Interim Report for Nokian Tyres plc January-September 2004
Mon November 1 08:00 am 2004 in category Stock exchange releases
Nokian Tyres plc Stock Exchange Release 1 November 2004 8:00 a.m.
INTERIM REPORT FOR NOKIAN TYRES PLC JANUARY - SEPTEMBER 2004
Group’s net sales and profit increased in Q3 and in the entire review period. Net sales rose by 14.7% to EUR 391.8 million (EUR 341.5 million in Jan-Sept 2003). Operating profit was EUR 60.2 million (EUR 38.4 million). All business units increased their operating profits. EPS were up to EUR 3.57 (EUR 2.05). The main target is to outperform significantly the results of 2003 in terms of net sales and profit.
NET SALES AND PROFIT
Demand for high-speed summer tyres and winter tyres continued to grow in Nokian Tyres’ main markets in the Nordic countries, Russia, Eastern Europe and North America. Demand for forestry tyres and special tractor tyres were also strong. Following the continued rise in raw material prices, tyre manufacturers implemented price increases.
Nokian Tyres showed sustained strong growth throughout the review period in core markets in Nordic countries, Russia and North America. Car winter tyre sales accelerated in the last weeks of September. The majority of sales consisted of winter tyres for passenger cars and other special products with high profit margins. The product range included many novelties, which, in addition to the implemented price increases, improved sales profitability. Production volumes at the Nokia plant increased and profitability improved. Furthermore, contract manufacturing increased considerably. Owing to the increase in raw material prices, material costs in production were higher than a year earlier.
July to September 2004
The Group’s net sales were up by 7.9% to EUR 141.0 million (EUR 130.7 million in the corresponding period in 2003). Net sales from manufacturing rose by 17.3% and amounted to EUR 122.3 million (EUR 104.0 million), while the Vianor tyre chain posted net sales of EUR 46.9 million (EUR 46.8 million); up by 0.3%.
Fixed costs increased by 3.8% and amounted to EUR 42.0 million (EUR 40.4 million), representing 29.8% (30.9%) of net sales.
The Group’s operating profit from both manufacturing and the Vianor tyre chain improved from the previous year and totalled EUR 30.7 million (EUR 21.7 million). Operating profit from the manufacturing business amounted to EUR 36.8 million (EUR 25.6 million) while Vianor’s operating profit before the depreciation of goodwill was EUR 3.2 million (EUR 3.0 million). The depreciation of goodwill amounted to EUR 1.8 million (EUR 1.7 million) and related to the Vianor tyre chain in its entirety.
Profit before taxes increased to EUR 28.0 million (EUR 19.0 million). Net profit for the review period was EUR 20.0 million (EUR 13.5 million).
January to September 2004
The Group’s net sales in the January to September period of 2004 totalled EUR 391.8 million (EUR 341.5 million), showing an increase of 14.7% on the corresponding period a year earlier. Net sales from manufacturing rose by 24.2% and amounted to EUR 313.3 million (EUR 252.2 million) and net sales from Vianor tyre chain was up by 8.3% totalling EUR 139.9 million (EUR 129.2 million).
The Group’s invoicing to the Nordic countries grew by 12.3%, to Russia and other CIS countries by 40.4%, and to North America by 41.8%.
The improvement in profits could be largely attributed to price increases, an improved sales mix featuring new products, and better productivity than in the previous year.
Raw material prices in the manufacturing business rose by 5% compared with the average prices in the corresponding period a year earlier. Fixed costs increased by EUR 10.8 million (EUR 2.4 million), or 8.7%, from the previous year, totalling EUR 135.2 million (EUR 124.4 million). The share of fixed costs of net sales decreased to 34.5% (36%).
The Group’s operating profit improved, totalling EUR 60.2 million (EUR 38.4 million). Operating profit from the manufacturing business amounted to EUR 71.1 million (EUR 47.2 million), while Vianor’s operating profit before the depreciation of goodwill was EUR 4.5 million (EUR 2.0 million). The depreciation of goodwill amounted to EUR 5.4 million (EUR 5.2 million) and related to the Vianor tyre chain in its entirety. Net financial expenses were EUR 5.2 million (EUR 6.6 million)
Profit before taxes totalled EUR 56.7 million (EUR 31.8 million), including a change in deferred taxes EUR 1.7 million as an extraordinary income due to a reduction of the Finnish corporate tax rate. Net profit for the review period was EUR 40.0 million (EUR 21.8 million). Earnings per share were up to EUR 3.57 (EUR 2.05).
The return on net assets (RONA, rolling 12 months) was 23.7% (18.6%). Income financing after the change in working capital and investments (cash flow II) was EUR –50.8 million (EUR –48.3 million). Equity ratio was 46.9% (41.3%) and included the capital loan booked under shareholders’ equity.
The Group employed an average of 2,789 (2,616) people, and 2,853 (2,710) at the end of the review period. Meanwhile, Vianor employed 1,244 (1,224) people at the end of the review period.
MANUFACTURING BUSINESS
Passenger car tyres
Net sales generated from the Nokian passenger car tyre business grew by 23.9% from the corresponding period in the previous year, totalling EUR 245.7 million (EUR 198.3 million). Operating profit amounted to EUR 65.4 million (EUR 41.8 million).
Nokian passenger car tyres sold well throughout the review period. The strongest growth areas included Russia and the USA. Sales picked up from the previous year also in the Nordic countries and especially in Norway. Sales focused on winter tyres and other special products with high profit margins, and on countries in which Nokian Tyres holds the strongest position. In the Nordic countries, the market share of Nokian-branded tyres increased from 22.3% to 24.7%.
Preseason sales of winter tyres were strong. A more extensive product selection helped boost sales. In addition to complementary sizes of the studded Nokian Hakkapeliitta 4, the newest friction tyre Nokian Hakkapeliitta RSi was launched for consumer sales. Both tyres did very well in the latest winter tyre tests performed by trade magazines. Winter tyres represented 75% (64.4%) of net sales during the period.
Average prices improved significantly from the previous year, thanks to a better sales mix and price increases. As a result of production investments and productivity-boosting measures, the Nokia plant’s production volumes increased by 11% and productivity (kg/mh) improved by 6%. Efficient logistics solutions improved delivery capacity to the distributors.
Increased contract manufacturing of low-speed summer tyres released the plant’s capacity for the manufacture of core products. The capacity was not, however, sufficient to cater to the increased demand in all markets.
The new environmentally friendly summer tyre, Nokian NRHi, boosted the company’s position as a summer tyre manufacturer in the Nordic countries and especially in Germany. In September, Nokian Tyres launched as the first tyre manufacturer in the world, an entirely clean top-speed W class (270 km/h) summer tyre for passenger cars. The Nokian Z novelty represents the rapidly growing ultra-high performance segment in the tyre market. The consumer sales of Nokian Z tyre will start in the Nordic countries, Central Europe and Russia in the spring 2005. This tyre is manufactured without using harmful high-aromatic oils.
Heavy tyres
The net sales of Nokian Heavy tyres business totalled EUR 46.9 million (EUR 43.6 million), showing an increase of 7.4% from the previous year. Operating profit amounted to EUR 6.0 million (EUR 4.4 million).
The heavy tyres market continued to show favourable development. Forestry tyres sold particularly well, fuelled by the increase in machine manufacture. Similarly, special tyres for tractors and various industrial machines sold clearly better than a year earlier. The good sales mix and price increases implemented earlier in the year improved profitability.
The production quantities of heavy tyres grew, productivity improved and the plant’s capacity utilisation rate rose. In the third quarter, the plant operated at maximum capacity usage. Contract manufacturing also increased.
In September, Nokian Tyres introduced the Nokian TRI2 tyre, which was received very well in the markets. The new tyre is designed for road maintenance machinery and tractors. It will make farming work smoother, improve driving qualities, and enhance road safety during road maintenance work. The rubber compound used in the new product only contains environmentally sound low-aromatic oils. As of August, only environmentally sound low-aromatic oils are used in the manufacture of heavy tyres.
Bicycle tyres
Net sales from Nokian bicycle tyres were down by 4.1% on the previous year to EUR 3.5 million (EUR 3.7 million). Operating profit was positive and improved from the previous year.
In October, Nokian Tyres announced its intentions to sell its bicycle tyres business to a new company called Suomen Rengastehdas Oy. The new owner will also take over the manufacture of heavy inner tubes and provide contract manufacturing services to Nokian Tyres in this area. The new owner will employ the 59 people working at Nokian Bicycle Tyre unit and in heavy inner tubes manufacture under their existing contracts, effective as of 1 December 2004.
The total sale price comprising the business operations and the real estate is EUR 3.6 million. The deal is conditional and will be finalised provided that Lieksan Teollisuuskylä Oy purchases the Lieksa facility. The real estate deal requires the approval of the Lieksa town council. The deal is scheduled for finalisation on 30 November 2004. Nokian Tyres will book the capital gain from the sale of business operations in the final quarter of the year.
Retreading business
Reorganised in late 2003, Nokian Tyres’ retreading unit started operations in early 2004. The retreading business comprises the manufacture of retreading materials at the Nokia plant, the tyre retreading activities that previously belonged to the Vianor organisation in Finland, Sweden and Norway, and the retreading plant purchased in St. Petersburg in 2003. Owing to these changes, the unit’s net sales and operating profit are not comparable with the previous year’s figures.
Net sales generated from the Nokian Tyres’ retreading business totalled EUR 17.4 million (EUR 7.4 million). The operating profit was positive.
The summer season was good in the retreading business with the tyre retreading increasing in the Nordic countries. Due to the mild weather in the early winter, the winter season started later than a year ago. The strongest export regions were Norway, the Baltic States and the USA. New products boosted sales volumes and improved profitability. The Group’s own products were used more frequently in the company’s own retreading plants compared to the previous year.
RoadSnoop
The markets for pressure watch devices continued to develop slowly.
During the review period, a law was introduced in the USA making pressure watch devices compulsory in all new vehicles, effective gradually from the beginning of 2005. Nokian Tyres’ RoadSnoop unit concentrates on developing a pressure watch application suitable for original equipment installation.
VIANOR
Vianor generated net sales of EUR 139.9 million (EUR 129.2 million), showing an increase of 8.3% over the corresponding period last year. Vianor’s operating profit before the depreciation of goodwill totalled EUR 4.5 million (EUR 2.0 million). The depreciation of goodwill amounted to EUR 5.4 million (EUR 5.2 million). Vianor’s cash flow II totalled EUR –17.4 million (EUR –14.2 million). Owing to the winter tyre season, the majority of Vianor’s operating profit and cash flow is generated in the final quarter of the year.
The summer tyre season and seasonal management were successful, and the retail of summer tyres in the Nordic countries clearly improved from the previous year. Market shares picked up, thanks to an extensive product and service range. Vianor was able to maintain a moderate cost level while average product prices were higher than a year earlier. Nokian-branded tyres accounted for an increasing share of sales, and the manufacturing business benefited from growing synergies.
During the review period, three Vianor outlets operating as franchises were set up in Finland. Three new tyre hotels were opened in Finland and one in Estonia.
INVESTMENTS
Nokian Tyres spent a total of EUR 36.4 million (EUR 31.2 million) on investments during the period. The budgeted overall investments for 2004 total EUR 64.0 million (EUR 44.2 million), including the initial investments of EUR 22 million in the new plant to be constructed in Russia. Other investments include production investments and moulds for new products at the Nokia plant.
CONTRACT MANUFACTURING
Contract manufacturing of Nokian-branded passenger car tyres in Indonesia, Slovakia and the USA progressed as planned with the production volume almost doubling from the previous year.
In September, Nokian Tyres and the Chinese Giti Tire signed an agreement under which Giti Tire will start contract manufacturing passenger car tyres for Nokian Tyres in its plants in China. Giti Tire is the biggest tyre manufacturer in China and the market leader. The contract manufacturing will initially cover Nokian-branded summer tyres intended primarily for the North American markets. Production activities will begin in October 2004. The objective is to manufacture 500,000 tyres in 2005 and to gradually increase the volume to 1.5 million tyres.
During the review period, it was agreed that the contract manufacturing of Nokian-branded truck tyres would be transferred from the Michelin plants in Poland and Hungary to Bridgestone’s Bilbao facility in Spain in early 2005.
OTHER MATTERS
Nokian Tyres’ projects in Russia
In March, Nokian Tyres announced that its Russian operations would focus on the sales of Nokian-branded tyres and on the construction of its own tyre plant in Vsevolozhsk, St. Petersburg. The company also decided to discontinue the operations of its Russian joint venture, Amtel-Nokian Tyres, focused on selling Nordman tyres.
Land construction for the new Nokian Tyres plant began in early May, and at the end of the month the company signed a contracting agreement on the plant construction with Lemcon Oy, part of the Lemminkäinen Group. The contract is worth EUR 21 million. The cornerstone of the new factory was laid at the end of June. The construction work has progressed as planned and on schedule.
The plant is fully owned by Nokian Tyres, and the company plans to invest a total of EUR 52 million in it this year and next year. Production will start in 2005, and the objective is to manufacture approximately 1.5 million tyres in 2006.
The part of the plant completed in the first phase will have a total area of some 21,000 square metres, which provides capacity for producing approximately 4 million tyres annually. The plant will be gradually expanded with additional investments, aiming at a capacity of some 8 million tyres. The Nokian-branded passenger car tyres manufactured at the plant will primarily be sold on the growing Russian tyre market. In the initial phase, the plant will employ approximately 200 people, most of them Russian.
The logistics centres established in the vicinity of Moscow and St. Petersburg will further strengthen the distribution and sales network of Nokian-branded tyres in Russia.
Extension of the logistics centre
In September, Nokian Tyres plc and Nordisk Renting Oy signed an agreement regarding extension of the Nokian Tyres logistics centre in the town of Nokia, Finland. Nokian Tyres has signed a 15-year lease for the property, with a purchase option. The value of the investment is approximately EUR 17 million. The extension of the logistics centre covers of 34,000 square metres. Construction work will begin in the autumn of 2004, and the building is scheduled for completion at the end of 2005. The new premises provide storage capacity for 600,000 tyres. The extension will be built next to the 32,000-square metre logistics centre constructed in the town of Nokia in 2001. The maximum capacity of the current storage facilities is roughly 600,000 tyres.
Shares subscribed for with bonds with warrants
After the increase in share capital registered on 10 December 2003, a total of 2,460 shares were subscribed for with the 2001A bonds with warrants attached to the Nokian Tyres plc’s Option Program of 2001. The increase in share capital resulting from the subscription, EUR 4.920, was entered in the Trade Register on 18 February 2004. Trading of the shares along with the old shares started on 19 February 2004.
After the increase, Nokian Tyres plc’s share capital is EUR 21,368,882.00.
After the increase in share capital registered on 18 February 2004, a total of 15,250 shares were subscribed for with the 2001A bonds with warrants attached to the Nokian Tyres plc’s Option Program of 2001 and 36,785 shares with the 2001B warrants. The increase in share capital resulting from the subscription, EUR 104,070, was entered in the Trade Register on 14 May 2004. Trading of the shares along with the old shares began on 17 May 2004. After the increase, the number of Nokian Tyres shares is 10,736,476 and the share capital is EUR 21,472,952.00.
After the increase in share capital registered on 14 May 2004, a total of 13,270 shares were subscribed for with the 2001A bonds with warrants attached to the Nokian Tyres’ Option Program of 2001 and 51,965 shares with the 2001B warrants. The increase in share capital resulting from the subscription, EUR 130,470, was entered in the Trade Register on 16 August 2004. Trading of the shares along with the old shares began on 17 August 2004. After the increase, the number of Nokian Tyres shares is 10,801,711 and the share capital is EUR 21,603,422.00.
DECISIONS MADE AT THE ANNUAL GENERAL MEETING
The Annual General Meeting of Nokian Tyres held on 5 April 2004 accepted the profit and loss statement for 2003 and discharged the Board of Directors and the President from liability. The final dividend was set at EUR 1.56 per share, the matching date on 8 April 2004 and the payment date on 19 April 2004.
The meeting decided that the Board of Directors will have eight members. Rabbe Grönblom, Chairman of the Board, Kotipizza Oyj; Bo-Erik Haglund, Doctor of Science h.c.; Satu Heikintalo, Managing Director, G2 Helsinki Oy; Hannu Penttilä, Managing Director, Stockmann plc; Henrik Therman, Master of Science; Matti Vuoria, President and CEO Varma Mutual Pension Insurance Company; and Kim Gran, President and CEO Nokian Tyres plc, continue as Board members. Mitsuhira Shimazaki, Director, Sales Administration, Bridgestone Europe NV/SA, was appointed as a new member to the Board. At its meeting following the Annual General meeting, the Board elected Henrik Therman as Chairman of the Board.
Authorised public accountants KPMG Wideri Oy continue as auditors.
Authorisations granted to the Board of Directors
The Annual General Meeting authorised the Board of Directors to make a decision regarding an increase of the share capital on one or more occasions by issuing new shares and/or convertible bonds. The share capital of the company may be increased by a maximum of EUR 4 million. A maximum of 2,000,000 new shares can be issued, each bearing a nominal value of EUR 2.00.
The Board of Directors may also deviate from the shareholders’ pre-emptive subscription right, provided there is a compelling financial reason for the company as referred to in chapter 4:2a of the Companies Act, regarding acquisitions and other corporate arrangements.
The Board of Directors has the right to decide upon the parties who are entitled to subscribe, as well as the subscription prices, terms and conditions of share subscription, and the terms and conditions of convertible bonds. The validity of the authorisation is one year from the date of the Annual General Meeting.
Bonds with warrants
The Annual General Meeting also decided to issue bonds with warrants to the staff of the Nokian Tyres Group and to Direnic Oy, a wholly-owned subsidiary of Nokian Tyres plc. A deviation will be made from the shareholders’ pre-emptive subscription right because the warrants are designed to be part of the Group’s incentive scheme. The number of warrants is 735,000.
A total of 245,000 warrants will be marked with the symbol 2004A, 245,000 with the symbol 2004B and 245,000 with the symbol 2004C. The warrants entitle to the subscription of a maximum of 735,000 Nokian Tyres plc shares. The Board intended to issue the shares in spring 2004 (2004A warrants), 2005 (2004B warrants) and 2006 (2004C warrants).
The share subscription price for warrants 2004A shall be the average price of a Nokian Tyres plc share weighted by the share trading volume on the Helsinki Exchanges between 1 January-31 March 2004. For warrants 2004B, the price shall be the average price of a share weighted by the share trading volume on the Helsinki Exchanges between 1 January–31 March 2005, and for warrants 2004C, the average price of a share weighted by the share trading volume on the Helsinki Exchanges between 1 January–31 March 2006.
The price of shares subscribed for with warrants shall be reduced by the amount of dividends paid after the commencement of the period for which the subscription price was determined, and dividends paid before the subscription, on the record date of each dividend payment. The share subscription period for warrants 2004A is 1 March 2006-31 March 2008, for warrants 2004B 1 March 2007–31 March 2009, and for warrants 2004C 1 March 2008–31 March 2010.
As a result of the subscriptions with the 2004 bonds with warrants, the share capital of Nokian Tyres plc may be increased by a maximum of EUR 1,470,000 and the number of shares by a maximum of 735,000 new shares.
The Board of Directors’ decision
regarding the distribution of bonds with warrants
In its meeting in August, the Board of Directors of Nokian Tyres plc approved the distribution of bonds with warrants directed to the personnel of the Group and to the wholly-owned subsidiary of Nokian Tyres plc, issued by the Annual General Meeting of Shareholders on 5 April 2004. A total of 211,875 2004A bonds with warrants were distributed to the Nokian Tyres Group personnel. The remaining bonds with warrants were granted to Direnic Oy, a wholly-owned subsidiary of Nokian Tyres plc, to be further distributed to the present and future personnel of the Group.
The maximum number of Nokian Tyres plc shares that can be subscribed for with the bonds with warrants is 735,000. The share subscription price for warrants 2004A is EUR 62.96 (the trade volume weighted average quotation of the Nokian Tyres plc share in the Helsinki Exchanges in January-March 2004), for warrants 2004B the trade volume weighted average quotation of the Nokian Tyres plc share in the Helsinki Exchanges in January-March 2005, and for warrants 2004C the trade volume weighted average quotation of the Nokian Tyres plc share in the Helsinki Exchanges in January-March 2006.
The share subscription period for warrants 2004A is 1 March 2006-31 March 2008, for warrants 2004B 1 March 2007–31 March 2009, and for warrants 2004C 1 March 2008–31 March 2010.
The Annual General Meeting approved the issue of bonds with warrants on 5 April 2004, and the terms and conditions of the bonds with warrants were published in a stock exchange release on 12 February 2004.
Adoption of IFRS reporting
Nokian Tyres is fully prepared to adopt the IFRS reporting in line with the target schedule. The change does not have any essential effects on company’s profit and loss accounts or balance sheet. In the first quarter of 2005, Nokian Tyres will disclose its opening balance, comparison figures and accounting principles with reconciliation to the Finnish accounting standards valid in 2004. More details about adopting IFRS are available on company’s home page address www.nokiantyres.com.
OUTLOOK FOR THE YEAR-END
The outlook for the year-end in Nokian Tyres’ main markets is positive. The demand for winter tyres for passenger cars, high-speed summer tyres and heavy special tyres continues to grow in the Nordic countries, Russia, Eastern Europe and the USA. The retreading materials business shows promising prospects, too.
The company is well positioned to reach the target set for 2004, which is to outperform significantly the results of 2003 in terms of net sales and profit.
The raw material prices are expected to rise, following the strong world economy and the growing tyre production in China. Nokian Tyres estimates that compared with the previous year, the raw material prices will be some 8% higher in the final quarter and 6% higher for the full year.
Most of Nokian Tyres' profits are accumulated in the second half. The company concentrates on ensuring its success in the year’s best sales season, the winter tyre season, with the objective of exceeding previous years’ winter tyre sales figures in the Nordic countries and Russia. A large order book and an upgraded and more extensive product range support the good sales outlook. The newest Nordic friction tyre, Nokian Hakkapeliitta RSi, and the additional sizes for the Nokian Hakkapeliitta 4 will be launched for consumer sales for the first time. The novelties coupled with the price increases implemented in the second half are expected to enhance sales profitability. The heavy tyres business is also showing a large order book. The capacity of the St.Petersburg-based retreading plant has been more than doubled to meet the growing demand for retreading materials in Russia.
Passenger car tyre production volume at the Nokia plant is approaching the target, which is 10 % volume growth in 2004. The contract manufacturing will support the sale of core products and will help improve service to the distributors.
Measures have been taken to further improve high-season customer service and logistics in the Nordic countries. The Russian logistics centres established in Moscow and St. Petersburg improve the services provided to local customers. At Vianor, the share of company’s own products will increase and the streamlining of operations will continue. Call Centre activities and an Internet-based appointments system will be introduced to enhance customer services.
INTERIM REPORT FOR NOKIAN TYRES PLC JANUARY - SEPTEMBER 2004
Group’s net sales and profit increased in Q3 and in the entire review period. Net sales rose by 14.7% to EUR 391.8 million (EUR 341.5 million in Jan-Sept 2003). Operating profit was EUR 60.2 million (EUR 38.4 million). All business units increased their operating profits. EPS were up to EUR 3.57 (EUR 2.05). The main target is to outperform significantly the results of 2003 in terms of net sales and profit.
NET SALES AND PROFIT
Demand for high-speed summer tyres and winter tyres continued to grow in Nokian Tyres’ main markets in the Nordic countries, Russia, Eastern Europe and North America. Demand for forestry tyres and special tractor tyres were also strong. Following the continued rise in raw material prices, tyre manufacturers implemented price increases.
Nokian Tyres showed sustained strong growth throughout the review period in core markets in Nordic countries, Russia and North America. Car winter tyre sales accelerated in the last weeks of September. The majority of sales consisted of winter tyres for passenger cars and other special products with high profit margins. The product range included many novelties, which, in addition to the implemented price increases, improved sales profitability. Production volumes at the Nokia plant increased and profitability improved. Furthermore, contract manufacturing increased considerably. Owing to the increase in raw material prices, material costs in production were higher than a year earlier.
July to September 2004
The Group’s net sales were up by 7.9% to EUR 141.0 million (EUR 130.7 million in the corresponding period in 2003). Net sales from manufacturing rose by 17.3% and amounted to EUR 122.3 million (EUR 104.0 million), while the Vianor tyre chain posted net sales of EUR 46.9 million (EUR 46.8 million); up by 0.3%.
Fixed costs increased by 3.8% and amounted to EUR 42.0 million (EUR 40.4 million), representing 29.8% (30.9%) of net sales.
The Group’s operating profit from both manufacturing and the Vianor tyre chain improved from the previous year and totalled EUR 30.7 million (EUR 21.7 million). Operating profit from the manufacturing business amounted to EUR 36.8 million (EUR 25.6 million) while Vianor’s operating profit before the depreciation of goodwill was EUR 3.2 million (EUR 3.0 million). The depreciation of goodwill amounted to EUR 1.8 million (EUR 1.7 million) and related to the Vianor tyre chain in its entirety.
Profit before taxes increased to EUR 28.0 million (EUR 19.0 million). Net profit for the review period was EUR 20.0 million (EUR 13.5 million).
January to September 2004
The Group’s net sales in the January to September period of 2004 totalled EUR 391.8 million (EUR 341.5 million), showing an increase of 14.7% on the corresponding period a year earlier. Net sales from manufacturing rose by 24.2% and amounted to EUR 313.3 million (EUR 252.2 million) and net sales from Vianor tyre chain was up by 8.3% totalling EUR 139.9 million (EUR 129.2 million).
The Group’s invoicing to the Nordic countries grew by 12.3%, to Russia and other CIS countries by 40.4%, and to North America by 41.8%.
The improvement in profits could be largely attributed to price increases, an improved sales mix featuring new products, and better productivity than in the previous year.
Raw material prices in the manufacturing business rose by 5% compared with the average prices in the corresponding period a year earlier. Fixed costs increased by EUR 10.8 million (EUR 2.4 million), or 8.7%, from the previous year, totalling EUR 135.2 million (EUR 124.4 million). The share of fixed costs of net sales decreased to 34.5% (36%).
The Group’s operating profit improved, totalling EUR 60.2 million (EUR 38.4 million). Operating profit from the manufacturing business amounted to EUR 71.1 million (EUR 47.2 million), while Vianor’s operating profit before the depreciation of goodwill was EUR 4.5 million (EUR 2.0 million). The depreciation of goodwill amounted to EUR 5.4 million (EUR 5.2 million) and related to the Vianor tyre chain in its entirety. Net financial expenses were EUR 5.2 million (EUR 6.6 million)
Profit before taxes totalled EUR 56.7 million (EUR 31.8 million), including a change in deferred taxes EUR 1.7 million as an extraordinary income due to a reduction of the Finnish corporate tax rate. Net profit for the review period was EUR 40.0 million (EUR 21.8 million). Earnings per share were up to EUR 3.57 (EUR 2.05).
The return on net assets (RONA, rolling 12 months) was 23.7% (18.6%). Income financing after the change in working capital and investments (cash flow II) was EUR –50.8 million (EUR –48.3 million). Equity ratio was 46.9% (41.3%) and included the capital loan booked under shareholders’ equity.
The Group employed an average of 2,789 (2,616) people, and 2,853 (2,710) at the end of the review period. Meanwhile, Vianor employed 1,244 (1,224) people at the end of the review period.
MANUFACTURING BUSINESS
Passenger car tyres
Net sales generated from the Nokian passenger car tyre business grew by 23.9% from the corresponding period in the previous year, totalling EUR 245.7 million (EUR 198.3 million). Operating profit amounted to EUR 65.4 million (EUR 41.8 million).
Nokian passenger car tyres sold well throughout the review period. The strongest growth areas included Russia and the USA. Sales picked up from the previous year also in the Nordic countries and especially in Norway. Sales focused on winter tyres and other special products with high profit margins, and on countries in which Nokian Tyres holds the strongest position. In the Nordic countries, the market share of Nokian-branded tyres increased from 22.3% to 24.7%.
Preseason sales of winter tyres were strong. A more extensive product selection helped boost sales. In addition to complementary sizes of the studded Nokian Hakkapeliitta 4, the newest friction tyre Nokian Hakkapeliitta RSi was launched for consumer sales. Both tyres did very well in the latest winter tyre tests performed by trade magazines. Winter tyres represented 75% (64.4%) of net sales during the period.
Average prices improved significantly from the previous year, thanks to a better sales mix and price increases. As a result of production investments and productivity-boosting measures, the Nokia plant’s production volumes increased by 11% and productivity (kg/mh) improved by 6%. Efficient logistics solutions improved delivery capacity to the distributors.
Increased contract manufacturing of low-speed summer tyres released the plant’s capacity for the manufacture of core products. The capacity was not, however, sufficient to cater to the increased demand in all markets.
The new environmentally friendly summer tyre, Nokian NRHi, boosted the company’s position as a summer tyre manufacturer in the Nordic countries and especially in Germany. In September, Nokian Tyres launched as the first tyre manufacturer in the world, an entirely clean top-speed W class (270 km/h) summer tyre for passenger cars. The Nokian Z novelty represents the rapidly growing ultra-high performance segment in the tyre market. The consumer sales of Nokian Z tyre will start in the Nordic countries, Central Europe and Russia in the spring 2005. This tyre is manufactured without using harmful high-aromatic oils.
Heavy tyres
The net sales of Nokian Heavy tyres business totalled EUR 46.9 million (EUR 43.6 million), showing an increase of 7.4% from the previous year. Operating profit amounted to EUR 6.0 million (EUR 4.4 million).
The heavy tyres market continued to show favourable development. Forestry tyres sold particularly well, fuelled by the increase in machine manufacture. Similarly, special tyres for tractors and various industrial machines sold clearly better than a year earlier. The good sales mix and price increases implemented earlier in the year improved profitability.
The production quantities of heavy tyres grew, productivity improved and the plant’s capacity utilisation rate rose. In the third quarter, the plant operated at maximum capacity usage. Contract manufacturing also increased.
In September, Nokian Tyres introduced the Nokian TRI2 tyre, which was received very well in the markets. The new tyre is designed for road maintenance machinery and tractors. It will make farming work smoother, improve driving qualities, and enhance road safety during road maintenance work. The rubber compound used in the new product only contains environmentally sound low-aromatic oils. As of August, only environmentally sound low-aromatic oils are used in the manufacture of heavy tyres.
Bicycle tyres
Net sales from Nokian bicycle tyres were down by 4.1% on the previous year to EUR 3.5 million (EUR 3.7 million). Operating profit was positive and improved from the previous year.
In October, Nokian Tyres announced its intentions to sell its bicycle tyres business to a new company called Suomen Rengastehdas Oy. The new owner will also take over the manufacture of heavy inner tubes and provide contract manufacturing services to Nokian Tyres in this area. The new owner will employ the 59 people working at Nokian Bicycle Tyre unit and in heavy inner tubes manufacture under their existing contracts, effective as of 1 December 2004.
The total sale price comprising the business operations and the real estate is EUR 3.6 million. The deal is conditional and will be finalised provided that Lieksan Teollisuuskylä Oy purchases the Lieksa facility. The real estate deal requires the approval of the Lieksa town council. The deal is scheduled for finalisation on 30 November 2004. Nokian Tyres will book the capital gain from the sale of business operations in the final quarter of the year.
Retreading business
Reorganised in late 2003, Nokian Tyres’ retreading unit started operations in early 2004. The retreading business comprises the manufacture of retreading materials at the Nokia plant, the tyre retreading activities that previously belonged to the Vianor organisation in Finland, Sweden and Norway, and the retreading plant purchased in St. Petersburg in 2003. Owing to these changes, the unit’s net sales and operating profit are not comparable with the previous year’s figures.
Net sales generated from the Nokian Tyres’ retreading business totalled EUR 17.4 million (EUR 7.4 million). The operating profit was positive.
The summer season was good in the retreading business with the tyre retreading increasing in the Nordic countries. Due to the mild weather in the early winter, the winter season started later than a year ago. The strongest export regions were Norway, the Baltic States and the USA. New products boosted sales volumes and improved profitability. The Group’s own products were used more frequently in the company’s own retreading plants compared to the previous year.
RoadSnoop
The markets for pressure watch devices continued to develop slowly.
During the review period, a law was introduced in the USA making pressure watch devices compulsory in all new vehicles, effective gradually from the beginning of 2005. Nokian Tyres’ RoadSnoop unit concentrates on developing a pressure watch application suitable for original equipment installation.
VIANOR
Vianor generated net sales of EUR 139.9 million (EUR 129.2 million), showing an increase of 8.3% over the corresponding period last year. Vianor’s operating profit before the depreciation of goodwill totalled EUR 4.5 million (EUR 2.0 million). The depreciation of goodwill amounted to EUR 5.4 million (EUR 5.2 million). Vianor’s cash flow II totalled EUR –17.4 million (EUR –14.2 million). Owing to the winter tyre season, the majority of Vianor’s operating profit and cash flow is generated in the final quarter of the year.
The summer tyre season and seasonal management were successful, and the retail of summer tyres in the Nordic countries clearly improved from the previous year. Market shares picked up, thanks to an extensive product and service range. Vianor was able to maintain a moderate cost level while average product prices were higher than a year earlier. Nokian-branded tyres accounted for an increasing share of sales, and the manufacturing business benefited from growing synergies.
During the review period, three Vianor outlets operating as franchises were set up in Finland. Three new tyre hotels were opened in Finland and one in Estonia.
INVESTMENTS
Nokian Tyres spent a total of EUR 36.4 million (EUR 31.2 million) on investments during the period. The budgeted overall investments for 2004 total EUR 64.0 million (EUR 44.2 million), including the initial investments of EUR 22 million in the new plant to be constructed in Russia. Other investments include production investments and moulds for new products at the Nokia plant.
CONTRACT MANUFACTURING
Contract manufacturing of Nokian-branded passenger car tyres in Indonesia, Slovakia and the USA progressed as planned with the production volume almost doubling from the previous year.
In September, Nokian Tyres and the Chinese Giti Tire signed an agreement under which Giti Tire will start contract manufacturing passenger car tyres for Nokian Tyres in its plants in China. Giti Tire is the biggest tyre manufacturer in China and the market leader. The contract manufacturing will initially cover Nokian-branded summer tyres intended primarily for the North American markets. Production activities will begin in October 2004. The objective is to manufacture 500,000 tyres in 2005 and to gradually increase the volume to 1.5 million tyres.
During the review period, it was agreed that the contract manufacturing of Nokian-branded truck tyres would be transferred from the Michelin plants in Poland and Hungary to Bridgestone’s Bilbao facility in Spain in early 2005.
OTHER MATTERS
Nokian Tyres’ projects in Russia
In March, Nokian Tyres announced that its Russian operations would focus on the sales of Nokian-branded tyres and on the construction of its own tyre plant in Vsevolozhsk, St. Petersburg. The company also decided to discontinue the operations of its Russian joint venture, Amtel-Nokian Tyres, focused on selling Nordman tyres.
Land construction for the new Nokian Tyres plant began in early May, and at the end of the month the company signed a contracting agreement on the plant construction with Lemcon Oy, part of the Lemminkäinen Group. The contract is worth EUR 21 million. The cornerstone of the new factory was laid at the end of June. The construction work has progressed as planned and on schedule.
The plant is fully owned by Nokian Tyres, and the company plans to invest a total of EUR 52 million in it this year and next year. Production will start in 2005, and the objective is to manufacture approximately 1.5 million tyres in 2006.
The part of the plant completed in the first phase will have a total area of some 21,000 square metres, which provides capacity for producing approximately 4 million tyres annually. The plant will be gradually expanded with additional investments, aiming at a capacity of some 8 million tyres. The Nokian-branded passenger car tyres manufactured at the plant will primarily be sold on the growing Russian tyre market. In the initial phase, the plant will employ approximately 200 people, most of them Russian.
The logistics centres established in the vicinity of Moscow and St. Petersburg will further strengthen the distribution and sales network of Nokian-branded tyres in Russia.
Extension of the logistics centre
In September, Nokian Tyres plc and Nordisk Renting Oy signed an agreement regarding extension of the Nokian Tyres logistics centre in the town of Nokia, Finland. Nokian Tyres has signed a 15-year lease for the property, with a purchase option. The value of the investment is approximately EUR 17 million. The extension of the logistics centre covers of 34,000 square metres. Construction work will begin in the autumn of 2004, and the building is scheduled for completion at the end of 2005. The new premises provide storage capacity for 600,000 tyres. The extension will be built next to the 32,000-square metre logistics centre constructed in the town of Nokia in 2001. The maximum capacity of the current storage facilities is roughly 600,000 tyres.
Shares subscribed for with bonds with warrants
After the increase in share capital registered on 10 December 2003, a total of 2,460 shares were subscribed for with the 2001A bonds with warrants attached to the Nokian Tyres plc’s Option Program of 2001. The increase in share capital resulting from the subscription, EUR 4.920, was entered in the Trade Register on 18 February 2004. Trading of the shares along with the old shares started on 19 February 2004.
After the increase, Nokian Tyres plc’s share capital is EUR 21,368,882.00.
After the increase in share capital registered on 18 February 2004, a total of 15,250 shares were subscribed for with the 2001A bonds with warrants attached to the Nokian Tyres plc’s Option Program of 2001 and 36,785 shares with the 2001B warrants. The increase in share capital resulting from the subscription, EUR 104,070, was entered in the Trade Register on 14 May 2004. Trading of the shares along with the old shares began on 17 May 2004. After the increase, the number of Nokian Tyres shares is 10,736,476 and the share capital is EUR 21,472,952.00.
After the increase in share capital registered on 14 May 2004, a total of 13,270 shares were subscribed for with the 2001A bonds with warrants attached to the Nokian Tyres’ Option Program of 2001 and 51,965 shares with the 2001B warrants. The increase in share capital resulting from the subscription, EUR 130,470, was entered in the Trade Register on 16 August 2004. Trading of the shares along with the old shares began on 17 August 2004. After the increase, the number of Nokian Tyres shares is 10,801,711 and the share capital is EUR 21,603,422.00.
DECISIONS MADE AT THE ANNUAL GENERAL MEETING
The Annual General Meeting of Nokian Tyres held on 5 April 2004 accepted the profit and loss statement for 2003 and discharged the Board of Directors and the President from liability. The final dividend was set at EUR 1.56 per share, the matching date on 8 April 2004 and the payment date on 19 April 2004.
The meeting decided that the Board of Directors will have eight members. Rabbe Grönblom, Chairman of the Board, Kotipizza Oyj; Bo-Erik Haglund, Doctor of Science h.c.; Satu Heikintalo, Managing Director, G2 Helsinki Oy; Hannu Penttilä, Managing Director, Stockmann plc; Henrik Therman, Master of Science; Matti Vuoria, President and CEO Varma Mutual Pension Insurance Company; and Kim Gran, President and CEO Nokian Tyres plc, continue as Board members. Mitsuhira Shimazaki, Director, Sales Administration, Bridgestone Europe NV/SA, was appointed as a new member to the Board. At its meeting following the Annual General meeting, the Board elected Henrik Therman as Chairman of the Board.
Authorised public accountants KPMG Wideri Oy continue as auditors.
Authorisations granted to the Board of Directors
The Annual General Meeting authorised the Board of Directors to make a decision regarding an increase of the share capital on one or more occasions by issuing new shares and/or convertible bonds. The share capital of the company may be increased by a maximum of EUR 4 million. A maximum of 2,000,000 new shares can be issued, each bearing a nominal value of EUR 2.00.
The Board of Directors may also deviate from the shareholders’ pre-emptive subscription right, provided there is a compelling financial reason for the company as referred to in chapter 4:2a of the Companies Act, regarding acquisitions and other corporate arrangements.
The Board of Directors has the right to decide upon the parties who are entitled to subscribe, as well as the subscription prices, terms and conditions of share subscription, and the terms and conditions of convertible bonds. The validity of the authorisation is one year from the date of the Annual General Meeting.
Bonds with warrants
The Annual General Meeting also decided to issue bonds with warrants to the staff of the Nokian Tyres Group and to Direnic Oy, a wholly-owned subsidiary of Nokian Tyres plc. A deviation will be made from the shareholders’ pre-emptive subscription right because the warrants are designed to be part of the Group’s incentive scheme. The number of warrants is 735,000.
A total of 245,000 warrants will be marked with the symbol 2004A, 245,000 with the symbol 2004B and 245,000 with the symbol 2004C. The warrants entitle to the subscription of a maximum of 735,000 Nokian Tyres plc shares. The Board intended to issue the shares in spring 2004 (2004A warrants), 2005 (2004B warrants) and 2006 (2004C warrants).
The share subscription price for warrants 2004A shall be the average price of a Nokian Tyres plc share weighted by the share trading volume on the Helsinki Exchanges between 1 January-31 March 2004. For warrants 2004B, the price shall be the average price of a share weighted by the share trading volume on the Helsinki Exchanges between 1 January–31 March 2005, and for warrants 2004C, the average price of a share weighted by the share trading volume on the Helsinki Exchanges between 1 January–31 March 2006.
The price of shares subscribed for with warrants shall be reduced by the amount of dividends paid after the commencement of the period for which the subscription price was determined, and dividends paid before the subscription, on the record date of each dividend payment. The share subscription period for warrants 2004A is 1 March 2006-31 March 2008, for warrants 2004B 1 March 2007–31 March 2009, and for warrants 2004C 1 March 2008–31 March 2010.
As a result of the subscriptions with the 2004 bonds with warrants, the share capital of Nokian Tyres plc may be increased by a maximum of EUR 1,470,000 and the number of shares by a maximum of 735,000 new shares.
The Board of Directors’ decision
regarding the distribution of bonds with warrants
In its meeting in August, the Board of Directors of Nokian Tyres plc approved the distribution of bonds with warrants directed to the personnel of the Group and to the wholly-owned subsidiary of Nokian Tyres plc, issued by the Annual General Meeting of Shareholders on 5 April 2004. A total of 211,875 2004A bonds with warrants were distributed to the Nokian Tyres Group personnel. The remaining bonds with warrants were granted to Direnic Oy, a wholly-owned subsidiary of Nokian Tyres plc, to be further distributed to the present and future personnel of the Group.
The maximum number of Nokian Tyres plc shares that can be subscribed for with the bonds with warrants is 735,000. The share subscription price for warrants 2004A is EUR 62.96 (the trade volume weighted average quotation of the Nokian Tyres plc share in the Helsinki Exchanges in January-March 2004), for warrants 2004B the trade volume weighted average quotation of the Nokian Tyres plc share in the Helsinki Exchanges in January-March 2005, and for warrants 2004C the trade volume weighted average quotation of the Nokian Tyres plc share in the Helsinki Exchanges in January-March 2006.
The share subscription period for warrants 2004A is 1 March 2006-31 March 2008, for warrants 2004B 1 March 2007–31 March 2009, and for warrants 2004C 1 March 2008–31 March 2010.
The Annual General Meeting approved the issue of bonds with warrants on 5 April 2004, and the terms and conditions of the bonds with warrants were published in a stock exchange release on 12 February 2004.
Adoption of IFRS reporting
Nokian Tyres is fully prepared to adopt the IFRS reporting in line with the target schedule. The change does not have any essential effects on company’s profit and loss accounts or balance sheet. In the first quarter of 2005, Nokian Tyres will disclose its opening balance, comparison figures and accounting principles with reconciliation to the Finnish accounting standards valid in 2004. More details about adopting IFRS are available on company’s home page address www.nokiantyres.com.
OUTLOOK FOR THE YEAR-END
The outlook for the year-end in Nokian Tyres’ main markets is positive. The demand for winter tyres for passenger cars, high-speed summer tyres and heavy special tyres continues to grow in the Nordic countries, Russia, Eastern Europe and the USA. The retreading materials business shows promising prospects, too.
The company is well positioned to reach the target set for 2004, which is to outperform significantly the results of 2003 in terms of net sales and profit.
The raw material prices are expected to rise, following the strong world economy and the growing tyre production in China. Nokian Tyres estimates that compared with the previous year, the raw material prices will be some 8% higher in the final quarter and 6% higher for the full year.
Most of Nokian Tyres' profits are accumulated in the second half. The company concentrates on ensuring its success in the year’s best sales season, the winter tyre season, with the objective of exceeding previous years’ winter tyre sales figures in the Nordic countries and Russia. A large order book and an upgraded and more extensive product range support the good sales outlook. The newest Nordic friction tyre, Nokian Hakkapeliitta RSi, and the additional sizes for the Nokian Hakkapeliitta 4 will be launched for consumer sales for the first time. The novelties coupled with the price increases implemented in the second half are expected to enhance sales profitability. The heavy tyres business is also showing a large order book. The capacity of the St.Petersburg-based retreading plant has been more than doubled to meet the growing demand for retreading materials in Russia.
Passenger car tyre production volume at the Nokia plant is approaching the target, which is 10 % volume growth in 2004. The contract manufacturing will support the sale of core products and will help improve service to the distributors.
Measures have been taken to further improve high-season customer service and logistics in the Nordic countries. The Russian logistics centres established in Moscow and St. Petersburg improve the services provided to local customers. At Vianor, the share of company’s own products will increase and the streamlining of operations will continue. Call Centre activities and an Internet-based appointments system will be introduced to enhance customer services.
NOKIAN TYRES
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Million euros 7-9/04 7-9/03 1-9/04 1-9/03 Last 12 1-12/03
months
Net sales 141.0 130.7 391.8 341.5 578.9 528.7
Operating expenses 100.8 99.4 303.2 275.5 441.3 413.6
Depreciation according
to plan 7.7 7.9 23.0 22.4 29.7 29.1
Operating result before
non-recurring items and
goodwill amortisations 32.5 23.4 65.6 43.5 108.1 86.0
Non-recurring items 0.0 0.0 0.0 0.0 0.0
Goodwill amortisations 1.8 1.7 5.4 5.2 6.9
Operating result 30.7 21.7 60.2 38.4 79.1
Financial income
and expenses -2.5 -2.6 -5.2 -6.6 -8.1 -9.5
Result before extra-
ordinary items and tax 28.2 19.0 55.0 31.8 92.8 69.6
Extraordinary items -0.1 0.0 1.7 0.0 1.7 0.0
Direct tax
for the period 1) 8.1 5.5 16.7 10.0 28.7 22.0
Profit applicable to
minority shareholders 0.0 0.0 0.0 0.0 0.0 0.0
Net result 20.0 13.5 40.0 21.8 65.8 47.6
CONSOLIDATED BALANCE SHEET 30.9.04 30.9.03 31.12.03
Intangible assets 14.0 14.6 13.7
Goodwill 30.2 36.0 36.4
Tangible assets 214.4 200.8 202.4
Investments 0.8 1.3 0.7
Inventories 112.1 101.9 85.1
Receivables 199.4 179.1 118.9
Cash in hand and at bank 7.8 4.9 19.0
Shareholders' equity 235.1 186.4 211.2
Capital loan 36.0 36.0 36.0
Minority shareholders' interest 0.0 0.0 0.0
Long-term liabilities
interest bearing 116.0 122.6 82.2
non interest bearing 21.6 21.2 22.0
Current liabilities
interest bearing 74.7 79.0 36.8
non interest bearing 95.1 93.5 87.9
Total assets 578.5 538.6 476.1
Interest bearing net debt 183.0 196.6 100.0
Capital expenditures 36.4 31.2 44.2
Personnel average 2,789 2,616 2,650
CASH FLOW STATEMENT 30.9.04 30.9.03 31.12.03
Operating activities
Cash flow from operating activities
before the financial items and
taxes -8.0 -11.4 107.3
Financial items and taxes -27.6 -18.4 -28.2
Cash flow from operating
activities -35.6 -29.8 79.0
Investing activities
Cash flow from investing
activities -38.5 -29.6 -42.7
Financing activities
Cash flow from financing activities
Share issues 2.5 1.3 1.6
Change in short-term financial
receivables and debt 43.3 28.9 -13.7
Change in long-term financial
receivables and debt 33.9 25.5 -14.1
Dividends paid -16.7 -11.7 -11.7
Cash flow from financing
activities 63.0 44.0 -37.9
Change in cash and cash
equivalents -11.2 -15.5 -1.5
NOKIAN TYRES Last 12
KEY RATIOS 30.9.04 30.9.03 months 31.12.03
Earnings per share, euro 3.57 2.05 6.04 4.48
Equity ratio, % 2) 46.9 41.3 51.9
Equity ratio, % 40.6 34.6 44.4
Gearing, % 2) 67.5 88.4 40.5
Shareholders' equity
per share, euro 21.76 17.49 19.77
Number of shares
(1,000 units) 10,802 10,656 10,682
1) Direct tax in the consolidated profit and loss account is
based on the taxable profit for the period.
2) Capital loan is included in equity
SEGMENT INFORMATION 7-9/04 7-9/03 1-9/04 1-9/03 1-12/03
Net sales 141.0 130.7 391.8 341.5 528.7
Manufacturing 122.3 104.0 313.3 252.2 372.3
Vianor 46.9 46.8 139.9 129.2 213.0
Operating result 30.7 21.7 60.2 38.4 79.1
Manufacturing 36.8 25.6 71.1 47.2 75.6
Vianor 1.4 1.3 -0.8 -3.2 4.9
Operating result before
amortisations Vianor 3.2 3.0 4.5 2.0 11.8
Cash Flow II -29.8 -25.7 -50.8 -48.3 65.7
Manufacturing -21.9 -20.6 -31.4 -35.4 60.1
Vianor -7.6 -5.3 -17.4 -14.2 1.8
CONTINGENT LIABILITIES 30.9.04 30.9.03 31.12.03
Million euros
FOR OWN DEBT
Mortgages 0.0 1.1 1.0
Pledged assets 0.5 0.0 0.5
ON BEHALF OF OTHER COMPANIES
Guarantees 0.0 0.1 0.1
OTHER OWN COMMITMENTS
Guarantees 1.0 1.0 1.0
Leasing and rent
commitments 33.9 35.4 3