Growth in the west – Russia remains challenging

January-March 2015

Net sales decreased by 9.8% to EUR 281.3 million (EUR 311.9 million in Q1/2014). Currency rate changes cut Net sales by EUR 29.1 million compared with the rates in Q1/2014.
Operating profit was down by 29.4% to EUR 48.3 million (68.4). Operating profit percentage was 17.2% (21.9%).
Profit for the period increased by 249.3% amounting to EUR 135.3 million (38.7). The company returned the 2007-2010 total additional taxes and punitive interests of EUR 100.3 million to the financial result based on the annulment decision made by the Board of Adjustment of Finnish Tax Administration.
Earnings per share were up by 249.5% to EUR 1.02 (EUR 0.29).

Full year financial guidance reiterated

In 2015, with current exchange rates, Net sales and Operating profit are to decline slightly compared to 2014.

Ari Lehtoranta, President and CEO:

“The end of the year 2014 was very volatile in Russia. Oil price, Ruble valuation and purchasing behaviour changed on a daily basis following the slightest moves in geopolitical and economic environment. The situation has somewhat stabilized and our first quarter has gone according to our plans. Biggest negative impacts have come from currency valuations and delay in the start of the winter tyre sales in Russia. While the whole market has gone down in Russia and CIS, we have been able to improve market share, volumes and margins in all other markets. This is due to our competitive product portfolio, expanding distribution, improved productivity and excellent people.

Currency rate changes cut our Net sales by EUR 29.1 million. Local price changes and increasing success in SUV tyres compensated part of the drop. Together with the raw material cost gone down by 15%, these helped us to maintain a reasonable Operating profit level of 17.2%. According to the tax decision by Board of Adjustments, we returned the 2007-2010 total additional taxes of EUR 100.3 million to the financial result, which improved our Net profit accordingly.

Our distribution network keeps on growing; the current number of Vianor stores is 1,371, the NAD network has already grown to 930 stores and the new N-Tyre partner concept has 67 stores in operation. The competitiveness of our product portfolio continues to improve; we have launched new winter tyres and All-Weather tyres for Central Europe and North America, and the magazine test success has remained on good level. Our Heavy Tyres and Vianor business units increased their sales and Heavy Tyres also its profitability. Vianor’s decline in profitability is explained by the seasonality.

Even if the market development visibility in Russia and CIS is still poor at the moment, we remain confident about our future. We reiterate our guidance for the year and feel positive about the growth opportunities for the future.”

Read the whole stock exchange release here.