Shareholder s 2011 edition

Transcription

1 Michelin Individual Shareholder s Guide 2011 edition A NEW PHASE OF DYNAMIC GROWTH

2 Contents_ 1 Interview with Michel Rollier, Managing Partner 2010 Business Review and Outlook. P Business review and results Trends and Results by Key Market. P Michelin at a glance Getting to know the Group, its Performance and Management Team. P In close touch with our shareholders Ongoing Dialogue for a Carefully Nurtured Relationship. P To find out more, please visit the Finance section of our website. +

3 interview with michel rollier Michelin - Individual Shareholder s Guide edition 1 With its new phase of dynamic growth, Michelin is embarking on its most ambitious project in 30 years. How was business in 2010? MICHEL ROLLIER Thanks to the remarkable dedication of our teams across the organi zation, Michelin amply benefited from the upturn in demand. Tire markets were up in all regions of the world. Our net sales rose by over 20%, with a more than 13% increase in volumes. Our operating margin came to 9.5%, based on record-high operating income of nearly 1.7 billion. Our net income exceeded 1 billion. The Horizon 2010 plan has delivered savings of over 1 billion over the last the road around the world, and there ll probably be 1.6 billion by This means that our markets are going to enjoy strong growth, as customer needs become increasingly diverse. In China, South America, India, Russia and the Middle East, growth could be as high as 10% a year. At the same time, the transportation industry is leading a profound transformation to spend less but more effectively, reduce costs and lessen environmental impacts. These new demands will enable the best in the indusfive years, raised plant productivity by 35% and spectacularly improved workplace safety, with the accident frequency rate hitting a record low of Michelin has emerged from the crisis stronger than ever and ready to capture all of its markets extraordinary growth potential. The success of the 1.2 billion rights issue carried out last October has given us the resources to do so. How are your markets doing? MICHEL ROLLIER Today, there are 800 million vehicles on

4 2 try, like us, to make a difference. How is Michelin positioned with regard to these changes? MICHEL ROLLIER The growth in the global tire market and the transportation industry s ongoing response to the challenges of sustainable development present historic opportunities for Michelin. Geographically, the extensive capacity scheduled to come on stream in Brazil, China and India will enable us to capture all of the growth in these markets starting in Technologically, we have proactively responded to changing demand by bringing to market lighter tires that deliver greater safety, longer tread life and better fuel efficiency. This balanced performance and the ability to simultaneously improve all of the different performance factors are unique to Michelin. In line with our vision of a better way forward, every day, our Michelin Performance and Responsibility approach is demonstrating its strength and effectiveness in meeting the challenges of tomorrow. Our decision in 2010 to pledge to support the United Nations Global Compact further highlights our commitment to responsible development. Raw materials costs are rising sharply. Will you be able to pass them on in your prices? MICHEL ROLLIER That s what we did throughout We are determined to protect our margins and we re in a good position to do so, thanks to the superior advantages that we offer both to carmakers, in terms of environmental performance, and to users, in terms of safety, longevity and fuel efficiency. As regulations become stricter and raw materials and energy become more expensive, the quality of our products and services will become more valuable. As proof, just look at 2010, when we sold more MICHELIN brand passenger car and light truck tires than ever before, in both mature and fast growing markets. In October, you presented your new phase of dynamic growth for the period. What are your objectives in this phase? MICHEL ROLLIER Our strategy for the next five years hinges on three main objectives. The first is strong, diversified growth. We re aiming to increase sales volumes by 25% by 2015 and by 50% by 2020, by capturing share in the new markets and adding value to our products and services in mature markets. The second objective is to become more competitive. We now have increasingly efficient plants in the mature economies. We intend to build on these gains, by pursuing our continuous improvement process. We plan to invest 1.6 billion a year between 2011 and 2015 to support our growth and competitiveness targets. This is a much bigger commitment than before. The third objective is to maintain our business performance. Our target for 2015 is operating income well in excess of 2 billion, ROCE of more than 9% and positive free cash flow generated over the entire period. What are your growth drivers? MICHEL ROLLIER The first one is our ability to satisfy the real needs of our customers through innovation. This has always been Michelin s strength, and the new organizations will provide us with even greater leverage in this area. Another powerful driver is the MICHELIN brand, with its extraordinary capital of trust and affinity. In fact, the brand will be the primary source of our growth, because it delivers the balanced performance that customers expect and society needs. At the same time, we plan to develop the market for affordable highperformance tires, which represent more than 40% of the global market. Our growth in this segment will be spearheaded by our brand portfolio. In addition, growth will also be driven by our services, which we plan to enhance and diversify in order to build even stronger relations with all of our dealer and distribution stakeholders. Through our Michelin Performance and Responsibility approach, we will pursue our commitment to improving working conditions, training, diversity, partner relationships and the environmental footprint of our production facilities. Lastly, and most importantly, we are counting on the professionalism and dedication of our employees, who have enabled Michelin to overcome obstacles to become a world leader. With its

5 3 strategic plan, Michelin is embarking on its most ambitious project in 30 years. It will be supported by our Moving Forward Together program, which embodies our shared dedication to success. I am quite confident that we will indeed succeed. You have also announced that you are preparing your succession, even though your term runs until Isn t this premature? MICHEL ROLLIER On the contrary, I feel this is exactly the right time. The reins should be handed over smoothly in the best interests of the Company, its shareholders and its employees. I discussed my decision thoughtfully and at great length with the Supervisory Board. Jean-Dominique Senard and I have worked closely together for six years, and I ve come to appreciate his qualities, both as a person and as a business leader. Shareholders will be asked to elect him as Managing General Partner at the Extraordinary Meeting on May 13, I would also like Michelin s corporate governance to be adjusted, so I m going to recommend expanding the Supervisory Board s role and limiting the term of future Managing Partners to four years, renewable one or more times. In practical terms, how will the transition be organized? MICHEL ROLLIER If shareholders approve these recommendations at the Extraordinary General Meeting, I will remain Managing General Partner until Jean-Dominique Senard replaces me and Didier Miraton will remain Non-General Managing Partner. I will continue to serve in my current position for 18 months to two years and, once the transition is completed, I can retire. I m certain that Jean-Dominique Senard and Didier Miraton will then be able to lead the Group with the requisite skills and vision, in complete accordance with Michelin s values. Michel Rollier

6 4 A NEW PHASE OF DYNAMIC GROWTH With its high-quality products and services, attractive brands, outstanding operating performance and robust balance sheet, Michelin has emerged from the recent recession stronger than ever, thanks to the dedication of its employees, the loyalty of its customers, and the lasting trust of its shareholders. By 2030, the number of vehicles worldwide will have doubled and road mobility will have to substantially reduce its energy consumption and its environmental impact. Both of these trends represent powerful growth drivers for Michelin. A pioneer and active promoter of sustainable mobility and one of the few global tiremakers, Michelin has embarked on a new phase of dynamic growth. To meet the challenges that lie ahead, the Group can leverage such core strengths as its technological leadership, its capacity for innovation and the power of the Michelin Performance and Responsibility approach. Throughout, the organization will remain sharply focused on helping to enhance mobility while creating value for customers, employees, shareholders and society as a whole. Michelin at a glance 111,090 employees (105,057 full-time equivalents) 70 production facilities in 18 countries e17.9 Bn in net sales

7 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 5 michelin at a glance contents Corporate Profile p. 06 Challenges and strategy p. 08 Corporate Governance p. 16 Control p. 18

8 6 Corporate Profile Michelin holds forefront positions in every tire market (1) as well as in travel-related services. Leveraging its technological lead, capacity for innovation, high-quality products and services, and powerful brands, the Group is pursuing a global expansion strategy and improving efficiency in every aspect of its business. Its corporate mission is to secure its sustainable growth in order to help improve mobility and create value for customers, employees and shareholders (1) With a 15.5% share of the global market by value according to Tire Business 2010 Global Tire Company Rankings. A comprehensive brand portfolio A global brand: MICHELIN. A primary brand dedicated to sports cars and SUVs: BFGoodrich. Strong regional brands: UNIROYAL in North America, KLEBER in Europe and WARRIOR in China. Market-leading national brands. Retread solutions. Product and service dealership networks.

9 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 7 Products and services that set the standard for quality and reliability For its customers the world over, Michelin delivers diversified and innovative products and services designed to facilitate mobility across the full range of applications. Tires for cars, vans, trucks, farm tractors, handling and construction equipment, motorcycles, scooters, bicycles, aircraft, subway trains, trams and space shuttles, with innovative solutions tailored to widely varying conditions of use and expectations. Distribution and services, with the integrated Euromaster (Europe) and TCI (United States) dealership networks and the TyrePlus franchises or brand partnerships for car tires in Asia, the Middle East, Russia, Australia and Mexico. Customer assistance services with Michelin OnWay and Michelin Euro Assist. Fleet tire advice and management services with Michelin Fleet Solutions in Europe and Michelin Business Solutions in North America. MICHELIN maps and guides and ViaMichelin mobility assistance services. Michelin Lifestyle products developed in partnership with licensees: car and bike accessories, work, sport and leisure gear, and collectibles. AN EFFICIENT ORGANIZATION 8 Product Lines, each with its own marketing, development, production and sales resources. A Technology Center in charge of research, development and process engineering, with operations in Europe, North America and Asia. 2 Integrated Tire Dealership Networks: Euromaster and TCI. 2 Specialty Units: ViaMichelin and Michelin Lifestyle. 8 Regions: North America, South America, Western Europe, Eastern Europe, ASEAN/Australia, China, Japan/South Korea and Africa/India/Middle East. 13 Corporate Departments that support the Product Lines and the Technology Center and impel general corporate policies. 4 Performance Divisions: Research-Development-Process Engineering, Manufacturing, Sales and Marketing, and Supply Chain and Logistics

10 8 CHALLENGES AND STRATEGY With the strategic plan s focus on growth, competitiveness and commitment, our strategic vision is designed to deliver strong, diversified growth by capturing the full value of our products and services in mature markets and expanding more quickly in new markets. As we continue to make our organization more competitive and cost-effective, the mutual commitment of the Company and its employees will enable us to successfully move forward together. THE FUTURE SHAPE OF MOBILITY Road mobility is a key driver of economic development but its growth poses enormous challenges in the areas of safety, energy, the climate and the environment, where expectations are high and the sense of urgency is growing. The transportation industry is undergoing a radical transformation. For Michelin, the challenge is to fully leverage both our skill in identifying emerging needs and our innovation capabilities to develop cleaner, safer, more fuel-efficient road mobility solutions that make optimum use of information and communication technologies. This is our corporate mission. The right tire changes everything The global advertising campaign, starring the famed Michelin Man, was rolled out in 55 countries on five continents in million vehicles today 1.5 billion vehicles by 2030 In million units 3,000 2,500 2,000 1,500 1, Passenger cars Commercial vehicles Total vehicles Sources : OCDE, IRF, FMI, IHS Global Insight

11 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 9 KEEPING PACE WITH THE SHIFT IN DEMAND OUR CORE STRENGTHS The shift in demand towards China, India, Brazil, Russia and the Middle East, along with competitive pressures and changing needs in Europe and North America are having a fundamental impact on manufacturing strategies. We will need to build new capacity in fast-growing regions and to improve our competitiveness and responsiveness in mature markets. Everywhere in the world, we need to be close to our customers. That s why instilling a real culture of diversity provides a significant competitive advantage. At the same time, growing globalization of purchasing and production calls for heightened vigilance with regard to working conditions. We have a number of strengths that will help us meet the challenge of sustainable mobility and support a new phase of dynamic growth: The MICHELIN brand is recognized for its superior performance in delivering enhanced safety, longevity and fuel efficiency, pushing the boundaries in all these performance metrics. As technological leader, Michelin is constantly raising the performance bar in ways that impact both consumer standards and tire regulations. Michelin is a global player, with operations in all countries and leading positions in all markets. The Group boasts a healthy balance sheet following the successful 1.2 billion share issue carried out in October It is deploying a balanced growth strategy, coordinated by the Michelin Performance and Responsibility approach, delivering benefits for all stakeholders. Asia has five times as many people as Western Europe and the United States combined, yet only 49 cars per 1,000 residents. The 10 th Michelin Challenge Bibendum was held in Rio de Janeiro in The world s leading sustainable mobility event, Challenge Bibendum enables carmakers, auto equipment manufacturers, energy companies, research institutes and government agencies to exchange ideas about the future of mobility and to compare their leading edge technologies. US$ 3.2 Bn estimated value of the MICHELIN brand Brand Finance MICHELIN, N0 1 for perceived quality in 10 major markets

12 10 The Group is aiming for 25% growth in unit sales by 2015 and 50% by With its strategic plan, it is embarking on its most ambitious project in 30 years. STRONG, DIVERSIFIED GROWTH INNOVATING AND CREATING COMPETITIVE DIFFERENTIATION Michelin is the tire industry s biggest investor in innovation, developing technological responses to the challenges of higher raw materials and energy costs, and stricter safety and environmental standards. Our Technology Center is deploying facilities around the world to better anticipate customer needs and align products and services with local demand. New work organizations are being put in place to drive faster, more efficient innovation. This is being achieved by promoting dialogue between the Research-Development-Process Engineering and Strategic Marketing teams, generating feedback from customers and other market players throughout the innovation process and completing the process-engineering phase more quickly. LEVERAGING GROWTH DRIVERS While our growth strategy is underpinned by sales of MICHELIN-brand products and services, it is being enhanced by a multi-brand portfolio focused on the fast-growing segment of competitively priced tires for high-performance vehicles. Our market access strategy helps to impel this growth, with a target of 1,000 Euromaster franchise outlets in Europe by 2015 and 1,800 TyrePlus centers in the new markets. The retread business is also being actively expanded, to encourage the truck market shift to radial tires. A STEPPED UP CAPITAL EXPENDITURE A total of 1.1 billion was spent in 2010 and the strategic plan provides for 1.6 billion in capital spending per year to: Sharply increase production capacity in fast-growing markets. Align manufacturing operations with demand in mature markets and increase competitiveness. Set up information systems that enable us to meet our operational excellence and service quality objectives. Three high-capacity plants are under construction to serve vibrant emerging markets: Pau Brasil, a car and light truck tire plant in Brazil. Chennai, a truck and earthmover tire plant in India. Shenyang 2, a car and truck tire plant in China. The three projects represent a total investment of 2.75 billion and will come on stream in 2012.

13 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 11 LEADING THE TIRE INDUSTRY IN R&D 6,000 employees, 500 million per year. 8,500 patents, three times more than 10 years ago. 100-million project to comprehensively upgrade the worldwide Technology Center in Clermont-Ferrand by 2016, with the construction of modern new buildings to house all of Michelin s R&D teams on the same site % growth in unit sales by 2015 e1.6 Bn in annual capital expenditure in the period % of sales in emerging markets by ,000 t annual growth in production capacity over the period w w w Michelin, the world leader in fuel-efficient tires, pioneering the new product-service system. 1,000 TyrePlus centers in nine countries, in new growth regions. Michelin has acquired 100% control of Shanghai Michelin Warrior Tire in China and Tigar in Serbia, and set up distribution partnerships with Taqui Pneu in France and Rodi in Spain. Architect s plans for the new Technology Center in Ladoux (France)

14 12 ENHANCED COMPETITIVENESS Michelin is leading a transformation program to improve competitiveness and reduce costs. A total of 1.2 billion in savings were achieved between 2006 and As demand recovers, we are reaping the full benefits of these cost efficiencies. POWERFUL MANUFACTURING RESOURCES IN THE WESTERN WORLD By consolidating production at larger, more specialized facilities, investing in productivity and deploying the Michelin Manufacturing Way (MMW), Michelin has assertively improved its manufacturing operations and created highly competitive plants in Europe and North America. After the United States, Spain and Italy, the industrial reorganization plan in France has now been completed on schedule. All employees affected by the reorganization have received personalized support. Plans are now underway to optimize the supply and distribution chains. This will drive further improvement in order fill rates, reduce inventories and deliver increased flexibility thanks to powerful synergies between our supply chain, logistics, sales and manufacturing operations. A CONSTANT COMMITMENT TO PROGRESS Michelin is transforming its business processes to do things better, faster and at a lower cost, while aligning all of its teams behind its priority targets. From design, innovation and process engineering to project management, administration, logistics and customer relations, all of the major business processes are being reviewed with a focus on speed, simplicity, efficiency and employee empowerment. The main performance indicators are accident frequency and severity, workstation ergonomics, customer satisfaction, materials waste, product quality, Michelin s own cost and productivity metrics and the Michelin site Environmental Footprint (MEF), a composite indicator that measures environmental impact. e1.2 Bn in savings between 2006 and 2010.

15 w w Standardization is reducing capital project costs and speeding the ramp-up process. DOING THINGS BETTER AT A LOWER COST Rapid advances are being driven by widely used systems such as Bib Standard, Bib Boost, Bib Flex, Bib Detect, Bib Innovation and Bib Ramp Up, which require little or no investment. w w Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition SPECIALIZED PLANTS IN FRANCE - 4WD and light truck tires at Cholet - Super Sport and racing tires at Clermont-Ferrand - Truck tires at Joué-lès-Tours - Earthmover tires, rubber compounds and metal fabrics at Montceau-les-Mines - Aircraft tires at Bourges SCALE EFFICIENCIES IN MANUFACTURING OPERATIONS Over 50% of car and truck tires are manufactured at plants with a capacity of at least 100,000 tonnes, twice as many as in Western Europe 32 plants 10 PCLT sites 12 TT sites 7 ST sites 6 component and semi-finished product sites 51,356 employees* Eastern Europe 8 plants 5 PCLT sites 3 TT sites 3 ST sites 1 component and semi-finished product site 12,085 employees* North America 18 plants 10 PCLT sites 4 TT sites 3 ST sites 2 component and semi-finished product sites 20,994 employees* Asia 7 plants 4 PCLT sites and 1 under construction 3 TT sites and 1 under construction 2 ST sites 2 component and semi-finished product sites 14,458 employees* South America 4 plants 2 PCLT sites and 1 under construction 3 TT sites 1 ST site 5,086 employees* Africa and the Middle East 1 plant 1 TT site 1,078 employees* *Full-time equivalent employees at December 31, PCLT: passenger car and light truck tires TT: truck and bus tires ST: specialty tires

16 14 The Michelin corporate community is made up of more than 110,000 people, representing 120 nationalities. Their diversity, professionalism and commitment make them the driving force behind our performance and development, supported by an employee relations process rooted in dialogue and mutual respect. MOVING FORWARD TOGETHER A MUTUAL COMMITMENT Michelin is committed to enabling every employee to find fulfillment in his or her job responsibilities, to promoting diversity and to combating all forms of discrimination. Training policies allow each employee to continue to grow and develop throughout his or her career. All employees receive performance-based compensation, with profit-sharing and bonus systems adapted to each country and job function. Michelin has also set up a stock option plan open to a broad range of managers and regularly carries out worldwide employee rights issues. RESPECTING EMPLOYEES Workplace safety is a priority concern, as reflected in the practices and performance that have given Michelin one of the best track records of any manufacturing company worldwide. All possible measures are taken to limit short-time working, for example by launching preventive maintenance operations, organizing training courses, and asking staff to take their vacation early. When industrial reorganization programs are necessary, the employees concerned are offered solutions within the Group and personalized support. MICHELIN PERFORMANCE AND RESPONSIBILITY Michelin is dedicated to enhancing mobility by basing its development on the core values of Respect for Customers, Respect for People, Respect for Shareholders, Respect for the Environment and Respect for Facts. The Michelin Performance and Responsibility approach structures this corporate culture and coordinates our commitment to the principles of sustainable, balanced, responsible development. Ten major challenges have been selected for priority action, project leaders have been appointed and action plans have been launched, backed by indicators to measure progress and performance.

17 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 15 w The Michelin Performance and Responsibility Charter adopted in 2002 has been translated into 15 languages. In 2010, the Michelin Performance and Responsibility: A Better Way Forward brochure was published to show each employee how he or she can effectively contribute to the process every day. 10 MAIN AREAS FOR IMPROVEMENT The responsible performance of Michelin products and services. The environmental impact of tire use. The recovery, reuse and disposal of end-of-life tires. Team diversity. Relations with local communities. Quality of worklife on the Group s sites (ergonomics, safety). Environmental management of Michelin sites. Industrial risk management. Michelin s contribution to sustainable mobility. Responsible procurement. w A RECOGNIZED COMMITMENT In 2010, Michelin pledged to support the United Nations Global Compact and was included in the ASPI Eurozone, Ethibel Excellence Europe, DJSI World and DJSI Europe indices of companies with the highest sustainable development performance

18 16 CORPORATE GOVERNANCE A PARTNERSHIP STRUCTURE SUPPORTING A LONG-TERM VISION Tire manufacturing is a capitalintensive industry in which the pace of technological innovation is relatively slow. It is therefore essential to be able to devise long-term plans and follow them through. In France, incorporating as a partnership limited by shares (SCA) provides a legal framework aligned with this longer-term view. Organized as an SCA since its formation, Compagnie Générale des Etablissements Michelin (CGEM), the Group s parent company, has found that this partnership model offers three main advantages: - it supports the deployment of longterm strategies by a stable management team whose interests are aligned with those of shareholders ; - it guarantees clear segregation of management and supervisory powers ; - it fosters direct ties with each shareholder as all shares must be registered. MANAGING PARTNERS A STABLE, RESPONSIBLE MANAGEMENT TEAM The Group is managed by Michel Rollier, Managing General Partner, and Didier Miraton and Jean-Dominique Senard, Non-General Managing Partners. They are assisted by the Executive Council, comprised of seven executives responsible for the Product Lines, Corporate Services and Performance Divisions. Michel Rollier Born in Graduate of Institut d Etudes Politiques (IEP) Paris, MA in Law. Joined Aussedat-Rey (a member of the International Paper Group) in 1971 as Financial Controller, going on to become head of an operating unit, then Chief Financial Officer from 1987 to 1994 and Deputy Chief Executive Officer from 1994 to Joined the Michelin Group in Vice President, Finance and Legal Affairs. Appointed Chief Financial Officer and member of the Executive Council in October Managing Partner since May 20, Jean-Dominique Senard Born in Graduate of HEC business school, MA in Law. From 1979 to 1996, held various management positions in finance and operations at Total then Saint-Gobain. Joined Pechiney in 1996 as Chief Financial Officer and member of the Executive Committee, then Director, Primary Aluminum Division, until Subsequently appointed as a member of Alcan Group s Executive Committee and Chairman of Péchiney SA. Joined Michelin in 2005 as Chief Financial Officer and member of the Executive Council. Managing Partner since May 11, Didier Miraton Born in Graduate of Ponts et Chaussées engineering school. Joined Michelin in 1982, spending most of his career working in research and innovation in France and the United States, with a focus on Truck, Earthmover and Handling Equipment tire technologies. Appointed Managing Director of the Michelin Technology Center and member of the Executive Council in Managing Partner since May 11, 2007.

19 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 17 EXECUTIVE COUNCIL Éric de Cromières Marketing and Sales Performance, Euromaster, TCI, Maps and Guides, ViaMichelin, Michelin Lifestyle. Also responsible for overseeing Information Systems. Claire Dorland-Clauzel Communication and Brands. Jean-Christophe Guérin Manufacturing Performance. Also responsible for overseeing Quality and Supply Chain operations. Jean-Michel Guillon Human Resources. Organization. Also responsible for Security. Florent Ménégaux Passenger Car and Light truck tires. Also responsible for overseeing Racing. Pete Selleck Truck Tires. Bernard Vasdeboncœur Speciality tires: Agriculture, Aviation, Two-wheel, Earthmovers, Components Also responsible for overseeing Procurement

20 18 Control Independent Supervisory Bodies Reporting Directly to Shareholders The Supervisory Board oversees Michelin s management on an ongoing basis on behalf of the shareholders and reports to shareholders on its oversight activities at each Annual Meeting. It has eight members. Supervisory Bodies

21 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition Pat Cox Independent Member Born in 1952 Irish 259 Michelin shares Pat Cox was a Member of the House of Representatives of Ireland and a Member of the European Parliament, where he served as President from January 2002 to June Benoît Potier Independent Member Born in 1957 French Member of the Audit Committee 3,117 Michelin shares Benoît Potier has been with Air Liquide for 25 years. He became Chief Executive Officer in 1997, Chairman of the Management Board in November 2001, and Chairman and Chief Executive Officer in May François Grappotte Independent Member Born in 1936 French Chairman of the Audit Committee 1,240 Michelin shares After 20 years as Chief Executive Officer of Legrand, François Grappotte served as non-executive Chairman beginning in 2004 and was named Honorary Chairman on March 17, Laurence Parisot Independent Member Born in 1959 French 500 Michelin shares After serving as Chief Executive Officer of the Louis Harris France Polling Institute (1986), Laurence Parisot was named Chief Executive Officer of Institut Français de l Opinion Publique (Ifop) in She was also Chairperson of Optimum until March Since July 2005, she has been President of the French employers federation (MEDEF). 05 Pierre Michelin Independent Member Born in 1949 French Member of the Audit Committee 1,747 Michelin shares After serving in Philips IT department, Pierre Michelin joined Groupe Bull, where he currently heads a division. Since 2003, he has also been a Professor of Information Systems at the Reims Management School. 06 Éric Bourdais de Charbonnière Independent Member Born in 1939 French Chairman of the Supervisory Board Member of the Audit Committee 3,198 Michelin shares After 25 years with JP Morgan, where he was Chief Executive Officer for France, Éric Bourdais de Charbonnière served as Chief Financial Officer of Michelin from 1990 to 1999, when he retired. He has been Chairman of the Supervisory Board since Barbara Dalibard Independent Member Born in 1958 French 433 Michelin shares Barbara Dalibard has been Chief Executive Officer of the French national railways travel division, SNCF Voyages, since She was previously a member of the France Telecom Executive Committee, in charge of corporate communication services. Before that, she held various management positions at France Telecom and Alcatel. 08 Louis Gallois Independent Member Born in 1944 French 300 Michelin shares Louis Gallois is Chief Executive Officer of EADS and President of the Airbus Shareholders Committee. He has served as Chairman of SNCF and held various positions in the aviation industry as well as at the Ministry of the Economy and Finance, the Ministry of Research and Industry, and the Ministry of Defense. STATUTORY AUDITORS PricewaterhouseCoopers Audit Represented by Christian Marcellin, Partner, and his substitute Pierre Coll. Deloitte & Associés Represented by Dominique Descours, Partner, and his substitute, BEAS.

22 20 In 2010, Michelin recorded historic results with a 13.4% increase in sales volumes, led by the Group s global presence and the rebound in mature markets. Net Sales, up 20.8%, amounted to 17.9 billion. The Group also posted operating income of 1,695 million euros and 9.5% operating margin And generated positive free cash flow of 426 million euros at a time of sharply rebounding demand, rising raw materials prices, revitalized capital expenditure and prepaid contribution to pension plans. Business review and results Sales and marketing operations in 170 countries 75% OF CONSOLIDATED SALES GENERATED IN THE REPLACEMENT MARKET. 9.5% OPERATING MARGIN BEFORE NON-RECURRING ITEMS.

23 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 21 business review and results Contents Financial Results and Structure p. 22 Income Statement Cash-Flow statement Balance Sheet p Operating Highlights p. 29 Passenger car and light truck tires p. 30 Truck tires p. 31 Specialty businesses p. 32 Outlook for 2011 p. 33

24 22 Financial Results and Structure A NEW PHASE OF DYNAMIC GROWTH For Michelin, 2010 was a year of strong growth, enhanced manufacturing flexibility and historically high margins. In recent years, Michelin has laid the foundations for a new phase of dynamic growth, built on the dedication and professionalism of our teams, the value of our brands and a clearly strengthened balance sheet. NET SALES Consolidated net sales amounted to 17,891 million, up 20.8% at current exchange rates compared with The increase was led by a 13.4% improvement in sales volumes and a 1.7% gain from the price mix, as higher prices amply offset the impact of an unfavourable product mix throughout the year. The latter reflected the faster growth in original equipment volumes than in the replacement segment. The favorable 2.6% price effect gathered momentum on price increases in every region and the application of contractual clauses indexing prices to raw materials costs. The 4.8% positive currency effect resulted mainly from increases in the US dollar, Brazilian real, Canadian dollar and Australian dollar against the euro. Analysis of Net Sales In million and percentage of net sales 14, Net sales +1,982 Volumes +13.4% +278 Price mix +1.7% +824 Currency +4.8% 17, % 2010 Net sales

25 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 23 E17,891 Million net sales in millions 16,384 16,867 16,408 17, net sales by region as a% of the total inside the chart in millions and as % change outside the chart 43% 23% 2010 net sales by Business as a% of the total inside the chart in millions and as % change outside the chart 55% 13% 14, % 32% 7,682 / +13.8% Europe 6,148 / +23.1% North America and Mexico 4,061 / +32.7% Other regions 9,790 / +18.2% Passenger car and light truck tires and related distribution 5,680 / +26.3% Truck tires and related distribution 2,421 / +19.2% Specialty businesses

26 24 RESULTS Operating income before non-recurring income and expenses amounted to 1,695 million or 9.5% of net sales, compared with 862 million and 5.8% in There were no non-recurring items recognized for the year. The 833-million increase in operating income and 3.7-point improvement in operating margin, before nonrecurring income and expenses, mainly reflected the favorable impact of higher volumes ( 914 million), the price mix ( 278 million, including 391 million from higher prices) and the currency effect ( 184 million). Higher raw materials prices reduced operating income by 544 million. E1,049 Million Net income in millions ,049 E1,695 Million Operating income (1) in millions Operating margin (1) as a % of net sales 1, % 1, % % 5.8% 1, % Net income for the year came to 1,049 million (1) Before non-recurring items Analysis of Net Sales In million and as a percentage of net sales , Price-mix (o/w price: + 391m) Volumes External costs* (o/w raw materials: - 544m) Cost of driving growth Productivity Currency 2009 Operating Income before non-recurring items 2010 Operating Income before non-recurring items *External costs: raw materials and logistics at constant exchange rates

27 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition operating income (1) by business in millions inside the chart as a % of net sales and change in points outside the chart 1,014 NET FINANCIAL POSITION Free cash flow stood at a positive 426 million for the year, despite a strong rebound in business, higher raw materials costs, an upswing in capital expenditure to 1.1 billion and a prepaid contribution to pension plans totaling 270 million. Following the success of the 1.2 billion rights issue, gearing declined to 20% at December 31, 2010, while net debt was reduced to 1,629 million, from 2,931 million at year-end E426 Million Free cash flow (2) in millions 443 1, (39) (359) (2) Cash flows from operating activities less cash flows from investing activities (excluding cash flows from cash management financial assets and borrowing collaterals). 10.4% / +2.4 pts Passenger car and Light truck tires and related distribution 4.4% / +5.9 pts Truck tires and related distribution 17.8% / +4.5 pts Specialty businesses Gearing Net Debt / Equity Ratio 86% 84% 80% 75% 70% 55% 53% (1) Before non-recurring items. 20% June 30, 2007 Dec. 31, 2007 June 30, 2008 Dec. 31, 2008 June 30, 2009 Dec. 31, 2009 June 30, 2010 Dec. 31, 2010

28 26 CONSOLIDATED INCOME STATEMENT (in millions except per share data) Year ended December 31, 2010 Year ended December 31, 2009 Net Sales 17,891 14,807 Cost of sales (12,403) (10,527) Gross income 5,488 4,280 Sales and marketing expenses (1,847) (1,650) Research and development expenses (545) (506) General and administrative expenses (1,237) (1,113) Other operating income and expenses (164) (149) Operating income before non-recurring income and expenses 1, Non-recurring expenses - (412) Operating income 1, Cost of net debt (236) (262) Other financial income and expenses Share of profit/(loss) from associates 29 9 Income/(loss) before taxes 1, Income tax (449) (103) Net income/(loss) 1, Attributable to the shareholders of the Company 1, Attributable to the non-controlling interests 1 (2) Earnings per share (in E) Basic Diluted

29 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition CONSOLIDATED CASH FLOW STATEMENT 27 (in millions) Year ended December 31, 2010 Year ended December 31, 2009 Net income 1, Adjustments Cost of net debt Other financial income and expenses (10) (40) Income tax Amortization, depreciation and impairment of intangible assets and PP&E Non-recurring income and expenses Share of loss/(profit) from associates (29) (9) EBITDA before non-recurring income and expenses 2,660 1,802 Other non-cash income and expenses (14) (28) Change in provisions, including employee benefit obligations (423) (372) Cost of net debt and other financial income and expenses paid (177) (207) Income tax paid (297) (19) Change in working capital, net of impairment (427) 947 Cash flows from investing activities 1,322 2,123 Purchases of intangible assets and PP&E (964) (707) Proceeds from sale of intangible assets and PP&E Equity investments in consolidated companies, net of cash acquired (4) (1) Disposals of equity investments in consolidated companies, net of cash sold - 10 Purchases of available-for-sale investments (14) (5) Proceeds from sale of available-for-sale investments 1 29 Cash flows from other financial assets (743) (109) Cash flows from investing activities (1,663) (736) Proceeds from issuance of shares 1,204 2 Dividends paid to the shareholders of the Company (65) (65) Proceeds of the issuance of convertible bonds - - Cash flows from financial liabilities (437) (667) Other cash flows from financing activities (39) (20) Cash flows from financing activities 663 (750) Effect of changes in exchange rates 37 2 Increase/(Decrease) of cash and cash equivalent Cash and cash equivalents as at January 1 1, Cash and cash equivalent as at December 31 1,590 1,231

30 28 CONSOLIDATED BALANCE SHEET (in millions) December 31, 2010 December 31, 2009 Goodwill Other intangible assets Property, plant and equipment (PP&E) 7,193 6,782 Non-current financial assets and other assets 1, Investments in associates and joint ventures Deferred tax assets Non-current assets 9,998 9,231 Inventories 3,770 2,994 Trade receivables 2,770 2,314 Current financial assets Other current assets Cash and cash equivalent 1,590 1,231 Current assets 9,665 7,287 TOTAL ASSETS 19,663 16,518 Share capital Share premiums 3,215 1,987 Reserves 4,556 3,210 Non-controlling interests 3 3 Equity 8,127 5,495 Non-current financial liabilities 3,251 3,568 Employee benefit obligations 2,457 2,374 Provisions and other non-current liabilities 938 1,105 Deferred tax liabilities Non-current liabilities 6,691 7,087 Current financial liabilities Trade payables 1,813 1,249 Other current liabilities 2,136 1,927 Current liabilities 4,845 3,936 TOTAL EQUITY AND LIABILITIES 19,663 16,518

31 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 29 Michelin booth at 2010 Paris Auto Show showcased global ad campaign MICHELIN Alpin 4 takes top score in ADAC test and earns highest 3-star rating On-road, environmental and technological performance: A winning trio with the new MICHELIN Pilot Sport 3 Sales of MICHELIN X One super singles top one million Distribution: Michelin and Rodi sign partnership agreement in Spain s Catalonia-Aragon region Earthmover tires: MICHELIN X-TRACTION, a new solution to improve worksite productivity Michelin Group tops the podium at Dakar 2011 e1.2 billion rights issue successfully completed 2010 Operating Highlights A full description of 2010 highlights may be found on the Michelin website:

32 30 PASSENGER CAR AND LIGHT TRUCK TIRES & RELATED DISTRIBUTION Historically high financial performance In all, net sales in the Passenger Car and Light Truck Tires and Related Distribution segment stood at e9,790 million for the year, up 18.2% on Unit sales were sustained throughout the year by firm demand for winter tires and the strength of the MICHELIN brand. The price mix remained favorable despite the OE/replacement market mix, reflecting price increases implemented throughout the year to help offset higher raw materials prices and ongoing improvements in the segment/speed rating mix. The sharp rise in volumes, especially in winter tires, the amply positive price-mix in the face of higher raw materials costs and the improvement in manufacturing costs at a time of high capacity utilization helped to lift operating income before non-recurring income and expenses to 1,014 million or 10.4% of net sales, compared with 661 million and 8.0% in TECHNOLOGY LEADER 31 PLANTS IN 17 COUNTRIES no.1 WORLDWIDE IN FUEL-EFFICIENT TIRES (in million) Net sales 9,790 8,280 Operating income 1, (before non-recurring items) Operating margin 10.4% 8.0% (before non-recurring items) Passenger Car and Light Truck operations accounted for 55% of Group net sales.

33 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 31 TRUCK TIRES & RELATED DISTRIBUTION Rebounding performance, led by volumes, despite higher raw materials costs Net sales in the Truck Tires and Related Distribution segment amounted to 5,680 million for the year, up 26.3% on Sales volumes rose sharply against low prior-year comparatives, with faster growth at the end of the year causing certain supply issues in mature markets. Despite an unfavorable OE/replacement market mix, the price-mix improved quarter after quarter, thanks to the gradual application of price increases to pass on rising raw materials prices. At a time of sharply rising raw materials costs, operating income before non-recurring income and expenses came to 249 million, thanks to higher volumes, the segment s improved competitiveness and the responsive pricing policy. no.1 WORLDWIDE IN THE ORIGINAL EQUIPMENT, RETREAD AND REPLACEMENT MARKETS 26 PLANTS IN 15 COUNTRIES (in million) Net sales 5,680 4,496 Operating income 249 (69) (before non-recurring items) Operating margin 4.4% (1.5)% (before non-recurring items) Truck operations accounted for 32% of Group net sales.

34 32 SPECIALTY BUSINESSES structurally high operating income Net sales from the Specialty Businesses came to 2,421 million, a gain of 19.2% on Growth was led by Michelin s powerful momentum in every tire market, as well as by the application of contractual clauses indexing prices to raw materials costs. Operating margin before non-recurring income and expenses stood at a structurally high 17.8%, compared with 13.3% in The improvement was due to i) the increase in tonnages sold in each of the Specialty tire businesses, with a significant contribution from the Earthmover segment and ii) the favourable impact in the second half of the increase in prices indexed to raw materials costs. GLOBAL MARKET LEADER IN EARTHMOVER AND AIRCRAFT RADIAL TIRES EUROPEAN MARKET LEADER IN AGRICULTURAL TIRES EUROPE S LEADING MOTORCYCLE TIRE BRAND EUROPEAN MARKET LEADER IN MAPS, GUIDES AND TRAVEL ASSISTANCE WEBSITES 16 PLANTS IN 8 COUNTRIES (in million) Net sales 2,421 2,031 Operating income (before non-recurring items) Operating margin 17.8% 13.3% (before non-recurring items) Specialty operations account for 13% of Group net sales.

35 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 33 Michelin is committed to driving a new phase of faster, more dynamic growth, at a time of steadily increasing global tire demand and rising raw materials prices. In this environment, Michelin enjoys a number of differentiating competitive strengths, including a powerful brand and the premium pricing power it confers; the technological leadership and balanced performance delivered by its tires, which are aligned with customer expectations; the competitiveness and flexibility of its manufacturing base, which has been considerably enhanced through the commitment of its teams; and a robust balance sheet capable of supporting its growth ambitions and weathering the ups and downs of the business cycle. Backed by these strengths, and barring any major change in the economic environment, Michelin has set ambitious objectives for Outlook for 2011 Michelin aims to drive at least a 6.5% increase in unit sales, in line with the growth targets. Michelin will maintain a highly responsive pricing policy in the face of rising raw materials costs. Michelin expects to report higher operating income in 2011, despite the cost of stepping up its presence in new markets (around 150 million in temporary outlays for production start-ups, sales and marketing operations and advertising). In light of the increase in raw materials costs and the unprecedented 1.6 billion capital expenditure program, free cash flow is expected to be temporarily negative in Nevertheless, Michelin confirms its objective of generating positive free cash flow over the entire period.

36 34 As owners, shareholders have made a commitment to supporting their Company over the long-term, participating in its expansion and sharing the risks while exercising their power of decision. Their confidence is a strength that Michelin carefully nurtures by adhering to strict ethical standards, applying fair corporate governance practices and engaging in high-quality dialogue. By investing in Michelin, shareholders are embracing a project whose success is being driven by technological leadership, powerful brands, expansion in the global marketplace and a commitment to combining performance and responsibility by demonstrating our core values: Respect for Customers, People, Shareholders, the Environment and Facts. In Close Touch With Our Shareholders + 44% gain in the Michelin stock price between December 31, 2000 and December 31, 2010 E 9.48 Bn in market value at December 31, ,000 registered shareholders

37 Michelin - Individual Shareholders Guide edition 35 In Close Touch With Our Shareholders Contents Share data and performance p. 36 Capital and ownership structure p. 37 A dedicated team at your service p. 40 Shareholding options p. 42 Owning directly registered shares p Account management - Buy and sell orders - Fees Estate, transfers and gifting p. 47 Taxation p. 48 Reaching out to our Shareholders p. 50 The Shareholder Information Kit p. 52 The Shareholder Consultative Committee p. 54 Employee Shareholders p. 56 The Annual Shareholders Meeting p. 58 Your rights as a Shareholder p. 60 Financial glossary p investor calendar p. 65

38 36 SHARE DATA AND PERFORMANCE Michelin stock price, 2006 to 2010 Base 100 at December 31, 2005 Share information ISIN: FR Par value: e2.00 Traded in units of: 1 Stock market: NYSE Euronext Paris Compartment A Ticker symbol: ML Eligible for the SRD deferred settlement system Eligible for PEA Equity Savings Plans (French tax residents only) Market 9.48 billion capitalization at December 31, 2010 Average daily 1,116,722 in 2010, trading volume for a 187% share turnover Stock index weightings at December 31, 2011: The Michelin share represented 1.34% of the CAC 40 index and 0.57% of the Euronext 100 index. The Michelin share is also included in the main socially responsible investment indices, which are made up solely of companies whose strategies fully integrate sustainable development objectives. These include: The Dow Jones Sustainability Indices (DJSI) created by Dow Jones Indexes, STOXX Limited and the Swiss rating agency SAM (Sustainability Asset Management) > DJSI STOXX for European sustainability leaders > DJSI World for global sustainability leaders The Ethibel Sustainability Index (ESI) Europe, managed by the Ethibel rating agency. The Advanced Sustainability Performance Index (ASPI) Eurozone, managed by the Vigeo rating agency. 0 0 dec. 05 june 06 dec. 06 june 07 dec. 07 june 08 dec. 08 june 09 dec. 09 june 10 dec. 10 Monthly trading volumes Michelin CAC 40 questions/answers Where can I find past share performance data? Share price history since January 1, 1995 may be downloaded as an Excel spreadsheet from share-debt/historyratios

39 CAPITAL AND OWNERSHIP STRUCTURE Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition Ownership structure at December 31, % 1.8% 37 At December 31, 2010 Share capital: 353,215,690 Shares outstanding: 176,607,845 Voting rights outstanding: 226,828,425 Number of shareholders at December 31, 2010 Michelin has more than 4,000 institutional shareholders, 70,000 employee shareholders and 159,000 other individual shareholders. The 49,000, or more than 44%, increase in the number of non-employee individual shareholders primarily reflects the results of the September 28, 2010 rights issue , , , , ,445 Number of shareholders, 2006 to 2010 Employees (through the Employee Stock Ownership Plan) Individual shareholders Resident institutional investors Non-resident institutional investors Voting rights structure at December 31, % 13.2% 29.8% 2.5% 16.1% Did you know? Created in 1863 as a partnership limited by shares, the Company changed its name to Michelin et Compagnie in Michelin shares were first listed 57 years later, on August 22, In 1951, the Company changed its name to Compagnie Générale des Etablissements Michelin, which today serves as the parent company of the Michelin Group. 26.8% Employees (through the Employee Stock Ownership Plan) Individual shareholders Resident institutional investors Non-resident institutional investors Shares held in the same name for at least four years carry double voting rights.

40 38 Share performance, 2006 to 2010 Share price (in ) High Low High/low ratio Closing price for the year Change over the year + 0,2% + 42,6% - 52,1% + 8,3% + 52,7% Change in the CAC 40 index over the year - 3,3% + 22,3% - 42,7% +1,3% + 17,5% Market capitalization at December 31 ( billions) Average trading volume for the year 1,116,722 1,138,691 1,740,267 1,217,949 1,191,679 Average shares outstanding 152,902, ,184, ,495, ,770, ,390,450 Total shares traded over the year 288,114, ,504, ,508, ,577, ,878,126 Share turnover ratio 188% 199% 308% 216% 212% Source : Euronext NYSE.

41 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 39 Per share data, 2006 to 2010 In per share, except ratios Dividend per share 1.78 (1) Net assets per share Basic earnings per share (4) Price-earnings ratio Pay-out ratio 30.0% 140.8% 40.7% 30.1% 36.7% Dividend yield (2) 3.3% 1.9% 2.7% 2.0% 2.0% How are the above ratios calculated? (1) Subject to approval at the Annual Shareholders Meeting on May 13, (2) Based on the closing share price for the year. (3) Pro forma, adjusted to reflect the October 2010 rights issue. (4) 2009 earnings per share have been restated to take into account the impact of the October 2010 rights issue. Net assets per share net assets/shares outstanding at December 31 Basic earnings per share net income/shares outstanding at December 31 Price-earnings ratio Share price at December 31/basic earnings per share Pay-out ratio dividend/basic earnings per share Dividend yield dividend/closing share price for the year

42 40 A DEDICATED TEAM AT YOUR SERVICE Michelin shares are always held in registered form, reflecting our dedication to understanding your needs and to fostering a personalized relationship with you throughout the year. We are fully committed to supporting you in every aspect of the share ownership process and to answering all of your questions as quickly as possible. Whether you re interested in our business operations, strategy or results, or wondering how to manage your shares, calculate their cost price or organize your share gifting, we are there to help you to find the right solution and get the right answer to your questions. To contact us: Toll free number (France only): Phone: +33 (0) Fax: +33 (0) Postal address: Compagnie Générale des Établissements Michelin 12, cours Sablon Clermont-Ferrand Cedex 9 France actionnaires-individuels@fr.michelin.com Every day, we do our best to meet the needs of our shareholders. All our teams are available when you need them, to answer your questions quickly and effectively and to make your shareholder experience as rewarding as possible. Jacques ENGASSER, Shareholder Relations Manager

43 Michelin - Individual Shareholders Guide edition 41 Shareholders registered directly in the Company Registry may also call upon the services of: The Share Services Team We open shareholder accounts and execute buy and sell orders, while fostering close relationships with our directly registered shareholders. Nancy ADAM and Nicole ALMODOVAR The Estate, Transfer and Gifting Team We quickly deal with estate, transfer and gifting issues involving directly registered shares, in liaison with shareholders, notaires or heirs. Monique BRUYAS and Josette LARBRE employee shareholders may contact: The Employee Shareholder Relations Team We answer questions from employee shareholders and help them in carrying out all of their administrative formalities, acting as an interface with the custodian banks. Corinne CAZABONNE and the network of country BIB Action correspondents questions/answers I need some information about my shares. How and when may I get in touch with you? You can contact us: by phone from Monday to Friday, 9 a.m. to 6 p.m. by , fax or letter, at any time. We are committed to replying to every request within 24 hours. Note as well that all of our corporate information may be found on the website, at We look forward to your visit! I need to know the closing share price after your office hours. What should I do? If you live in France, you can call the toll-free number after 6 p.m. and get a message, recorded after close of trading, providing a wide variety of price and trading information (in French only): opening price, high for the day, low for the day, closing price, percentage change from the previous closing price, trading volume, closing CAC 40 index and percentage change since the previous closing.

44 42 SHAREHOLDING OPTIONS According to Company by-laws, all Michelin shares must be held in a registered share account. When the account is held and administered by the issuing Company, the shares are said to be directly registered. Any French shareholder, regardless of how many shares he or she owns, may register the shares directly with the Company. Benefits of direct registration (in practice restricted to French residents): Directly registered shareholders enjoy a number of service and fee benefits. ADDED SERVICES We offer: direct, personalized contact, direct execution of buy and sell orders, calculation of the average cost price of your shares, payment of dividends directly to your account, without any fees. WAIVED FEES Directly registered shareholders do not pay any: custody and management fees, transfer fees under gifting or estate arrangements, fees related to corporate actions, such as bonus share or rights issues. Difference between direct registration and indirect registration Michelin shares may be registered directly with Michelin and/or indirectly with your bank or broker. Custodian Management fees Dividends Information Shareholders Meetings Buy and sell orders NB: Non-French tax residents You own registered shares directly Compagnie Générale des Établissements Michelin CGEM None Paid immediately into your account indirectly Your bank or broker Invoiced by your bank or broker Paid by your bank or broker Sent directly to all registered shareholders Notice of Meeting and admission card sent directly to all registered shareholders Possible by phone, fax or post. Executed immediately by Michelin Orders are executed by your bank or broker, according to their procedure Non-French tax residents should note that the above services for directly registered shareholders are governed by French law, particularly as concerns taxation. Please contact us to find out more about the possibilities offered to non-resident investors. Directly registered shareholders also pay lower fees on Michelin stock trading orders.

45 OWNING DIRECTLY REGISTERED SHARES Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 43 Aaccount management Opening an account To open an account in the Company s share registry, you need to sign the share account application (convention d ouverture de compte de titres), either: - before transmitting your first buy order to the Shareholder Relations Department; or - after transferring your indirectly registered shares previously held by a bank or broker. The share account may be individual, joint-tenant, tenancy-in-common or held under a usufruct or bare ownership arrangement. Account statements In addition to regulatory tax information and/or forms, account holders or managers receive: - a statement of holdings after every transaction ; - at the beginning of each year, an account statement as of the previous December 31, along with the prices to be used in filing a French wealth tax (ISF) return. To comply with French anti-money laundering legislation, shareholders must provide the following documents prior to executing their first trade: - a photocopy of both sides of a valid photo identity, such as a passport or national identity card ; - a photocopy of proof of address in France, such as an electricity or landline phone bill ; - bank account details for wire transfers and direct debits (in the case of tenancy-incommon estate accounts, only the representative of the undivided estate needs to submit bank details). In the case of joint accounts, each tenant must submit all of these documents. French law prohibits us from placing a buy or sell order unless we are in possession of these documents. Michelin stock trades Subject to the conditions and limitations described below, the Shareholder Relations Department transmits your Michelin buy and sell orders to the authorized bank or broker. You will receive a trade advice confirming that the order has been executed. Other account transactions You will be notified personally of any other transactions concerning your Michelin share account. Any related buy or sell orders are executed and the shares recorded in your account as quickly as possible and free of charge. Annual tax package In February, we will send you a statement of reportable tax information to be included with your tax return for the prior-year. In particular, it shows the amount of proceeds from stock sales during the year.

46 44 Buy and sell orders through the Share Services Team Acceptable orders Please submit only firm buy and sale orders. Short-sell orders (i.e. selling immediately stocks purchased under the deferred settlement system) will not be accepted. You need to fill out a French buy or sell order To be valid, a French trade order must clearly indicate, in French: - your name and full postal address; - your shareholder account number, if you already own Michelin shares, - whether the trade is to buy or sell, - The number of shares to be purchased or sold, - the buy or sell price, according to the type of order described below, - how long the order remains in effect. Types of order Limit price orders: specify the maximum purchase price (buy limit) or minimum selling price (sell limit). This is the most commonly used order. They allow you to set the desired price but they may be only partially filled or take some time to be completed, depending on your price and which way the share price is moving. When several partial transactions are required to fill the order, brokerage fees are charged for each one. Pros: w you control the price and are protected against downside fluctuations. Cons: w there is no guarantee when or if the order will be fully executed. For example: You want to buy 100 shares for a maximum of e55 each. You place a buy limit order at e55 or better. Your order is executed, in full if there are 100 shares for sale at that price, or partially at e55 and partially for less, or it remains partly outstanding if the share price has risen. You want to sell 100 shares for at least e60 each. You place a sell limit order at e60 or better. Your order is executed, in full if there is enough demand for 100 shares at that price, or partially at e60 and partially for more, or else it remains partly outstanding if the share price has fallen. Market orders, which do not indicate any price: are filled immediately, ahead of limit or peg orders. You can be sure that all of the order will be executed, but not necessarily at the same price. The price shown on the trade advice is the average price and a single brokerage fee is charged. Pros: w orders are filled quickly and completely. Cons: w there is no control over price. For example: You absolutely want to sell 100 shares, regardless of the price. You place a sell market order for 100 shares. At the same time, two buy orders are available, one for 40 shares at e60 and the other for 150 shares at e58. In this case, 40 of your shares will be sold at e60 and 60 shares at e58.

47 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 45 Peg orders: are limit orders to buy or sell a given number of shares at a price set to track the current bid or ask of the Euronext central order book. In other words, the price will be the opening price if the order is placed at start of trading or the best bid or ask price over the trading day. They are not priority orders, so they may be gradually filled in several trades. Pros: w the trade is executed at the best price available when placed. Cons: w there is no guarantee when or if the order will be fully executed. For example: You place a peg buy order for 100 shares. At that time, the best ask is for 80 shares at e57. In this case, 80 shares will be purchased at e57 with the rest of the order postponed or transformed into a limit buy order for 20 shares at e57 or better. Placing orders through the Share Services Team Buy or sale orders received by the Share Services Team before 5:15 pm CET are placed the same day. Orders may be submitted by: - Postal mail to 12, cours Sablon, Clermont- Ferrand Cedex 9, France - Fax to +33 (0) Phone to (toll-free, France only) or +33 (0) , if calling from outside France. - to actionnaires-individuels@fr.michelin.com Barring any instructions to the contrary, orders received after 5:15 pm CET and not executed before close of trading that day are carried over and placed the next trading day. The Shareholder Relations Department acts as the sole interface with the bank or broker executing your trade. New effective September 1, 2011, you will be able to trade your Michelin shares online. Joint accounts (tenancy-in-common, undivided estate, joint tenancy) Unless proxy has been expressly given to one of the joint tenants, buy and sell orders concerning joint accounts must be placed in writing and signed by all of the tenants. large trades Orders of e15,000 or more must be placed in writing with the Shareholder Relations Department. Note that prior to executing a buy order of this amount, the bank or broker has the right to require that enough cash has been deposited in your account to cover the purchase. Payment The net amount shown on the trade advice is paid: - by check or wire transfer to the bank or broker, in the case of buy orders, - by wire transfer to your account by the bank or broker, in the case of a sell order.

48 46 fees Brokerage fees For directly registered shares, brokerage fees amount to 0.30% of the gross transaction amount, excluding VAT, with a minimum charge of e6.00. No custody fees We do not charge any custody and account administration fees, including in the event of gifting, transfers or estate settlements. questions/answers How do I transfer my shares to a directly registered account? If you reside in France, to transfer your shares registered with your bank or broker to an account directly registered with Michelin, fill in the demande de transfer (share transfer form) and send it to your French bank or broker. As soon as your shares are transferred, we will send you a notice of direct registration and a convention de compte (share account application). The share transfer form and the share account application are available on request or downloadable from in the Nominatif Pur section on the Être Actionnaire page. These documents are not available or valid in English. Why can t I transfer my shares from my PEA equity savings plan to a directly registered account? If you are a French tax resident, you may invest in Michelin shares as part of your tax-advantaged PEA equity savings plan. However, Michelin is not authorized to manage PEA accounts, which under French legislation must be linked to a checking account. As a result, only a bank is authorized to open a PEA account, buy and sell shares in and out of the account and pay dividends into it. In this case, it is better to retain your Michelin shares in indirect registered form.

49 ESTATE, TRANSFERS AND GIFTING For holders of directly registered shares: The Shareholder Relations Department is committed to assisting you in transferring your Michelin shares for estate settlement or gifting purposes. For other estate or gifting matters, you should contact your notaire (in France), estate lawyer or estate planning advisor, who will have a broader understanding of your personal asset situation. Gifting your shares in France via donation partage or don manuel? Donation-partage Similar to gifts inter vivos in the UK, donation-partage is a deed by which you gift all or part of your shares to your children and other heirs while you are still alive. The shares must be accepted by the giftees, who become the de facto owners, there- by removing the shares from your estate and, in general, maintaining their value at the time of gift rather than death. A donation-partage is irrevocable and the deed must be signed before a notaire. You should send us a copy of the deed so that we change the owners names in the Share Registry. Don manuel A don manuel is when you give your shares handto-hand, i.e. outright. In general, shares given as a don manuel are returned to the estate to be revalued before the estate is divided. A don manuel does not have to be recorded by deed in front of a notaire, but it should be declared to the French tax authorities by filing a 2735 tax form within a month of the date of gift. You should send us a copy of the 2735 form or the gift letter (with a certified true signature) so that we change the owners names in the Share Registry. Gift tax allowances in France, as of January 1, 2011 In France, most estate tax allowances are also applicable, in the same conditions, to gift taxes, except that any conditions incumbent on the deceased must be fulfilled by the gifter and any incumbent on the heirs and beneficiaries by the giftees. The gift may be conveyed in one or several Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition times, up to the allowance, every six years; i.e. after six years, you may give the same amount again without being liable to the gift tax. Each parent may give up to e159,325 per child (i.e. e318,650 for a couple), without being liable to the gift tax. Grandparents can give up to e31,865 to their grandchildren, without being liable to the gift tax. An individual may give e80,724 per spouse or civil-union (PACS) partner, e15,932 to each brother or sister, e7,967 to each nephew or niece and e5,310 to each great-grandchild. Inheritance (for French residents) To enable us to deal with estate matters quickly and efficiently, please notify us of the date of death, the name and address of the deceased and the address of the notaire who is handling the estate. We will forward all of the information he or she needs to file the estate papers. Michelin will then scrupulously follow the notaire s instructions concerning division of the shares. 47

50 48 TAXATION The following information concerns shareholders who are tax residents of France. This information is not applicable to other countries, each of which has its own tax rules. NOTE: Being qualified as a French tax resident requires more than just an address in France. You are generally considered to be a French tax resident if you fulfill one of the following four conditions: - You have your household in France. - France is your primary place of residence (more than 183 days a year). DIVIDEND TAX IN FRANCE Shareholders who are French tax residents may choose to pay their dividend tax in one of two ways: Reporting dividends as taxable income Stock dividends are subject to income tax as saving and investment income. - You work in France. - You have most of your assets in France. These conditions should be interpreted in the light of international agreements governing double taxation. If your shares are directly registered, in March of each year, we will send you the imprimé fiscal unique (IFU) reportable tax form, which shows your dividend income and any proceeds from share sales during the prior year. Compagnie Générale des Etablissements Michelin is subject to the same rules of disclosure to French tax authorities as banks and brokers. Tax relief 40% allowance In calculating your tax liability, a 40% allowance (abattement) is first applied to any dividend income received from companies headquartered in the European Union or in a country having signed a tax treaty with France to avoid double taxation. The amount of this reduction is uncapped. Additional annual allowance After applying the 40% allowance, dividend income may be reduced by an additional allowance of e1,525 per year for a single, widowed or divorced person or for a married couple who have elected to be taxed separately or e3,050 for a married couple or civil partners who have elected to file a joint tax return. Paying a 19% flat-rate withholding tax (prélèvement forfaitaire libératoire) Opting to pay the 19% flat-rate means forfeiting the standard abattement deductions, even on any dividends that you elect to report as taxable income. Should you choose this option, which is all-or-nothing and irrevocable, please notify us before the dividend payment date. Prélèvements sociaux withholding taxes Regardless of how you decide to pay your dividend tax, your gross dividend income, before abattements, is subject to prélèvements sociaux withholding taxes, which total an aggregate 12.3% as of These taxes include the CSG (8.2%), the CRDS (0.5%) and the social security financing tax (3.6%; i.e. the original 2.5% plus a 1.1% surtax to finance the RSA guaranteed minimum income system). These social surtaxes are withheld at source if the paying agent is based in France.

51 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 49 CAPITAL GAINS TAX IN FRANCE The net capital gain is the difference between the selling price (excluding transaction fees and taxes) of a share and its purchase cost (including purchase fees). The annual proceeds exclusion from capital gains tax has been eliminated Effective January 1, 2011, all capital gains on the sale of securities in France are subject to income tax and prélèvements sociaux withholding tax, regardless of the amount of proceeds. Transitional measures are in place to allow shareholders to claim capital losses suffered in 2010 if their total proceeds did not exceed the previous exclusion. CALCULATING YOUR SHARE VALUE FOR THE FRENCH ISF WEALTH TAX If you are subject to the French wealth tax (ISF), your listed securities should be valued at the last known market price or the average price over the 30 trading days preceding January 1 of each year. In 2010, the figures for the Michelin share Closing price: e53.70 Average price: e THE SPECIFIC CASE OF PEA EQUITY SAVINGS PLANS Compagnie Générale des Établissements Michelin is not authorized to manage PEA accounts. (See the FAQs on page 46) tax rate The tax rate has been raised to 19% from 18% and the aggregate prélèvements sociaux rate has been increased to 12.3%, for a total capital gains tax of 31.3%.

52 50 REACHING OUT TO OUR FRENCH INDIVIDUAL SHAREHOLDERS Lille Caen Rennes Nantes Amiens Metz Rouen Reims Paris Nancy Orléans Strasbourg Dijon Lille Tours Annecy Clermont-Ferrand Amiens Metz Rouen Reims La Rochelle Lyons Paris Nancy Bordeaux Caen Grenoble Rennes Nice Strasbourg Toulouse Montpellier Marseilles Nantes Orléans Biarritz Dijon Perpignan Tours 2004 to Annual Shareholders Meeting La Rochelle Biarritz Bordeaux Clermont-Ferrand Perpignan Lyons Annecy Grenoble Nice Toulouse Montpellier Marseilles Meetings with shareholders In recent years, Michelin has actively reached out to individual shareholders in France by organizing information meetings in the country s leading cities. The annual meeting in Paris, which is led by the Managing Partners, is generally held in the autumn. In 2010, it took place on November 19, during the Actionaria investor fair. Outside Paris, the meetings are led by Jacques Engasser, Shareholder Relations Manager, or by Valérie Magloire, Investor Relations Officer. Organized locally, these events offer an invaluable opportunity to discuss important issues with our French shareholders and to get to know them better. They allow us to present your company, its business operations and results, explain its strategy in greater detail, and answer your questions. In 2010, we went to Perpignan, Bordeaux, Reims, Nice, Nantes and Strasbourg, while in 2011, meetings will be organized in six new cities: Marseilles, Toulouse, Lille, Metz, Annecy and Rennes, as well as Paris. In this way, we will continue to diversify the venues from one year to the next, so as to cover the entire country and stay in touch with all of our shareholders in France. At the same time, 292 meetings were organized in 17 countries with 797 analysts and institutional investors in to 2008 Michelin reaches out to shareholders throughout France

53 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 51 Salon Actionaria investor fair November 19-20, 2010 Palais des Congrès in Paris As in 2009, Michelin participated in the Actionaria investor fair held in Paris at the Palais de Congrès convention center on November 19 and 20, The event gave us an opportunity to talk and strengthen our ties with the many shareholders who visited our booth and to present your company to potential investors. During the two days, the Shareholders Relations and Consumer Services teams were able to answer a wide variety of questions and queries. Michelin will also attend the next edition of the fair, to be held on November 18 and 19, We are looking forward to seeing you there! the Ladoux Technology Center Guided Tour, May 7, 2010 A guided tour of our Ladoux Technology Center was organized for a small group of shareholders, invited on the basis of criteria that change every year. Participants discovered the diversity of skills and capabilities deployed in our Research, Development and Process Engineering activities, thanks to a presentation by the Center s Managing Director, followed by rolling resistance demonstrations and test rides with professional drivers on wet pavement and in other conditions. Shareholders enjoyed the total immersion in the heart of Michelin s business, while the Shareholder Relations Team appreciated the opportunity to interact extensively with shareholders. If you are a loyal shareholder and would like to participate in the next guided tour, which will take place on Friday afternoon, May 13, 2011, after the Annual Shareholders Meeting, please call us at +33 (0) to pre-register. Space is limited, so only the first 60 shareholders who contact us by May 3, 2011 will be selected for the tour.

54 SEEN FROM WITHIN IN THE NEWS IN CLOSE TOUCH WITH YOU Pages 4/5 EDITORIAL Ladies and Gentlemen, Dear Shareholders, ISSUE No 05 MARCH was an excellent year, when Michelin reported historically high margins thanks to both the dedicated efforts of all our teams, who successfully captured the recovery in tire demand, and the improvements in competitiveness and efficiency delivered by our Horizon 2010 plan. Michelin has emerged from the recession stronger than ever and is ready to embark on a new phase of dynamic growth. The growth in the global tire market and the transportation industry s ongoing response to the challenges of sustainable development present historic opportunities for your company s future. Geographically, we have begun to re-align the business base with the shift in demand, through a vast capital expenditure program in fast growing countries. Technologically, we have proactively responded to changing demand by bringing to market tires that take less and less raw material to make, while still offering greater safety, longer tread life and better fuel efficiency. Our strategy for the next five years is ambitious and hinges on three main objectives: to drive strong, diversified growth, to become more competitive and to maintain our business performance. To succeed, we can leverage main competitive advantages, including our ability to satisfy the real needs of our customers through innovation, the Michelin brand and its capital of trust, as well as our other brands and the portfolio of services that we plan to enhance and diversify. Lastly, there s the professionalism and dedication of our employees, who have enabled Michelin to grow and become a leader. I am confident that we will succeed. Michel Rollier, Managing Partner 52 THE SHAREHOLDER INFORMATION KIT Michelin regularly and transparently provides shareholders with the clear, comprehensive information they expect, in both paper and electronic formats. These documents may be downloaded from the Shareholders Corner on the website. The Shareholder Kit on CD-ROM Shareholder Kit documents are also available on a CD-ROM on request from the Shareholder Relations Department. The 2010 International BIB FORUM Page 3 Page 6 Horizons TOPICAL REVIEW : A New Phase of Dynamic Growth Shareholder documents the Individual Shareholder s Guide The Shareholder s Guide, which you are now reading, has been designed with you in mind. It includes a review of your Company s 2010 performance and outlook for the future (Part 1 Interview with Michel Rollier, Managing Partner), a presentation of the Group (Part 2 Michelin at a Glance), the consolidated financial highlights for 2010 (Part 3 Business Review and Results) and practical information to make your investment easier to manage (Part 4 In Close Touch With Our Shareholders). The Guide has also been enriched with interactive features in its online version, available in the Shareholder s Guide section of the website. The global ad campaign goes to the show MICHELIN S LETTER TO ITS SHAREHOLDERS the Horizons shareholder newsletter The Michelin Shareholders Consultative Committee is looking for new members Page 8 Known as Horizons, the Letter to Shareholders keeps you up-to-date with the latest Group news and emerging trends. Each issue reviews important Group events and highlights, offering insight into our strategic vision, while presenting new product launches, business developments and share performance.

55 MICHELIN PERFORMANCE AND RESPONSIBILITY the Annual and Sustainable Development Report 2010 ANNUAL AND SUSTAINABLE DEVELOPMENT REPORT The Shareholders Corner on the website Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 53 A NEW PHASE OF DYNAMIC GROWTH Published once a year, the Annual and Sustainable Development Report reviews Group strategy, operating highlights and financial results for the year, and presents our sustainable development objectives, action programs and achievements. the Registration Document Published once a year, the registration Document contains all of the financial and legal disclosures required by French legislation and Autorité des Marchés Financiers (AMF) to enable investors to analyze our strategy and results for the previous year. Michelin also publishes all of the periodic and annual regulated information required of a listed company in Bulletin des Annonces Légales Obligatoires (BALO), the French journal of Record. The specially designed Shareholders Corner page on the corporate website was entirely revamped and restyled in The home page offers quickclick access to the information you need, with easy browsing among the different sections. In particular, you will find: - The Finance Toolbox, with our contact details, financial calendar, easy access to all your documents and the possibility of signing up for alerts. - Clear tax information for French residents, concerning dividends, VAT, capital gains, PEA equity savings plans and the ISF wealth tax. - All of the shareholder documents in electronic file formats, easily downloadable from the Shareholders Kit. - A video of the entire Annual Shareholders Meeting, together with a summary of the presentations. questions/answers I would like to know the different release dates for Group results. How can I find that information quickly? The financial calendar is easily accessible from the Shareholders Corner home page, on It shows, in chronological order, all of the dates for the release of our quarterly, interim and annual results. It also lists the dates for the meetings with shareholders in various French cities, the Annual Shareholders Meeting, dividend payment and the release of tire market data.

56 54 THE SHAREHOLDER CONSULTATIVE COMMITTEE Comprising shareholders from various backgrounds, the active and enterprising Shareholder Consultative Committee plays an important role in helping us to improve our shareholder relations process. Each member contributes his or her vision of the various issues on the agenda. After sharing ideas, the Committee recommends practical measures to improve shareholder documents so that they address your expectations and concerns more effectively. members of the Shareholder Consultative Committee in 2010 (from left to right) Jacques ENGASSER, Shareholder Relations Manager Susan SIMMONS, 44, Clermont-Ferrand employee member Gilles CHAMBON, 66, Royan Thierry LEBRUN, 69, Antibes Michel DELERUE, 71, St-Germain-de-Belvès Daniel BLANC, 38, Salon-de-Provence Caroline MEIGNEN, 49, Rully Patrick DRIZARD, 55, Paris Anne Valérie DUMONT, 44, Paris Bernard LARGILLIER, 60, Marseille Pascal SURZUR, 49, Quimper Jacques BEGON, 67, Tence Not pictured: Éric DUBOIS, 38, St-Germain-en-Laye Jacques MARTIN, 56, Villefontaine Jana POPA, 57, Zalau (Rumania) employee member

57 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 55 how the Shareholder Consultative Committee works Chaired by a Michelin Managing Partner, the Shareholder Consultative Committee comprises 14 sitting members, of whom at least 12 are not employees of the Group. Each member must be a Michelin shareholder and remain so throughout his or her term of office; each one agrees to attend Committee meetings. Members serve for four-year terms that begin on the day of the Annual Shareholders Meeting following the date when new members were designated. New members are designated every year, depending on the number of terms expiring. Any shareholder may ask to serve on the Committee, simply by responding to the call for candidates published in the Letter to Shareholders, on the website and/ or the business and financial press. Candidacies may be submitted by letter, fax or . Members are designated by a Managing Partner, based on the short-list of candidates whose backgrounds meet a certain number of criteria to ensure their representativeness. All designation decisions are final. Role and responsibilities Through its input and recommendations, the Shareholder Consultative Committee helps to improve the quality of our financial and/or image communication with individual shareholders. The Committee may issue recommendations in the following areas: - Committee meeting agendas. - Preparation of shareholder documents. - Preparations to organize and hold Shareholder Meetings. - Meetings with shareholders in France and/or other countries. - Company-led discussions on how to communicate with shareholders. - Possible research on what Michelin can do to respond more effectively to shareholder expectations. Issues discussed at recent meetings For the past several years, the Committee has primarily worked on ways to improve our shareholder communication media, such as the Letter to Shareholders, the Shareholders Corner on the website, the Shareholder s Guide, and the Michelin presentation to meetings with shareholders outside Paris. In 2010, however, the meetings focused on the Committee s evolving role and responsibilities, with the goal of enabling it to act as an effective interface between Michelin and its shareholders. In this way, it can express your expectations and concerns, giving us a clearer idea of how you feel about the shareholder relationship.

58 ฉบ บท 04 ม ถ นายน 2553 เร ยน ท านผ ถ อห นท กท าน เม อป ท ผ านมาเป นป ท เศรษฐก จถดถอยอย างเป น ประว ต การณ แต กล มบร ษ ทของเราสามารถร บม อ และปร บต วได เป นอย างด เย ยม ผมขอถ อโอกาสเร ยน ให ทราบถ งว ส ยท ศน ในระยะยาวของบร ษ ทฯด งน ประการแรกธ รก จของเราเก ยวข องก บตลาดท ม การเต บโตอย างมาก กล าวค อ เราคาดว าจำนวนยานยนต จะเพ มข นสองเท าจากน ไปจนถ งป 2573 ประการท สอง จ ดศ นย กลางของการขยายต วของการขนส งทางถนนได เคล อนเข ามาส ทว ปเอเซ ยและทว ปอเมร กาใต ตลาดเหล าน ม อ ตราการเต บโตอย างมาก และยานยนต หมายถ งความสามารถในการเข าถ งการส ญจรทางบก และการขนส งทางบกเป นต วจ กร สำค ญสำหร บการขยายต วทางเศรษฐก จ ล กค าของเราในประเทศเหล าน ม ความต องการ เก ยวก บยางรถของเขาในระด บเด ยวก บล กค าของเราในประเทศท พ ฒนาแล ว ด งน น โครงการท ม เป าหมายท ช ดเจนจ งทำให ม ชล นสามารถย นหย ดอย ในตลาดเหล าน ได ในประเทศย โรปตะว นตก และ อเมร กาเหน อ การขยายต วจะม น อยมาก แต ล กค าของเรา ย งคงให ความสำค ญก บผล ตภ ณฑ ประส ทธ ภาพส ง การบร การ และการม ส วนร วม ในการร กษาสภาพแวดล อม ด งน น ว ว ฒนาการของกระบวนการขนส ง เช น ข อจำก ดจากสภาพแวดล อม และจากกฎระเบ ยบต าง ๆ เป ดโอกาสให เราแสดงให เห นอย างช ดเจนมากกว าถ งความ เป นผ นำด านเทคโนโลย ของเรา ส ดท าย เราย งคงทำให ท วโลกทราบว า ยางรถของเราม อาย ใช งานท ยาวนานกว า ม ความ ปลอดภ ยส ง และประหย ดน ำม นอ นเป นผลให การปล อยก าซคาร บอนไดออกไซด ลดลง เราย งคงความเป นผ นำทางด านการสร างสรรค เทคโนโลย ใหม ๆอ นล ำหน า ซ งย งไม ม ใครเท ยบเค ยงได ท านส ภาพสตร ท านส ภาพบ ร ษและท านผ ถ อห นท งหลาย เราม ความม นใจในอนาคตระยะยาว เน องจากบร ษ ทของเราได แสดงให เห นแล วถ งข ดความสามารถในการปร บต วและ พล งความม งม นท ช ดเจน ม เชล โรล เยร Managing Partners 内部观察在全球最大的市场 中成长 第 3 页 第 4/5 页 新闻报道年度股东大会相关报道 第 6 页 与你保持紧密联系电子通告 (e-notice) 第 8 页 2010 年 6 月第四期 篇首语女士们先生们, 尊敬的股东们, 2009 年, 在历史罕见的低迷市场中, 米其林集团显示了出色的适应能力 我希望为各位提供我们对未来的长远观点 首先, 我想要指出的是, 米其林业务所处的市场有着健康增长的前景 : 到 2030 年, 预计全球车辆总数将翻倍 其次, 我认为道路交通的增长动能已经转移到了亚洲和南美洲 由于汽车是道路移动性的主要工具, 而道路交通是经济发展中的重要因素, 这些市场均实现了强劲有力的增长 与成熟市场中的用户一样, 这些国家中的最终用户对轮胎产品的要求非常严格 通过极有针对性的产能扩建项目, 米其林将在这些国家建立起强有力的业务根基 在西欧和北美市场, 销量的增长将会疲软 但我们的客户希望获得更多更好的服务和产品性能, 并越来越关注环保特性 因此, 道路交通的未来变化以及更多的法律及环保限制将为米其林带来更多机会, 强化我们的技术领先优势 在全球范围内, 我们将继续宣传产品卓越的使用寿命及其安全性能, 并提高人们对于米其林产品的燃油效率和更低排放的环保性能的认知 米其林的领先地位源自我们的创新能力及无可匹敌的技术优势 因此, 女士们先生们, 尊敬的股东们, 我们对公司的长期发展前景充满了信心 尤其是在米其林展示了其灵活性与优势的情况下 贺立业 (Michel Rollier) 集团管理合伙人 56 EMPLOYEE SHAREHOLDERS Following the three Employee Shareholder Plans in 2002, 2003 and 2008, 70,000 employees and former employees in 67 countries and five continents are now shareholders. an efficient, structured organization The employee shareholder relations organization is built on a network of correspondents appointed in the Personnel Department in every country. The correspondents ensure compliance with local legislation and oversees relations with local employee shareholders, including account management and communication. ก จกรรมภายใน ขยายฐานในตลาด ท กำล งขยายต ว หน า 3 แวดวงข าว ต ดตามการประช มใหญ ผ ถ อห นประจำป หน า 6 Horizons จดหมายข าวสำหร บผ ถ อห นม ชล น เร องเด นในฉบ บ บทบรรณาธ การ การต ดฉลากแสดง ระด บมาตรฐานผล ตภ ณฑ ว ว ฒนาการใหม ของตลาดยางยนต หน า 4/5 ร วมม อก บผ ถ อห นอย างใกล ช ด การเช ญประช ม ผ านทางเวบไซต หน า 8 地平线 (Horizons) 话题回顾轮胎定级轮胎市场的真正革命 米其林股东通讯 The 12 versions of the Letter to Shareholders may be found in the Letter to Shareholders section of the website. Employee shareholders who would like more information about their investment are encouraged to contact their correspondent or local Personnel Department. The list of BIB Action correspondents may be found in the employee shareholder section of the website. employee shareholder information in your own language The Letter to Shareholders is published in 12 languages so that every employee shareholder can take in the latest corporate news in his or her own language. Many country organizations also post comprehensive employee shareholder information on their intranets. IMPORTANT: updating your personal information If you change address, you should inform your country BIB Action correspondent or the custodian bank that administers Michelin shares acquired under the 2002, 2003 and/or 2008 BIB Action employee shareholder plans. The easiest, fastest and most secure way to do this is via the Internet. Just go to the Personal Information section of the website. You can also update your details by: - Fax at +33 (0) Phone at +33 (0) Postal mail to: SOCIÉTÉ GÉNÉRALE Securities Services SGSS/GIS/BOC/STP 32, rue du Champ de Tir BP NANTES Cedex 3 Note: - The custodian bank for employee shareholders domiciled in the United States of America and Canada is SGVESTIA. - The custodian bank for employee shareholders domiciled in the United Kingdom is EQUINITI. NB: Sending your new mailing address to the Michelin Personnel department does not suffice as this information is not forwarded to the custodians (Société Générale, SGVestia, EQUINITI) or CGEM. To keep your share account information up-to-date with your latest home or mailing address, you must inform the custodian or your country BIB Action correspondent.

59 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 57 questions/answers Special information for expatriates Assignment to another country has no impact on your portfolio. However, you should inform us of your new posting as soon as possible by sending us a signed international mobility form. In this way, you will be sure to: - Receive all the documents or information to which you are entitled as a shareholder, including account statements, the French IFU reportable tax form (if applicable), the notice of annual meeting and the Letter to Shareholders. - Receive your dividend. - Benefit from the appropriate tax treatment, depending on your country of residence. There are two possibilities: - You can request that your new country organization administer your share account. - You can continue to have your account administered directly in France, as a non-resident. The various mobility forms may be found on the Employee Shareholder pages of the Michelin France intranet. Just choose the one you need and return it completed and signed to your BIB Action country correspondent or the CGEM Employee Shareholder Relations Department. For all employee shareholders, other than those domiciled in the United Kingdom, the United States of America and Canada. How can I connect to Société Générale s Nominet website if I ve lost my log-in and password? On the site, click the I have lost my identification numbers link. Fill in your name and mailing address and within a week you should receive a new log-in and password from the bank. The five-year lock-up on my shares has been lifted and I d like to sell them. How do I do that? We recommend you sell them online by logging onto with your log-in and password. Go to the transaction section, then click on place a sell order. Enter the number of shares you wish to sell and click OK. You can also fill in the downloadable sell order from the Employee Shareholder pages of the Michelin France intranet and send it back signed to Société Générale by fax or postal mail. What if I want to sell my shares before the five-year lock-up ends? Conditions for early sale vary by country. We highly recommend that employee shareholders living outside France contact their BIB Action correspondent. For French residents, cases for lifting the five-year ban may be found in the summary table in the Employee Shareholder pages of the Michelin France intranet. I m going to retire soon. Do I have to sell my shares? No, you can keep them as long as you like. However, if you wish to sell the shares acquired under the 2008 plan before their lock-up ends in July 2013, and you live in France, you may do so by sending Société Générale a certificat de travail, or a statement from the Michelin Personnel Department certifying the date of termination of your work contract, or else an attestation d admission à la retraite showing the date of termination. If you live in another country, please contact your local BIB Action correspondent.

60 58 ANNUAL SHAREHOLDERS MEETING The Annual Meeting offers an exceptional opportunity to learn about your company s results and outlook. It also gives you a say, by voting on the proposed resolutions, in the major decisions the Company wishes to make. You can demonstrate your interest in your Company s business and management by voting on the resolutions. As every year, the 2010 Annual Shareholders Meeting was held on first call, with a more than 54% attendance rate. THE DIFFERENT TYPES OF SHAREHOLDER MEETINGS: An Ordinary Shareholders Meeting (known as the Annual Meeting in English) must be held within six months after the end of the preceding fiscal year. During this meeting, management presents detailed information about the Group s operations and results, and shareholders approve the financial statements for the year, set the amount of the dividend and elect or re-elect members of the supervisory bodies. For an Ordinary Shareholders Meeting to officially conduct business and cast binding votes, at least one fifth of the voting rights must be present or represented by proxy on first call. No quorum is required for a Meeting held on second call. Resolutions are passed by a simple majority (50%) of voting rights present or represented by proxy. An Extraordinary Shareholders Meeting (known in English as a Special Meeting) may be called at any time. This type of meeting is called to approve any changes in the Company s by-laws, such as the appointment of Managing Partners and General Partners, or changes in the corporate purpose, name or share capital. The quorum is one fourth of the voting rights present or represented on first call and one fifth on second call. Resolutions are passed by a two-thirds majority of voting rights present or represented. A Combined (or Joint) Ordinary and Extraordinary Shareholders Meeting combines both types of meeting on the same day and is called on the same Notice of Meeting.

61 Michelin - MICHELIN INDIVIDUAL SHAREHOLDER S GUIDE edition 59 THE MICHELIN ANNUAL SHAREHOLDERS MEETING Four or five weeks before the Meeting, you will receive the Notice of Meeting, comprising: - the Meeting agenda, - an overview of the Company s business during the year and its results over the past five years, - a presentation of the resolutions submitted for your approval and the text of the resolutions, - the proxy/postal voting form. To attend and vote at the Annual Shareholders Meeting, you must own your Michelin shares at least three business days before the date of the Meeting, i.e. before midnight CET May 9, If you cannot attend the Meeting in person, you can watch the webcast with a slight delay in the Annual Shareholders Meeting section of the website. New The e-notice of Meeting: This year, all shareholders have been offered the possibility of receiving their Notice of Meeting by . For Michelin, this process will help further its sustainable development commitment by significantly reducing paper and ink usage, while also generating major savings in printing and postage costs. For shareholders, the e-notice of Meeting guarantees timely delivery of proxy materials, without any risk of postal delays. Online voting: In the same way, assuming that shareholders at the Annual Meeting on May 13, 2011 approve the resolution concerning secure online voting, you will be able to vote online on resolutions submitted to the 2012 Annual Shareholders Meeting. Postal voting 1) If you received the Notice of Meeting by post, simply fill out your proxy/postal voting form and send it back in the enclosed reply-paid envelope. 2) If you received your Notice of Meeting by , print your proxy/postal voting form, fill it out and: - If you reside in France: Enclose the form in the envelope (no stamp required) to: MICHELIN - ASSEMBLEE GENERALE LIBRE REPONSE SAINT GREGOIRE CEDEX - Where you reside in another country, and you are not a Michelin Group employee: Enclose the form in a stamped envelope to: Iron Mountain - Services Assemblées ZA Cap Malo - CS La Mézière - France - Where you are not a French resident but you are a Michelin Group employee: Enclose the form in an envelope to: NAME OF YOUR COMPANY - MICHELIN ASSEMBLEE GENERALE And send the envelope to your local country correspondent.

62 60 YOUR RIGHTS AS A SHAREHOLDER Buying a Michelin share makes you a part-owner of the Company. As such, and like every other shareholder, you are entitled to certain basic rights, such as the right to information, to participate in corporate actions, to receive a dividend and to attend and vote at shareholder meetings. The right to information You can find all of your Company s financial information, results and other publications on website. The right to participate in corporate actions As a shareholder, you are entitled to pre-emptive rights to subscribe or receive new shares or share equivalents issued as part of a corporate action. Pre-emptive rights to subscribe new shares or share equivalents If the Company issues new shares or share equivalents with pre-emptive subscription rights, you will be able to subscribe the new shares, pro-rata to your existing holdings. Rights to bonus shares If new shares are paid up by capitalizing earnings, reserves or additional paid-in capital, they are allocated to shareholders, pro-rata to their existing holdings on the day of issue. The right to receive a dividend The right to attend and vote at shareholder meetings The Annual Meeting offers a perfect opportunity to learn about your Company, its situation and outlook, and to participate in its decision-making process by voting on the proposed resolutions.