Nokian Tyres plc Interim Report January–September 2023: Market environment challenging, building the new Nokian Tyres on track
Nokian Tyres plc Interim Report January–September 2023, October 31, 2023 at 2:00 p.m. EET
This release is a summary of Nokian Tyres’ Interim Report January–September 2023. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.
July–September 2023
- Segments net sales were EUR 276.1 million (July–September 2022: 333.5) and decreased by 17.2%. With comparable currencies, segments net sales decreased by 12.7% due to demanding car and tire market environment as well as high inventories in the distribution. Net sales were EUR 276.1 million (333.5) and decreased by 17.2%.
- Segments operating profit was EUR 19.6 million (-17.9). Operating profit was EUR 8.3 million (-8.5). EUR -11.3 million (9.6) was booked as non-IFRS exclusions.
- Earnings per share were EUR 0.03 (0.18).
- Cash flow from operating activities was EUR -90.8 million (-99.2).
January–September 2023
- Segments net sales were EUR 805.6 million (January–September 2022: 988.8) and decreased by 18.5%. With comparable currencies, segments net sales decreased by 14.9% due to lower passenger car tire supply volumes as well as due to demanding car and tire market environment and high inventories in the distribution. Net sales were EUR 805.6 million (988.8) and decreased by 18.5%.
- Segments operating profit was EUR 20.7 million (17.6). Operating profit was EUR -1.0 million (59.8). EUR -21.7 million (42.2) was booked as non-IFRS exclusions.
- Earnings per share were EUR -2.55 (-1.16).
- Cash flow from operating activities was EUR -215.2 million (-322.9).
- The sale of Nokian Tyres’ operations in Russia was completed in March. The sale price was EUR 285 million. Nokian Tyres no longer has any operations in Russia.
- In October, the Board decided on the second divided installment of EUR 0.20 per share to be paid in December 2023.
Guidance for 2023 (updated on October 24, 2023)
In 2023, Nokian Tyres’ segments net sales are expected to be approximately EUR 1,150–1,200 million and segments operating profit percentage of net sales approximately 5.5–6%.
As of 2023, segments net sales and segments operating profit exclude Russia and other items, which are not indicative of Nokian Tyres’ underlying business performance.
Jukka Moisio, President and CEO:
“In July-September 2023, our profitability continued to improve, and segments EBITDA rose close to 17 percent. At the same time, the car and tire market continued to be demanding, and inventories in the distribution were on a high level. Customers’ focus on inventory management together with low consumer confidence affected third quarter net sales negatively. Despite lower volumes, margins were on a good level, and we estimate, based on the customer feedback, that we have maintained or further improved our market share in premium winter tires.
During the quarter, we continued to make good progress with our strategic investments to build up new capacity in our core markets. I’m especially pleased to see that our new passenger car tire factory in Romania, which will be the world’s first zero CO2 emission tire factory, is starting to take shape and is well on track for the first tires to be produced in less than a year.
In the fourth quarter, which is the most important season for Nokian Tyres in 2023, we expect cash generation to be strong. Our strong balance sheet enables us to continue to execute our growth plan and reward our shareholders. While the market environment is currently challenging, it does not affect our long-term financial targets. Nokian Tyres team is doing an excellent job in developing high-quality products, delivering first-class service, and building the new Nokian Tyres.”
Key figures
|
EUR million |
7–9 |
7–9 |
Change |
CC* |
1–9 |
1–9 |
Change |
CC* |
2022 |
|
Net sales |
276.1 |
333.5 |
-17.2% |
-12.7% |
805.6 |
988.8 |
-18.5% |
-14.9% |
1,350.5 |
|
Operating profit |
8.3 |
-8.5 |
|
|
-1.0 |
59.8 |
|
|
56.7 |
|
Operating profit, % |
3.0% |
-2.6% |
|
|
-0.1% |
6.1% |
|
|
4.2% |
|
Result before tax |
3.3 |
-11.9 |
|
|
-12.8 |
37.8 |
|
|
11.2 |
|
Result for the period |
4.2 |
24.3 |
|
|
-351.7 |
-159.8 |
|
|
-175.5 |
|
EPS, EUR |
0.03 |
0.18 |
|
|
-2.55 |
-1.16 |
|
|
-1.27 |
|
|
|
|
|
|
|
|
|
|
|
|
Segments net sales |
276.1 |
333.5 |
-17.2% |
-12.7% |
805.6 |
988.8 |
-18.5% |
-14.9% |
1,350.5 |
|
Segments EBITDA |
46.1 |
7.4 |
|
|
98.6 |
92.3 |
|
|
118.7 |
|
Segments EBITDA, % |
16.7% |
2.2% |
|
|
12.2% |
9.3% |
|
|
8.8% |
|
Segments operating profit |
19.6 |
-17.9 |
|
|
20.7 |
17.6 |
|
|
17.8 |
|
Segments operating profit, % |
7.1% |
-5.4% |
|
|
2.6% |
1.8% |
|
|
1.3% |
|
Segments EPS, EUR |
0.09 |
0.25 |
|
|
-2.41 |
-0.99 |
|
|
-0.86 |
|
Segments ROCE, %** |
|
|
|
|
1.4% |
4.9% |
|
|
0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
Equity ratio, % |
|
|
|
|
60.1% |
64.0% |
|
|
64.9% |
|
Gearing, % |
|
|
|
|
28.2% |
22.2% |
|
|
9.8% |
|
Interest-bearing |
|
|
|
|
386.2 |
373.6 |
|
|
140.9 |
|
Capital expenditure |
69.5 |
26.9 |
|
|
156.6 |
59.6 |
|
|
129.7 |
|
Cash flow from operating activities |
-90.8 |
-99.2 |
|
|
-215.2 |
-322.9 |
|
|
-4.3 |
* Comparable currencies
** Restated rolling 12 months excluding Russia
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 figures as of January 1, 2023, and has restated the financial year 2022 accordingly. The balance sheet and the cash flow figures have not been restated.
BUSINESS UNIT REVIEWS
Passenger Car Tyres
|
EUR million |
7–9 |
7–9 |
Change |
CC* |
1–9 |
1–9 |
Change |
CC* |
2022 |
|
Net sales |
169.6 |
215.5 |
-21.3% |
-16.6% |
455.5 |
624.2 |
-27.0% |
-23.7% |
810.7 |
|
Operating profit |
7.6 |
-8.7 |
|
|
-6.9 |
44.7 |
|
|
23.3 |
|
Operating profit, % |
4.5% |
-4.0% |
|
|
-1.5% |
7.2% |
|
|
2.9% |
|
Segment operating profit |
18.8 |
-18.1 |
|
|
14.8 |
2.2 |
|
|
-24.7 |
|
Segment operating profit, % |
11.1% |
-8.4% |
|
|
3.2% |
0.3% |
|
|
-3.1% |
* Comparable currencies
Heavy Tyres
|
EUR million |
7–9 |
7–9 |
Change |
CC* |
1–9 |
1–9 |
Change |
CC* |
2022 |
|
Net sales |
59.7 |
68.4 |
-12.7% |
-10.1% |
195.3 |
206.4 |
-5.3% |
-3.6% |
271.0 |
|
Operating profit |
7.2 |
9.1 |
|
|
25.5 |
37.9 |
|
|
39.5 |
|
Operating profit, % |
12.1% |
13.2% |
|
|
13.1% |
18.4% |
|
|
14.6% |
|
Segment operating profit |
7.2 |
9.1 |
|
|
25.5 |
37.9 |
|
|
44.1 |
|
Segment operating profit, % |
12.1% |
13.2% |
|
|
13.1% |
18.4% |
|
|
16.3% |
* Comparable currencies
Vianor, own operations
|
EUR million |
7–9 |
7–9 |
Change |
CC* |
1–9 |
1–9 |
Change |
CC* |
2022 |
|
Net sales |
68.1 |
76.5 |
-11.0% |
-4.2% |
218.0 |
232.7 |
-6.3% |
0.7% |
362.0 |
|
Operating profit |
-4.8 |
-5.1 |
|
|
-8.8 |
-7.9 |
|
|
2.8 |
|
Operating profit, % |
-7.0% |
-6.7% |
|
|
-4.0% |
-3.4% |
|
|
0.8% |
|
Segment operating profit |
-4.8 |
-5.1 |
|
|
-8.8 |
-7.7 |
|
|
3.1 |
|
Segment operating profit, % |
-7.0% |
-6.7% |
|
|
-4.0% |
-3.3% |
|
|
0.9% |
|
Number of own service centers at period end |
174 |
174 |
|
|
|
|
|
|
173 |
* Comparable currencies
CONFERENCE CALL
A conference call for investors, analysts and media will be held on October 31, 2023 at 3:00 p.m. EET. In the call, President and CEO Jukka Moisio and CFO Niko Haavisto will present the financial results. In addition, SVP, Supply Operations Adrian Kaczmarczyk will give an update on how the expansion of Nokian Tyres’ manufacturing footprint and rebuilding capacity is proceeding.
To participate, please dial in 5−10 minutes before the beginning of the event:
Finland +358 (0)9 2319 5437
Sweden +46 (0)8 50520424
UK +44 (0)33 0551 0200
US: +1 786 697 3501
Password: Nokian Tyres
The call can also be listened live via https://nokiantyres.videosync.fi/2023-q3-results/register.
A recording of the conference call and a transcript will be available on the company’s website later.
FINANCIAL REPORTING
Financial Statement Release 2023 will be published on February 6, 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. Our purpose is to empower the world to drive smarter. 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 2022, our segments net sales totaled EUR 1,350 million. At the end of 2022 we employed some 3,300 professionals. Nokian Tyres is listed on Nasdaq Helsinki. Further information: www.nokiantyres.com.
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