Market share gains and improvements in operations mitigate the impact of the weak Russian economy. Strong cash flow enables stable dividends.

October-December 2014

Net sales decreased by 7.7% to EUR 380.0 million (EUR 411.8 million in 10-12/2013).
Operating profit was down by 16.9% to EUR 77.5 million (93.2). Operating profit percentage was 20.4% (22.6%).
Profit for the period increased by 237.6% amounting to EUR 50.1 million (-36.4).
Earnings per share were up by 232.1% to EUR 0.37 (EUR -0.28).

January-December 2014

Net sales decreased by 8.7% to EUR 1,389.1 million (EUR 1,521.0 million in 2013). Currency rate changes cut Net sales by EUR 99.9 million compared with the rates in 2013.
Operating profit was down by 19.9% to EUR 308.7 million (385.5). Operating profit percentage was 22.2% (25.3%).
Profit for the period increased by 13.4% amounting to EUR 208.4 million (183.7).
Earnings per share were up by 12.9% to EUR 1.56 (EUR 1.39).
Cash flow from operations was EUR 458.3 million (325.6).

Dividend

The Board of director proposes a dividend of EUR 1.45 (EUR 1.45) per share.

Financial guidance

In 2015, with stable exchange rates, Net sales and Operating profit are to decline slightly compared to 2014. First quarter Operating profit will be significantly below last year, as a delayed start of winter tyre sales in Russia will result in sales shifting to the following quarters.

Ari Lehtoranta, President and CEO:

“The drastic oil price drop combined with further weakening of Russian and CIS currencies and economies had a negative impact on our sales and thus on our financial performance. Our teams, however, were able to strengthen our market position in all markets and continue to improve our operational efficiency. This together with higher than estimated material cost reductions helped us to deliver good financial results. I am especially happy for the record strong cash flow.

Currency rate changes cut our full year Net sales directly by EUR 99.9 million, which together with the product mix change and price pressure caused our Operating profit to drop by 3.1 percentage points. Thanks to the declining raw material cost, improved productivity and running a tight ship, our profitability remained on a good 22% EBIT level.

Our distribution network continues to grow; the current number of Vianor stores is 1,355 and the NAD network has already grown to 869 stores. Additionally, we have launched a new N-Tyre partner concept in Russia and 53 stores are already in operation. The competitiveness of our product portfolio is in great shape; we have been winning the majority of professional tests not only with our winter tyres but also increasingly with our summer tyres. Our Heavy Tyres and Vianor business units continued to improve their profitability.

Even if the market development visibility in Russia and CIS is very poor at the moment, we remain confident about our future. We start 2015 with a strong balance sheet, better than ever product range, constantly expanding distribution and a well performing organization.”

Read the whole stock exchange release here.