Nokian Tyres plc Financial Statement Release 2020: Good performance in an unprecedented market environment
Nokian Tyres plc Financial Statement Release 2020, February 9, 2021 at 2:00 p.m.
This release is a summary of Nokian Tyres’ Financial Statement Release 2020. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.
October–December 2020
- Net sales were EUR 413.4 million (474.8 in October−December 2019). With comparable currencies, net sales decreased by 7.1%.
- Segments operating profit was EUR 80.1 million (106.8), with negative currency impact. Operating profit was EUR 71.4 million (101.0).
- Segments earnings per share were EUR 0.44 (0.63). Earnings per share were EUR 0.40 (0.58).
- Cash flow from operating activities was EUR 429.0 million (398.2).
January–December 2020
- Net sales were EUR 1,313.8 million (1,585.4 in 2019). With comparable currencies, net sales decreased by 13.3% especially due to COVID-19, measures taken to reduce carry-over stocks in the Russian distribution channel, and mild winter 2019-2020 in all main markets.
- Segments operating profit was EUR 190.2 million (337.2). The decline was driven by lower volumes, underabsorption of factory costs and currencies. EUR -70.2 million (-20.8) was booked as non-IFRS exclusions. Operating profit was EUR 120.0 million (316.5).
- Segments earnings per share were EUR 1.04 (3.06; positively impacted by EUR 1.08 related to the rulings on the tax disputes). Earnings per share were EUR 0.62 (2.89; positively impacted by EUR 1.08 related to the rulings on the tax disputes).
- Cash flow from operating activities was EUR 422.4 million (219.8).
- In March 2020, the Board of Directors withdrew the company’s financial guidance for 2020 due to the COVID-19 outbreak, which increased the uncertainty in the car and tire market.
- The Board of Directors proposes a dividend of EUR 1.20 (1.14) per share for the financial year 2020 to be paid in two instalments.
Guidance for 2021
In 2021, Nokian Tyres’ net sales with comparable currencies and segments operating profit are expected to grow significantly.
The global car and tire demand is expected to pick up, but the COVID-19 pandemic continues to cause uncertainties for the development.
Jukka Moisio, President and CEO:
“Our October-December 2020 sales continued to be impacted by COVID-19 as restrictions were again tightened in many countries. Passenger Car Tyres’ net sales were also negatively impacted by a delayed winter season in main markets. Heavy Tyres and Vianor continued to perform well considering the volatile market. Segments operating profit declined mainly due to the lower passenger car tire volumes.
I am extremely proud of how our team responded to the challenges in 2020. We have demonstrated the resilience of our company. Our focus has been on serving demand, safeguarding supply and reducing costs. In Russia, we successfully achieved our target to lower distribution channel inventories in line with the plan. The cash flow was significantly better than in the previous year, and we maintained a strong balance sheet.
At the same time, we have progressed on our key projects to support the company’s long-term growth. We began commercial tire production in the US factory and are completing our new test center in Spain. The project to increase Heavy Tyres’ capacity in Finland is proceeding as planned. These investments, together with innovative new products and robust sales and marketing efforts, will provide an excellent foundation to capture profitable growth opportunities as we move forward.
In 2020, we continued to take important steps forward in our sustainability journey. We got our ambitious greenhouse gas emissions targets approved by the Science Based Targets initiative as the first tire company in the industry. We had a good development also in occupational safety, with LTIF dropping from 4.3 to 3.7. However, the work continues, as even a single accident is one too many.
We are starting 2021 in a good position. We will drive growth through new product launches, and improvements in go-to-market activities. Cash flow will continue to be in focus, with prioritized investments on a lower level compared to previous years. In the coming months, we will review our strategy to continue to deliver positive long-term results to our stakeholders.”
Key figures, EUR million
| 10–12 /20 |
10–12 /19 |
Change | CC* Change |
2020 | 2019 | Change | CC* Change |
|
| Net sales | 413.4 | 474.8 | -12.9% | -7.1% | 1,313.8 | 1,585.4 | -17.1% | -13.3% |
| Operating profit | 71.4 | 101.0 | 120.0 | 316.5 | ||||
| Operating profit % | 17.3% | 21.3% | 9.1% | 19.8% | ||||
| Profit before tax | 70.9 | 95.1 | 106.0 | 336.7 | ||||
| Profit for the period | 55.9 | 81.1 | 86.0 | 399.9 | ||||
| EPS, EUR** | 0.40 | 0.58 | 0.62 | 2.89 | ||||
| Segments operating profit | 80.1 | 106.8 | 190.2 | 337.2 | ||||
| Segments operating profit % | 19.4% | 22.5% | 14.5% | 21.3% | ||||
| Segments EPS, EUR** | 0.44 | 0.63 | 1.04 | 3.06 | ||||
| Segments ROCE, % | 9.3% | 18.6% | ||||||
| Equity ratio, % | 65.3% | 75.9% | ||||||
| Cash flow from operating activities | 429.0 | 398.2 | 422.4 | 219.8 | ||||
| Gearing, % | -1.1% | 2.3% | ||||||
| Interest-bearing net debt |
-17.2 | 41.1 | ||||||
| Capital expenditure | 31.6 | 65.4 | 149.9 | 290.1 |
* Comparable currencies
** EPS 2019 excl. the impact of the rulings on the tax disputes of EUR 1.08 were EUR 1.81. Segments EPS 2019 excl. the impact were EUR 1.98
BUSINESS UNIT REVIEWS
Passenger Car Tyres
| 10–12 /20 |
10–12 /19 |
Change | CC* Change |
2020 | 2019 | Change | CC* Change |
|
| Net sales, M€ | 262.0 | 317.3 | -17.4% | -9.8% | 871.3 | 1,123.8 | -22.5% | -18.0% |
| Segment operating profit, M€ | 66.5 | 82.2 | 177.8 | 308.5 | ||||
| Segment operating profit % | 25.4% | 25.9% | 20.4% | 27.4% |
* Comparable currencies
Heavy Tyres
| 10–12 /20 |
10–12 /19 |
Change | CC* Change |
2020 | 2019 | Change | CC* Change |
|
| Net sales, M€ | 53.2 | 54.5 | -2.5% | 0.9% | 194.6 | 202.7 | -4.0% | -1.8% |
| Segment operating profit, M€ | 5.0 | 10.1 | 23.7 | 35.7 | ||||
| Segment operating profit % | 9.5% | 18.6% | 12.2% | 17.6% |
* Comparable currencies
Vianor, own operations
| 10–12 /20 |
10–12 /19 |
Change | CC* Change |
2020 | 2019 | Change | CC* Change |
|
| Net sales, M€ | 115.4 | 120.0 | -3.9% | -2.4% | 318.1 | 336.5 | -5.5% | -2.8% |
| Segment operating profit, M€ | 10.0 | 14.1** | 4.0 | 7.7** | ||||
| Segment operating profit % | 8.7% | 11.8% | 1.3% | 2.3% | ||||
| Number of own service centers at period end | 174 | 189 |
* Comparable currencies
** Including EUR 2.0 million profit from sale of real estate
CONFERENCE CALL
A conference call for investors, analysts and media will be held on February 9, 2021 at 3:00 p.m. Finnish time. In the call, President and CEO Jukka Moisio and CFO Teemu Kangas-Kärki will present the financial results.
To participate, please dial in 5−10 minutes before the beginning of the event:
Finland: +358 981 710 310
Sweden: +46 856 642 651
UK: +44 333 300 08 04
US: +1 631 913 1422
PIN: 96356159#
The call can also be listened live via www.nokiantyres.com/resultinfo-Q4-2020
A recording of the conference call and a transcript will be available on the company’s website later.
FINANCIAL REPORTING
Nokian Tyres Financial Review for 2020 will be available in English and Finnish at www.nokiantyres.com the week commencing March 1, 2021 at the latest.
Interim Report January–March 2021: May 4, 2021
THE ANNUAL GENERAL MEETING 2021
The Annual General Meeting of Nokian Tyres plc is scheduled for March 30, 2021.
Releases and company information are available at www.nokiantyres.com/company/investors/.
Nokian Tyres plc
Päivi Antola
SVP, Corporate Communications and Investor Relations
Further information:
Jukka Moisio, President and CEO, tel: +358 10 401 7742
Teemu Kangas-Kärki, CFO, tel: +358 10 401 7750
Päivi Antola, SVP, Corporate Communications and Investor Relations, tel: +358 10 401 7327
Distribution: Nasdaq Helsinki, media, www.nokiantyres.com
Nokian Tyres develops and manufactures premium tires for people who value safety and sustainability. Inspired by our Scandinavian heritage, we craft innovative products for passenger cars, trucks and heavy machinery that give you peace of mind in all driving conditions. Our Vianor chain provides tire and car services. In 2019, the company’s net sales were EUR 1.6 billion and it employed some 4,700 people. Nokian Tyres is listed on Nasdaq Helsinki. Further information: www.nokiantyres.com