• Front page
• Nokian Tyres
  • Letter from the CEO
  • Board of Directors
  • Management
  • Investor information
• Strategy
  • Success factors
  • Values
  • Market leadership: Vianor Ukraine
• Profit centres
  • Car tyres
  • Heavy tyres
  • Vianor
  • Truck tyres
• Sales and distribution
  • Nokian Tyres globally
  • Expertise in seasonal logistics
• R&D and testing
  • A selection of new products
  • Guardians of safety
• Environment and safety
  • Your tyre choice matters
  • Competence development
• Financials
  • Key figures
  • Income statement
  • Financial Position
  • Cash flow statement

Well positioned after structural changes

Year 2009 in the changed business environment was ambivalent and full of sharp turns for Nokian Tyres. I am glad to state that our decisive actions in the changed market conditions succeeded and eventually we achieved quite good financial results. We are now in a good position to return to profitable growth.

The rapid global economic downturn and the devaluation of our most important sales currencies that began already in the second half of 2008 continued in the first half of 2009. The situation required immediate action and made us redefine our short-term objectives. We started to focus on defending our market positions, streamlining our production and significantly improving our cash flow. We postponed our expansion investments, downsized inventory by cutting production volumes and reduced trade receivables as planned, thereby securing our strong financial position. The second half of the year then started to show positive signs in sales and the succesful cost-savings programme started to improve our profitability and results.

Russia, which we still believe offers the greatest growth potential, was most severely hit by the sudden recession. Tyre demand fell, distributors had large carry-over stocks and trouble financing their business. The situation started to stabilize in the second half of the year and we maintain positive expectations towards our future business in Russia. Besides our extensive distribution network, our own manufacturing operations inside the Russian customs barriers give us a major competitive advantage.

Backed by our new test-winning winter tyre Hakkapeliitta 7, we increased our winter tyre market share in the Nordic countries, which is significant for the company’s future. In line with our strategy, we succeeded in offering the best products and services in the market that fulfil the needs of our customers in Nordic conditions. As the business environment becomes more challenging, the competitive advantages of Nokian Tyres become more evident.

The Vianor chain expanded as planned and now consists of over 600 outlets in 19 countries. The recession underlined Vianor’s significance to the Group as the support of a loyal distribution channel proved its strength.

We anticipate a gradual recovery of demand in 2010. The number of tyres in the distribution channel is now clearly lower than a year earlier, which means there is potential for sales growth. Our new and improved product range is in top form, and we have the industry’s most effective distribution channel in our core markets. We expect our market and price leadership in our core markets together with our new industrial structure to support our cash flow and profitability this year. We are in a good position and ready to expand operations as soon as the market growth accelerates.

I would like to thank our customers, personnel and other stakeholders for the past year. Our achievements did not come easy, but even when facing tough choices, co-operation was our key driving force. Together we will make the future years an addition to our success story.

Best wishes for 2010, Kim Gran