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Jul 26

Nokian Tyres’ Half Year Report: Building the New Nokian Tyres on Track

This release is a summary of Nokian Tyres’ Half Year Financial Report January–June 2023. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/. 

April–June 2023

  • Segments net sales were EUR 293.1 million (April–June 2022: 332.3) and decreased by 11.8%. With comparable currencies, segments net sales decreased by 7.3% due to lower passenger car tire supply volumes. Net sales were EUR 293.1 million (332.3) and decreased by 11.8%.
  • Segments operating profit was EUR 15.2 million (0.9). Operating profit was EUR 9.5 million (46.9). EUR -5.7 million (46.0) was booked as non-IFRS exclusions.
  • Segments earnings per share were EUR 0.05 (-1.62). Earnings per share were EUR 0.01 (-1.67).
  • Cash flow from operating activities was EUR -66.7 (-109.4).

January–June 2023

  • Segments net sales were EUR 529.5 million (January–June 2022: 655.2) and decreased by 19.2%. With comparable currencies, segments net sales decreased by 16.1% due to lower passenger car tire supply volumes. Net sales were EUR 529.5 million (655.2) and decreased by 19.2%.
  • Segments operating profit was EUR 1.1 million (35.5). The decline was driven by lower volumes. Operating profit was EUR -9.4 million (68.4). EUR -10.4 million (32.9) was booked as non-IFRS exclusions.
  • Segments earnings per share were EUR -2.50 (-1.24). Earnings per share were EUR -2.58 (-1.33).
  • Cash flow from operating activities was EUR -124.3 million (-223.7).
  • The sale of Nokian Tyres’ operations in Russia was completed in March. The sale price was EUR 285 million. Nokian Tyres no longer has any operations in Russia.

Guidance for 2023 (unchanged)

In 2023, Nokian Tyres’ segments net sales are expected to be between EUR 1,300–1,500 million and segments operating profit percentage of net sales between 6–8%. It is expected that due to seasonality, the segments operating profit will be generated in the second half of the year.

As of 2023, segments net sales and segments operating profit exclude Russia and other items, which are not indicative of Nokian Tyres’ underlying business performance. Jukka Moisio, President and CEO:

“During the second quarter, we progressed in our long-term journey to build the new Nokian Tyres in line with our plan.

The car and tire market environment is demanding, and during the quarter, we also faced some currency headwinds, impacting our net sales negatively. Segments operating profit turned positive as anticipated and segments EBITDA rose to 14%. We expect the second half of 2023 to be stronger due to winter and all-season tire sales and contribution from contract manufacturing.

During the quarter, we progressed with our strategic investments to build up new capacity in our core markets. In May, we reached a significant milestone as we celebrated the start of the building work on our new passenger car tire factory in Romania, which will be the world’s first zero CO2 emission tire factory.

In the coming months, our focus will be on adding new capacity, retaining a competitive premium product portfolio and serving our customers. We have a clear action plan for growth and a strong team that can execute it. Our new financial targets indicate our ambition for the future. We in Nokian Tyres team have an inspiring journey ahead of us towards EUR 2 billion business and strong profits in the long term.”

Key figures

EUR million 4–6 /23 4–6 /22 Change % CC* Change % 1–6 /23 1–6 /22 Change % CC* Change % 2022
Net sales 293.1 332.3 -11.8% -7.3% 529.5 655.2 -19.2% -16.1% 1,350.5
Operating profit 9.5 46.9     -9.4 68.4     56.7
Operating profit, % 3.2% 14.1%     -1.8% 10.4%     4.2%
Result before tax 6.4 30.9     -16.1 49.7     11.2
Result for the period 1.8 -231.1     -355.9 -184.2     -175.5
EPS, EUR 0.01 -1.67     -2.58 -1.33     -1.27
                   
Segments net sales 293.1 332.3 -11.8% -7.3% 529.5 655.2 -19.2% -16.1% 1,350.5
Segments EBITDA 41.3 25.9     52.5 84.9     118.7
Segments EBITDA, % 14.1% 7.8%     9.9% 13.0%     8.8%
Segments operating profit 15.2 0.9     1.1 35.5     17.8
Segments operating profit, % 5.2% 0.3%     0.2% 5.4%     1.3%
Segments EPS, EUR 0.05 -1.62     -2.50 -1.24     -0.86
Segments ROCE, %**         -0.5% -10.6%     0.9%
                   
Equity ratio, %         60.0% 63.7%     64.9%
Gearing, %         16.2% 14.8%     9.8%
Interest-bearing net debt         219.6 243.0     140.9
Capital expenditure 52.8 18.7     87.2 32.8     129.7
Cash flow from operating activities -66.7 -109.4     -124.3 -223.7     -4.3

* Comparable currencies ** Restated rolling 12 months excluding Russia

In addition to IFRS figures, Nokian Tyres publishes alternative non-IFRS segments figures, which exclude the ramp-up of the US factory and other possible items that are not indicative of the Group’s underlying business performance.

Following the completion of the Russia exit in March 2023, Nokian Tyres has excluded Russia from its IFRS and non-IFRS figures for Q1/2023 and Q2/2023, and has restated the comparison periods and the financial year 2022 accordingly. The balance sheet and the cash flow figures have not been restated

BUSINESS UNIT REVIEWS

Passenger Car Tyres

EUR million 4–6 /23 4–6 /22 Change % CC* Change % 1–6 /23 1–6 /22 Change % CC* Change % 2022
Net sales 152.6 185.2 -17.6% -13.6% 285.9 408.7 -30.0% -27.5% 810.7
Operating profit -5.2 23.5     -14.4 53.4     23.3
Operating profit, % -3.4% 12.7%     -5.1% 13.1%     2.9%
Segment operating profit 0.5 -22.7     -4.0 20.3     -24.7
Segment operating profit, % 0.4% -12.2%     -1.4% 5.0%     -3.1%

* Comparable currencies

Heavy Tyres

EUR million 4–6 /23 4–6 /22 Change % CC* Change % 1–6 /23 1–6 /22 Change % CC* Change % 2022
Net sales 67.5 73.7 -8.4% -6.4% 135.7 138.0 -1.7% -0.4% 271.0
Operating profit 8.7 16.8     18.3 28.9     39.5
Operating profit, % 13.0% 22.8%     13.5% 20.9%     14.6%
Segment operating profit 8.7 16.8     18.3 28.9     44.1
Segment operating profit, % 13.0% 22.8%     13.5% 20.9%     16.3%

* Comparable currencies

Vianor, own operations

EUR million 4–6 /23 4–6 /22 Change % CC* Change % 1–6 /23 1–6 /22 Change % CC* Change % 2022
Net sales 94.4 99.1 -4.7% 3.4% 149.9 156.2 -4.0% 3.1% 362.0
Operating profit 9.5 9.4     -4.0 -2.8     2.8
Operating profit, % 10.1% 9.4%     -2.7% -1.8%     0.8%
Segment operating profit 9.5 9.6     -4.0 -2.5     3.1
Segment operating profit, % 10.1% 9.7%     -2.7% -1.6%     0.9%
Number of own service centers at period end 173 174             173

* Comparable currencies

Source: Nokian Tyres

Tire and Rubber Association of Canada

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