Michelin tires first quarter 2007 net sales were supported by an approximate 5% year-on-year sales volume growth. All Group operations contributed to the growth, especially Truck & Specialty tires. Although growing, the Passenger car & Light truck operations were affected by Original Equipment sales, which were down in North America & Asia. The price-mix effect was maintained at a high level, above 4%. The currency impact was strongly negative at -3.6%. Overall, Group quarter-on-quarter net sales were up a satisfactory 5.5%.

Tire markets were dynamic in all regions except for North America which is still affected by a partial economic slowdown & a further round of fuel price increases. Europe's truck tire markets clearly posted very strong growth, reflecting strong economic activity, especially in Eastern Europe; the passenger car & light truck markets also trended up, in both original equipment & replacement segments. The markets in emerging countries, driven by China, continued to post high growth. In addition, the very sharp recovery of South America's truck tire market was driven by the strong recovery of the agricultural sector.

The Group confirms its assumption made earlier this year of a neutral impact of raw material costs on its 2007 P&L. This chiefly assumes that average 2007 natural rubber price trends will be approximately the same as the 2006 average cost. Should a strong hike be recorded in mid-year 2007, the Group would need to revise its assumptions.

Michelin tires is maintaining for full-year 2007 the outlook already communicated at the beginning of the year: its net sales & operating margin before non-recurring items should post a tangible increase compared to 2006, in line with its 2010 objectives.

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