Nokian Tyres plc Half Year Financial Report January–June 2017: Strong first half of the year with solid full year expectations
Nokian Tyres plc Half Year Financial Report January–June 2017, August 8, 2017, 8:00 a.m.
This release is a summary of Nokian Tyres’ Half Year Financial Report. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.
April–June 2017
- Net sales increased by 16.5% to EUR 393.0 million (337.4 in 4–6/2016). Currency exchange rate changes affected net sales positively by EUR 10.9 million compared with the rates in 4–6/2016.
- Operating profit increased by 21.5% to EUR 94.1 million (77.5). Operating profit percentage was 24.0% (23.0%).
- The profit for the period increased by 16.0% to EUR 71.1 million (61.3).
- Earnings per share were EUR 0.52 (0.46).
- Cash flow from operating activities was EUR -5.9 million (21.3).
January–June 2017
- Net sales increased by 17.2% to EUR 718.9 million (613.3 in 1–6/2016). Currency exchange rate changes affected net sales positively by EUR 32.2 million compared with the rates in 1–6/2016.
- Operating profit increased by 19.6% to EUR 153.0 million (128.0). Operating profit percentage was 21.3% (20.9%).
- The profit for the period increased by 15.1% to EUR 116.4 million (101.2).
- Earnings per share were EUR 0.86 (0.75).
- Cash flow from operating activities was EUR -46.0 million (-40.0).
Financial guidance (Updated)
In 2017, with the current exchange rates, net sales and operating profit are expected to grow by at least 10% compared to 2016.
Previous guidance (May 3, 2017)
In 2017, with the current exchange rates, net sales are expected to grow by at least 10% and operating profit is expected to grow by over 5% compared to 2016.
Key figures, EUR million
| 4–6 /17 |
4–6 /16 |
Change % |
1–6 /17 |
1–6 /16 |
Change % |
2016 | |
| Net sales | 393.0 | 337.4 | 16.5 | 718.9 | 613.3 | 17.2 | 1,391.2 |
| Operating profit | 94.1 | 77.5 | 21.5 | 153.0 | 128.0 | 19.6 | 310.5 |
| Operating profit % | 24.0 | 23.0 | 21.3 | 20.9 | 22.3 | ||
| Profit before tax | 87.1 | 74.8 | 16.5 | 146.0 | 123.2 | 18.5 | 298.7 |
| Profit for the period | 71.1 | 61.3 | 16.0 | 116.4 | 101.2 | 15.1 | 251.8 |
| Earnings per share, EUR | 0.52 | 0.46 | 14.7 | 0.86 | 0.75 | 13.8 | 1.87 |
| Equity ratio, % | 76.4 | 72.0 | 73.8 | ||||
| Cash flow from operating activities |
-5.9 | 21.3 | -46.0 | -40.0 | 364.4 | ||
| Gearing, % | -2.6 | 6.6 | -19.7 | ||||
| Interest-bearing net debt | -36.0 | 79.6 | -287.4 | ||||
| Capital expenditure | 42.6 | 25.3 | 68.4 | 60.0 | 44.4 | 35.0 | 105.6 |
Hille Korhonen, President and CEO:
“In H1/2017 Nokian Tyres demonstrated strong performance in all of its main markets. Our net sales and operating profit improved.
The Passenger Car Tyres business unit showed strong growth during H1/2017. Net sales and operating profit increased clearly year-over-year, and we were able to increase our market shares in our main markets. The growth was driven by Russia due to its stronger currency, price increases and low carry-over stocks from 2016. The growth in Russia will be moderate in H2/2017, as H2/2016 was already strong. We have been responding to the growing demand by increasing the production volumes at both factories and by building a new production line at the Russian factory. The new production line will be taken into use by the end of the year. Raw material costs continued to go up during H1. We estimate, that raw material costs will increase by approximately 20% for the full year 2017 compared with 2016. We have already implemented the necessary price increases in all markets, and the full effect of these increases will be seen from H2 onwards due to the seasonality of Nokian Tyres’ business model. We have been building the foundation for future growth by renewing our product range with new winter tyre range: the Nokian Hakkapeliitta 9 and Nokian Hakkapeliitta 9 SUV, along with Nokian Nordman 7 and Nokian Nordman 7 SUV.
Heavy Tyres increased its sales and production volume especially in the forestry business. We have been investing in production technology, people and marketing activities in order to support further growth. Heavy Tyres has announced several new products, including the Nokian E-Truck series of all-season truck and bus tyres and Nokian HTS G2 – the second generation of terminal tyres.
Vianor’s (own equity) sales were impacted by the atypical spring season, and its profitability was affected by non-recurring expenses. However, a profitability improvement program is proceeding according to plan. Our branded distribution network, including Vianor, NAD, and N-Tyre stores, grew by 145 stores during H1/2017.
In May, we announced an investment in a new greenfield factory in Dayton, Tennessee, USA. This factory will enable us to further enhance our position in the North American market with a wider product range and better customer service.
Our personnel have been doing a great job everywhere. As the company’s new President and CEO, I am very proud of all of them. A strong position in our core markets, investments in growth markets, a strong distribution network, competitive products, and the whole organization delivering excellent results provide us a solid foundation for future growth. We have returned to a growth track and intend to stay on this track also in the future.”
BUSINESS UNIT REVIEWS
Passenger Car Tyres
| 4–6 /17 |
4–6 /16 |
Change % |
1–6 /17 |
1–6 /16 |
Change % |
2016 | |
| Net sales, M€ | 276.4 | 230.1 | 20.1 | 524.4 | 432.6 | 21.2 | 981.1 |
| Operating profit, M€ |
84.8 | 64.7 | 31.0 | 160.7 | 127.0 | 26.6 | 305.8 |
| Operating profit, % |
30.7 | 28.1 | 30.6 | 29.4 | 31.2 |
Heavy Tyres
| 4–6 /17 |
4–6 /16 |
Change % |
1–6 /17 |
1–6 /16 |
Change % |
2016 | |
| Net sales, M€ | 44.0 | 38.7 | 13.5 | 83.8 | 76.3 | 9.8 | 155.3 |
| Operating profit, M€ |
9.1 | 6.1 | 50.1 | 14.8 | 15.0 | -1.2 | 28.2 |
| Operating profit, % |
20.8 | 15.7 | 17.7 | 19.7 | 18.2 |
Vianor
Equity operations
| 4–6 /17 |
4–6 /16 |
Change % |
1–6 /17 |
1–6 /16 |
Change % |
2016 | |
| Net sales, M€ | 89.8 | 89.4 | 0.4 | 146.1 | 143.2 | 2.0 | 334.8 |
| Operating profit, M€ |
4.0* | 5.5 | -27.6 | -11.8** | -9.2 | -29.0 | -8.1 |
| Operating profit, % |
4.5* | 6.2 | -8.1** | -6.4 | -2.4 | ||
| Equity stores, pcs | 205 | 202 | 212 |
* Excluding non-recurring items: Operating profit EUR 5.8 million, operating profit percentage 6.5%.
** Excluding non-recurring items: Operating profit EUR -10.0 million, operating profit percentage -6.8%.
Press and analyst meetings
Nokian Tyres published its half year financial report for January–June 2017 on August 8, 2017 at 8:00 a.m. Finnish time.
The result presentation for analysts and media will be held on August 8, 2017 at 10:00 a.m. Finnish time at Hotel Kämp (address Pohjoisesplanadi 29, Helsinki). President and CEO Hille Korhonen will present the half year financial report and answer questions from the audience.
The presentation can be listened to as an audiocast over the internet at
www.nokiantyres.com/resultinfo-Q2-2017 starting at 10 a.m.
The event can also be attended via conference call. Please dial in 5–10 minutes before the beginning of the event:
FI: +358981710495
UK: +442031940552
SE: +46856642702
US: +18557161597
An audio file of the event will be available on the company’s website later on the same day.
Reporting schedule
The Interim Report January–September 2017 will be published on November 1, 2017. Releases and company information will be available at: www.nokiantyres.com/company/investors/.
Further information:
Hille Korhonen, President and CEO, tel: +358 10 401 7733
Nokian Tyres plc
Antti-Jussi Tähtinen, Vice President, Marketing and Communications
Distribution: Nasdaq Helsinki, media, www.nokiantyres.com
Attachment: Nokian Tyres’ Half Year Financial Report January–June 2017
Nokian Tyres is the world’s northernmost tyre manufacturer. The company promotes and facilitates safe driving in demanding conditions. It supplies innovative tyres for cars, trucks and special heavy machinery mainly in areas with special challenges on tyre performance: snow, forests and harsh driving conditions in different seasons. Nokian Tyres’ product development is consistently aiming for sustainable solutions for safety and the environment, taking into account the whole life cycle of the tyre. A part of the Nokian Tyres group, the tyre chain Vianor has approximately 1,500 stores in 27 countries. In 2016 Nokian Tyres had approximately 4,400 employees and net sales of approximately 1,4 billion euros. Nokian Tyres’ share is listed on the Nasdaq Helsinki. Further information: www.nokiantyres.com