Nokian Tyres plc Half Year Financial Report January–June 2024: Improved tire availability driving sales growth in a challenging environment
Nokian Tyres plc Half Year Financial Report January–June 2024, July 19, 2024 at 1:00 p.m. EEST
This release is a summary of Nokian Tyres’ Half Year Financial Report January–June 2024. The complete report is attached to this release. It is also available on the company’s website at www.nokiantyres.com/company/investors/.
April–June 2024
- Net sales were EUR 324.6 million (April–June 2023: 293.1). With comparable currencies, net sales increased by 11.2%.
- Segments operating profit was EUR 20.1 million (15.2). Operating profit was EUR 8.4 million (9.5). EUR -11.7 million (-5.7) was booked as non-IFRS exclusions.
- In the second quarter, the political strikes in Finland caused loss of production, and delays in shipments.
- Earnings per share were EUR 0.01 (0.01).
- Cash flow from operating activities was EUR -57.9 million (-66.7).
January–June 2024
- Net sales were EUR 561.2 million (January–June 2023: 529.5). With comparable currencies, net sales increased by 6.8%.
- Segments operating profit was EUR 5.0 million (1.1). Operating profit was EUR -17.8 million (-9.4). EUR -22.8 million (-10.4) was booked as non-IFRS exclusions.
- During the first half of the year, there was negative impact coming from the Red Sea crisis and the political strikes in Finland, causing loss of production, delays in shipments, and increased logistics costs.
- Earnings per share were EUR -0.18 (-2.58).
- Cash flow from operating activities was EUR -145.2 million (-124.3).
- In March, Nokian Tyres’ President & CEO Jukka Moisio informed Nokian Tyres’ Board of Directors of his intention to retire from his position during 2024. The Board of Directors has initiated the process of finding a successor for Moisio.
Guidance for 2024 (unchanged)
In 2024, Nokian Tyres’ net sales with comparable currencies and segments operating profit are expected to grow significantly compared to the previous year.
Jukka Moisio, President and CEO:
“In April–June 2024, our net sales increased clearly driven especially by Central Europe. Sales growth in Passenger Car Tyres continued as a result of improved product availability and higher sales volume. Vianor delivered a solid sales performance, while the weak OE market continued to impact Heavy Tyres’ net sales negatively. Segments operating profit improved driven by sales volume growth and lower raw material costs.
The car and tire market continues to be demanding due to economic uncertainties and low consumer confidence. The political strikes in Finland had a negative impact still in the second quarter. Due to the strikes in February–April, we lost in total approximately three weeks of production in Passenger Car Tyres and one week in Heavy Tyres. The negative financial impact of the political strikes and the Red Sea crisis on H1 EBITDA was approximately EUR 20 million, of which more than half was in Q1.
We continue building the new Nokian Tyres, and in early July we manufactured the first tire in our new factory in Romania - right on schedule and according to our plans. This is an important and great achievement from the whole Nokian Tyres team. In the US, we opened a finished goods warehouse next to our factory, completing the US investment phase. This year, we are also celebrating the 90th anniversary of our innovation, the winter tire, while at the same time continuing strong innovation work to launch new products to the markets.
We are taking firm steps forward in sustainability. During the quarter, we introduced an innovative concept tire made with a fully renewable lignin raw material, which has potential to replace a significant part of the carbon black currently used in tire production, reducing the need for fossil materials and lowering carbon emissions in tire manufacturing. This is once again a concrete step on the way to reach our target of increasing the share of recycled and renewable raw materials in our tires to 50% by 2030.
Tire sell-in is expected to grow in 2024, and with our increasing capacity and competitive product portfolio, we are ready to seize this opportunity. Due to seasonality, the sales growth and segments operating profit are expected to be generated in the second half of the year. Our strong balance sheet enables us to both continue executing on our clear growth strategy toward EUR 2 billion net sales with strong profits and reward our shareholders.”
Key figures
|
EUR million |
4–6/2024 |
4–6/2023 |
1–6/2024 |
1–6/2023 |
2023 |
|
Net sales |
324.6 |
293.1 |
561.2 |
529.5 |
1,173.6 |
|
Net sales change, % |
10.7% |
-11.8% |
6.0% |
-19.2% |
-13.1% |
|
Net sales change in comparable currencies, % |
11.2% |
-7.3% |
6.8% |
-16.1% |
-9.2% |
|
Operating profit |
8.4 |
9.5 |
-17.8 |
-9.4 |
32.1 |
|
Operating profit, % |
2.6% |
3.2% |
-3.2% |
-1.8% |
2.7% |
|
Result before tax |
1.3 |
6.4 |
-30.3 |
-16.1 |
14.2 |
|
Result for the period |
0.8 |
1.8 |
-24.6 |
-355.9 |
-325.5 |
|
EPS, EUR |
0.01 |
0.01 |
-0.18 |
-2.58 |
-2.36 |
|
|
|
|
|
|
|
|
Segments EBITDA |
46.8 |
41.3 |
59.3 |
52.5 |
170.5 |
|
Segments EBITDA, % |
14.4% |
14.1% |
10.6% |
9.9% |
14.5% |
|
Segments operating profit |
20.1 |
15.2 |
5.0 |
1.1 |
65.1 |
|
Segments operating profit, % |
6.2% |
5.2% |
0.9% |
0.2% |
5.5% |
|
Segments ROCE, %* |
|
|
3.6% |
-0.5% |
4.0% |
|
|
|
|
|
|
|
|
Equity ratio, % |
|
|
55.0% |
60.0% |
58.0% |
|
Gearing, % |
|
|
46.8% |
16.2% |
16.6% |
|
Interest-bearing net debt |
|
|
600.4 |
219.6 |
223.6 |
|
Capital expenditure |
89.2 |
52.8 |
158.9 |
87.2 |
252.1 |
|
Cash flow from operating activities |
-57.9 |
-66.7 |
-145.2 |
-124.3 |
82.4 |
* Rolling 12 months
In addition to IFRS figures, Nokian Tyres publishes alternative non-IFRS segments figures, which exclude the ramp-up of the US factory, the preparations for the Romanian factory ramp-up 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 segments figures as of January 1, 2023.
BUSINESS UNIT REVIEWS
Passenger Car Tyres
|
EUR million |
4–6/2024 |
4–6/2023 |
1–6/2024 |
1–6/2023 |
2023 |
|
Net sales |
188.8 |
152.6 |
331.9 |
285.9 |
653.4 |
|
Net sales change, % |
23.7% |
-17.6% |
16.1% |
-30.0% |
-19.4% |
|
Net sales change in comparable currencies, % |
24.3% |
-13.6% |
17.0% |
-27.5% |
-15.8% |
|
Operating profit |
-3.8 |
-5.2 |
-17.3 |
-14.4 |
4.1 |
|
Operating profit, % |
-2.0% |
-3.4% |
-5.2% |
-5.1% |
0.6% |
|
Segment operating profit |
7.1 |
0.5 |
4.2 |
-4.0 |
36.7 |
|
Segment operating profit, % |
3.7% |
0.4% |
1.3% |
-1.4% |
5.6% |
Heavy Tyres
|
EUR million |
4–6/2024 |
4–6/2023 |
1–6/2024 |
1–6/2023 |
2023 |
|
Net sales |
60.2 |
67.5 |
115.3 |
135.7 |
257.1 |
|
Net sales change, % |
-10.7% |
-8.4% |
-15.0% |
-1.7% |
-5.1% |
|
Net sales change in comparable currencies, % |
-10.3% |
-6.4% |
-14.4% |
-0.4% |
-3.4% |
|
Operating profit |
7.6 |
8.7 |
14.0 |
18.3 |
32.8 |
|
Operating profit, % |
12.7% |
13.0% |
12.1% |
13.5% |
12.8% |
|
Segment operating profit |
7.6 |
8.7 |
14.0 |
18.3 |
32.8 |
|
Segment operating profit, % |
12.7% |
13.0% |
12.1% |
13.5% |
12.8% |
Vianor, own operations
|
EUR million |
4–6/2024 |
4–6/2023 |
1–6/2024 |
1–6/2023 |
2023 |
|
Net sales |
95.5 |
94.4 |
151.4 |
149.9 |
344.0 |
|
Net sales change, % |
1.2% |
-4.7% |
1.0% |
-4.0% |
-5.0% |
|
Net sales change in comparable currencies, % |
1.3% |
3.4% |
1.7% |
3.1% |
1.8% |
|
Operating profit |
7.5 |
9.5 |
-8.4 |
-4.0 |
3.4 |
|
Operating profit, % |
7.8% |
10.1% |
-5.6% |
-2.7% |
1.0% |
|
Segment operating profit |
7.5 |
9.5 |
-8.4 |
-4.0 |
3.4 |
|
Segment operating profit, % |
7.8% |
10.1% |
-5.6% |
-2.7% |
1.0% |
|
Number of own service centers at period end |
175 |
173 |
|
|
174 |
CONFERENCE CALL
A conference call for investors, analysts and media will be held on the publishing day at 2:00 p.m. EEST. In the call, President and CEO Jukka Moisio and CFO Niko Haavisto will present the financial results. Participants can listen to the call online at https://nokiantyres.videosync.fi/2024-q2-results.
To ask questions, please participate in the conference call by registering at https://palvelu.flik.fi/teleconference/?id=50050069. The phone numbers and a conference ID to access the conference call will be provided after the registration.
A recording of the conference call will be available on the company’s website for 12 months after the call.
FINANCIAL REPORTING
Interim Report January–September 2024 will be published on October 29, 2024.
Releases and company information are available at www.nokiantyres.com/company/investors/.
Further information:
Jukka Moisio, President and CEO, tel: +358 10 401 7742
Niko Haavisto, CFO, tel: +358 10 401 7819
Päivi Antola, SVP, Communications, Investor Relations and Brand, tel: +358 10 401 7327
Nokian Tyres develops and manufactures premium tires for people who value safety, sustainability and predictability. 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 2023, our net sales totaled EUR 1,174 million. At the end of 2023 we employed over 3,400 professionals. Nokian Tyres is listed on Nasdaq Helsinki. Further information: www.nokiantyres.com.