Nokian Tyres plc Half Year Financial Report January-June 2023, July 21, 2023 at 2:00 p.m. EEST
This release is a summary of Nokian Tyres' Half Year Financial Report January-June 2023. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.
April-June 2023
Segments net sales were EUR 293.1 million (April-June 2022: 332.3) and decreased by 11.8%. With comparable currencies, segments net sales decreased by 7.3% due to lower passenger car tire supply volumes. Net sales were EUR 293.1 million (332.3) and decreased by 11.8%.
Segments operating profit was EUR 15.2 million (0.9). Operating profit was EUR 9.5 million (46.9). EUR -5.7 million (46.0) was booked as non-IFRS exclusions.
Segments earnings per share were EUR 0.05 (-1.62). Earnings per share were EUR 0.01
(-1.67).
Cash flow from operating activities was EUR -66.7 (-109.4).
January-June 2023
Segments net sales were EUR 529.5 million (January-June 2022: 655.2) and decreased by 19.2%. With comparable currencies, segments net sales decreased by 16.1% due to lower passenger car tire supply volumes. Net sales were EUR 529.5 million (655.2) and decreased by 19.2%.
Segments operating profit was EUR 1.1 million (35.5). The decline was driven by lower volumes. Operating profit was EUR -9.4 million (68.4). EUR -10.4 million (32.9) was booked as non-IFRS exclusions.
Segments earnings per share were EUR -2.50 (-1.24). Earnings per share were EUR -2.58
(-1.33).
Cash flow from operating activities was EUR -124.3 million (-223.7).
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.
Guidance for 2023 (unchanged)
In 2023, Nokian Tyres' segments net sales are expected to be between EUR 1,300-1,500 million and segments operating profit percentage of net sales between 6-8%. It is expected that due to seasonality, the segments operating profit will be generated in the second half of the year.
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:
"During the second quarter, we progressed in our long-term journey to build the new Nokian Tyres in line with our plan.
The car and tire market environment is demanding, and during the quarter, we also faced some currency headwinds, impacting our net sales negatively. Segments operating profit turned positive as anticipated and segments EBITDA rose to 14%. We expect the second half of 2023 to be stronger due to winter and all-season tire sales and contribution from contract manufacturing.
During the quarter, we progressed with our strategic investments to build up new capacity in our core markets. In May, we reached a significant milestone as we celebrated the start of the building work on our new passenger car tire factory in Romania, which will be the world's first zero CO2 emission tire factory.
In the coming months, our focus will be on adding new capacity, retaining a competitive premium product portfolio and serving our customers. We have a clear action plan for growth and a strong team that can execute it. Our new financial targets indicate our ambition for the future. We in Nokian Tyres team have an inspiring journey ahead of us towards EUR 2 billion business and strong profits in the long term."
Key figures
EUR million  4-6    4-6     Change  CC*     1-6     1-6     Change  CC*     2022
/23    /22     %       Change  /23     /22     %       Change
%                               %
Net sales    293.1  332.3   -11.8%  -7.3%   529.5   655.2   -19.2%  -16.1%  1,350.5
Operating    9.5    46.9                    -9.4    68.4                    56.7
profit
Operating    3.2%   14.1%                   -1.8%   10.4%                   4.2%
profit,
%
Result       6.4    30.9                    -16.1   49.7                    11.2
before tax
Result for   1.8    -231.1                  -355.9  -184.2                  -175.5
the
period
EPS, EUR     0.01   -1.67                   -2.58   -1.33                   -1.27
Segments     293.1  332.3   -11.8%  -7.3%   529.5   655.2   -19.2%  -16.1%  1,350.5
net
sales
Segments     41.3   25.9                    52.5    84.9                    118.7
EBITDA
Segments     14.1%  7.8%                    9.9%    13.0%                   8.8%
EBITDA,
%
Segments     15.2   0.9                     1.1     35.5                    17.8
operating
profit
Segments     5.2%   0.3%                    0.2%    5.4%                    1.3%
operating
profit,
%
Segments     0.05   -1.62                   -2.50   -1.24                   -0.86
EPS, EUR
Segments                                    -0.5%   -10.6%                  0.9%
ROCE,
%**
Equity                                      60.0%   63.7%                   64.9%
ratio, %
Gearing, %                                  16.2%   14.8%                   9.8%
Interest                                    219.6   243.0                   140.9
-bearing
net debt
Capital      52.8   18.7                    87.2    32.8                    129.7
expenditure
Cash flow    -66.7  -109.4                  -124.3  -223.7                  -4.3
from
operating
activities
* 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 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 for Q1/2023 and Q2/2023, and has restated the comparison periods and 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|4-6  |4-6   |Change|CC*   |1-6  |1-6  |Change|CC*   |2022 |
|           |/23  |/22   |%     |Change|/23  |/22  |%     |Change|     |
|           |     |      |      |%     |     |     |      |%     |     |
+-----------+-----+------+------+------+-----+-----+------+------+-----+
|Net sales  |152.6|185.2 |-17.6%|-13.6%|285.9|408.7|-30.0%|-27.5%|810.7|
+-----------+-----+------+------+------+-----+-----+------+------+-----+
|Operating  |-5.2 |23.5  |      |      |-14.4|53.4 |      |      |23.3 |
|profit     |     |      |      |      |     |     |      |      |     |
+-----------+-----+------+------+------+-----+-----+------+------+-----+
|Operating  |-3.4%|12.7% |      |      |-5.1%|13.1%|      |      |2.9% |
|profit, %  |     |      |      |      |     |     |      |      |     |
+-----------+-----+------+------+------+-----+-----+------+------+-----+
|Segment    |0.5  |-22.7 |      |      |-4.0 |20.3 |      |      |-24.7|
|operating  |     |      |      |      |     |     |      |      |     |
|profit     |     |      |      |      |     |     |      |      |     |
+-----------+-----+------+------+------+-----+-----+------+------+-----+
|Segment    |0.4% |-12.2%|      |      |-1.4%|5.0% |      |      |-3.1%|
|operating  |     |      |      |      |     |     |      |      |     |
|profit, %  |     |      |      |      |     |     |      |      |     |
+-----------+-----+------+------+------+-----+-----+------+------+-----+
* Comparable currencies
Heavy Tyres
+-----------+-----+-----+------+------+-----+-----+------+------+-----+
|EUR million|4-6  |4-6  |Change|CC*   |1-6  |1-6  |Change|CC*   |2022 |
|           |/23  |/22  |%     |Change|/23  |/22  |%     |Change|     |
|           |     |     |      |%     |     |     |      |%     |     |
+-----------+-----+-----+------+------+-----+-----+------+------+-----+
|Net sales  |67.5 |73.7 |-8.4% |-6.4% |135.7|138.0|-1.7% |-0.4% |271.0|
+-----------+-----+-----+------+------+-----+-----+------+------+-----+
|Operating  |8.7  |16.8 |      |      |18.3 |28.9 |      |      |39.5 |
|profit     |     |     |      |      |     |     |      |      |     |
+-----------+-----+-----+------+------+-----+-----+------+------+-----+
|Operating  |13.0%|22.8%|      |      |13.5%|20.9%|      |      |14.6%|
|profit, %  |     |     |      |      |     |     |      |      |     |
+-----------+-----+-----+------+------+-----+-----+------+------+-----+
|Segment    |8.7  |16.8 |      |      |18.3 |28.9 |      |      |44.1 |
|operating  |     |     |      |      |     |     |      |      |     |
|profit     |     |     |      |      |     |     |      |      |     |
+-----------+-----+-----+------+------+-----+-----+------+------+-----+
|Segment    |13.0%|22.8%|      |      |13.5%|20.9%|      |      |16.3%|
|operating  |     |     |      |      |     |     |      |      |     |
|profit, %  |     |     |      |      |     |     |      |      |     |
+-----------+-----+-----+------+------+-----+-----+------+------+-----+
* Comparable currencies
Vianor, own operations
+---------------------+-----+----+------+------+-----+-----+------+------+-----+
|EUR million          |4-6  |4-6 |Change|CC*   |1-6  |1-6  |Change|CC*   |2022 |
|                     |/23  |/22 |%     |Change|/23  |/22  |%     |Change|     |
|                     |     |    |      |%     |     |     |      |%     |     |
+---------------------+-----+----+------+------+-----+-----+------+------+-----+
|Net sales            |94.4 |99.1|-4.7% |3.4%  |149.9|156.2|-4.0% |3.1%  |362.0|
+---------------------+-----+----+------+------+-----+-----+------+------+-----+
|Operating profit     |9.5  |9.4 |      |      |-4.0 |-2.8 |      |      |2.8  |
+---------------------+-----+----+------+------+-----+-----+------+------+-----+
|Operating profit, %  |10.1%|9.4%|      |      |-2.7%|-1.8%|      |      |0.8% |
+---------------------+-----+----+------+------+-----+-----+------+------+-----+
|Segment operating    |9.5  |9.6 |      |      |-4.0 |-2.5 |      |      |3.1  |
|profit               |     |    |      |      |     |     |      |      |     |
+---------------------+-----+----+------+------+-----+-----+------+------+-----+
|Segment operating    |10.1%|9.7%|      |      |-2.7%|-1.6%|      |      |0.9% |
|profit, %            |     |    |      |      |     |     |      |      |     |
+---------------------+-----+----+------+------+-----+-----+------+------+-----+
|Number of own service|173  |174 |      |      |     |     |      |      |173  |
|centers at period end|     |    |      |      |     |     |      |      |     |
+---------------------+-----+----+------+------+-----+-----+------+------+-----+
* Comparable currencies
CONFERENCE CALL
A conference call for investors, analysts and media will be held on July 21, 2023 at 3:00 p.m. EEST. 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 (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-q2-results/register (https://nokiantyres.videosync.fi/2023-q2-results/register).
A recording of the conference call and a transcript will be available on the company's website later.
FINANCIAL REPORTING
Interim Report for January-September 2023 will be published on October 31, 2023.
Releases and company information are available at www.nokiantyres.com/company/investors/.
Further information:
Jukka Moisio, President and CEO, tel: +358 10 401 7742
Teemu Kangas-Kärki, CFO, tel: +358 10 401 7750
Päivi Antola, SVP, Communications, Investor Relations and Brand, tel: +358 10 401 7327