Review by the President and CEO
Interim Report January–September 2020, October 27, 2020
Jukka Moisio, President and CEO:
“In July-September 2020, our sales with comparable currencies increased, driven by North America and Central Europe. Net sales of Passenger Car Tyres increased in all areas except Russia, where we have successfully continued the measures to reduce high carry-over stocks in the distribution channel. Heavy Tyres and Vianor maintained their previous year’s performance level, which is a good achievement in a volatile market environment. Segments operating profit declined slightly from the comparison period, mainly due to the lower passenger car tire sales in Russia.
Good development was partly driven by some sales shifting from the second quarter to the third quarter as result of improved customer confidence. We have responded to the changes in demand with fast measures. At the same time, we have continued to manage costs prudently while preserving cash and maintaining our strong balance sheet. In the third quarter, operating cash flow developed positively and was significantly higher than in the comparison period.
Nokian Tyres has made significant investments in recent years. The investment phase is starting to be behind us, which will further support our free cash flow generation. Now we need to make sure that we benefit from these investments in the best possible way. In the Nokia factory, we will continue to increase heavy tires production, while the passenger car tire manufacturing will focus on the production of high-quality premium car tires and prototyping.
The fourth quarter of the year is typically seasonally strong to us, however, the uncertainty in the market continues. We have proven the resilience of our business model and the ability of our team to adapt to the changing market conditions. Going forward, top-line growth continues to be our top priority. Expanding product portfolio will be a key driver for boosting sales.”