Nokian Tyres plc Financial Statements Bulletin 2009: Solid result and improved cash flow in a tough market

Thu February 11 07:58 am 2010 in category Stock exchange releases
Stock Exchange Release Feb 11, 2010 8:00 a.m.

Nokian Tyres plc Financial statements bulletin 2009: Solid result and improved cash flow in a tough market

Net sales of Nokian Tyres Group amounted to EUR 798.5 million (2008: EUR 1,080.9 million), down by 26.1% compared to 2008. Operating result was EUR 102.0 million (EUR 247.0 million). Earnings per share were EUR 0.47 (EUR 1.12), and result for the period was EUR 58.3 million (EUR 139.9 million). Cash flow from operations improved to EUR 123.1 million (EUR 9.5 million). The Board of Directors proposes a dividend of EUR 0.40 (EUR 0.40) per share.

Outlook and guidance for 2010:
In 2010, the company is positioned to improve net sales and operating result compared to 2009.

Kim Gran, President and CEO:
“Eventually, after taking decisive action in a tough market we achieved quite satisfactory results in 2009. The launch of our new winter tyre, Hakkapeliitta 7, has been a great success and has helped us to maintain healthy prices and strengthen our market leader position on our core markets. Prices were increased on all core markets to compensate for devaluations but did not fully cover the changes in sales and market mix. The Vianor chain was expanded by 116 shops and now consists of over 600 outlets.

The streamlining measures aiming at a lighter cost structure and full utilization of a lower cost production in the Russian plant were implemented as planned. Our actions will have a strong impact on our results for years to come. Manufacturing operations booked improved results and margins in the fourth quarter year-over-year signalling that actions taken in 2009 are starting to have a positive effect.

Our target was to provide strong cash flow and eliminate receivable risk. Cash flow from operations improved by EUR 113.6 million year-over-year due to cost cuts, lower investments, inventories and reduced trade receivables. Investments were cut by EUR 94.7 million and inventories by EUR 90.9 million year-over-year. At the end of 2009, current receivables were EUR 72.7 million lower than a year before. Wages and salaries were cut by EUR 44.6 million and fixed costs excluding salaries by EUR 24.2 million compared to 2008.

We have already set our minds to return to the growth track, expecting that in 2010 we will have a good possibility to increase our sales, instead of merely focusing on cost savings. Sales will be supported by a slowly recovering economy on our core markets and our distributors’ quite moderate carry-over stocks after this winter.

Russian and Nordic markets have stabilized and are showing early signs of growth. In spite of some encouraging signals, we will still base our actions on a gradual rather than a rapid recovery.

A strong growing distribution, good seasonal logistics, an improved cost structure with production inside duty borders of Russia and CIS and new products will give us a good chance to strengthen our market leadership in the core markets and to return to profitable growth in 2010.”

Read the whole Financial Statement Bulletin here.