Nokian Tyres plc Interim Report January-September 2024, October 29, 2024 at 1:00 p.m. EET
This release is a summary of Nokian Tyres' Interim Report January-September 2024. The complete report is attached to this release. It is also available on the company's website at company.nokiantyres.com/investors.
July-September 2024
Net sales were EUR 313.6 million (July-September 2023: 276.1) and increased by 13.6%. With comparable currencies, net sales increased by 14.4%.
Segments operating profit was EUR 30.4 million (19.6). Operating profit was EUR 4.1 million (8.3). EUR -26.3 million (-11.3) was booked as non-IFRS exclusions.
Earnings per share were EUR -0.03 (0.03).
Cash flow from operating activities was EUR -92.2 million (-90.8).
The Romanian factory is progressing on schedule and within budget. Commercial production will start in early 2025. In August, the European Commission approved a EUR 99.5 million Romanian state aid measure to be paid to support the establishment of the Romanian factory.
In July, Paolo Pompei was appointed Nokian Tyres' President and CEO, effective as of January 1, 2025. Pompei succeeds the current President and CEO Jukka Moisio, who will retire from the company in the end of 2024.
In October, the Board decided on the second divided installment of 0.20 per share to be paid in December 2024.
January-September 2024
Net sales were EUR 874.8 million (January-September 2023: 805.6) and increased by 8.6%. With comparable currencies, net sales increased by 9.4%.
Segments operating profit was EUR 35.4 million (20.7). Operating profit was EUR -13.6 million (-1.0). EUR -49.1 million (-21.7) was booked as non-IFRS exclusions.
During the first half of the year, there was negative impact coming from the Red Sea crisis and the political strikes in Finland, causing loss of production, delays in shipments, and increased logistics costs.
Earnings per share were EUR -0.21 (-2.55).
Cash flow from operating activities was EUR -237.4 million (-215.2).
Guidance for 2024 (unchanged)
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:
"In July-September 2024, our net sales increased clearly, and we gained market share. This is a strong sign that customers continue choosing Nokian Tyres as we now have improved passenger car tire availability, both in Central Europe and the Nordics. Segments operating profit improved driven by sales volume growth and lower raw material costs. However, the car and tire market is weak, and the current economic uncertainties make it difficult to estimate the market and consumer behavior.
In September, only 16 months from the groundbreaking, we reached a significant milestone as we celebrated the opening of our new zero CO2 emission tire factory in Romania. The construction process was exceptionally efficient, and I would like to thank the entire Nokian Tyres team who made this achievement possible, as well as the Romanian government and authorities for their invaluable support. The new capacity enables us to better serve our customers and helps strengthen our position, especially in Central Europe. In the US, we have finalized the investment phase in the Dayton factory, enhancing our capabilities to produce tires tailored for North American consumers.
This year, we celebrate the 90th anniversary of our innovation, the winter tire, while continuing strong innovation work to launch new products to the markets. With increasing capacity and a strong innovation pipeline, we have a firm foundation for future success. Despite the market uncertainties, our team has done an excellent job, and we continue building the new Nokian Tyres as planned."
Key figures
EUR million             7-9/2024  7-9/2023  1-9/2024  1-9/2023  2023
Net sales               313.6     276.1     874.8     805.6     1,173.6
Net sales change, %     13.6%     -17.2%    8.6%      -18.5%    -13.1%
Net sales change in     14.4%     12.7%     9.4%      -14.9%    -9.2%
comparable currencies,
%
Operating profit        4.1       8.3       -13.6     -1.0      32.1
Operating profit, %     1.3%      3.0%      -1.6%     -0.1%     2.7%
Result before tax       -5.6      3.3       -35.9     -12.8     14.2
Result for the period   -4.2      4.2       -28.9     -351.7    -325.5
EPS, EUR                -0.03     0.03      -0.21     -2.55     -2.36
Segments EBITDA         58.8      46.1      118.1     98.6      170.5
Segments EBITDA, %      18.8%     16.7%     13.5%     12.2%     14.5%
Segments operating      30.4      19.6      35.4      20.7      65.1
profit
Segments operating      9.7%      7.1%      4.1%      2.6%      5.5%
profit, %
Segments ROCE, %*                           4.2%      1.4%      4.0%
Equity ratio, %                             49.6%     60.1%     58.0%
Gearing, %                                  64.0%     28.2%     16.6%
Interest-bearing net                        801.3     386.2     223.6
debt
Capital expenditure     101.1     69.5      260.0     156.6     252.1
Cash flow from          -92.2     -90.8     -237.4    -215.2    82.4
operating activities
* Rolling 12 months
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.
BUSINESS UNIT REVIEWS
Passenger Car Tyres
+----------------------+--------+--------+--------+--------+------+
|EUR million           |7−9/2024|7−9/2023|1−9/2024|1−9/2023|2023  |
+----------------------+--------+--------+--------+--------+------+
|Net sales             |209.9   |169.6   |541.8   |455.5   |653.4 |
+----------------------+--------+--------+--------+--------+------+
|Net sales change, %   |23.8%   |-21.3%  |18.9%   |-27.0%  |-19.4%|
+----------------------+--------+--------+--------+--------+------+
|Net sales change in   |24.9%   |-16.6%  |20.0%   |-23.7%  |-15.8%|
|comparable currencies,|        |        |        |        |      |
|%                     |        |        |        |        |      |
+----------------------+--------+--------+--------+--------+------+
|Operating profit      |8.3     |7.6     |-9.0    |-6.9    |4.1   |
+----------------------+--------+--------+--------+--------+------+
|Operating profit, %   |3.9%    |4.5%    |-1.7%   |-1.5%   |0.6%  |
+----------------------+--------+--------+--------+--------+------+
|Segment operating     |34.4    |18.8    |38.6    |14.8    |36.7  |
|profit                |        |        |        |        |      |
+----------------------+--------+--------+--------+--------+------+
|Segment operating     |16.4%   |11.1%   |7.1%    |3.2%    |5.6%  |
|profit, %             |        |        |        |        |      |
+----------------------+--------+--------+--------+--------+------+
Heavy Tyres
+----------------------+--------+--------+--------+--------+-----+
|EUR million           |7−9/2024|7−9/2023|1−9/2024|1−9/2023|2023 |
+----------------------+--------+--------+--------+--------+-----+
|Net sales             |57.9    |59.7    |173.2   |195.3   |257.1|
+----------------------+--------+--------+--------+--------+-----+
|Net sales change, %   |-2.9%   |-12.7%  |-11.3%  |-5.3%   |-5.1%|
+----------------------+--------+--------+--------+--------+-----+
|Net sales change in   |-2.3%   |-10.1%  |-10.7%  |-3.6%   |-3.4%|
|comparable currencies,|        |        |        |        |     |
|%                     |        |        |        |        |     |
+----------------------+--------+--------+--------+--------+-----+
|Operating profit      |7.5     |7.2     |21.5    |25.5    |32.8 |
+----------------------+--------+--------+--------+--------+-----+
|Operating profit, %   |12.9%   |12.1%   |12.4%   |13.1%   |12.8%|
+----------------------+--------+--------+--------+--------+-----+
|Segment operating     |7.5     |7.2     |21.5    |25.5    |32.8 |
|profit                |        |        |        |        |     |
+----------------------+--------+--------+--------+--------+-----+
|Segment operating     |12.9%   |12.1%   |12.4%   |13.1%   |12.8%|
|profit, %             |        |        |        |        |     |
+----------------------+--------+--------+--------+--------+-----+
Vianor, own operations
+----------------------+--------+--------+--------+--------+-----+
|EUR million           |7−9/2024|7−9/2023|1−9/2024|1−9/2023|2023 |
+----------------------+--------+--------+--------+--------+-----+
|Net sales             |69.4    |68.1    |220.8   |218.0   |344.0|
+----------------------+--------+--------+--------+--------+-----+
|Net sales change, %   |2.0%    |-11.0%  |1.3%    |-6.3%   |-5.0%|
+----------------------+--------+--------+--------+--------+-----+
|Net sales change in   |2.4%    |-4.2%   |1.9%    |0.7%    |1.8% |
|comparable currencies,|        |        |        |        |     |
|%                     |        |        |        |        |     |
+----------------------+--------+--------+--------+--------+-----+
|Operating profit      |-6.6    |-4.8    |-15.0   |-8.8    |3.4  |
+----------------------+--------+--------+--------+--------+-----+
|Operating profit, %   |-9.5%   |-7.0%   |-6.8%   |-4.0%   |1.0% |
+----------------------+--------+--------+--------+--------+-----+
|Segment operating     |-6.6    |-4.8    |-15.0   |-8.8    |3.4  |
|profit                |        |        |        |        |     |
+----------------------+--------+--------+--------+--------+-----+
|Segment operating     |-9.5%   |-7.0%   |-6.8%   |-4.0%   |1.0% |
|profit, %             |        |        |        |        |     |
+----------------------+--------+--------+--------+--------+-----+
|Number of own service |175     |174     |        |        |174  |
|centers at period end |        |        |        |        |     |
+----------------------+--------+--------+--------+--------+-----+
CONFERENCE CALL
A conference call for investors, analysts and media will be held on the publishing day at 2:00 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/q3-2024.
To ask questions, please participate in the conference call by registering at https://palvelu.flik.fi/teleconference/?id=50050273. 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
Releases and company information are available at company.nokiantyres.com/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' purpose is to make the world safer by reinventing tires, and how they are made, over and over again - a safer place to drive, work and live now and for generations to come. Inspired by our northern heritage, we develop and manufacture premium tires for passenger cars, trucks and heavy machinery with sustainability at the heart of all our operations. Our Vianor chain provides tire and car services. We are some 3,400 people with net sales of EUR 1.2 billion in 2023, and together we lead the journey to smarter driving for people and for businesses. Nokian Tyres is listed on Nasdaq Helsinki. Further information: company.nokiantyres.com (https://eur04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcompany.nokiantyres.com%2F&data=05%7C02%7Canne.aittoniemi%40nokiantyres.com%7Cf1814dad9749408f783608dce69dc88f%7C2293b824c7984957856edf1992afab2e%7C0%7C0%7C638638812570408822%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=CCP2xLOhIK8yrLSw1%2FqBLKMWglskEIa%2FarkdD%2BGA9Bk%3D&reserved=0)