Review by the President and CEO

Nokian Tyres plc, Hille Korhonen, President and CEO

Hille Korhonen, President and CEO (Financial Statement Release 2017):

“Our year 2017 was successful in all aspects. Positive news and new initiatives stimulated our year, and we demonstrated strong performance in all of our main markets. These achievements are the result of determined work, and significant successes in several areas indicate our commitment to our strategy and goals.

The Passenger Car Tyres business unit performed well in 2017. Net sales increased in all markets. Market growth was exceeded in Russia due to our competitive product portfolio, price positioning and supply capability. Sales and marketing investments and new products generated sales growth in Other Europe and North America. We responded to the growing demand by increasing in a timely manner the production volumes at both factories and by commissioning a new production line at the Russian factory. Operating profit increased year-over-year. In Q4/2017, raw material costs decreased slightly compared with Q3/2017. We estimate that raw material costs will remain approximately at the same level for the full year 2018 compared with 2017. 

In November 2017 we renewed an important local labor agreement for year 2018 at our Nokia factory regarding flexible working hours for the passenger car tyre personnel. The goal of the agreement is to prepare for the company’s growth, build flexibility for future seasons, and ensure employment for the duration of the agreement. The agreement further strengthens the role of the Nokia factory as a competitive center for expertise and production. 

Heavy Tyres increased its sales, operating profit, production volume, and productivity in 2017. All market areas showed growth. Sales of agricultural tyres and forestry tyres increased, in particular. In December 2017, we announced that we are increasing Heavy Tyres’ production capacity by 50% by investing a total of approximately EUR 70 million in its factory in Nokia over the following three years. At the same time, we signed an agreement that encourages our heavy tyres personnel to increase production flexibility by means of multi-skilling. The aim of the investment is to further support our own growth as well as our customers’ growth. 

Vianor’s (own equity) net sales increased slightly due to the challenging retail market situation in the Nordic countries. However, the profitability improvement program progressed according to plan. Our branded distribution network, including Vianor, NAD, and N-Tyre stores, grew by 346 stores in 2017. 

In December 2017, we announced that we are accelerating profitable growth, customer orientation and innovative future solutions by renewing our leadership and operational model. The purpose of this change is also to create a market-focused and scalable structure and to increase efficiency through global functions and processes. 

Nokian Tyres is in great shape, and we are ready for the construction work of our Dayton factory. High customer satisfaction, a new global structure, our safe and eco-friendly products, and competent personnel create an excellent ground for future growth. We are definitely on the right track and well positioned to further improve our sales and operations.”