Nokian Tyres plc Interim Report January−September 2018: Growth in all main markets. Negative impact from currencies, guidance updated.
Nokian Tyres plc Interim Report January−September 2018, October 31, 2018, 8:00 a.m.
This release is a summary of Nokian Tyres’ Interim Report January−September 2018. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.
July–September 2018
- Net sales decreased by 1.7% to EUR 356.9 million (363.1 in 7–9/2017). With comparable currencies, net sales increased by 1.2%.
- Operating profit decreased to EUR 85.9 million (89.8) negatively impacted by currencies.
- Profit for the period was EUR 65.2 million (10.2; including EUR 59 million in additional taxes and interest related to tax year 2011).
- Earnings per share rose to EUR 0.48 (0.08).
- Cash flow from operating activities was EUR -73.7 million (-88.1).
- Guidance updated.
January–September 2018
- Net sales increased by 3.7% to EUR 1,122.0 million (1,082.0 in 1–9/2017). With comparable currencies, net sales increased by 8.7%.
- Operating profit increased to EUR 255.2 million (242.8).
- Profit for the period was EUR 199.3 million (126.7. In Q3/2017, profit included EUR 59 million in additional taxes and interest related to tax year 2011).
- Earnings per share rose to EUR 1.45 (0.93).
- Cash flow from operating activities was EUR 76.9 million (-134.1). In relation to the tax disputes concerning the years 2007−2011, the Finnish Tax Administration returned the previously paid EUR 148 million in additional taxes and interest to the company in June 2018.
Guidance updated
In 2018, net sales and operating profit are expected to be at the same level or slightly higher compared with 2017 due to continued negative currency impact.
Earlier guidance from February 2, 2018
In 2018, with the current exchange rates, net sales and operating profit are expected to grow compared with 2017.
Hille Korhonen, President and CEO:
“In January−September 2018, our performance was good and we grew faster than the market. With comparable currencies, net sales increased by 8.7%. Operating profit increased slightly compared to the first nine months of 2017, despite a significant negative currency impact. Net sales in July−September were negatively impacted by high inventory levels of summer tires in Russia and lower new car sales in Sweden and Norway.
The construction work at our new US factory in Dayton, Tennessee, is proceeding as planned, and commercial production is planned to begin in 2020. The test center project in Spain is ongoing and on schedule. Both the US factory and the Spanish test center will be major assets to us as we are focusing on our next stage of growth. We are aiming at doubling our sales in North America and growing our sales by 50% in Central Europe in the next 5 years, as well as maintaining our market leader positions in the Nordics and Russia. In line with our strategic target to grow in Central Europe, we had two major product launches in October, launching two new summer tires for the Central European markets: the Nokian Powerproof and the Nokian Wetproof.
Sustainability is an important part of our strategy, and I am particularly proud to announce that we were again included in Dow Jones’ DJSI World sustainability index. Our company was also selected for the more strictly defined DJSI Europe index.”
Key figures, EUR million
| 7–9 /18 |
7–9 /17 |
Change % |
CC* Change % |
1–9/18 | 1–9/17 | Change % |
CC* Change % |
2017 | |
| Net sales | 356.9 | 363.1 | -1.7 | 1.2 | 1,122.0 | 1,082.0 | 3.7 | 8.7 | 1,572.5 |
| Operating profit | 85.9 | 89.8 | 255.2 | 242.8 | 365.4 | ||||
| Operating profit % | 24.1 | 24.7 | 22.7 | 22.4 | 23.2 | ||||
| Profit before tax | 82.8 | 67.4 | 248.2 | 213.4 | 332.4 | ||||
| Profit for the period | 65.2 | 10.2 | 199.3 | 126.7 | 221.4 | ||||
| Earnings per share, EUR | 0.48 | 0.08 | 1.45 | 0.93 | 1.63 | ||||
| Equity ratio, % | 70.5 | 71.3 | 78.2 | ||||||
| Cash flow from operating activities | -73.7 | -88.1 | 76.9 | -134.1 | 234.1 | ||||
| Gearing, % | 1.8 | 8.5 | -14.2 | ||||||
| Interest-bearing net debt |
25.8 | 116.6 | -208.3 | ||||||
| Capital expenditure | 49.4 | 35.3 | 114.2 | 95.3 | 134.9 |
* Comparable currencies
BUSINESS UNIT REVIEWS
Passenger Car Tyres
| 7–9 /18 |
7–9 /17 |
Change % |
CC Change % |
1–9/18 | 1–9/17 | Change % | CC Change % |
2017 | |
| Net sales, M€ | 265.9 | 276.2 | -3.7 | -0.7 | 834.0 | 800.6 | 4.2 | 10.0 | 1,138.8 |
| Operating profit, M€ |
91.5 | 98.3 | 260.0 | 259.0 | 359.9 | ||||
| Operating profit, % |
34.4 | 35.6 | 31.2 | 32.4 | 31.6 |
Heavy Tyres
| 7–9 /18 |
7–9 /17 |
Change % |
CC Change % |
1–9/18 | 1–9/17 | Change % |
CC Change % |
2017 | |
| Net sales, M€ | 45.1 | 42.1 | 7.0 | 9.0 | 134.7 | 125.9 | 7.0 | 9.2 | 172.3 |
| Operating profit, M€ |
5.9 | 7.9 | 19.0 | 22.8 | 32.2 | ||||
| Operating profit, % |
13.0 | 18.8 | 14.1 | 18.1 | 18.7 |
Vianor, own operations
| 7–9 /18 |
7–9 /17 |
Change % |
CCChange% | 1–9/18 | 1–9/17 | Change% | CC Change % |
2017 | |
| Net sales, M€ | 68.6 | 68.7 | 0.0 | 2.9 | 214.9 | 214.7 | 0.1 | 3.2 | 339.4 |
| Operating profit, M€ |
-5.4 | -7.0 | -10.1 | -18.9 | -5.8 | ||||
| Operating profit, % |
-7.9 | -10.3 | -4.7 | -8.8 | -1.7 | ||||
| Own service centers, pcs, at period end | 191 | 196 | 194 |
CONFERENCE CALL
A conference call for investors, analysts and media will be held at 10:00 a.m. Finnish time. In the call, Nokian Tyres’ President and CEO Hille Korhonen 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: 0800523163
Sweden: +46 856642651
UK: +44 3333000804
US: +1 6319131422
PIN: 38828061#
The call can also be listened live via www.nokiantyres.com/resultinfo-Q3-2018
A recording of the conference call and a transcript will be available on the company’s website later.
CAPITAL MARKETS DAY
Capital Markets Day will be held on November 13, 2018. The presentation material will be available at the www.nokiantyres.com/cmd2018 at the beginning of the event.
FINANCIAL REPORTING
Financial Statement Bulletin 2018: February 5, 2019
Releases and company information are available at www.nokiantyres.com/company/investors/.
Nokian Tyres plc
Päivi Antola, SVP, Communications and IR
Further information:
Hille Korhonen, President and CEO, tel: +358 10 401 7733
Teemu Kangas-Kärki, CFO, tel: +358 10 401 7750
Päivi Antola, SVP, Communications and IR, tel: +358 10 401 7327
Distribution: Nasdaq Helsinki, media, www.nokiantyres.com
Attachment: Nokian Tyres’ Interim Report January−September 2018
Nokian Tyres is the world’s northernmost tyre manufacturer and one of the most sustainable companies in the industry. We offer peace of mind in all conditions by developing high-quality, safe and eco-friendly tyres for passenger cars, trucks and heavy machinery. We are especially well known for our innovative winter tyres. Our group also includes the Vianor chain, specialising in vehicle maintenance and tyre services. In 2017, the company’s turnover was approximately EUR 1.6 billion and it employed some 4,600 people. Nokian Tyres is listed on Nasdaq Helsinki. Further information: www.nokiantyres.com