Nokian Tyres plc Financial Statement Release 2023, February 6, 2024 at 2:00 p.m. EET
This release is a summary of Nokian Tyres' Financial Statement Release 2023. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.
October-December 2023
Net sales were EUR 368.0 million (October-December 2022: 361.7) and increased by 1.7%. With comparable currencies, net sales increased by 6.3%.
Segments operating profit was EUR 44.5 million (0.2). Operating profit was EUR 33.1 million (-3.2). EUR -11.3 million (-3.4) was booked as non-IFRS exclusions.
Earnings per share were EUR 0.19 (-0.11).
Cash flow from operating activities was EUR 297.6 million (318.6).
January-December 2023
Net sales were EUR 1,173.6 million (January-December 2022: 1,350.5) and decreased by 13.1%. With comparable currencies, net sales decreased by 9.2% due to lower passenger car tire supply volumes, demanding car and tire market environment and high inventories in the distribution.
Segments operating profit was EUR 65.1 million (17.8). Operating profit was EUR 32.1 million (56.7). EUR -33.0 million (38.9) was booked as non-IFRS exclusions.
Earnings per share were EUR -2.36 (-1.27).
Cash flow from operating activities was EUR 82.4 million (-4.3).
The sale of Nokian Tyres' operations in Russia was completed in March, after which all Nokian Tyres' operations in Russia ended. The sale price was EUR 285 million.
The Board of Directors proposes a dividend of EUR 0.55 per share for the financial year 2023 to be paid in two installments (dividend for the financial year 2022: 0.55).
Guidance for 2024
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:
"2023 marked a new beginning for Nokian Tyres. We completed our exit from Russia, announced long-term financial targets, and advanced our strategic investments to build up capacity. I want to thank all our employees for their commitment and excellent work to build the new Nokian Tyres, as well as our customers for their trust.
In 2023, the car and tire market was demanding due to economic uncertainties, high inflation, and low consumer confidence. Dealers focused on reducing their inventories, resulting in lower replacement tire sell-in. We improved our performance and volume delivery towards the end of the year in line with our expectations, and our cash flow was strong. This provides us with a solid foundation for 2024 to continue further improving our activities.
We are taking firm steps forward in sustainability. One of our targets was to reduce our factories' direct CO2 emissions by 52% per production ton by 2030 compared to 2015, and we reached this target already in 2023. Our long-term sustainability target is to achieve net-zero emissions by 2050. Nokian Tyres was again included in the Dow Jones Sustainability Europe Index, an achievement that we are proud of.
Important and exciting milestones will be reached in 2024, when we celebrate the 90th anniversary of our innovation, the winter tire. Our new and the world's first zero CO2 emission tire factory in Romania will start production, US investment phase will be completed, and new innovative products will be launched. 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. 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               |10-12/2023|10-12/2022|2023   |2022   |
+--------------------------+----------+----------+-------+-------+
|Net sales                 |368.0     |361.7     |1,173.6|1,350.5|
+--------------------------+----------+----------+-------+-------+
|Net sales change, %       |1.7%      |          |-13.1% |       |
+--------------------------+----------+----------+-------+-------+
|Net sales change in       |6.3%      |          |-9.2%  |       |
|comparable currencies, %  |          |          |       |       |
+--------------------------+----------+----------+-------+-------+
|Operating profit          |33.1      |-3.2      |32.1   |56.7   |
+--------------------------+----------+----------+-------+-------+
|Operating profit, %       |9.0%      |-0.9%     |2.7%   |4.2%   |
+--------------------------+----------+----------+-------+-------+
|Result before tax         |27.1      |-26.6     |14.2   |11.2   |
+--------------------------+----------+----------+-------+-------+
|Result for the period     |26.2      |-15.7     |-325.5 |-175.5 |
+--------------------------+----------+----------+-------+-------+
|EPS, EUR                  |0.19      |-0.11     |-2.36  |-1.27  |
+--------------------------+----------+----------+-------+-------+
|                          |          |          |       |       |
+--------------------------+----------+----------+-------+-------+
|Segments net sales        |368.0     |361.7     |1,173.6|1,350.5|
+--------------------------+----------+----------+-------+-------+
|Segments net sales change,|1.7%      |          |-13.1% |       |
|%                         |          |          |       |       |
+--------------------------+----------+----------+-------+-------+
|Segments net sales change |6.3%      |          |-9.2%  |       |
|in comparable currencies, |          |          |       |       |
|%                         |          |          |       |       |
+--------------------------+----------+----------+-------+-------+
|Segments EBITDA           |71.9      |26.4      |170.5  |118.7  |
+--------------------------+----------+----------+-------+-------+
|Segments EBITDA, %        |19.5%     |7.3%      |14.5%  |8.8%   |
+--------------------------+----------+----------+-------+-------+
|Segments operating profit |44.5      |0.2       |65.1   |17.8   |
+--------------------------+----------+----------+-------+-------+
|Segments operating profit,|12.1%     |0.0%      |5.5%   |1.3%   |
|%                         |          |          |       |       |
+--------------------------+----------+----------+-------+-------+
|Segments ROCE, %          |          |          |4.0%   |0.9%   |
+--------------------------+----------+----------+-------+-------+
|                          |          |          |       |       |
+--------------------------+----------+----------+-------+-------+
|Equity ratio, %           |          |          |58.0%  |64.9%  |
+--------------------------+----------+----------+-------+-------+
|Gearing, %                |          |          |16.6%  |9.8%   |
+--------------------------+----------+----------+-------+-------+
|Interest-bearing net debt |          |          |223.6  |140.9  |
+--------------------------+----------+----------+-------+-------+
|Capital expenditure       |95.5      |65.6      |252.1  |129.7  |
+--------------------------+----------+----------+-------+-------+
|Cash flow from operating  |297.6     |318.6     |82.4   |-4.3   |
|activities                |          |          |       |       |
+--------------------------+----------+----------+-------+-------+
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, 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                                 |10-12/2023|10-12/2022|2023  |2022 |
+--------------------------------------------+----------+----------+------+-----+
|Net sales                                   |197.9     |186.5     |653.4 |810.7|
+--------------------------------------------+----------+----------+------+-----+
|Net sales change, %                         |6.1%      |          |-19.4%|     |
+--------------------------------------------+----------+----------+------+-----+
|Net sales change in comparable currencies, %|10.6%     |          |-15.8%|     |
+--------------------------------------------+----------+----------+------+-----+
|Operating profit                            |11.0      |-21.3     |4.1   |23.3 |
+--------------------------------------------+----------+----------+------+-----+
|Operating profit, %                         |5.6%      |-11.4%    |0.6%  |2.9% |
+--------------------------------------------+----------+----------+------+-----+
|Segment operating profit                    |22.0      |-27.0     |36.7  |-24.7|
+--------------------------------------------+----------+----------+------+-----+
|Segment operating profit, %                 |11.1%     |-14.5%    |5.6%  |-3.1%|
+--------------------------------------------+----------+----------+------+-----+
Heavy Tyres
+--------------------------------------------+----------+----------+-----+-----+
|EUR million                                 |10-12/2023|10-12/2022|2023 |2022 |
+--------------------------------------------+----------+----------+-----+-----+
|Net sales                                   |61.8      |64.6      |257.1|271.0|
+--------------------------------------------+----------+----------+-----+-----+
|Net sales change, %                         |-4.4%     |          |-5.1%|     |
+--------------------------------------------+----------+----------+-----+-----+
|Net sales change in comparable currencies, %|-2.6%     |          |-3.4%|     |
+--------------------------------------------+----------+----------+-----+-----+
|Operating profit                            |7.3       |1.6       |32.8 |39.5 |
+--------------------------------------------+----------+----------+-----+-----+
|Operating profit, %                         |11.8%     |2.5%      |12.8%|14.6%|
+--------------------------------------------+----------+----------+-----+-----+
|Segment operating profit                    |7.3       |6.1       |32.8 |44.1 |
+--------------------------------------------+----------+----------+-----+-----+
|Segment operating profit, %                 |11.8%     |9.5%      |12.8%|16.3%|
+--------------------------------------------+----------+----------+-----+-----+
Vianor, own operations
+--------------------------------------------+----------+----------+-----+-----+
|EUR million                                 |10-12/2023|10-12/2022|2023 |2022 |
+--------------------------------------------+----------+----------+-----+-----+
|Net sales                                   |126.0     |129.4     |344.0|362.0|
+--------------------------------------------+----------+----------+-----+-----+
|Net sales change, %                         |-2.6%     |          |-5.0%|     |
+--------------------------------------------+----------+----------+-----+-----+
|Net sales change in comparable currencies, %|3.7%      |          |1.8% |     |
+--------------------------------------------+----------+----------+-----+-----+
|Operating profit                            |12.1      |10.7      |3.4  |2.8  |
+--------------------------------------------+----------+----------+-----+-----+
|Operating profit, %                         |9.6%      |8.3%      |1.0% |0.8% |
+--------------------------------------------+----------+----------+-----+-----+
|Segment operating profit                    |12.1      |10.7      |3.4  |3.1  |
+--------------------------------------------+----------+----------+-----+-----+
|Segment operating profit, %                 |9.6%      |8.3%      |1.0% |0.9% |
+--------------------------------------------+----------+----------+-----+-----+
|Number of own service centers at period end |          |          |174  |173  |
+--------------------------------------------+----------+----------+-----+-----+
CONFERENCE CALL
A conference call for investors, analysts and media will be held on February 6, 2024 at 3:00 p.m. EET. 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/2023-q4-results/register.
To ask questions, please participate in the conference call by registering at https://palvelu.flik.fi/teleconference/?id=10012189. 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
Nokian Tyres Annual Report for 2023 will be available in English and Finnish on the company's website the week commencing February 26, 2024.
Interim Report January-March 2024: April 29, 2024
THE ANNUAL GENERAL MEETING 2024
The Annual General Meeting of Nokian Tyres plc is scheduled for April 30, 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.