Nokian Tyres plc Interim Report January–September 2021: Strong volume and profit growth

Nokian Tyres plc Interim Report January–September 2021, November 2, 2021 at 2:00 p.m.

 

This release is a summary of Nokian Tyres’ Interim Report January–September 2021. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.

July–September 2021

  • Net sales were EUR 443.5 million (349.9 in July−September 2020) and grew by 26.8%. With comparable currencies, net sales increased by 24.6%.
  • Segments operating profit was EUR 96.9 million (69.3). Operating profit was EUR 89.1 million (62.3).
  • Segments earnings per share were EUR 0.54 (0.44). Earnings per share were EUR 0.50 (0.38).
  • Cash flow from operating activities was EUR -81.0 million (7.1) due to increased working capital.
  • In September, Nokian Tyres announced its revised mid-term strategy and updated targets. In mid-term, net sales target is EUR 2 billion. Target for segments operating profit and segments ROCE is at the level of 20%.

January–September 2021

  • Net sales were EUR 1,201.5 million (900.4 in January−September 2020) and grew by 33.4%. With comparable currencies, net sales increased by 34.9%.
  • Segments operating profit was EUR 236.8 million (110.1), with negative currency impact of approximately EUR 14 million. Operating profit was EUR 215.2 million (48.6).
  • Segments earnings per share were EUR 1.35 (0.60). Earnings per share were EUR 1.22 (0.22).
  • Cash flow from operating activities was EUR -96.1 million (-6.6) due to increased working capital.

Guidance for 2021 (unchanged)

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:

“In July–September, we achieved a record-high third quarter net sales. Thanks to a great performance by all our business units and business areas, together with early timing of deliveries, net sales with comparable currencies increased by 24.6%. Segments operating profit grew significantly driven by higher sales volume.

As anticipated, increased raw material and logistics costs, including the shortage of container capacity, were visible in the third quarter. We have taken mitigating actions, including price increases, to reduce the impact of cost inflation. These actions led to a higher Average Sales Price in the third quarter. We have announced further prices increases in a wide range of markets and products, and we will continue to carefully control costs, as cost inflation is expected to continue.    

We operated the Russian factory and Heavy Tyres’ factory at full capacity to ensure the availability of our premium products. 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 September, we announced Nokian Tyres’ revised growth strategy and updated financial and non-financial targets. Non-financial targets focus on bringing new environmental and safety innovations to products, reducing CO emissions, further improving workplace safety, and monitoring the sustainability of suppliers. Our financial targets are to reach EUR 2 billion in net sales and keep the profitability on a high level by targeting segments operating profit and segments ROCE to be at the level of 20%. After the third quarter, last 12 month rolling net sales were EUR 1.6 billion, segments operating profit 19.6% and segments ROCE 14.4%. These results confirm that our team is on the right track.”
 

Key figures

EUR million

7–9
/21

7–9
/20

Change
%

CC*
Change
%

1–9
/21

1–9
/20

Change
%

CC*
Change
%

2020

Net sales

443.5

349.9

26.8%

24.6%

1,201.5

900.4

33.4%

34.9%

1,313.8

Operating profit

89.1

62.3

 

 

215.2

48.6

 

 

120.0

Operating profit %

20.1%

17.8%

 

 

17.9%

5.4%

 

 

9.1%

Profit before tax

85.0

56.2

 

 

208.3

35.1

 

 

106.0

Profit for the period

69.1

52.5

 

 

169.1

30.1

 

 

86.0

EPS, EUR

0.50

0.38

 

 

1.22

0.22

 

 

0.62

Segments operating profit

96.9

69.3

 

 

236.8

110.1

 

 

190.2

Segments operating profit %

21.8%

19.8%

 

 

19.7%

12.2%

 

 

14.5%

Segments EPS, EUR

0.54

0.44

 

 

1.35

0.60

 

 

1.04

Segments ROCE, %**

 

 

 

 

14.4%

9.5%

 

 

9.3%

Equity ratio, %

 

 

 

 

65.7%

57.5%

 

 

65.3%

Cash flow from operating activities

-81.0

7.1

 

 

-96.1

-6.6

 

 

422.4

Gearing, %

 

 

 

 

15.9%

18.5%

 

 

-1.1%

Interest-bearing
net debt

 

 

 

 

251.0

280.6

 

 

-17.2

Capital expenditure

20.3

31.0

 

 

59.6

118.5

 

 

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

7–9
/21

7–9
/20

Change
%

CC*
Change
%

1–9
/21

1–9
/20

Change
%

CC*
Change
%

2020

Net sales

330.6

254.9

29.7%

27.5%

856.4

609.2

40.6%

43.7%

871.3

Segment operating profit

97.7

71.8

 

 

221.1

111.3

 

 

177.8

Segment operating profit %

29.6%

28.2%

 

 

25.8%

18.3%

 

 

20.4%

* Comparable currencies

Heavy Tyres

EUR million

7–9
/21

7–9
/20

Change
%

CC*
Change
%

1–9
/21

1–9
/20

Change
%

CC*
Change
%

2020

Net sales

69.0

49.8

38.5%

36.3%

188.7

141.4

33.4%

32.5%

194.6

Segment operating profit

11.9

7.8

 

 

36.2

18.7

 

 

23.7

Segment operating profit %

17.3%

15.8%

 

 

19.2%

13.2%

 

 

12.2%

* Comparable currencies

Vianor, own operations

EUR million

7–9
/21

7–9
/20

Change
%

CC*
Change
%

1–9
/21

1–9
/20

Change
%

CC*
Change
%

2020

Net sales

70.1

67.4

4.1%

2.3%

219.7

202.7

8.4%

5.1%

318.1

Segment operating profit

-4.5

-3.2

 

 

-4.3

-6.0

 

 

4.0

Segment operating profit %

-6.4%

-4.8%

 

 

-1.9%

-3.0%

 

 

1.3%

Number of own service centers at period end

175

175

 

 

 

 

 

 

174

* Comparable currencies


CONFERENCE CALL

A conference call for investors, analysts and media will be held on November 2, 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: 91432369#

The call can also be listened live via https://nokiantyres.videosync.fi/2021-q3-results

A recording of the conference call and a transcript will be available on the company’s website later.

FINANCIAL REPORTING

Financial Statement Release 2021 will be published on February 8, 2022.

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