2009 REGISTRATION DOCUMENT Interview with Michel Rollier 2 1 MICHELIN AT A GLANCE 5 4 CORPORATE GOVERNANCE 81 7 CONSOLIDATED FINANCIAL STATEMENTS 149 1.1. COMPANY PROFILE 6 4.1. A PARTNERSHIP LIMITED BY SHARES 82 7.1. CONSOLIDATED FINANCIAL STATEMENTS 1.2. SUMMARY ORGANIZATION CHART 7 4.2. BOARD AND MANAGEMENT PRACTICES 83 AFR FOR THE YEAR ENDED DECEMBER 31, 2009 150 CONTENTS 1.3. HISTORY AND DEVELOPMENT OF THE COMPANY 7 4.3. ADMINISTRATIVE, MANAGEMENT 7.2. STATUTORY AUDITORS’ REPORT AND SUPERVISORY BODIES, AND SENIOR MANAGEMENT 87 AFR 1.4. PRODUCTION FACILITIES 8 ON THE CONSOLIDATED FINANCIAL STATEMENTS 211 4.4. COMPENSATION, BENEFITS AND STOCK OPTIONS AWARDED TO THE MANAGING PARTNERS AND SUPERVISORY BOARD MEMBERS 93 4.5. TRADING IN MICHELIN SHARES BY MANAGING 2 REPORT OF THE MANAGING AFR PARTNERS AND SUPERVISORY BOARD MEMBERS 8 COMPANY FINANCIAL PARTNERS 11 AND THEIR CLOSE RELATIVES IN 2009 103 STATEMENTS 213 4.6. REPORT OF THE CHAIRMAN OF THE SUPERVISORY BOARD 104 2.1. CHALLENGES AND STRATEGY 12 8.1. FINANCIAL STATEMENTS OF COMPAGNIE GÉNÉRALE AFR 2.2. TIRE MARKETS IN 2009 18 4.7. STATUTORY AUDITORS’ REPORT ON THE REPORT DES ÉTABLISSEMENTS MICHELIN 214 OF THE CHAIRMAN OF THE SUPERVISORY BOARD 111 8.2. STATUTORY AUDITORS’ REPORT 2.3. NET SALES 26 AFR ON THE FINANCIAL STATEMENTS 228 2.4. CONSOLIDATED INCOME STATEMENT REVIEW 30 8.3. STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATED 2.5. CONSOLIDATED BALANCE SHEET REVIEW 38 AGREEMENTS AND COMMITMENTS WITH THIRD PARTIES 229 5 INVESTOR RELATIONS 113 2.6. CONSOLIDATED CASH FLOW STATEMENT REVIEW 43 8.4. STATEMENT OF CHANGES IN EQUITY 230 2.7. RETURN ON CAPITAL EMPLOYED (ROCE) 45 5.1. INFORMATION ABOUT THE COMPANY 114 8.5. APPROPRIATION OF 2009 NET INCOME 231 2.8. TREND INFORMATION 45 5.2. SHARE INFORMATION 116 8.6. FIVE-YEAR FINANCIAL SUMMARY 232 2.9. 2009 HIGHLIGHTS 46 5.3. SHAREHOLDER RELATIONS 119 2.10. INVESTMENTS 52 5.4. DOCUMENTS ON DISPLAY 119 2.11. RISK FACTORS 54 5.5. ADDITIONAL INFORMATION ABOUT THE CAPITAL 120 9 ADDITIONAL INFORMATION 233 2.12. MATERIAL CONTRACTS 58 2.13. CHANGE OF CONTROL 58 9.1. PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND ANNUAL FINANCIAL REPORT AFR 2.14. TRANSFER OF SHARES IN MANUFACTURE FRANÇAISE AND FOR THE AUDIT OF THE ACCOUNTS 234 DES PNEUMATIQUES MICHELIN 59 6 MICHELIN PERFORMANCE 9.2. STATUTORY AUDITORS 235 2.15. INFORMATION CONCERNING SUPPLIER PAYMENTS 59 AND RESPONSIBILITY 127 9.3. 2007 AND 2008 FINANCIAL STATEMENTS 2.16. MATERIAL CHANGES IN THE COMPANY’S BUSINESS 6.1. 2009 EMPLOYEE AND ENVIRONMENTAL INFORMATION INCORPORATED BY REFERENCE AFR 237 OR FINANCIAL POSITION 59 PUBLISHED IN COMPLIANCE WITH FRENCH NRE LEGISLATION 128 9.4. ANNUAL INFORMATION DOCUMENT 237 2.17. OWNERSHIP STRUCTURE AND VOTING RIGHTS 60 6.2. 2009 EMPLOYEE INFORMATION 129 6.3. 2009 ENVIRONMENTAL INFORMATION 141 6.4. REVIEW REPORT FROM ONE OF THE STATUTORY AUDITORS, PRICEWATERHOUSECOOPERS AUDIT, 10 ANNUAL SHAREHOLDERS 3 FINANCIAL HIGHLIGHTS 61 ON THE PROCESSES USED TO COMPILE CERTAIN SOCIAL AND ENVIRONMENTAL INFORMATION, MEETING OF MAY 7, 2010 241 3.1. SALES 62 AND ON CERTAIN SOCIAL, AND ENVIRONMENTAL INDICATORS 148 10.1. MANAGING PARTNERS’ REPORT AND PRESENTATION 3.2. EARNINGS 64 OF THE RESOLUTIONS 242 3.3. REPORTING SEGMENTS 66 10.2. SUPERVISORY BOARD REPORT 254 3.4. COST STRUCTURE 69 10.3. STATUTORY AUDITORS’ REPORTS 255 3.5. CASH FLOW AND BALANCE SHEET 74 10.4. TABLE OF CONCORDANCE 258 3.6. GROUP KEY FIGURES AND RATIOS 79 AFR This pictogram indicates chapters and sections that are also included in the Annual Financial Report. 7 CONTENTS 3 1 2 3 4 DOCUMENT 5 6 7 8 The original French version of this Registration Document was filed with the Autorité des marchés financiers (AMF) on March 1, 2010, in accordance with the provisions of 2009 REGISTRATION Article 212-13 of the General Regulation of the AMF. It may be used in connection with a financial transaction in conjunction with an 9 Information Memorandum approved by the Autorité des marchés financiers. It was prepared by the issuer and is the responsibility of the person whose signature appears therein. 10 7 CONTENTS 3 1 INTERVIEW WITH MICHEL ROLLIER 2 A ROBUST PERFORMANCE DESPITE THE CRISIS 3 4 5 I How have you responded to the economic crisis? I Have you changed your strategy? I How are you progressing with your programs to make Michelin more competitive? For Michelin, the crisis began in mid-2008, and we immediately The crisis has not called into question either our strategic goals or took steps to preserve our main financial metrics. Each day of the paths we’re pursuing to achieve them. On the contrary, it has We’re diligently pursuing our competitiveness programs with unsold production significantly increases our financing needs. inspired us to step up our efforts. Our strategy can be summed the goal of building strong bases in mature markets capable 6 That’s why we introduced a tighter production management up in three key objectives: strengthening our competitiveness of defending our market share against competition from system to control inventory levels. This hands-on approach has through cost reductions; building our presence in emerging tires imported from low-cost countries. A third of our retiring proven effective, helping us to reduce debt and generate positive growth markets; and extending our technological leadership to employees will not be replaced. We’re reducing purchasing cash flow. outperform the competition in value creation and respond to and production costs, as well as overheads. The best standards To limit the impact of the production cutbacks for employees the sustainable mobility challenges facing the road transport and best practices are being deployed on all our sites and new 7 whenever possible, we considerably increased the number of sector. To implement these three strategic priorities, we’re putting technologies are being introduced in every aspect of our business. training days, with programs focused on safety, operational our values into action and exercising all our responsibilities. This We’re upgrading and expanding our plants and refocusing excellence and continuous improvement. We’ve improved the has been clearly demonstrated, for example, by our MICHELIN their operations on specific products, as demonstrated by the supply chain through more accurate forecasting, shortened Energy™ Saver tires, which help reduce fuel consumption adjustment programs underway in North America, France and 8 and CO emissions, as well as by our road safety campaigns, time to market to respond more quickly to customer demand, 2 Japan. Despite the crisis, we will almost meet our cost-cutting broadened our skills base, and enhanced our flexibility. Our workplace safety performance, reduced environmental footprint targets for the 2006-2010 period, and these gains will still be improvements have steadily met the crisis head on. They’ve had and support for employees concerned by restructuring programs. with us once the crisis is past. just as big an impact and they will be lasting. All of the measures are aligned with our Michelin Performance and Responsibility approach. 9 10 2 l MICHELIN / 2009 Registration Document 7 CONTENTS 3 1 Will you scale back spending programs Do the green economy and lower CO emissions I I 2 WE WANT TO ENSURE in fast-growing countries? targets represent an opportunity or a handicap for Michelin? THAT ROAD MOBILITY 2 We don’t intend to. We’re counting on these countries to drive our long-term development since they’re the only regions We think that road mobility will be revitalized by the decisive HELPS TO DRIVE ECONOMIC currently experiencing growth. Today, these markets account for reduction in its energy consumption and its environmental impact AND SOCIAL DEVELOPMENT a little more than 30% of our sales, and our goal is to raise that in terms of pollutants, noise, CO2 emissions and traffic congestion. share to at least 40% over the medium term. We plan to double The green economy is more than an opportunity; it’s a necessity, BY ALIGNING ITS FUTURE 3 our output in China, where the automobile market expanded by given current population growth, especially in urban areas, and WITH THE MAJOR CHALLENGES 45% in 2009, and invest in a truck tire plant in India, a market the mobility expectations of people in developing countries. Plus that enjoys considerable growth potential. We’re going to build it will be the driving force behind the entire economy. Michelin is FACING OUR SOCIETY a new car tire plant in Brazil that will triple our local production well positioned and well prepared to play our role as technology 4 capacity. And to bring these projects to fruition, we need the full leader. commitment of every team member around the world. I What’s the outlook for Michelin? 5 I Given the popularity of small cars and today’s more competitive market, aren’t your tires too expensive? In the short term, visibility is still limited. Demand is growing in Looking out to the longer term, we are confident. Our company’s China and a number of other Asian markets, while in Europe and storied past reflects the ability to adapt to situations. Michelin Consumers around the world expect a lot from our tires, North America, the massive inventory drawdowns are behind could not have become a world leader without a number of whether for big cars or small. They know that MICHELIN tires us and the situation is improving. In the passenger car and light key strengths, beginning with our people, who have always 6 are more expensive but they also know that our tires are the truck tire segment, dealers have started to rebuild inventory.