2013 Autumn Conference

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1 KEPLER CHEUVREUX 2013 Autumn Conference Paris, September 18, Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

2 September 18, AUTUMN CONFERENCE 1 STRATEGY MOVING FORWARD AS SCHEDULED 2 MICHELIN PERFORMANCE AND RESPONSIBILITY: SIX MAJOR SUSTAINABLE DEVELOPMENT AMBITIONS FOR Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

3 September 18, AUTUMN CONFERENCE 1 STRATEGY MOVING FORWARD AS SCHEDULED 3 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

4 The Three Strategic Pillars Innovate to drive differentiation and loyalty Continuously become more competitive Drive faster growth 4 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

Group Key Figures: Leverage the Group s Strengths to Enhance Profitable Growth and Reduce the Cost Structure Operating profit and margin (before non-recurring items) & ROCE 2,423 14 2,500 12.

5 Group Key Figures: Leverage the Group s Strengths to Enhance Profitable Growth and Reduce the Cost Structure Operating profit and margin (before non-recurring items) & ROCE 2, , % 13 2,000 1,500 1, , % 9.7% % % 1,945 1, % 10.5% 9.5% 9.4% 11.3% 11.3% 1, operating profit target 2,900m 2015 annual ROCE target above 10% 5.6% 5.4% H Operating profit (in m) Operating margin (as a % of net sales) ROCE (in %) 5 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

6 The Three Strategic Pillars Innovate to drive differentiation and loyalty Continuously become more competitive Drive faster growth 6 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

7 MICHELIN: a 100% Premium Brand in Every Market TIER 1 TIER 2 TIER 3 Tier 1 segment: 1/3 of the global PC/LT tire market 2012 sales: more than 70% under the MICHELIN brand Price positioning (100 = Michelin) 7 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

8 Research & Development Centers around the World 8 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

9 Upgrade Projects at the Global R&D Center in Clermont-Ferrand URBALAD 9 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

10 Labeling: Michelin Well-Positioned with all "A " Ratings in Wet Braking 17/18 Top 10 summer car tires in the most recent range in each size Wet braking F E C B A A 1 3 B C E F Tier 1 competitors: 3 G Rolling resistance 10 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

11 Investing in Indonesia to Insource the Technology and Retain Value Added The Indonesian project Synthetic rubber plant scheduled to come on stream in 2017 Joint venture with Petrokimia Butadiene Indonesia Total investment: $435m Michelin contribution: 55% Strategic vision for vertical integration Secure supply Maintain and protect the technology Retain the value added Costs 11 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

12 The Three Strategic Pillars Innovate to drive differentiation and loyalty Continuously become more competitive Drive faster growth 12 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

2012-2016 Competitiveness Plan: 1billion* 317m achieved in 18 months with weak

Manufacturing Transport 152 25 42 194 35 15 20 55 3 55 65 68 2012 gains H1 2013

Total gains 2012 gains H1 2013 objective H1 2013 gains Total gains *before

13 Competitiveness Plan: 1billion* 317m achieved in 18 months with weak volumes OBJECTIVES - 200m/ - 300m - 200m/ - 300m - 500m/ - 600m SG&A Materials Manufacturing Transport gains H objective H gains Total gains 2012 gains H objective H gains Total gains 2012 gains H objective H gains Total gains *before inflation and including avoided cost 13 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

Enhance Productivity: Improving Output per Employee Tonnes per employee (base 100 in 2006) 180 100 100 103 105 99 105 80 103 95 135 101 141 94 137 125 2006 2007

14 Enhance Productivity: Improving Output per Employee Tonnes per employee (base 100 in 2006) Production Tonnes per employee Continuous improvement + industrial footprint 14 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

15 Managing the Business: Becoming more Agile and Competitive New OPE business management program Annual program costs: around 100 million over the next five years 2013e: 82m 2013 plan successfully deployed: Finance ERP implemented in North America, Poland and China Expected outcomes in 2017: At least a 250 million reduction in inventory At least a 200 million reduction in annual SG&A and supply chain costs 15 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

16 The Three Strategic Pillars Innovate to drive differentiation and loyalty Continuously become more competitive Drive faster growth 16 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

17 A Natural Hedging through Balanced Geographic Exposure and Business Portfolio Western Europe North America Rest of the World 17 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

18 Capital Programs Being Deployed on Schedule to Capture Growth Brazil (Michelin-brand Car & Light truck in large rim diam.): production ramp-up (17KT in 2013) China (Michelin-brand Car & Light truck in large rim diam. and Truck): production ramp-up (25KT in 2013) India (Michelin Radial Truck): 1 st tire: July 2013 United States (Mining giant tires): 1 st tire: end Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

Investing to Enhance our Competitive Strengths and Drive New Growth Capex and depreciation (in millions) Capex Depreciation 1,711 1,996 2,000 2,200 1,900

19 Investing to Enhance our Competitive Strengths and Drive New Growth Capex and depreciation (in millions) Capex Depreciation 1,711 1,996 2,000 2,200 1,900 1, ,007 1,100 1,600 1,200 1,300 1,600 1,400 1, e 2014e 2015e 2016e 2017e 19 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

20 September 18, AUTUMN CONFERENCE 2 MICHELIN PERFORMANCE AND RESPONSIBILITY: SIX MAJOR SUSTAINABLE DEVELOPMENT AMBITIONS FOR Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

21 April 2013 International Bib Forum: 3,000 Michelin Group Managers 21 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

22 Michelin Performance and Responsibility: Six Major Ambitions for Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

opportunity Environment Employement Diversity Employee

ethic Noise Recycling Raw materials Water Fuel

23 Michelin Performance and Responsibility: Six Major Ambitions for 2020 Corporate sustainability Equal opportunity Environment Employement Diversity Employee health Plant safety Road safety CO2 emissions Business ethic Noise Recycling Raw materials Water Fuel efficiency 23 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

each market segment Safety Energy saving

24 1 Product Performance Leadership Performance composit index specific to each market segment Safety Energy saving Longevity Road noise reduction with a mass reduction bonus when applicable 2020 new product performance objective: up 10% vs product performance 24 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

2020 Mass reduction 105 Safety 105 Road noise 105 Energy

25 1 Product Performance Leadership: Example 5% on performance + 5% on mass reduction bonus = 10% global Longevity Mass reduction 105 Safety 105 Road noise 105 Energy saving Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

26 2 2 Leadership in Responsible Operations Resource consumption Air emissions Waste Responsible Production Process 2020 Responsible logistics to contribute to 10% CO 2 cut 70% of suppliers in line with Michelin corporate standards 26 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

27 3 Sustainable Financial Performance Deliver a structural 1billion Free Cash Flow from m 599m 1,000m target 2020 ROCE: 15% 10.5% 10.9% 12.8% 15% 5.4% 9% value creation threshold target 27 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

28 4 Commitment to the Well-being and Development of our Employees 75% Managers: coming from within the company Total Case Incidence Rate (TCIR) Women managers: from 18% to TARGET 30% Achieve and maintain an 85% 2012 Employee Engagement Rate at Group level 28 Kepler Cheuvreux 2013 Autumn Conference September 18, < 2020

29 5 Live in Harmony with our Communities 30,000 working days per year donated by Michelin employees to support communities > 2,000 jobs created annually with Michelin involvement to support local businesses 100% of Michelin sites deploy a community involvement program 29 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

30 6 Advocacy: Fostering Better Life through Sustainable Mobility Cement kiln Synthetic sport grounds Re-use in new tires 2014 edition in China Promote mobility solutions Action for road safety 30 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013 Recycling tires

31 Caring about Giving People a Better Way Forward Because we believe mobility is essential for human development. WHY HOW WHAT We innovate passionately to make road mobility safer, more convenient and environmentally friendly. We meet our economic, social and environmental responsibilities through the Michelin Performance and Responsibility Approach. 31 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

32 Key Takeaways Sustainable Financial Performance Robust profitability Efficient competitiveness plan Capital programs being deployed on schedule A new commitment to improvement and growth 6 major ambitions for 2020 Including two financial performance targets: 1 billion structural free cash flow ROCE 15% ACTING FOR SUSTAINABLE MOBILITY AS A RESPONSIBLE COMPANY 32 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

September 18, 2013 2013 AUTUMN CONFERENCE 2 APPENDICES 33

33 September 18, AUTUMN CONFERENCE 2 APPENDICES 33 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

Mining Business: Favorable, Enduring Market Structure

uptime A wide base of profitable customers such as:

independence from suppliers: - proprietary processes

Multiple barriers to entry: - capital intensity, - no

testing capabilities Long-term partnership relations

34 Mining Business: Favorable, Enduring Market Structure Customer demand focused on cost reduction and dumper uptime A wide base of profitable customers such as: No credible substitute product High degree of independence from suppliers: - proprietary processes - vertical integration in semi-finished products Multiple barriers to entry: - capital intensity, - no turnkey plant, - high technological content, - testing capabilities Long-term partnership relations with customers 34 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

35 Sales in Mature and New Markets As a % of net sales 67% 45% 55% 33% As a % of net sales in new markets As a % of net sales in mature markets 35 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

+300* 1,500 570 +300* 1,800 780 830 840 930 1,020 2005 2010 2015 2020 Michelin

36 Passenger Car and Light Truck: Stronger Momentum Worldwide Passenger car & Light truck tire markets (in millions of tires) Mature markets New markets 1,100 1, * 1, * 1, , Michelin estimates * Of which 70% in new markets 36 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

140 86 +30* 170 104 45 40 54 66 2005 2010 2015 2020 Michelin estimates * Of

37 Truck: Robust Growth across every Truck Tire Market Radial Truck Tire Markets (in millions of tires) Mature markets New markets * * Michelin estimates * Of which 70% in new markets 37 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

Car & Light truck Margins: Grow OE Profitability and Lift Mix through Product Innovation and 17 &+ Strategy Operating profit and margin (before non-recurring items) 12% 1,000 830 1,014 1,018 1,033 10.

38 Car & Light truck Margins: Grow OE Profitability and Lift Mix through Product Innovation and 17 &+ Strategy Operating profit and margin (before non-recurring items) 12% 1, ,014 1,018 1, % 2015 op. margin target 10.3% 10% % % 9.3% 600 8% % H Operating profit (in m) Operating margin (as a % of net sales) 38 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

39 Truck Margins: Ready to Lift Margins thanks to Plant Efficiency, Product & Service Plan Operating profit and margin (before non-recurring items) 1, % 6.6% 6.5% 9% 2015 op. margin target 7% % 3.5% % % H Operating profit (in m) Operating margin (as a % of net sales) 39 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

Specialty Tires: Strong Margins at Targetted Levels Operating profit and margin (before non-recurring items) 946 900 800 700 600 500 400 300 388 412 17.8% 17.9% 270 432 17.8% 694 21.5% 26% 24% 23.

40 Specialty Tires: Strong Margins at Targetted Levels Operating profit and margin (before non-recurring items) % 17.9% % % 26% 24% 23.3% 2015 op. margin target % % H Operating profit (in m) Operating margin (as a % of net sales) 40 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

41 Passenger Car and Light Truck: August Market Data in Line with July Passenger car and Light truck tire market data 41 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

42 Truck: August Market Data in Line with July Truck tire market data 42 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

43 Contacts Investor Relations Valérie Magloire Matthieu Dewavrin +33 (0) , cours de l île Seguin Boulogne-Billancourt - France investor-relations@fr.michelin.com 43 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

44 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 documentation published in France by Autorité des marchés financiers available from the website. This presentation may contain a number of forward-looking statements. Although the Company believes that these statements are based on reasonable assumptions at the time of the publication of 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 induced by these statements." 44 Kepler Cheuvreux 2013 Autumn Conference September 18, 2013

NET SALES AT SEPTEMBER 30, October 28, 2013

NET SALES AT SEPTEMBER 30, October 28, 2013 NET SALES AT SEPTEMBER 30, 2013 October 28, 2013 1 NET SALES AT 30 SEPTEMBER 30, 2013 October 28, 2013 Net Sales of 15,282m over First 9 Months, Sales Volumes Up 2% in 3 rd Quarter Markets: up in Q3 Europe: