Nokian Tyres plc Financial Statement Release 2022: Resilient performance in an unprecedented business environment

Nokian Tyres plc Financial Statement Release 2022, February 7, 2023 at 2:00 p.m.

This release is a summary of Nokian Tyres’ Financial Statement Release 2022. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/. 

October–December 2022

• Net sales were EUR 411.3 million (512.6 in October–December 2021) and decreased by 19.8%. With comparable currencies, net sales decreased by 22.2% due to lower passenger car tire supply volumes.
• Segments operating profit was EUR 13.5 million (88.0), with no significant currency impact. The decline was driven by lower passenger car tire supply volumes and changed factory mix. Operating profit was EUR -13.5 million (53.0). EUR -27.0 million (-35.0) was booked as non-IFRS exclusions.
• Segments earnings per share were EUR 0.11 (0.49). Earnings per share were EUR -0.11 (0.27).
• Cash flow from operating activities was EUR 318.6 million (492.6). 

January–December 2022

• Net sales were EUR 1,776.1 million (1,714.1 in 2021) and grew by 3.6%. With comparable currencies, net sales decreased by 2.2%. The year began with good demand in all markets. The war in Ukraine started to impact on the operating environment in late February. Tire imports from Russia to Europe and North America ended in July. 
• Segments operating profit was EUR 221.2 million (324.8), with positive currency impact of approximately EUR 31 million. The decline was driven by lower passenger car tire supply volumes and changed factory mix due to lower production in Russia. Operating profit was EUR -116.2 million (268.2). EUR -337.4 million (-56.7) was booked as non-IFRS exclusions.
• In June, the Board of Directors decided to initiate a controlled exit from Russia. As part of the process, impairments and write-downs of EUR 300.7 million were recorded in the second quarter. In October, an agreement for the sale of the Russian operations was signed. The sale process is ongoing. The transaction is subject to approval by the relevant regulatory authorities in Russia and other conditions, which creates substantial uncertainties related to the timing, terms and conditions and the closing of the transaction.
• Segments earnings per share were EUR 1.30 (1.84). Earnings per share were EUR -1.27 (1.49).
• Segments ROCE was 10.3% (15.8%). 
• Cash flow from operating activities was EUR -4.3 million (396.5).
• The Board of Directors proposes a dividend of EUR 0.35 per share for the financial year 2022 to be paid in May. In addition, it is proposed that the AGM would authorize the Board of Directors to decide on the second dividend instalment of a maximum of EUR 0.20 per share to be distributed in December (dividend for the financial year 2021: 0.55).
   

Guidance for 2023

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.

Restated comparison figures for 2021−2022 excluding Russia

Nokian Tyres has restated alternative non-IFRS figures for 2021 and 2022 to reflect the way Nokian Tyres’ management monitors the business following the Russia exit announcement and the ongoing process. The balance sheet will not be restated.

Nokian Tyres will publish more detailed restated comparison figures for 2021 and 2022 in a separate release.

Jukka Moisio, President and CEO:

“The year 2022 was exceptional and full of major changes. I am proud of the Nokian Tyres team, who showed exceptional strength and resilience in the midst of the unprecedented events, responding to fast-changing situations while at the same time caring for customers and for each other.

During the year, we started to build the new Nokian Tyres without Russia, increased production in Finland and in the US, and launched high performing new products in our core segments, making our product portfolio the strongest ever. We also made the decision to build a new passenger car tire factory in Romania, which will be the world’s first zero CO2 emission factory in the tire industry, and the decision to start collaborating with tire contract manufacturers. These actions are extremely important in terms of additional capacity and our future growth.

Despite the challenging operating environment, we had many successes and achievements in 2022. In Heavy Tyres, we had a record year in terms of net sales, profitability and productivity. Vianor delivered all-time high net sales, and in North America, we reached the highest ever sales volume of passenger car tires. We improved workplace safety to the best ever level and were included in the Dow Jones Sustainability Europe Index, being one of the top-scoring companies in the Automobiles and Automotive components industry.

As we enter 2023, our focus will be on adding new capacity, retaining a competitive premium product portfolio and serving our customers. The first half of the year will be demanding as we are lacking supply, but we expect our volumes to start picking up again from the second half of 2023 onwards as we continue to progress our ongoing strategic projects. The year 2023 will be a new start for Nokian Tyres to EUR 2 billion business long-term.”
 

Key figures

* Comparable currencies

The definitions of alternative performance measures (non-IFRS figures) are presented in the report by the Board of Directors in Nokian Tyres Financial Review 2021.

In this Financial Statement Release, the following exchange rates for the Russian ruble have been used: 85.3 at the end of 2021, 98.0 average in January–March 2022, 84.5 average in January–June 2022, 76.3 average in January–September 2022, 70.4 average in January–December 2022 and 77.9 at the end of 2022 (source: Refinitiv).

BUSINESS UNIT REVIEWS

Passenger Car Tyres

* Comparable currencies

Heavy Tyres

* Comparable currencies

Vianor, own operations

* Comparable currencies

CONFERENCE CALL

A conference call for investors, analysts and media will be held on February 7, 2023 at 3:00 p.m. EET. 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 (0)9 2319 5437
Sweden +46 (0)8 50520424
United Kingdom +44 (0)33 0551 0200
Standard International Access +44 (0)20 3037 9299

Passcode: Nokian Tyres

The call can also be listened live via https://nokiantyres.videosync.fi/2022-q4-results/register.

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 2022 will be available in English and Finnish at www.nokiantyres.com the week commencing February 27, 2023.

Interim Report January–March 2023: April 25, 2023

THE ANNUAL GENERAL MEETING 2023

The Annual General Meeting of Nokian Tyres plc is scheduled for April 26, 2023.

Releases and company information are available at www.nokiantyres.com/company/investors/.

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

Nokian Tyres develops and manufactures premium tires for people who value safety, sustainability and predictability. Our purpose is to empower the world to drive smarter. 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 2021, the company’s net sales were EUR 1.7 billion and it employed some 4,900 people. Nokian Tyres is listed on Nasdaq Helsinki. Further information: www.nokiantyres.com