REVIEW BY THE PRESIDENT AND CEO
Half Year Financial Report January–June 2021, August 3, 2021
Jukka Moisio, President and CEO:
“Tire demand continued strong in the second quarter. Thanks to a great performance by all our business units and business areas, net sales increased by 54.8% with comparable currencies. Segments operating profit grew significantly driven by higher sales volume.
In Passenger Car Tyres, volume growth was particularly strong in Russia. The higher share of Russian volume had a negative impact on the average sales price.
To ensure the availability of our premium products, we operated the Russian factory at full capacity. In the US, we continued to ramp-up production to reach an output of around one million tires in 2021. In Finland, we are increasing our production capacity for passenger car tires by approximately 30% this year as announced in March.
In the second quarter, our operating cash flow was positive despite the increasing working capital requirements. Capital expenditure was lower year-over-year in line with the 2021 plan.
Raw material costs started to increase in the second quarter and are estimated to have a significant negative impact in the second half of the year compared to 2020, together with increasing logistics costs. We are taking mitigating actions to reduce the impact of cost inflation.
In 2021, our focus will remain on growth and cash flow. New products and continuous improvements in go-to-market activities will help us build an even stronger foothold in our core markets. We want to benefit from a good momentum in the market while still acting prudently to keep our company strong and competitive for years to come.”