Nokian Tyres plc Half Year Financial Report January–June 2021: Strong volume and profit growth
Nokian Tyres plc Half Year Financial Report January–June 2021, August 3, 2021 at 2:00 p.m.
This release is a summary of Nokian Tyres’ Half Year Financial Report January–June 2021. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.
April–June 2021
- Net sales were EUR 416.2 million (270.7 in April−June 2020) and grew by 53.7%. With comparable currencies, net sales increased by 54.8%.
- Segments operating profit was EUR 89.6 million (24.4), with negative currency impact of approximately EUR 5 million. Operating profit was EUR 81.8 million (-22.8).
- Segments earnings per share were EUR 0.51 (0.09). Earnings per share were EUR 0.47
(-0.18). - Cash flow from operating activities was EUR 9.3 million (25.3).
January–June 2021
- Net sales were EUR 758.0 million (550.5 in January−June 2020) and grew by 37.7%. With comparable currencies, net sales increased by 41.5%.
- Segments operating profit was EUR 139.9 million (40.8), with negative currency impact of approximately EUR 15 million. Operating profit was EUR 126.1 million (-13.7).
- Segments earnings per share were EUR 0.80 (0.16). Earnings per share were EUR 0.72
(-0.16). - Cash flow from operating activities was EUR -15.1 million (-13.6).
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:
“Tire demand continued strong in the second quarter. Thanks to a great performance by all our business units and business areas, net sales increased by 54.8% with comparable currencies. Segments operating profit grew significantly driven by higher sales volume.
In Passenger Car Tyres, volume growth was particularly strong in Russia. The higher share of Russian volume had a negative impact on the average sales price.
To ensure the availability of our premium products, we operated the Russian factory at full capacity. In the US, we continued to ramp-up production to reach an output of around one million tires in 2021. In Finland, we are increasing our production capacity for passenger car tires by approximately 30% this year as announced in March.
In the second quarter, our operating cash flow was positive despite the increasing working capital requirements. Capital expenditure was lower year-over-year in line with the 2021 plan.
Raw material costs started to increase in the second quarter and are estimated to have a significant negative impact in the second half of the year compared to 2020, together with increasing logistics costs. We are taking mitigating actions to reduce the impact of cost inflation.
In 2021, our focus will remain on growth and cash flow. New products and continuous improvements in go-to-market activities will help us build an even stronger foothold in our core markets. We want to benefit from a good momentum in the market while still acting prudently to keep our company strong and competitive for years to come.”
Key figures
| EUR million | 4–6 /21 |
4–6 /20 |
Change % |
CC* Change % |
1–6 /21 |
1–6 /20 |
Change % |
CC* Change % |
2020 |
| Net sales | 416.2 | 270.7 | 53.7% | 54.8% | 758.0 | 550.5 | 37.7% | 41.5% | 1,313.8 |
| Operating profit | 81.8 | -22.8 | 126.1 | -13.7 | 120.0 | ||||
| Operating profit % | 19.6% | -8.4% | 16.6% | -2.5% | 9.1% | ||||
| Profit before tax | 79.6 | -26.9 | 123.3 | -21.2 | 106.0 | ||||
| Profit for the period | 64.5 | -24.8 | 100.0 | -22.4 | 86.0 | ||||
| EPS, EUR | 0.47 | -0.18 | 0.72 | -0.16 | 0.62 | ||||
| Segments operating profit | 89.6 | 24.4 | 139.9 | 40.8 | 190.2 | ||||
| Segments operating profit % | 21.5% | 9.0% | 18.5% | 7.4% | 14.5% | ||||
| Segments EPS, EUR | 0.51 | 0.09 | 0.80 | 0.16 | 1.04 | ||||
| Segments ROCE, %** | 13.9% | 10.6% | 9.3% | ||||||
| Equity ratio, % | 66.1% | 63.3% | 65.3% | ||||||
| Cash flow from operating activities | 9.3 | 25.3 | -15.1 | -13.6 | 422.4 | ||||
| Gearing, % | 9.4% | 16.3% | -1.1% | ||||||
| Interest-bearing net debt |
140.0 | 254.1 | -17.2 | ||||||
| Capital expenditure | 23.4 | 36.6 | 39.3 | 87.5 | 149.9 |
* Comparable currencies
** Rolling 12 months
The definitions of alternative performance measures (non-IFRS figures) are presented in the report by the Board of Directors in Nokian Tyres Financial Review 2020.
BUSINESS UNIT REVIEWS
Passenger Car Tyres
|
EUR million |
4–6 /21 |
4–6 /20 |
Change % |
CC* Change % |
1–6 /21 |
1–6 /20 |
Change % |
CC* Change % |
2020 |
| Net sales | 279.9 | 163.9 | 70.8% | 74.9% | 525.8 | 354.4 | 48.4% | 55.3% | 871.3 |
| Segment operating profit | 70.6 | 13.6 | 123.4 | 39.5 | 177.8 | ||||
| Segment operating profit % | 25.2% | 8.3% | 23.5% | 11.1% | 20.4% |
* Comparable currencies
Heavy Tyres
|
EUR million |
4–6 /21 |
4–6 /20 |
Change % |
CC* Change % |
1–6 /21 |
1–6 /20 |
Change % |
CC* Change % |
2020 |
| Net sales | 62.6 | 40.5 | 54.8% | 52.6% | 119.7 | 91.6 | 30.7% | 30.4% | 194.6 |
| Segment operating profit | 11.7 | 2.6 | 24.3 | 10.8 | 23.7 | ||||
| Segment operating profit % | 18.8% | 6.4% | 20.3% | 11.8% | 12.2% |
* Comparable currencies
Vianor, own operations
|
EUR million |
4–6 /21 |
4–6 /20 |
Change % |
CC* Change % |
1–6 /21 |
1–6 /20 |
Change % |
CC* Change % |
2020 |
| Net sales | 91.5 | 80.8 | 13.1% | 8.0% | 149.6 | 135.3 | 10.6% | 6.5% | 318.1 |
| Segment operating profit | 10.1 | 9.6 | 0.2 | -2.8 | 4.0 | ||||
| Segment operating profit % | 11.0% | 11.8% | 0.2% | -2.1% | 1.3% | ||||
| Number of own service centers at period end | 174 | 186 | 174 |
* Comparable currencies
CONFERENCE CALL
A conference call for investors, analysts and media will be held on August 3, 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: 76245505#
The call can also be listened live at https://nokiantyres.videosync.fi/2021-q2-results
A recording of the conference call and a transcript will be available on the company’s website later.
FINANCIAL REPORTING
Interim Report for January–September 2021: November 2, 2021
CAPITAL MARKETS DAY 2021
Nokian Tyres’ virtual Capital Markets Day 2021 for investors and analysts is scheduled for September 9, 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 and 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 2020, the company’s net sales were EUR 1.3 billion and it employed some 4,600 people. Nokian Tyres is listed on Nasdaq Helsinki. Further information: www.nokiantyres.com