UPDATE 2-French tyre maker Michelin confirms 2023 guidance after Q1 sales rise

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April 26 (Reuters) - French tyre maker Michelin on Wednesday confirmed its full-year outlook after a rise in first-quarter sales as premium positioning helped offset a fall in volumes mainly due to reduced inventories and after it halted its Russian business.

The group, which makes tyres used in cars, aircraft, bicycles and industrial equipment, maintained its full-year forecast of segment operating income above 3.2 billion euros ($3.54 billion) at constant exchange rates and reported free cash flow excluding M&A of more than 1.6 billion euros.

Michelin posted a 7.4% rise in consolidated sales to 6.96 billion euros for the first three months of the year, against 6.48 billion euros reported a year ago.

The automotive business, which manufactures passenger car tyres and makes up the bulk of the group's revenue, saw its sales increase 6.2% to 3.46 billion euros, against 3.25 billion euros a year ago.

However, volumes declined 6.6% mainly due to a reduction in inventory and the termination of Michelin's operations in Russia following the invasion of Ukraine.

"The termination of operations in Russia as of March 15, 2022 accounted for around 25% of the total decline in volumes during the quarter," the group said in a statement.

Finnish peer Nokian Tyres on Tuesday posted a bigger than expected first-quarter loss as a result of the Russian exit, but reiterated expectations for a return to profit this year.

Chief Financial Officer Yves Chapot told analysts in a call the group expects volume in the second-quarter to be "either flat or slightly positive" with a different geography, meaning an expected rebound in China.

Chapot also attributed the slowed growth to 15% in the first quarter of its non-tyres business, aiming to generate between 20% to 30% of Michelin's total sales by 2030, to a higher price effect last year, and remained on a "very positive trend".

For more than two years, the automotive industry has been grappling with a series of disruptions from the coronavirus pandemic to the war in Ukraine, along with component shortages and logistical difficulties. ($1 = 0.9049 euro) (Reporting by Lina Golovnya in Gdansk; Editing by Jane Merriman, Emelia Sithole-Matarise and Jonathan Oatis)