveness plan is in line with the implementation schedule, bringing in 146 million euros of revenue, helping to offset the additional €142 million in production costs and administrative expenses. In the end, the exchange rate effect brought in 37 million euros in revenue growth.
On the whole, net profit for the first half of 2017 reached 863 million euros, an increase of 12%.
Net asset positioning
In terms of negative free cash flow, as of June 30, 2017, the dividend expenditure was 585 million euros, the share repurchase expense was 101 million euros, and the debt-to-equity ratio was 16%, which was not much changed compared to the same period of last year, and the net liabilities were 1.685 billion. Euro, compared with December 31, 2016, the company's debt to equity ratio was 9% and net debt was 944 million euros.
Passenger car/light truck tires and related distribution business
Net sales of passenger car/light truck tires and related distribution business increased by 5.9% in the first half of 2017 compared to 5.916 billion euros in the same period of last year and this year it increased to 6.263 billion euros.
The recurring business operating profit was 800 million euros, accounting for 12.8% of net sales, while the figures for the same period of 2016 were 814 million euros and 13.8%, respectively.
The 3% increase in sales volume and the optimized price/product mix are the main reasons for the changes, which can basically offset all the impact brought by the increase in raw material prices. This favorable price-combination effect demonstrated the success of the MICHELIN CrossClimate+ and MICHELIN Pilot Sport 4S product lines, driving Michelin-branded tires (up 4%) and sales of 18-inch tires (up 23%). Sales of other brands of the Group increased by 3% over the same period.
Truck tires and related distribution business
Compared with the same period in the first half of 2016, net sales of truck tires and related distribution business increased from 2.907 billion euros to 3.041 billion euros, an increase of 4.6%.
Recurring business operating profit reached 229 million euros, accounting for 7.5% of net sales, and data for the same period of the first half of 2016 was 288 million euros and 9.9% respectively.
The changes in growth mainly reflected stable sales, which was mainly due to the initiative to increase prices and increase profits in the second half of the year. In the first half of the year, new products and services continued to be introduced, and the success of MICHELIN X Multi, MICHELIN X Works, mid-market tire products and tire maintenance services improved.
Special tire business
Net sales of special tires reached EUR 1,755 million, compared to EUR 1,469 million in the same period last year.
The recurring business operating profit was EUR 364 million, accounting for 20.8% of net sales. In the first half of 2016, the figures for the same period were 303 million EUR and 20.6% respectively.
This result was mainly attributed to the 16% increase in sales volume, showing that the Group's mining machine tire market demand continues to pick up, sales of construction machinery and agricultural raw tires increased rapidly, which can fully offset the application of contractual price index adjustment provisions in the first half of the year, raw materials The impact of rising prices and continued price declines.
In general, computer numerical control milling machine (CNC) machining is a deductive manufacturing technique that programs 3-axis linkage, complex to 5-axis linkage, drives milling cutters to remove layers from solid blocks called blanks to produce finished parts. CNC milling is one of the main types of CNC Machining, which uses cutting tools that rotate at a speed of several thousand to tens of thousands of revolutions per minute (RPM) to precisely remove materials to obtain parts with complex surfaces. In addition to milling, CNC machining is also equipped with drills, boring tools, thread cutters and other tools to complete different part features at once. CNC machining produces parts based on a computer-aided design (CAD) model that is sent to a CNC machine through computer-aided manufacturing (CAM) software.
CNC Machining centers developed from CNC milling machines. The biggest difference compare to CNC milling machines is that the machining center has the ability to automatically exchange machining tools, by installing tools for different purposes on the tool magazine, the machining tools on the spindle can be changed through the automatic tool changing device in a single clamping device to achieve a variety of machining functions.
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CNC Milling Finish |
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|
Process |
Roughness Ra(um) |
|
Cylindrical milling cutter milling (rough) |
12.5~3.2 |
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Cylindrical milling cutter (fine) |
3.2~0.8 |
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Cylindrical milling cutter (precision) |
0.8~0.4 |
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Cylindrical milling cutter (rough) |
12.5~3.2 |
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Cylindrical milling cutter milling (fine) |
3.2~0.8 |
|
Cylindrical milling cutter milling (precision) |
0.8~0.4 |
|
Cutter milling (fine) |
12.5~3.2 |
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End milling cutter (rough) |
3.2~0.4 |
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End milling cutter (precision) |
0.8~0.2 |
|
High speed milling (rough) |
1.6~0.8 |
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High speed milling (fine) |
0.4~0.2 |
CNC milling accuracy
CNC milling centers and high-Precision Machining centers. Ordinary machining center, resolution of 1μm, maximum feed speed of 15 ~ 25m / min, positioning accuracy of about 0μm. High-precision machining center, resolution of 0.1μm, maximum feed speed of 15 ~ 100m / min, positioning accuracy of about 2μm. Between 2 and 10 μm, with a ± 5 μm more, can be called precision grade. FCE equipped with different grade and different size CNC milling center. Take in to account into both economic and quality in parallel.
CNC Finishing surface treatment
Post-processing is the final step in the CNC machining process. In a quick guide, we offer a lot of surface treatments to complete your final parts and get them to meet strict specific requirements. It should be noted that in CNC machining, post-processing is in optional, as the quality of the machined parts is already very high.
Anodized
The anodizing process allows the part to obtain excellent corrosion resistance, increasing the hardness and wear resistance of the surface. Anodizing is also the most common pre-painting treatment, which can help the painted surface to obtain good adhesion. We typically apply two types of anodizing in our production: Type II, corrosion resistant; Type III is thicker, adding a layer of wear resistance. Both anodizing processes can achieve a variety of color effects.
Polishing
Grinding polish, it offers the fastest turnaround parts and does not require post-processing. The surface finish of the grinding part is equivalent to 125 um in Ra, and the requirements can be increased to 63, 32 or 16 um Ra. Minor tool marks may still be visible on the last part.
Powder coatings
Powder Coating is thermoplastic powder spraying directly on the processed part. The sprayed parts are then baked in an oven to form a durable, abrasion- and corrosion-resistant plastic coating. In the powder coating process, its color, brightness, surface roughness can be customized.
Shot blasting
Shot peening is the high-speed spraying of beads of different hardnesses and sizes onto the surface of the part. To get different textures and brightness of the surface. Since the surface has been hit by similar forging beads, the hardness and wear resistance of the surface have also been enhanced.
Design of CNC machining
CNC machining is a universal machining process, especially parts that can be cut and machined can be achieved through CNC, from simple shape shapes to complex curved structures. However, as with every manufacturing technique, CNC machining has some design limitations. We break them down as follows to ensure that your products are optimally designed to better fit the CNC machining process.
General Tolerance
When designing parts, the size of each part is different according to the application environment, working conditions, etc., and the requirements for the machining accuracy of the workpiece are also different. Although CNC machining can achieve very high machining accuracy, we should also be aware that demanding machining accuracy and accuracy (strict product tolerances) usually mean Longer production times and higher costs. If a specific tolerance is not specified in the product design, we recommend choosing at the following levels.
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Permissible deviations in mm for ranges in nominal lengths |
Tolerance Class Designation(Description) |
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fine |
medium |
coarse |
very coarse |
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0.5 up to 3 |
±0.05 |
±0.1 |
±0.2 |
-- |
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over 3 up to 6 |
±0.05 |
±0.1 |
±0.3 |
±0.5 |
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over 6 up to 30 |
±0.1 |
±0.2 |
±0.5 |
±1.0 |
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over30up to 120 |
±0.15 |
±0.3 |
±0.8 |
±1.5 |
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over120upto400 |
±0.2 |
±0.5 |
±1.2 |
±2.5 |
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over 400up to 1000 |
±0.3 |
±0.8 |
±2.0 |
±4.0 |
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over 1000up to 2000 |
±0.5 |
±1.2 |
±3.0 |
±6.0 |
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over 2000 up to 4000 |
-- |
±2.0 |
±4.0 |
±8.0 |
The highest precision of our equipment is 0.001, and the recommended most precise machining requirements do not exceed +/-0.005mm
Interior angle
All internal vertical edges of our products need to have rounded corners instead of right angles. This is because the tools used in CNC milling are cylindrical, which means they cannot produce inner right-angled edges. The fillet required by this process is called the inner corner fillet. When designing parts, the larger the inner corner fillet, the more efficient the production process. Because of the larger fillets, larger diameter milling cutters can be used to increase milling speed, and fewer swaps can be made to improve accuracy.
Undercut
Undercut cannot be machined with standard milling cutters, so the use of retract slots for parts should be avoided when designing CNC machined parts. In particular, for non-standard inner contour shapes, customized machining tools are required, which will greatly increase processing time and costs. Secondly, if undercut can not be avoided, due to the limited length of cnc tools, the undercut can not be too deep. If they are too deep or the location is difficult to reach, they will not be able to be produced because the CNC tool cannot reach the machining location.
Chamber wall thickness
CNC machining requires your part design to meet minimum wall thickness requirements. In general, it is recommended to choose the thickest possible and avoid very thin or characteristic walls. This is because CNC tools processing thin-walled parts will cause vibration deformation, which may cause interruptions or damage, and the size is out of specification. The standard minimum wall thickness for CNC machined metals is 0.030" (0.76 mm) and for plastics is 0.060" (1.5 mm).
Thread
When designing parts, it is useful to choose the largest possible thread size because smaller taps have a higher risk of breaking during production. If possible, avoid using deep hole threads as they lead to higher production costs, especially when custom tools are required.
Metal
In principle, materials with high hardness are easier to process because better processing accuracy can be obtained, but they are limited by the hardness of processing tools, so the hardness of the generally recommended parts is 8 ~ 60HRC, and for metal materials, the hardness is greater than stainless steel Followed by cast iron, followed by copper, and finally aluminum, while the processing of ceramics, plastics, etc. belongs to the processing of non-metallic materials. Fast production time.
Polymer
Although CNC can process thermoplastics, the material properties of polymers still have many difficulties for CNC processing. First, due to poor thermal conductivity, many thermoplastics melt or bend when in contact with CNC milling machines or drill bits. Secondly, the processing of plastics, because the hardness is low, the size accuracy caused by the knife during product clamping and processing is not high. For those parts that do not have special requirements for the strength and hardness of the metal, thermoplastics can provide a cheaper alternative.
Cost optimization of machined products
Simplify product design
Simplifying product design while taking into account functionality usually saves production time and reduces production costs. Because the manufacture of complex structures and surfaces often requires complex longer passes, more layering to obtain the same fine contour quality. This means higher production costs.
Reduce cutter changes
Using the same milling machine machining features, larger and same internal fillets, can reduce the number of tools used to reduce machining time. For example, if a workpiece needs a 10mm end face milling cutter to process some features, it also needs a spherical milling cutter to process a curved surface, and a 2mm milling cutter to process a fine groove, which will require repeated tool changes and reduce the machining efficiency
Proper material selection
The choice of raw material for machining can have a significant impact on production time and costs for CNC machining. If possible, choose a material with good processability, such as brass or aluminum. For those applications that do not require metal hardness and strength, CNC machining of engineering plastics like PMMA and ABS also helps to reduce costs because the material blank is cheaper, and the processing efficiency is higher.
Tolerance and wall thickness
Higher tolerances and thinner wall thicknesses also increase THE CORRESPONDING CNC machining costs, as it takes time to achieve higher precision cutting. If your product or component can accept a larger size range, choose a lower tolerance to reduce production time and costs. The same is true for wall thickness: a larger wall thickness margin should be chosen.
Choice of surface treatment
Surface treatment is often the final stage of the CNC machining process, which can also affect the cost of your entire project. Choosing less surface treatment for your part or product can lead to better time and cost efficiency. FCE can recommend to you how to optimize the surface treatment to balance the conflict between cost and quality according to your final needs.
FCE Machining services
FCE facilities are equipped with the most advanced and highest precision 3, 4 and 5-axis CNC machines, which allows us to complete your order in record time
1. 15+ year work experience engineers
2. Fastest 5 days delivery
3. Prototypes can be machined as quickly as 1 day.
4. More than 200 metals and plastics material available in stock
5. Tolerances as low as +-0.005mm
6. ISO 9001: 2015 certified factory
7. 40+ CNC machines
8. 50,000+ machined parts per month
We cooperated with many world top 500 companies and awarded good responds always.
Cnc Milling,Cnc Milling Services,Custom Cnc Milling,Cnc Lathe And Milling Machining
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